5 positive ways artificial intelligence will impact accountants

Today, AI is being used for image recognition, object identification, detection, classification and automated geophysical feature detection. These are underlying tasks that once required the input of a human.

Focusing on how artificial intelligence will impact accountants, AI will very soon help you to automate much of the routine and repetitive activities that are undertaken on a daily, weekly or annual basis.

It will also help you to:

Empower quick decision-making

Create smart insights

Examine huge quantities of data with ease.

With this in mind, here are five examples of how ai could be useful for your accountancy firm over the coming years.

1.       Predictive and forecasting solutions

With AI integrated into the software, you will be able to provide a comprehensive and accurate insight for your clients without the usual “manual heavy lifting” and number crunching behind report creation. On a day-to-day basis, being able to quickly and easily access up-to-date and accurate reports and forecasts can help you form a closer and more useful relationship with your clients.

This revolution will be empowered by one of the cornerstones of AI today: machine learning.

This is the ability of software to essentially program itself based on the data it encounters. The software is able to learn from what you do with data and can make its own suggestions for humans, if not act entirely autonomously. Machine learning is everywhere. It allows mobile phones to enhance predictive text, use speech recognition, create route suggestions when navigating, and suggest places you might want to visit when you reach your destination. At companies worldwide, 77% of businesses already say they’re completely or very reliant on machine learning technologies.

2.       Smart assistants

Are you an accountant who, during crunch time when seemingly every client is sending through their accounts, considers turning off your phone or email so you can get some work done? You’re probably not alone. Fortunately, smart assistants might be able to give you a helping hand. They can form the first line of customer contact and might even be able to provide clients with the information they need, such as details about their current tax liability.

3.       Automatic tagging and allocation of transactions

The next two areas where AI will help your accountancy practice are also enabled by machine learning. This will save you time by correctly tagging transactions and assigning them to the right ledger account. Put simply, your accounting software will learn from previous tagging decisions that are typically made according to rules that the accountant is aware of. Some of these rules are intuitive but others can be surprisingly complex, at least from a computer’s point of view. Over the coming years, the ability of technology to discover these rules and predictively plan will help to remove a significant component of your daily workload.

4.       Anomaly detection

Computers love data, of course, and when machine learning is applied to massive amounts of data—such as the yearly ledgers of a large company—then there are clear benefits.You will be able to discover anomalies that may exist, and the process will be much quicker and take significantly less effort.

If an audit is required, for example, it will be possible to audit all the data rather than merely a sample, yet without the huge resources typically required for what’s traditionally considered a “full” audit.

Optical character recognition (OCR) isn’t new but AI enhances its accuracy significantly and opens it to new usage scenarios.

        5.     OCR solutions

While it’s always been possible to extract information automatically from documents, this required a human to point out to the OCR software where the data was located—something that also meant the document layout couldn’t be altered without further instruction.

        So what next for AI and accountants?

How will we get all these wonderful AI-enabled benefits? Well, the good news is you probably won’t have to do very much. While in the past you might have expected to buy an add-on software package to gain revolutionary new functionality, the kind of tools discussed above will more than likely start to appear over the coming years in the software you’re using now. Some of it, such as bank account reconciliation, might already be present in your firm’s accounting and client management software—and you might not even be aware.

All you might have noticed is that things just got a little bit easier when the software appeared to get that little bit smarter. This is the shape the revolution will take—many small increments, rather than an overnight change.

It simply means being aware of what’s common-sense good practice as far as technology goes and ensuring solutions such as cloud computing are adopted within your practice.

This gives you all the benefits available today while ensuring you’re prepared for the future.

Cloud ERP: The Time Has Come

Hardly any software vendors today want to be stuck with an on-premises-only product portfolio. In the ERP subsector, probably the most important technology area for CFOs, it took market leaders Oracle and SAP longer than most to diversify into the cloud. But now they’re leaders there as well.

But while the global cloud ERP market is expected to grow, it likely won’t be at a lightning-fast pace. Statista forecasts that the market will be $28.8 billion in 2022, representing an 8% compound annual growth rate since 2016.

So far, CFOs as a group — those at large companies, at least — have been fairly reluctant to trust their core financial and operational data to public clouds. Still, companies’ overall growing fondness for cloud computing could influence faster change in the ERP arena.

