AI in Accountancy | Reshaping the Accountancy space

It’s no secret that artificial intelligence (AI) has stormed the nation over the course of 2023. Professionals in our network are speculating how this might impact the accounting world and there’s been much discussion as to whether AI could potentially replace accountants altogether.

To ease your worries, we’ve explored how AI is likely to affect the accounting industry, as well as what we can expect from recruitment over the coming years.

Understanding Artificial Intelligence:

While the term ‘artificial intelligence’ has long induced ‘automation anxiety’ among accounting professionals, it’s essential to grasp its essence. Among its various applications, ‘machine learning’ stands as the most pertinent to accounting. This facet enables computers to identify patterns, create rules based on these patterns, and refine these rules through feedback.

Machine learning is not new to our society. In fact, it’s something that we’ve likely all experienced. For example, Amazon uses machine by analysing the data from your product views and purchased items to be able to identify and suggest other items that you may like based on this data.

How will AI impact junior finance roles?

According to Medium, rather than replacing junior finance roles like accounts payable, AI is poised to reshape them. As AI systems evolve and infiltrate the accounting sphere, there will be an augmented demand for junior accountants proficient in these systems. The emerging roles will blend financial expertise with technological acumen, involving tasks such as supervising AI systems, verifying results, and handling complex financial scenarios.

With accounts receivables, AI can streamline tasks like matching payments to invoices and rectifying simple invoicing errors.  In addition to this, AI can also automate applying cash to open invoices.

This automation can liberate time for professionals to focus on more complex disputes and maintaining crucial customer relationships, whilst ensuring greater efficiency.

How will AI impact mid-senior finance roles?

Moving beyond junior roles, AI’s impact extends to mid-senior positions like management accountants. The integration of AI facilitates automation of manual tasks such as data entry, reconciliation, and reporting. This allows accountants to allocate more time to strategic and analytical responsibilities, leveraging data analytics for comprehensive financial insights and informed decision-making. We’ve listed some further insight below:

  • Automation streamlines manual processes like data entry, reconciliation, and reporting, freeing up accountants for their roles that require human touch, such as strategic and analytical responsibilities.
  • Data analytics facilitates swift and comprehensive analysis of vast data sets, granting accountants a holistic view of financial performance. This enables trend identification, predictive insights, and informed decision-making.
  • AI automates functions like forecasting, budgeting, and risk management while generating novel tools for better decision-making.

It’s worth noting that in financial planning and analysis, machine learning helps data for making predictions. But the quality of the data used and any biases in it can affect how accurate these predictions are. Accountants doing this kind of work need to be careful about the data they use for their predictions.

What are the advantages of AI in accounting?

Human errors often creep into our work, whether that’s because we’re feeling distracted in the office, or we’ve lost some sleep. AI can shine here. Unlike us mere mortals, it doesn’t experience these issues, meaning that this technology can ensure impeccable accuracy in repetitive tasks. Furthermore, AI has the ability to discern patterns that might elude human detection.

For these reasons alone, AI can be a total game-changer that empowers accounting professionals, enhancing both your efficiency and insight into data sets. AI can help streamline accounting by automating tasks, resulting in significant time saved. Time consuming processes such as bank reconciliations and invoicing can be automated, allowing accountants to redirect their precious time to juicer projects including client relationship management and strategic decision-making.

What are the pitfalls of AI for accountants?

AI systems, intentionally or not, can exhibit biases that have the potential to  lead to discrimination against specific groups, or compromise the accuracy of financial reporting. Take, for example, a project focused on developing an AI system for automating financial reporting.  In such a project, AI bias may emerge due to historical data disparities, perpetuating unfair financial outcomes. Moreover, the AI algorithms might inadvertently prioritise certain factors, impacting the precision of financial reporting. So although AI can be a great help, a human touch is still required to have a final say.

Moreover, the best AI systems can be seen as a substantial financial investment, making it unattainable for some businesses. Additionally, a successful AI implementation relies on high-quality datasets. Some CFOs might lack confidence in their data accuracy, which can hinder their decision to embrace AI. The accuracy of AI algorithms are dependent on the quality of data they are inputted with, which, if incorrect or inconsistent, can lead to unrealistic expectations and substandard performance.

How will AI affect the accountancy job market?

In the evolving accountancy job landscape, the surge of AI will set the scene to restructure roles and skill requirements. As AI streamlines routine tasks, there may be a shift towards more analytical, strategic, and tech-proficient professionals. Accountants may witness a growing demand for expertise in AI implementation and data analysis, prompting a continuous need for upskilling and adaptability. Ethical considerations will gain prominence, while efficiency gains will create new opportunities. Collaboration between accountants and technology will be pivotal for leveraging AI’s potential in financial analysis and decision-making. The job market may depend on blending traditional accounting with technological awareness.

How can we embrace AI in accounting?

According to ACCA Global, accountants ‘need not worry’ about these new technologies but they do need to start thinking about how AI can complement and streamline their work.

For those considering integrating AI into their accounting practices, it’s important to remember that change doesn’t have to happen overnight. A strategic approach can yield benefits.

Here’s an idea on how you can make the transition:

  • Identify the pain points and current processes in your accounting workflows that could benefit from AI, particularly focusing on repetitive tasks like data analytics.
  • Research and select an AI system that aligns with your business, considering factors like ease of use, integration capabilities, and affordability.
  • Educate your team on the value of AI in terms of time savings rather than job replacement, garnering their support for the transition.
  • Consider piloting AI initiatives to measure success and determine whether a full-scale implementation is warranted.

Like other technologies, AI can assist accountants to further develop their professions. But it doesn’t replace human expertise or the relationship building skills which are vital in accounting.

Meet the team

Looking to navigate your next strategic move in the dynamic world of accountancy, or eager to fortify your team with exceptional talent? Reach out to our team below:

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