AI is just the beginning: technology will keep changing how us bookkeepers work
The accounting industry broadly has experienced some rapid change recently, and change has been rapid nowhere more so than for bookkeepers. We have seen changes not just in terms of how we interact with our clients, being more connected and available than ever, but how we perform the core tasks of our role.
A huge shift in this change has been the emergence of artificial intelligence (AI) technology, the almost logical next step from offshoring. What had become a common practice for some of the biggest firms, has been replaced by technology with programs replacing human capital. The disruption of automation has been huge, it levelled the playing field and very quickly had an effect on the profitability or lack thereof for every bookkeeper in Australia. But what’s next? How do we prepare? How do we adapt?
Bill Gates recently discussed the issue of AI technology and machine learning replacing humans in the workforce, stating he feels machines should pay income tax. It’s an interesting idea — the machines that replace staff should pay tax just as a human doing the same role would. The effect of such a development would have a major effect on all industries but none more so than accounting and bookkeeping. Accountants and bookkeepers, one of the leading industries in adopting AI, would face major changes in profitability themselves but it opens up clients to the same challenges.
Great change often spurs even greater internal industry shifts as businesses, clients and professionals look to adapt to the new landscape. Bookkeepers are only at the beginning of this journey. While we have begun to adopt these new technologies, more will follow and as technology advances, what clients expect and what is considered the industry standard will also change rapidly.
Being ‘tech forward’ just a few years ago would likely mean having everything in an excel document to share. In a few years, ‘tech forward’ will likely mean using AI for everything but management. How quickly things change.
Change might even bring implications to how clients see the role of their bookkeeper for their business. Clients will start seeing bookkeepers as professionals having the power or knowledge to drastically alter organisational structures to improve financial health in the short term, a possibility leading to huge increases in client demands. It is an emerging trend already. Clients more often than before see bookkeepers as advisers to their business, beyond the traditional transactional role we once played.
The important consideration, how does the change in client demand affect the industry landscape? How clients see value in the services they are paying for has already caused some big shifts for accountants broadly. Just this year, all four of the biggest global accounting firms have changed internal structures in order to provide better services for their existing clients, while also looking to grow down, working with smaller businesses.
What would have been an impossibility — the big four having small business clients with lower turnover, without the advancements of technology, is now a reality. The adoption of automation and machine learning is making core responsibilities more cost efficient, changing what firms can work with what clients.
Now though, smaller bookkeeping firms face the prospect of competing for clients with the largest firms on the globe, all with access to international networks of advisers, tax agents, accountants and consultants, far beyond what mid-level and smaller firms can offer.
Being a bookkeeper is set to change, even more rapidly than it has over the past five years. However, to better understand what a major technological change like the emergence of AI will have in the industry, we should look beyond what our competitors are doing. How will government react to this change? Government priorities often differ with industry and technology creating a huge divergence of priorities. While we will look to find efficiencies and provide the best, most useful products to our clients, government works from a different perspective and is often slower to adapt to change.
In some cases, government support is welcome, providing protection to industries and workers, allowing us to be competitive on the international stage. The Turnbull government set out some years ago to spark an innovation revolution, supporting advancement and disruption. The federal government’s ‘ideas boom’, announced in December 2015 was expected to be a game changer. In many ways, things have not progressed as was expected but we should not expect that trajectory to remain.
Overseas, governments have toyed with the issue of machines replacing humans in the workforce, commenting sparingly on this topic. It appears that many public agencies have not fully grasped just what a major change technology will bring to medium and low-skilled households. Government coming late to the party often means we are heading towards reactionary, protectionist policies. Couple this with the global phenomenon of the emergence of nationalist, populist policies in the US and Japan and we are headed to unknown territory.
It is not just government that’s weary of technology being more advanced than workers. Elon Musk, one of the great thinkers and innovators of our time, has warned for some time that robots will be able to do everything better than humans and has warned governments to prepare for inevitable change.
Again, being ahead of change is more than just being ahead of competitors, we must try to preempt what governments will do. If governments move away from their desire to embrace technology and implement protectionist policies for voters, how does that impact businesses looking to use platforms like AI and machine learning?
The impact of such a drastic policy shift will have a greater effect on the accounting industry than many others. While we will have to adapt to the changes when running and organising our own businesses, we will also be required to act as advisers to clients. Not only must we plan for our own futures, but the futures of our clients too.
No business is exempt to change or advancement. While our industry is going to continue to experience rapid disruption, it is something we should embrace, find time to analyse and plan for, because every change presents an opportunity to grow your business and your skills. This change should be in the back of your mind when making any decision for your business.
Something that has exploded into prevalence is how, in some cases, university graduates are deeply unprepared for working in our industry. It is another area where we as leaders should take initiatives in creating education courses for our new staff.
It’s time to consider yourself as an adviser, not only to your clients, but to your own business and staff. Take time to think ahead and plan for what is coming. Great change, something that for us as accountants appears to be an inevitability over the next decade, brings with it great opportunity.
If managed correctly, we as an industry can elevate ourselves beyond the status quo and transform into something more valuable to businesses.
As your clients are looking for more professionals that can help them through the changes they are experiencing in their respective industries, bookkeepers creating new niches for themselves in client advisory is one that we shouldn’t ignore.
Chris Paterson, managing partner, business services, Crowe Horwath Australia