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The Top Challenges for Accountants in Insurance Part I

In part 1 of our ongoing Flexi Education Series, we sit down and talk to Schuyler Ryan CPA, AIAF – Assistant Vice President, Finance at Union Mutual

Marc Meyer: Hi Schuyler thanks for jumping on a quick call to talk about all-things insurance and accounting. You ready to do this?

Schuyler Ryan: I am!

MM: What do you see as the top accounting challenge(s) for insurance companies?

SR: One of the challenges we face in the Accounting field is being stuck in the past which hinders us from looking toward the future. To some extent, this will never change as we cannot report financials on a period before the period ends. Our role as accountants is often looking in the rearview mirror.

As an example, while the calendar year changes, the accounting department does not turn the calendar until late in the first quarter. For the insurance industry, this is largely due to the annual statement filing deadline of March 1st and continued prior year related filings through June 1st. 

MM: Is this feeling that you are “stuck in the past” more of an accounting problem, or is it a process problem?

SR:  I would say it is a mix. The accounting part of it is just the nature of our role. You cannot report on a period until it is closed, for example you cannot report on 12/31 financials until 1/1 because you have to close all of that activity. But there is also a process piece to it.

MM: Can it be “fixed?”

SR:  There is certainly the opportunity to streamline our processes to close a financial period and complete required reporting more efficiently. By completing the close process sooner, we would have the opportunity to move on to the next period sooner. If we can move on to the next period sooner and have more real time information available, we would be better business partners to the rest of the Company.  

MM: From a process standpoint, are there ways to speed that up?

SR: Yes, for us, we work on trying to get our entries in by the 5th business day after the close of the month. This has been an improvement for us – just a couple of years ago this was a real struggle. However, we continue to work toward improved efficiency in our processes for financial closing and reporting.

One example where Flexi has helped us to implement process efficiencies is in the realm of invoice processing and accruing for invoices at period-end. Once invoices are entered in the system, they’re automatically being accrued in our financials without having to do a manual entry.

MM: That is a great lead-in to my next question. Because of the proliferation of new tools and technologies, is it safe to say that your job is getting easier?

SR: I would say new tools and technologies make some of the more run of the mill bookkeeping tasks easier and more efficient. Overall, as referenced previously, we’ve seen a lot of improvement particularly in some more of the basic areas like creating journal entries and entering/processing invoices.

The automated workflow within Flexi for invoice processing and approvals is a time saver as is the ability to copy and paste journal entries. However, there are still complex accounting processes that require the skills of an Accountant. Being able to streamline some of the more basic tasks have helped to free up members of the team to take on more complex tasks that help them to develop and grow professionally.

MM: There could never be too much automation, could there be?

SR: In general, I would say no. But it must be careful automation. You do not want to automate a process that has so many nuances that you end up spending more time correcting automation (that’s done incorrectly) than if you had just done it manually. The goal is to automate things in a way that is effective.

We’re not able to automate everything and I think it’s because of all those nuances, but if you can get it to a good place then I don’t think there can be too much automation if it’s working effectively.

MM: You talked earlier about your staff and how you want them to employ more critical thinking and problem-solving skills. From your standpoint, are they embracing that mindset?

SR: I am incredibly proud of how our accounting department has embraced this growth mindset. I really want people who are visionaries, who are innovative, and who are thinking about things like, “How can we streamline this process?  How can we help the company be the best that it can be?”

This has shifted over recent years and actually points back to an earlier interview on accounting automation that you did with Spencer Kuo in which he talked about that “bookkeeper mentality.” That mentality is gone. Accountants are no longer just “bean counters” anymore. We really need to be analytical and help the larger organization to make strategic decisions.

That transition of the person who wants to do the bookkeeping to someone who needs to be a problem solver is important. It’s critical to have a finance team full of critical thinkers and individuals who can embrace change and innovation.

MM: Do you think we are at the crossroads when it comes to the role of the accountant? When you interview new job candidates, do they know that is what you’re looking for? Do they realize the expectations in accounting have changed?

SR: That is a good question. I do think we are at the crossroads and we do need to make that shift. In terms of interviewing candidates, I am looking for someone who is a critical thinker, a problem solver, and who is not content with doing the same thing every day.

When you have these interviews and meet candidates, you can get a sense from people when you simply ask them, “What made you get into accounting?” Do they want to manage debits and credits, or do they want to think through and solve problems? There is a definite difference.

MM: That is an interesting question to ask because I would not even know what a typical response would be. But I guess it is safe to say that everyone gets in it for different reasons.

SR: When I first started in accounting, my thinking was, “I like the concept of everything balancing,” and that makes/made sense to me because accounting was very black and white. But now, it has really shifted to the fact that I feel like I am doing a different thing every day, I am forecasting, and I’m really thinking about how different decisions will impact the financials. So, my perspective has shifted for me throughout my career as I have learned that it is not so black and white after all.

MM: So, today’s accountant needs to be more well-rounded? Skilled?

SR: Skilled is a good way of phrasing it. Simply put, people must be smart. You cannot do this job by just following step-by-step instructions. I look for people who I know are going to be smart and who can think critically about the task at hand. I like members of the team to have diverse skills and backgrounds because they can challenge and encourage each other by offering different perspectives.

MM: Is it hard to find talent these days?

SR: Yes, it certainly can be. It is not as easy as you might think. Often, people see a job opening for an accountant and they think bookkeeper but that is not what I am looking for. There are more simplistic roles that are suitable for someone who fits into that role, so I don’t mean to discredit that. It is just that, for our team – in corporate accounting for insurance, for example – I am looking for someone who has a different skill set- analytical and forward-thinking.

MM: So, the notion of automation taking everyone’s jobs is not exactly happening anytime soon?

SR: No. 😊

MM: We are almost done. This has been great, by the way. So, challenge wise, what happens in the industry in five to ten years? Are we poised for a technical tsunami in which AI and automation just turn the industry upside down?

SR: When you say industry, are you speaking of Insurance or Accounting?

MM: Let’s make it a two-fold question then. Let’s talk first about accounting and then how accounting is affecting insurance.

SR: Got it. As far as AI and Automation, I do think they are both going to continue to shape the accounting field and again, it redefines the type of person you want to hire. Regarding what it means to the overall finance and accounting departments, if you can automate some of the more basic functions, we’re still going to have people working in accounting. It is just going to be different in terms of the problems we’re solving and the goals we’re trying to achieve.

In terms of insurance, it is probably not much different from other industries from an accounting perspective. But the insurance industry, as a whole, is seeing so much change in terms of automation and AI. When technology moves throughout the company it sort of pulls accounting along. So, when we’re automating other areas, it gets you thinking about how you can make these improvements in other departments. Accounting is no exception there.

MM: What’s on your wish list that could make your job easier?

SR: One of the reasons we implemented Flexi was to try and reduce our reliance on excel in our processes. I would like to see us continue to explore the capabilities of Flexi and optimizing it to reduce our reliance on Excel and improve our overall financial reporting structure. Any way that we can automate things that tend to be repetitive and that aren’t worth the brainpower of our team, I’m all for it.

MM: Schuyler, believe it or not, we are done! That went super quick. Thank you so much for your time. Have a great rest of your week!

SR: Thank you- you’re welcome!

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