seven changes ai brings to accounting

look at the future that lies beyond the hype.

by hitendra patil
rise of the aiccountants

accounting, as it existed until now, is ripe for a makeover.

more: humans beat ai in some aspects | why accountants should embrace artificial intelligence | ai brings opportunities for accountants | seven things you must know about ai
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this is not a doomsday prediction for the accounting profession. on the contrary, it is just a confirmation of the golden era of accounting that is about to come.

and artificial intelligence will be the driver leading the metamorphosis.

the what

before we get into why ai can do so, let us touch upon the likely “what,” i.e., what can happen because of (more) ai in accounting.

1. shoeboxes of receipts – no more

“source documents” were being entered into accounting and tax software. then cloud gave rise to “data imports,” “bank feeds,” etc. ai will only enhance automation. as data “moves between systems,” the cycle of transaction-> data -> paper (bills/invoices) -> data-paper (financial statements) will break. data-to-data will reduce the need for printed receipts and bills (hence costly data entry). the impact? ai will make accounting more accessible to small businesses and individuals, i.e., they won’t find the cost of accounting to be prohibitive. (will that increase the total addressable market size for accountants?)

2. data drudgery – no more

as data moves more freely (accurately and securely) between systems, the need to manually enter data into various systems will minimize. straight-through processing at the day-to-day accounting transaction level was too cost-prohibitive, but ai will address that problem. the dreaded data drudgery will go away. ai will dramatically decrease the need for manual data entry and processing.

3. messy books – no more

as accurate, secure, permitted data movements between systems become more prevalent, erroneous entries in the books will significantly minimize. it will be harder to create a “mess” in the books! ai will lead to a greater emphasis on data quality (and hence governance as well). as clean(er) books get more and more auto-created (and auto-reconciled), accountants will have more opportunities to apply their expertise and judgment to the business situations of the clients.

4. dollars for hours – no more

as the reduction in most time-consuming data handling work makes way for accountants to apply their expertise to client situations, ai will enable accountants to focus on more strategic and analytical tasks. accountants won’t (be able to) charge for “hours taken to analyze.” instead, they will charge for the impact of such analysis. (will value pricing become easier to implement?)

5. accounting reports in exchange for a fee – no more

now, with all that data handling by ai, clients can generate (and better trust) their own reports when they need/want. can one sell what clients themselves can do? accounting reports are not what accountants will (be able to) charge for. ai will increase the importance of human professional judgment in accounting work. that professional judgment will be the new (chargeable) superpower of accountants.

6. audit sample – no more

don’t be surprised if there comes a day when there are systems that keep doing real-time audits, not of sample data but all data. the days of collecting an “audit sample” will be history. instead, the focus will shift to auditing to connect the dots between “business purpose-business operations-compliance-esg-business outcomes.” ai will transform the audit process, making it more efficient and effective.

7. traditional accounting jobs – no more

as (what we now believe is) “accountants’ work” metamorphoses, so will change traditional accounting jobs. ai will create new types of job roles and opportunities within the accounting profession.

the why

do the seven whats mentioned above seem like an astrological prediction?

ai is based on science and the application of that science to human work. therefore, everything will make perfect sense when you learn what ai is and how it is created, learns and works. you can then envision many more transformations coming to the profession and your work.

the metamorphosis will be much easier to understand and foresee when you get past the “ai tools hype” and get a solid understanding of the fundamentals of ai, especially when it comes to the application of ai in accounting work.

the when

when are these transformations likely to manifest? for starters, they are already in the making in some form or shape within your technology solutions. with time, such ai-powered functions will become more powerful. it will not feel like an overnight apocalypse, provided you are keeping yourself abreast of the progress of ai in the accounting profession.

posted on january 21, 2024