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May 13, 2024
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7
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Will AI Replace Accountants? Why This Question Misses the Mark

Will AI replace accountants? In this article, we explain what role that AI will (and won't) play in the future of accounting.

Parker Gilbert
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Going by industry chatter, you might think AI will soon replace you. PwC is using ChatGPT to offer clients advice. Last year, KPMG fired 5% of its workforce just before announcing a partnership with Microsoft to leverage AI. 

As an AI accounting company, we’ve spent years thinking through the AI-enabled reality the industry is marching towards. So let’s address the question head on— will AI replace accountants? 

No, the truth is that AI will never fully replace human accounting teams. Instead, AI will take the role of your superpowered assistant that takes the work you like least off of your plate.

Think of AI as a CPA sidekick.

Dan Black, Global Leader, Talent Attraction & Acquisition at EY, confirms this view. "The robots are not coming for your jobs. They’re coming for your tasks," he says. "And in most cases, they’re coming for tasks that you don’t want to do anyway."

In this article, we examine how valid Black's quote is by examining what AI can and cannot do.

AI Will Turn Preparers Into Reviewers

If you want to deliver strategic insights to your company or finally tackle the projects that have been slated on your to-do list for months, you can't sit around copy-pasting data or dragging formulas in spreadsheets all day. 

What if you could call upon a CPA assistant and have them perform the tedious, repetitive work that you dread? Think tackling recurring journal entries or downloading and pivoting your ERP data every month-end.

This setup would give you the flexibility to respond quickly when management asks you for insights and free up time to get to work closer to business impact. You’d spend less time entering data (executing tasks, in Black's words) and more time explaining what the numbers mean and diving deep (your job.)

AI is the sidekick that handles tedious tasks. Now what does this practically look like today? 

Let’s look at the example of policy generation. Nearly all accounting teams are tasked with generating standard accounting policies outlining the process of handling prepaids, fixed assets, etc. 

Typically, this translates to hours spent researching the right technical accounting topics, modifying or adding nuance based on practical expedients or industry-specific practices, then hours of leveraging what you learned in high school English class and actually writing the policy. 

Now, teams using Numeric delegate much of that work to their “CPA sidekick”.

Numeric's AI policy memo generator asks you for context on your business that only you know and transforms your input into an accounting policy for your review.

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Instead of brainstorming word choices, scanning for grammatical errors, or starting from scratch, you can focus on refining and editing your policy. AI thus cuts the time needed to generate a policy, but it needs a human in the loop, an informed editor, and only you can fulfill that role.

Much like how Excel replaced tasks like manual calculations, AI will replace rote tasks within your workflow — not you. One day, AI will be just as indispensable as spreadsheets are to accounting teams and will help you deliver more strategic value to your company.

AI Will Get You to Insights Faster

Most accountants dread the month-end close—with good reason. This is when you’re gathering huge amounts of data, scanning for anomalies, posting adjusting entries, etc. For many accounting teams, the close is your biggest opportunity to deliver meaningful insights to the business—but you can't do that if you're neck deep in manual processes.

Again, let’s look at the month-end process through our CPA sidekick framing. 

What if during month-end, you had a superpowered assistant who could scan every transaction-line for differences and proactively highlight potential anomalies or drivers of change?

You’d save hours of mind-numbing file comparisons, would have ample time to interpret results, reach out to business partners for clarifications, and discover insights quickly.

As a practical example accountants leverage today, Numeric's AI-generated flux analysis scans every transaction and generates a first draft of variance explanations, pulling key drivers of changes month over month from underlying GL data. 

Instead of spending time formatting spreadsheets or just making a rough guess at what has changed in an account, your capable assistant scans every transaction and then reports back on what’s changed. With the first pass handled by AI, your role is then adding in additional nuance based on your knowledge of what key stakeholders are interested in or investigating further into what’s been bubbled up as a key driver.

In short, you can leverage your position in your company to interpret results and translate them for a wider audience. In this way, ironically, AI helps you overcome automation and become a strategic business partner.

AI Will Assist Overworked Accountants

Finally, it’s no secret that accounting faces a shortage of qualified professionals even as demand for these services increases. 

This shortage creates a vicious circle where companies overwork their current accountants due to the talent shortage, causing burnout that paints accounting as an unrewarding career path.

As a result, fewer students enter accounting, creating a long-term shortage, and kicking off the cycle of overwork.

If you needed additional proof points, take a look at some of the anonymous quotes from when International Recruitment firm Robert Half examined the problem in a 2023 report:

  • “The environment is stressful due to long hours. Hiring competent newcomers is lacking, resulting in more pressure on the veterans.”
  • “High staff turnover at lower levels leaves more work for management.”
  • “The extreme workload, which includes weekends and late nights, lacks recognition.”

Sound familiar?

With too few hands on deck, extended hours, and a to-do list that’s never-ending, it’s clear — accountants need the help that AI provides. If any profession is in need of a sidekick on call, it’s accounting. 

For one last practical example of our CPA sidekick at work, consider how much time you’ve spent recently scanning bank account statements for a single transaction or a total.

Numeric's AI bank statement parser pulls relevant details from bank statements that are hundreds of pages long, eliminating the time accountants spend searching bank statement docs during reconciliation. 

Let’s be honest, no one enjoys scanning a bank statement. And small improvements like this cumulate to a large overall impact on the close timeline. In short, AI helps companies do more with existing headcount — which is especially impactful given the backdrop of the accountant shortage. 

With too few accountants, AI isn’t poised to replace accounting teams but lends a much-needed helping hand to lower leverage, time-intensive tasks.

AI is Changing the Role of the Modern Accountant

Accounting has always experienced a positive impact from tech advances, and AI is no different. It will instead change how accountants operate and how they deliver insights to their organizations. The Big Four are already busy rolling out AI assistants to their staff

With a capable accounting sidekick at your disposal with AI, what then will the role of the in-house accountant become? 

Briefly, you and your team will play three roles:

Accountants as Editors 

AI is great at getting 80% of the way there for many tasks, accountants will continue to apply their technical knowledge and business context to take AI’s first draft across the finish line. 

You will review AI outputs, edit, and verify based on business context that only you have. Examples include reviewing JEs drafted by AI pulled directly from invoices, reviewing the application of schedules produced by AI based on transaction details, etc.

Accountants as Interpreters

Accountants sit at the intersection of critical business functions and must translate financial data across the business. While AI may be able to tackle complex workflows, there will always be a people and relationship-based aspect of the function.

You will dive deep into what departments need and communicate reporting to stakeholders — whether that be outlining the impact on revenue recognition of a new trial program run by the sales team or passing along details on CAC to marketing leaders. You will continue to play the role of interpreter of financial data.   

Accountants as Architects

AI also needs a human in the loop to establish the right prompts, the right data feeds, the right output format, etc. 

You will be the architect of the financial operations system, building the tech stack that enables accurate, actionable financial data. From setting up integrations to the correct tools to leveraging AI appropriately across the record to report lifecycle, modern accountants are technologists charged with building the right foundation and piping for financial data.   

Ultimately, accountants are here to stay. But with AI acting as a CPA sidekick tackling the most mundane and repetitive work, the role of the accountant will change and require building new skillsets to serve as editors, interpreters, and architects. 

Curious about how you can use AI during the month-end close process? Schedule a demo with our team.

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