Generative AI has the power to revolutionise the accounting industry, elevate the role of accountants by automating repetitive workflows and improve employee experiences. However, with countless headlines calling out the threat posed by AI to job security, the thought of businesses turning to this technology may well spark fear – especially for sectors where a lot of manual processes remain, such as accounting.
Today, one of the hottest questions being debated is, will ChatGPT and other forms of generative AI replace entire industries, like accounting, or will they, as we like to say at Sage, “elevate human work”?
Is Generative AI on the Path to Replace Accountants?
Generative AI will have a profoundly disruptive impact on accounting and finance and will require businesses to embrace new tools and more extensive automation. Its impact on the global economy is an estimated $2.6 to $4.4 trillion in annual growth.
That growth is on top of the $11 to $17.7 trillion in economic value already estimated for traditional AI. Although AI could automate as much as 27% of jobs, this automation does not automatically translate to job losses.
What it does mean is that those businesses embracing AI best will be able to put accounting staff onto more value-adding tasks, with greater productivity and likely greater job satisfaction – helping to retain and attract key talent at a time when highly-skilled workers are in short supply.
Today’s Opportunity to Embrace Generative AI
Standard, or so-called ‘narrow’ AI is already widely used within the accounting industry, from automating data processing tasks to identifying anomalous transactions and accounting entries.
Generative AI, however, is a giant leap forward in capability – it has the power to advance the automation of simple tasks to the automation of entire workflows.
Large Language Models (LLMs), a form of generative AI, are trained on massive amounts of textual content, including accounting standards and regulations, business cases and best practices, and even software documentation.
This training also teaches LLMs to understand the patterns and structures of language, leading to the big AI breakthrough we’re now seeing. Where narrow AI operates within strictly defined workflows limited by meticulous rules, generative AI can understand human-like instructions and can determine the complete set of activities required to complete a request. Its ability to generate computer code and interact with software translates this understanding into action.
LLM-Powered Digital Assistants
LLM-powered digital assistants will transform the way accounting professionals interact with technology by replacing limiting, hard-to-learn user interfaces that require pre-defined menus and complex data entry forms with simple, human-language interaction. Imagine simplifying work processes to an instruction you might ask a human.
Helping with the Work Load
Not only will this improved interaction increase productivity, but it will also expand the breadth of work an accountant can take on. And, as these digital assistants become ever more capable, they will also become expert resources for understanding and applying accounting standards.
When these capabilities are added to AI’s ability to take on repetitive, time-consuming jobs like processing invoices or reconciling accounts, the accounting industry will elevate to deliver higher value services, like strategic guidance into financial planning and capital allocation.
Accountants we speak to are positive – they see opportunities where most see threats. They’re optimistic that the combination of generative AI and forward thinking will expand the accountant’s role as a trusted advisor to businesses.
The Value of Human Accountability
Accounting is an industry of trust. A trust that is built on businesses having confidence in the audits and advice that accountants provide. Automated processes can be put in place for routine tasks, but accountability for results, a core element of accounting, will still reside with humans.
AI is not infallible and can produce inaccurate outcomes, known as hallucinations, where the generative AI algorithms produce factually incorrect responses. Knowing the limits of generative AI is almost as important as knowing the capabilities, and businesses must be aware it’s not the technology alone but how it is integrated and managed that will bring out the best results.
For accounting, that means finding the areas where AI automation will make the most positive impact on workflows and employee experiences.
Enabling Accountants to Deliver More Strategic Value
Equip accountants with the power of LLMs, and they will have an invaluable, hyper-efficient research assistant that can analyse massive amounts of information and structure coherent, professional presentations of the results.
This AI assistant will enable accounting professionals to deliver greater strategic value by improving both the quantity and quality of decision-making. The same skill for analysis can also recognise and plot trends over time for enhanced forecasting and planning capabilities, such as identifying recurring patterns in cashflows so that accounting teams can prepare for the peaks and troughs in activity.
With 47% of CFOs saying their top priorities are building predictive models and scenario analysis capabilities caused by ongoing economic uncertainty, the ability to produce in-depth forecasts that link to wider market trends will make businesses more resilient when facing economic disruption.
Solving the Accounting Industry’s Skilled Labour Shortage
Prolonged labour shortages and the Great Resignation are increasing pressure on already stretched finance teams, with over half of accounting professionals globally looking to leave their current company in their next career move. This issue is playing out in businesses across the world.
Accounting and finance managers are faced with the challenge of attracting new talent but also ensuring they hold onto their existing staff. Here generative AI can help kill two birds with one stone by improving employee experience.
In a recent survey, 63% of workers who integrated AI into their daily tasks reported increased satisfaction and enjoyment in their jobs, meaning the integration of generative AI tools could make an accounting career more fulfilling for those in the industry and more attractive to prospective talent.
Accounting will Lead the AI Elevation of Human Work
The accounting industry plays a significant role in society and the global economy as the provider of market confidence and as a trusted resource for financial guidance. As accountants, we have the opportunity to not only elevate human work but also to elevate the entire accounting industry.
We should deploy new AI technologies, balancing pace and determination with prudence and humility. In this new era of generative AI, the businesses able to effectively adopt and integrate AI will be the winners.
By By Aaron Harris, CTO of Sage