The threat of artificial intelligence (AI) replacing human workers in accounting careers is a common concern. But a closer look reveals a different story.
AI is poised to transform accounting careers, not eliminate them. It will free professionals from the shackles of repetitive tasks, allowing them to focus on more strategic and analytical work, ultimately making accounting careers more fulfilling and impactful.
This shift, however, necessitates a change in the skills required for career success. The days of mindlessly processing invoices are slowly fading. The future belongs to those who can leverage AI’s power to unlock valuable insights and contribute meaningfully to financial decision-making.
Technology has transformed accounting before. The introduction of spreadsheets sparked similar anxieties about job losses. Yet, figures from Morgan Stanley show that bookkeepers didn’t become extinct. In fact, the number of accountants, auditors, and finance managers significantly increased.
The lesson? When technology automates tedious tasks, it creates opportunities for more analytical and value-added work.
Use case: How AI empowers AP teams
At its core, AI excels at automating repetitive tasks that consume a significant portion of an AP team’s time. Here are some examples of how AI is streamlining AP processes:
Touchless expense reports: Imagine a world where expense reports are generated automatically. Generative AI can create them from a simple snapshot of a receipt, complete with AI-powered categorization, saving time and reducing errors. Employees can simply photograph their receipts with their mobiles, and the AI can extract relevant information like date, vendor, and amount, automatically populating an expense report. This not only frees up employees from tedious data entry but also reduces the risk of human error.
Optical character recognition (OCR) for bills: AI-powered OCR technology can extract data from bills with remarkable accuracy, boosting efficiency in processing invoices and expenses. Previously, manually entering data from invoices was a time-consuming and error-prone process. OCR eliminates this burden by automatically capturing data points like vendor information, invoice number, and line items. This not only saves time but also ensures greater accuracy in data capture.
AI-based receipt matching: No more manually matching receipts to transactions. AI can automate this tedious task, freeing up valuable time for AP professionals. Matching receipts to corresponding transactions can be a cumbersome process, especially for companies that process a high volume of invoices. AI can streamline this process by automatically matching receipts to the appropriate transactions based on predefined rules and data points.
Automated vendor categorization: Gone are the days of manually assigning categories to vendors. AI can automate this process for physical card transactions, reducing the workload for AP teams. Manually classifying vendors into different expense categories can be a time-consuming task. AI automates this process by analyzing spending patterns and automatically assigning vendors to the appropriate categories. This not only saves time but also improves the accuracy and consistency of expense categorization.
Seamless bill & PO matching: AI can streamline the process of matching bills to purchase orders, ensuring accuracy and timely payments. Traditionally, matching bills to purchase orders involved manual verification to ensure accuracy. Today, this can be automated by comparing data points between bills and purchase orders, flagging any discrepancies for review. Automation reduces the risk of errors and ensures timely payments to vendors.
Beyond automation, AI as an analytical powerhouse
While automation is a clear benefit, AI’s true potential lies in its ability to handle vast amounts of data analysis.
However, to unlock this potential, finance professionals need to develop the right skillset. Nicolas Boucher, founder of AI Finance Club, emphasizes how AI can elevate the value finance leaders bring to their organizations. When used correctly, AI can assist with functions like:
Scenario analysis: Simulating different business scenarios to evaluate potential outcomes and make informed decisions. For instance, AI can be used to model the impact of changes in interest rates, currency fluctuations, or market conditions on a company’s cash flow. This allows businesses to make data-driven decisions and plan for potential risks.
ROI analysis: Measuring the return on investment for various initiatives, helping businesses prioritize resources effectively. AI can analyze historical data and financial projections to calculate the potential ROI of different projects or investments. This allows companies to allocate resources strategically and maximize their return.
Trend analysis: Identifying patterns and trends in financial data to gain insights into business performance. AI can analyze vast amounts of financial data to identify trends and patterns that might not be readily apparent to humans. This allows businesses to stay ahead of potential problems and capitalize on emerging opportunities.
Variance analysis: Investigating discrepancies between budgeted and actual financial results to identify areas for improvement. AI can compare budgeted figures to actual spending and pinpoint variances. This allows businesses to identify areas where spending is exceeding budget and take corrective action.
New skills for success
As technology takes over the mundane tasks, the essential skills needed for success in accounting careers are changing. The emphasis on spreadsheets, programming, and data generation is giving way to a greater focus on financial planning and analysis (FP&A).
While some may find the need for Python proficiency daunting, Boucher offers a silver lining, “Ask ChatGPT to open the realm of possibilities, that is use Python. Python is the best tool to automate finance. And I mean, automate finance.” ChatGPT can use Python to read and analyze data from spreadsheets, as demonstrated by Boucher’s examples of uploading data and receiving AI-generated visualizations and recommendations.
Is AI a cure for burnout?
A record number of accountants are leaving the profession, with burnout cited as a major factor. A study by Avalara shows that over 80% of CFOs face a talent shortage in their teams. Many accounting professionals can relate to the feeling of being bogged down by endless manual tasks. Strategic tasks that leverage education and challenge thinking are much more engaging.
AI in accounting: partner, not a replacement
The world of accounting is welcoming a powerful new partner. Contrary to fears of robots taking over, AI is actually poised to make accounting careers more fulfilling and impactful.
According to the State of AI in Accounting Report by Karbon, “82% of accountants are intrigued or excited by AI, yet only 25% are actively investing in AI training for their teams.”
The results speak for themselves. Artificial intelligence is here to stay and the ripples it has created is undeniable to ignore. A strong commitment to AI training only means that the role of accountant becomes more varied, helped by the invisible accountant, AI.
Staying ahead of the curve
No one is being replaced, but change has arrived. Here are some tips for forward-thinking accounting professionals who want to thrive in the age of AI:
Embrace the change: Explore the wealth of resources available, such as webinars, courses, and e-books on AI for accounting. Many professional organizations and online platforms offer training specifically designed to help accountants develop their AI skills.
Communication is key: The effectiveness of many AI tools relies on clear and concise communication. Learn how to interact with these tools to get the most out of them. Understanding the capabilities and limitations of AI tools is crucial for maximizing their effectiveness.
Data mastery: As the focus shifts to understanding data, develop your skills in pulling the right data for analysis. Finance professionals will need to be comfortable with querying databases, manipulating data sets, and using data visualization tools to extract meaningful insights.
Become technologically proficient: Take the time to explore and experiment with AI-powered automation tools.
The future of accounting is bright
Many accounting professionals can relate to the feeling of being bogged down by endless manual tasks. The good news is that AI offers a solution. By automating tedious tasks, AI can free up time to focus on more strategic and analytical work. This, in turn, can lead to increased job satisfaction and a brighter outlook for the future of accounting careers.
