Top 4 Accounting trends in 2020
Top 4 Accounting Trends To Lookout For In 2020
February 19, 2020
how ai will impact accounting
How AI Will Impact The Accounting And Finance Industry?
February 21, 2020

Artificial Intelligence And Automation: A Boon Or Bane For The Accountants?

AI and automation

What is Artificial Intelligence?

Artificial intelligence (AI) is a smart representation of human intelligence operations by machines, particularly computer systems. AI applications comprise of natural language processing (NLP), expert systems, speech recognition, and machine vision.

Just like we humans are blessed with a vital organ in our body-brain that aids us in thinking and reasoning, similarly, AI machines run on automation. The commands that we give to these intelligent machines, they abide by it and perform tasks infallibly.

The three cognitive skills that lay the very foundation for Artificial Intelligence are: ascertaining, logical thinking, and self-rectification. Now let us demonstrate each of its skills and see how are these contextually valid in accountancy field when we talk about certain automated cloud accounting software:

Skill #1: Ascertaining Processes

In this process, AI computer programming centers on getting data and making rules for how to turn the data into workable information. These rules are called algorithms; they provide step-by-step instructions to the computers for completing a specific task. In the context of accountants, be it any business accounting software, it will first learn the process and then function.

Skill #2: Logical Thinking Processes

Herein, AI programming centers on selecting the right algorithm to reach a coveted result. In the context of accountancy, automated cloud accounting software does the same.

Skill #3: Self-Reconciliation Processes

In this step, AI programming is contrived to persistently calibrate algorithms and assure they render the precisest results possible.

How Should Accountants Perceive Artificial Intelligence (AI)?

AI has started to spread its roots in ways unthinkable. Humans, being the superior-most race alive on the planet, are sure to feel the pressure as they might not be indispensable anymore. But, is this the only angle we should perceive this change with?  Certain reliable surveys reveal, by 2020 accounting jobs will run by automated cloud accounting software.

According to another study, only 4% of 600 finance professionals have carried out business accounting software systems in their organizations and that’s notwithstanding 47% feeling eager about it.

The major concern is whether the jobs of these professionals will be threatened or not. The biggest question here is will even the best accounting software replace accountants? Before getting down to that answer, lets first have a look at what are the pros and cons of this potent technical advancement-Artificial Intelligence.  

Pros & Cons of Artificial Intelligence

  • Artificial intelligence technologies are rapidly developing, chiefly because AI can analyze huge data much quicker and make anticipations more precisely than humans. While a human researcher might bear the brunt of the vast volume of data that’s being created daily, AI applications apply intelligent robot learning toprocess data and rapidly turn it into workable information. But, deploying some of the best accounting software and the likes can turn out to be highly expensive.
  • Now, there is another disruptive technology that exists by the name of Augmented Intelligence. Some industry moguls conceive that the tag augmented intelligence, which has a more achromatic connotation, will help people empathize that most effectuations of AI will be weak and they will simply focus on betterproducts and services. The graver problems will have to be worked towards by the real humans who can seek help from some programs like cloud accounting software in accountancy context.
  • While AI tools have an array of new operations for business enterprises, the use of artificial intelligence also arouses ethical questions. Factually, an artificially created system will not go beyond the boundaries of its data premise and only visualize what it has already learned. This can be baffling because, forinstance, an automated cloud accounting software, which corroborates most modern AI tools, will only be as sharp as the data it is provided with during programming. On the contrary, an accountant will select data according to the situation in hand in the same circumstance and might even tweak it if need Thus, the possibility of machine learning bias is underlying and must be supervised closely. Therefore, to avoid any kind of bias, accountants must inculcate ethics into their cloud accounting software.
  • Accountability is likely an obstacle for deploying AI software in businesses that operate within the strict regulatory and surveillance compliance requirements. For example, financial organization in the United States operates under ordinances that require them to justify their credit-issuing decisions. When a decision to deny credit is made by cloud accounting software, it becomes difficult to explain the reason behind the decision because AI tools arrive at such decisions by operating on elusive correlations between thousands of variables. In this case, the program may be cited as black-box AI because its decision cannot be explained or be accountable for.

