Artificial intelligence (AI) is entering the everyday lexicon as products as diverse as cars and fridges often now employ some form of AI to support their functions.
In fact, there are very few areas of commerciality that are unaffected by the phenomenon, and the venerable practice of accountancy is no different. This industry that has been around for hundreds of years, must change with the times, just like any cutting edge tech sector, if it wants to stay relevant. Global research from software provider Sage, showed that 96 per cent of accountants are confident about their future roles, although 68 per cent see that role changing due to automation.
It is clear that accountants must study how they can use AI, fully accepting that it will alter their business model. Understanding exactly where AI can improve a practice is key to this, because it allows accountants to leverage the technology to their advantage and ensure competitors don’t gain an edge with potential clients.
Communication with clients is one major area that AI can help with. Chatting via Facebook Messenger or using WhatsApp and Skype is part of everyone’s daily life, so progressive accountants should offer something similar to their clients. Major accounting software vendors have jumped on this disruptive trend already, with companies like Sage, Xero and OneUp introducing accounting chat bots for entrepreneurs.
Elsewhere Optical Character Recognition (OCR) technology is being used to great effect to commoditise audit and bookkeeping work, allowing handwritten or printed receipts or invoices to be uploaded directly into accounting systems. Intelligent software is also being introduced that helps clients to adhere to complex tax or anti-money laundering laws, absorbing a variety of jurisdictional regulations and using machine learning to apply that to different circumstances experienced by clients.
This streamlining of accountancy services is all very well, but it naturally reduces the cost of those services in a more competitive, less labour-intensive market. How then does an accountancy practice remain profitable?
One view is that AI has less relevance to the consultancy and strategy arm of accountancy. Just as the large multi-national practices have split out their business consultancy arms, smaller accountants may have to do the same. Using AI to free up headcount from other areas of the business to focus on strategy consultancy may be a smart move, since this relies on experience and inter-personal relationships as well as number crunching.
The following discussion between IR Global accountancy professionals, examines how a positive vision for the future can be achieved, if accountants are willing to embrace AI, then leverage it to build out other, more lucrative, areas of the business. We look at the actions accountants should be taking right now to modernise, and debate how this phenomenon will develop further during the next decade.