Machine Learning Isn’t the End for Accountants
The introduction of technology to replace labor is hardly new - society has been grappling with this issue since the invention of the printing press. So what is it about the current automation conversation that is striking fear into the hearts of so many?
In part, the disruption that historically was confined to manual labor and manufacturing is beginning to threaten the knowledge economy, too. And one knowledge-based industry that many fear is at a particular risk of obsolescence due to automation is accounting.
With a spate of commercials airing at this year’s Super Bowl promising to replace human tax preparers with IBM Watson, and a newly developed machine learning system in Xero that automatically suggests the account code for small business owners - there is no question that accounting as a whole is undergoing substantial transformation. But these technologies are hardly the end of the profession. Automation tools like chatbots have also entered other known accounting systems as well, with more machine learning in the works.
To be sure, artificial intelligence and machine learning in particular are already having an impact on the everyday tasks of most service providers, accountants included. Mobile document collection and automated workflow solutions are eliminating manual data entry from bookkeeping, and a variety of more advanced tasks, like classifying transactions, filling out compliance forms, and computing key KPIs are also being automated.
In fact, these tasks merely scratch the surface - emerging applications of AI promise to move beyond basic processing and into intuition, and even ‘cognition.’ Given the direction and the pace of these innovations, it’s perfectly natural to pose the question, “are accountants going to be replaced by robots?”
The answer? No, of course not. Fundamentally, human tasks break down in two categories: creative work and executional work. AI and machine learning threaten to replace all executional work, but fortunately for the humans, even at their best these systems are still terrible at the creative.
What this means is that an accounting firm focused primarily or exclusively on compliance and executional work will need to pivot and move to the creative - going beyond the commodity services like filing tax returns and preparing statements - and begin providing context and meaning from data.
An automated future for accounting won’t involve mass layoffs, but it does require the role of the accountant to evolve. As technology continues to eliminate data entry, accountants will shift from ‘preparers’ - recording and classifying information within one system - to ‘integrators’ - facilitating the flow of information among a suite of connected systems.
In short, accountants won’t be replaced by robots, but they will work alongside them leveraging fully-integrated suites of AI-powered SaaS applications to perform everyday tasks. Moreover, technology will automate what can be automated and accountants will need to redeploy their time to focus on delivering creative, value-added client services.
A recent study suggests this is what consumers want and expect. When asked, the majority of business owners who have an accountant consider that accountant to be a ‘trusted advisor.’
These owners rely on their accountant’s ability to deliver strategic business advice, so much so, that often the accountant is as much an expert as they are a financial therapist. The relationship between the client and the accountant is a distinctly human one and that relationship will never be replaced.
The simple truth is the professions that are willing to adopt technology and exploit automation will not be destroyed, but will instead survive and prosper. It’s not the end of accounting, it’s just the beginning.