The adoption and application of Artificial Intelligence (AI) is going to be one of the most contentious and controversial topics for businesses in every sector both this year and in years ahead.
Some industries may find it being a distraction and of little use apart from novelty but others might find themselves completely disrupted and overturned by the sudden and quick introduction and implementation of the still-infant technology.
But what are the realistic implications for accountants and their working world?
We take a deeper look at the probabilities and possibilities awaiting the accounting profession.
AI – how did we get here?
The idea of AI has been around for many years, first as a staple in science fiction through films such as 2001: A Space Odyssey; Her and Moon but also TV, comics and video games too.
The reality is that computer scientists and researchers have been experimenting with evolving algorithms and statistical models for decades.
Since the 1980s, businesses have been utilising forms of AI to provide automated advice and decisions for complex problems using knowledge and rules set by humans.
This progressed in the 1990s and 2000s with the introduction of machine learning which was quickly adopted into pricing and trading strategies along with portfolio management. Then we saw the leap into “big data” and deep learning techniques in the 2010s which power fraud detection, image analysis, live translation and credit scoring activities.
AI Jargon
Every article about AI contains more jargon and acronyms than your average instruction manual so here is a brief, non-exhaustive reminder:-
- Artificial intelligence (AI) – computer systems or machines that are able to perform tasks that typically require human intelligence
- Generative AI (GenAI) – a subset of AI specifically focused on creating or generating unique new content such as text, images or other data
- Machine learning – another subset of AI that focuses on creating and developing algorithms and models that enable computers to “learn” from data without being explicitly programmed to do so
- Large language models (LLMs) – advanced machine learning models designed to process and generate human-like language and text based on extensive training on vast amounts of textual data
- Big data – large and complex datasets that are too large, varied or fast-moving for traditional data processing techniques to be applied effectively
State of AI today
Until recently AI was limited to predictive models such as digital voice assistants such as Siri or Google Home and recommendations from audio and video streaming services. AI’s deployment in cases was based on observing and learning from patterns in data. It would then use these patterns to make predictions and classifications.
New AI advances now allow these models to go further with machine learning using data for ever more complex forms of prediction that allows it to create entirely new and unique outputs through generative AI.
Examples of generative AI include LLMs such ChatGPT and Google Bard which are trained to process huge amounts of text, spot patterns in words and phrases relations and repetition and predict what should come next with increasing accuracy and sophistication.
This is what allows them to produce unique content such as blogs, social media posts, Excel formulas, images and even poems
Vast amounts of data power these LLMs and their capabilities are increasing exponentially. ChatGPT v3.5 used around 175 billion parameters while ChatGPT v4 is rumoured to have over 1 trillion. A ChatGPT programmer once said that comparing a previous iteration of ChatGPT to the next one is like comparing a chimpanzee to a human.
Chat GPT, Google and now Microsoft have announced advances in their AI products in recent weeks.
AI-ccountants?
So what does all of this potentially mean for accountants and their industry?
Ideally every accountant wants to improve ways of working, increasing productivity and generally saving time doing long and involved tasks that involve concentration and repetition but AI promises potentially even more in terms of revolutionising the industry beyond the routine.
Data entry, financial reconciliation and invoice processing can all now undoubtedly be streamlined through AI today but what is just around the corner?
Data Analysis and Insights
Being able to analyse vast amounts of data swiftly and accurately is a transformative application for any accounting practice.
This not only includes identifying errors and discrepancies; AI can uncover hidden patterns, correlations and trends that might not be apparent to a human or forensic analyst. These insights into a client’s financial health, risk profile and areas for improvement could be invaluable.
Predictive Analytics and Forecasting
Data analysis is the bedrock of any accountancy work but predictive analytics powered by AI would take this a step further utilising historical data and machine learning algorithms to forecast future financial outcomes and scenarios.
For accountants, being able to anticipate potential problems, identify opportunities for clients and make data driven decisions on investments, resource allocation and overall financial strategy would be a great opportunity.
Fraud Detection and Prevention
One of the most important practical applications of AI is its ability to detect anomalies and unusual patterns in financial data.
An AI can analyse transactions, behaviour and historical trends as well as flagging up suspicious activity potentially offsetting severe financial losses for clients.
AI can also help accountants develop more robust internal controls and preventative measures to safeguard against future fraud attempts.
Enhanced Client Services
For client service teams AI can provide several tangible advantages.
Real time reporting and AI powered virtual assistants can combine to provide personalised financial advice to build a tailored and responsive client experience that will increase their satisfaction, loyalty and your growth.
Data entry tasks, financial statement preparation, reporting and invoicing will increasingly be automated with AI with a focus on reducing errors by identifying erroneous data and detecting anomalies at early stages.
Regulatory Compliance
As you are well aware, the accounting industry is already subject to a complex and wide landscape of regulations. AI can assist accountants in staying compliant by automating certain common compliance tasks.
Monitoring regulatory changes, identifying risks and ensuring adherence to reporting requirements. This frees up accountants time to focus on providing strategic advice and addressing more complicated compliance issues.
Oh the humanity
One important point to remember is that while the depth, breadth and range of AI tools is impressive and growing, they are still tools that complement actual human knowledge, experience, creativity and expertise rather than replace.
Chris Horner, insolvency director with BusinessRescueExpert, said: “ChatGPT and Bard are very impressive but for accountancy practices, they are still machine learning systems designed to provide plausible responses to questions.
“They aren’t designed or expected to provide anywhere near the same level of professional nuance and judgement that a trained professional accountant could.
“They might be programmed to understand the law but they won’t have the in-depth understanding of changing legislation nor the genuine human connection. Accountants know their clients and know people so they can provide emotionally intelligent responses to clients which AI cannot reproduce at the moment.
“It can quickly analyse information and provide suggestions and insights based on data but the expert eye of a human accountant is needed to check, validate and build on those suggestions.
“In the same way directors and business owners seek our advice on insolvency and turning their businesses around; clients come to you because they trust your knowledge and expertise. The circumstances for every business are unique to them so they absolutely won’t want a generic solution provided by a neutral neural network.”
One certainty in the development of AI is that it will play a bigger role in accountancy and customer service in the coming months and years.
Which is why establishing genuine human relationships based on trust and shared goals and values is so important right now.
This is why we have created our Accountant’s Hub portal to provide any professional working with us on behalf of their clients the tools and knowledge they need, when they need it to advise them better.
We’re working more closely with more accountancy practices and accountants than ever before because we take personal professional relationships as seriously as you do.
So get in touch whenever you feel your clients could do with some impartial but professional and insolvency advice that we absolutely guarantee will come from an experienced human!