AI will replace accountants as we know them today and reshape the profession. We examine how AI will upend accounting in the near, medium, and long term.
Before we look into will ai replace accountants, it’s important to understand the recent history and current state of the accounting profession. An accountant’s job has already been increasingly automated and accountants that have not learned to embrace and take advantage of new technologies may already feel like their skillset is becoming outdated.
Accounting Jobs are Becoming Tech Jobs
Over the last several decades, accounting jobs have transformed from processing data, categorizing data, summarizing it, and reporting it to more managing the systems that do a lot of these steps for us.
It used to be enough for an accountant to be an expert at using Microsoft Excel and the ERP that their employer uses. As data has become cheaper to collect, and store new tools and skillsets have been required to handle it.
The functional limitations of Excel spreadsheets have become more abundantly clear when you start coming up against million row limits or simply realize how much time it takes to manipulate spreadsheets each month to prepare recurring reports.
More advanced tools like SQL data warehouses, advanced analytics platforms like Alteryx and Power BI have become more common place in the accounting realm and have required an accountants skillset to expand.
We see the overall trend of accounting jobs and skillsets blending with traditional IT or Center of Excellence skillsets continuing. In fact, this will be the cornerstone of accounting jobs over the next decade. The trend of accountants needing new technical skillsets will accelerate with the advent of ChatGPT.
Accounting Tasks will Become Automated Incrementally
Accountants already spend most of their time on a computer. The specific tasks an accountant performs will vary based on job role, but common tasks can be broken down into a number of similar categories.
- Moving data from paper or one system to another computer system
- Reconciling and validating that data moved from one system to another correctly
- Interpreting and presenting data to management
- Interacting with management to develop strategic plans and forecasts
Each one of these tasks is subject to different levels of automation currently. Simple tasks like transactional accounting and clerk level jobs can already be mostly automated. More advanced tasks like account reconciliation and filling out forms can also be mostly automated.
Advances in AI like ChatGPT have the potential to make advanced tasks easier like forecasting, planning, budgeting, and deciphering complex tax treatments or changes to accounting standards.
AI and technological advancements will continue to move up the chain of complexity and will incrementally automate and eliminate lower-level jobs first. Over-time more advanced tasks will also be mitigated and eliminated.
Current State of Accounting Automation
Let’s use Accounts Payable as an example of accounting process automation. It’s a fairly simple part of the accounting cycle, and it’s one that’s the most mature in level of automation.
A vendor can either send an invoice to a centralized e-mail inbox or submit a payable through an electronic interface. An automation script can watch an e-mail inbox for incoming information, then send it to a character recognition and AI parsing model to extract important information like date, dollar amount, products purchased etc.
The output is formatted in a way that can be either uploaded or directly input into an accounting system. This eliminates the steps of printing, logging the invoice receipt date, matching it against a PO and validating the purchase amounts.
However, even the best Accounts Payable solutions are only 70% – 80% accurate.
This means that there will be 20% of processing exceptions that have to be manually reviewed, and fed back into the machine learning algorithms that are parsing data. Over-time these systems will improve but we imagine that there will always be some level of exception that occurs.
Future Accountants Will Manage the Accounting Process
Because of the level of exceptions that occur, accounting jobs will move from performing tasks to managing the accounting process where tasks are mostly automated and performed by robots or eliminated completely.
The accounting skillset is well suited for identify anomalies and exceptions. It’s a large part of the reconciliation process and cross-functional value-add that an accounting group can bring to the workplace.
Accountants will be expected to manage exceptions, document them and work with other parts of the business to fix non-reconciling items or items that do not flow through the standard automated process.
AI will Make Advanced Tools Easier to Use
One of the over-arching trends of business intelligence is that technology has become easier and easier for business users to take advantage of.
It used to be that report automation would require a knowledge of computer scripting, SQL, SSRS, and SSIS. In today’s world, a report can be automated with the use of a number of low-code or no-code drag and drop tools like Microsoft Power BI.
The next advancement in these tools will be the ability to ask the computer to generate example reports for you and an accountant or business user can pick and choose the visuals that they like best to tell the story that they need to convey to management.
