Accounting technology is continuously adapting and evolving to comply with changes in tax legal regulations and reporting obligations to stakeholders. It has transformed to align with the ever-changing work styles of business owners and accountants.
From Peachtree software in 1980, later acquired to become the well-known Sage 50 brand, the desktop version now seems like a relic from the past. The need to work remotely and access customer support with the press of a button is the norm today, unlike the Peachtree times when there were limited support capabilities.
According to a 2020 survey by Codat, only 3% have used QuickBooks desktop in the UK, while 24% used Xero, 21% used QuickBooks Online, and 19.9% used Sage.
Since most accounting tasks have transitioned to the cloud, accountants have gained more flexibility to work anywhere, anytime, as long as they have a stable, secure internet connection.
The cloud has offered much more than just the flexibility to access any part of the business finances immediately on a laptop or even a mobile phone. It has brought with it online data storage, the ability to submit receipts through an app, send invoices to clients within minutes, and submit reports through the software with a direct connection to the tax office, among many other features.
Although the role of accountants has ultimately not changed, thanks to the new tools, work has become more efficient, eliminating many unnecessary steps and speeding up the pace of completing tasks.
The reconciliation process has been automated with capabilities such as matching invoice numbers, amounts, or bank rules. Invoices can now be created from quotes, and recurring bills are automatically created and sent to customers on specific dates.
However, the execution of these tasks still requires accountants. Even though there is automation, there is still a need for accountants to check and approve matched transactions, set up bank rules, and ensure that reporting is correct. As for bills, many create them as drafts and check before sending them off for payment.
We are now entering a new era in accounting software, and this might change accountants’ roles for good. For years, cloud software has been tested for reliability, security, and efficiency.
These changes did not happen overnight, and it is these protocols running behind every automation that formed the basis for the inclusion of Artificial Intelligence (AI) in accounting.
AI is not a stand-alone product; it is a continuously learning machine running hundreds of codes simultaneously to deliver on a user-friendly screen what is needed.
AI-based software is no longer simply highlighting matching text in the reconciliation process; it is designed to do much more. Paired with OCR, it reads and analyses a mass of data in the background to learn how to remove errors by building a network.
The main question today is, what will be the future role of accountants? One aspect will not change – helping AI to learn and simulate what an accountant would do in various scenarios, which is the correct response to action A or B, and how that affects other elements.
Alan Harris, CTO of Sage, said during the Tranform 2024 conference, that 25% of accountants work based on chasing errors and discrepancies, making corrections, and collecting copies of relevant information.
AI is developed in a way that these tasks are removed from accountants by introducing a large network that spots errors as they occur and perhaps corrects them based on past scenarios.
Like in any training, it needs to know what is right and what is not. With real data already in place as bank account transactions flow to and from accounting software, payables and receivables are set to be continuously checked, and outstanding amounts are chased by the system rather than by humans.
Based on my own experience of working with various OCR software, I must say that recognition is not yet perfect. It is much better than years before, with fewer errors, however, it still requires accountants to adjust and approve mismatches.
If AI uses OCR as one of the recognition tools, it needs more time to increase its reliability. In my view, AI still has a long way to go before achieving complete automation.
Perhaps it will be more a case of trial parts in some sections, like expenses or reconciliation.
however, the role of accountants will still involve manually checking, adjusting, and approving transactions, tax submissions and reports, or reminders to customers in the meantime.
The ultimate goal is to build AI to an autonomous level and transfer logic skills based on real scenarios from millions of businesses. The hope is to ensure that those scenarios in some ways are more harmonious and applicable to as many, if not all, or find what works best in a given case. Thus making the future of accountants free from endless chasing and error correction to being reviewers and continuous pattern-trainers of AI systems.
In the meantime, more testing will be carried out on the trial AI solutions, and accountants are still at the forefront of this job. It would not be possible to build a successful and efficient system without significant input from accountants. Moreover, it is accountant to provide correct data to feed into network building. It is known rubbish in, rubbish out; so it is quintessential to ensure good data is in.
Larger accounting firms like Xero, QuickBooks, and Sage are heavily invested in the AI future, and so are their users by default. It is the continuous role of accountants to assist in building the structure, while IT companies write the codes and build networks and relationships. Together, it is possible to transform how the accounting system works and take yet another leap into a new era. Maybe this means that monthly closing for accountants will be a seamless and stress-free exercise, with AI running in the background making continuous checks and automatically (or semi-automatically) correcting any errors. Can accountants completely rely on and let go of the manual adjustments part of the job? I would say it is possible. Who knew back then that we could work remotely and use cloud systems for work? It seemed like an impossible dream, but now it’s a reality.