You may have heard that bookkeepers and accounting technicians are being automated out of existence thanks to artificial intelligence.
AI technology and tools like ChatGPT are transforming the world of work by automating tasks and improving efficiency. Unfortunately, the World Economic Forum identified accounting, payroll, and bookkeeping clerks as at-risk jobs that are set to become increasingly redundant.
But that's based on the notion that bookkeepers are little more than data entry clerks. For those who are eager to take on more analytical and advisory responsibilities, the adoption of AI can actually be a good thing.
The bottom line? Accounting professionals are still in demand, but the way they do their jobs is changing. Keep reading to find out how.
TABLE OF CONTENTS
- The Transformative Impact of AI on Accounting
- Real-World Applications
- Challenges of AI in Accounting
- Essential Skills for the AI-Enhanced Accounting Pro
- The Outlook for Accounting Jobs
THE TRANSFORMATIVE IMPACT OF AI ON ACCOUNTING
The digital transformation in accounting has been underway for many years, but AI has kicked that transformation into high gear. Here’s how AI is building upon existing automation in accounting:
Going Beyond Structured Data
Initially, accounting automation involved simple rule-based systems for tasks like data entry and basic calculations, reducing the potential for human error. But AI brings the ability to also handle unstructured data like invoices in various formats, bank statements, and emails. AI systems can extract, interpret, and process this data, making sense of vast datasets more efficiently than traditional methods.
Machine learning algorithms can also analyze historical trends to make more accurate predictions about future financial conditions. AI systems can learn from patterns and behaviours to identify unusual transactions that may indicate errors or fraudulent activity with greater accuracy.
But will AI replace accountants entirely? Not likely. Why? Because to ensure compliance, an actual person still needs to verify that the numbers make sense and that the system is doing its job properly. Exceptions invariably come up that take the expertise of a skilled pro to resolve.
Plus, any AI-powered system is only as good as the data that fuels it—so bookkeepers and accounting assistants will need to be on guard against the “garbage in/garbage out” phenomenon.
Remember: AI doesn’t always get things right, and an accounting firm could face serious consequences if the figures are wrong.
AI tools are changing the game in accounting
Analyzing the Info and Drawing Conclusions
Traditional automation focused on processing data. AI takes things a step further, analyzing vast amounts of financial data to identify trends, patterns, and risks.
AI can forecast future financial performance and cash flow. It can also analyze spending patterns and identify areas where a business can potentially reduce costs.
Going forward, jobs in the accounting industry will be much more about providing context for the numbers. Why did the financial statement turn out that way? What are some best practices the business owner could implement to cut costs or budget more effectively?
Helping clients understand what the data is telling them will be an increasingly important part of a bookkeeper’s role.
Ultimately, by automating tasks and providing deeper data analysis, AI empowers accounting professionals to become more effective. They can use AI technology to:
- Recommend better budgeting strategies and investment decisions
- Evaluate potential risks and rewards of various business scenarios
- Generate reports and presentations—a KPMG survey found that 57 per cent of Canadian companies plan to use generative AI for financial reporting over the next few years
AI can help accounting professionals be more effective in their jobs
REAL-WORLD APPLICATIONS
Here are a couple of real-world examples from Accounting Today that demonstrate effective AI deployment in accounting practices:
- GWCPA is using AI to speed up financial statement analysis. “We take a client’s financial statement, export it to a PDF, take all the client information out…and we upload it and ask, ‘If you were going to analyze this, what would be the key factors you’d alert the client to quickly?’ Within seconds, it does it,” said managing partner Samantha Bowling.
- RSM US is applying the power of GenAI to gauge compliance. “What we have been able to do is leverage generative AI to take the client’s regulatory environment, on the one hand, and their internal controls and process document, on the other hand, and bring them together to map where our clients are meeting or not or only partially meeting regulatory requirements,” noted digital enterprise leader Sergio de la Fe.
The key takeaway is that AI isn’t replacing accounting firms or pros; it’s augmenting their capabilities.
