It’s safe to say that artificial intelligence (AI) and automation have penetrated every industry out there. And accounting software is no exception.
According to Acumen’s report, the AI in accounting market is projected to reach a whopping $53 million in revenue by 2030. Businesses are clearly opening themselves up to the potential that AI has in streamlining operations, increasing efficiency, and reducing costs. However, the question remains: will AI eventually replace accountants and bookkeepers with automation?
The quick answer is, no — not any time even remotely soon. But accountants and bookkeepers need to understand both AI and automation in order to do their jobs as effectively as possible. Keep reading to find out more.
Understanding AI and automation in accounting
Before delving into the potential impact of AI in accounting, it’s essential to understand the role AI plays in modern accounting practices.
In modern accounting, AI is being used to automate several tasks, including data entry, invoice processing and financial statement analysis. Automation of these routine tasks has allowed accountants to focus on more complex financial analysis and strategic decision-making.
Bookkeeping is no exception, with AI aiding businesses in systematically addressing reconciling bank statements, categorising transactions, generating financial reports and more. All at faster rates and with greater accuracy, saving time while reducing chances for error all at once.
In addition, AI can also assist in fraud detection and prevention. By analysing large volumes of financial data, AI algorithms can identify patterns and anomalies that may indicate fraudulent activities — leaving the deeper investigation work to the accountants and auditors.
Another area where AI is making a significant impact is in tax compliance. With constantly changing tax regulations and complex calculations, ensuring compliance can be a daunting task, especially for businesses that operate in various countries (and/or have clients who do.) AI-powered tax software can automate the process of tax preparation, minimising the risk of errors and ensuring accurate calculations.
How likely is AI going to replace human accountants?
With all of the above covered, it sounds like AI can just replace entire swathes of accounting and bookkeeping departments altogether. But this is a misconception.
As valuable as AI is, it has its limits when it comes to efficient accounting.
AI and routine accounting tasks
AI is extremely efficient at performing routine accounting tasks, such as data entry and transaction processing. This capability allows AI to handle large volumes of data quickly and accurately, freeing up human accountants and bookkeepers to focus on more complex and strategic aspects of their work.
However, it is important to note that AI lacks the critical thinking and problem-solving skills that human accountants possess. Accountants bring a unique perspective and expertise to the table, enabling them to interpret financial data, provide strategic advice, and make complex decisions based on their experience and knowledge.
Furthermore, human accountants play a crucial role in ensuring the accuracy and integrity of financial information. They have the ability to identify anomalies, investigate discrepancies, and apply professional judgment to ensure compliance with accounting standards and regulations.
AI and complex accounting operations
Although AI is advancing rapidly, it still faces challenges when it comes to handling complex accounting operations that require judgment and expertise. Matters such as tax planning, auditing, and providing specialised financial advice are areas where human accountants excel.
Professional accountants consider various factors, including legal and regulatory requirements, industry-specific knowledge, and client-specific circumstances, to provide customised solutions. They possess the ability to analyse complex financial data, identify trends, and make informed recommendations that align with the goals and objectives of their clients.
Besides, human accountants bring a human touch to their interactions with clients. They can empathise with their clients’ concerns and provide personalised guidance and support, which is particularly valuable in sensitive financial matters.
While AI can undoubtedly enhance the efficiency and accuracy of routine accounting tasks, it is clear that human accountants will continue to play a vital role in the field. The combination of AI’s automation capabilities and human accountants’ expertise and judgment can lead to more effective and comprehensive financial management for businesses and individuals alike.
Breaking down ethical concerns
As AI continues to advance in accounting and bookkeeping, it’s crucial to address ethical implications. Decisions made by AI systems may not always align with human moral values and may raise concerns regarding privacy, data security, bias, and fairness. Human accountants and bookkeepers play a vital role in ensuring ethical standards are upheld and maintaining accountability.
On top of that, the ethical considerations extend beyond technical accuracy. Human accountants are trained to identify and address potential biases that may arise in financial reporting. They can critically analyse the data and challenge any assumptions or inconsistencies, ensuring that the financial information presented is reliable and unbiased. This level of scrutiny is essential in maintaining the integrity of financial reporting and upholding the trust of stakeholders.
So… what is the future of accounting and tech?
As AI continues to evolve, it is crucial for accountants and bookkeepers to adapt and stay ahead of the technological curve.
Upskilling for an AI-supported accounting industry
Accountants and bookkeepers need to stay updated with the latest AI technologies and acquire new skills to leverage its potential effectively. Developing expertise in data analysis, predictive modeling, and AI implementation will ensure accountants remain valuable contributors in an AI-driven accounting industry.
The role of accountants in an automated world
While AI can automate routine tasks, the role of accountants will shift towards more strategic advisory roles. Accountants will be required to use their expertise to interpret data, provide financial insights, and make informed business recommendations based on client goals and objectives.
As AI becomes more integrated into the accounting field, accountants will have the opportunity to explore new areas of specialisation. For example, they can focus on developing expertise in AI auditing, ensuring that AI systems are transparent, ethical, and compliant with regulatory standards. This specialised knowledge will be in high demand as businesses increasingly rely on AI-driven accounting systems.
How we at Dext are preparing for the future of automated accounting
Accounting involves more than just crunching numbers. Human accountants possess soft skills such as communication, empathy, and critical thinking, which enable them to understand the needs of clients and provide a personalised approach to their financial challenges.
They also have limited time and resources to wholly dedicate themselves to every single aspect of accounting and bookkeeping. With the right AI solution, businesses and accounting firms can bridge the gaps that come with modern accounting and bookkeeping by optimising how their work gets done without having to cut down any valuable manpower.
That’s what we at Dext set out to accomplish for our clients. Our market-leading solutions utilise best-in-class AI technology that makes accounting and bookkeeping faster, more streamlined, and more accurate. All so that your teams have more time to spend on decision-making and strategising.
We’ll let our technology speak for itself: start a free trial today.