Artificial intelligence (AI) is becoming a real and prevalent part of our everyday lives, especially for many of us in the accounting industry. AI has immense potential to replace manual tasks and, in so doing, free humans up to engage in innovation and creativity.
The idea that “the robots are coming for our jobs” is one disassociated from the reality of these technologies. That said, it’s a fact that accounting is changing.
The salient question is how AI is changing accounting, how AI innovation can change accounting jobs, and what accountants need to do to thrive during this digital revolution.
Spoiler alert: specialties will increase in value, and people who have certifications like Certified Management Accountant may be ideally poised to lead the way.
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Accounting AI is Creating Jobs
The World Economic Forum (WEF) has issued numerous reports forecasting how AI will impact jobs worldwide. In fact, their analysts predict that automation will result in an increase of 58 million jobs, two-thirds of which will be highly skilled.
They compare the current climate of change to similar times in the past. For example, in the early days of bookkeeping software, accounting jobs changed drastically. Intuit, launched in 1983, and Microsoft Excel, launched in 1985 did not in fact represent the demise of human bookkeepers, as many feared. Instead, the field grew 75% over the course of a decade.
The net result of new technology in accounting and bookkeeping has been that accounts and tellers performed higher-skilled work than before. With AI and automation, this will continue to be true.
Benefits of AI for Accounting
The most common use for AI in accounting is to take care of repetitive tasks. For example, AI systems can capably, and with minimal error, complete tasks that include the following:
- Inputting and matching data
- Receipt reconciliation
- Creating and sending invoices
- Expense reports
- Tracking price changes
- Account reconciliation
- Sorting transactions
- Data recording and reporting
AI is built on algorithms, which improve over time as they are fed more data. In addition to continuous improvement, AI isn’t susceptible to human error and has around-the-clock capacity to work.
Three of the primary benefits experts see AI providing to accountants are:
- Invisible accounting: A behind-the-scenes function that frees up human accountants to engage more with strategic decision-making
- Continuous auditing: Auditing without the need for breaks and with no gaps in reason or precision
- Active insight: Accounting managers and leaders can get real time visibility into their financials
Of course, CMAs, CPAs, CFOs/vCFOs and other credentialed accounting professionals already aim for roles where they make strategic decisions. Bookkeepers may represent a group that feels more at risk for an AI takeover.
AI is best at replacing manual tasks and alleviating the burden of repetition. However, much of bookkeeping exists in that realm.
So, will AI replace bookkeepers?
In some ways, the jobs performed by the average bookkeeper in a business or firm today can be replaced by AI. That does not mean that bookkeepers are replaceable, just that their jobs may change. Entry creation, approval flow and even auditing and tax services can be done, in part, by “bookkeepers,” or AI software for bookkeeping tasks.
An example is Zeni, a start-up that raised $13.5 million to automate bookkeeping using AI. They term their AI-powered solution a “financial concierge” and aim to serve start-ups or other business models with lean resources. This can present a cost-saving measure, reducing the number of bookkeeper hours a company has to pay for. While this may look like a precise example of how AI can replace bookkeepers, that is hardly the end of the story.
Virtual accounting services, including AI bookkeeping, represent not just a threat but an opportunity. In fact, most modern finance firms and accounting firms already use some form of AI accounting software.
AI Accounting Software
Accounting and invoice generators like Quickbooks, Oracle, FreshBooks, Zoho Books and many others are used every day in businesses of every size. Almost all of these have some element of AI.
Accounting software has made accounting jobs immeasurably easier, enabling people to think critically, gain the full picture of a company’s finances, and work across verticals to achieve results.
AI takes data management and processing that would consume the time of many people and presents it in a way that can be used, sometimes right away. AI assistants and platforms can create a huge competitive advantage for firms, and firms of the future have already bought in.
Accountants of the future should also buy into technology, learning how to adapt and leverage the opportunities it provides.
The Impact of Artificial Intelligence on Accounting
In 2018, researchers assessed the growing impact of AI applications on the development of the accounting industry. They did acknowledge that AI has the power to subvert traditional development models and usher in an age of innovation for the accounting industry.
Since 2016, top four firm Deloitte announced that it would introduce AI into taxation, accounting, and auditing. In fact, Deloitte, KPMG, EY and PwC have all been involved in AI initiatives since about that time.
Renowned ML and AI experts have continued to join the movement toward transforming finance and tech with technology. In this particular paper, researchers make the following conclusion:
“The application of artificial intelligence can solve the pain points of inefficiency and low added value in the accounting field, making the accountants turn to more creative work and bring greater value to the company.”
A 2020 Study on the Transformation of Accounting Based on New Technologies identified new accounting technologies that included AI, big data, cloud and blockchain. It analyzed how these technologies were used in regular accounting practices, and considered how tech transformation is accelerating.
Researchers found that AI, Robotic Process Automation (RPA) and Machine Learning (ML) used in tandem generate more relevant information that helps business leaders make better decisions.
Every sector, from established accounting firms to innovative fintech companies, are finding opportunities in technology. Far from replacing all accounting jobs or presenting major threats to the industry, AI has the power to transform accounting, for the better.
Embrace the Future of Accounting
In 2019, Sage research ran a large-scale survey of people in the accounting industry. 58% of respondents felt that AI would help their firms improve in the future. Intelligent technology has the ability to max out efficiency and create unparalleled insights. This is shaping the world of accounting every day, and the role of accountants stands to change.
For accountants who wish to lead the way into this bright, AI-supported future, there is no better option than to develop an array of skills beyond just accounting. This is part of the reason that the Certified Management Accountant delineation has grown so much in the past years, and continues to be a powerful way to differentiate from the pack.
Becoming a CMA gives future accountants the opportunity to embrace change and sit at the head of the ship, so to speak, as it charts new waters.
Do you have specific questions about AI transformation in accounting, or how the industry is changing? It is something that is on most of our minds.
Drop a question below and myself and our CEA community can lean in. We’re all here to do great work, and understanding the role AI will play in our field is crucial.
After all, robots may not be coming for our jobs, but automation may help us do them better.