Nearly 60% of accountants surveyed said they plan to use artificial intelligence (AI) to automate tasks and improve performance in the future, according to a 2019 report from Sage, an accounting software firm. Many businesses, however, haven’t yet implemented the technology. According to The CPA Journal, results from the 2019 Rosenberg Practice Management Survey showed that although technologies such as blockchain and AI may eventually change the industry, this change isn’t yet underway.
Artificial intelligence in accounting has the potential to advance the field in significant ways, and firms will likely seek accounting professionals with the backgrounds and skills to integrate AI-driven processes into accounting strategies. Earning an advanced degree in accountancy can equip accounting professionals for success in this new environment.
A Look at AI and Innovative Tech in Accounting
The role of artificial intelligence in accounting is growing. AI has the ability to increase productivity and reduce costs, enabling accountants to spend less time on routine tasks, such as organizing and analyzing large volumes of information like spreadsheets, receipts and PDFs. Instead, they can spend time on more critical tasks, such as interpreting data sets and developing client reports. Because of AI technology’s increased accuracy, firms can also avoid mistakes and identify fraud; a private organization suffers an average median loss of $164,000 due to occupational fraud, according to the Association of Certified Fraud Examiners.
AI-related concepts that are likely to have the most impact on accounting include machine learning, data mining and predictive analytics.
Machine learning “is the application of statistical models and algorithms that mirror cognitive strengths like pattern recognition and contextual, specific learning,” according to the Illinois CPA Society. This type of AI can analyze thousands of documents and provide accountants with reports in much less time than doing it by hand. However, accountants are responsible for building statistical models with accurate data sets so that the algorithms function properly.
By leveraging dating mining, accounting professionals can analyze trends in large data sets. This helps them identify payment patterns — by geography, customer or time of year, for example — and other trends relevant for their clients. In addition, strong data mining can identify data anomalies and outliers that should be flagged as possible errors or even fraud.
Accountants who incorporate predictive analytics — using data to more accurately predict future needs, opportunities and challenges — into their work processes and systems can obtain better outcomes for clients. For example, accounting professionals can use predictive analytics to forecast when an organization risks diluting cash flow; the organization can then take the necessary steps to cut costs or acquire new funds.
The Skills Needed to Maximize AI’s Effects in Accounting
With the integration of AI technology, it’s more important than ever for accounting professionals to enhance their technology and data analytics skills. They should combine these skills with the more traditional accounting skills of math, communication and leadership.
Technology and Data Analytics
Accounting professionals should have the skills needed to understand and leverage big data. The skills include AI-powered technologies and processes, such as machine learning, data mining and predictive analytics. An understanding of software programs such as Apache, SPSS and MATLAB is also helpful for effectively working with big data.
Knowledge of mathematical concepts is a foundational skill for a successful accounting career. Accounting professionals must have expertise in statistics, algebra and mathematical formulas. They should also exhibit strong problem-solving and quantitative skills.
Accountants need to be effective communicators. They need to interpret data and communicate findings in a manner that clients and co-workers can easily understand. They must be able to convey how insights gleaned from data should drive current and future behaviors and decisions.
Professionals in advanced accounting roles need to exhibit strong leadership skills as they’re managing teams and instituting policies and procedures. Accounting leaders may also advocate for integrating AI technology into their firms’ workflows or take the initiative in applying the technology.
The Challenges to Incorporating AI into an Accounting Strategy
Incorporating artificial intelligence into accounting may expose some challenges for firms, including an enhanced need for cybersecurity and employees’ lack of technological skills. Cybersecurity is already an important concern for most organizations, and instituting AI technology can impose further risks. The average total cost of a data breach is $3.86 million, and it typically takes 280 days to identify and resolve a breach, according to IBM.
To mitigate these risks, accounting leaders must ensure that safeguards are instituted to protect client data, such as hiring information technology (IT) professionals. Accounting leaders should also consider training employees on how to safely and effectively implement and use AI-related technologies. Accounting professionals can benefit from a technology background and education, including an understanding of basic coding, to properly and securely implement artificial intelligence in accounting and effectively communicate with other employees and IT professionals.
Pursue an Advanced Degree in Accountancy
The financial world is in constant flux. Accounting firms are increasingly seeking professionals with advanced skills that can help them thrive. Rider University’s online Master of Accountancy provides students the opportunity to cultivate advanced accounting skills in one of four concentrations: business analytics, finance, forensic accounting and generalist.
The business analytics concentration offers instruction in key areas such as data analytics and database management and helps students develop expertise in the latest technologies, applications and processes. Discover how Rider University’s online Master of Accountancy can help you acquire the technical, analytical and communication skills needed for a leadership role in accounting.