Will AI replace accountants?

Artificial intelligence (AI) has been shaking up our working life as we know it.

From art to agriculture, AI is making its mark in various industries—and accountancy is no exception.

The question is, will AI replace accountants?

While AI is definitely transforming the way accountants tick off their to-do lists, it also presents unrivalled opportunities for improved accuracy, efficiency and strategic decision-making.

But AI also has its fair share of limitations, especially in the accounting profession.

In this article, we’ll cover the impact of AI on accountancy, its benefits and challenges, and how accountants can use AI tools to optimize small businesses and help them stay ahead of the curve.

Impact of AI on accountancy

AI is having a sizeable impact on accountants, both in terms of how they work and the services they can offer.

The good news is accountants are willing to adapt to—and adopt—AI.

AI is making its presence felt in these 5 areas of accounting:

1. Automation

AI can put repetitive, time-consuming work on auto-pilot, such as data entry, account reconciliation, and invoice processing.

For instance, let’s say you own a medium-sized accounting firm.

Using AI-powered software to process and categorize thousands of invoices every month can potentially save hundreds of hours in manual work.

If your invoices are stuck in siloed offices, cloud-based automation can consolidate that data, making it faster and easier to access, wherever you are.

This frees you up to nurture your client relationships and provide them with higher value advisory services.

2. Accuracy

AI can also process large quantities of complex data and highlight discrepancies that can be easily missed by the human eye.

For example, you could use an AI tool to scan financial statements and flag up any inconsistencies for later review—all at the touch of a button.

This helps to ensure that your clients’ financial records are accurate and financial reporting is regulation-compliant.

3. Productivity

The upshot of using AI to automate routine tasks and improve data accuracy is a boost in your overall productivity.

For instance, you can use AI to immediately process payroll and calculate tax, which will have a positive effect on your productivity.

This also enables your firm to increase the number of clients on its books without having to increase staff headcount.

4. Analytics

In addition to providing real-time financial insights, AI enables you to analyse past financial data to predict future financial trends, which can help you plan more effectively and make more informed decisions.

Pattern recognition is one of the biggest advantages of AI-powered software.

It can compare hundreds of thousands of data points faster than humans, giving you insight in minutes or even seconds, that would otherwise take days to manually calculate.

5. Fraud

AI is an effective tool for accountants to combat fraudulent activity.

It can analyse large volumes of financial transactions and detect any irregularities, which adds an extra layer of protection against fraud.

It can be trained on compliance regulations, and can quickly flag anything that might affect your client or your practice.

Limitations of AI in accountancy

AI has clear advantages over accountants in terms of the speed, accuracy, and consistency with which it can process large amounts of data—without taking a break.

These advantages provide significant time and cost savings. But AI also has its limitations compared to your skillset:

1. Intuition

When making complex financial decisions, you need to exercise your professional judgment.

Occasionally, you also have to rely not only on your knowledge, skills, and experience, but also on your intuition, which goes well beyond analysing the data in front of you.

AI tools don’t have this capability.

They’re limited to “learning” from past mistakes and the quality of an AI tool’s learning curve is determined by the quality of the performance feedback provided to it.

If the feedback loop is good, the AI tool will respond effectively when presented with the same or similar scenarios in the future.

But if the feedback loop doesn’t help it adjust, the AI tool won’t be as effective the next time around.

You’ll need to work with the AI, like an assistant, rather than giving it the reins entirely.

2. Creativity

To develop bespoke solutions to financial challenges businesses may face, accountants often have to put their creative hats on.

Creativity is a combination of knowledge, understanding, emotion, and human (rather than simulated) intelligence, which AI doesn’t have. The ability to come up with inspired solutions to client problems is something only humans can do.

Another part of your creative skillset is the ability to adjust to change.

At the moment, AI tools typically have a hard time completing tasks that call for genuine creativity and versatility because they are still so bound to reference material.

Your creative skillset is essential here, as AI can’t do this for you.

