With the current shortage of accountants, finance department staff may face increased workloads. They are also contending with new and sometimes daunting automation tools. The result: more errors, at least according to one research firm.
New data from Gartner reveals that nearly six in 10 (59%) people working in the controllership function are making several errors per month. The surveyed controllers said these errors were closely linked to constraints on accounting staff capacity.
The numbers are concerning, especially for teams in need of more talent. Gartner data reports that 33% of accountants make "at least a few" financial errors weekly. Surveyors also suggest technology implementation could be a solution, with a 75% reduction in errors reported for companies with "high technology acceptance."
Significantly, though, Gartner did not ask the finance staffers they surveyed how the level of errors compared with those in past periods or with perceived historical norms. In addition, the survey did not prove any definitive correlation between larger workloads and staff errors.
Although errors have always been costly, those occurring today unfold in an environment where automation options abound, yet quality manpower is scarce. One conclusion could be that balancing quality work, maintaining culture, and effectively encouraging and measuring productivity while integrating new technology has proven to be challenging.
CFOs are no strangers to errors recently, either. From Lyft misreporting margin expansion to a North Carolina school district CFO accidentally overpaying employees, finance leaders have shown they are prone to mistakes, too.
Accounting Shortage
Other factors contribute to heightened workloads in finance functions, according to Gartner. Eighty-one percent of respondents cited increased workload demands due to economic volatility, while just under three-quarters (73%) pointed to increased workload from new regulations.
These challenges, alongside the growing accountant shortage, create an unrewarding environment ripe for errors. If accountants remain in high demand and short supply, their workloads may dissuade future college students from entering the field altogether.
Yet, accountants still play a significant role for technology companies aiming to aid CFOs in addressing workload issues. Despite facing pressures amid the squeeze on quality accounting talent, some organizations looking to solve the problem have prioritized integrating accountants into every aspect of their operations.
"I think the [accountant shortage] comes down to fear, uncertainty, and doubt in the role," said Razzak Jallow, CFO of FloQast, the software company that prides itself on being by accountants, for accountants. "Traditionally in accounting, following the Big Four track meant long hours and [modest] pay, which isn't ideal for many."
"But the reason we love accountants so much, and why we are ‘by accountants for accountants,’ is because we recognize their intelligence, hard work, and dedication to their craft," Jallow continued.
Jallow remains confident in his company's foundations. According to him, FloQast's track record and distinctive culture embody the contributions of well-prepared CPAs to any organization.
"We've built an entire company of accountants, from our technical consultants to our business development representatives," he said. "I think it's fair to say [FloQast] has been a fairly successful business, and it demonstrates the impact strong accountants can have on enhancing operational capabilities.”
Gartner surveyed 497 individuals working in the controllership function for this survey. The data was collected in July 2023 and published on February 21, 2024.