Impacts of Artificial Intelligence

Although almost all jobs will be impacted by automation, only 5 percent of lines of work would be fully automated by looking at the current technologies. While many other occupations will have certain constituents mechanized, statistically about 30 percent of the activities in the overall 60 percent of all lines of work could be mechanized. So, right from blue-collar workers like welders to white-collar mortgage brokers, accountants, and CEOs—they all will have to work besides ever-evolving machines to keep up with it.

Employees will be required to showcase a specialized skill set acquired over a while to thrive in the workplace of the future automation. The necessity to fathom innovative technological skills such as computer programming will grow rapidly as some of the best business accounting software will come into the picture.

Most importantly, humans will have to work more on the non-mechanical side of things such as creativity, critical thinking, and complex information processing, because a machine cannot go beyond the fed data. The demand for staple skills like digital know-how has been increasing and that trend will carry on and accelerate.

As per research, in many countries, the demand for physical and manual skills will slump but will continue to be the exclusive largest category of workforce skills by 2030. As a result, additional pressure will be experienced by the already existing workforce.

In accountancy as well, automated cloud accounting software might displace some workers. But, on the whole, during 2016–2030, around 15 percent of the worldwide workforce, or about 400 million workers, could be dismissed by automation. This again brings us down to the importance of projecting the pace and scope of adoption in automation.

Even in our most tedious adoption milieu, only about 10 million people would be given the sack, close to zero percent of the worldwide workforce. However, the positive to it is that new jobs will be created simultaneously. Even as workers are fired, there will be a growth in demand for work and jobs. Statistical scenarios showed an array of additional labor demand in between 21 percent to 33 percent of the workforce worldwide. This will benefit developing countries like India where the working-age populace is already springing up speedily.

How To Combat The Contrary Impact Of Artificial Intelligence In Accountancy?

  • Ascertaining rich economic and productivity growth can create a magical situation for all the challenges laid by business accounting software and similar tools in the accountancy sector. For increased jobs and progression, it is a requisite. If the productivity of a nation increases, it automatically impacts its economic growth.
  • Developing education systems is a must to fight the menace that automation is likely to spell. Influential people working in tandem with education imparters and employers could ameliorate basic STEM skills while in the early days of schooling systems and improve apprenticeship henceforth. Major emphasis should be on creative, critical, and systematic thinking and adaptive and life-long learning.
  • Bettering labor-market milieu signalsthe alignment of labor-class in most economies for development and growth in commercial sectors. With the help of digital platforms, the labor market can find suitable jobs and restore vibrancy. When the alteration rates are high, even within the same company, wages rise evidently. This can help in solving issues of portability of benefits, worker classification, and pay-parity amidst the working labor class.
  • Rearing business dynamics and entrepreneurship frequently in an economy will not only hike productivitybut also lead to certain job opportunities. A vivacious environment for SMEs, as well as a competitive environment for large business organizations, nurtures business dynamism that leads to job growth. Encouraging new businesses and startups will require simpler and amended regularizations, tax and other inducements.
  • Funding human capital is extremely important to combat the impacts of AI. In some economies, slumping public investment for worker training is a matter of grave concern. Via tax benefits and other bonuses, policymakers can advocate companies to invest in human capital that will lead to significant job creation, learning, capability building, and wage growth. Similarly, incentives for the private sector must be encouraged for other benefits and R&D.
  • Funding elements driving job creation will requirethe government to consider coming forward and investing for the benefit of employees and future job prospects. For example, bettering the infrastructure and thinking about climate-change adaptation can give way to construction, wiring buildings and setting up solar panels that are often middle-wage jobs most likely to be affected by automation.
  • Restyling workflow and workspace is the need of the hour where people will be facilitated to work more closely with machines. This is a dual situation of both an opportunity and a challenge, in terms of creating a competitive and productive environment. Organizations are altering too, as more collaboration at workspaces can be seen and companies seek to become increasingly nonhierarchicaland intelligent.
  • Reconsidering incomes results in a substantial reduction in unemployment/greater pressure on pay parity. Policies of contingent transfers, universal basic income, support for quality, and adapted social meshes could be looked at and tested. Finding economically-viable solutions and incorporating multiple roles that favor workers will providethem with not merely stable incomes but also a purposeful life of dignity.Many workers will require assistance in adjusting as work evolves at higher rates of change between skill requirements, activities, sectors, and locations. Best practices resulting in smooth transition safety nets should be adapted, while new methods should be continually considered and tested.
  • Embracing automation and AI with an open mind will lend a safe harbor to all those who are scared of losing their livelihoods.  Even as we captivate the productive benefits of these quicklyevolving technologies, we need to be fully ready for the risks it brings along and mitigate them.Data security, privacy violation, and potential issues of bias must always be taken into account by tech and other firms and they must find effective ways to address these issues. Automation done partially will become more dominant as machines complement human labor. For example, AI algorithms that can interpret diagnostic scans quite accurately will help doctors diagnose patients’ diseases and suggest suitable treatments.

