Artificial intelligence has always been a great element in science fiction, involving machines a lot smarter than human beings.
Imagine the Terminator filing tax returns while preparing a great dinner. Feel free to compliment the chef, but please don’t upset him — ever. AI is not really the same thing in the real world (at least in 2019), but the technology will still significantly transform every industry. Already, many AI technologies are being used every day, from chatbots to search engine algorithms.
Accountants will also benefit from this cutting-edge technology. It is already being deployed on multiple fronts in the industry, and the number of applications will only increase.
A Quick Overview of Artificial Intelligence
AI developers aim to make machines process information like humans. This way, computers can work and react similarly to humans. At best they could think creatively, independently and ultimately with better judgment than people (that’s when Alexa plans to destroy humanity in order to save the world).
All kidding aside, practically, AI can be seen as an assistant — hopefully soon a super assistant — that will do the administrative tasks that generally take up a majority of an accountant’s time.
However, a big difference between human beings and machines’ intelligence is the massive scale and speed machines can process. Machines can consume vast amounts of information to identify patterns and help make informed decisions.
How Artificial Intelligence Can Help Accountants
AI is already present in accounting, and it will grow significantly as the industry continues to automate and reduce reliance on manual data entry. You can already find AI technology in a number of software applications with benefits including (but not limited to):
- Scaling up quantity and quality of data analysis: AI can process huge amounts of data (structured and unstructured), and boosts the scale, scope and rigor of the analysis. Auditors often perform test procedures — AI can literally analyze all the available transactions.
- Enhancing powers of observation and detection: AI can extract insights, pick up faint signals and detect more complex patterns in data than humans can.
- Augmenting cognitive capacity: Using feedback loops, AI can automatically and instantly learn from errors or new cases and become increasingly smarter over time. It never forgets and continually builds on and deepens the corporate memory.
- Improving consistency: AI can be a far more consistent decision-maker. Robots do not get bored, tired, frustrated, moody, lazy, emotional, hungry, thirsty or sick. Machines are not impacted by cycles or fluctuations in biological or physiological states like people. They don’t take vacations or leave of absence either.
- Mitigating repetitive tasks: Rather than wasting time with tedious tasks such as data entry and manual review procedures, accountants can focus their efforts on all the work that requires a human touch.
- Reducing errors: In a traditional bookkeeping setting, accounting mistakes may go unnoticed. AI can detect errors immediately and ensure your books are always accurate.
- Clearing invoices faster: Dealing with payments from multiple invoices can be challenging. Machine learning allows AI to analyze the data and clear out invoices or generate new ones.
- Accelerating data analysis: AI can also perform large-scale tasks that would be virtually impossible for humans to complete in a timely manner. Example: AI can analyze the data from every accounting project ever completed in your practice. The technology can then provide valuable insights on how to proceed with a potential project idea most effectively or even recommend that the company scraps it all together. While a human accountant might arrive at the same conclusion, it would take countless hours to go through the data.
- Real-time audits to ensure compliance: AI can instantly detect inaccuracies and flag improper submissions in expense reports and travel claims. While carefully reviewing these details would be quite tedious for human accountants, AI tools can learn the company’s policies and analyze data in bulk to ensure that there are no discrepancies.
New Accounting Skills Required for the AI Age
AI is seen as a technology that will replace a lot of jobs at any skill level. In accounting, AICPA CEO Barry Melancon made an alarming prediction that the accounting industry could be negatively affected by changes in technology, losing more than 1 million jobs. True or not, accountants will have to adopt this technology, just as they had to adopt the computer or internet.
Tax professionals will have to learn how to implement AI technologies for their daily work activities, for instance, developing the ability to automate their workflow and interpret new kinds of data. They will basically be required to leverage the power of machine learning.
This evolution in technology will also encourage accountants to combine being “tech savvy” with very human skills — the ones unreachable by machines — like storytelling, effective communication and relationship building, for example.
The accounting industry is evolving and professionals need to adapt to these changes and understand how to effectively respond. While AI is a brilliant technology and we often envision computers replacing people, we may underestimate the importance of purely human skills like enthusiasm, creativity or empathy: all essential facets of our profession.
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