The Future of AI and Accounting

In our continuation of the Flexi Education Series, we recently had the pleasure to sit down with Dmitry Trudov, President at Flexi Software. The purpose of the conversation was to talk about where accounting is in the grand scheme of emerging technologies such as AI, Machine Learning and RPA. We were most curious about what the next evolution might be in accounting, what are some of the current user trends, and what Dmitry’s view is from a 30,000-foot view level.

 

Q: Dmitry thanks for taking the time to speak with us. I know you are busy working on the next version of Flexi Software, but beyond that, what is keeping you up at night? Is it AI and machine learning? Business Intelligence? Workflow automation?

Dmitry Trudov: All the above. Some are still in a growth mode and others are a little more defined. In the end, it is all about the quest in understanding structured information and getting to the holy grail of accounting: anticipating, planning, and forecasting. Quite simply, the path forward needs to be based on historical data.

Q; So the reason why everyone is so hot on AI, automation and ML is to not only automate what is possible but also to have systems that can look at trends and make determinations. Trust the machines, essentially.

DT: Right. A machine’s understanding of the data is where we want to go. In other words, it will be much more informative and valuable for a user to see what the machine thinks about where the business is going to be a year from now. Historical data is invaluable.

From a real-world perspective, a lot of machine learning techniques are now being used by people in hedge funds. Before, they paid a lot of money for PhDs to come up with algorithms to simulate stock movements and predict the stock flows. Now, increasingly, they just write machine learning algorithms.

In addition, a lot of people talk about how they want to look at historical data better and how they want a better user experience. But there is a big difference between automation and intelligence. For example, when we want the machine to do the same thing every time like our existing process, that is RPA. And heaven forbid if there is an extra comma somewhere – that’ll mess everything up! My point is there is no intelligence there. There’s automation, but there’s not intelligence.

Q: Do you think the accounting industry, within the last three years, is finally wrapping its arms around RPA?  I feel like there is a lot of talk about accounting automation and AI but there hasn’t been a lot of advancements in it.

DT: Correct. Because it is not easy to write machine learning algorithms that add intelligence. There are not a lot of people who can do that today and whoever can develop that is spending their time not on accounting and finance but on banking, hedge funds and trading, because that’s where the money is. Eventually it will evolve, and we’ll get there.

Q: Do you think it’s moving quickly or is it at a snail’s pace

DT: I think it’s going to be slow because accountants aren’t what you call, early adopters. Believe it or not, a lot of accountants still print everything.

Q: Creatures of habit, right?

DT: Somewhat, but it is probably more about trust. Accountants do not trust computers, which is largely driven by the notion that all ERP systems have “some” problems. Although it is much more stable now, many still remember how it was 10 years ago. They still remember those times when everything crashed and burned and the only thing they had to rely on was something that they printed. And when a company’s finances are at stake, it’s not easy to build that level of trust.

Imagine, then, if we ask them to not only trust the fact that the computer can aggregate the numbers, but we also ask them to trust that the computer can make decisions on which journal entry to enter or what adjustment to make.

Q:  I know you have heard this, but it has been said that one of the biggest fears of accounting automation, and probably AI in the same breath, is that accountants are worried about losing their jobs. And the rebuttal is, ”no you’re not losing your job; you’re going to have more time to do more strategic activities” … Do you buy into that?

DT: Yes, absolutely. It’s just like when things went to the cloud, a lot of IT people were afraid of losing their job because they no longer had the server room to play in. But did they lose their job? No. They found much better jobs. If there is anything that an accountant needs to be afraid of, it’s not AI, it’s the fact that accounting is going to go the route of IT and it’s all going to be converted into some kind of services organization that just provides you with the service of doing your accounting.

Q: So, you’re saying accounting as a service?

DT: Yes. In fact, there’s research out there that says by 2030 accounting will be pretty much converted into a service rather than a department. Just like IT now mostly gets converted to cloud services.  The work is going to be done in what they call accounting factories. Right now, we’re seeing that trend. As an example, InfoSync is an accounting factory providing accounting services to over 8000 restaurants, and one of our clients. We realized early on that Flexi Software is actually a perfect platform for outsourcing companies (BPOs) to do just that, provide accounting services.

