Will artificial intelligence (AI) replace accountants? As someone who’s worked in, and has been trying to get out of, public accounting for the last decade… I sure hope so. Between the long hours and the repetitive and mundane work, it’s no wonder why there’s a nationwide shortage of accountants. But what if, instead of replacing the accounting industry, AI can be its savior? What if instead of traveling back to 1984 to kill Sarah Connor, AI helps accountants everywhere finally harness the resources to get past this current rut?
In his latest book, Rise of The AiCCOUNTANTS™ – Accountants Augmented by Artificial Intelligence (AI): The Essential Guide to The What, Why, and How of AI for Accountants Hitendra R. Patil asks this exact question. The book contains:
- Nearly 100 examples specific to how artificial intelligence works/can work in the accounting profession
- Actionable intelligence through practically implementable checklists
- Templates of suggested emails for interacting with clients when you deliver AI-powered services
- 30+ analogies to help easy understanding of the content
- And much more…..
To give you a little teaser to the book, I asked him a few questions.
Is the practical use of AI in accounting here or is it still a work in progress?
AI has been making inroads into most of the software used by accounting professionals. Almost all of the artificial intelligence in accounting-related software solutions is embedded/behind the scenes. In other words, in accounting software, one cannot directly interact with an AI tool like ChatGPT.
Today, accounting software uses AI-powered optical character recognition (OCR) technology to scan and extract data from receipts and invoices and enter the information into the system, saving time and reducing the risk of errors. AI is used to reconcile bank accounts by automatically matching transactions in accounting software with those in the user’s bank account. Cash flow forecasting is done by using AI. Audit software uses artificial intelligence to identify financial risks and detect anomalies by analyzing large volumes of transactional data in accounting databases.
However, “interactive AI” is also finding its way into accounting technology. E.g., accounting software uses AI to provide insights and recommendations where a user can “ask questions” to the accounting software. As more and more natural language processing gets infused into accounting software, advisory services will become more powerful as expert accountants can find answers by asking complex questions to AI-powered software. As an analogy, the ability of accountants to use artificial intelligence is like customizing a car from all the available choices.
What type of accountants are most at risk of being replaced by AI?
AI, by itself, will not replace any accountants. It is the accountants using AI, i.e., the AiCCOUNTANTS™, who will replace those who do not. Essentially, any accountant that earns mostly from turning data from one form into another (financial transactions data added to accounting software) and into information (financial reports, etc.) is the one most susceptible to the replacement of his/her revenue-generating work by AI tools.
As AI gets more prevalent, even basic advisory work will also be prone to replacement as artificial intelligence software can become capable of generating the most common financial insights. In general, almost all of the “data-driven” (based on data already created) work is in danger of getting automated.
Will AI tools be affordable to the everyday accountant or will large firms dominate the market?
As AI “engines” become more commonplace, their infusion into software applications used by accountants will become more prevalent and hence more economical as time goes by. That will level the playing field in the usage of artificial intelligence in the profession. Till such time that happens, commercial feasibility considerations are likely to drive the adoption of AI more for higher value-higher fee complex work. At the same time, most of the data-driven features will get done by AI tools embedded within. More likely than not, AI will help accountants graduate to a higher level of services to increase their earning potential.
What should accountants do now to ready themselves for the AI revolution?
First and foremost, learn the fundamentals about how AI tools are created, how the technology learns by itself, and how it works. If today you can (almost) predict what your accounting (or other) software will do, it is because the software code is not changed (till a new “version” comes out). But artificial intelligence is different. It constantly learns! How does it learn, and what happens because of its new learning? You’d want to learn how AI learns.
The good news is you do not need to be a programmer to understand the basics of AI.
You would also need to understand the limitations and risks associated with artificial intelligence and how those can impact your work.
And, of course, you need to start experimenting with AI-powered software to discover new possibilities for you and your firm.
Rise. Be an AiCCOUNTANT™.
This blog post is really insightful and provides a great understanding of how AI can help, instead of replace, the accounting industry. I found it interesting to learn about how AI is currently being used in accounting-related software solutions and also the potential for more interactive AI to be used for advisory services. One question I have is how can small accounting firms, without large budgets, prepare themselves for the AI revolution in terms of investing in AI-powered software?
Thank you for sharing your thoughts, Jeremias! It is even more important for smaller firms to leverage AI more by ensuring they use the AI-powered features in their core softwares. If they continue to do manual work, it will be very challenging for them to remain competitive and relevant. Technology industry will ensure the cost of AI solutions keeps becoming affordable – which means learning how AI works is a must – because those who learn it will be more competitive in the marketplace. And as I stated in my book, Rise of The AiCCOUNTANTS™, you don’t really need to have any prior knowledge of AI to get familiar with AI.
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