Here is Why AI & Robots Will be Able to Replace Accountants in 2024

Artificial intelligence (AI) is making inroads in many industries and functions to improve productivity and efficiency at a reduced cost. A study by Oxford University predicted that by 2033, more than 40% of jobs would be automated.

Business process automation is a foregone conclusion when it comes to new-age businesses. From physical robotic processes to data recording to decision-making systems and predictive analysis, automation is evolving in its capabilities and application.

Finance and accounting, generally considered a specialist domain, is witnessing the fast adoption of artificial intelligence technologies. Though observers on the fence are betting on the loss or creation of jobs, the disruptive potential of AI invasion is much different than what is often projected.

Technology and Accounting

Till now, accounting as a discipline has gained much more from earlier technological advancements. Attempts at leveraging technology have been made time immemorial, from abacus to simple calculators, from the launch of digital spreadsheets (Visicalc) in the 1970s to the emergence of accounting software and ERP software.

Accounting and auditing have immensely benefitted from automated data recording that has enabled higher accuracy and completeness of record-keeping. Cloud-based accounting software has provided hassle-fee accounting, thereby saving time from manual data entry and reducing the scope of data recording errors. With these upcoming technologies, the complex procedure of accounting has not only been made easier but also a lot of time can be saved during the whole process. It would also be worthwhile to mention that the accuracy has improved by a lot as well. 

Accounting software of the new generation are not just passive data recording instruments but are active participants in invoicing, transactions, reporting & real-time data recording and updates. The software also integrates international payment systems and updates bank records resulting in quick bank reconciliation and that too, with one hundred percent accuracy. Technology has freed accountants from repetitive & mundane tasks.

As a result, the routing and traditional tasks are taken up by technology, and accountants have more time for insightful analysis and interpretation rather than just “recording, compiling, categorizing, and summarizing of data.”

Building upon evolving capabilities, the accounting software integrates various financial functions. It delivers a comprehensive financial ecosystem for a small business that helps both accounts save time in integrating different technological platforms and enables a seamless data flow within a single comprehensive platform.

Due to automation, the role of accountants has changed rather enriched. Cloud computing comes with benefits ranging from data-security standards, turnkey solutions, wider integrations, real-time tracking, accessing on the move, etc. All these features have enabled accountants to deliver value-added services to their clients, which was not even expected a decade ago.  

CPAs and Artificial Intelligence: Partnerships

With increasing automation in finance and audit, the role of CPAs has expanded and now involves high-level thinking, analysis, and complex human interactions. Automation has saved almost 80% of the time CPAs spend just sorting records and data while giving advisory services. Technology and human partnership, in a sense, have limited the demand for technical skills, but there is increased demand for social and people skills.

Automation helps deliver efficiency where the task is repetitive, voluminous, and complete. Artificial intelligence needs structured data. AI can learn from use cases, depending on the available data, or be fed into the inference engine. Human oversight is necessary for structuring the data and building use cases for machine learning and deep learning.

Automation helps improve human efficiency across different domains. Be it delivering customer experience or marketing activities like collecting quality leads for the business.

AI empowers businesses to understand and respond to fast-changing business by making ready data available and simulating business environments for testing and evaluating variables before hitting ground zero.

Artificial Intelligence and Accounting Jobs

Automation as a service (AaaS) is a fast-emerging service for delivering AI solutions. Automating routine and mundane tasks have paved the way for intelligent automation, as per the survey findings by Deloitte. The disruptive nature of innovation seems to unfold where bots can do complex decision-making, risk management, portfolio management, financial modeling, etc. With the increased capability and further scope enabled by deep learning, there is a potential threat to traditional accountants.

It is not just the accountants; the role of CFOs is also changing. Payroll, billing, record-keeping, etc., are done by automation. Risk management, simulation, etc., are done by AI. Accountants and CFOs are needed to cater to the bigger picture, like leveraging equity and debts, decisions on supply chain management for working capital management, etc. Their role has now evolved to that of a leader and visionary.

It is due to the onset of automation and AI that accounting is not just confined to any department in an organization but is now a boardroom member that actively participates in setting mission, vision, goals and may even define the way moving forward based on predictions provided by the data.

Even on the employee front, those well-adapted to AI are paid above the median salaries of similar traditional profiles, particularly freshers, technocrats, residents of high-tech cities, etc. But for mid-career professionals and technology averse, the opportunities are reducing at an increasing rate.

With the changing technological landscape, the corporate search for profits has led to adopting robotic process automation (RPA) bots as quick-fix to short-term gains. As the development and deployment of bots are cheaper and can be easily configured to link with existing systems, the potential threat to low-skilled jobs is looming.

From mere record-keeping, the accountants have to don the role of an analyst too. Technology costs go down in the longer term and the scale of industry-wide deployment increases. It reduces the demand for basic accounting jobs and pushes the real income southwards. With AI taking most functions, the value of higher-order and humane skills will increase.

The human counterparts are needed to up their game as the new “digital employees” are riding on efficiency, accuracy, and cost-effectiveness advantages. Statutory requirements require a CPA for certain audits and accounting tasks. Also, being industry experts, the CPAs are a part of policy-making and implementation because they are members of accounting bodies. Thus, CPAs tend to gain from better data obtained from automation. They can focus on analysis and interpretations.

