Why AI can be accountants' next big pivot
March 1, 2024
Accountants are no strangers to change. From major accounting laws like Sarbanes-Oxley to tax reform to digital transformation, the profession is in a constant state of motion.
Despite the change, one thing has remained the same: Accountants rely on tools to manipulate and drive value on top of data. For decades there have been major innovations that have benefited accountants, and AI is currently the one most talked about, with the highest potential we've seen in a long time.
Large firms have already invested millions to embrace this new technology, but the great news is that small firms and sole practitioners can also drive significant value through AI pilots in the year ahead. If you're thinking about whether AI can help your firm, here are some things to consider.
AI is real — and a little hype
In a profession like accounting that is built on trust, "artificial" can be a concerning word. And when you read about generative AI "hallucinations" (misleading or incorrect results from AI models based on nonexistent patterns in data), it's not surprising that accountants might be asking whether or not we can trust AI. This year, a lot of attention has been focused on generative AI, and while the excitement is well-deserved, there is also some hype. In fact, AI is already powering the tools and software that accountants have known and loved for years.
I've spent my career in technology and have been fortunate to work at the apex of cutting-edge innovations like AI. I worked for years as a developer on Microsoft Excel, and later helped drive innovations and delivery of transformative changes in search, commerce, payments — often with data and AI being the core engine of change.
In my experience, there are amazing opportunities for efficiency and productivity gains through AI, as long as software companies are building with trust at the core of innovation. Accountants can take a pragmatic, thoughtful approach to AI that unlocks efficiency and scale without removing human judgment and analysis.
It's all about the data
These latest AI advances are exciting and rely on something that has been fundamental to the accounting profession since day one: data. Every algorithm, machine learning model and generative model is built on data. We have a phrase in the industry that says, "Garbage in, garbage out." If the data is low quality or algorithms are applied incorrectly, then forecasts, reports and analysis will be inaccurate or incomplete.
Speeding up the process of getting insights from data has been a passion of mine since I led the team that developed and wrote the core code that powers PivotTables in Excel 30 years ago. I wanted to help people take large amounts of data and quickly organize, summarize and analyze it for key trends or different perspectives they may not have been able to see before. I wanted to literally allow people to be curious and "play" with their data and to analyze it in real-time to look for and draw new conclusions that only they could see.
Accountants have come a long way since PivotTables, but AI offers a similar leapfrog to virtually unlimited insight and value.
Keep humans in the loop
For years compliance and technology teams have seemingly been at odds. One group is known for governance and risk management, while the other is charged with pushing the boundaries, moving fast on innovation and taking some risks.
Just like doctors taking care of patients, accountants look after the "vitals" that are critical to the health of a business — and our economy at large. Therefore, for accountants to be risk-averse and have a high level of scrutiny of technologies they adopt is important. Healthy caution with AI and generative AI is well-founded, but the key is to pick the right AI for the right scenarios.
Algorithms or machine learning models with extraordinary accuracy are good for use in automated scenarios, such as calculating moving averages on cash flow.
Some generative AI scenarios and machine learning models can add incredible value even if they are right only 90% of the time — the important thing is to keep humans in the loop. By that, I mean using AI to suggest answers to humans, rather than automatically applying them. A good example is using AI to draft a response to a client that requires your approval before sending.
I recommend trialing AI in areas that are repeatable and predictable — like invoicing or spend management. For example, one of our customers, Furey, uses Bill AI to auto-read and extract data for international payments. With the time they've saved on using AI to automate, they're able to reinvest that into more analytical work that is of higher value for clients.
Use AI to help create even more value
Done right, leveraging AI in accounting can and should drive cost and time savings by automating tasks, analyzing financial information more quickly and reducing the time spent cleaning up data and fixing errors. That's the promise and potential of technology — to help you enter the field on third base. But without human legs to run it home, it will stop there.
Countless stories are emerging about the limitations of AI and technology — some humorous, others concerning. But all make clear that human context, judgment, ethics and problem-solving abilities are essential.
This is why CAS offerings are a rapidly growing area in the accounting field — because data and AI are increasing the value of accountants' counsel and ways they can help small businesses manage cash flow and grow. Accountants know that every business and every situation is unique. AI may not be equipped to handle new or unforeseen issues, but accountants are. They have been doing that through the pandemic, market uncertainty, and more.
The next big pivot
AI is the accounting profession's next big pivot. And because accountants and AI both thrive on insights through accurate data, this is an ideal partnership. The combination of skilled accountants and AI-powered financial data will create new value and increased confidence in the profession.
As accountants pivot toward AI, they advance toward a brighter and more dynamic future, where human insights and AI-driven capabilities converge to redefine the boundaries of accounting and value to small businesses. With AI, you have the freedom to focus on your customers and other business priorities.
Ken Moss
Chief technology officer, Bill
[Source: Accounting Today]
