Technology in accounting: humans are here to stay

As technology gets smarter and takes over more and more of the work we typically deem “skilled”, are professionals like accountants at risk of being replaced? The short answer is “No”. The long answer is “It all depends on the professional accountant’s attitude”.

Let’s begin by taking a step back to understand the nature of this trend. The author Martin Ford has written extensively on this subject, and his recent book, The Rise of the Robots, contains a lot of food for thought. The main point that should concern professional accountants is that the ongoing drive towards automation is no longer just a threat to low-level jobs, particularly those that already rely heavily on machinery—think driverless cars, automated mining and agriculture and so on. More troubling, professional work is at risk too.

The trouble is that the vast processing resources of the cloud are making it both possible and affordable to develop machines that are not just programmed to be smart via algorithms, but that can learn from their past mistakes.

For example, this machine learning is making it possible for software to write news items—already, says Ford, top media outlets like Forbes are using software to generate a news story every 30 seconds. Another example is software called WorkFusion, which can almost completely manage the execution of complex projects.

Oxford University research in 2013 suggested that nearly 50 percent of US jobs are susceptible to full automation, and a Parliamentary Report to the House of Lords in 2015 put the figure at 35% for British jobs. PwC has warned that accounting is the professional discipline most likely to be automated in the next 20 years.

Nothing new

There were those who predicted that the advent of the adding machine, and then the growing number of accounting packages, would make the professional accountant redundant. It didn’t happen then, and there’s no reason for it to happen now.

These tools removed a lot of the drudgery in accounting, essentially allowing clerks and bookkeepers to move higher up the value chain, to offer a greater value to clients than just neat and balanced ledgers. Ever since, professional accountants have mutated into financial advisors and strategists, and even business counsellors.

The growing automation of many accounting tasks currently performed by humans thus presents a real opportunity for professional accountants with the vision to seize it.

However, it cannot be emphasised enough that to see the opportunity instead of the threat requires a significant mindshift. Particularly for the smaller accounting practices servicing small to medium-sized enterprises, which often rely on work like processing accounts and compiling financial statements for cash flow—exactly the kind of work that is being automated first.

Those who cannot see beyond these traditional pillars of their business will gradually be driven to service smaller and smaller companies, and risk going out of business.

Vision and courage needed

On the other hand, those with the vision—and, let’s face it, courage—to seize the opportunity will have to improve their own skills in order to add value by analysing those financial statements and their implication for the business strategy. In other words, the professional accountant can ride on the back of technology to fulfil the role of a CFO or chief strategy officer for smaller clients, or to complement the work of those officers in companies that have them.

In conclusion, one should not allow optimism to blind one to the fact that the total number of jobs available in accounting will reduce, and will be under constant pressure to continue adding value. Automation will threaten the work of those who do not have the ability or the drive to upskill themselves.

Professional accountants with an eye to the future should be investing in technology so that they can be the ones to provide automated services to their clients; even more critical, they should be investing in the skills of their people to ensure they remain able to offer what machines cannot: judgement and advice.

Feature image: 401(K) 2012 via Flickr