For business owners, the reliance on accountants is reduced to an extent as the data is presented in an understandable form with just a few clicks. The scope of traditional accountants gets limited as digital spreadsheets are transformed into various reports and charts with just a few clicks. Business owners can customize the reports as per their needs and brings better insights.

Artificial Intelligence Outperforming and Outpacing

Research firm Gartner has predicted a compound increase in the sale of automation software annually. Not just accounting but even recently emerging domains of social media management and digital marketing are deploying automation for managing daily tasks.

As automation is becoming more politically acceptable, the widespread adoption of AI is a challenge to upgrade the current set of human skills and also a disruptive threat to traditional bounds. White-collar automation is much faster than automating physical tasks. It is much more subtle; the impact is not visible easily and can be deployed as a turnkey solution leaving less time for the accountants to upgrade their skills.

Limitations of Artificial Intelligence in Accounting

While AI technology offers numerous benefits in the accounting field, it also has several limitations that professionals should consider. Understanding these constraints is essential for a balanced view of AI’s role in accounting. Here are some key limitations:

• Complex Judgment Calls: AI excels at processing data and identifying patterns but struggles with complex judgment calls that require human intuition and experience. Tasks involving ethical considerations, subjective assessments, or unique client needs often necessitate human intervention.
• Data Quality Dependence: AI systems rely heavily on the data quality they analyze. Inaccurate, incomplete, or biased data can lead to incorrect conclusions. Ensuring high-quality data is crucial, which may require significant effort and resources.
• Limited Context Understanding: AI cannot understand the broader context in which financial decisions are made. For example, it may not grasp the nuances of a company’s culture or market conditions, leading to decisions that don’t align with organizational goals.
• Resistance to Change: Implementing AI in accounting can be challenging for professionals who fear job loss or change in their roles. This cultural barrier may slow down the integration of AI solutions within organizations.
• High Initial Costs: Developing and deploying AI solutions can be expensive. Small and medium-sized firms may find investing in the necessary technology and expertise challenging, limiting the accessibility of AI benefits.

Key Insights

• Rapid Automation Adoption: By 2033, over 40% of jobs are expected to be automated, impacting various sectors including finance and accounting.
• Technological Advancements: The transition from basic tools like the abacus to advanced accounting software and ERP systems has greatly benefited the accounting industry.
• Efficiency and Accuracy: Automation in accounting has improved accuracy, reduced manual data entry errors, and saved time, allowing accountants to focus on analysis and interpretation.
• Enhanced Roles for CPAs: The role of CPAs has evolved to involve more high-level thinking, analysis, and human interactions due to automation handling repetitive tasks.
• Human and AI Partnership: AI requires structured data and human oversight for tasks such as building use cases for machine learning and deep learning.
• Changing Job Landscape: Automation is transforming roles within accounting and finance, leading to reduced demand for low-skilled jobs and increasing value for higher-order skills.
• Business Impact: Automation provides businesses with ready data and simulation capabilities, enabling better decision-making and adaptability to market changes.
• Income Disparity: Professionals adept at AI and automation technologies tend to earn higher salaries, while opportunities diminish for those resistant to technological changes.
• Corporate Adoption of RPA: Robotic Process Automation (RPA) is becoming a cost-effective solution for businesses, posing a potential threat to traditional accounting roles.

FAQ

1. How is artificial intelligence impacting the accounting industry? AI is automating routine tasks, improving accuracy, and saving time, allowing accountants to focus more on analysis and advisory roles.
2. What percentage of jobs are expected to be automated by 2033? By 2033, more than 40% of jobs are predicted to be automated.
3. How has technology historically benefited accounting? From the abacus to modern accounting software, technology has improved accuracy, efficiency, and data management in accounting.
4. What new roles are CPAs taking on due to automation? CPAs are now more involved in high-level thinking, analysis, and human interactions, as automation handles repetitive and voluminous tasks.
5. What is the role of human oversight in AI-driven accounting? Human oversight is crucial for structuring data, building use cases, and ensuring that AI systems learn and function correctly.
6. How is automation affecting job opportunities in accounting? Automation is reducing the demand for low-skilled accounting jobs while increasing the value of higher-order skills and analytical capabilities.
7. What impact does automation have on business decision-making? Automation provides businesses with real-time data and simulation capabilities, enabling better decision-making and responsiveness to market changes.
8. Are there any financial benefits for professionals skilled in AI? Yes, professionals skilled in AI and automation technologies often earn higher salaries compared to those with traditional accounting skills.
9. What is Robotic Process Automation (RPA) and its impact on accounting? RPA is a cost-effective solution for automating repetitive tasks in accounting, posing a potential threat to traditional roles but increasing efficiency.
10. How is the role of CFOs changing due to AI and automation? CFOs are shifting from handling routine tasks to focusing on strategic decisions such as leveraging equity, managing supply chains, and guiding the company’s vision and goals.

By Nestor Gilbert

Nestor Gilbert is a senior B2B and SaaS analyst and a core contributor at FinancesOnline for over 5 years. With his experience in software development and extensive knowledge of SaaS management, he writes mostly about emerging B2B technologies and their impact on the current business landscape. However, he also provides in-depth reviews on a wide range of software solutions to help businesses find suitable options for them. Through his work, he aims to help companies develop a more tech-forward approach to their operations and overcome their SaaS-related challenges.