You see your trusted accountant each spring, ensured that your taxes are in good hands year in and year out. Accounting is a respected profession that spans all industries—but could this soon be a bygone era? With talk of automation in accounting, could you be turning your taxes over to robots before you know it?
We spoke with experts on artificial intelligence, machine learning, automation and accounting to get some answers. Could AI accounting become a reality? Are accounting jobs at risk? Keep reading to learn more about what’s to come for accountants in the age of artificial intelligence.
The complicated relationship between technology and the workforce
Technology threatening jobs? It’s anything but new.
Technology has had a historical pattern of both ending and creating jobs. A few hundred years ago, railroads created more opportunities to sell goods to consumers. Today, the infiltration of computers created an entirely new set of office jobs that never before existed.
However, technologies have also displaced workers: Cashiers are being replaced with self-check-out stations. Farming technologies decimated agricultural occupations—in the 1800s, 80 percent of the U.S. labor force worked on farms, and today it’s two percent.
Which jobs will be next? The University of Oxford released a study outlining their predictions: Forty-seven percent of US jobs could be lost within 25 years due to advancements in technology. Could accounting be the next career to succumb to automation, AI or robots?
AI accounting: Inevitable or unrealistic?
With 1.3 million accountants practicing in the U.S., losing this position to automation would pack a serious punch to the workforce. But the industry is already embracing forms of AI and automation. Smacc, a startup using AI to automate accounting, is gaining traction. The accounting software firm, Xero, is launching a machine-learning system to categorize invoices, and more and more accounting firms are adopting AI, at least in some capacity.
AI can help in accounting by streamlining operations, saving time and money and increasing efficiency. It’s also gathering and processing data; learning how to organize different types of information through machine learning. Because of advancements in administrative capabilities, accounts payable and accounts receivable roles are becoming infiltrated by AI.
Could AI in accounting actually be a positive thing?
Perhaps accountants shouldn’t begin to sweat. AI accounting could be a blessing in disguise. With repetitive, simplistic tasks becoming automated, accountants could be freed up to tackle more complex issues. For example, data collection could become automated, while accountants focus on the interpretation and implementation of the data.
Bank reconciliation, accounts payable and expense management will also become automated, according to Accounting Web. Some other accounting tasks that could be taken over by computers include: Auditing expense submissions, clearing invoice payments, assessing risk, calculating analytics, categorizing invoices and more.
But there are some things computers simply can’t do. Accountants hold a number of strengths over AI—their creativity, their critical thinking and their decision-making skills in business. Accountants also hold the power of building trust and relationships with clients.
What's in store for the future of accounting?
So, will robots or AI replace accountants?
“The short answer is that they already are. And they will certainly replace more and more of them,” says Kentaro Toyama, Professor of Information and author of Geek Heresy: Rescuing Social Change from the Cult of Technology.
“Software systems, such as Intuit's TurboTax, have certainly taken away portions of the job that accountants used to do,” Toyama says. “Many accountants themselves use tax-filing software, which means that some part of what they used to get paid for is going to software companies.”
Toyama believes this trend will continue to expand past tax duties to digest ambiguous information and make subjective judgments. But that’s not to say that all accounting jobs will be threatened.
High-end, higher-skill accounting positions, will still be occupied by people for the foreseeable future, because of the complexity of the decision making they require. Even the positions that move toward automated work will need human accountants to oversee strategy, balance business goals and ensure ethical guidelines are being met, he adds.
Gabe Lumby, who has an accounting practice serving the bookkeeping, payroll and tax needs of small businesses, thinks AI will affect accounting in a different way—through the commoditization of the service.
“I think as AI continues to advance, the purchasers of accounting and tax services—businesses and individuals—will continue to view the service provided as a commodity. If all CPAs in your town prepare the same tax return with the same end results, consumers are going to make the choice of whom to hire based on price,” he says.
“With the current tech that is already available in 2017, it is becoming easier and easier to provide accounting services. I don't think the accounting industry is going to disappear due to robots/AI, but I do think the profession is changing rapidly and being commoditized very quickly.”
Embrace the inevitable
Like every industry, technology is sure to make its mark in accounting. Whether streamlining tasks, filing taxes or automating repetitive duties, AI accounting is no longer a thing of science fiction—it’s on the horizon and is trickling into everyday life slowly.
There’s no telling how soon these changes will take effect in accounting jobs, or even how big the changes will be. But rest assured, human accountants will be needed to oversee any technological adaptations to the field. In fact, the profession is projected to grow faster than average in the coming years.
Accounting is a large field—and taxes are only part of the equation. Learn more about all there is to this field in our article, "9 Types of Accountants Who Do More Than Just Taxes."