Impact Of Artificial Intelligence (AI) And Machine Learning On The Future of Accounting Profession.
Are you studying or intend to pursue accounting in college or university? you may be wondering what is the future of Accounting profession and the future outlook of accountancy given the recent disruptions being witnessed in various professions and occupations. Advancement in artificial intelligent system has, in some cases, outdone human efforts or better matched cognitive intelligence, as a result, most tasks that require military precision are being undertaken by these powerful systems. Most people are fearing that time will come when most business functions will be undertaken by AI systems, rendering accountant jobless. Artificial intelligence and block chain poise a threat to the traditional functions of an accountant such as book keeping and auditing. Automating of repetitive functions such as book keeping and validation of the input may render auditing functions obsolete. However, it does not mean the end to accountants. Most human resource practitioners foresee exciting times for the future of accounting profession. They do not anticipate robots taking over the human functions played by accountants. The future of accounting profession will largely harness computing power, therefore, future accountants need to change their mindsets and develop high computing skills to complement the work of AI systems.
The relentless progress that technology has shown is undeniable, whether you are a millennial, an iGeneration or even a laggard, one cannot deny the fact that we live in a time of technological marvels that seem to follow the footprint of Moore’s Law (1965). There are already elements of artificial intelligence (AI), and machine learning, seen in our daily life today. Siri and Google are excellent illustrations of digital supporters that provide tailored services based on attributes learned about the user. Many have heard of the comparison made of Apollo 11 technological features to the smartphones available in the market today. Moreover, it is said there is more computing power on an iPhone than there was on the 1969 Apollo 11 mission to the moon or the Deep Blue supercomputer had in 1997.
Artificial Intelligence (AI) can be defined as “the capacity of machines and software to exhibit or imitate a sense of cognitive intelligence”. It is training machines to make human-like decisions and perform smart tasks that usually require human intelligence. Competencies presently branded as AI include successfully understanding human speech, competing at a high level in strategic game systems such as chess, autonomous cars, military simulations, and interpreting complex data. AI developers have managed to fashion applications that can expand human performance, automate complex processes, and simulate human engagement to progressively sophisticated levels. The current interest in AI has been driven by a trifecta of developments in machine learning techniques, data availability and continued acceleration in computer processing.
According to Arthur Samuel, an inventor in the field of AI who coined the term ‘machine learning’ in 1959, machine learning offers computers the capability of learning without being explicitly programmed. Machine learning is a “field of computer science that is considered the leading edge in artificial intelligence (AI) giving computers the ability to learn without being explicitly programmed”. It’s a subset of AI where machines use neural networks designed to function the same way as a human brain. The algorithms can process and analyze data from various sources around the world to predict outcomes and learn from successes and failures, recognize patterns, make connections, and classify it by the elements it contains.
Impact of Artificial Intelligence On The Future Of Accounting Profession
Given that AI and machine learning systems are fueling the technology we use in our homes, workplaces and entertainment centers, it is no surprise that accounting technology companies are testing with and employing them in their platforms. Accounting technology firms such as Xero and its rivals have been applying machine learning principles to wipe out challenges many small non-accounting-savvy business owners face. There are limitless rewards experienced by companies who are using these systems that have caused shock waves in the accounting society. Such benefits are as follows;
Future of Accounting Profession: Clearing Invoices Payment
Nowadays, accounts receivable or treasury clerks struggle to clear invoice payments when customers’ pool invoices in one expense, pay incorrect amounts or do not include invoice numbers with their payment. To clear the invoice, an accountant either has to physically add up several invoices that might coincide the payment amount or contact the customer to clarify some data. In the case of a short payment, the accountant either has to ask for approvals to accept the quick payments or request the remaining amount from the customer.
An intelligent system could support this task by promptly suggesting invoices that might match the paid amount and, based on established thresholds, spontaneously clear the minor payments or automatically generate a delta invoice.
Future of Accounting Profession: Expense Claim Auditing
Another transactional finance task that could benefit from AI-enhanced automation is expense claim auditing. Machines could learn a company’s payment policy, read receipts and audit overhead claims to ensure compliance and only detect and forward questionable claims to relevant employees for authorization. Rather than exclude the human workforce in accounting firms, the accountants will have new colleagues (machines) who will work in tandem with them to deliver more efficient and effective services to customers. This move will free up hours in the day for accountants to accomplish more vigorous analytics on the outputs of the system. Taking advantage of AI will enable accounting, audit, and compliance sectors to scrutinize significant amounts of data, and supply more analysis and insight as a part of their job description.
Future of Accounting Profession: Determining bonus accruals
Deploying AI solutions, firms could leave this calculation to a machine that uses all existing system data and predictive analytics abilities to come up with an unprejudiced accumulation. Furthermore, this would give accounting teams more time during the closing process for undertakings that require human intervention.
Future of Accounting Profession: Automating Approval Workflows
Today, approval workflows are mostly based on two-dimensional matrices that list various conditions based on which approval levels are triggered. Intelligent workflows could let finance players differentiate and sieve out the specific exemptions from the standard low-risk exception, that is usually accepted anyway. This way, accountants do not need to wait for approvals and feel empowered, while still limiting the risk for the organization.
Future of Accounting Profession: Machines as Financial Guardians
All industries require professionals who act in both financial and legal aspects and shoulder significant financial onus. They are usually very skilled and experienced employees, but being human, they are therefore prone to misconceptions, biases and other human errors. Machines and computers with sophisticated AI capabilities can someday take over such financial roles as they are not inclined to such human mistakes and become more efficient fiduciaries than their human counterparts.
This aspect of AI implementation is highly attractive for public trust funds like medical research, parks, educational institutes, etc., by ensuring long-term continuity and adherence to the original mandates.
