Harbinger Foresight: Artificial Intelligence is Accounting’s Best Friend
Updated: Jan 13
It’s no secret that Artificial Intelligence (AI) is threatening to take over many jobs as it continues to grow. Accounting and finance are no exception. The addition of AI increases the ease and automation of many trivial accounting duties (i.e. journal entries, banking, etc.). AI’s largest contribution is its ability to collect and manipulate data at a large volume and rapid speed. Yes, this may seem like entry level roles in many industries are in jeopardy, however, in the big picture AI has been around for decades and helped with the growth of many businesses. AI is a popular topic today for two reasons, one, access to information has become easier, therefore, its improvements are more noticeable; and two, the advancements have been accelerating recently causing a fear of job loss.
I think AI is actually going to help businesses focus on larger and more important projects that help grow the business. At the cost of some lower level job positions the efficiency of the business should increase which will result in company growth. For larger organizations this can be a really good thing. Company growth means better performance and expansion in the long run; in the end, creating more jobs. With my accounting and finance background I like to look at everything with a cost versus benefit mindset, and the benefits of growing your business and providing a better service or product to your consumers certainly outweigh the potential loss of transactional level job roles.
A lot has been said about how AI will help grow large organizations through improving overall efficiency and creating a greater product or experience for the end user. This doesn’t mean the impact on smaller companies won’t be as positive. It‘s harder to see this end result for a company that may not have the resources to grow, so it may seem like these smaller company’s will be able to survive with less employees and eliminate many jobs and opportunities for young professionals to grow and enter their field of work. But, in reality, roughly half of small businesses fail, and if AI can improve this, there will be many more accounting professions which can have a great impact on the local economy. But how can AI really make accounting easier? There are several ways AI creates a new standard of efficiency; but the main ones are human error, manipulating and collecting data, and decision making/problem solving.
Limiting Human Error
In theory, the perfect AI system should remove all human error associated with the tasks performed. However, I believe we are very far from the perfect AI system, we still rely on humans to monitor and adjust these systems when needed. Nonetheless, by having AI perform transactional level tasks this really limits the human error when done by an associate. The simplicity and redundancy of the tasks mean employees with great strengths and talents should not be wasting their valuable time on these tasks, and AI allows them to have an impact in a more valuable area of business. A machine can also remove any bias in the decisions it suggests that a human may have such as availability, and confirmation biases. AI will consistently make rational decisions that humans can use to aid them in their decision-making process.
Manipulation of Data
As mentioned earlier, AI has the ability to manipulate large amounts of data. This advantage can save an associate hours, weeks, or even months of analysis allowing them to spend their valuable time on tasks that have a greater impact.
The increased standard of efficiency comes from this collection and manipulation of data. Machines gather the data with little to no bias or human error, allowing the user to rely on the consistency of the patterns derived from the AI. Adding to how AI enhances the decision-making process.
At this point I should start sounding like a broken record, AI collects data and analyses it with little to no errors, resulting in an efficient problem solving and decision-making process. But that’s really all it is. AI is an aid to accounting and finance in coming to conclusions and making decisions. AI gives the user possibilities, but there will always be the human need to make the final decision and consider the extraneous variables the machine cannot.
All in all, by automating accounting tasks such as tax, payroll, and banking employees can put their strengths and critical thinking towards higher level work, resulting in a more efficient use of employee’s time. And even though some lower level job roles may be eliminated, the need for humans to monitor and assess the effectiveness of the AI will always be there. This can create new roles in the IT departments, and create new tasks surrounding monitoring and evaluating the results of the AI and seeking room for improvement.
Adam Rifai Accounting & Business Analyst / Associate Consultant Toronto