The accounting industry is, like many others, already experiencing massive changes as a result of AI integration. And that’s good news, because AI is quite essential for any industry, thanks to its speed and accuracy benefits.
The accounting and finance industry has long weathered massive change. Since the 1950s and beyond, not much has changed about the tasks and roles of accounting professionals worldwide.
For a while, all the accounting industry could point at were recent developments such as accounting software and its endless benefits. But the artificial intelligence boom is promising to change that. AI is already overhauling the industry’s most basic components.
It was never an impossibility. The accounting industry is all about numbers. Artificial Intelligence also happens to deal with large, complex batches of data, most of which are basically numbers. The two have been merging for a while; the effects are already taking the shape of a new, changing accounting industry.
Below, we explore how different aspects of the accounting industry are being reshaped by AI.
Increasing task automation in accounting and finance firms
There is no way AI has infiltrated the accounting industry more efficiently than through the automation of accounting tasks.
Jean Baptiste Su, principal analyst at Atherton Research, already predicted this change. He says that by 2020, accounting tasks, but also tax, payroll, audits and banking, will be fully automated using AI-based technologies.
Smaller, more tedious tasks are already getting subjected to the power of AI-backed machines. There’s an advantage to this. AI algorithms and machine learning generate more data with fewer errors and lower overall cost in labor.
Nick Chandi, CEO of PayPie, says, automated data entry is now the rule for those after maximum efficiency. Poring over thousands of invoices and receipts is no longer another task the accountants have to grapple with.
Firms are now employing bots and AI software to simplify tasks as complex as data categorization and trend identification, and those as specific as expense auditing and accounts payable and receivable.
While focusing on the core tasks, the accounting professionals mostly outsource the secondary tasks like business reports, finance papers etc. These services also provide twiftnews help to professionals who are studying for a degree and the work is done in quick time.
More adoption of smart machines and software
Automation of accounting tasks isn’t happening on its own. The accounting industry is readily adopting new technology backed by machine learning and algorithm AI to make this automation happen.
Accounting professionals already see these technologies in various accounting software such as QuickBooks and OneUp. They’re also appearing in the form of invisible bots that accountants can use to track, scan, and identify receipts and invoices much faster.
Accountants are usually careful professionals, but these smart machines go even further. They can “eliminate accounting errors that are generally hard to find,” according to CEO Stephanie Weil of the Silicon Valley accounting firm Accounteam.
The cloud is another AI-backed innovation that the accounting industry is embracing massively for its powers against errors. Major offerings such as QuickBooks Online, OneUp and SageOne are already very popular.
For one, they need little or no human intervention. A study done by Jean Baptiste Su’s analytics company, Atherton Research, found that almost all popular cloud accounting services rated highly in recognizing transactions coming in from bank feeds and working out the necessary accounting without human help.
All services tested achieved more than 30% effectiveness, with OneUp getting as high as 95%. That doesn’t mean that AI-backed machines are perfect though. Experts recommend that AI needs to get better to really weed out accounting errors as required.
Changes in accounting tasks altogether
Various accounting tasks are changing in nature, thanks to AI. With increasing task automation as detailed above and the adoption of more AI-centered machines for accounting tasks, the modification of accounting tasks was always inevitable.
Now, as robots and algorithms take up more menial tasks (especially those that involve massive number-crunching), such tasks are fading away. Nick Chandi agrees in his Forbes article that some tasks, such as accounts payable and accounts receivable, are now tasks for robot brains.
It’s a smart plan, as AI bots and software run numbers faster and determine trends much clearer than the smartest accounting professionals. But AI’s abilities are also limited, despite all that automation. It gets answers from only the data it’s been given, so there is always a need for human judgment to avoid errors.
This has proven to be good for accounting professionals because it means their role in the industry isn’t over yet. Accounting and finance firms are now developing new roles that require human judgment to patch up AI’s deficiency.
Even then, change is still coming. Accenture’s recent prescient report, From Reporting The Past to Architecting the Future, remarks that ‘there is a tipping point for finance jobs on the horizon’ even though AI integration in the accounting and finance industries will not directly displace human labor.
Accounting firms are restructuring
In what appears to be a direct result of the change in accounting tasks detailed above, accounting firms are also undergoing company-wide restructuring thanks to AI. As machines take on human jobs, the people that used to do these tasks are taking on new roles in accounting firms, mostly those AI hasn’t infiltrated yet.
In worse scenarios, some of those people are being let go. Bryce Covert highlights this massive loss of mostly administrative jobs.
As a result, many accounting firms are relegating entry-level jobs to machines, making them scarce, as people take up higher-ranking, largely managerial tasks instead.
Accounting professionals are evolving
The effect of AI on the accounting industry hasn’t spared the people that actually make up the industry. Accounting professionals everywhere are aware of the changes and evolving with them, as Nick Chandi mentioned.
Many have already embarked on improving their skill set to weather the AI effect. As machines take up entry and lower level accounting tasks, forward-thinking accounting professionals are now working to become better qualified for the higher-level, decision-based accounting tasks that AI hasn’t taken away.
Stephanie Weil of Accounteam agrees, noting that with AI doing the harder, more repetitive work, accountants are now free to “move to move to a more advisory role” in their companies.
Accounting services are getting smarter.
Accounting service providers are already taking advantage of AI’s error-reducing and number crunching abilities.
Almost all major accounting software suite providers, such as Sage, Xero, and Intuit have started to incorporate AI in their packages to improve and automate tasks like data entry, payroll management, tax preparation, and audit.
As AI continues to learn and evolve, accounting professionals can expect even more changes in these software suites in the next few years.
Conclusion
The accounting industry is, like many others, already experiencing massive changes as a result of AI integration. And that’s good news, because AI is quite essential for any industry, thanks to its speed and accuracy benefits.
From another angle, though, that also means AI is not going anywhere. The best that CEOs and accounting professionals alike can do is prepare for more change.
Join the conversation!