Machines and AI are certainly playing a critical role in enhancing and improving accuracy and efficiency of bookkeepers and financial businesses world-wide today!
As per a study conducted by The Economist (Future of Employment by C.Frey and M.Osborne 2013), there is a 94% probability of Accounting jobs being automated which is the second-highest amongst all sectors leaving behind prominent industries like Real Estate and Retail, and only falling behind Telemarketing.
Writing for the Motley Fool, tech specialist Andrew Tonner reveals a projection that 85 percent of customer service interactions will occur between customers and chatbots by 2020, based on Gartner research.
Because of its ubiquity and usefulness, a Bank of America report estimates the economic impact of AI to be an increase of between $14 trillion and $33 trillion.
We all know how accounting and bookkeeping have progressed from using calculators and sheets and sheets of paper for analysis to now using computers and Spreadsheets to do all that mundane work. In-fact it’s pretty much fitted into our subconscious brain despite it being a tectonic shift in the accounting profession.
Similarly, today, machines are here to perform repetitive transactional tasks without using any human intervention. Financial, as well as accounting software automation, has made spreadsheets obsolete! Hence, this has actually made the role of accountants and financial specialists to be all the more meaningful and strategic.
An example to understand how this is working in the real world, we can see the relevance of AI in the Accounts Payable and Receivable department wherein it is handling much of the work in initiating payments and matching purchase orders. Automated data entry and categorization are helping bookkeepers in faster analysis and understanding of broad financial trends.
Accounting Automation revolutionizes the way in which business approaches finance: one of the major reasons for the meteoric rise of automation in accounting has been the huge number of challenges that have been faced by entrepreneurs using manual accounting. Manual accounting has drained financial budgets, increased manpower and overheads and depleted data security.
On the other hand, accounting automation has led to immense benefits:
However, what needs to be understood is that as much as accounting is mathematical and number driven, it is also sophical i.e. it requires intellectual assessment and analysis.
Hence, even though machines are and will become more and more proficient in automating transactional accounting tasks, the accountant will still be the brains behind analyzing the data and spreadsheets to give precise forecasting and strategic advice.
Comprehending the Rise of Automation
Future of Employment: It is important to understand that bookkeeping jobs and transactional accounting jobs will be replaced by AI and automation software tools slowly paving the way for accountants to enhance their role into a much wider one of innovation and value-addition and gain specialization in areas such as budget analysis, financial advising, and management.
Business of Accounting: The accounting business as we see it today will certainly change and that too very rapidly. We can expect businesses to have better control over their financial management activities as well as concentrating and focusing on areas such as audit and quality control as well as get a better grip on their analytics and reporting functions.
Structure of Finance sector/department: Teams will shrink and there will be fewer and fewer people working in each section/area of finance however it will be a more interactive and collaborative workforce who will be seen communicating with sales professionals, software specialists, CFO’s and Heads of departments.
It appears as though the main obstruction to automation in accounting is getting individuals ready for the change. About 85 percent of executives comprehend that AI will enable their organization’s to accomplish or continue an upper hand in the industry as per an investigation from The Boston Consulting Group and MIT Sloan School of Management.
Since the CEOs appear to comprehend the significance of man-made reasoning, it just requires an attitude move from the bookkeeping and accounting experts to acknowledge the changes. With help from AI-empowered frameworks, bookkeepers are opened up to assemble associations with their customers and deliver critical insights.
AI and automation in accounting and finance are just the beginning. As the technology is getting more sophisticated, and the tools and systems available to support accounting are further expanding at a rapid pace. Accountants that resist these changes will not be able to keep up with others who have the advantage of time and cost savings and insights which AI can provide to them.
Automation in Accounting will grow rapidly and at a pace which only those companies will be able to embrace who are faster, smarter and more efficient than their competitors.
The interesting bit will be the firm’s ability to ensure that their traditional operating procedures and processes are impacted in the least possible way as they will make this transition.