How Your Firm Can Win with Artificial Intelligence
Artificial intelligence (AI) and automation are dramatically reshaping nearly every sector of the economy and every job. A recent report from digital thought leader McKinsey & Co. indicates that as many as 45 percent of activities performed for pay could be automated right now with current technologies.
Nowhere is this trend more evident than in the accounting profession where even in smaller firms, software and subscription services can now automatically collect and organize data on everything from payroll and inventory to audits and contract language, and, according to Xero, even perform analysis – once the sole province of human intervention – on tedious tasks like bank reconciliation.
But while the “rise of the machines” may invoke fear in some reactionaries, more visionary accounting professionals are asking themselves how human advisors can sustain their relevance and value among emerging supercomputers and automated applications.
How can they win, they wonder, in this new AI landscape?
As the accounting profession moves into the AI age, Roman Yampolskiy, PhD, a professor of computer engineering and computer science at the University of Louisville and a leading researcher on AI, emphasizes the importance of not fully relying on today’s software because of the one thing that AI currently lacks: common sense.
“Certain functions should not be passed on from our hands to machines, which, I remind you, have no common sense,” Yampolskiy said.
Maureen Schwartz, executive director of global public accounting association BKR International, concurs: “Even in the age of supercomputers, data will always remain most valuable when interpreted through the common sense of knowledgeable advisors.”
Here, according to BKR International, are three ways firms can employ common sense as they explore the potential for automation and AI in the accounting industry:
1. Invest in predictive analytics. Tools for automated credit modeling already exist to help advisors stay ahead of credit risks in accounts receivable portfolios, according to The Hackett Group Inc. Continued automation of data inputs — from gathering audit evidence to inputting employee expense reports – will provide advisors with better capabilities to help clients analyze data and predict problems before they affect cash flow or compliance.
“Whether it’s payroll or inventory data, when data is collected and organized regularly, it allows the expert to watch for patterns and inconsistencies that could lead to noncompliance or a cash flow issue before it becomes a big problem,” Schwartz said.
2. Explore tools that allow faster, friendlier response. Responding to prospects faster than the competition or answering client questions in a timely manner is still a big differentiator in professional services. We were just getting used to Googling information, but AI personal assistants are now doing the work for us.
Drawing from the entire Internet or customized databases, they increase the speed of research and calculations. They are designed to learn from past searches to better provide answers to requests. Tools like Siri, Watson, and Jenny make the interface (almost) like a human conversation.
“These tools could be used like a friendly CPA concierge to direct calls to the right person or remind clients of appointments,” Schwartz said.
3. Use behavior analytics for cross-servicing. If you notice the ads that follow you around as you search online, you are seeing a form of behavioral retargeting. Advertisers have used this technology for about 10 years. The sites you browse will embed cookies that make those product ads pop up on your screen – trying to entice you to come back and buy something. Similar technology will suggest other products you might like.
Accounting firms can invest in marketing automation tools (e.g., HubSpot) that track visitor behavior on their websites and automatically send visitors the content they are most interested in. Once visitors perform a certain number of activities on your site, tools like HubSpot can assign a score that prompts a partner to call them. Think of it as an extra salesperson working 24/7.
Undoubtedly, certain accounting functions will always need to remain in human hands, Schwartz said. Just as humans still currently monitor newly automated tasks like machine manufacturing or “robo” stock trading, CPAs and accountants will still need to monitor or review complex tax returns and audits, as well as analyze those exceptional situations that often occur in accounting transactions.
“No AI software, at least to date, is fail-safe,” she said.
Perhaps more importantly, Schwartz added, AI will likely never usurp the CPA’s or accountant’s advisory role. Clients will still want their accounting professional to apply human context and experience to their decisions, she said.
But make no mistake, despite the stalwart staying power of the accountant’s advisory function, AI will dramatically impact the profession, Schwartz said. Today’s most visionary firms are already scanning the horizon for the newest technologies that will make their work easier and attract young talent (including future programmers who can design proprietary software) to their firms.
“Those who deny that technology will affect them simply won’t be competitive. Rather than avoid what’s coming, we want to show firms the potential impact of AI and introduce ways of thinking differently about it,” Schwartz said.
You might also be interested in
Deanna Arteaga is a professional freelance writer and public relations specialist who for the past six years has covered CPA industry trends for AccountingWEB. She also writes about CPA firm marketing, higher education and professional development for CPAs, and workplace trends in the accounting profession. She has more than 20 years...