Considering all the news items covering AI, accounting professionals might consider the technology a threat to their livelihood. There is massive speculation that AI can be extremely helpful for data-driven industries such as accounting and that would lead to reduced requirements of the workforce.
Here are a couple of headlines to gain your attention:
- “Robots will soon do your taxes. Bye-bye, Accounting Jobs” – Wired (20 Feb 2017)
- “Goodbye accountants! Startup builds AI to automate all your accounting” – Tech Crunch (28 June 2016)
AI can automate calculations and simplify the complexities that only professional accounting expertise has handled till now. However, is this comfort and efficiency necessarily going to come at the cost of massive job reduction? Or can accounting pros find a way around and continue to remain a productive part of the system?
Accounting, technology and some history
Thanks to changing technologies, we have witnessed massive facelifts in the accounting industry. There was a time when the arrival of the electronic calculator was no less than a revolution in the accounting world. Computer-based software started offering electronic spreadsheets in the late 1960s with software like LANPAR (LANguage for Programming Arrays at Random). As the improvised versions of spreadsheet software, such as VisiCalc and SuperCalc, arrived in the market, the calculator seemed a thing of past.
Later in the 1980s, with the advent of steadfast accounting software, spreadsheet software took a beating as the manual execution of many accounting processes was not required. Peachtree, QuickBooks, etc. are examples of popular accounting software that changed the way accounting is executed in businesses, but the job kept growing.
Later as the internet grew in popularity and functionalities, cloud-hosted accounting software brought the mobility and cross-device usability challenge and untangled the integration with ERP, CRM, repository applications, and others. All this smooths the information sharing between different business-specific applications to reduce human-dependency even for data entry, which is further supported by the popularity and growth of e-transactions. With such available simplicity, some predicted that business owners could manage accounting tasks without requiring accounting experts by their side.
So, the history tells that technology has continuously challenged the accounting profession. However, jobs in the accounting industry continued to grow. Why? The growth in number the accounting jobs, even after the advancements in technology is because of two significant reasons:
- Reforms in skills to use the new technologies and creating new tech-dependent tasks
- Research and development of new technology
Impact of Artificial Intelligence on Accounting Jobs
Both of the reasons mentioned above rely on the objective of adding value to the overall system. Interpret it as:
Accounting jobs grew because technological solutions were devised to solve pre-existing problems and only a humanoid intelligence could trace further problems and develop solutions to resolve them.”
Now, AI promises of doing almost that without human interventions. According to a report published by McKinsey in July 2016, AI can automate nearly 86% of activities performed by bookkeepers, accountants, and auditing clerks. The report suggests that automation with accounting activities cost less with the automation using machine-learning, computers, and software. For 86% of the accounting tasks, AI can be a cost-effective and profit-making solution, but 14% of the functions require human attention. What adds more positives to the situation is that new technology brings new assignments.
Experts’ Take on Job Prospects in Accounting Sector?
AI can do a lot, but there’s also a lot it cannot do, and we cannot rely on it to deliver skepticism and judgment,”
AI: welcome to the machines (Reporting, EY Assurance)
Along with words of experts, there are statistics in support of job growth in the accounting sector. Bureau of Labor Statistics, United States Department of Labor, has listed Accountant and auditor occupation in the list of “Most New Jobs” category with an expected growth rate of 10% (which means an increase of 139,900 new jobs) from 2016 to 2026. The factors that fall in favor of this predicted growth, however, does not indicate that the job profile will remain the same. What accountants, auditors, bookkeepers and other professionals in the field are doing today is way different from what they were doing a decade ago, and they will not be doing the same a decade later.
Conclusion and Vital Challenge
Survival has its challenges, and accounting job is no exception. To remain a productive asset in the industry that’s all set to undergo some rapid changes, professionals will have to tone up their skill set. There is enough number of opportunities that accounting sector will have; it is the type of opportunity that’s going to change.
- Refining their potential: Accounting professionals can adopt automation for redundant and repeatable tasks (such as data-entry) to save time and assist more clients. This process will reduce the billable hours and help you to be more productive.
- Be the innovator: Accounting industry has always been solution-oriented. New technologies may show new problems and thus ask for new solutions. Moreover, someone with relevant education and professional experience in the industry can innovate these solutions.
- Driving the decisions: AI may simplify the operations, but the understanding of data will remain a forte of accounting professionals. Making decisions based on data will create demand for accounting professionals, and that means the role of business consultancy can be the right fit for you.
About the Author
Nishant Kadian, an editor at Ace Cloud Hosting, likes to cover accounting technologies and cloud computing trends. He is an Electronics and Communication Engineer and has been writing about SaaS, application hosting, and IT security since 2014.
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