Five years ago, accounting professional Ryan Tietjens found himself in conversation with a handful of strangers who were also going through the motions in their respective corporate jobs. Tietjens and his newly found business partners realised they shared a common desire — they wanted to shake up the accounting industry and build a business out of a new cloud platform that they knew would disrupt the accounting world.
That business became Interactive Accounting: An Australian-based startup helping startups transition into scalable and connected beasts.
Back when artificial intelligence (AI) was still thought of as a gimmick straight out of Hollywood, Tietjens said accounting was somewhat monotonous and unnecessarily time consuming.
“Accounting was really taking data from one source and putting it into a software platform, completing your financial accounts, exporting the data out, putting it in to another platform, and then moving on to the next job,” he said.
Tietjens said an accountant would spend the majority of their day keeping the Australian Taxation Office (ATO) happy: Filling out forms to ensure a customer was complying correctly with their business requirements.
It was like Groundhog Day, and Tietjens knew there had to be a better, faster, more enjoyable way of doing things.
In 2006, Rod Drury founded Xero, a cloud accounting platform that drastically disrupted the accounting space.
Targeting small to medium-sized businesses, the Xero platform offers automatic bank and credit card account feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, and standard business and management reporting, among other things.
Tietjens explained that Xero allows SMBs to not worry about the accounting side of things, as the platform also connects users to an accountant, with mutual transparency.
Before Xero, fresh faces entering the accounting working world after university would have their dreams somewhat crushed, as Tietjens reiterated: “All you really did was fill out forms for the ATO”.
“When Xero came along, we were like, ‘Hey, this is pretty cool, with connected data, taking data directly out of a client’s bank account’, and we were able to produce financial reports right through to tax returns,” he said.
“Now we can visualise data with dashboards and do all this other cool stuff, but what it meant is we don’t have to focus on or spend as much time on compliance as we used to.”
So what does the future of the accountant look like as more work processes become automated and delegated to technology?
There are many things a machine can do better and more efficiently than a human, such as trawl through thousands of web pages to find your closest service station — this is AI as experienced passively by hundreds of thousands of people on a daily basis.
Using algorithms to help make better decisions has been the “next big thing in analytics” for more than 25 years, but it’s now become a full-throated mainstream business direction. The influx of available data has also helped AI shift into the mainstream.
After spending 10 years building a cloud accounting product suite, Xero has finished ironing out its platform. It is now focusing on expanding its repertoire of AI-related services, with Drury telling shareholders last month that his company is well positioned to capitalise on machine learning, which he has firmly believed for a long time will redefine accounting in future years.
To Tietjens, the number one feature Xero launched was live data, which uses AI to pull bank feeds automatically into the platform.
“Before Xero came around, you had to export data out of your banking package, bring it in to your accounting software, and reconcile it,” he said.
“Now you wake up in the morning and spend 10 minutes reconciling your books and [making sure] your accounts are up to date, right up until close of business yesterday.