Accountants vs. Robots
We occasionally talk around here about automation and its ability (or lack thereof) to replace accountants. Last time we checked in on this topic, my colleague Will Lopez had just penned a column declaring an end to the debate once and for all: NOT GONNA HAPPEN. Whether he’s aware of it or not, there’s some new fancy research to back him up:
Technological advances in AI and automation will have an enormous impact on the workforce, but it may take decades for those effects to be fully felt. That gives business leaders and politicians a last chance to change labor and education policies that have left too many workers locked in low-quality, low-paying jobs.
On Tuesday, MIT’s task force on the Work of the Future released its final report, coming to the conclusion that the immediate effects of automation on work were overhyped and overshadowed by longer-term political trends that have allowed an increasingly unequal share of economic growth to be captured by the well-off.
So we’ll have to address the fact that benefits of automation have mostly gone to the well-off another day, but as for the automation job apocalypse… Okay, it might happen someday, but it will be a day in the very far future after many of us have shuffled off this mortal coil. Which doesn’t come as much of a surprise. There’s definitely a lot of cool tech happening in accounting these days: It’s getting good at bookkeeping. It can crunch the numbers on a tax return or payroll withholdings in a few seconds. But automation doesn’t care about running an accounting firm. It doesn’t care about providing exceptional client service. It won’t express empathy or compassion when a pandemic shuts everything down. The CPA 3000 is not going to show up at your front door, demanding all your client files by order of the AICPA. It lacks the desire to do something, to do anything.
Even this natural-language system called GPT-3 that “generates tweets, pens poetry, summarizes emails, answers trivia questions, translates languages, and even writes its own computer programs”—which anyone would have to admit is pretty remarkable—doesn’t come close to knowing what its purpose is. “It does not plan out what it is going to say. It does not really have a goal,” a professor said.
As I said before, maybe someday that will change. But for now, what I think we’re all learning is that the end result for firms that have been dragging their feet around technology will be far more boring. That is, if a firm does the bare minimum, the worst that can happen is not that the firm will be replaced and overrun by robots; it’s that a more capable firm will come along and scoop them up at a slightly unsatisfying valuation. Which sounds just fine.
Dealing with complaints
When is complaining worth it? That’s the subject of this Tyler Cowen column, and he more or less has the answer:
The basic “economics of complaining” are becoming clear: Complain when the marginal cost of extra service is low. Complain when the reputation of the seller is evaluated online in a meaningful way. Complain when the service norms are something other than equal treatment.
As a writer of things on the internet who has fielded more than my fair share of complaints, I’d be thrilled if complaints worked this way. My cost of extra service is high. I get criticized regularly, mostly in comment sections, email, or on Twitter, so whether that qualifies as meaningful is debatable. Finally, all readers are treated equally (except maybe an editor or two), so it’s doubtful that any one complaint will make a difference. Result: I can reasonably ignore the vast majority of complaints that come my way without much risk.
So if you assume Tyler has this more or less right, then how should accounting firms plan to deal with complaints? It’s a tricky calculus. Accounting is a service-based profession so that typically means being pretty responsive to complaints.
But does it have to?
Depending on the service, the marginal cost could be relatively high, so lots of times you could tell a complainer to go jump in a lake. The problem with that, however, is then the complainer could write many aggrieved reviews online, and most accountants trade on high-quality service and their good reputation. “It takes 20 years to build a reputation and five minutes to ruin it,” etc. You ignore those online reviews at your own peril.
Also, all clients are NOT created equal, so if a client is a frequent complainer and is high on the spectrum of importance, you could end up spending a lot of time responding to complaints. Still, a situation could arise where a frequent complainer is low on the importance spectrum, but they could make a lot of trouble for you online, so you’re back to reputation maintenance.
All this makes a pretty compelling case for… automation! Yes, the more automated some core services—say bookkeeping, payroll, tax preparation—are, the lower the marginal cost would be, forcing you to be more responsive to complaints. But the trade-off would be fewer errors and more equal treatment of clients, resulting in fewer complaints (theoretically at least).
Full disclosure: I work for a company that, in no small degree, automates payroll, and we have an army of people who deal with customer complaints. So just understand that people, regardless of the economics, will always complain.
Fresh from Gusto
- A new study from my colleague Luke Pardue found that as the PPP Covered Period expired, companies reduced their headcount, costing 232,000 jobs.
- 401(k) and Tax Benefits for SMBs with Nicolle Wilson of Guideline on December 14 and 22.
- Painless December Ethics CPE: You Have to Take It, So Make It Painless with Greg Kyte and me on December 15.
- A Coaching Experience: Goal Setting for 2021 After a Year of Disruption with Amber Setter on December 22 and 28.
Read with Gusto
- Yes, audit firms care about media coverage.
- A longread about Shopify.
- No-kill meat.
- J.R.R. Tolkien’s house can be yours for somewhere between $5 million and $6 million.
- “Given that Mr. Claus is older and overweight, making him particularly vulnerable were he to catch the virus, kids want to know: Does he need to quarantine before traveling?”