We sometimes feel that technology is accelerating faster than we can keep up. As it happens, Ray Kurzweil’s ‘Law of Accelerating Returns’ theory describes that phenomena rather nicely.

It’s sobering, then, to realise that artificial intelligence has been around for 60+ years. For it was in 1956 that the first official AI conference took place, in Dartmouth College, New England.

There have been many lofty predictions involving AI over the years, and many, many false dawns:

“Duplicating the problem-solving and information-handling capabilities of the [human] brain is not far off; it would be surprising if it were not accomplished within the next decade.” Herbert Simon, AI Pioneer, New York World Fair, 1964.

Why, then, does it feel like AI is all the rage today? Why is AI presenting as the bogeyman about to take our jobs away?

In short, AI is in vogue again. And unlike the false dawns and subsequent AI Winters of the mid-70s and late 80s, it seems that artificial intelligence now works as per the instructions on the label.

Instead of trumpeting the virtues of AI from the rooftops as previous pioneers have been inclined to do (from pride, excitement, and a need to source funding), technology companies have simply got on with embedding the technology into their products and systems.

Witness, for example, the AI inherent in our email systems – silently sorting the spam from the required reading. Or at the other extreme, the intelligence that allows vehicles to drive themselves.

Before we dive into artificial intelligence and its effect on the accounting and bookkeeping industry, let’s first understand exactly what we mean by the term ‘artificial intelligence’.

What is AI?

“Artificial Intelligence (AI) is usually defined as the science of making computers do things that require intelligence when done by humans.” Jack Copeland, 2000.

We bunch artificial intelligence into three types:

Narrow AI – Whereby a computer does one thing really, really well. A chess-playing computer, for example. Much of the AI in place today falls under the narrow AI banner: the afore-mentioned spam sorter in your email, your phone’s map and music apps (among loads of other phone examples), self-driving cars … they’re all narrow AI.

General AI – General AI describes the arbitrary achievement of a computer to reach the approximate intelligence level of a human. It’s perhaps inspired in part by one of the founders of modern AI – Alan Turing and his Turing test. A computer ‘passes’ the Turning test when its intelligence is indistinguishable from a human’s. Microsoft’s XiaoIce chatbot is a sort of example of general AI. It is however missing the ability to reason and think abstractedly like a human can, among things.

Super AI – When we think of AI in popular culture such as movies and books, we tend to think of super AI; HAL 9000 from 2001: A Space Odyssey, for instance. Super AI occurs when computers accelerate past the intelligence of humans. We’re not there yet. Nor are we across what it will mean for humanity. What problems will a computer with an IQ a trillion times more powerful than ours be able to solve? All of Earth’s problems, perhaps?

An AI future

For the accounting and bookkeeping industry, it’s advancements in narrow AI that most concern us for the next five to ten years. Continued automation breakthroughs in transaction processing, for example, will create opportunities for smart operators, and dangers for laggards.

The small business owner of the future may not know whether they have accounting software. They may go about the business of doing their business without entering a transaction or recording an invoice or approving a pay run. Frictionless transactions might enable that future, where the business advisor sets their client up with the accounting solution, while sensors in-store record data that feeds into the accounting solution managed by the business owner’s advisor.

Sound far-fetched? Amazon Go will allow customers to shop without scanning their goods. No cashier, no self-scanning – simply walk in, select what you want, and walk out.

The Committee for Economic Development of Australia (CEDA) identified the probability that 40% of Australia’s workforce (more than five million people) could be replaced by automation within the next 10 to 20 years. This is a common prediction but in the past new technology has not necessarily destroyed jobs but created new ones. We can’t know what new jobs might emerge in the future but there will be more roles in the artificial intelligence industry as that technology becomes more mainstream. AI will disrupt industries though, some jobs will be lost, and people will need to learn new skills.

It’s interesting to note that there have been around 1,500 new jobs created since 1990 – positions such as SEO specialist, web analyst, social media manager, vlogger (or blogger, for that matter). In most major cities, approximately 10% of workers are in one of those 1,500 roles.

There are always signals that a job is losing relevance, and a recent MYOB stakeholder survey showed clearly that bookkeepers are aware that their roles are changing right now. This doesn’t mean that their future is one where they become obsolete though. It does mean that bookkeepers and their stakeholders need to rethink how their service can be redefined and offered in different ways to maintain relevance.

Opportunities through AI

“I didn’t go to university to learn numbers – I went there to learn how to help businesses.” Amanda Gascoigne, Gascoigne Consulting.

Improvements in artificial intelligence in accounting and bookkeeping will create new service opportunities for both professions. Perhaps the most profound change won’t be technical, though. Rather it’s the change in engagement model – from reactive to proactive.

The AI-augmented future will see accountants and bookkeepers actively and constantly engaging with clients. The machines will do the laborious work, while the humans will provide the emotional, social, and contextual intelligence that an AI cannot hope to replicate anytime soon.

It’s worth repeating that the machines will augment our work, not replace it. No computer will adequately ask questions of a client unassisted – certainly not in the foreseeable future. The key is to embrace technology, to put it to work, and to turn any time savings into new service opportunities.

Accounting and bookkeeping forecasts

• Accounting may be the next on-demand community, similar to Airbnb and Uber. People may use an app to identify what companies specialise in services they require and connect the client with that company directly from the app.
• Thanks to AI and improvements in algorithms, bookkeepers will manage, guide and check the data, not record it.
• As compliance and advisory work continue to be unbundled, accountants will be providing consumable analytics and actionable advice for clients, focusing on delivering actionable value.
• Business advisory services will generate more than 80% of revenue for accounting practices.

Final note

There are two different futures for the professions:

1. Where new technologies are viewed as a way to enhance traditional ways of working
2. Where technology generates a rethinking of how work is designed and delivered and actively displaces the work of traditional professions.

Which future emerges depends on action today to respond to the digital challenge facing all industries, especially ours.