Automation is a hot topic these days, and rightly so, as it is transforming the work processes of every industry. This includes accounting which, according to speculation, is now on the verge of being wiped out. Advancements have been going on for decades, but the recent digitization of financial data and cloud technology has accelerated the use of artificial intelligence in the workplace. Deloitte, one of the big four firms, has estimated that more than 40 percent of basic accounting work will be automated by robotics by the year 2020.
The global council member of ACCA (Association of Chartered Certified Accountants), Brendan Sheehan, uses the term “democratized” for technology automating basic functions. He says, just like journalism was democratized by blogs, a similar evolution is set to happen in the accounting platform. Research by the ACCA suggests that the development of smart accounting systems will largely impact accountancy for the coming three to ten years.
The benefits are evident. Automation ensures accuracy in data entry and calculations that are done at a much higher speed. This means more time for employees to concentrate on other major tasks like advisory and analytics.
Another vital task that gets an advantage is – auditing. Presently the auditors use sample data of the financial statements to check the overall statistics. But with the integration of automation, it will be possible to check all data sets and pick out inconsistencies. Combining that with tools of analysis and you get full data checkup reports that are accurate.
Once blockchain takes a full hold on the enterprise platform, it will make audits a much easier process. It will also enhance the security of the data stored in the cloud.
Automation is new, but the technology is being widely accepted because of its efficiency. But there are downsides to the coding system. What must be clear is that the code is written by a human, which can contain faults and will only be foolproof if all possibilities are checked.
Here is an example. One fine morning on his way to work, a tech worker in the UK found that he is out of the job. His security clearance card wasn’t working at the entrance. This occurred because of a minor human error. The automated response was because his contract renewal information had not been updated by the office. The programming of the machine showed his status as ‘no longer employed’, so the machine did as it was told.
We as humans rely too much on the technology around us. In this case, too, people followed the email correspondence overlooking the fact that this was a small mistake triggered by a human error.
So what can be done to rectify this? Our machines must have informative interfaces that are easily accessible for editing. Also, we as humans must be aware to recognize an issue and take steps to amend it. Ensuring the right inputs are being submitted and outputs must be assessed.
Evolution is constant. Thus, there will be several accounting tasks that will be automated in the coming years like, routine back-office work or tax filing for inheritance, income, sales and more. Also, the process of reporting compliance will become smoother with new tools.
Core finance and technical skills will remain critical, and accountants would need to combine their creativity, communication and leadership skills. The real challenge will be in connecting the dots, that is, with all the data and analytics ready for you, accountants will need to apply themselves in a method that helps the management table in making decisions for the future. And this is precisely how they can create their place in the upper level.
Advanced software, like QuickBooks, has already made its way into the work process. An ideal situation is the perfect blend of both human and machine skills working together towards a common goal.
Technology is, without a doubt, changing the scenery of industries. Experts have cleared that accounting jobs have nothing to fear, however, they will have to evolve with everything else. CPAs have a key role to play in keeping the financial balance of an organization.
Tools and software cannot wholly replace critical thinking and decision making skills. One must respect the technology and use it to our advantage, keeping our own talents over the systems. Remember, automation is here to enhance productivity, thus we must streamline our tasks in a way to better utilize our own skills.
Like a cup of coffee, blending the right mix of coffee and cream will give that amazing taste we all love. Similarly, intelligent human expertise integrated with modern technology can create that perfect blend we need to increase efficiency and business growth.