The New York Times recently wrote an article ‘The Robots Are Coming For Phil In Accounting’. It discusses the rise of AI technology and how it poses a risk in displacing accountants. Yes, the robots are coming for Phil or Phillipa, but below are 3 reasons why AI will help accountants.
There’s a difference between what AI can do and what your clients want AI to do.
The technology we call Artificial Intelligence is still a far cry from what we see in futuristic movies. Current developments still need continual human involvement to input information to correct its logical pattern recognition.
How effective the model is in providing solutions or recommendations to real world problems would depend on the complexity of the situation. On a good day, these models can carry out predictable tasks like sentence completion and data transferring.
But as we get to crucial business decisions with a huge ‘grey area’, these models become less effective. Software engineers and data scientists on the other end need to recalibrate their code and add minor improvements. Then, the whole process repeats itself.
The financial world of a small enterprise is filled with unpredictable inputs relating to daily business decisions. Given this, it’s not farfetched to say that AI technology still has a lot to figure out before it can replace advisors. Remember, these advisors can factor-in those insights, in real time.
Real value is unlocked through the subtle details.
This brings us to our second point. In many cases, real value is found when you have carefully assessed the situation and acted accordingly. Sure, there are shared processes and strategies encompassing all financial advisors. What makes you/your skillset different from others are the things that you do or know that are not common knowledge.
For instance, you run into one of your customers on the street. While chatting they tell you that they “might” be a couple of days late paying an outstanding invoice because the accounts team is away on a team building exercise.
How does this information get into your systems for the AI models to work on? Now multiply this by every potentially relevant, but rarely material, bit of data that relates to a business that isn’t captured by your systems, in any given day, week or year.
This is what AI currently lacks: the subtle nuances in client behavior. The AI models are only as good as the inputs and at the SMB level, those inputs are rarely perfect. This means you need human intervention to be able to operate in the grey areas where data input is not captured.
You can exploit current technology to increase the value you provide.
Rather than see the technology as a replacement for accountants, AI actually makes accounting more human.
At best, AI technology does predictable tasks efficiently. We have reliable software to do the mundane tasks for us. This includes tracking bills and invoices or setting updates and reminders and smart software for predicting future things without you having to do all of the underlying analysis.
Compliance work has been the bread and butter of financial advisory. But it makes sense that much of it such as reconciliation, BAS etc. should be replaced. This leaves you more time for higher value, higher-rate work. If you’re doing this work in-house for a business, it likely takes up time that could be better spent performing higher value accounting activities. If you offer compliance services, you likely either offshore the work, or compete against others that offshore it, pushing pricing down and removing margins.
So, one of the reasons why AI will help accountants is that the technology can save you time. By using AI-driven tools you can save time on compliance work, do more of the financial advisory. This will open up more time for client engagement.
While building PayPredict, we ran a series of interviews with business owners and executives with large companies asking how they felt about their current accounting services and things they liked/disliked. It was clear from the interview data that those respondents who were happiest with their accountants also felt that engagement with them, as a client, was excellent.
That’s the opportunity with AI-driven tools right now. To build a high engagement service while still being able to perform the underlying tasks required of you.
There’s never been a better time to be in the accounting industry.
Again, artificial intelligence is here to stay and have a share of our office work. It will continue to develop and provide efficiencies in doing everyday tasks. Our job is to see this as an opportunity to upsell ourselves. Use the technology to unlock greater value to the things we do. So, keep that office chair and get familiar with that new system and put its insights to good use.