Automated software comprehends natural language and can respond to questions asked of it. The system taps patient data and other relatable data sources to form a conjecture, which is then presented. Other examples of AI applications are chatbots, a program used online to answer questions and help customers schedule re-examinations. It also helps patients through the payment process. These virtual health supporters can provide basic check-up feedback. Likewise, jobs with repetitive tasks could shift towards a model of dealing with and trouble-shooting automated systems in other areas.

For example, employees of Amazon, one of the biggest e-commerce setups, which previously piled objects are becoming robot operators, supervising the automated arms and adjudicating issues such as disruption in the flow of objects. So, if we talk about AI in personal finance programs, such as TurboTax and Intuit’s Mint, leading financial institutions, which collect personal data via automation and provide financial advice.

Other applications of the likes of IBM Watson have been deployed to the process of buying a home. Today, automated cloud accounting software performs much of the trading on Wall Street. The growing automated technology is playing a big role in assisting organizations to fight off cyber attacks. I

It is a huge thing to fight a menace like cybercrime soon with the help of these disrupting technologies in almost all fields. It will not only lower the threat of private data being stolen by professional hackers but will also lay down a secure foundation for extremely coveted data to be protected at all levels. Hence, we have to understand that automation is not something to be feared.

Alongside getting positive changes, it is leaving a lot of room for humans to use it to their advantage. The only thing we need to keep in mind while dealing with automation and AI is how can we add value to the already processed information and how can we stand out between these technological advancements to make a mark smartly!

Conclusion

In a nutshell, governments and organizations at large should deploy automation and AI to extract the maximum benefits of its enhanced performance and fruitful contributions towards the societal benefits. It is a given that these technologies will produce the economic surplusages that will aid societies in handling workforce conversions. The government must play a prudent rule and ensure that the workforce conversions are as placid as possible. So, the answer to the coveted question raised earlier in the article that will AI wipe out the possibilities of accountancy is ‘NO.’ However, shutting your eyes down to the fast-evolving AI can leave behind those who don’t keep up with it.

There is, sure enough, a change over towards furnishing real-time data and accounting software is being deployed to deliver this. We are witnessing automated flows from bank accounts into software, with automated rapprochement against sales and purchase invoices.  Though this demands an element of human review, the time interval has drastically reduced.

Henceforth, even in a future with automation, there will be work for everyone as it has today. But, that work will demand the accountants to acquire valuable skills and far keener adaptability of the workforce in general than existent today to work in tandem with some of the best accounting software. It will be imperative to train and retrain accountants and new generations for the coming challenges. Government, SMEs, and trailblazers need to grind together and create the right inducements to invest more in human capital. The future with mechanization and AI will be disrupting, but a lot more productive if we channelize the technologies with assuredness by extenuating the negative effects.

Leave a Reply

Your email address will not be published.

4 + 1 =