Q: When you say accounting factory, you are basically saying that somebody is outsourcing their accounting activities, right?

DT: Yes and no. There are the big firms that have practices around this, like Cognizant and Infosys. Outsourcing accounting is not a new concept, but what I’m talking about is slightly different. This is about transplanting your accountants into more strategic roles, and relying on accounting factories to take on the more traditional accounting functions that can be done much more efficiently with automation technology that would be cost prohibitive to build yourself. AI, for example, would require a huge investment to build and buy AI components to then load into an accounting system. So, if each individual company had to purchase that, it would be a pretty large investment and likely would not make sense for a company that is not focused on accounting. But for an accounting factory, this IS their focus and that high cost can be spread across multiple clients. And from an AI standpoint, AI does not care if it processes one invoice or ten or a million, it will do exactly the same thing. It will just be running and crunching this information, leveraging the same software.

Q: That’s interesting. This is a broad-based question but five years from now, what will be the impact of AI and automation in accounting? Are we going to be further along or are we still going to be just talking about it?

DT: AI is happening. Some of the machine learning is very easy to put in place. The question becomes though, how transformative will those things be? In reality, probably not that much because making things quicker and easier is not truly transformative.

When a software can really do something long term, like anticipating things that need to happen at the end of the quarter or the end of the year, offering up checklists of things you can anticipate and/or do right away, and sometimes even doing it for you, those sorts of things are really transformational. Because what an accountant does is they run a report, look at it and say, “Oh my goodness, I have to fix this and then re-run the report…” (sometimes over and over again) The AI is the software that would read the report for them and instinctively say, “oh, I need to fix this before I deliver this report.” When AI is at that level, and it has to get to that level, then we will have had a transformation.

Q: So, can we be there in five years?

DT: Well, when did they say that the singularity is going to happen? When computers will be as smart as a human? 2028 originally (but that  continues to be a moving target).

Q: Yes, a moving target! Dmitry, thank you so much for your time, this was really fascinating.

DT: You’re welcome.

 

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Are Robots Poised to Take Over Accounting Too?

Artificial intelligence (AI), machine learning (ML), and robots are technologies that are taking center stage across industries, especially in industries such as manufacturing, retail, customer service, and agriculture. The accounting industry is no exception.

Experts predict that as many as 800 million jobs could be replaced with AI by 2030. Traditionally, it was blue collar workers that were concerned about what this meant for their job security, but white collar workers like accountants are now expressing concern that technology could render their positions obsolete. 

While automation certainly has gained momentum in accounting, specifically in up and coming cloud-based software solutions, it is meant to make accountants’ jobs easier–not render their jobs null and void. 

AI was already a fixture in accounting for the past several years, especially in tax preparation, payroll, and auditing. It is seen in repetitive, mundane tasks that used to eat hours of accountants’ time, freeing them up now to focus on strategy and analysis. 

There will always be a need for a human element, especially where strategic and advisory services are concerned. While automation is taking over on tasks that were previously extremely time consuming, it’s also enhancing the integrity of the data. Automation means fewer manual errors and more data consistency. It’s actually a boon for accountants, helping them to do their job faster, easier, and with more confidence.

Remaining competitive in a field that is no doubt changing due to advancing technologies means embracing the change. Embrace the new tools and become an expert in the software options clients have. The better equipped an accountant is to help a client integrate and utilize AI, the more trusted they will be, and the more invaluable their services.

Getting more involved in the IT side of accounting will give new grads a leg up in the job hunt. Many universities are already incorporating coursework in IT and database management in their accounting programs. Continuing education and workshops are also available for seasoned accountants.  

The right software will ease you through the technological transition

Flexi is trusted by world-leading brands. Flexi powers nearly 1,500 customer sites in dozens of industries, with 20,000+ users to date processing billions of transactions securely and in real-time.

Submit your information and get a demo of the Flexi suite today to see how the right software can use automation and AI to your advantage. 

 

How AI & Automation Are Making Their Way to Accounting

Artificial intelligence (AI) and automation are making their way to accounting, just as they are permeating all other industries. AI is getting stronger and smarter as technology evolves, becoming not just an automator but also a smart technology that can learn and draw conclusions in real time.

