How AI will disrupt the accountancy and business advisory profession
6 min read
15 February 2018
AI will disrupt the finance industry, there's no doubt about it. But according to Andrew Paton-Smith, creator of www.Jazoodle.com, the accountancy and business advisory profession in particular will go through an evolutionary process.
The role of an accountant or business advisor is fundamentally one of an expert whom collates, examines, and presents data about a business and its environment. Then his or her skills are used to recommend and help clients implement strategies that take best advantage of available data sets, insights, skills, experiences and knowledge.
The accountant is indeed an intelligent body when looked at in this context, however, artificial intelligence (AI) is being discussed a huge amount – and has been for a while. So what is AI, and how will it impact the accountancy and business advisory profession in the future?
AI is not an army of robots set to take over every task, or the role of an accountant. AI is also not a technology that is 100 per cent accurate in all situations and contexts. Granted, the uses of machine learning may reduce inaccuracies over time and if it’s given large enough data sets, but this context must be taken into account.
In a 2017 white paper, the ICAEW argued that AI will disrupt these professions, and that it will not replace human knowledge, experience, and insight just yet – or for the foreseeable future. Not every problem will be suitable for a machine learning or AI approach, after all, but they do offer potential opportunities in three distinct areas.
- Consistent, timely, cheaply produced data with which to support better decision making;
- A powerful medium with which to quickly and simply gain great insight from the results derived; and
- Provide a means of reducing time, and therefore cost, in the production of such insights
We are seeing this now, with the use of accounting systems such as Xero in “understanding” transactional data inputs and classifying that data accordingly. As more transactions are added into a system, the better it learns and thus errors are reduced in the coding.
This is not the future, but the present. As we progress through the next decade and beyond, these techniques will become more sophisticated. In this context, this transactional side of accounting may become less relevant to the end client.
Smaller businesses are more likely to feel positive about new technologies, such as artificial intelligence, than larger companies.
What is of more interest are the systems that enable greater added value for accountants and business advisers. So, with greater time being freed up in the reduction of transactional processing, how will accountants and advisors move forward?
We have said that AI will disrupt the industry by allowing us to compute, far more consistently, larger amounts of data, and to gain insights from that data. These insights are generated more quickly, with less effort in generating them in the first place, and at a fraction of the cost of traditional number crunching work.
AI will enhance the added value that accountants and advisors will be able to provide clients, and leave the accountant or adviser to utilise their skills, knowledge and experience in implementing advice based upon the data that is so easily produced. Rather than a technology to be feared, it is actually complementary to the skills, knowledge and insights of the accounting and advising profession.
By combining the expertise, skills and insight of the accounting and advisory professions, with the data crunching abilities of certain systems, it’s easy to see how AI will disrupt the industry – and prove valuable to end clients.
For example, they may want to invest in a new van or piece of equipment. it’s then not only possible to provide advice on the tax implications and benefits of these purchases, but also on whether the investment is likely to increase a client’s bottom line. It also becomes possible to pinpoint potential downturns or pitfalls on the horizon, and the effect these proposed investments may have on revenues in light of this.
AI will disrupt the industry in the way of bringing significant new areas for revenue generation. However, industries must adapt to these technologies, and ensure businesses are structured and prepared to be able to take advantage of revenues that shift from transactional to more added-value areas.
Andrew Paton-Smith is creator of www.Jazoodle.com
As the Taylor report on employment in the modern economy highlighted, our workplaces are changing rapidly. And some of the biggest drivers of that change are automation, robots and artificial intelligence.