By Jim McFie, a Fellow of ICPAK
The Transformative Potential That AI Offers Accounting Businesses Is Too Great to Ignore
I was having lunch with a friend recently; he is a computer programmer. He had just written a program and there was a bug in it; the program crashed and he received a message from it that there was an error in the program. A couple of years ago he would have put the error message into Google which would have displayed a large number of possible solutions to correct the error. He would have gone through them one by one until he arrived at the “solution” which would really solve his problem. But he did not have to do that. He put the error message into ChatGPT and a few seconds later the unique solution was presented to him together with examples of how he could solve the problem.
In the US many accountants are leaving the profession; the number of accountants leaving their jobs has increased for several years, and this trend shows no signs of slowing down. While there is no single reason behind this mass exodus, several factors have contributed to the trend. When the accountant thinks about the work s/he has done over the span of a few years, s/he realizes that the nature of work has changed. While the traditional role of accountants primarily focused on record keeping and financial reporting, their responsibilities have expanded to include strategic planning and decision-making. In addition, the evolution of technology has greatly influenced the accounting profession, with new tools and systems designed to streamline processes and increase efficiency. Furthermore, automation and now, artificial intelligence have transformed how accountants approach their work. Although some may fear that these innovations could replace human jobs, many accountants view them as opportunities to enhance their skills and improve their services.
A past student of mine, Franciesca Serem, who was on her way to becoming a partner in KPMG in the United States (US), decided to leave her practice as an auditor to join industry. The reason was work-life balance; this equilibrium is a struggle that many professionals face, but it is acute for practicing accountants in the US. Long working hours and job pressure can affect an accountant’s well-being, resulting in burnout and a lack of job satisfaction. The consequences of an unhealthy work-life balance can be far-reaching, both at work and in one’s personal life, affecting relationships, physical and mental health, and overall happiness. With proper balance, the lines between work and personal life can become clear, making it possible to set boundaries to protect one’s well-being. Recognizing the importance of work-life balance is crucial for accountants to thrive in their careers while maintaining a fulfilling personal life.
While many people outside the accounting field may think of it as not a particularly creative profession, those working as accountants know that innovation and strategic thinking are essential to success. Unfortunately, many accountants are bogged down in monotonous and repetitive tasks, leaving some frustrated and unfulfilled; but recently I was having lunch with two past students who are both working as accountants and they claimed that they loved their work; and the late Joe Gichuki, whose work was always done with supreme quality, would point out that he did his work for God – and if something is going to be offered to God, it cannot be shoddy. It is vital to recognize the impact of routine work on job satisfaction for a large group of people; many talented professionals have left the field entirely due to the lack of opportunities for creativity and strategic thinking. However, there is hope for the profession yet; those willing to think creatively and find ways to innovate within the constraints of the work they are given can still find fulfillment and joy in the accounting world.
The accounting field has always been a highly regulated industry, with many reporting regulations and oversight agencies to adhere to. The complexity and frequency of financial regulations have been steadily increasing, placing a heavier burden on accountants. This rise in regulatory pressure has resulted in increased compliance-related tasks, which can be time-consuming and mentally draining. While ensuring compliance is critical, it can come at a cost; the added pressure can lead to decreased job satisfaction for accountants. As the amount of regulation continues to increase, it will be essential for firms and professionals to proactively manage these issues to help alleviate the negative impact on their employees.
The increasing use of automation has led to some accountants expressing concern over their job security. With automated accounting software becoming more available, the fear of redundancy can be real. However, embracing technology as an opportunity rather than a threat is essential, Automation can take on repetitive and mindless tasks, allowing accountants to focus on more meaningful work, such as financial analysis and strategic planning. Adapting and acquiring new skills is vital to stay ahead in this fast-changing landscape. In other words, the technological disruption could catalyze career progression if approached with the right mindset. As the world of accounting and finance becomes increasingly complex, the importance of ongoing professional development and training cannot be overstated. With new advancements and technologies being introduced regularly, staying up-to-date is essential for any accountant wanting to remain competitive. In addition, with continuous learning and skill development, accountants can avoid becoming obsolete, which can significantly impact their job satisfaction and career prospects. Unfortunately, a number of accountants do not stay up to date by devoting time and effort to attend training and professional development courses run by ICPAK and other entities. Professional growth and specialization is a crucial aspect of any successful accounting career. Broadening one’s skill set and expanding one’s knowledge allows accountants to take on more complex and challenging projects and positions. In turn, the pursuit of specialized areas of accounting can lead to better job opportunities and increased earning potential.
