Are you wondering how accounting automation will affect you and your firm? Are you curious to know how the use of AI in accounting is impacting the industry?
Gusto is here to help you navigate your career, stay ahead of the curve, and thrive now and in the future. So we’re thrilled to partner with CPA Academy to help you understand how AI in accounting impacts your profession.
That’s why we were pleased to present a webinar called, “How to Survive (Career-Wise) as the Robots Take Over,” and you can watch the full presentation here. Accounting experts Greg Kyte and Caleb Newquist discussed machine learning in accounting, AI in accounting, and automation in accounting and finance.
Greg Kyte is a comedian and CPE who made Accounting Today‘s list of the Top 100 Most Influential People in the industry. With 12 years of standup experience, he brings a fresh, funny take to accounting education. Caleb Newquist is the head of content Editor-at-Large at Gusto and the founding editor of Going Concern, a leading accounting news publication featuring breaking news, developing stories, and industry insights in the field. Caleb combines his editorial eye, content expertise, and accounting background to create his unique brand.
Is accounting insulated from the trend toward automation?
Everywhere we look, we encounter automation. From Netflix algorithms to self-driving cars to store bots, we live in a world saturated with machines. While much of the panic has dissipated about the robot takeover, there’s still a deep sense of unease. It’s impossible to predict just how much AI will replace people across industries, but it’s become clear that AI and automation aren’t going anywhere anytime soon.
Caleb and Greg discussed some of the industries currently grappling with automation, including journalism, transportation, retail, and manufacturing. Machines have the best chance of replacing processes that really don’t require a human touch. Whether it’s spitting out facts in a bare-bones news article, checking people out at the grocery store, or recommending music based on your preferences, machines are replacing people in diverse industries and at multiple skill levels.
“Not only will the robots do more work, they’ll do it better, and they won’t complain a single time.”– Caleb Newquist
Is the accounting industry as vulnerable to loss of jobs as these other industries are? Greg and Caleb argued yes. According to their insights, there is a risk of job loss or at the very least, a shift in valued skill sets, in the accounting industry over the next decade.
But is the news all bad? Absolutely not. There are ways to protect yourself from the onslaught of machines. Not only that, automation can be a tool that accountants use to their benefit to make their job easier, increase accuracy, and free up headspace for critical thinking and connecting with colleagues and customers. And ultimately, there are certain processes that simply can’t be replicated by a machine.
Scale, speed, and accuracy in automation
Before diving into where accountants can outsmart the robot takeover, it’s important to see where the industry is vulnerable. Accounting automation surpasses human labor in all the areas you would expect it to: scale, speed, and accuracy. Humans can’t compete with machines when it comes to quickly and accurately assessing vast volumes of data. By being able to handle a seemingly infinite amount of data, machines also take some of the guesswork out of accounting.
In auditing, for example, accountants regularly have to make judgment calls about larger trends based on small data sets. If a machine can look at all the data instead, it effectively eliminates the need for a human to make assumptions.
“Auditing has [involved taking a] representative sample of the transactions. … You don’t analyze every transaction because, man, we can’t do that. There’s no way we could do that. And so you take the representative sample, and you kind of use statistics to [draw conclusions about] all of the data, to [apply it to all] of the data [based on] assumptions. But with automation, it’s very realistic that every single transaction can be analyzed by a robot and flagged for whether or not that’s something that needs further looking into.”– Greg Kyte
In this example, the machine is outcompeting humans fourfold: It’s analyzing more transactions more quickly and accurately while eliminating the need for the critical thinking a human would need to apply.
Math is where machines surpass people by far, and companies are harnessing that power in sometimes staggering ways. Caleb shared the example of Armanino, a crypto and blockchain financial firm using automated bookkeeping.
“It’s moving towards continuous auditing where they’re able to put out reports on an almost continual basis, and that’s kind of a crazy thing to think about. It’s hard for me to even get my head around how, at any point in time, you can just spit out a report that’s [based on data that’s] only a few minutes old. … That doesn’t require many humans. … That’s a good example of how wild things are getting.”– Caleb Newquist
Using machines also eliminates a lot of the human error that’s so prevalent in pretty much any industry. When human error affects a person’s business finances, taxes, or other critical issues, a small error can lead to serious consequences.
Everyone makes mistakes. Everyone can get distracted by their personal lives, a lack of sleep, or an interesting conversation with a coworker. On the other hand, mind-numbing tasks may lead people to become complacent or lose focus. There are endless reasons why people make mistakes. Greg had one of the more hilarious human error examples from H&R Block.
“They wanted all of my old tax returns, and then they had me fill in this onboarding thing. … Every question they asked me on this sheet of paper [could have been found on my] old tax return. It’s right there. … Both of those places showed that I had two dependents. And then, when my tax return was finalized and submitted to the IRS, they did not have any dependents on my tax return. And it’s like, how do you miss that? That is so basic.”– Greg Kyte
It’s unlikely that companies will choose to have a person—who can make mistakes, be inefficient, and cost the company time and money—over a machine.
Where automation fails
Is there anything automation can’t do? Where can people surpass machines in the accounting world?
Both Greg and Caleb agreed—we can’t replace the ability that people have to make judgment calls. High-level thinking, critical analysis, leadership, relationship management, and forecasting outcomes based on experience and even intuition are irreplaceable human traits.
There are some decisions that can’t be made solely on numbers or even patterns. Machines can’t put problems in the context of human conditions and needs, such as a company member’s personal life, multiple businesses, or the complexity of their business. Machines can’t consult with a person, give them assurance and follow up, and build trust with them.
Accountants often act as advisors for their clients, guiding them toward making important, sometimes life-altering decisions with their money. While machines can forecast trends with unparalleled accuracy, someone still needs to talk to a client, discuss their needs, and interpret the data in light of their client’s wants. On the other hand, rote tasks that don’t require deep thinking or complex analysis are at risk.
“H&R Block [is not] helping you do your tax planning and your high-level stuff. They’re really just helping you make sure you send something into the IRS that hopefully won’t get audited, and that’s the danger zone for something getting taken over by automation.”– Greg Kyte
At the end of the day, no industry has ever been immune from sometimes both small and seismic shifts. By being smart, proactive, and flexible, you can not only survive this shift but thrive in it.
Learn more about automation in accounting and finance
Accounting is one of many industries currently being impacted by artificial intelligence. Machine learning in accounting has made automation easier to implement and much more sophisticated. Machines far outperform people in terms of scope, speed, and accuracy. They can pull out patterns from huge volumes of data, spit out continuous reports, and eliminate the need to make judgment calls based on small samples. They’re likely to be the go-to choice for companies worldwide for key functions. At the same time, people have irreplaceable attributes when it comes to accounting. Complex human challenges require human beings to resolve them. AI can’t replace high-level thinking, problem-solving, relationship management, and leadership.
Gusto’s mission is to create a world that empowers a better life. We’re here to help you navigate your future with confidence. Don’t forget to check out our other two articles based on the same webinar: “How to Prevent a Robot from Taking Your Accounting Job” and “FAQs About Accounting and Automation.”
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