4 Ways AI Will Help (and Not Hurt) Accountants
Artificial intelligence. The words alone can send a chill down an accountant’s spine, but they shouldn’t.
Artificial intelligence (AI) is technology enabling computers to perform decision-based tasks that would previously have been left to humans. The more it is used, and the more data (and human guidance) it has, the better its analyses and decision-making becomes. One of its chief benefits is the ability to analyze large volumes of data at speeds that no single person or team of people could process so quickly.
And though its relatively new technology, it’s here to stay. Recent surveys indicate more than 80% of executives believe AI leads to a competitive advantage, and 79% think it will increase company productivity. AI is sure to have a profound impact on the accounting profession over the next decades.
Rise of the Machines?
The good news is that despite apocalyptic predictions to the contrary, the machines are not coming for your job. You and your colleagues in the accounting department won't wake up one day to discover a computer has replaced you. We'll have more to say about this question in a future blog—stay tuned!
Instead, AI presents a tremendous opportunity for accountants to optimize the parts of their skill set that can't be automated or left to machines—the parts of the job that require insight and creative problem solving, which algorithms can't replicate.
While many low-level tasks will be automated might be some short-term upheaval in lower-level accounting positions by new technology, particularly as AI becomes embedded in everyday accounting practice, the demand for higher-level analysis and judgment work will only grow. With the need for accountants projected to grow by 6% through 2028, though some aspects of the role may look different due to the influence of AI on practice, we should not expect the profession to disappear anytime soon. In other words, the nature of the work of accountants will change, not disappear.
Here, then, are four ways that the implementation of AI will benefit accounting.
1. Productivity and Efficiency
Perhaps the most significant benefit that AI holds for accounting is automating mundane, repetitive administrative tasks that are part of an account’s day-to-day activities. This so-called “invisible accounting” is primed for handing over to AI as the gathering, sifting, and organizing of the vast amounts of data is something that machine algorithms can do with a speed and capacity that outstrips any human accountant.
While delegating this kind of responsibility to a computer program will take some low-level repetitive work out of the hands of human accountants, doing so will actually increase the amount of data easily accessible by those accountants while simultaneously freeing them to focus on more interesting tasks, making them more efficient and more able to accomplish business goals.
2. Augmented Analyses for Audits
Artificial intelligence can also enhance an accountant’s existing skills and abilities by automating the analysis of data, leaving final interpretation to the highly trained human.
In the case of audits, for example, instead of sampling data, by using AI, auditors can examine entire ledgers in a fraction of the time it would take to do so with traditional techniques. The AI can crunch the numbers and produce a report of items needing a human auditor’s judgement and expertise to resolve. This allows auditors to focus their attention on areas of highest risk and offer value-added services to clients based on the results.
The notion of ‘continuous audit’—in which financial fraud, as well as accounting errors caused by human oversight, can be constantly checked for and guarded against in real-time—is now possible, with algorithms assessing data in volume and at speed and accountants evaluating the results.
3. Automating Compliance Tracking
AI also holds promise as a way to make compliance faster and more cost-effective.
To ensure compliance with the U.S. Financial Accounting Standards Board’s change in lease accounting standards, one global manufacturing company’s corporate finance group reported completing the review of 1,700 leases months ahead of the deadline with an estimated 15 to 20 percent reduction in project hours and an estimated 42 percent reduction in costs (versus an entirely manual approach) due to the use of an automated data abstraction tool that turned over the data entry to an AI.
Likewise, automated AI-driven anti-fraud and financial management practices could significantly improve corporate compliance procedures, protecting both corporate and client finances.
4. Focus on Value-Added, High-Leverage, Analytical Work
With the more widespread introduction of AI into the accounting profession, the accountant’s role will pivot from data gathering and manual analyses to interpretation of results and better decision support.
Because AI can analyze large quantities of data, accounting professionals can leverage its insights to help with better business decision-making based on data. Accountants can compare transactions and income streams across different parts of an organization, gaining insights into the business in ways that would have previously been impossible to do using manual means. Accountants can also be in the vanguard of digital conversion within their own enterprise, as expertise in controls design and understanding data biases can be of value to other departments within their organization as they look to benefit from the advantages of AI.
And AI’s massive data-crunching abilities will also allow accountants to derive insights from demographic, transactional, and other external data in real-time. This will aid their projections and means that accountants will be able to help clients detect financial challenges and course-correct before they become crises.
Interested in seeing a real-world example of how an AI product can help in your accounting practice? Click here now for a product demo of CaseWare AnalyticsAI.