A firm in the US which brings accounting practices, their clients and data together in one place recently did a survey of 595 accounting individuals from 6 continents, the majority of whom were from the US, about using Artificial Intelligence (AI) in accounting. Their findings surprised them. They found that accountants have never been more connected and due to that fact, the best learning will occur in the accounting profession. One thing they emphasize is learning from those around you: doing that is better than a webinar from your favorite tech partner or a post from a major social media celebrity; learning from your peers who are also figuring it out a day at a time is the way forward. And the beauty about doing so is that it makes learning fun – it is part of building relationships with the only other people you know who can turn an HEIC file into a well-cropped PDF. And they suggest that if AI overwhelms you and you are not sure where to turn, make the first move. Start a group chat, a Slack channel, or join conversations on social media.
The study found that the majority of accounting professionals expect that AI will transform the accounting industry in substantial ways; enthusiasm about AI depends significantly on a person’s role within a firm; owners, partners and directors are more likely to embrace AI, whereas lower-level contributors are more skeptical; the majority of accountants are not worried that AI will replace them, but they are concerned about what the bookkeeper’s role will look like in the future. Accountants are using AI to compose emails and fine-tune their writing tone, in favor of accounting-specific functions, like tax preparation and audit. Professionals are recognizing that AI is important to the value of their firm and can give them a competitive advantage, but they are worried that AI will reduce the level of humanity in their client interactions, and are concerned about data protection and ethical dilemmas. More accountants are excited by AI than those actively investing in AI training for their teams. Commitment to AI education correlates with firm size; as firm size increases, so does AI training investment until you get to firms with over 200 employees. The transformative potential that AI offers accounting businesses is too great to ignore. And at the same time, the potential implications of not giving it the attention it deserves are equally too great to ignore.
ChatGPT is the second-fastest growing app in history, reaching 100 million active users in just 2 months, only surpassed by Meta’s Threads app: Threads was launched on 5 July 2023 – it was downloaded more than 30 million times in 16 hours and more than 100 million times in its first five days. Globally and across all industries, the AI market is projected to expand 37% each year to 2030. How does this affect accountants? 71% of respondents in the study believe that AI will bring substantial changes to the accounting industry. But the majority of respondents, no matter what their role is, are not sure whether to trust AI or not; there are signs that firm leaders are more trusting of AI compared to individual contributors. 58% are not worried that AI will take over their roles, but lower-level staff are almost three times as worried as partners and over twice as anxious as managers. This disparity in concern highlights a crucial communication gap within the industry. There is a need for clear, open dialogue about AI’s role, not as a replacement, but as a powerful tool that complements and elevates the human element in accounting. Right now, at least, AI cannot match the accountant’s role as a strategist with human experiences, an understanding of nuances, passion, and resilience. What it can do, however, is support the accountant in streamlining their work, and saving them time to reinvest back into their clients and the firm.
The study found that more people are not using AI at all (22%) compared to those using it for accounting specific functions like financial forecasting and analysis (11%), client support (10%), and tax preparation and audit (6%). It is likely that these numbers will change as more AI solutions that assist accounting-specific tasks continue to emerge. Firms are using GPT-powered practice management to save time drafting emails and summarizing communications. In fact, an argument can be made that the integration of AI in accounting practice management systems has led to communication – especially email writing – being the number one use of AI in accounting firms.
At the same time, AI note taking apps can automatically transcribe phone calls and render minutes for meetings, and ChatGPT can be used to generate marketing strategies, plans and copy. I have used ChatGPT to write an audit program. The potential benefits of implementing AI in a firm has immense implications. A firm that successfully uses AI saves time, becomes more efficient, can automate processes, and has access to deep, accurate, real-time client data. All of which make it a more attractive business. Firms lagging in AI adoption risk not just falling behind, but also devaluing their business in an increasingly techsavvy marketplace. Young accountants want to use technology, and the likes of Chad Davis, Jason Staats, and Carla Caldwell are showing the world that accountants can do powerful things with automation, AI, and tech in general. And that is exciting for young people considering their career choices: at the present time, fewer and fewer young Kenyans are enrolling for the Certified Public Accountant qualification in KASNEB: they are attracted away to a career in IT.
No matter your experience or age, you should prioritize learning how to leverage new tech. Or at the very least, experiment with it. Get to know how tools like ChatGPT work. Learn how to use low and no-code tools. Follow leaders in the accounting tech space like Jason Staats, Hector Garcia, Ashley Francis, Chad Davis, and Carla Caldwell. And consume resources designed specifically for accounting and bookkeeping firms, like CPA.com’s generative AI hub, and Future Firm’s technology content. By immersing yourself in new tech and becoming an early adopter (even if it is just for experimental purposes), you will be better placed to leverage game-changing tools for your accounting firm.