Research and advisory firm IDC estimates that 70% of companies’ core applications currently run on-premises or in co-location facilities. The rest are in private clouds (23%) or public clouds (8%).

In a recent survey by 451 Research, however, 60% of participating technology professionals said they expected their companies’ approach to IT in 2020 would be focused on off-premises cloud solutions.

More Robust

In the ERP market, count Jeff Buchheister among the converted. His company, Cetera Financial Group, replaced its old on-premises system with an Oracle cloud solution in August after an eight-month implementation period.

It’s early days, but Buchheister, Cetera’s finance chief, is impressed. Because Oracle, like other cloud providers, handles all of the system’s administration and maintenance, the IT department has eliminated two full-time positions. What’s more, his finance team is reporting efficiencies that he predicts will save him at least 10% on accounting staff costs.

A key reason Buchheister chose a cloud solution was to avoid having to keep asking the board of directors for permission to implement upgrades. Automatic upgrades are included in cloud subscription costs. “The cloud solution’s ability to constantly keep us upgraded with new functionality and to keep us from falling versions behind was really attractive,” says Buchheister.

Such converts are driven by not only automatic updates and drastically reduced maintenance expenses, but also lower up-front capital costs and faster start-up times for rented software delivered through the Internet.

Modern cloud ERP software is more robust than earlier incarnations, as well. As the market has matured, vendors have addressed earlier security fears and added capabilities that have users whizzing in hours through tasks that formerly took days.

Still, among organizations that aren’t ready to move to the cloud, some may never be. Many are stepping gingerly, adopting a hybrid approach in which they move some ERP functions to the cloud but keep those that store proprietary data on premises. Still, others think the most sensitive data is actually safer in the cloud, but they keep some processes on site. It’s not just fear that is staying the hands of those reluctant to move.

“It’s hard for a company with years of investment sunk into an on-premises ERP system to make that move to a more modern cloud-based solution,” says Melanie Posey, research vice president, and general manager at 451 Research. “Then there’s the extent to which the business depends on that system for day-to-day operations. So, there are a lot of reasons to keep the ERP as-is.”

When a company moves close to fully amortizing the cost of its old on-premises systems, though, it becomes more likely to migrate to cloud solutions of one type or another. Flavors include a software-as-a-service (SaaS) solution running in a multi-tenant public cloud, a single-tenant private cloud hosted by a cloud vendor, and a private cloud maintained in-house.

Cost Questions

At such a time, a company wants to understand the financial ramifications of switching to the cloud.

The SaaS payment model is a lure for some. Instead of paying an upfront hardware cost and annual licensing fees, cloud users pay-as-you-go subscription fees. That said, from a total-cost-of-ownership standpoint, cloud solutions may actually prove more expensive.

After five or six years, subscription fees will likely outweigh the ongoing maintenance fees a company would pay for an on-site solution. “If you do a careful analysis, an on-premises solution, while not as easy to implement and maintain, is going to be a lower-cost solution over the long term,” says Jeff Carr, CEO of Ultra Consulting.

That assessment, however, assumes that the company will continue to use the on-premises ERP for a lengthy period of time, Carr acknowledges. And, as in the case of Cetera, the opportunity to reduce staffing costs could be an important factor in going with a cloud ERP solution.

Another factor lifting cloud ERP sales is the fact that other enterprise applications already run in the cloud, as do myriad consumer products that people feel comfortable using online. Once eyed skeptically as a potential security risk for the kind of sensitive data that’s in an ERP system, cloud software is now perceived as much more mainstream.

Perceptions have slowly changed as vendors have touted encryption capabilities and the enhanced security protocols available on cloud platforms like Amazon Web Services. “In corporations that rely on on-premises solutions, adherence to updates and compliance often lags those that are well maintained by a software vendor,” says Juergen Lindner, vice president of SaaS at Oracle.

Cetera’s Buchheister buys the argument. “We’re better off having Oracle, which has a very large team that focuses on this with 100% of their time, handle our ERP security than employing our IT department to do it,” he says. “As we’re a financial services company, there are hackers trying to get into our systems, and there is a benefit to us in having our ERP system sitting outside of our primary network.”

Transition Tips

Migrating your ERP to the cloud is not as easy as flipping a switch, according to technology consulting firm Emerald TC. Some preparatory work is required. Consider the firm’s following tips:

1. Establish goals for your ERP project.

2. Build a cross-functional team composed of everyone who will use the system to guide the process of choosing the right cloud ERP for the company’s needs, identifying reports, and assessing data elements for the integration.

