AI and the Future of Accountancy

The idea of machines replacing humans has existed in movies and books for a long time, but it did not turn into a reality. Many thinkers and experts, however, have again started playing up this fear with the increasing popularity of artificial intelligence technology. They are of the view that the advancement in AI technology will consume many manual jobs. The sphere of influence of AI has started touching the accounting industry. Accounting professionals now fear that firms will no longer need to hire accountants once this technology evolves to a certain level. Though this is more a figment of imagination because ever since the accounting industry embraced technology and automation long back, the demand for expert auditors and accountants has only grown and manifold at that. AI will certainly impact accounting in the long run, but the fears of accounting jobs going away are completely misplaced. AI will save time and lead to greater efficiency Unlike many other professions, the pace of technological change has been quite slow in the accounting industry because of the excessive regulations. Trust and transparency are the two most important pillars of accountancy, which is why accountants have to match everything manually to ensure financial statements are balanced, accurate, and fair. They need to check a lot of documents themselves, which is quite labor-intensive and time-consuming. This is precisely the reason why firms need to hire accountants in good numbers. Artificial intelligence can save a lot of time in such manual tasks. From the processing of expense reports to account payables and risk management, each of these tasks can be accomplished more efficiently with algorithms and advanced analytics. AI can streamline and automate many complex accounting processes. Some machine learning applications have already started automating accounting tasks. Though they are still at the basic level, they will predict many things such as whether an organization will be able to meet its sales target or not with great precision. Intelligent machines and algorithms can fundamentally alter the way accounting divisions function in companies. AI system, when configured well, help eliminate accounting errors completely, thereby reducing the liability of the accounting department. The way artificial intelligence is developing, it will not be a threat to accountants for a long time, but you can expect more automation in bookkeeping tasks. In spite of the rapid development in technology, new regulations and complexities will keep emerging that will ensure the presence of human intervention to meet sound compliance requirements and ensure financial control. Even if the jobs of accountants go away to some extent, AI in turn will create new jobs like accounting businesses data analysts and business consultants in accountancy firms. Big accounting agencies like Deloitte have already started using AI tools for natural language processing of a massive number of contracts, deeds, and other documents. The technology can extract and interpret relevant information fast. AI can help analyze a colossal amount of data in a shorter period, which otherwise would have taken a longer time. The advantage of technological development will reach smaller firms quite late as they don’t have sufficient resources to access the latest in technology and it will take time when new technology will be cheaper for them. It took mobile phones almost 20 years to become affordable; AI too will take some time before it becomes affordable for smaller firms. So, the only way left for small accounting firms is to outsource accounting services to India or any other emerging offshore destination. Outsourcing vendors can provide them with the technological advantage of AI because of the economies of scale.