Blip. Blop. Accounting Robot. Are You Ready?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
We’re amid investigating the Accounting Profession Paradox. The paradox consists of the two facts that studies have concluded that there’s more than 98% likelihood that Accounting will be automated. However, at the same time the American Bureau of Labor Statistics have predicted that Accounting as a profession will grow by more than the average of all other professions. Last week we did some fact-checking on the growth story which seemed not to hold true and this week we dig into the automation argument. Obviously, this is not the first time that I write about accounting automation as I’ve previously written about accounting robots and robotics process automation (RPA). I’ve also written a full series on Digital Finance which you can read here. So, what more proof is needed?
There’s no end to the possibilities, or are there?
The starting point for accounting automation is that it’s rules based. At the end of the day (just like in the binary number system where you only have 0 and 1) there’s only debit and credit to account for. If you know how to classify transactions it can be completely automated. Examples of this are vendor invoice automation, travel expense automation, and intercompany reconciliation automation. Granted there might be exceptions which need to be reviewed by a human, however, through machine learning your robot will learn how to handle these exceptions as well. Let’s try to tackle a few questions.
Q: How about when new regulation changes the classification of transactions?
A: In this case you need a human or a technical accountant to interpret what the new classification means and code it into the system. In the future though why wouldn’t the regulatory body be able to code this classification into a message sent directly to your ERP system which will then do the necessary changes and notify you of the change?
Q: Since this is technology driven it likely also comes with a heavy price tag for modern technology investments which I can’t afford. So, how can I automate?
A: Granted some investments might be needed, yet, if you look at RPA as an example individual tasks can be completed for as little as 19￠ per task. That you can easily compare with the salary of your accountant currently doing the tasks.
Q: You always try to demeanor Accounting into something related to bookkeeping but accountants are doing a lot more than that including sophisticated analyses. Automation won’t be able to do all of that, right?
A: Now I use automation as a proxy also for Artificial Intelligence and predictive analytics. Reality is that through let’s say predictive analytics you can both understand in-depth WHAT happened, WHERE it happened, and WHY it happened as well as WHAT IF we do various initiatives to change the situation. The only thing where I don’t see automation yet is in the actual execution i.e. HOW to make it happen. So, sophisticated analyses are definitely in scope of automation.
Q: I’m doing planning and forecasting which require heavy data modeling and challenging of stakeholders on their assumptions. Can that really be automated too?
A: The short answer is yes. Many companies including the likes of Microsoft and Novo Nordisk have already fully automated their forecasting and reversed the burden of proof. Now people will have to argue why the automated forecast is not correct. Likely they can’t because it has already proven to be more accurate than any human made forecast.
Q: I work in a small company where hardly any change ever happens so I guess I’m safe?
A: A full automation transformation is likely going to take several years but whether we’re talking 5, 10 or 20 years no one can tell. Therefore, it’s also likely that in some companies you would not see much change for the foreseeable future. I always say though that you can keep running back in time until you retire to escape automation but honestly that’s not very satisfying, is it?
Where does this leave us?
Likely there are even more questions to ask and answer so I’ll encourage you to post them in the comments or on posts in the feed so we can add them to the list. However, it likely won’t change the general picture that automation and AI have made their entry into finance and accounting and it’s likely that they will only expand their presence. The way I see it there’s not really any paradox. The fact that the accounting profession is growing looks to be a misstatement as no evidence was found in last week’s article to support it. The automation fact is very real though and happening as I publish these words.
The BIG question is then now that the paradox has been untangled “what will all the now redundant accounting professionals do with their careers?”. We will continue to explore this topic next week and further into the future we’ll look at how accounting professionals can position themselves for a career in different parts of the finance function.
This is the third article in the series where we uncover the “Accounting Profession Paradox” and if you haven’t done so already you can read the two previously articles below. Don't forget to subscribe to the series to receive a notification when the next articles are published.
What Is The Accounting Profession Paradox?
Is The Accounting Profession Really Growing?
For previous articles about robotics, accounting or finance transformation please continue to read below. You can also follow me on Twitter here.
Are You Ready For Robotics Process Automation?
Have You Met Your Robot Accountant Yet?
Robots Are The Future Of Analytics
Your Robot Accountant Has A Name, It's Dixie
What Defines A Finance Master?
The CFOs Roadmap To Transforming Finance
How Finance People Can Be More Successful
The New Career Path For Finance Professionals
Anders Liu-Lindberg is the Head of Global Finance Program Management Office at Maersk and I have more than 10 years of experience working with Finance at Maersk both in Denmark and abroad. I am also the co-founder of the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 6,000 members. My main goal at Maersk is to create a world-class finance function not least when it comes to Business Partnering. I am the co-author of the book “Skab V?rdi Som Finansiel Forretningspartner” and a long-time Finance Blogger with 23.000+ followers.
Leading & Growing Consulting Practices ★ Connecting Analytics, Economics & Strategy ★ Developing Tomorrow's Leaders & Experts ★ Speaker ★ Onalytica Key Opinion Leader Industry 4.0
6 年As you point out there will be the opportunity to quite a bit of automation in the accounting profession, including financial analysisi.? In addition to RPA and AI the other technology that will have an impace is blockchain. Part of what we'll see is a transformation to more auditing of the process to ensure the process (all the automation) is actually correct.? The problem with the BLS forecasts is simply - they are regressions that are basically based on the future looking like the past. Economists are not frequently thinking aobut paradigmn shifts and how they impact their forecasts (hence why so many missed the Great Recession.? I'd also suggest that the draining of jobs will be slow to start, until the technology is developed enough that companies can simply replace their systems. Then the impacts will be rapid.? We'll see exponential change and large scale disruption. People need to be careful of the slow ramp up period of exponential change - don't be a frog in a pot of water waiting to be boiled.?
Chief Financial Officer
6 年Obviously, the automation has made entry into finance and accounting. However, it is not a threat for the profession, but there is an opportunity. The accounting profession is adapting their role in companies, focusing on worth tasks and providing them a big value to the decision process. Consequently, it is growing in quality terms.
Helping mid-sized organizations increase sales and improve customer service since 1993 | #LinkedInLocal
6 年Any comments to add Larry?
Helping mid-sized organizations increase sales and improve customer service since 1993 | #LinkedInLocal
6 年Back in the 60's (and before), large organisations had floors of accounting clerks who spent their days entering entries by hand in their books. They were replaced by fewer people who did accounting on mainframes, who were in turn replaced by fewer people doing accounting on PC's, then by accounting clerks entering data in ERP's. I bring this up because accounting was one of the first business functions to be computerized. It stands to reason that, as Anders noted, it will likely be one of the first to be automated. As back in the early days of computerization, the data entry clerks will likely be the first to lose their jobs. The CA's and CPA's will find other areas of practice ... until we all lose out jobs!
Lead Consultant, Power Generation at Aurecon
6 年Successful RPA researchers put task/process automation at the centre of their development, not job automation. Workers should remain relevant for the foreseeable future provided their work involves a degree of human creativity, complexity and value addition. If the accountant's daily tasks involves simply collecting, recording and passing information to users, their job is as good as gone. "Disrupt or be disrupted" - if your work does not continually create value or improve efficiency, you could be replaced by a robotic system to improve the efficiency of your team or function.