As tools improve and become increasingly easier to use, the accountants who understand the nuance of the data won’t be the people who are being replaced but the more technical users that are experts in increasingly outdated tools will be the ones that are at the biggest risk of job elimination.
Understanding the Accounting Process Will be Harder Than Automating It
One of the biggest challenges with utilizing a Center of Excellence that is staffed with technology and reporting experts is that they don’t understand user data or business needs to the level that accounting, and finance experts do.
In the future, it may take longer to explain your desired results to shared services support staff than it does for you to fix the problem yourself using an easy-to-use software tool powered by AI.
Accountants add Valuable Perspective That Can’t be Automated
As AI powered tools make it easier to automate processes, an accountant’s job role will change to managing the process vs. completing the process themselves.
AI will also free up accountants to focus on more value added challenges. After all, filling out things like tax forms is not very value added for someone with decades of experience and training.
Where accountants add the most value is by offering their experience and opinions to different operational and department managers. For example, the value of the FP&A process of budgeting and forecasting is forcing a business at multiple levels to think through how they are going to complete strategic goals.
Through having a number of conversations and talking through what the planning period might look like, accountants can help shape decisions that impact the future of a business. The thought process and training of accountants will differ greatly than people who have spent most of their career in marketing or sales.
People Enjoy Interacting with Other People
One of our final considerations is that people enjoy working with other people. Even if a process can be 100% automated, it does not mean that it will be the ideal state for many people within a company.
Having attempted to fully automate several processes, we find that when co-workers are confused and frustrated, they do not want to be shoved off onto a chat bot or web form. People want to have a human interaction with someone who can take the time to help them and understand the nuance of their challenges.
We believe that the desire for human connections and relationships within the workplace will ensure that accountants will have a bright yet very different looking future in the workplace.
When Will AI Replace Accountants as we Know Them Today?
Here is our prediction for the timeline of accounting automation and the elimination of jobs. These estimates are based on the evolution of the accounting industry over the last several decades. We baseline the technological increases that occurred in the late 1990s with the advancement in personal computing and adjust for the increasing pace of technological change.
- 1 – 3 years from today – AI features will existing to some degree in almost all major business software. Users will be able to ask questions about their data and receive a mixed bag of valuable to non-valuable responses.
- 3 – 5 years from today –Systems will become more highly integrated solving one of the biggest challenges that accountants have. AI will assist in helping accounting systems talk to each other eliminating a large number of IT jobs and eliminate a large number of potential failure points and manual adjustments in the accounting cycle.
At this point in time, we will also see new areas of the accounting profession emerge. AI auditors and jobs that specialize in understanding why AI operates the way that it does and help document it.
- 10 years from today – The accounting profession will be mostly unrecognizable from a daily tasks perspective compared to today. Most of the manual work involved in aggregating, summarizing, and auditing data will be mostly automated. There will be a minimal number of exceptions and AI will have advanced to the point where it will be able to reason its way through common exceptions without intervention.
Accountants will still exist but the role will be more focused on analysis and prompt engineering. Low level accounting jobs will barely exist and accountants will be financial experts that bridge the gap between conversations with other managers and working with AI to meet strategic financial objectives.
There is no way to avoid AI eliminating many jobs within the accounting profession as we know them today.
An interest and depth of understanding the finances of businesses will continue to be valuable skillset and accountants will maintain a role working with managers to help steer organizations to meet financial goals.
In the interim, the accountant’s role will shift from completing tasks themselves to managing a highly automated accounting process across the entire accounting cycle. If you look at the Harvard Business Review’s breakdown of the 4 pillars of Digital Transformation from 2021, it gives a good insight into what a cross-trained accountant might work on in a world where most of the technical heavy lifting is performed by AI assistants.
New job roles will emerge as AI auditing becomes more important and to avoid a black box of numbers that people will need to have confidence in to support decision making. The accounting field may even find themselves creating their own AI models to audit and improve their understanding of other AI models.
While the accounting career will look wildly different than it does today, there will continue to be a demand for the thought process and skillset that accountants are known for.