The Future of Accountancy: The importance of ‘Soft Skills’ in the age of AI

Feb 13, 2024 | Business Strategy, Key Business skills

Accountants, bookkeepers and tax advisers study for years to qualify in their chosen profession. You build up crucial technical skills and knowledge and, over time, related practical experience – which is also important.

And, if you’re like most decent professionals you then commit time and effort to keeping up to date by committing to, at least a minimum level of, Continuing Professional Development (CPD).

Along the way we all hear reference made to the need for complementary ‘soft skills’.

Too often the implication is given that these are optional. That they are ‘soft’ as compared with the ‘hard’ technical stuff. And sometimes, they are even disparaged by older colleagues who simply had to learn this stuff over time through watching their colleagues.

Regardless of your ambitions, these ‘soft’ skills and personal qualities, will become more important than ever as we start to depend more heavily on AI.

In this blog post I will unravel the myths surrounding soft skills, debunk common misconceptions, and explore why, what I prefer to think of as Key Business Skills (KBS), are more important than ever if you want to ensure the success of your accounting career and practice.

My own experience

I have long believed that my own career success owed more to the development of my non-technical (soft?) skills than it did to my knowledge and application of accounting and tax law.

This was very much the case during my career in practice and I am sure it contributed to me being head-hunted twice – by reference to my reputation and personal profile.

Of course I kept up to date technically but I had also been interested in personal development since my teenage years. And, throughout my time in practice (and since) I have always been just as keen to improve a range of key business skills.

The ‘common sense’ myth

How do we gain our technical skills? No one is born a great auditor, tax adviser or accountant. We learn by working alongside experienced colleagues, by studying to pass relevant exams, by our experiences in practice and by continuous study and CPD.

Why then should anyone imagine that the other key skills, that we need to be a successful and profitable accountant, can just be left to ‘common sense’?

Some people assume that all of the important non-technical skills can be developed merely by working alongside experienced colleagues and by learning ‘on the job’. No formal training is necessary. Older partners didn’t have such training. Anyone who needs training or support in ‘soft’ skills is not worthy of becoming a full equity partner. What nonsense!

The ‘Practice Makes Perfect’ myth

A similarly flawed attitude that many people mistakenly assume will help here is that ‘Practice makes perfect’.

It doesn’t. ‘Practice’ alone does not guarantee you will improve. Indeed I suggest it’s more accurate to say that ‘practice makes permanent’.

If you develop bad driving habits and practice driving, you won’t become a better driver. You will merely reinforce your bad driving habits.

It’s exactly the same with all key business skills. If you don’t know what you’re doing it’s so much harder to learn what works. You guided you are in danger of simply reinforcing and repeating bad habits that may not be helping you move forwards.

Reframing Soft Skills

As I implied earlier, I have long been frustrated by use of the term ‘soft skills’. The implication is that they are not ‘hard’; they are soft and that they are for softies.

The way many people talk about such skills, and the fact that they are not covered by professional exams even suggests that they are optional. This is in clear contrast to the ‘hard’ obligation to keep our technical knowledge up to date and sharp.

Over the years I have long highlighted the reasons why Key Business Skills are becoming even more important to accountants than ever before.

You have probably heard the idea that every business needs: Finders, Minders and Grinders. Accountants tend to be very good at ensuring that they can do the daily grind. That is the day to day compliance and technical work.

Ten years ago my research helped me to identify and categorise 12 key non-technical skills that ambitious accountants needed, to at least some degree, if they were to contribute to the success of their firm (whatever the size). Now I am updating that research.

My personal skills self-audit replaces ‘Grinders’ with ‘Binders’. And then for each of the 3 headlines Finders, Minders and Binders I identified 4 distinct skills, making 12 in total. Let me know if you’d like to know more about this.

Advisory services

The imminent death of compliance services has been predicated for longer than some commentators have been on the speaking circuit.

I have challenged this prediction for well over ten years but, I do now accept that over the next few years, the time it takes accountants to deal with many compliance matters will reduce. And I am now also seeing evidence that many smaller/simpler taxpayers are choosing to rely on software so as to save on their accountancy fees.

To date a huge majority of (especially smaller) clients turn to an accountant to assist them with complying with their legal obligations relating to preparing and filing accounts and tax returns. I can now see a future where this will no longer be as common.

As a result more accountants will need to develop skills they haven’t always needed in the past. Skills related to promoting the value and benefit of their advisory and support services. These will be services that clients do not feel compelled to seek out, as they do now, to assist them with their legal obligations.

This is one of the reasons why there is so much talk about the need to develop the ability to provide advisory and related services for clients.

I would go further and suggest that your advisory and support services will mean that you will be competing with a wider range of service providers – so not just other accountants, qualified or otherwise. You’ll be competing with management consultants and business coaches who have a long history of developing the key business skills they need to win over your clients, to win their trust and to win their confidence.

The impact of AI

With increased use of AI, we will see an even greater emphasis on the importance of non-technical skills. In this context I am referring especially to the human interactions, feelings and support that AI cannot provide to clients.

This is yet another reason why you will almost certainly need to develop and enhance a number of Key Business Skills (KBS) over the next few years.

Conclusion
One thing is abundantly clear to me: the future belongs to those who embrace the power of key business skills in tandem with their technical expertise.

The myths of “common sense” development and “practice makes perfect” have been debunked. Formal training and deliberate practice are indispensable for cultivating effective business skills.

Looking ahead, the rise of artificial intelligence amplifies the importance of human-centric skills.

As compliance services evolve and advisory roles expand, accountants must adapt to meet the changing needs of their clients. This entails not only competing with traditional counterparts but also with a diverse array of service providers who are themselves adept in key business skills.

As my research evolves to reflect these shifting dynamics, I urge you to invest in developing and enhancing the key business skills relevant to what you do now and what more you ar likely to be doing in the near future.

In doing so, you will not only future-proof your careers but also elevate the value your clients will derive from your services in an increasingly automated landscape.

Do you know where you excel and where you have gaps in your skills base?

If there is sufficient interest I could recreate the self-audit as the concept is as even more important in 2024 than ever before.

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