What might the future hold for AI in accountancy?
What might the future hold for AI in accountancy?
As technology advances at speed, how will the future role of accountants evolve? This feature forms part of our special editorial report on the subject, in association with Sage.
Why do we have professions like accountancy? To the general public, the professions might look very different, but for centuries they have existed for the same fundamental issue: to help people solve problems they can’t solve themselves by using acquired knowledge and practical expertise.
However, in an era where the flywheel of technological advancement has picked up speed, this model is straining under the weight of increasing expectations. Clients are asking for more, fee levels have stalled and there are fewer human resources to meet rising demands. So how can the professions – and most pertinently for this piece, accountancy – meet these challenges?
Meeting the challenge
If you’ve been to one of the many accounting events held in 2024, you’ll have probably heard a version of the quote below at least once: “Artificial intelligence won’t replace accountants. Accountants using artificial intelligence will replace accountants who aren’t.”
Author and economist Daniel Susskind, who has tackled the future of the professions in several books, expresses a similar sentiment – albeit at a broader level. He has stated that if technology continues to develop at its current rate, the professions have two possible futures:
humans use AI to streamline and optimise traditional work
technology becomes more powerful and actively displaces professionals
In the short to medium terms, Susskind sees these futures running in parallel, but longer term the second future will come to dominate. However, this is likely to come in the form of displacement rather than replacement.
Services gatekeeper
The traditional view of the professional as a “gatekeeper” to all accounting services is being slowly eroded, with individual tasks such as data extraction and processing being chipped away from the main body of work.
In a similar way to the factory assembly line, complex professional work is increasingly breaking down into the individual tasks that make it up, and made more process-based – with specialised tools being developed to speed up this work.
Susskind draws on the first five years of being a lawyer, citing document retrieval, review and assembly as the main tasks on which juniors cut their teeth. All of these tasks are ones on which technology is increasingly likely to impinge.
Many tasks in professionals’ day jobs are also not strictly part of their job descriptions. In a recent conversation with AccountingWEB, Infinitas Accounting founder Caroline Armstrong expressed frustration that despite having spent seven years training, accountants are still spending a large proportion of their time on administration and client communication. These are both areas on which technology can be leveraged to allow accounting professionals to focus on work they are qualified to do, allowing them to increase their fees, which Armstrong feels is currently needed.
Ironing out creases
There are still creases to be ironed out in this possible future. For example, the computing power needed to drive a new wave of tech-driven development in accountancy is currently too expensive, making wholesale transformation uneconomic at this point in time. However, as we have seen in areas such as solar power, as adoption grows costs come down.
So in the future, will the role of an accounting professional be displaced or replaced? Judging by the adaptability shown by successive generations when dealing with technological changes such as the personal computer, spreadsheets and cloud computing, accounting professionals will evolve their roles and continue to offer value and expertise to their clients, their firms or their businesses – just in a different way.
However, it will ultimately come down to individuals to engage with what’s out there and choose what’s right for them, and also to the vendors offering the next generation of technology to clearly articulate its practical benefits to accounting professionals.
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