Growing a backbone: Will AI empower accountants or undermine them?

In our digital-first world, as companies tackle everything from regulatory shifts to the global pandemic, accountants have proven themselves to be the unsung heroes of company success.

Technology continues to disrupt our lives, and the accounting profession is no exception

They’ve been leading the charge in helping business leaders navigate fast-moving changes in personnel and supply chain costs during the crisis.

As a former CPA myself, I appreciate that accounting has always been a core function in keeping the machine of business moving. Accounting operational excellence is an aspiration for many, but is essential to every part of a business.

It provides senior leaders with the financial insights they need to make decisions at speed and informs the budgets that enable frontline teams to get their jobs done. But now, the rise of artificial intelligence (AI) in the finance function is changing things.

With reports from management consultancies speculating that the accounting profession will be impacted by AI in a major way, it’s natural to question if there is a threat posed by AI to what was once a stable career.

It might be crude to consider the fate of accounting sealed in tandem with that of factory work, but with the sector increasingly wary of its own future, will the timely number-crunching work of accountants be robotised? Or is the profession evolving to become more strategic and advisory in its very nature, while leaving the details to the automatons?

Moving towards the vision

The value of Financial Directors (FDs) increasingly derives not just from crunching numbers, but from their strategic insights and analytical skills that benefit the business. In other words, the profession is becoming less task-led. Instead, the role of the FD is shifting towards one that is critical in advising the top brass, using numbers to inform company direction and strategy.

Today’s modern accountants inject strategically valuable insights into the decision-making process. But to do so effectively, they need two things: data and time. Rote, repetitive work such as chasing information, manually cleaning up month-end numbers, and holding status update meetings are all the types of actions that need to be streamlined if accountants are to have the time to analyse the figures and act as trusted advisors to senior management.

The World Economic Forum recently projected that by 2025, the time spent on tasks by humans and machines will be equal. This means we are likely to see an increased use of AI within the professional world, anywhere that tasks can be automated.

This prediction corroborates what is happening within the profession on the ground. For example, we are already seeing situations in the accounting profession wherein automation seamlessly exists alongside real-life humans to support its overall functions.

This is because at its most basic level, AI is well-placed to support task-based activities with limited capabilities; a certain input will result in a specific automated response. For example, an accounting system can be taught to automatically code transactions from a bank feed based on rules provided by a user.

Taking it one step further, machine learning (ML) uses AI algorithms applied to large datasets to identify patterns and make predictions or decisions with limited human guidance. ML gets better the more data it processes. The types of recommendations we see on our Amazon or Netflix accounts are examples of this type of AI. Likewise, this also supports accounting functions which rely on simple predictions or pattern-spotting to aid in decision making.

It’s ultimately still up to the human (the accountant) to interpret what the data means in the context of the broader business, but having the details well-organised provides useful assistance. In this way, the role of AI and machine learning is to be a sort of ‘smart assistant’ to the accountant, taking on the smaller tasks that free up time for more high-level thinking and decision making based on the accuracy of data.

When accountants win, everybody wins

What is clear is that when AI is used to handle the repetitive tasks that bog down the profession, it can bring huge benefits to the organisations that each accountant serves in.

When day-to-day accounting transactions are transformed to be as simple and efficient as possible, information-sharing in accounting has a highly positive impact on other business functions. The lead accountants are elevated to more strategic, decisive roles within the organisation, earning a seat at the table alongside the company’s CEO and COO.

This fact has been brought into sharp focus by the pandemic. Senior leadership had to respond to the real-time impact of unexpected lockdowns. In these unprecedented times, those that had access to accurate, data-driven accounting insights were better placed to pivot the business.

Such insights made the difference between a stab in the dark and the ability to trim the sails to steady the ship during the turbulent year.

AI transforming the accounting profession post-pandemic

Having learned costly lessons from the pandemic, many organisations are now developing multi-scenario financial forecasting models to help them respond to the possibility of further sudden changes in their operating environment.

Here, of course, AI and machine learning both play a crucial role. They can be ‘trained’ to come up with better forecasting capabilities thanks to continuous, vast data input from multiple sources. This improves the accuracy of the projections far more than the Excel spreadsheet of yesteryear.

In this way, as AI becomes smarter and sharper in its projections, it increasingly becomes viewed within the organisation as a trusted data source — interpreted, of course, by the human whose real-life knowledge and understanding of the company’s strategic direction and objectives can interpret the data in context and inform company strategy accordingly.

Technology continues to disrupt every facet of our lives, and the accounting profession is no exception. However, by working with these technologies, rather than against them, accountants can leverage their assistance to help elevate their roles within the organisation. No longer is accounting operating behind the scenes; it’s now driving the entire process.

About the author

Adam Zoucha is currently managing director of EMEA for software firm FloQast.

Prior to joining FloQast in 2015, he worked in the audit practice at Deloitte in San Francisco.