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By Shanice Jones | July 2022
Artificial intelligence is changing how humans interact with the world. Because of its widespread use across every industry, many CPAs are concerned that robots or computer programs will replace their profession, but this isn’t the case.
Automation will enhance how CPAs work, not take over accounting.
But that’s not to say that automation won’t change the focus of accountants and the kind of work they do. So what are the benefits of adopting AI-powered tools for CPAs? Let’s dive into what automation is and how it can help accounting firms future-proof their practice.
Many tech buzzwords sound similar, which can be confusing when understanding what automation means. Robots, AI, machine learning, predictive analytics, deep learning, and robotic process automation are often used interchangeably by those who don’t know better. On the other hand, some people cover their ears and turn the other way when these terms come up in conversation.
Let’s get this out of the way—CPAs will not be replaced by automation. But as financial leaders, CPAs must have a more in-depth understanding of how automation in accounting works.
Imagine a well filled with different levels of automation. The most advanced AI technology that makes computers pseudo-cognizant of their tasks, called deep learning, rests at the very bottom of the well. This level of automation is still being studied and is unlikely to come to the financial sector any time soon.
As we make our way up from the deepest part of the well, we meet machine learning. Machine learning AI is becoming more widely available in many business software tools. This level of AI is used mainly to understand consumer markets better.
Almost to the surface now, we have arrived at the top two technologies that make CPA jobs much more manageable. Robotic process automation at the surface of the well and just beneath it, a slightly more sophisticated version called intelligent process automation.
Robotic process automation uses no AI and is simply a software tool that can handle mundane, repetitive tasks like making calculations, updating records, recording transactions, basic algorithms, and data analytics.
Intelligent automation builds on the foundation of RPA by adding in a sprinkle of machine learning. The software is programmed to perform a specific set of functions but learns how to become more efficient and understand growing amounts of data over time.
It’s important to note that RPA can only perform functions that it is made to do, and really isn’t artificial intelligence at all. The artificial intelligence that is used in financial tools is made to enhance CPAs' ability to meet their clients' needs.
Without CPAs, these automated tools are nothing more than that—tools.
The increasing interest in AI and robotic process automation has made many people across industries wonder whether or not their job will be performed by computers one day. However, there will always be some accounting tasks that a CPA can only perform.
Automation is meant to make CPAs’ lives easier. Here are just a few of the ways that CPAs can benefit from using automated tools:
Tedious, manual accounting tasks are prone to human error. And now, with at least 80 different data privacy laws in effect, automated tools help CPAs navigate this space without making costly errors. No more typos or missing keystrokes. Automation for CPAs means streamlined data entry and simple data aggregation.
Along the same lines as #1, accounting automation significantly reduces the time it takes to complete daily tasks. There is an increasing focus on agile processes in several industries. Accounting automation is a great way to put those ideas into practice and create a cohesive culture focused on agility.
This doesn’t mean that CPAs will have less work to do. It means that their time will be better spent on strategic tasks moving forward.
For the 2021 filing season, there were $56.2 billion in payments processed, and over half of them were made electronically. Reconciling records and optimizing them for tax purposes using automated accounting software translates into smoother tax prep, more clients, and simple IRS integrations.
Automation allows accountants to shift their focus from daily tasks to long-term projects in areas such as estimates, judgments, thinking of new business models, auditing complex transactions and developing their skills and talent.
Higher productivity means a more engaged workforce. Studies show that highly engaged workers are less likely to leave their positions, improving retention and decreasing turnover costs.
As the financial services industry continues to adopt new technologies, accountants' roles will change. Automation gives financial firms access to more advanced analytics and larger data sets, which means more personalized input for clients and better goals. CPAs are an advantageous position for businesses that want to expand their reach.
Modernized accounting tools also help CPAs measure and scale with more accurate insights. Tracking accounting KPIs such as unrecorded adjustments, open tasks, and journal entries enables data-driven business decisions and drives accountability.
CPAs can compile reports and build dashboards that are automatically updated or adjusted without relying on IT. By putting more control over reporting in accounting’s hands, organizations can take action faster and better than their competitors.
Finally, accounting automation produces happier clients. Increased accuracy, more efficient processes, decreased stress, improved productivity, and better insights trickle down to positive client outcomes.
Not only is their increased satisfaction due to the accountant’s ability to move quickly and accurately, but it’s also due to a changing economic environment where business owners and individuals are filled with financial uncertainty.
Gold is out, and crypto is in. More people are using digital payments and online banking than ever before. And 40% of business owners say they depend on digitization for their financial needs. Accountants need to embrace digital transformation to be of better service to their clients, do better work, and establish thought leadership in the industry.
Financial professionals are becoming accustomed to using technology to run their firms more efficiently. However, there is a widespread fear that someday computers, robots, and algorithms could take over CPA jobs, leaing nothing left of the industry for humans.
The financial services industry could look very different in the future. New technology like automation, machine learning, fintech, blockchain and defi foreshadows a future where self-service and robotic process automation take center stage as CPAs move into a more analytical position for their organizations.
Daily tasks will shift, and accountants may find themselves in a more strategic and valuable position than before. While computers can handle logical calculations, human CPAs are better suited for understanding clients' needs, building trust with organizations, and leading toward a digitized finance future.