Future of Accounting Profession: Analytics calculation
Accounting software is adapting and becoming smarter as time goes by, it is executing jobs that previously required human intervention. Tedious, labor-intensive, and mind-numbing tasks are being eliminated by machines through the art of restructuring operations thereby saving time, money and increasing efficiency.
Due to advancements in gathering and processing data skills; administrative capabilities, accounts payable and accounts receivable roles, learning how to organize different types of information through machine learning are becoming infiltrated by AI.
Future of Accounting Profession: Data analysis
Though companies employ large teams of accountants who work overtime to meet a deadline and finalize audits, the massive amount of transactions that pass through firms limits the quantity and quality of transactions that auditors can inspect by hand. Presently, auditors only study a select sample of transactions.
In a report by PWC, the future of auditors is seen to be bright as they will be able to audit 100% of firms’ financial transactions. Machine learning patterns will be able to process and review the data, recognize irregularities and come up with a list of outliers for auditors to check. Therefore, instead of spending most of their time checking data, auditors will be able to apply their abilities in examining and inferring the reason behind a pattern or anomaly.
Future of Accounting Profession: Risk assessment
In assessing economic proposals for services projects, finance teams are tasked with evaluating projects individually based on the customer characteristics, such as maturity, industry, size, current system landscape, the complexity of the products to be implemented and so on. To make this assessment, the team often relies on the top managers of the finance department who possess experience in similar projects. This comprehensive evaluation is not only unbearable for any finance team to do on such a large scale and guarded timeline, but the final decisions are limited by these individuals’ perspectives.
Machine learning could assist in the simplification of risk assessment mapping by pulling data from every project a company had ever finalized to compare it to a recommended project. Using this data, the team could then map the proposed plan against all historical projects and come up with a better-informed risk assessment. This could, in turn, allow finance managers to provide a better offer to customers using a lower risk uplift, or ensure that there is enough cover in case the risk is high. This capability could significantly increase the company’s revenue and margin.
Future of Accounting Profession: Bank reconciliation
A bank reconciliation is a practice corresponding the balances in a firm’s accounting records for a cash account to the corresponding data on a bank statement. Machines can learn how to automate bank reconciliations completely. AI and machine learning technology pick up from previous allocations and account choices and then makes the right recommendations for new bank transactions. As accounting companies and branches begin to rely significantly on machines to do the heavy lifting of calculating, reconciliations and responding to inquiries on balances and verifying information, auditors and bookkeepers will be able to not only deliver more value but handle more clients than ever before.
Future of Accounting Profession: Transforming the finance role
The primary objective of many chief financial officer (C.F.O.) is to leverage technologies that will positively impact jobs and finance. For this to happen, the skills required of those in the finance and accountancy function will have to change drastically. Transactional jobs will become less critical, while business partnering, cross-functional knowledge, and tech savvyness will become more critical. Furthermore, these systems must be built, maintained and integrated into existing operational systems and processes. Although the resources required for these transactional tasks will be fewer, the fast-changing business models driven by digitization will need additional financial resources to be developed and supported. Many other functions besides finance, including HR, procurement and legal, will be equally affected. The best thing leaders can do to prepare for the impact of machine learning, and artificial intelligence technologies are to strive to develop a learning culture, so employees can stay ahead of what is coming. Now is the time for CFOs to educate and prepare themselves on this topic, so they can lead their teams in adapting when the time is right.
Advanced Technology: How It Is Impacting The Future Of Accounting Profession
There is no contrast that artificial intelligence systems are not only a dominant force in the market but are refining quickly. They provide outputs that can be exceedingly accurate, replacing and, in some cases, far superseding human efforts. Nonetheless, they do not replicate human intelligence.
Accountants hold some strengths over AI; their ingenuity, critical thinking, decision-making skills and most importantly the power of building trust and relationships with clients. With the introduction of AI systems in every corner, accountants must pivot away from the business of crunching numbers and instead focus, more so than ever before, on using AI to develop a deep understanding of how the systems can solve accounting and business problems. Instead of hopelessly trying to outdo machines, they should empower themselves by utilizing these machines to market themselves as visionaries to their clients and company.
Accountants must inevitably come to terms with the exceptional potential of machine automation. Artificial intelligence won’t wipe out accountants, but rather revolutionize how they work. To form a positive vision of the future, accountants must take their fate into their own hands, instead of waiting for it to be imposed on them by robots. It is imperative for accountants to recognize AI as a business enhancement tool rather than a direct competitor and to apply the strengths and limits of the different form of intelligence towards building an understanding of the best ways for individuals and computers to work together.
As much as accountants have been using technology for many years to accelerate what they do and delivered more value to companies; the introduction of AI systems into the market should be seen as a blessing and an opportunity to improve on turnaround time, job satisfaction and excellence, and investment choices. By focusing on their niche, training themselves on future technologies, mastering machine learning, and building a closer human relationships; a savvy accountant can come to possess the knowledge of experts regarding the same machines and ensure they remain relevant far into the unknown future.
Machine learning and artificial intelligence in accountancy functions are here to stay. As accounting firms embrace centralized systems; and pacesetters continue to make progress in the development of AI, these machines will only become unbeatable. That being said, AI will only pose a crippling threat to an accountant who cannot keep up with the changing time and welcome newly found technology advancements to exploit it to their advantage.
Future Of Accounting Profession: Skills To Learn
As most human resource practitioners and analysts predict the future of accounting is set for a revolution. It is, therefore, imperative for accounting students to enhance their computing, programming, data mining and data analysis skills in order to remain relevant in the future job marketplace.
We encourage all accounting students to enroll for courses in emerging disciplines like python programming, data science and statistical data analysis to enable them fit in the future accounting profession market.