AI everywhere: What accountants should know
Artificial intelligence will shake up finance work, but there’s time to prepare
It seems as if there’s a new gadget or new app coming at us almost every week. But of all the new technology trends coming our way, artificial intelligence is the one that will have the most impact on accounting.
That’s according to Bernard Marr, author of Data Strategy: How to Profit from a World of Big Data, Analytics and the Internet of Things. He sees significant changes ahead. “Accounting is full of manual tasks, such as computing calculations and verifying data from spreadsheets. By using artificial intelligence, these tasks can be completed faster and more accurately than by hand,” Marr said. “This will allow accounting firms to be more efficient and deliver insights in real time, which helps firms be more competitive in the market.”
While AI will bring change to virtually every industry, it’s poised to provide many benefits specific to accounting. Among those benefits are AI’s ability to process large volumes of data much faster and more accurately than humans can and to identify patterns in data that people would likely not be able to detect. (See this CPA Insider article for more.) Machine learning, a type of AI, also brings down the cost of handling all this data, which can help firms do more.
Gartner, which recently released its annual list of 10 strategic technology trends that will have the biggest impact on organizations in the coming year, predicts that within a few years AI, which topped its list, will be integrated into almost every mobile app, browser-based application, and service. For CPAs, specific tasks Marr predicted will be automated by artificial intelligence include expense submission audits, reconciling invoices, risk assessment, analytics calculation, bank reconciliations, and automated invoice categorization.
However, Marr said that CPAs need not worry about losing their jobs to AI. He predicted that AI will not replace humans in accounting, but rather will automate repetitive tasks. “CPAs can then focus on areas that only humans can do, such as think strategically and offer the human perspective,” he said.
By embracing AI instead of fearing its impact, CPAs can better position themselves to lead their organizations through the transition. Marr recommended identifying tasks and processes where AI can add value, allowing people to focus on the inherently human aspects of the field. CPAs familiar with the technology will be poised to work alongside AI for the best result — the combination of automation and human insight. Additionally, CPAs can prepare by focusing on building their strategic thinking skills, which will become even more valued in the future.
“In five years, the field of accounting will look totally different thanks to artificial intelligence,” Marr said. “CPAs and organizations that prepare for and embrace the technology will have the competitive edge for the future.”
These dramatic shifts provide significant challenges and opportunities for college accounting and finance students looking to graduate in the next two to four years, according to Sean Stein Smith, CPA, CGMA, DBA, and assistant professor at Lehman College in New York City.
“They’re in a great spot to be in the middle of all the action and growth that is coming to the accounting fields and business,” said Smith.
We spoke to Smith about ways that students can prepare for the “paradigm shift” that AI and emerging technologies are bringing to accounting and finance.
- Understand the current tools One of the best ways to prepare for the future is to be grounded in the present according to Smith. Pursue a solid working knowledge of the current tools, and the “power and functionality” of those tools, to develop a grounding in current accounting and finance practices. Emerging technologies are exciting but much of the foundational work of accounting is still done with tools that have been around for a long time.
“With all the buzz about AI, Excel is often overlooked,” said Smith. “Every company is going to be different in terms of the tools they have and how they use those tools, but having a root understanding of how those basic tools work is key.”
- Stay current on new developments: Technology is advancing so quickly, in so many different directions, that it is nearly impossible to keep up with all the advances. However, a broad understanding where the technology is going and how clients and businesses will use it, is a vital qualification for students, Smith said.
One way Smith recommended developing that literacy is to take 20 minutes a day to read one article a day about changes and advances in accounting.
“If you read one article a day on these trends, it will add up,” he said. “You’re going to put yourself in a great spot if you know the trends that are happening and are able to analyze what they mean.”
- Develop communication skills: AI and emerging technologies will replace a large portion of manual accounting work and that makes skills outside of accounting and finance “more important than ever” according to Smith. Technology will quickly produce vast quantities of information for clients and businesses, information they will need human help to interpret. Learning to analyze that information and communicate your insights by writing well and conversing intelligently will be an essential skill for future accountants.
“The top characteristics anybody would be looking for in a CPA straight out of college are do you understand accounting and finance, and are you able to talk about these issues,” said Smith.
- Learn how business works: As the accounting and finance industries move from “bean counters to trusted advisors”, new accounting professionals can bolster their the value by engaging with both the nuts and bolts operations of a business and a client’s life outside of financial numbers, according to Smith. He spent several years in industry before moving into academia.
“Understanding how a business works is key,” said Smith. “Any time I had a chance to work with operations I took it because I understand then more of how the business worked and I was able to offer better advice.”
For accounting and finance students soon to be entering the workforce, Smith recommended enrolling in institutional cross-training programs. If none are available, Smith advised students to be willing to volunteer to work on other types of projects that aren’t accounting related.
- Be willing to learn: The disruptive nature of technological advance makes forecasting the future difficult. No matter what the technological future holds, employers and clients will be looking for curiosity and an enthusiasm for new experiences. Flexibility and adaptability will be in high demand as the work of accounting and finance changes.
“If you are curious, if you are open to new things, there is going to be a lot of growth opportunity in both accounting firms and working in business,” said Smith.