Business March 23, 2020 Last updated March 31st, 2020 241 Reads share

Automation: The Buzz Word in Accounting

Image Credit: DepositPhotos

The world is being disrupted by automation. All professional fields are undergoing a sea change with the introduction of automation. Automation aims at deleting all repetitive and boring manual work from the life of professionals. This would leave them free to do more challenging work and also give them the freedom to take on more portfolios. In other words, automation will help to increase the income of firms.

“Don’t ever let your business get ahead of the financial side of your business. Know your numbers.
Tilman J. Fertitta

Scope for human error or a tired mind bogged down by soul-numbing boring work which does not challenge the worker, is the ideal area for automation.

If you have to stay ahead of the financial side of the business, you have to use technology to stay afloat. It is already foreseen among accountancy professionals that traditional roles will slowly change and automation and technology will transform the work patterns in this field. In fact, some changes are already underway. Accountancy professionals are gearing up to face this disruption by adapting to the changing scenario and learning the uses of automation. Technologies like cloud computing, robots which carry software and virtual reality are the new face of accountancy and the medium that has changed the look of drab offices. The drab old offices are now equipped with spanking, smart new machines which make automation a reality in the workplace

“Automation is driving the decline of banal and repetitive tasks.”
Amber Rudd

Kinds of Automation Used in Accountancy

Robotic Process Automation (RPA)

Robotic Process Automation removes repetitive tasks by automating them. Modern tools in RPA are Kofax and Blue Prism. These are capable of automating very difficult processes and are very powerful.

Natural Language Processing (NLP)

Often the language of automation is different from the natural language of human beings. NPL aims at aligning human language and machine language. It may sound strange and it causes wonder at how machines will be able to understand human language. NPL transforms human language into structured data and helps computers to speak and write in a natural way.

Artificial Intelligence (AI)

We have seen movies like “The Matrix ” in which artificial intelligence thinks and acts like human beings. We like to believe that artificial intelligence actually behaves like that. But that is not reality, it is a film and that is a product of the human imagination. Yet the day when AI behaves like humans are not far off.

All research in the field of artificial intelligence is working towards creating such a robot or even a computer. In the field of accountancy, which has this ability. it will have the ability to make decisions and complete jobs on its own. Such an ability will come in very handy. As of now, Artificial Intelligence is used by financial firms to find out fraud and judge risks appertaining to financial investments.

You cannot endow even the best machine with initiative.”
-Walter Lippmann

Machine Learning (ML)

So far, we have been using software which we need to edit if we want to improve it. Now, we have the help of Machine Learning which edits and improves software without any human being having to work on it. Most people find this strange, to say the least, and wonder how software can improve without human beings who created it, working to improve it.

Machine Learning software uses huge quantities of data, generated by itself, to analyze and identify patterns and then it uses the results of the analysis to better its output. Machine Learning will make machines smarter and more efficient with the passage of time.

Machine learning will automate jobs that most people thought could only be done by people”.
-Dave Waters

Advantageous Changes from Automation

Mr. Smith, who worked in a renowned bank, felt deadened by the reconciliation work that was his task in the bank. Morning, noon and night, five days a week, he had the same chore to do. He took no pleasure in his work and was always looking for ways to avoid it. Reconciliation had to be done manually and it was an onerous task. Since he was not interested in his work, Mr. Smith made mistakes and got pulled up often.

Now, however, things have changed and there are tools that allow data to be imported from the firm and the bank’s enterprise resource planning system (ERP). These tools require human intervention to resolve some of the problems which cause a conflict in data. But by and large, these tools are being improved and some offices have adopted automated reconciliation. One such bank is Mr. Smith’s and today he is a very happy and willing worker.

Some of the other areas that have been helped by automation are:

  • Compliance
  • Strategy
  • Routine Tasks
  • Customer Interaction

Advantage #1: Compliance

Important controls in compliance have been automated and this has guaranteed that there are no errors, such as can be made by humans, which prove so costly. Machine Learning improves efficiency in this area though accountants still need to have a firm grip on their understanding of compliance.

Advantage #2: Strategy

Artificial Intelligence excels at strategic thinking and analyses, to the extent that it appears to be almost human. In the near future, it is possible that accountancy will see symbiotic computing. Symbiotic computing means that human beings and computers will work together and bring out the best possible results in accountancy.

Advantage #3: Routine Tasks

Robotic Process Automation automates repetitive tasks and so eliminates them. Some of the routine and time-consuming tasks are number crunching. This is one task that is perfectly replicated by Robotic Process Automation, (RPA). Another area for which Robotic Process Automation is ideally suited is the calculation of depreciation. In fact, any work which entails following an algorithm can be automated with the tools that use RPA.

Advantage #4: Customer Interaction

Natural Language Processing helps in computerizing customer data and the interactions between the customer and the accountant. It is possible to draw up contracts and prepare documents that are intelligible to the customer with the aid of Natural Language Processing.

Conclusion

The question now arises, “is accountancy no longer a career option due to automation?”

Every new entrant to this field can look for job opportunities by keeping abreast of the new developments in Data Analytics, Creativity and Strategic Thinking, Emotional Intelligence, and Communication. The last two are particularly important as these are tools in the hands of accountants with which to communicate with clients, understand their needs and build a bridge between the new age machines and the client.

machine learning illustration -DepositPhotos

Kapil RANA

Kapil RANA

An entrepreneur, Kapil is a qualified CPA and Fellow Chartered Accountant, a first class management and law graduate, advance qualification in information systems. He is a kind of personality who keep on kindling and challenging the fire of knowledge, so that it does never vanish. Pursuing the same trait, Mr. Rana is all set for his new venture, ‘Doctorate in Business Administration. He is the founder of HostBooks, along with experience on strategic management, corporate development & structuring of multinational organizations. He resides in California (Bay Area) and spends his time off playing squash and debating service innovation, politics, sports and of course, corporate.

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