Accounting is all about data and decision-making! In the course of recording and processing finances for a year, accountants confront an accumulation of large datasets, which can be a potential source of greater insights about the growth and economies of organizations.
The ultimate purpose of accountants as professionals is to unearth these hidden insights and opportunities from data and provide better advice to make better decisions about the allocation of future investments, resources, etc.
To deliver more value and radically improve the quality, efficiency, and effectiveness of their work, accountants have embraced technology for many years. Indeed, the partnership between humans and computers in accountancy has produced better results in the past than humans or computers in isolation. This freed up a lot of time to focus on more valuable tasks such as decision-making, problem-solving, advising, strategy development, relationship building, and leadership.
After computers, artificial intelligence (AI) is now bringing about an even bigger evolution in accounting through the application of intelligent systems and machine learning. AI and machine learning algorithms can learn from experience and begin performing complex tasks that were once the sole preserve of human accountants.
Machine learning-based predictive models can now forecast revenue and spending, keeping businesses compliant, reduce financial workload, predict fraudulent activities, and improve the accuracy of rules-based approaches, enabling greater automation of processes.
Opportunities
A better way to process data is probably one of the most exciting aspects of AI. Artificial intelligence is capable of processing huge quantities of data and has the ability to discover patterns that even the smartest people cannot find. That in itself opens up a large number of new possibilities.
Besides, AI has superior data-processing capabilities which can automate basic tasks such as invoicing, payroll and bookkeeping, and eventually replace some financial roles, that involve the processing of large amounts of data and consists of repeated, stabile and structured tasks.
By processing big data and uniformly applying predefined rules and new learnings from experience, AI can spot trends, patterns, and anomalies at a speed and scale beyond the capabilities of the human brain.
AI can deliver ‘invisible accounting’ by taking the hard work and inefficiency out of process-heavy bookkeeping, data entry, and pattern analysis for both the business owner and the accountant. Automation enables companies to increase efficiency by eliminating the time consumed in repetitive tasks and improving productivity by performing tasks faster than humans. Benefits include improved efficiency in time, reduced litigation costs, and greater consensus.
Challenges
Despite all these benefits and opportunities, AI within accounting systems is in its infancy and is still evolving. So, there is a lot of development, enhancement, and refinement to happen before we have a fully functioning accounting system with AI as its bedrock. AI can surely crunch the numbers, but at this point, it hasn’t yet been learned to be truly creative and innovative in thinking. In other words, AI in accounting is yet to pass the Turing test, a famous experiment that determines whether an AI system can think and respond like a human.
As AI systems continue to get more powerful, they will be able to move further into complex decision areas, potentially replacing humans altogether in many cases. When we look at the accuracy and efficiency of AI, it’s obvious that some low-level bookkeeping roles will disappear.
Luckily, the next generation of accountants may not have to get their hands dirty with the data entry, but this leaves the question of what the accountant’s role will become in the coming years.
With all transactions, coding, and rules done by AI, where will the human accounting professionals add value in the whole accounting process? Is AI going to be a challenge to their abilities as accountants or an opportunity to streamline the basic bookkeeping and free up time for things humans are really good at – talking, listening, empathizing, and helping business owners find the best possible solutions to their problems?
The answers lie in how the industry, as a whole, will react to the influence of AI in the coming years.
