Artificial intelligence, or AI, is developing at a very rapid and rather alarming rate – and the end results might not be what most of us expect. Some of the world’s biggest tech personalities like Stephen Hawking and Elon Musk have already warned the public about the potential dangers of the speed at which AI is advancing. And while this may sound like a Hollywood sci-fi movie to most people, some professionals are already feeling the pressure of AI’s unexpected forward leaps – particularly those in the fields of accounting and finance.
“There certainly will be job disruption. Because what’s going to happen is robots will be able to do everything better than us… I mean all of us.” – Elon Musk
As automated AI-based accounting software gets better and better, some are afraid that this could soon lead to a lot less job opportunities for accountants. Considering the capabilities of AI when applied to finance and data analytics, this is a fear that’s quite understandable.
Unlike humans, AI-based accounting technologies don’t get tired or bored, allowing them to very easily accomplish the most tedious and repetitive tasks necessary to core accounting, such as data entry and general bookkeeping. These tasks can be very time-consuming when done manually, and the reality is that AI-based accounting software can finish these tasks much faster than any determined, professionally trained accountant.
Relax.. it’s not the end of humanity yet!
Here’s the good news: this doesn’t necessarily mean that professional accountants will soon be phased out in favour of AI algorithms. Just ask Jean Baptiste Su, Vice President and Principal Analyst at Atherton Research, a Silicon Valley-based global technology research and advising firm. Su believes that 2020 will be the year when all accounting tasks, plus finance-related tasks like taxation, payroll, banking, and auditing, will be fully automated through AI-based technologies.
While this will certainly present serious challenges for today’s accountants, it also comes with huge opportunities for ample growth in the field of accounting itself. In fact, more financial experts see these tech developments as advantages instead of threats. As any major accounting firm will tell you, state of the art AI-based accounting software are largely geared towards digesting and analysing large volumes of data at inhuman and previously impossible speeds.
Smart Tools for Smart Accountants
Rather than replacements, AI-based accounting software should be viewed as supplementary tools for the job. For instance, the multinational financial consultation company Deloitte now arms its auditors with AI-based tools that can interpret thousands of contracts or deeds using its natural language processing capabilities. These tools can also assess vast real estate holdings quickly and accurately, as well as analyse and compile the risks faced by large companies – developments that Deloitte’s own clients now want to adopt into their own businesses.
Our own Artificial Intelligence Robotic Software here on OnePosting can digitize invoices to improve workflow. It’s designed to make all of the line level accounting data available for processing, allowing a number of accounts payable tasks to be completed with more efficiency.
These tasks include processing vendor invoices, matching them against purchase orders to identify any discrepancies, and checking against Goods Receipts to verify that invoiced items have been received while our cloud-based workflow handles exceptions. For customer invoicing, the same technology is used to gather documents for customers and prevent them getting multiple mailings. It can also process the secure and confidential delivery of these invoices, as well as verify that they have been accessed.
Alternatively, our software can also be used to provide procurement teams with data that’s relevant to negotiations with vendors. Instead of relying on already stretched accounting teams for relevant data, procurement teams can simply access line level purchasing information on their own. This allows them to immediately undertake one-off pricing audits and perform real-time price analysis during negotiations.
Meanwhile, at the Chicago-based accounting firm Crowe Horwath, chief strategist Derek Bang and his team of data scientists recently began using machine-based learning to thoroughly sift through their healthcare clients’ enormous and disparate billing systems, flagging whichever accounts are likely to cause problems in processing and reimbursement in the future. This allowed their client hospitals and healthcare providers to actively tackle time-consuming and costly cases instead of waiting for them to surface on their own.
These are just some of the many AI-based accounting software that are now available to both financial professionals as well as their clients.
AI Software is the Future of Accounting
As you can see, the most recent advances in AI-based accounting software and technology are less about replacing humans and more about helping us deal with operational tasks faster, more accurately, and with much more efficiency. There’s no doubt that AI is a disruptive technology that is bound to change the field of accounting. But instead of outright taking jobs from accountants, this new tech is actually providing solutions to age-old accounting problems, essentially giving accountants more opportunities for long-term strategizing to serve their clients better.
In other words, AI is redefining what it means to be an accountant today. Not since the creation of double-entry bookkeeping over 500 years ago has the world of finance seen such a leap in client service and efficiency. In a way, AI-based accounting tools are simply accomplishing a more sophisticated and streamlined version of what spreadsheets are supposed to do.
“The more analytic and decision-oriented computations, at least for the next 20 to 30 years, will still require humans,” explains Tom Davenport, an AI and business processes professor at Babson College. Davenport recently spoke to the Journal of Accountancy to discuss the AI-related changes that are seemingly turning the world of accounting on its head. He explained that the current era of AI-based accounting tools is very similar to the time when the Internet came into the world.
During the first years of the Internet, only a handful of influential companies and individuals had the resources to actually go online for business purposes. Today, however, almost anyone with a working smartphone can explore online commerce. Likewise, the power to actually develop and fine-tune AI-based accounting tools is only affordable now to the largest accounting and IT firms.
According to many experts, it’s only a matter of time before its use becomes commonplace, just like what happened with the Internet. In order to keep up with these changes, CPAs need to step up their game and extend their knowledge in the field of IT.
It’s very likely that the traditional roles of accounts receivable and accounts payable clerks will disappear as AI-based tools take on the reins of core operational accounting. However, this doesn’t mean that accountant-clerks will have nowhere to go. Even as AI advances at an unexpectedly fast rate, accounting firms and their clients are not about to rely on AI-based accounting software alone.
Smart Accountants > Smart Accounting Tools
Capable and well-trained CPAs are still required for strategic financial advising, cash forecasting, long-term investing, and other strategic assignments that only human minds can fathom – at least for now and in the near future.
This is why universities in both the UK and the US are taking solid steps to produce capable business and accounting graduates – ones who have the skills and expertise necessary to thrive and contribute to the increasingly tech-dominated world of finance.
For instance, Imperial College London is combining business-focused academics with data science to inform its students about the many ways business analytics and AI are changing society. This initiative includes an innovative student placement scheme that’s designed to arm students with fresh insights on real-world data.
Meanwhile, Maryville University emphasizes the importance of strategic accounting, tax planning, financial reporting, financial statement analysis, and other skills that can’t be delegated to AI algorithms and tools. Recognizing that today’s accounting world is changing rapidly, its Master’s in Accounting curriculum is designed to develop the advanced accounting skills, business strategies, and financial savvy needed to help CPAs adapt to the inevitable changes facing the global market.
As artificial intelligence continues to advance at a brisk rate, today’s accountants have no choice but to keep up or risk being irrelevant. While AI-based tools are mostly delegated to operational tasks, their current improvement rate could also mean that strategic accounting tasks might soon be well within the capabilities of AI.
If we’re lucky, our future accountants will be able to ride the coming wave of new and improved technologies. And if not, Elon Musk’s prediction of a world ruled by artificial intelligence might not be too far-fetched after all. the advanced accounting skills, business strategies, and financial savvy needed to help CPAs adapt to the inevitable changes facing the global market. As artificial intelligence continues to advance at a brisk rate, today’s accountants have no choice but to keep up or risk being irrelevant. While AI-based accounting software are mostly delegated to operational tasks, their current improvement rate could also mean that strategic accounting tasks might soon be well within the capabilities of AI. If we’re lucky, our future accountants will be able to ride the coming wave of new and improved technologies. And if not, Elon Musk’s prediction of a world ruled by artificial intelligence might not be too far-fetched after all.