How AI Is Changing The Accounting Industry
Artificial Intelligence (AI) is a technology that enables a computer to perform decision-based tasks that were previously conducted by humans. It comes in multiple forms, including machine-based learning. The more you use it, the better it gets at analysis and decision making. And even though there are benefits to using AI, it holds concerns for some accountants.
There Are Pros & Cons To The Increasing Use Of AI
There’s no denying the fact that AI is an invaluable technological asset where extensive training is required. But, for some CPAs, it poses a disruptive trend similar to that with cloud accounting.
For professions like accounting where right-minded thinking is necessary, AI can provide many benefits. And in the very near future, it could be integrated into a number of accounting services and products. AI can take on your time-consuming tasks, but at what cost?
Is AI a threat or opportunity?…
AI May Be Replacing Some Workers In The Accounting Industry
However, according to The Economist, Artificial Intelligence use in the accounting profession has a 94% chance to cause job losses in the next few decades. AI is already automating and eliminating jobs in banking, law, and other industries.
Intelligent machines will be able to handle compliance with rules, regulations, and organizational policies. It will also be able to evaluate employee performance and influence HR decisions.
Like Alan Turing, one of the forefathers of modern computing, once stated in his paper Computing Machinery and Intelligence (1950): “we may hope that machines will eventually compete with men in all purely intellectual fields.”
Investment Management May Face Some Big Changes Due To AI
It’s predicted that AI “automated wealth managers” will one day be able to offer financial advice. This means accounting firms will no longer need to employ full-time advisors.
Bridgewater Associates, one of the most prominent hedge fund managers, is using AI-backed trading that can predict market trends based on historical data. This is good for investors, but faster AI-backed trading decisions can offset entire markets. This could result in adverse effects on entire markets because it will affect capital flows and macroeconomic policies.
Some worry about the Runaway Effect, where we cause greater harm by trying to solve problems. AI systems in the future might generate autonomous knowledge/data giving rise to these negative situations.
AI Can Benefit The Way You Work & The Enhance The Services You Deliver
Your daily tasks probably include data analysis and generating reports for your clients. Even though there are software tools that can help you automate these tasks, you still need to review and verify your findings.
Artificial Intelligence can now do this for you. What this means is that it has the potential to change the entire accounting profession.
The Association of Chartered Certified Accountants claims in one of their reports that AI-powered automation will soon eliminate almost all tedious and cumbersome data-related tasks like bookkeeping and transaction coding.
What this means is that instead of focusing on crunching numbers, you can concentrate more advisory services and other high-value tasks for your clients. Your staff will be more productive, and your firm will be able to serve more clients and deliver more value-added services. In this way, AI will benefit your business as it propels innovation in the industry.
AI Can Be Used To Correct Human Inaccuracies & Increase Productivity
Being human, we are all prone to misconceptions, biases and other errors. So in this respect, sophisticated AI capabilities in computing can someday take over and eliminate these human errors. This will be beneficial for public trust funds like medical research, parks, educational institutes, etc., by ensuring long-term continuity and adherence to original mandates.
And the proper use of AI would increase productivity and be an excellent resource for management. Accountants are already using tools like CRM software and process management tools to increase productivity and make more informed decisions. As the technology of AI keeps advancing, it will help accounting firms generate more insight and reduce expenditures.
What Does This Mean For Your Accounting Firm?
Similar to the advent of cloud accounting, disruptions in the accounting industry are expected. This means that you must rethink your services. This is according to a report by Dr. James Canton entitled Imagine Tomorrow: A New World for Accountants.
And as Forbes reports in Accounting And Finance- Artificial Intelligence, Robots And Chatbots, “just as others who faced the prospect of machines taking over jobs that used to be done by humans, accounting and finance professionals might anticipate the reality of 4th Industrial Revolution with fear.”
In this light, you must consider… Will AI pose a threat to your accounting firm? Will you be able to keep up with technology?
When used judiciously, not only can AI free up your staff to take on other tasks, and automate accounting processes, it can help you improve your operations and reduce costs. CPAs and financial leaders who embrace the changes that are coming and gain AI expertise will ultimately be the winners in the industry.
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