Thanks to recent breakthroughs, artificial intelligence is rapidly transitioning from a niche role with specific use cases to part of a broader conversation about its utility in everyday business contexts and settings.
Unfortunately, this growing ubiquity has also led to some misunderstandings, and more than a little anxiety. In the accounting and finance world, will AI become a transformative business solution that, properly harnessed, offers unprecedented value? Or does it pose a menacing — if somewhat latent — threat by replacing talented people with opaque processes and questionable reliability?
Unsurprisingly, the answer to that loaded question largely depends on whom you ask. For many high-value use-cases, AI offers little added value — only a surprisingly damaging downside. So-called "AI hallucinations" — the confident, authoritative-sounding errors that riddle many AI responses — have called into question the reliability of the technology.
However, it's increasingly clear that, in less-strategic, clerical areas, AI offers tremendous value through its ability to detect latent patterns, make conclusions and predictions, and intelligently automate time-consuming, manual tasks. That's certainly true in accounting and finance — despite the commendable and worthy concerns of some experts. I believe that, used correctly, AI is a worthy strategic initiative and will become increasingly commonplace in our profession.
AI will make accounting a more attractive career
Without question, the Great Resignation and "quiet quitting" have impacted the ability of accounting firms and finance departments to attract and retain the talented people they need.
Here's what won't help that situation: asking employees to engage in low-value, repetitive work — like entering invoice data. Too often, entry-level and early-career accounting and finance jobs have been characterized by drudgery involving multi-month closing cycles, 50-tab spreadsheets with inscrutable and opaque formulas, convoluted processes, time-intensive reconciliations and lengthy audits. Small wonder that companies struggle to fill these positions.
However, AI tools and technologies can remove much of this monotonous work. They can automatically match invoices and POs, perform reconciliations in seconds, apply complex revenue-recognition rules, allocate expenses to different cost centers, and calculate commissions for sales compensation. The introduction of AI means accountants can focus on more strategic tasks like managing relationships with clients and business partners, crafting strategy, evaluating opportunities and making strategic decisions. Effectively managed AI-powered automation should be an attractive prospect for the next generation of accountants.
Is AI worth the time and money?
Accounting watchdogs point out that the development, implementation and maintenance costs of AI can be significant. That's certainly true — only the largest firms will have the capital patience to build AI-powered customized solutions at the code level and keep them updated as tax laws change and accounting guidelines evolve.
However, that doesn't mean accounting firms and finance departments are necessarily on the outside looking in, unable to tap into the power of AI. Much like powerful tax-preparation programs or vertically integrated accounting systems, accounting and finance pros should expect software vendors to treat AI as a critical feature of their offerings to addres their pressing concerns. Vendors will face growing demands to harness and embed AI within their software, which will become a crucial differentiator.
Trust and reliability are critical features
We're still in the early stages of an AI adoption curve that will stretch out for the next several years, which is why it's no surprise to see some unexpected results — some amusing and others quite concerning. As many finance pros "watchfully wait" to see what useful capabilities emerge and what potential pitfalls remain, it's important for AI designers to manage user expectations. A cautious approach, where humans can intercede when AI accuracy isn't perfect will give users confidence the AI won't exceed its capabilities, creating a mess or worse — causing real harm.
Moving forward, software vendors must redouble their efforts to create levels of AI reliability and trust that match the reliability and trust accountants deliver to their own clients. Without this non-negotiable requirement, AI will never win support from accountants and will fail to deliver on its promise to transform the accounting industry.
To be sure, it will surely take many years or even decades before AI can begin to tackle some of the many sophisticated accounting issues — things like employee retention credits, arcane depreciation rules, the nuances of deferred income and complex tax questions. AI will never be a panacea for the complexities of accounting and finance, and it doesn't possess empathy or understand human dynamics — traits that are essential for providing high-level strategy and guidance. However, once the technologies achieve a greater level of reliability and trustworthiness, AI tools will free accountants from mundane, repetitive work and empower them to focus their time and talents on higher-value client service and strategic counsel.
