The Fourth Industrial Revolution is here. Automation, artificial intelligence, and increased connectivity are the hallmarks of this new era.
Many have predicted that accountants will become obsolete thanks to the rise of automated accounting software. However, just as in any changing industry, new tech brings with it the need for new skills. Accountants may not be going anywhere, but their job role is changing dramatically.
Automated accounting software has made sending your receipts in a big manilla envelope once a year obsolete. Today, accountants have a much more proactive role. Managing cash flow, offering customized tax advice, and other financial planning services are now commonplace tasks in the accounting world.
This shift from reactionary to proactive tasks is typical of the high tech, highly skilled workforce demanded by the latest Industrial Revolution. Accountants and other financial professionals must keep up with these rapidly changing trends, or risk becoming extinct. But when accountants and AI work together, magical things can happen.
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Robotics is expected to eliminate 40% of basic accounting work by 2020. Repetitive transactional tasks are increasingly handed over to automated software and AI enabled programs. Gone are the days of staying late to meet deadlines, check tax forms, and input receipts. Today, programs like HubDoc can check, process, and input invoices faster than any human could (not to mention for less money than most accountant’s hourly rates).
Understandably, this has caused a little bit of panic. Tech pundits are quick to make broad sweeping predictions (it is their job after all). Some have even heralded AI as the ‘end of accounting’. On a related note, despite the hullabaloo surrounding automation, it has only entirely replaced a single occupation since 1950: elevator operators (sorry, aspiring button-pushers).
Here’s what the doomsday enthusiasts and Luddites aren’t telling you: new technologies have been revolutionizing accounting for years.
From the abacus to the spreadsheet, accountants have always had to adjust to new technologies and trends. When financial professionals embrace the power of the new tech at their disposal, they can increase their productivity and value.
Let’s face it: machines are better (and faster) at crunching the numbers than a human would ever be. Do you really miss data entry, basic calculations, invoicing, and other busy work? You studied too hard to simply work as a human calculator.
By handing off basic transactional tasks to automated accounting software, CPAs are free to focus on high value offerings. The rise of value based accounting is testament to the fact that clients are no longer looking for someone to crunch the numbers: they are searching for someone who can tell them what the numbers mean.
Accounting rules have always shifted; accountants have long relied on their professional judgement to provide accurate advice for clients. Risk analysis, financial forecasting, taxation law, and compliance are just a few examples of high value accounting judgement at work.
While a program may be able to tell you what, how many, and when, artificial intelligence cannot always answer why, how, or so what. An algorithm can tell you to change, but it can’t tell you what you should change to. Remember, AI is only as good as the data it learns from. A sharp accountant can therefore become a valuable asset to any business interested in long term security (provided they can answer the most important questions of all: so what and what next).
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Other skills that can’t quite be programmed? The long overlooked soft skills. These include things like leadership, relationship management, communication, critical thinking, creativity, and more.
Traditional accounting classes have long ignored these essential skills, but the industry is beginning to change. Accounting and entrepreneurship degrees are now offered by many higher education institutions around the world. As well, accounting firms are increasingly searching for talent with these soft skills. Invest in yourself by acquiring further training for these in-demand skills. Online courses, books, podcasts, seminars, and professional development courses are great places to start.
The stereotype of the lone accountant crunching numbers late into the night is exactly that: an outdated cliche that no longer reflects the current reality.
Modern accountants are specialists. By handing off routine tasks to automation, they have freed more time and brain power for high value offerings like risk analysis, financial forecasting, and strategic advice. In today’s collaborative and porous work structures, this type of specialized financial judgement is invaluable.
Rather than reducing the value of accountants, financial and accounting software is increasing it.
When accountants hand off mundane and repetitive tasks to a software, their inner business analyst, entrepreneur, and manager is unlocked. With more time and brain power at their disposal, accountants can provide more value than ever. Indeed, many niche firms have rebranded from an accounting firm to an advisory business.
AI is not a replacement for accountants. It’s a powerful tool that smart CPAs are utilizing to save time, increase efficiency, and provide more insightful financial analysis and advice for their clients.
AI is here, and like it or not, it has changed the face of accounting and financial services. Instead of fighting the automation revolution, why not join it?
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