How AI will affect the future of the Accounting Profession?
The widespread adoption of Artificial Intelligence is recreating the way we used to think and work. Especially the fields such as Science, Medical Research, Space Exploration and Gaming, AI took these domains to another level. But when it comes to business and accounting, AI is still at its initial stages. So to fabricate a future vision of AI in Accounting, we need to dig down for an understanding of how AI can affect the Accounting profession. Also, what are the practical challenges and how Accountants and CPAs can make the best out of it?
Accountancy met Artificial Intelligence
We are surrounded by applications of AI. As per the future predictions, in the coming years AI will be embedded in everything we touch and do. We know that AI systems do not replicate Human Intelligence. However, the progress made by researchers so far tend to excel the accuracy and consistency as like humans.
Accountants and CPAs can use this intelligence to bring many opportunities by improving efficiency and providing more insights to businesses. Using this technology, they can enhance what they operate and add more value to the business. The implementation of AI can improve the quality of business and investment decisions, which is the main purpose of the profession. Accountants help organizations and economies perform by giving good decisions for the allocation of resources and hold other accounts which eventually supports investment, growth, trust and confidence in organizations and economies.
AI-powered systems can use entirely different approaches to tackle fundamental business problems. Few common issues such as gaining confidence and trust of investors on financial results of the company; companies should ensure that the correct amount of tax is paid; management decisions of spending on organizational resources and holding accountability of those decisions. These fundamental problems of an organization could be taken care of by intelligent systems. Therefore, it is essential to recognize and exploit the potentials of AI effectively.
How can the potential of AI transform the Accounting Industry?
The magic wand of AI waves and abracadabra disappearing the problems. And now look we are surrounded by AI-powered applications in our mobile phones, smartwatches, cars, home appliances, retail experiences, public services, media and whatnot. Artificial Intelligence in basic terminology describes a machine which mimics human cognitive functions such as “learning” and “problem-solving”. Going deeper into AI techniques such as Machine Learning (ML), Natural Language Processing (NLP), Computer Vision etc empowers the transformation.
Coming to the Accounting Industry, AI can help Accountants by solving 3 broad problems:
- AI provides innovative, better and cheaper data to operational decision-making.
- Creating new insights from the analysis of data
- Freeing up to focus on problem-solving, decision-making, advising, strategy development, relationship building and leadership.
Now, let’s see how AI can transform Accountancy.
Moreover, using ML code and enabling process automation, accounting entries can be improved with accuracy. ML models can predict fraudulent activities. It enhances access and analysis of unstructured data such as contracts and emails through deep-learning. Also, forecast revenues can be predicted with ML-based models.
The automation and speedier capability of AI systems can put a strong emphasis on manual tasks. The professional aspect of accountants and lawyers involves adherence of code of conduct, ethical and moral obligations which eventually plays a big part in decision-making. AI can assist accountants with a part of work so that they are freed up to focus on brainstorming and making decisions.
Read this 3 factors to consider before adopting AI
Could AI threaten Accounting jobs?
According to a report published by McKinsey in July 2016, AI can automate nearly 86% of activities performed by book-keepers, accountants and auditing clerks. The reports claim that automation and accounting activities can be cost-efficient and provide profit-making solutions faster. But 14% of the function still requires strict human attention.
Instead of painting a grim picture of the future of accounting, this is a great opportunity. Accountants and CPAs can get rid of laborious and boring tasks allowing them to be more focused on delivering more value to the business. Accounting jobs will grow with the rise of AI as technical solutions will solve pre-existing problems. New trends, issues and strategies will be made to enhance the business. New age accountants need to have accounting skills along with technical awareness. So, instead of removing the accountant and CPAs counterparts, AI can assist you in the most effective way to bring out the best outcomes.
How Accountants can use AI Capabilities?
About the provided helping hand by AI, Accountants need to refine their potential. They can use automation for redundant and repeatable tasks (such as data-entry) to save time, so that they can concentrate on assisting more clients with their services. By this process, billable hours can be reduced and help you to be more productive.
The solution-oriented accounting industries always look for an innovative and creative mind. With clients getting even more interested in new technological advances and applications, businesses cannot undo implementation of AI. Accountants need to become aware and innovative with upcoming trends and its integration with the business. AI can simplify and analyse data with its functions but understanding and decision-making will remain forte of accountants and CPAs.
At a more precise level, AI can be implemented to do the following accounting tasks:
- AI could generate data from multiple sources and consolidate them into a meaningful report. This process can be executed each month by a company.
- AI-powered machines and API can integrate unstructured data. This will make the procurement process easier and paperless. Also, any price changing can easily be tracked down among several suppliers.
- AI invoice management can make accounts payable/receivable operations more streamlined and secure with the digital cashflow.
- Security of data and files with digitized tracking of file access. This manages the file and documentation, and also increases the accuracy and efficiency of audits.
- Reviewing expenses and check receipts enhances expense management for a company.
- At the customer service end, AI chatbots can interact with people and efficiently resolve common queries.
The global AI market size has reached $62.4 Billion in 2020. With the growth rate of 42.2% from 2020 to 2027, it is expected to reach 733.7 Billion. AI is not just for big organizations; the technology is becoming cheaper and easily accessible to Small Firms too. You need to stay aware and keep updating your knowledge with the latest technologies and its applications to integrate with your business.
Author Bio : Elena Smith is a career-oriented woman and passionate content writer associated with Sagnext Infotech. She is knowledgeable in areas including the latest technologies, QuickBooks hosting, cloud computing and Cloud accounting. When it comes to writing she has the ability to stamp out gobbledygook and makes business blogs understandable and interesting.