Company leaders need to be aware of the technology called Artificial Intelligence (AI) and how it will affect accounting departments in the future. The discussion is not on science fiction robotic sentience of good vs. evil but instead of AI as a technological tool to support decisions based on big data analytics and cognitive thinking.
AI is being called a component of the Fourth Industrial Revolution. It is critical that future leaders prepare for the wave of emerging technology and its potentially disruptive innovation. Many Fortune 100 companies are already making huge investments in these emerging technologies, and some are planning to directly impact future accounting departments.
Impact on the Accounting Profession
How will AI affect your accounting department? AI will learn the habits of your business. It will learn what you consider normal and question what looks to be out of place and try to find the answers you need. Robotic Process Automation (RPA) may take over many of the clerical and reporting jobs tasks. AI may replace some financial analysis and variance analysis work. For example, RPA may generate a flux analysis report, with AI analyzing the results and proposing commentary.
Accountants would be wise to prepare for what is coming and understand the impact on their careers and their business clients. I have made it a goal to expand my role beyond that of a typical finance/accounting person and actively seek out ways to learn about topics that future employers may find valuable. I recently attended a professional development program on Robotic Process Automation from the Boston chapter of Financial Executives International.
Today, RPA is taking over repetitive, rule-based tasks. Many finance and accounting people can make the connection to RPA based on how Excel macros take the place of repetitive tasks. Software will be automating software in the form of a Bot. These Bots will take over where there is data entry and re-keying of data. Bots can also format the data based on rules. As Bots take on more tasks, this is where AI comes in. I anticipate RPA and AI will come together in the future to enhance the current RPA initiatives.
I use a modern ERP system called Visibility.net that has built-in software automation that works behind the scenes. One example is the use of workflows that automate tasks like transaction approvals, automatic e-mail notifications, and automatic report generation when triggered by an event.
Another specific accounting example involves my G/L accounts like WIP (Work in Process), where the sub-ledger calculates the balance and records transactions strictly by work order transactions only. This keeps my G/L balance the same as the sub-ledger balance at all times and in real time.
ERP systems may be sold with their own add-on module of AI, just as Business Intelligence (BI) modules are sold today to enhance the analytical capability of your ERP system. AI will be a tool to enhance our ability to provide valuable information and solutions.
The Future of AI
Machine learning will soon become more sophisticated than it is today. Now, Siri and Google learn what interests you and attempt to predict what new content you may like next. These tools can accept voice commands, so they digitize your voice pattern to make it recognizable. If they had access to your ERP data, they could report on it and answer questions on accounts payable balances, account receivable balances, etc. They could make payments or bill customers based on system rules.
AI will be able to understand past problems and their solutions, and to formulate a predicted solution based on the prior events. It will not just store the data, but be able to utilize it. AI can accept and review a high volume of transactions. IBM’s Watson is an AI initiative that has already read over 8,000 medical journal articles and is recommending potential medical advice for cancer patients. It can read the genetic information of a cancer patient and cross-reference the information against all the medical journal articles that it reads that reference that specific issue.
The IBM Watson AI-fueled system is working in fields like health care, finance, and entertainment and retail, connecting businesses more easily with their customers, making sense of big data, and helping doctors find treatments for cancer patients.
Will your company need to downsize as a direct result of AI? I hope not. While software automation may replace certain accounting functions, it offers an opportunity for accountants to work on higher-level tasks. Some will fear the change in the technology known as AI in the coming years, but I would encourage everyone to embrace it and leverage it to make each of us more valuable to our respective companies.