With things such as ATMs, self-checkout counters at grocery stores, and rumors of self-driving cars being on the market in the near future, it’s easy to begin to wonder if humans will become unnecessary for many tasks. When Steven Spielberg’s movie, A.I., came out in 2001 the premise of human like androids seemed incredibly far-fetched, but almost two decades later that no longer seems as crazy.
The accounting field is no stranger to technological advances, and like many other fields, accounting is learning to adapt to these changes. It has been predicted that by 2020, many accounting practices will be automated.
Based on all of this, you could easily ask the question: Do I even need a human accountant? (Wouldn’t it be much cheaper to not have one?)
And, despite all of the currently available technology and predicted AI in the future, we could easily answer: Yes, you do. Here’s why.
1. Analyzing and Interpreting
A good accountant should not only be able to compile financial data and produce reports, they should be able to communicate what that means to you, others in the business, and possibly to people outside of the business. The accountant should be able to take that data, reflect on why it may look the way it does, analyze trends that have occurred recently, and use it to help make decisions for the company’s future.
Computer software can produce prompt and accurate reports. However, if as a business owner, you don’t have a full understanding of them, or you aren’t sure how to use that data to influence future decisions, the computer software actually isn’t of much use to you.
2. Common Sense
In an article for Forbes, Nick Chandi explains, “…computers are only great transactional machines….It’s also pretty hard to teach a machine common sense.” Common sense, or practical judgment, is a skill necessary to all fields.
For example, imagine if an employee made a mistake when entering his hours for a pay period. Instead of entering 40 hours, he only entered 4. A computer would simply process that 4 resulting in a much lower paycheck for the employee. A human accountant could take a look at the payroll report, observe that difference, and use common sense to realize that the employee probably did not only work 4 hours. After some communication, the issue could be resolved.
3. Personal Connection
As we mentioned in this post, the role of the accountant is evolving to include being a financial advisor and business coach. Due to their familiarity with a business’ finances, accountants are well placed to use their expertise and offer financial advice. Some could argue that AI could also offer financial advice, but in reality we still live in a human world where formulaic advice often doesn’t work. (Plus, the idea of technology offering advice makes me think of the Magic 8 Ball that I had as a kid, though obviously things are much more advanced than that).
A human accountant is necessary for a personal connection. That could mean a personal connection for financial advice, a person to pick up the phone when you have an urgent tax question, or simply someone to crunch the numbers with you and be empathetic if they are not looking good.
Why Accountants Should Embrace the Technology
Rather than fear new technology and automation, accountants and their clients should embrace it. As we have explained, even with these new advances, the need for a human accountant still exists and will continue to do so.
Chandi reassures us that new technology will actually “…empower accountants….” With new technology able to take care of many of the time consuming tasks such as data entry, accountants have much more time to focus on the more challenging stuff–analysis and interpretation.
As the role of the accountant evolves, it is more important to remember that the way an accountant may bill will change as well. Accountant Blake Oliver describes his own experience, ” Manually keying in bills, printing paper checks — these are just a couple of the tasks I once billed clients for on an hourly basis.” Fast forward a few years, and Oliver found that thanks to Cloud apps his efficiency doubled for these tasks. “By necessity I transitioned my clients from hourly billing to fixed monthly fees — otherwise I would have gone broke!”
What Does this Mean for a Business Owner?
The fact that human accounting is still viable is obviously very comforting for those of us who work in the field. With the advent of new accounting technologies, business owners and managers should also take comfort in the fact that human accountants are being enabled to do even more to help benefit your business.
If you are in the process of looking for an accountant to work with, don’t be scared off by one who embraces technology. Those are the ones who will really be able to help you get to the next level.
Looking for more advice for your business? Contact us at Lumen Advisory and Finance!