Since the launch of OpenAI’s ChatGPT and similar technologies, companies are racing to become early adopters of generative artificial intelligence (AI) and AI-powered solutions.
Disruption within the workforce is inevitable, and no industry is immune. But asking “will AI replace accountants?” may be oversimplifying the impact of AI on the accounting industry. The answer is much more nuanced.
While a recent Goldman Sachs report predicted that "roughly two-thirds of current jobs are exposed to some degree of AI automation and that generative AI could substitute up to one-fourth of current work," there are some important qualifiers.
First, the report notes that innovation has historically created more jobs than it displaces. It's also more likely that AI will replace repetitive tasks instead of entire accounting jobs.
Benefits of AI in accounting
Smart accountants are already saving time and money using AI for specific tasks, such as:
Extracting data
Without even mentioning the implications of AI on the clinical side, AI-led automation powered by machine learning and natural language processing have vast potential to affect healthcare on the finance side. Global firm PwC predicts AI in healthcare accounting can:
- Convert physician notes into billable medical codes.
- Perform real-time audits to identify and rectify errors in bills.
- Identify medical billing cases that require prior authorization.
- Help billing staff predict the likelihood of a claim being rejected.
AI's data-extracting capabilities can also be beneficial in:
- Identifying fraud
- Bookkeeping
- Bank book reconciliation
- Payment and invoice processing
All of these uses can reduce errors and promote operational efficiency in any industry, freeing up humans for other tasks. A CPA Journal piece predicts that machine learning will largely take over processing information, which now accounts for about 80% of the time spent in advisories services. Accounting professionals will instead focus on analyzing the information and providing value-added services.
Automating manual accounting tasks
Process automation is one of the top ways in which financial services organizations are leveraging AI, according to Deloitte's most recent State of AI in the Enterprise report. But tools exist to allow any organization to benefit from process automation. In 2020, for instance, 71% of healthcare provider executives responding to a PwC survey reported "significant investments" in automating administrative functions.
Microsoft Power Automate, a part of the Microsoft Power Platform on which Gravity Software is built, uses process and task mining in its process advisor, which helps users discover workflow bottlenecks and inefficiencies so they can see where automation could bring the biggest benefits.
Process automation can be enhanced further with newly added AI capabilities that allow users to create "user-intuitive flows by embedding powerful language models and build unique scenarios with advanced low-code AI," Microsoft's website states.
Predictive modeling and analytics
PwC's Next in Health podcast host Igor Belokrinitsky asserts that AI has the potential to forecast supply and demand, possibly better than the market can, to better allocate resources in a healthcare setting. Most executives responding to a PwC Health Research Institute survey confirmed this, saying they planned to invest in predictive modeling to improve supply chain reliability.
Such use cases are a signal of organizations' increasing trust in AI to perform analytical tasks, with 44% of respondents to Deloitte's survey saying they use it to assist with high-level decision-making.
Where AI falls short
Despite companies' increasing trust in and adoption of AI, it still falls short in a few key areas:
Accuracy
Frequent users already know that when they ask a question to a generative AI program such as ChatGPT, they'll get an authoritative-sounding answer.
The answer may not necessarily be true, however. Large language models are notoriously bad at mathematical calculations, as Microsoft researchers acknowledged in a recent publication.
Concerns about inaccuracy in AI are so pervasive that the Federal Trade Commission put technology companies on notice in a recent blog post. The agency warned it would be "focusing intensely on how companies may choose to use AI technology," specifically in regards to steering people "unfairly or deceptively into harmful decisions."
"Many of these chatbots are effectively built to persuade and are designed to answer queries in confident language even when those answers are fictional," the post stated.
Geoffrey Hinton, known as "the godfather of AI," recently resigned his position at Google so he could speak freely about just such dangers.
These concerns serve to illustrate that AI-led tasks still require human supervision — another reason why AI won’t replace accountants anytime soon. AI can assist with tax preparation, reporting, and even financial planning, but there’s still a need for an experienced professional to give accurate, personalized recommendations.
Critical thinking and decision-making
AI can find and compile financial data, but knowing how to act upon that data requires critical thinking.
"When it comes to strategic decision making, a finance group’s analytical skills and ability to quickly unlock insights from financial data are as important as digital tools," says PwC's Mark Watermasysk about the integral role of human intelligence in private equity deals.
In M&A, there are nuances that can't be quantified. Will the workplace cultures mesh? Will internal and external stakeholders respond favorably to the deal? Are these concerns pressing enough to consider holding off on the transaction?
While AI can certainly play a supporting role in other areas of accounting and finance, most organizations will still need experienced professionals to take ownership of strategic responsibilities, including:
- Budgeting
- Forecasting the overall company direction
- Setting the financial direction and goals for the organization
- Ensuring compliance with changing regulations
- Risk management
All these areas require frequent human interaction, including conversations with stakeholders, and deep institutional knowledge in addition to analytical skills. Customizing financial reporting
Although AI excels at some financial reporting tasks, accounting team members still need to present data in a way that’s tailored to individual stakeholders.
They need to be able to make recommendations based on financial data and respond to questions.
While the company’s executives will be interested in specific KPIs and business insights, shareholders have different expectations for quarterly reporting.
Maximize the benefits of AI with Gravity
Businesses are increasingly realizing that the greatest potential for AI in accounting and other areas is to augment human capabilities rather than replacing them.
Every accounting and finance professional should break down their role into specific tasks and determine which ones could potentially be automated to free up time for more strategic priorities.
Gravity Software’s new features leverage the latest AI innovations to make processes like data entry, accounts payable and bank book reconciliation more efficient to save time while creating new opportunities for the accounting profession.
Schedule a demo to see how our new features enhance your productivity and advance your organization.
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