Is technology going to replace jobs? That’s far from a new question.
Switchboard operators in Madrid during the 1920s had that same concern if you watch the Netflix show Cable Girls. The four young female characters are afraid of new technology they think will replace them. In order to retain their jobs, they organize a coup to prevent those new technologies from taking place. Now, the show also includes romance, scandal, and even a clever way of showing how women have more control than men believe; however, they’re ultimately talking about fear of new technology.
Today, when there is talk about how automation, artificial intelligence (AI) and machine learning (ML) will impact the accounting profession as a whole, there is a lot of uneasiness. However, history shows that accountants will not be replaced. Just like with switchboard operators, what an accountant does may change, but they will still have work to do to help businesses and individuals.
The reality is that ML and AI are going to affect the bookkeeping, accounting, and tax work performed by accountants. These aren’t changes that will happen sometime in the future. ML and AI are here now. This requires a look at the new tools, processes, and job skills needed to accompany this technological change.
A History of Embracing Change
Today’s changes are really no different than changes that occurred in the profession 35 years ago. Back when accountants used keypunch for data entry to create financial statements and binders of tax research were updated weekly by administrative professionals so tax accountants and attorneys could do tax research. Things changed in the early 90s, when professionals began using computers. Accountants now had access to tax software, QuickBooks desktop, and CDs full of tax research. The profession didn’t ship work off 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. Research was done by professionals themselves and even by customers. It was not uncommon for customers to know answers to questions before talking with their professionals. Customers also started turning to solutions like TurboTax and QuickBooks to do their accounting and tax return preparation themselves. Again, the profession shifted how things were done.
Around 2005, things became really different when the concept of a paperless office was introduced. Instead of inputting data, administrative staff scanned information provided by customers. Additional tools then came about allowing official documents to be scanned in and used to populate and index workpapers. The grunt work that tax professionals used to do was eliminated or pushed down to administrative professionals. The tax professional was essentially elevated to a position focused on reviewing the tax return.
Interestingly enough, people wondered how tax professionals would learn how to prepare tax returns if they were not inputting data. What happened was experienced professionals helped train younger professionals how to do returns. The focus moved from where to input data to how the data is properly displayed for compliance with tax laws in the most advantageous way for customers.
In 2010, cloud software was introduced to the market. This was the beginning of the current transformation enabling machine learning for automation.
It’s Now a Digital World
Fast-forward to 2020 when a world-wide pandemic forced most businesses to become more digital. Video meetings became everyday occurrences. As a society, we not only survived, many actually thrived.
The major shifts of the past are similar to what’s happening today with AI and ML. Changes to processes are needed, but what is different is the focus of those processes is related to data. How is data collected? What is done with the data? Who touches the data? How will professional opinions be put on that data?
Instead of fearing technology and a potential loss of jobs, accountants need to embrace, or at least get comfortable with, becoming more strategic and advisory-focused. Even with technology, 20% of the work—the work that has the most value—will still be completed by humans!
Data will provide new insights in seconds. No more sorting through spreadsheets to get to 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 happens. Sharing this information with clients in a timely manner will help accountants to provide better business advice. And there are so many more possibilities that no one has even thought about yet.
When digital tax research became a thing, there were accountants who refused to use the search function. If you were to talk to those same people today, they have changed their ways. They adjusted to using and trusting search functionality. The saved time is likely being used in more creative ways today. From strengthening customer relationships to reading case law to understanding the potential impact on customers to proactively taking ideas to customers that can make them more successful—that’s the fun stuff. It’s an area where accountants can continue to evolve and, when they do, customers will rely even more on them for sound advice.
Perhaps the biggest potential win is that deadlines days become just another day. There is no mad rush to finish work because of lack of resources. Capacity is gained and the work done with a lot less stress. With that newfound time, accountants can take on more customers or simply go home early. This is possible when automation takes away the busy work.
Ultimately, AI and ML are going to help accountants do their jobs faster, more accurately, and more thoroughly.
Technology Moves Accounting Forward
The question facing the accounting profession today is how to embrace new technologies and shift roles to capitalize on them. Finding the answer is imperative to prepare accounting for the future. This is not about eliminating jobs; it’s about another evolution.
Innovation and technology are needed in order to advance our society. That’s what is so interesting when thinking about the cable girls of the 1920s. Could you imagine if they didn’t replace the switchboard operators? Would we even have mobile phones today? Would there still be people managing the switchboard? Today, we’re grateful someone figured out what was next from a technological perspective, but also that those jobs were adapted to fit with 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.
Jody Padar is Vice President of Strategy at Botkeeper, and the Radical CPA.
Bloomberg Tax Insights articles are written by experienced practitioners, academics, and policy experts discussing developments and current issues in taxation. To contribute, please contact us at TaxInsights@bloombergindustry.com.