06 June 2017
Artificial intelligence (AI) has already invaded our daily lives, with banks using chat bots to liaise with customers and digital personal assistants like Siri helping smart phone users get personalised services. The automation of accounting will lay the foundation for AI to grow, leading to a radical transformation of finance.

Automation gaining ground

According to Accenture's Finance 2020 report, 80 percent of finance and accounting tasks will be automated in the next few years. This is for the best: the firm estimates costs will decrease by 40 percent and employee productivity will increase by two to three times.

Accuracy and security are other important considerations. As all calculations are handled by software, automated accounting eliminates many of the mundane and inaccuracy-prone processes associated with accounting such as invoice processing, leave time or payroll calculation.

Furthermore, because most automation software works on a cloud basis, allowing for the latest data to be saved and stored from anywhere, it keeps data safe from disasters (fires, floods, arson and terror attacks) affecting on-premises systems that would otherwise claim all hard copies of an organisation's information.

Automating accounting offers scalability. For a young business entering a phase of high growth, onboarding processes for HR and accounting responsibilities can quickly increase significantly in quantity and in complexity. Automation facilitates the ability to manage and update databases as the company grows without needing more human capital.

Finally, rather than having to analyse and build business data into hand-made reports, most accounting and HR software offer customisation options so that data can be compiled into a variety of charts and formats that are easier to use and share with the rest of the team.

Focusing on value-added tasks

Automating administrative and accounting tasks will lead to greater efficiency and cost savings in the end-to-end supply chain in the more routine, rote and transaction-oriented tasks within book close, customer order to cash, reconciliations and other accounting tasks, says Jeff Thomson, president of the Institute of Management Accountants (IMA).

"This frees up more time for management accountants to spend on more complex, valued-added tasks such as complex synthesis, data analytics and more, harnessing the power of big data and computing technology."

Automated accounting with the cloud will likely play a much larger role in managing basic but important financial tasks such as calculating leave time, automating payroll and managing employee records.

It will lead to a structural change in how financial data is stored, away from centralised data centres to an online world where key information will be accessed in a faster, more secure, more flexible and efficient way. It enables a single source of truth, the holy grail of finance officers and accountants, and forms a solid basis for financial planning and analysis (FP&A).

Preparing the future of finance today

The cloud is essential to lay the ground for the fast development of artificial intelligence because of the huge amount of raw data that it stores. This data can be anonymised to feed algorithms that can learn from all this information.

"AI is already streamlining controllership and auditing functions that are more routine and rote in nature, and also automating many layers of the analysis process in FP&A functions. The good news is: this will result in greater efficiency and cost savings. The 'bad' news is that in the short term, traditional accounting and auditing jobs will be displaced," warns Thomson.

The big question, he adds, is whether management accountants are prepared to become retooled and retrained, evolving into data scientists with awareness of data governance and data life cycles, with deep application of data mining, business intelligence and prescriptive analytics.

"Is the profession 'future ready' to seize the opportunity, or will it wither in the face of technology disruption?" he asks.

To seize the AI opportunity, management accountants must evolve beyond traditional roles of hindsight and oversight, to additional and more future oriented "lines of sight" such as insight and foresight, Thomson concludes.

© Oracle 2017