3. Interpersonal skills

Building and maintaining client relationships is key to accountants understanding business needs and gaining client trust.

The personal interaction you have with your client is part and parcel of relationship-building.

It requires self-awareness, empathy, and emotional intelligence—all uniquely human characteristics that AI isn’t able to imitate (yet).

Your clients want to know that a human is at the helm, helping them navigate their finances as part of their team.

They want to feel you are on their side, and they won’t get that from AI.

There are 3 key differences between the way AI tools and accountants work, that can help you find the value in what you bring to the client:

1. Adaptability

AI tools have the capacity to quickly adapt to new information and update their learning models as they go.

But they may also need substantial reprogramming to cope with completely new tasks.

By contrast, accountants use their past experience and professional judgment to accommodate a whole host of circumstances on the fly—often meeting unanticipated challenges head-on with creative solutions.

2. Ethical judgment

AI is driven by algorithms and designed to adhere to preexisting rules, which are completely binary and may not necessarily factor into ethical considerations.

Accountants, on the other hand, apply their ethical judgment and knowledge of professional standards to ensure compliance with the law and any relevant codes of ethics.

Ultimately, you’ll be responsible for making those calls, making you more valuable to the client.

3. Communication skills

AI tech can analyse big data and produce detailed reports, but it occasionally falls short when attempting to communicate complex findings in a meaningful way.

Cold, hard facts can appear detached and uninspiring.

But accountants are trained to decode complex financial data and communicate it to a variety of audiences including clients, colleagues, and stakeholders alike, bringing the data to life.

Your unique skillset here is telling the story of the data, and creating a compelling narrative to engage clients, stakeholders, and your team.

How likely is it that AI will replace accountants?

It’s fairly safe to say that AI won’t be replacing accountants anytime soon.

Edward Tian, CEO of GPTZero, an AI detection software company, believes there’s more to accounting than meets the eye.

“Accountants don’t just run the numbers,” says Edward. “There’s so much more to the job that requires human interaction and specialized skills.”
Edward points to accountants working hand-in-hand with businesses for the purposes of brainstorming and budgetary planning.

“Even with AI tools that provide financial breakdowns and trend forecasting, only human accountants can fully understand a company’s vision and goals in addition to the complexities involves in hiring, for example.

“AI can be an invaluable accounting tool and help to improve many business processes, but a human touch is always going to be needed.”

How can accountants adapt to AI?

In order for accountants to future-proof their jobs and maximize their efficiency, they need to successfully adapt to using AI.

Here are 3 ways you can do this:

1. Prioritize education and training

Take dedicated courses on AI for accountants or undertake training in AI and data analytics to ensure you develop the necessary skills to use AI effectively in your job.

Beyond specific AI education and training, it’s a good idea for you to research the latest developments in AI technology, best practices, and regulations to keep your knowledge current.

2. Improve data quality

The full potential of AI tools can only be realized when they’re fed high-quality data.

Commit to creating a pipeline of precise, up-to-date, and balanced information.

This will enable AI to learn from patterns and make reliable, unbiased forecasts.

3. Adopt a strategic role

Focus on aspects of your job that can’t be easily automated by AI, such as offering bespoke strategic advice and business insights to clients, running face-to-face training, or nurturing your stakeholder relationships.

AI-powered accounting software will give you more free time, to spend on the business or your own development, ensuring longevity and happiness both from the client, and in your role.

Final thoughts

Although AI lacks intuition, creativity, and interpersonal skills at the moment, its capacity to increase automation, data accuracy, and productivity levels puts it in good stead for becoming a core fixture in the accounting industry now and in the future.

While it won’t replace you, it will significantly redefine your role.

But you’ll need to upskill in order to work alongside AI—in a partnership—where AI completes the high-volume, run-of-the-mill tasks, and you engage in high-value strategic, advisory work.

The bottom line is, when you embrace AI, you gain a competitive advantage over others that are slow to embrace the technology.

AI adoption is a win for you, your clients, and the economy.