Beyond AI: The Value of a Human Touch in Accounting
Artificial intelligence (AI) has transformed the world in ways we couldn't have imagined a few years ago. From a mere concept in science fiction to a reality in our everyday lives, AI has become increasingly integrated into our industries and daily routines, from virtual assistants like Siri and Alexa to self-driving cars. However, this integration has also led to a new debate about the role of artificial intelligence in relation to human intelligence.
"Accountants must balance artificial intelligence with their unique skills and expertise to provide the best service to their clients." AI can provide data analysis, but accountants must use their judgment and experience to interpret the results accurately.”
Stated by Kim Littlefield, Director of Accounting Programs at the University of Nevada, in her research paper “The impact of accounting software on business performance”
Many tech pundits believe that AI is the future and will eventually surpass human intelligence. On the other hand, some argue that human intelligence is irreplaceable and that AI can never truly replicate the complexity and nuances of the human mind.
AI in Accounting
According to market forecasts by Mordor Intelligence, the Accounting industry's use of Artificial Intelligence is projected to experience a Compound Annual Growth Rate (CAGR) of 30% from 2022 to 2027. Artificial intelligence is a hot topic in accounting. As we move forward, AI will be incorporated into accounting systems and software.
“ What previously took weeks to complete can now be done in days, what took days can now be done in hours, and what took hours can be done in mere minutes, all with the click of a button.”
1. Artificial intelligence for enhancing accountants' expertise:
AI can automate repetitive tasks in accounting, such as data entry and reconciliation, allowing accountants to focus on more complex tasks that require human expertise such as advisory and consultancy tasks. Artificial intelligence can also analyze vast amounts of data and provide insights that humans may miss, helping accountants make more informed decisions. CPAs need to keep up with the technology and continue to educate themselves on how it can benefit their clients.
2. AI for financial protection and controls in an accounting firm:
Artificial intelligence can help accounting firms to build trust through better financial protection and controls. As the volume of online transactional data increases, so does the potential for financial fraud, manual accounting errors, and fraudulent payments. AI can review the data at speed. It can spot irregularities like duplicate invoices, identify relationships between what appear to be typical (but aren't) payments, and classify spending appropriately so the company doesn't pay for things it shouldn't.
For instance, AI tools can help with bank reconciliations by automatically matching transactions from bank statements with those in the accounting system. This can reduce the time and effort required for reconciliations and free up time for more strategic tasks.
The Value of a Human Touch in Accounting
"Technology cannot replicate the relationship between a person and a client. It cannot read facial expressions, understand tone or body language, or adapt to the client's changing needs."
Stated by Mollie Lombardi, Co-founder of Aptitude Research Partners, in his recent article Embracing Automation for the Future of Work
1. Emotional Intelligence in the Accounting Profession:
The World Economic Forum’s “The Future of Jobs” report told us that emotional intelligence would be among the top 10 job skills.
While accounting may seem like a technical field that only involves numbers and calculations, building solid relationships with clients and communicating financial information in a way that is easy to understand requires human interaction and emotional intelligence.
This includes empathizing with clients, and understanding their unique needs and goals, clearly and concisely.
2. Creativity and Critical Thinking in Accounting:
While Artificial intelligence can assist with data analysis and automating repetitive tasks, it cannot replace the need for human judgment and context when making complex accounting decisions. Accounting professionals need to be able to think critically and creatively to provide innovative solutions to complex accounting issues.
A survey conducted by Sage in 2020 found that 81% of accountants believe that human relationships are essential to the industry's future, and 72% believe that client relationships will be more important in the next five years.
Accountants must adopt AI to stay competitive
The accounting profession is modernizing and becoming more sophisticated. While the rules of finance remain the same, the practices of how the work is done are shifting. Accountants must recognize that AI is here to stay, whether they like it or not. They should not turn a blind eye to this technology and hope it won't affect their business. Instead, accountants should educate themselves on the potential of AI to improve their business and invest in new systems to stay ahead of the curve. To benefit from this technology, CPAs and EAs should enroll in AI and data management courses.
A report by Accenture says that artificial intelligence can improve productivity for employees and the company by up to 40% and also turbocharge the profession from a backward-looking “bookkeeping” function to delivering forward-thinking consultancy. The benefits of AI for accounting and finance are already evident. Those who invest in AI and automation will be the ones who stay ahead of the competition.
“Humans can act as a safety net for artificial intelligence.”
While AI is great at automating repetitive tasks, it still requires human oversight to ensure accuracy and completeness. By embracing AI's benefits while emphasizing the importance of personalized service and human expertise, accounting firms can establish themselves as trusted partners in their client's financial success. In short, humans and AI can work together to provide the best possible service to clients.
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