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Most people have seen, or are at least familiar with films like Blade Runner, Terminator or even Wall-E. When watching such films however, now that artificial intelligence is no longer merely the stuff of Hollywood, these technological advances might also change the world of accounting
“New technology already plays a huge role in the finance industry, and it will only become more important” explains Bastien Francescato, manager of Michael Page Finance. “Look for example at the increasing number of companies that use Business intelligence tools to retrieve, analyse, transform and report data. That´s one of the reasons why the need for high level roles is increasing. Companies are looking for people who can analyse the data and think strategically.”
Accountants receive data, they process it (usually) into a computer system, the system takes the data and generates more data and instructions. These instructions may be to pay or issue an invoice with the rest of the data being fed into a variety of financial and management reports for review. These reports are then either filed or analysed to make decisions about the future direction of a business or product. This could sometimes mean the trends of that data may be repeated with different inputs or changed to reflect a change in the market. This is, of course, a very simplistic view of what a finance department does. Equally important to a finance or company leader is how can they do all this quicker, more accurately, with more insight and at a lower cost?
Artificial intelligence (AI) is an area of computer science that is focused on developing intelligent machines that can work and react like humans. The creep of automation through finance departments has been revolutionary but has always been dependent on the fixed instructions that were originally programmed into the tool. Artificial intelligence is being developed to add the capability of two new fundamental factors – learning and problem-solving.
Over the last twenty years specifically, technology has advanced at such a pace that many roles in an accounting department have disappeared – a combination of artificial intelligence and automation have the capability to take on many of the tasks a transaction led accountant would typically undertake, with little or no human involvement. The process is almost seamless, error-free and when there are mistakes the system has the capability to ‘learn’ from them so that they are not repeated. Reports can be generated and sent to the appropriate people with automated follow-up and escalation if required.
Another crucial part in accounting is audit. Historically, a junior auditor may have been sent out to the back of beyond to count inventory - unpacking boxes, climbing ladders and asking supervisor upon supervisor where they may find a particular part or piece of equipment. These mundane tasks are now becoming more sophisticated, with the big firms testing drones that use artificial intelligence and image recognition to analyse information and automatically upload and relay this data back to a head office. Major accounting firms are all investing huge sums of money as the market continues to become more competitive and regulators take a harder line on failures in the profession.
The challenge of economic survival is to not only accept these changes but to capitalise on them. The history books are filled with companies who failed to adapt. The failure of such companies to acknowledge and capitalise on changes in the way we operate is well documented. The same is true in accounting.
Artificial intelligence has its limits – it lacks reasoning and it lacks intuition and will always do so. Like self-driving cars, in this world of ‘someone is always liable’ there is always a need to have someone answerable should it go wrong. Accounts will always need to be reviewed, decisions will always need to be taken in context and whilst more and more data and analysis will be available, someone needs to determine exactly what needs analysing, what the underlying (intuitive) reasons are and given these, decide what should be done. I think it is fair to say that many of the repetitive day-to-day tasks will be taken over by AI and as a result, will allow the role of accountants to evolve to a more strategic and problem-solving position.
This all leads towards accountants being needed in two distinct areas. The first being focused on process; ensuring the right procedures are followed consistently and then correctly flowed through the system to give a regular and accurate output. The second being those who will continue to be more and more embedded in business partnering roles, helping to take all this extra information that will be available and translating it into meaningful commercial insight.
The 2018 report “The Future of Jobs” published by the World Economic Forum, heralds the Fourth Industrial Revolution. In particular, it predicts a substantial change for white-collar workers as these technology advances become commonplace. Many of the most in-demand jobs today did not even exist 10 years ago, and looking forward, the report predicts that 65% of children entering primary school now will be working in roles that don’t exist today!
To conclude, accountants of the future will need to be systems literate, problem-solvers, commercially savvy and adaptable to change. Employers will need to support their finance teams in this transition as with so much more information available, the winners are likely to be those who are able to best commercialise this data.
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