When discussing artificial intelligence (AI), many accountants have asked the fundamental question: Will AI replace me and threaten my practice or the firm I work for?
A variant of this question has existed since the beginning of the personal computer. For example, before AI, questions arose about whether computers would eliminate accountants.
Here’s the simple answer: AI will not eliminate you, but your role will change.
Think about the impact of Intuit and Microsoft Excel on accounting. Even then, some doomsayers predicted the end of accountants. But you’re still here. Moreover, after overcoming any initial skepticism and learning curve, many fearful accountants could be heard muttering, “How did we do this before we had the software?”
There are several changes that AI will bring about, but the most significant is the reduction of repetitive tasks. By automating many drudgery-filled duties like data entry, tax returns and banking, accountants will be able to become more strategic in their analysis. Becoming a strategic partner should increase your value to the CPA-client relationship.
An AI Primer
Think of AI as programs under the umbrella of computer science that can analyze a staggering amount of information at “lightning” speed using predesigned rules, algorithms and patterns. AI is “systems or machines that mimic human intelligence to perform tasks and can iteratively improve themselves based on the information they collect,” according to Oracle. Simply put, AI via computers or robots can replicate the work of humans.
AI and Accounting
The Bureau of Labor Statistics predicts 7-percent growth for accountants and auditors between 2020 to 2030. That suggests more work (and clients) for accountants.
By automating tasks, AI can drastically reduce the time needed to finish everyday tasks that we have mentioned. For example, if you (or an assistant) only spend one hour per day committed to mundane work, instead of the usual three to four hours, you have freed up time for other projects.
The AI thrust is toward creative and strategic thinking. Less time spent doing or directing these tasks could create a window for an accountant to spend more critical (and billable) time on the tax code. AI could even help analyze summaries provided by the IRS or the American Institute of CPAs (AICPA) and the updates that your software will presumably incorporate.
There are two other significant AI benefits. First, it will probably allow you to accept more clients without automatically adding to human staff. This is a substantial financial incentive. Second, the possibility of billing for your time and robotic time is even more exciting. (Yes, I know an accountant who boasts about this.)
Accountants can also anticipate with a reasonable degree of certainty that AI could result in a positive unintended consequence: You might find yourself a little less stressed out during tax season.
A View to the Future
Some of my accountant clients ask me: “Anthony, what’s your take on AI?” Here’s my answer:
- Remain current. Every profession urges practitioners to remain current. However, when applied to AI, it’s more than a platitude. You must be ready for changes, and accountants must stay current with technologies, including cloud computing, blockchain technology, big data and the Intelligence of Things (IoT). The intelligence of things (not the Internet of things) refers to integrating interconnected machines and devices with the software used.
- Embrace learning. We’ve always paid a certain amount of lip service to being the perpetual student. Now, you might drown if you ignore this axiom. You don’t have to overwhelm yourself with emerging trends, but several reliable sources are necessary.
- Look for the opportunity. Ask yourself this fundamental question: Is there an area of my practice I can now service because of AI that I refrained from in the past?
Maintaining and Protecting Your IT System
Supporting your IT operation will become more critical than ever before. This is not a self-serving analysis. IT is the umbrella under which your entire business operates. You must ensure its smooth operation remains current with changes and constantly protect your business from bad actors who might invade your network. Time has always been money, but now that truism has even more validity as reliance on IT and IA continues to increase.