AI: Empowering Elevation In The Accounting Industry

Last updated on July 1st, 2024 at 02:13 am

Aaron Harris, CTO, Sage

The rise of generative AI in business has ignited apprehension and job security concerns – not least in sectors that rely on manual processes, such as accounting. But this technology has the power to revolutionize the accounting industry, elevate the role of accountants by automating repetitive workflows, and improve employee experiences. Today, one of the biggest questions is, will ChatGPT and other forms of generative AI replace entire industries, like accounting, or will they, as we like to say at Sage, “elevate human work”?

Is generative AI on the path to replace accountants?

Generative AI will have a profoundly disruptive impact for the accounting and finance industries and will require businesses to embrace new tools and more extensive automation. Its impact on the global economy is an estimated $2.6 to $4.4 trillion in annual growth. That growth is on top of the $11 to $17.7 trillion in economic value already estimated for traditional AI. Automation does not automatically translate to job losses, but AI couldsignificantly change 30.6% of Canadian jobs and automate as much as 15%. What it does mean is that those businesses embracing AI best will be able to put accounting staff onto more value-adding tasks, with greater productivity and likely greater job satisfaction – helping to retain and attract key talent at a time when highly-skilled workers are in short supply.

Embracing generative AI today

Large Language Models (LLMs), a form of generative AI, are trained on vast amounts of content, including textual content like accounting standards and regulations, business cases and best practices, and even software documentation. This training teaches LLMs to understand the patterns and structures of language, leading to the monumental AI breakthroughs we’re currently seeing. Where standard AI operates within stringently defined workflows and is limited by meticulous rules, generative AI can generate computer code and interact with software, translating and putting into action its understanding of human-like instructions to determine the steps required to complete a request.

Generative AI-powered assistants will transform the way accounting professionals interact with technology digitally by replacing confusing and restrictive user interfaces, that require pre defined menus and complex data entry forms, with simple, human language interaction. Imagine simplifying entire work processes down to an instruction that you might give a human. Not only will this improved process increase productivity, but it will also expand the scope of work an accountant can take on. As digital assistants increase capabilities, they will also become expert resources for understanding and applying accounting standards. The accounting industry will elevate to deliver higher value services, like strategic guidance into financial planning and capital allocation, with AI’s advanced abilities to take on repetitive, time-consuming jobs, like processing invoices or reconciling accounts. Embracing AI in this manner means revolutionizing financial services with AI finance automation, providing a seamless blend of efficiency and innovation in financial operations.

Accountants we speak to have a positive vision – they see opportunities where many others see threats. They’re optimistic that generative AI and forward thinking combined will expand the accountant’s role as a trusted advisor to businesses.

Human accountability remains at the forefront

Accounting is an industry of trust. A trust built on businesses having confidence in the services and advice that accountants provide. Routine tasks can be automated, but accountability for results, a foundation of accounting, will remain a human responsibility. AI is not infallible. Hallucinations, the term used to describe when generative AI algorithms produce factually incorrect responses, can cause inaccurate outcomes.

So it is not this technology alone that will propel the accounting industry forward, but rather when generative AI is integrated with purpose into repetitive workflows where automation will significantly improve employee’s experience and productivity. To identify those workflows, businesses must equally understand the capabilities and the limitations of generative AI.

Accountants enabled to deliver more value strategically

The power of LLMs equips accountants with an invaluable and hyper-efficient research assistant that can analyse large sets of information or data and organize the results logically and professionally. AI assistants can enhance the strategic value of accountants by enabling them to deliver improved quantity and quality of decision-making. Forecasting and planning capabilities are enhanced using the same AI skill for analysis, which can also recognize and plot trends over time – like identifying recurring patterns in cashflows, giving accounting teams time to prepare for the peaks and troughs in activity. Nearly a quarter of Canadian CFOs say that improved forecasting and scenario planning capabilities would enhance their companies 2024 planning. Furthermore, 47% of CFOs outlined that their top priorities are building predictive models and scenario analysis capabilities for ongoing economic uncertainty – the ability to produce in-depth forecasts that link to wider market trends will make businesses more resilient when facing economic disruption.

Solving the skilled labour shortage in the accounting industry

The ongoing labour shortage issue playing out in businesses across the world continues to increase pressure on stretched finance teams, with over half of accounting professionals globally looking to leave their current company in their next career move.

With accounting and finance managers faced with the challenge of attracting new talent and retaining their existing talent, generative AI can help by improving employee experiences. In recent surveys, 66% of Canadian workers said generative AI lets them take on additional work that they otherwise would not have capacity for, while 63% of global workers who integrated AI into their daily tasks reported increased satisfaction and enjoyment in their jobs. These findings show that a career in accounting can be more fulfilling for those in the industry and more attractive to prospective talent with the integration of generative AI tools.

Accountants leading the AI elevation of human work

Accounting plays a significant role in society and the global economy, by providing market confidence and as a trusted resource for financial guidance. As accountants, we have the opportunity to use new AI technologies to not only elevate human work, but also to elevate the entire accounting industry. Businesses effectively integrating and adopting this new era of generative AI will be the winners.