Automation and the end of accounting
- by 7wData
Recently I’ve been spending time looking at the various initiatives that the accounting software vendors have in terms of applying automation (via artificial intelligence) to their core offerings. While my assessment is that there is little happening in the enterprise space around this topic, in the small- and mid-sized accounting space there is huge amounts of work being done on this. I have seen development from a number of the main players in the space aligned to this automation theme and recently spent some time at Xero’s global HQ talking to their own machine learning team.
It is hardly surprising that Xero is at the forefront of talking about machine learning — its CEO, Rod Drury, has been waxing poetic for some time about the company’s move to Amazon Web Services and what that move enables in terms of utilizing the higher-level machine learning services that the Amazon cloud offers.
But beyond cool functionality being talked about, I’ve been thinking about what the end result of all this automation will be for the practitioners of note today — those accountants and bookkeepers who are responsible for the millions and millions of small- and mid-sized businesses’ and their accounts. The vendors and the accountants who see what is happening keep talking about "unlocking accountants to become truly strategic partners to the business" or words similar. but what does this mean? And will accountants really be able to do something better than a machine can?
Of course, there is some context here: in recent times there has been increasing disquietude about automation and what it will mean for workers. And while this is not new (the invention of the printing press, after all, was a threat to both the scribes who disseminated written knowledge but, more importantly, those who held power through the concentration of knowledge among a handful of elites), it is fair to say that technology is accelerating this process. One only needs to look at Uber or Airbnb to see what disruption looks like. But sadly, accountants seem to be in two camps; firstly those who don't see the change that is coming, and secondly those who somehow think disruption will magically slide off them and they'll remain unscathed.
And whereas the last few decades have been about automation threatening the livelihoods of blue collar workers (thing gas lamp lighters, ice delivery personnel, and blacksmiths) today it is the so-called knowledge economy or those white collar workers who felt secure, who are being threatened.
So if we look at what is happening in the accounting space, we can see examples of IBM suggesting that computers will replace human tax agents, Sage suggesting that its new chat bot will, over time, change the role of the adviser, and Xero’s initial forays which are simple and discreet (in its case automatically suggesting account codes on new transactions), these seemingly innocuous first steps are the tip of the iceberg in terms of sector disruption.
Recently I was talking to someone employed within the accounting software industry. This person was a highly skilled artificial intelligence practitioner and our conversation was around the applicability of these early initial forays into accounting software. I questioned this person about the longer-term impacts and whether this marked an end to the accounting industry as we know it.
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