We benefit every day from technological progress, but its shadow looms large. When life becomes so convenient that we doubt our own usefulness, it’s time to take inventory of the facts.
There are many people in many professions contemplating the impact of artificial intelligence (AI), and it’s hard to say just how its arrival on the business scene will affect professional services in the long term. We can only explore as far as we can see.
Let’s look back at the history of accounting technology and seek some answers about its trajectory.
Not long ago, most accountants meticulously recorded financial transactions in physical ledgers — a labor-intensive process that requires keen attention to detail and leaves little room for error. You might remember spending days, or even weeks, reconciling accounts and preparing statements.
Digital spreadsheets made it much faster to automate calculations and modify data. The move to formulas and pivot tables saved lots of time but still relied on human intervention.
The same is true of accounting software like QuickBooks and Xero, which have introduced efficiencies for bank reconciliation, invoice generation, tax calculation and then some. But these tools rely on you, the user, to set parameters, interpret results and make judgment-based decisions.
AI represents another seismic shift in the industry because it brings elements like data mining and deep learning into the mix. For instance, data entry can be efficiently managed by AI systems with Optical Character Recognition (OCR). They scan, read and input data from physical receipts and invoices without human intervention.
The next logical step in accounting technology evolution is predictive analysis. Driven by AI’s ability to analyze massive datasets at speed, this level of automation is changing the game of forecasting.
Predictive analysis is like a crystal ball you can use to anticipate financial outcomes based on current and past data trends. Instead of just reporting on what happened in the past month or quarter, imagine being able to provide your clients with insights into what might occur in the next six months or a year. This proactive approach can help you manage risks and optimize opportunities.
Here are a few scenarios in which you could put predictive analysis to work for your firm.
As the above examples show, predictive analysis is huge for a client-driven business. It has the potential to enhance your role as an advisor and trusted source of information.
Despite all of this newfound power, AI has limitations. When you need to apply emotional intelligence, ethics or nuance, it still can’t match up to the human mind.
If you’re guiding a client through a decision that includes both qualitative and quantitative facets, AI can only provide the latter. It can’t gauge your client’s emotional state, incorporate their long-term vision or offer advice from a place of empathy. You, on the other hand, can listen actively and consider the factors beyond the data.
There’s also an ethical dimension of accounting that’s deeply rooted in the history of the profession. Financial decisions often have moral implications, and while AI can be programmed to follow ethical guidelines, the “right” outcome is not always programmable. It’s your moral grounding combined with your professional expertise and personal understanding that makes you the stronger contender.
READ NEXT: 5 Best Accounting Podcasts for Easy Upskilling
Because of its inability to fully replicate the kind of complex decision-making we engage in as humans, AI isn’t yet on a path to replace your job and industry. Leading experts think AI will radically change the business and become your partner rather than your competition.
Renowned futurist Dr. James Canton believes that “AI will automate routine tasks but will also help in generating insights from financial data which humans alone might miss.” He says accountants will become known as consultants and strategists instead of number crunchers.
The Association of Chartered Certified Accountants (ACCA) echoes the sentiment. In a report, they state, “The accountant of the future will be less of a technician and more of an expert, adviser and strategist.”
Both evidence and opinions point to a future that isn’t about AI vs. accountants. Accounting firms, especially small to mid-sized ones, stand to benefit immensely from AI.
There are stories and strategies behind numbers, and technology can be an ally in your storytelling. Not to mention, taking advantage of the practical efficiencies provided by technology, such as automating routine tasks, frees up time for you to invest in developing higher-value services.
Bottom line: Most people agree that human expertise will always be sought after in strategic financial planning and in-depth business analysis. To prepare for the big wave of AI-driven change, amp up the human side of your accounting business by returning to the basics of strong client relationships.