CHALLENGES OF AI IN ACCOUNTING
While AI can provide enhanced efficiency, deeper data analysis, and improved decision making, it also comes with potential pitfalls for the accounting industry. These include:
- Cost: Implementing AI solutions can be expensive and complex, especially for smaller businesses that lack technical expertise or resources.
- Data security and privacy issues: AI-powered accounting software and systems need robust security measures to prevent data breaches and ensure client privacy.
- Lack of human oversight: AI systems have been known to give output that is incomplete, misleading, or just plain wrong. Accounting pros still need to exercise critical thinking and judgment to interpret AI-generated data.
- Ethical and bias concerns: AI systems can perpetuate or even amplify biases in their training data, leading to unfair or unethical outcomes. It’s important for companies to continually audit and update their AI systems to mitigate these risks.
ESSENTIAL SKILLS FOR THE AI-ENHANCED ACCOUNTING PRO
Accounting professionals are moving from being primarily number crunchers to becoming key strategic advisors who ensure the integrity and utility of financial data.
So what do you need to stay relevant?
Technical Skills
Technical proficiency with AI tools and data analysis will be increasingly important. Accounting professionals will need to understand how AI works and how to leverage its capabilities to extract valuable insights.
That means learning about the latest AI technologies, data analysis techniques, and regulatory changes. Enhancing your understanding of business intelligence tools and data visualization platforms is also key.
All of these changes may require closer collaboration between accounting firms and their IT departments. This collaboration will help ensure that the AI systems are properly tuned to meet the specific needs of the business and its financial reporting requirements.
Analytical and Advisory Skills
As routine tasks are automated, the role of accountants and bookkeepers is evolving to require more analytical and advisory skills. As noted above, professionals in this field are increasingly expected to interpret data and provide insights rather than just keep records.
That means you’ll need strong critical thinking skills to address more complex, judgment-intensive tasks like strategic planning and performance analysis.
As one recent report put it, “the answer to every tax question begins with, ‘It depends…” and ChatGPT is ill-equipped to deal with that level of ambiguity.”
As a knowledgeable accounting professional, you can offer actionable insights that help businesses optimize their operations and align their financial strategies with their overall business objectives.
Communication and Empathy
Computers are great at crunching numbers and managing vast sets of data. But some aspects of accounting work will still require the empathy and understanding that only a human can provide.
Say a client is trying to decide which charity to donate to.
An objective analysis of the numbers and online ratings of various charities might suggest a particular organization. But a human bookkeeper can weigh more intangible factors like the client’s preferences and values, and perhaps current trends or events.
Even as accounting becomes more automated, bookkeepers will still be needed to offer professional advice with a personal touch. That means communication skills—and a strong understanding of your client’s business—will be essential.
Accounting pros will continue to be needed to provide a human touch
Ethics
AI systems can sometimes produce biased results based on their training data. That can lead to discriminatory outcomes in areas like loan approvals or risk assessments.
Maintaining professional skepticism and a strong sense of ethics are some of the most important AI-driven skills for accountants. You need to keep a critical eye on data outputs from AI systems to ensure compliance and uphold ethical standards.
THE OUTLOOK FOR ACCOUNTING JOBS
The impact of AI on accounting practices may result in some workers being displaced, particularly those focused on routine bookkeeping tasks. But the current job outlook is actually very promising.
According to data from the Labour Market Information Council, there were over 24,000 online job postings for bookkeepers and accounting technicians across Canada between May 2023 and April 2024—an increase of 14 per cent over the same period a year earlier.
And accounting techs and bookkeepers get the Government of Canada Job Bank’s highest or second-highest rating for growth and demand in most areas of the country.
Ontario alone expects to see up to 15,000 openings for bookkeepers and accounting technicians between 2023 and 2027.
So the profession certainly isn’t going away anytime soon.
GET READY FOR THE FUTURE OF ACCOUNTING WITH AI
Interested in pursuing accounting jobs? You don’t need a university degree to get started in this field. A college diploma in accounting is excellent preparation for entry-level roles.
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