How AI Affects the Accounting Industry
For decades, artificial intelligence was nothing more than science fiction. But with the emergence of revolutionary technology, AI is now a reality – a reality that has muddled expectations for the future of many industries.
What Is Artificial Intelligence?
Artificial intelligence, or AI, is what allows computer systems, machines, and bots to complete tasks that would otherwise require human intelligence. With AI, machines can learn, adapt, and apply their “knowledge” to do various things.
Technological advancements have significantly impacted the workforce; with newer, greater technology, some jobs have been eliminated while new jobs were created. Advancements in AI, in particular, have only just begun to create a paradigm shift in the accounting industry.
Here are a few examples of how AI is already being used in accounting:
- Invoice processing
AI has proven to be beneficial for accountants who no longer have to dedicate time to tedious tasks that require manual assessing and processing. In addition to completing mundane tasks, AI provides better efficiency, security, and accuracy with data processing
The Impact of Artificial Intelligence on Accounting
There is a noticeable level of concern among employees who fear their positions will be eradicated as AI becomes more commonplace. However, AI is incorporated into industries like accounting with the goal of making people’s jobs easier, not to replace humans entirely. There are numerous benefits to incorporating AI into an accounting firm’s business model that are worth getting excited about.
“In public accounting, everything revolves around client service. To provide the best service, we need to hire and retain the most talented individuals. Employee burnout and turnover have been commonplace in the industry for years. Compounding this, rapidly changing accounting standards combined with growing fee pressure and competition have demanded that we find a way to get more work done than ever before with even less human capital,” says Shawn Gillon, Audit Partner at Withum, a top-25 advisory and accounting firm. “Artificial Intelligence (“AI”) helps us accomplish that by automating the tedious compliance tasks our team members traditionally faced, which didn’t add any perceived value to clients.”
“AI allows us to improve the client experience by freeing up time for team members to have more direct contact with clients and solve their most pressing challenges,” explains Gillon. “As our profession begins to think more analytically and like advisors, it’s easier for clients to see the value of our services. In addition to reducing pressure on our staff and improving the client experience, AI enhances the accuracy of our work and enhances our ability to detect fraud.
AI doesn’t just affect the procedures we perform. It forces us to understand how clients are using AI and how it affects the risks associated with the audit services we provide. That, in turn, is forcing us to change the types of people we hire, the skill sets we look for, and the kind of training we offer. Understanding and documenting client processes and internal controls are and will be more critical than ever.”
As more complex and voluminous accounting standards become effective and the amount of client data increases, we expect to see AI’s role in the industry continue to expand significantly.”
Eric Baldwin, Vice President of Customer Success for Jedox Inc., has also seen the potential benefits of AI in the accounting industry, adding “AI will help the accounting industry operate more efficiently and with higher accuracy.”
“AI is and will continue to affect the accounting industry in positive ways because it frees up employees from repetitive, manual tasks,” Baldwin continued. “In addition, digital solutions provide transparency, speed, and [auditability]. Unified solutions powered by AI improve reporting capabilities and ensure a stable environment to retrace data back to its source. With a literal click of a button, accountants can easily spot transactional discrepancies without having to mull through countless spreadsheets. Not only does the digital model allow for easy access to transactional data, but it also provides quick access to master data, including salary, benefits, sales, financials, actuals, book revenues, and more, making the accountant’s job that much easier. AI can automate repeatable processes so the accountant can use their expertise and skills to focus on more strategic, value-added tasks. It’s a win-win.”
Will Machines Replace Humans?
As mentioned earlier, financial automation and incorporating AI into a business model doesn’t mean that humans will be replaced by machines. It is clear that AI technology can potentially execute most, if not all accounting tasks, but even the most advanced technology cannot adequately mimic the human aspect of a business.
AI-powered machines have enormous data collecting potential, but they fall short when it comes to interpreting and analyzing that data. Humans, not machines, are required for consulting services, and it’s those services that accountants will have more time to focus on thanks to AI.
Essentially, within the accounting industry, the most successful digital transformation will occur when humans and artificial intelligence work together. A team made up of humans and machines will be the most efficient and successful in the industry.