It wasn’t long ago that cloud technology was emerging as a potential disruptor to the accounting profession. In the beginning, many didn’t foresee that cloud adoption would become so widespread, but now it’s becoming the standard and we’re looking at an even larger potential disruptor: artificial intelligence (AI) and machine learning.
As I’ll share at an upcoming session at AICPA Engage, we are at another inflection point in accountancy. AI and machine learning systems are already powering the technology we use in our everyday lives, and now, accounting technology companies are experimenting with and implementing them in their platforms.
A new report by Asian broking firm CLSA studies six sectors that will see material changes where AI and machine learning may cause some disruption, highlighting short-term growing pains in the tech and accounting professions. It says that while we won’t reach broad adoption of AI-powered systems without a few bumps in the road, truly capable AI will be “the most important development in all of human history.”
Machine learning systems have been making your life easier for longer than you might realize. Typing the beginning of a query into Google and having the remainder anticipated is a product of machine learning.
Suggestions from Netflix on what to watch next are also products of machine learning. When Facebook is able to recognize your friend in a photo you have uploaded, it’s another instance where machine learning has played a part.
In cloud accounting platforms, machine learning systems are already working in the background. Accounting technology companies like Xero and its competitors are applying machine learning principles to defeat the challenge many nonaccounting-savvy small business owners face in areas like coding transactions to the correct chart of accounts codes. The machine learning system is educated each time an accountant corrects errors in their clients’ files.
When the small business comes to create their next invoice, account codes are automatically suggested so the client doesn’t inadvertently make a mistake; in turn, saving the accountant valuable time cleaning up these errors. Roles in accountancy outside of client advisory services are already seeing change as well.
The Economist reports that AI-based systems are cutting the hours it used to take lawyers and loan officers to review contracts in the finance industry. Last year, JPMorgan Chase deployed natural-language processing software to sift through 12,000 commercial-loan contracts, reducing the time taken to do so by humans from 360,000 hours to seconds.
Assurance leaders at PwC envision a future where, with 100 percent of data available for analysis, as opposed to select samples, auditors will be able to study a business in its entirety. It’s only a matter of time before this technology is available in the accounting industry below the enterprise level.
CLSA’s report contends that a world where humans and AI are “bound together in a constant exchange of information and goals” is around the corner. By identifying the technology implementable in your firm that will help you, you can unlock more time to offer value-added services to your clients.
Remain up-to-date on technology developments to not only identify the best solutions for your firm but to be able to educate your customers when they come to you with questions.
Think of your practice as a business and productize your services. Part of this is building the soft skills and the analytical skills.
By learning how to interpret the data, whether it be from a mentor, experience on the board of a business, or attainment of further education or designations, you will be able to expand past services that will become highly commoditized to advisory services.
As we’ve said with cloud, with change comes opportunity. Advice is what has always set humans apart from technology, so start capitalizing on this defining trait today in order to be more efficient and successful.