How has technology changed the accounting profession?

Luca Pacioli’s Summa de arithmetica, geometria, proportioni et proportionalità, published in 1494, marks the point at which the modern accounting profession began. The Summa was the first codification of the double-entry method of bookkeeping – the method had been used, but not published, in 7th century Muslim civilisation, 11th century Korean civilisation, and 13th century Florentine civilisation. This methodological innovation – a technology of order – created a platform from which business transactions could be reliably recorded.

Accounting took to using calculative technology, as that technology was developed – from abacuses to analytical engines.

Since the advent of the age of personal computing, the accounting profession has adopted innovations that have allowed greater accuracy, less fixity, and better service. First among these technologies is Sage’s cloud-based accounting software.

How has modern computing technology changed the accountant’s professional identity?

In touch with information

Thanks to modern accounting systems, a company can keep comprehensive records in digital form. Having their sources of information integrated onto one software means that a company can manage their business processes, such as purchasing or manufacturing, far more easily. Integrated information allows less space for clerical errors, less time spent reconciling different aspects of a business, and greater ease in distributing important company information.

Accurate accounts

Modern accounting software greatly reduces the likelihood of human-error. With a modern accounting information system, financial data are more easily captured and stored. When using cloud-based accounting software, you don’t need to worry about having your data lost due to theft or device failure. These innovations have made the mundane part of accounting – collating invoices and so on – an unnecessary part of the profession. When invoices can be digitally processed, there should be no need to work your way through a mountain of slips.

Deeper insight

Modern accounting software can simplify the process of finding insights in data. A great accounting software system will be able to produce a variety of reports on demand. A modern accountant can see crucial company data almost at the speed of thought. Innovations in reporting have made it easier to show off important financial details, which is helpful when explaining difficult concepts to clients. These innovations mean huge reductions in rote work, and more time for an accountant to spend on finding valuable insights for their clients.

Time for strategy

The new wealth of information available to the accountant has further benefits. With the use of statistical programming suites, analysis can be more easily performed on company data. This can lead to strategic advantages – if a company is illumined about the key factors driving sales, for instance, they can make better business decisions. If they can be provided with future-oriented models, that use relevant data to predict business outcomes, they can act ahead of their competition to secure growth.

The modern accountant needs to be able to use computers knowledgably. If a modern accountant cannot use accounting software, or extract insights, or develop computational business models, then they risk becoming redundant. But an accountant that can use technology to enhance their ability and understanding is boon for any business.

Is artificial intelligence a threat to accountants?

Some pundits have identified the accounting profession as particularly vulnerable to take-over from advanced computing systems. According to The Future of Employment, a 2013 report by Carl Frey and Michael Osbourne of Oxford University, 47% of total US employment is liable to be replaced by artificial intelligence.
In their extraordinary study, they categorised over 700 jobs, and graded these jobs by the probability that these jobs are able to be computerised – meaning that an artificial intelligence could take a human’s place in performing the function. The jobs least likely to become computerised are those such as recreational therapy, whereas telemarketers are 99% likely to be replaced by computers.

Accountants and auditors do not fare well by Frey and Osbourne’s study – according to their figures, there is a 94% chance that these jobs will become computerised in the near future.
But how close to the truth is this prediction? How worried should accountants be?

Automation and its effects on employment

New technology will, inevitably, take jobs. The spinning jenny was a mechanised device invented by James Hargreaves in 1764 that revolutionised the yarn production process. It was so effective that Hargreaves had his machines destroyed by yarn spinners, and he had to take his production into hiding. But the spinning jenny was an inevitability, and inevitably led to the vast extension of the clothing industry.
Artificial intelligence is no different – jobs will be lost, but the new opportunity that emerges from the new technology will leave its mark in new employment. As has always been the case, adaptability to the new economic climate will be a large determinant of success post-change.

Accountants already use AI

The accounting profession has embraced the computer revolution. The most prominent (and ubiquitous) computer program in the field is Microsoft Excel, whose digital spreadsheets hugely reduced the burden of accountants.

Similarly, programs like Sage that allow people to access their books from wherever there is an internet connection, bring vast improvements to both accountants and businesspeople. Being able to see the present state of a business, and having a medium through which business information is more easily understood, allow for productivity gains – the less time spent on the tedious, means more time to spend on the more creative aspects (or, perhaps, more time for leisure).

These computer programs have made a number of jobs redundant – but these are largely administrative jobs.
What would it take to make accountants redundant? The fact is that an artificial intelligence that would make the accounting profession history would likely make most jobs redundant. The kind of problem-solving, creativity and pattern-finding that an accountant has to produce in their role requires a kind of intelligence that is not currently reproducible. It involves qualities of thought that are used by engineers, strategists, marketers, lawyers and other professionals. In the scenario in which artificial intelligence sophisticates to that point, it would fall to the newly-anointed artificially intelligent accountant to find a way to resolve the problem of comprehensive unemployment.

While many of the number-crunching aspects of the profession are likely to fall, the business savvy and strategic competency that is inherent in the accounting profession will live on.