Accounting for Change: Why AI Is Poised to Transform Accounting for the Better

Accounting for change: Why AI is poised to transform accounting for the better – By Aaron Harris, Chief Technology Officer at Sage

The rise of the innovative accountant – how AI is automating drudge work and creating new career options for accountants in business

We all have our time-honoured habits. These repeated actions or behaviours can be good—a daily walk or morning meditation—or not-so-good—doom scrolling on social media immediately after waking, say, or that delicious doughnut with your morning coffee.

After a few months, these habits may become so ingrained that we do them almost without thinking.

The accounting industry is no different. In fact, some of our habits – month-end close, reviewing and verifying information in accounts and financial transactions; annual audits and quarterly tax filings ? are centuries old.

These working rhythms have proved resilient and able to adapt to changing economic and business demands. But just because we’ve done something for centuries does not necessarily make it good for us as individuals or the accounting industry.

Many of these working practices in the accounting industry haven’t caught up with technology. Consider the stress and long hours of month-end deadlines that are almost immediately outdated once they are finished, or the tedious and repetitive search for financial and accounting data to reconcile. We know that there is a better way to do this. And now, change is possible, due to one technology ? artificial intelligence (AI).

Evolving AI…
AI, especially generative AI, can automate much of the drudge work of accounting. It can replace monthly closes with continuous accounting. And that can free up accountants to spend more time on higher-value and more interesting work.

For instance, advising clients on the cost-benefit analysis of adding a new warehouse or helping a business department to understand whether they can afford to hire more salespeople or launch a new product in a new country. It can also be used to minimize business risks, such as erratic cash flow or rising debtor days.

Moving away from these cycles would mark the biggest changes to accounting for centuries. There’s no denying that AI will have a big impact on how accountants in business and practice, think, work and create value for their clients.

By 2030, wider use of AI will mean that accountants spend less than half the time they currently do on routine tasks. The research also predicted that the monthly close would largely be a thing of the past by the end of the decade; three-quarters (75%) of accountants in small and medium-sized businesses who were questioned predicted that real-time financial data would replace the monthly close.

And despite predictions that AI will replace millions of workers in almost all industries, our research found that AI will be a job creator.

Showing our working out
Some finance departments are already seeing the benefits of AI.

One Sage client, a financial education nonprofit, called Operation HOPE, has used our AI software features to make major time savings in their accounts, as well as improving their accuracy and reducing financial risks.

With Sage’s AI and automation technologies, bills are scanned and data extracted. Reports are no longer slowed by time zones either with human errors during data entry reduced. Menial admin tasks no longer exist.

Another Sage client, Johnny’s Selected Seeds ? a seed producer in Maine, United States ? used AI to streamline its accounts payable process and supply chain. It used more up-to-date financial data to provide better information to its scientists who were able to pick suppliers that were more likely to deliver on time. That helped the company accelerate its lengthy research and development cycle and produce corn and tomato seeds quicker.

The next step for Sage, its customers and the accounting industry will be to understand the new roles that AI will create over the next decade.

What comes next in an AI-powered world?
It’s unclear exactly what skills accountants will need to learn to make the most of AI and advance in their careers. After all, AI technology is changing so fast and many accounting firms are still in the experimental phase of its use.

Established roles, such as financial analysts, are likely to lean more heavily on AI to analyse data and guide strategy. Demand will grow for these and other new, AI-influenced roles, in accounting and finance departments. However, exact skills and job specs are currently unclear.

Sage research predicts other new roles, including AI compliance specialists – i.e., those responsible for ethical and regulatory guidelines ? and a systems integrator, who acts as a bridge between technology and finance departments, will drive ongoing digital transformation.

Accountants, by their nature, are diligent and detail-oriented, making them suited to tackle challenges, such as AI’s tendency to fabricate information. Far from overlooking risks, accountants are poised to lead the charge in ensuring AI is safe, ethical and reliable. With this approach, they can unlock AI’s potential to transform accounting, automating tasks and enabling real-time, data-driven advisory work.

Now is the time to break some of the accounting industry’s age-old habits and create new and better ones.

About Sage
Sage exists to knock down barriers so everyone can thrive, starting with the millions of Small and Mid-Sized Businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.

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Author: Lovejoy Shangase from Burson Africa on behalf of Sage.

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