The battle of robots and accountants with a side of statistics
We dove into the deep end of all things artificial intelligence and how it relates to the world of accounting. We analysed industry statistics to determine the question everyone is asking, will robots take over accountants jobs?
An introduction into AI and Accounting
As we head into the future, terms like Artificial Intelligence, Machine Learning and The Metaverse will start to become terms that we use in our everyday language that most of us will understand or at least have a small grasp of. The technology in our world is forever improving and developing at a fast rate however, will this compliment our current world or lead us into a futuristic utopia that we aren’t ready for?
The biggest headlines in the technology and finance world today all surround the idea of whether will AI take over accountants’ jobs or not? Will there be a need for accountants in the future? Before we dive right into the evidence let’s discover the surface of the relationship between AI and accounting.
Artificial intelligence allows machines to operate close to the way that humans do in the way that we solve problems and think. By copying human behaviour AI can perform all the necessary tasks that are needed and can develop information at a fast rate which provides a quick and accurate output. That’s why such a close parallel has formed between AI and accounting as it is an industry that has processes that can be mimicked by machine learning.
Artificial Intelligence in the accounting market is currently predicted to grow at a compound growth rate of approximately 45% and is expected to reach approximately $16 billion by 2028. AI software alone will reach $62 billion just in 2022 which makes it one of the fastest-growing industries in the tech world.
Is AI really the enemy?
When we talk about robots taking over accountants’ jobs we don’t necessarily mean R2-D2 taking a look at an income statement, we haven’t quite reached that level…….yet. When we mention robots we are most likely talking about software and machines that complete tasks that would usually take accountant hours to do, whilst it might only take artificial intelligence 5 seconds. However, some studies suggest that AI in accounting will turn the industry into a feeding frenzy for dismissals due to the replacement of human skills.
Experts forecast that approximately 800 million jobs could potentially be replaced with the technology of AI by 2030. A study conducted by Semrush revealed that 38% of employees expect their job to be automated by next year with 13% expecting AI to completely eliminate their position entirely. The Committee for Economic Development of Australia predicts that AI will cause 40% of Australian jobs to disappear by 2025.
Accountants across the country have developed a fear over their billable hours being impacted by AI as it would cut down over half the time it could take to do time-consuming tasks. The head of ICAEW’s IT Faculty, Richard Anning explains the situation, he says, “if you’re looking at some of the more repetitive bookkeeping or process-driven tasks, those are more likely to be subjected to automation than the higher value tasks” he goes on to say, “automation is occurring at the staff level, but it will creep up the corporate ladder and begin to automate higher-level accounting jobs”. Apart from potentially taking over accountants positions, there are other elements to AI that may negatively impact the way in which we work.
If we solely rely on AI to implement our work and entire systems there is no human backup assistance available if an AI system were to be hacked into or attacked. On top of that, by introducing these so-called ‘robots’ to replace human work we are taking away the human touch and customer service that we often need to create an experience for our customers.
Taking a look at the bigger picture
If we step back and look at the bigger picture we may notice that the role AI plays in the accounting industry may not be as scary as you think. Businesses will always need accountants, someone needs to analyse and interpret the AI data as well as continue to consult clients and customers.
Sage accounting recently conducted a study around AI and accounting in which they found that 22% of accounting firms said that AI improved business operations and help in automating tasks and a further 50% of accountants plan to use accounting automation solutions. They also found that for 35% of accountants, advancing their accounting technology helps with keeping pace with their existing clients’ needs and expectations.
With AI being able to complete accounting functions such as payrolls, audits and tax preparation it is only inevitable that more agencies will adopt AI in the near future which opens up more opportunities for accountants to add new roles and services within their businesses.
Semrush recognises that incorporating AI into accounting provides opportunities such as, reducing operational time, reducing human error, having a greater business insight, enhancing productivity, automation of rote tasks and having more time to improve customer service.
Although the future will replace some roles within the finance sector, incorporating artificial intelligence into accounting spaces will create an opportunity for new roles such as people with AI automation and machine learning knowledge that also have a financial perspective. As a result of these new and improved roles, studies say that salaries could be set to increase by 20% due to the lack of people being qualified within this area of expertise.
CEO of FloQast (accounting software) Michael Whitmire explains that if small firms do not adapt to the changing time there is a huge danger of being left behind, especially when we are expecting 35% of skills to be different in the near future. By incorporating AI into accounting practices, accountants believe that it could save them as much as 10 working hours a week and potentially unlock up to $119,000 of additional revenue, declared in a survey by FreeAgent.
Similarly, the ATO has recently estimated that up to $28 billion can be saved within the next ten years by using AI to complete e-invoicing systems and Vanguard Systems believe that on average AP (accounts payable) automation will pay for itself within 6 to 18 months. Although it feels like the majority of accountants are opposed to working with artificial intelligence, we can see that there are still a large number of firms and accountants who are ready to trial this new technology.
Sage’s Practice of Now Report investigated the relationship between accountants and potentially working with AI in which they found that 66% of accountants would invest in AI and 55% plan to use it in the next 3 years. Accenture, The New Face of Wealth Management also found that 68% of wealthy clients preferred having access to both a human advisor and a robo-advisor instead of just one or the other.
So what will accountants’ futures look like?
As you can see there is a lot of fear speculating around the ideology of AI being filtered into the accounting world however, if we take time to look at the bigger picture we can see that this new technology is an opportunity to improve accounting functions and processes rather than a robot who will be replacing your role.
Matthew Addison, the chair of the Council of Small Business Organisations of Australia defines this situation as ‘augmented intelligence’. He explains that accounting will look like a human being involved in using the best-of-the-breed software to achieve an outcome more efficiently. Instead of just AI or just human intelligence both forces will be integrated to increase quality, improve efficiency and provide superior analysis of data for clients, every industry no matter how automated it will become will always have a need for humanity elements. Working alongside this new technology will provide contemporary roles within accounting firms and although yes, multiple roles could potentially be replaced, many jobs that accountants will be doing within the next 20 years will not have been invented yet.
With AI in the accounting market expected to grow at an increasingly high rate and technology catching up to human intelligence, it would be beneficial to adopt artificial intelligence to stay relevant within a changing environment and market.
As we’ve looked at the role of AI in accounting under a microscope it is now recognisable that we aren’t looking at a war between robots and humans; instead, the future of accounting will be an ideal blend of artificial intelligence and human intelligence to create a more efficient way in which accountants work. Machine learning, artificial intelligence and human intelligence will all work side by side and change the way accountants audit, analyse data, analyse financial statements and financial data.
So if we look back at the question “will robots take over accountants’ jobs?” I think it is safe to say that in some way it will replace some processes and accounting functions that accountants undertake, however the adoption of artificial intelligence will create new advanced jobs that will require new skills and experiences, it will cut down hours of work which creates more flexibility for accountants to work on other tasks and potentially unlock additional revenue.
We live in a time where we should no longer be scared of technology, we should be celebrating how far we have come and integrating it into our everyday lives, most people use it already and don’t even know!
So, how will you be integrating artificial intelligence into your life?