3. Take an inventory of current data elements throughout all departments. Back up all data.

4. Review the business processes you are seeking to improve. Cloud ERP makes processes go faster, but making a bad process faster is just increasing the speed of frustration.

5. Add extra time for project completion. Questions, broadening the scope of work, and minor glitches all take time to address.

6. Share all documentation, data dictionaries, and other information with your integration partner. The more information that is shared the better.

7. Look for a cloud ERP vendor with a proven history of successful transitions for companies in similar industries. Ask for and check on references.

8. Allocate extra time for training groups and individuals who will use the system.

Selling Security into the Boardroom

Technology has been the single biggest change agent in the banking market. Over the last 30 years, a continued and relentless path of technology innovation -- most notably the Internet of Things (IoT), big data analytics, mobility, and the maturation of standards and integration -- has shaped the industry and continues to do so today as we begin 2019.

Advancements in automation and Artificial Intelligence (AI) technology have enabled a new generation of capabilities that propel real-time interactions between security operations and fraud investigators, to customers and employees. The term "security" no longer means simply protecting the perimeter of a building; it also involves securing corporate networks and sensitive data, and enabling the highest order of customer trust, through all their engagements.

The evolution of technology, fraud mitigation, and the overall security structure has propelled security leaders to take a new approach to 'selling' the investment in technology to their senior executives and board of directors. Once a cost center, security -- and its technology investments -- are now a critical part of any business and are designed to deliver long-term value to shareholders and customers.

Here's a question: Are you in the right position to sell the value of your investments to your senior executive team? In this blog, we take a look at how to position for success and plan for the future of a security department: 

Propose the Value

Board-level executives process information and decisions differently. 

When going before this audience to gain buy-in for plans, you need to understand their overall mindset. Does your organization's board view security technology as a cost or an investment? If it's the latter, you're in a very good position and you can easily move on with the pitch.

However, if your leaders view security as a cost, you have to change their mindset ... now. Develop a pitch that explains how security aligns with the overall goals of the business, such as delivering exceptional customer engagement through video-enabled analysis of processes or addressing organized fraud schemes through the identification of abnormal behavior.

Share potential business results or new efficiency targets, outline how many different people will benefit from your plans, and describe how the business will benefit from your strategy.

Consider the use case of expedited remediation and how timely resolution can be a key to protecting the value of the brand. Remember: "Senior management is more likely to do business with you because of what you know about their business, rather than what you know about your business."

Build Partnerships

Security no longer operates in a silo. Today, convergence occurs at an organizational level. The alignment of risk management, IT, compliance and security enables a comprehensive approach to security that takes into account cyber and physical elements -- and helps leaders proactively recognize threats.

With this in mind, you must consider evolving the relationships you have beyond these partnerships. Learn how to collaborate with finance, operations, facilities, strategic planners, and marketing leaders. These stakeholders can be valuable allies in your road to gaining budget approvals, especially if you're able to gain insight from them on the ways in which your security strategy can benefit them.

Understanding the challenges that your fellow department heads face, as well as offering them ideas and solutions, can go a long way to helping you meet your own goals.

Speak the Language

If you're like any traditional security leader, you find it easy to discuss issues related to risk management, business continuity, threat mitigation, and security technologies. If you've embraced the value of and collaboration with IT, you're ahead of the game.

However, can you speak your executive team's native language? That is, can you speak business? Can you easily discuss liability, cash flow, gross margin, ROI, TCO, and profit margins as they relate to your department? If not, you need to educate yourself and your team to be able to gain approval for your future security plans.

Focus on outlining ROSTI: Return on Security Technology Investment

• Reduce expense results
• Optimize performance
• Standardize products or services
• Timeline for results
• Improve process, progress, and steps toward goals

Technology is a great force multiplier. Security helps secure an entire branch footprint, alleviates risk, helps ensure operational compliance, and improves fraud investigations. Video surveillance systems, analytics, threat management platforms, and other solutions can provide organizations with intelligence and unprecedented protection from fraud -- all while enhancing the customer experience. 

But all of these cost money. Therefore, being able to explain the business benefits will enable you to create a stronger, strategic security program within a financial institution. Following the suggestions above will help guide you along the right path to the future in communicating these needs to executive leadership.