Subledger Accounting for ASC 842 and IFRS 16 compliance
A subledger is a record containing all of the details of a transaction, and rolls up to the general...
Fewer folks are up for the nuanced challenges of accounting and financial reporting.
Over 300,000 U.S. accountants and auditors left their jobs in the past two years, a 17% decline, and the dwindling number of college students coming into the field can’t fill the gap. This is according to a December 2022 article in the Wall Street Journal.
Many students and younger professionals are burning out on the repetitive accounting tasks – not to mention long, grueling hours common before audit deadlines – and are more interested in higher-value work such as data analysis. Hence, finance and technology opportunities are luring up-and-coming accountants to other areas of business operations.
What does it mean?
Company accounting teams - which are crucial for internal controls and financial reporting – are suffering from a decline in personnel. Demand for accounting and finance professionals will likely continue to rise, prompting more companies to offer higher salaries along with lower overtime hours and workloads. But even that may not be enough to fill the growing talent gap.
How will it impact lease accounting?
Not having enough staff to account for leases is an obvious impact of this alarming trend. But ASC 842 created a significant opportunity for accounting teams to engage in data analysis and offer more value to the business.
Instead of mere transactional reporting of leases, accountants can now play a more pivotal role. With the right technology system in place, they can analyze leasing cost centers across the organization – both real estate and equipment related – and identify opportunities to reduce spending. This can drive a marked effect on the organization’s bottom line.
Companies must recognize that a crucial part of incentivizing accounting staff to engage in higher-value projects is to invest in the most advanced tools to automate repetitive, mundane tasks while simultaneously enabling detailed analytics.
Automation and digitization haven’t eliminated the need for accounting staff but instead provided a way for people who fill these essential roles to be happier and to focus on things that make better use of their time.
