Technology has given us many gifts, like computer, Internet, GPS, and among the list of gifts which humans have developed from the always evolving technology, Artificial Intelligence tops the list when it comes to transforming the world. All the major technologies like Siri, Cortona, Google Assistant, Amazon Echo, wouldn’t have been possible without Artificial Intelligence.
But one of the major sectors which have been affected by AI is business and their different processes and accounting is now no exception to it. With major technological changes like the shift from paper to software, desktop to the cloud, accounting is now being shaped by Artificial Intelligence in order to give it a more precise form. In addition to AI, machine learning is also playing a major role in changing the world of accounting and all these transformations will be witnessed by us in this blog post.
But before moving on to how AI and machine learning, will transform or is transforming accounting, let’s go through a quick description of both these technologies.
What is Artificial Intelligence?
It is a particular area of computer science which focuses on the development of intelligent machines that work, analyze and react like humans but to a larger extent and with better accuracy. AI is the process of making a system or process function automatically. Some major Artificial Intelligence implementations are in the area of Speech recognition, learning, planning, problem-solving, etc.
Example - Robotic process automation, (RPA programmed to perform high-volume, repeatable tasks normally performed by humans and it can adapt to changing circumstances).
What is Machine Learning?
Machine learning is the science of getting a computer to act without programming. Deep learning is a subset of machine learning that, in very simple terms, can be thought of as the automation of predictive analytics.
It is a specified field of computer science in which statistical technique is used to give computer systems the power and ability to learn with the data without being explicitly programmed. Some of the most common examples of machine learning are Google Maps, Sir, Cortona, PayPal, Uber, etc.
Types of Machine Learning Algorithms:-
Supervised Learning: In Supervised learning data sets are labeled so that patterns can be detected and used to label new data sets.
Unsupervised Learning: In Unsupervised learning data sets aren't labeled and are sorted according to similarities or differences.
Reinforcement Learning: In Reinforcement learning data sets aren't labeled but, after performing an action or several actions, the AI system is given feedback.
The Role of Machine Learning and AI in Transforming the World of Accounting
Although the concept of machine learning and AI is not new to this world, when it comes to its implementation to accounting then we can say that it is still in its early stage. In order to make AI and machine learning work together with the accounting system, we will have to look for a better process of bundling up of these two processes.
Artificial Intelligence has now moved out from a science fiction and Hollywood Movies, to a real concept which is being used and applied in various industries, from transportation and legal to advertising and pharma. In addition to minimizing error and exploration processes, AI also offers the benefit of real-time problem-solving in the most effective way possible.
And you should know that AI is not only being implemented at the industry level but is being used by most of the people, in their day to day life. From Siri to Facebook Messenger, now most of the things are becoming a part of the AI and even accounting is not an exception to it.
Although the concept of AI has started penetrating most of the industries when it comes to accounting, then we can consider the entry of AI in its early phase. Even if the accounting industry has welcomed huge waves of automation and technological advancement to improve the effectiveness and efficiency of their work but technology has not been able to replace the need of decision making and expert knowledge. Even the earlier version of intelligence system has shown us the importance of human knowledge and limitations of machines.
But many people consider AI as a replacement for a human which has created a perception of job loss from the adoption of AI. But this is not the ultimate truth. Artificial intelligence has been a hope for computer science for more than 60 years. With the concept becoming a part of your online activities, soon it will be woven into our daily task too. But this system does not replicate human intelligence as many experts will use the term AI to describe the current machine learning system. Although on a task-by-task basis, a machine produces far more accurate and fast output than humans.
But the above-mentioned reason doesn’t mean that the AI will completely wipe out the need of accountants. You should know that AI will obviously automate the process of repetitive bookkeeping or process driven tasks but it will also bring various new opportunities for accountants to improve their effectiveness and efficiency, provide better insight and deliver higher value to the business.
We can also consider the example of cloud computing in accounting. In the early phase of cloud accounting, it was considered as an alien technology and many professionals hesitated to move towards this new technology but look at the current trend of accounting. Most of the businesses are adopting cloud computing and it has become a new normal for most of the businesses. The same will happen with the AI and after some years, it will also become a new normal for all the businesses. And you should also know that the adoption of AI in accounting industry is happening at a much faster pace than cloud accounting.
Now accountants have become more tech-savvy and are more open to adoption and challenges. Those days are gone when accountants were only related to huge piles of papers, nerds, and boring job. Now accountants are technologically advanced people who add value to the business by becoming a major part of the decision-making process and the enhanced productivity of the firm. Therefore the adoption of AI will also be seamlessly done by the accounting industry and it will add more value to the output with enhanced accuracy.
Machine Learning and Artificial Intelligence will transform accounting by implementing the automation of the process, predictive analysis.
But we can see the improvements as accounting software as getting smarter day by day. For example, now most of the accounting software can automatically process a data or perform an analysis which earlier required human interventions. Consider the case of bank reconciliation, in which the accounting software learns how to automate this cumbersome job allowing you to get more free time.
The recent development of by Xero in the form of The Hey Xero chatbot will integrate financial information from that of Facebook Messenger. By using machine learning and AI, it will allow businesses to query their latest financial data.
But even with these developments, you don’t need to worry about your job as a bookkeeper or accountant because even the most advanced Artificial Intelligence will never be able to replace the human intelligence. So consider your accounting or bookkeeping job secured.