As AI continues to advance, many fear it. While the perceived threat of job extinction looms, AI and automation can actually be extremely beneficial for accountants and finance professionals. By remaining adept and relevant in the industry, you are likely not to be replaced by robots anytime in the near future.

Working with AI and automation, not against it

Embracing advances in technology is key to remaining relevant in the industry.

AI and automation largely take the guesswork and possibility of manual error out of everyday processing. A large chunk of accounting tasks were at one time reliant on manual data entry, which meant manual mistakes. Automated, cloud-based software provides a level of security and data integrity previously unknown to accountants. These are all good things.

With increased accuracy and decreased time spent creating and running reports, accountants are left with time left in their day to devote to other, more strategic tasks. In fact an entire component of modern accounting relies on strategic and advisory services, and if your firm or organization has the time to devote to providing such services, you have an immediate edge over your competitors in the field.

While AI and automation reduces or eliminates many of the tasks historically known to the accounting role, AI and automation free up time for accountants to become subject matter experts on the various technologies and systems available today, providing a new level of value to clients.

Additionally, there are many elements in the financial industry that remain impermeable to AI and automation. A study cited by Business.com notes that 68 percent of clients surveyed prefer having access to a financial advisor over a technology offered as a replacement. This statistic makes it very clear that plenty of folks prefer the personal, human element when it comes to strategizing and problem solving. And fortunately, machines can’t replace that.

Flexi helps you embrace the future

Flexi provides software that automates many aspects of the accounting process, freeing up your time and making sure you can close the books and provide reports in a timely manner to boot. Flexi won’t replace you; Flexi will work with you.

Learn more about partnering with Flexi today. Call 800-353-9492.

How Artificial Intelligence (AI) is Shaping the Accounting Industry

According to a study by Oxford University and Deloitte in 2015, accountants will be among the first professions affected by the rise of artificial intelligence (AI). Up to 95 percent of accountants will face some threat due to the advanced automation capabilities provided by AI. While this is categorized initially as a “threat,” it also opens the door to a new kind of accountant. The modern accountant does much more than crunch numbers. In fact, in the future, AI might do most of the number-crunching. Instead, accountants are moving toward a model of value-added opportunities to offer clients, such as strategy and advisory services.

Robots as partners

Not all human functions can be replicated by robots. Much of the high-volume work can, in fact, be done quickly and accurately by use of a bot. However, a bot cannot be taught judgment or analysis. For these reasons, Sonia Eland of DXC Technology suggests we not perceive bots as a threat, but instead, as a partner. The help of AI can assist humans in doing their jobs more accurately and more efficiently.

Embracing new roles

While the role of the modern accountant is evolving, the time for hesitation is slim. The accountants that will thrive under this new model are the progressive thinkers who are jumping in and finding new ways of being marketable and valuable in a changing workplace. Accounting professionals who embrace this change to advance their individual skills are on track to continue providing value to a profession and an industry that is changing. By freeing up time, accountants can even learn to code. In all, robotic process automation (RPA) is expected to free up the creativity and intellect of accounting professionals.

Flexi and the future

Flexi takes advantage of automation to make the lives of accountants easier. Flexi delivers all the rich features you’d expect in a top tier accounting solution, but without the high cost. With quick implementation that can be deployed on-premises, in the cloud or in a hybrid environment, Flexi will not only simplify your accounting processes today but also will have you ready to adapt quickly to market or business changes in your future. Seamlessly integrate Flexi software to your core system to ensure that financial statements are accurate, consolidations are error-free, and efficient processes are in place. Make sure your business retains visibility and transparency with expenses. AI in Accounting If you’re interested in learning more about AI in accounting download our whitepaper today! Key takeaways include:
  • What exactly is AI in accounting and when will it go mainstream?
  • Use case example and how AI addresses the startling statistic that only 25% of accountants are confident in the accuracy of their last close
  • How AI will impact accounting careers, and which jobs will be most needed
Learn more about Flexi accounting software solutions, or call 800-353-9492 to set up a demo today.