THE FUTURE OF ACCOUNTING
We live in a world that is driven and powered by advancements in technology and I think it’s safe to say that the present day is one of the most remarkable periods of technological change any of us have experienced, but will Artificial Intelligence (AI) replace the accountants of tomorrow?
As a self diagnosed technophobe this really isn’t my forte but even I can’t ignore what’s been happening in South Australia recently and with that I think we need to listen to influencers like Mr Musk. During a number of media interviews over the last few weeks Elon Musk hasn’t been backwards in coming forwards about his views on AI: he’s clearly of the opinion that it’s a threat to the human race. He believes that in the future just “a handful of major companies will end up in control of AI systems with extreme levels of power” and that there’s only “a very small chance that humans will be safe from such systems”.
“AI is likely to destroy humans” Elon Musk
He’s made a number of public appeals for those companies that are working on AI to slow down to ensure they don’t unintentionally build something unsafe. This opinion is strongly supported by the great Stephen Hawking who genuinely believes that AI will replace humans altogether. So what does it look like for the accountants of the future? Are we all doomed?
The accounting world has been dancing around the idea of change and transformation for a long time, individuals and global organisations will often claim to be thought leaders or technology super users but I really think that there’s a big wake up call coming for a number of us in that AI is about to completely transform the accounting industry. Automation and big data are already impacting how accountants work but until recently, accounting technology has simply existed to make certain tasks easier and to “automate”, it hasn’t been challenging accountants to rethink the way that they work.
From what I’ve seen, new technologies will drive a necessity for accountants to adapt both their processes and skill sets. A recent Forbes article identified accounting as one of the 10 professions that is threatened by AI. As automation evolves, accountants will be forced to “future proof” their spots in the team.
AI can help in accounting by streamlining operations, saving time and money and increasing efficiency. It’s also gathering and processing data; learning how to organise different types of information through machine learning. Because of advancements in administrative capabilities, accounts payable and accounts receivable roles are already becoming infiltrated by AI. Because of this accountants will have to adapt, and the role needs to move away from transaction processing and reporting and adopt a more complex human interaction. The BPO and Shared Services that we’ve all spilt blood, sweat and tears building will become transactional graveyards only to be replaced by Robotic Process Automation (RPA). Like workflow building applications, RPA software can lead to an immediate increase in process efficiency, accuracy, compliance and speed of completion. All while removing manual errors and increasing customer satisfaction.
Early studies show that actual results will vary for each organisation and for different processes, but RPA programs will typically deliver cost savings of 25% to 45%. And pay back periods will be measured in weeks, instead of months and years required for software development projects used today. All the usual suspects of accounting can benefit from RPA: mundane, repetitive, frequent, high volume tasks; rule-based vs. judgement-based decisions; manually intensive and error prone processes.
FUTURE PROOF
Many experts point to the human interactions as a key differentiator for accountants. Many people and businesses have unique needs that first or second generation AI will be unable to understand. For example, explaining complicated tax matters is better done by a human than AI right now. The accounting industry must develop the ability to adapt and evolve, as well as become proactive about the needs of tomorrow. Accounting as a profession needs to change, providing consultation and guidance to help prepare for and meet the future. Accountants should evolve to become business advisers and strategists who help drive long term business strategies.
THE TIME TO PREPARE IS NOW
The biggest impact I’m seeing AI bring to the accounting world is the general change in mindset. There has been a seismic shift over the last few years and some accountants are now much more tech savvy and open to new technology and it’s really great to see. Many accounting professionals that I meet today are aware of many of the latest trends on the market. They are either using advanced tech or are considering it for their daily activities. They are using artificial intelligence to assist them not because they have to, but because they want to. However, although AI is already drilling its way into the accounting industry, it’s not been fully adopted quite yet. For that to happen, there must be a singular tool or event to officially disrupt the traditional of handling manual data. New innovative tools will continue to pop up, and accountants will keep a good pace when it comes to trying them out until they become the standard.
WILL AI REPLACE ACCOUNTANTS?
As already mentioned the short answer is that to a certain degree they already are and some systems have already taken away portions of the job that accountants used to do. This trend will continue but that’s not to say that all accounting jobs will be threatened. If AI was actually going to take accountants’ jobs, you’d expect accountants and recruiters to be more worried! Instead, many are embracing the very real possibilities offered by technology. And when you look at what the possibilities are for accountants and the accounting profession, it’s not surprising.
High-end, higher-skill accounting positions will still be occupied by people for the foreseeable future, because of the complexity of the decision making they require. Even the positions that move toward automated work will need human accountants to oversee strategy, balance business goals and ensure ethical guidelines are being met. Like every industry, technology is sure to make its mark in accounting. Whether streamlining tasks or automating repetitive duties, AI accounting is no longer a thing of science fiction it’s on the horizon and is trickling into everyday life.
The technophone in me is confident to say that for now AI can not replicate human intelligence. We need to recognise the strengths and limits of this different form of intelligence, and build understanding of the best ways for humans and computers to work together.
Humans make decisions in two different ways. Much of our thought process is instinctive and unconscious, taking place very quickly and with little effort. This type of thinking is rooted in recognising patterns based on what has happened before, and is often described as intuitive. As humans we also use logic and reason in order to answer questions and make decisions. This conscious process uses our knowledge and typically takes over when intuition has not produced a satisfactory answer. This process takes time and effort. Accountants, as expert decision makers, use both ways of thinking and apply their knowledge to specific situations to make reasoned decisions, but also make quick intuitive decisions based on extensive experience in their field. As humans our intuitive thinking is particularly powerful, reflecting quick learning and high levels of flexibility. It provides the foundation for our language, vision, sensing, understanding of the everyday world and ways of interacting with others.
To build a positive vision of the future, we need to develop a deep understanding of how AI can solve accounting and business problems, the practical challenges and the skills accountants need to work alongside intelligent systems. It’s my belief that as this technology develops further, it becomes increasingly clear that it won’t eliminate accountants, but empower them.
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