In years much older than the one which I was born, the old natives of the Gulf of Guinea must have thought that their cross-country water body; River Niger, was never going to be intersected. It’d flow from their bosom down to the Atlantic, pure, no coalition. The same could be said about the Plateau natives, who might have thought their River Benue was going to flow free of disturbance. Well, as fate would have it, both independently existing water bodies have collided and now go down the same path, diffusing into each other daily. This is the 21st Century and the same metaphorical analysis can be used to describe the state of the Accounting Profession and Artificial Intelligence. Technology is eating deep into every sector. The world of numbers and checkbooks is not immune. Whether AI is the River Benue and Accounting the Niger, or I’m just being too metaphorical, one thing that’s definitely not a metaphor is that the confluence has occurred. AI has entered the Accounting sector; it’d keep going deeper and deeper.
However, this has stirred up the water of fear in the heart of many accountants who see AI as a threat to their jobs. Well, I know one thing the sure, if the confluence of the two great Rivers did not wipe off the existence of the latter, or the former, then the confluence of AI with the Accounting profession is not doomsday.
AI IN THE WORLD OF ACCOUNTING
In 2015, research carried out by Oxford University and Deloitte stated that the Accounting profession would be among the first professions to face drastic automation with over 95% of its tasks being handled by robots. Big firms in the business of accounting, taxation and auditing have embraced the implementation of AI for the execution of some day to day number-crunching activities. Firms like PwC and Deloitte, amongst others, have done well in incorporating the use of AI into their daily practice. Many traditional booking keeping and office administration tasks are now being handled by AI.
HOW AI IS USED IN ACCOUNTING
The inception of Robotic Process Automation (RPA) has drastically helped accounting firms to save time as auditing and contractual processing which would normally last months in the hands of the most agile humans, have been completed in few weeks. Tasks including initiation of payments and matching of customer purchase orders are now being handled by Accounts Payable and Receivable AI.
It might surprise you how efficient accountants would work when tedious tasks like data entry and categorization become purely automated. The automation of both tasks have optimized the rate of data process, hence, data is processed faster and more accurately. This has helped accountants to do more in the analysis of current financial trends rather than spend all day trying to do what an AI would do in minutes, hours at worst.
Jon Raphael, the Audit Chief Innovation Officer of Deloitte, in a recent survey stated that the company has implemented the use of AI tools with “natural language processing capabilities to interpret thousands of contracts or deeds”. In their words, “the technology can extract key terms and compile and analyze that information to perform risk assessment or other functions.”
However, that’s not all. Experts have prophesied that tedious tasks like auditing, tax remittance and payroll would soon become totally automated. This is because of their remarkable blend of speed and accuracy. Forbes, commenting on the future of AI in the accounting profession, stated that AI is now being enhanced to look through highly complex and intricate contracts.
WHY AI IS NOT ‘DOOMSDAY’
The impact of AI in the accounting profession cannot be swept under any rug, as its lump would still be mountain-sized! Bigger firms like Deloitte and PwC have topnotch efficiency and services. Definitely, it’s not because they have the best professionals and staffs, but because these professionals are performing real business management and client based tasks while their computers handle the basics. Some of the reasons why AI should be embraced in the accounting profession include:
- TIME MANAGEMENT: Yes, AI saves time. Time span for tasks have been seen to drastically drop from months to weeks, weeks to days, and days to hours. If accountants would like to get more done in less time, the services of our metal-head friends cannot be evaded. Also, while machines handle time consuming tasks, this can allow professional focus on business management and building stronger client relationships.
- REDUCES COSTS: Objectively, every company wants to get more for less. More profit, less expenditure. More clients, less staffs which means less costs. A machine can replace a whole department of workers, do their job faster, more accurately, without any need to take a wazz, take a break, or go on a vacation. Definitely, the cost of maintaining a machine can never match that of maintaining a human.
- INCREASES PRODUCTIVITY: With machines handling the time-consuming tasks, the role of the accountant can take a new turn as professionals would have more time to focus on market productivity. Time can be invested in bringing and implementing new business ideas. The intellectual aspect of the job will blossom too. The accountants can also dedicate more time to their advisory roles. Clients have a higher tendency to receive better business enhancing advice from accountants who are not worried about a stack of papers on their office desk.
- REDUCES BUREACRACY AND REDUNDANCY: The unnecessary time spent in awaiting a go-ahead from a superior, or a department head, which at the end delays getting the job done can be evaded with AI. Also, the collation of every psychological, emotional and physical factors that causes redundancy in humans are absent in robots.
- ACCURACY: This is indeed one of the most relevant reasons why the accounting profession needs to incorporate the use of AI. Myriads of time, we see how a well-balanced sheet loses its balance because of the omission of a single digit. This can be quite frustrating. If such document had been made public, such mistake can be spotted and this can make a company lose its credibility and repute. Machines have a 99.999% mistake proof system. Hence, it seems to be less prone to making mistakes.
Professionals have a function of oversight. Practical tasks such as business management, client counselling, hiring and firing, business administration, market innovation and development are strictly human based. Machines might be doing our number counting for us now, but it’d take another 20 years, if not double before we see a Business tycoon or company C.E.O who would like to take business advice from a XR270 Robot. If by then, there’s any that can.
By TEMIDAYO V. Olalekan
Content Writer, DigiLaw