Home Accountant The story of adaptation sets the stage for the future of accounting

The story of adaptation sets the stage for the future of accounting

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The story of adaptation sets the stage for the future of accounting

Will technology replace jobs? This is far from a new question.

The switchboard operators in Madrid in the 1920s had the same concern if you watch the Netflix Cable Girls show. The four young female characters are afraid of new technologies that they believe will replace them. In order to keep their jobs, they organize a coup to prevent these new technologies from taking place. Now the series also includes romance, scandals, and even a clever way to show how women have more control than men realize. however, they are ultimately talking about the fear of new technologies.

Today, when it comes to the impact of automation, artificial intelligence (AI) and machine learning (ML) on the accounting profession as a whole, there is a lot of unease. However, history shows that accountants will not be replaced. As with switchboard operators, what an accountant does can change, but there is still work to be done to help businesses and individuals.

The reality is that ML and AI are going to affect the bookkeeping, bookkeeping, and tax work done by accountants. These are not changes that will occur in the future. ML and AI are here now. This requires a look at the new tools, processes and professional skills needed to support this technological change.

A story of accepting change

Today’s changes are really no different from those that took place in the profession 35 years ago. Back in the days when accountants used data entry to create financial statements and tax research workbooks were updated weekly by administrative professionals so that tax accountants and lawyers could conduct tax research. Things changed in the early 90s when professionals started to use computers. Accountants now had access to tax software, the QuickBooks desktop, and CDs filled with tax research. The profession did not leave the work to a data entry professional; accountants adapted and learned to use desktop computers.

The changes didn’t stop there. In the early 2000s, the Internet became more popular. State agencies and the IRS had websites. The research was done by the professionals themselves and even by the clients. It was not uncommon for clients to know the answers to questions before speaking with their professionals. Customers have also started to turn to solutions like TurboTax and QuickBooks to prepare their accounts and tax returns on their own. Once again, the profession changed the way things were done.

Around 2005, things got really different when the concept of a paperless office was introduced. Instead of entering data, the administrative staff scanned the information provided by customers. Additional tools then appeared to digitize official documents and be used to fill out and index working documents. The tedious work that tax professionals used to do has been eliminated or relegated to administrative professionals. The tax specialist was basically elevated to a position focused on reviewing the tax return.

Interestingly, people wondered how tax professionals would learn to prepare tax returns if they did not enter data. What happened is that experienced professionals helped train young professionals to give feedback. The focus has shifted from where to enter data to how data is correctly displayed to comply with tax laws in the most beneficial way for clients.

In 2010, cloud software was introduced to the market. This was the start of the current transformation enabling machine learning for automation.

It’s now a digital world

Fast forward to 2020, when a global pandemic forced most businesses to go more digital. Video meetings have become everyday events. As a society, we have not only survived, but many have even thrived.

The major changes of the past are similar to what is happening today with AI and ML. Process changes are needed, but what is different is that the focus of these processes is data. How is the data collected? What do we do with the data? Who touches the data? How will professional opinions be expressed on this data?

Instead of fearful of technology and a potential loss of jobs, accountants need to embrace, or at least become familiar with, become more strategic and advisory-oriented. Even with technology, 20% of the work – the most valuable work – will still be done by humans!

The data will provide new information within seconds. No more sorting out spreadsheets to get answers. Tax planning could then be done in real time. And if cash flow becomes an issue, accountants can be alerted to the change as it occurs. Sharing this information with clients in a timely manner will help accountants provide better business advice. And there are so many other possibilities that no one has thought of yet.

When digital tax research became a thing, there were accountants who refused to use the search function. If you were to talk to these same people today, they changed their ways. They have adapted to the use and trust of search features. The time saved is probably used more creatively today. From building relationships with clients to reading case law, understanding the potential impact on clients, and proactively conveying ideas to clients that can make them more effective, that’s what’s fun. This is an area where accountants can continue to evolve, and when they do, clients will rely on them even more for sound advice.

Perhaps the biggest potential victory is that the days of deadlines become just another day. There is no mad rush to finish the job due to lack of resources. Capacity is gained and the work done with much less stress. With this new time, accountants can take on more clients or just go home earlier. This is possible when automation removes the loaded job.

Ultimately, AI and ML are going to help accountants do their jobs faster, more accurately, and in more depth.

Technology drives accounting

The question facing the accounting profession today is how to embrace new technologies and change roles to take advantage of them. Finding the answer is imperative to prepare the accounting of tomorrow. It’s not about cutting jobs; this is another development.

Innovation and technology are necessary to move our society forward. That’s what’s so interesting when you think of the cable girls of the 1920s. Can you imagine if they weren’t replacing switchboard operators? Do we still have cell phones today? Would there still be people managing the switchboard? Today we are thankful that someone understood what was to come from a technological point of view, but also that these jobs were adapted to adapt to the changes. Accounting will follow suit and be a stronger profession as a result.

This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.

Author Info

Jody Padar is Vice President of Strategy at Botkeeper, and radical CPA.

Bloomberg Tax Insights articles are written by seasoned practitioners, academics, and policy experts who discuss current tax developments and issues. To contribute, please contact us at [email protected].

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