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Leslie Haoen Shen discusses the role that artificial intelligence plays in accounting

While the complete automation of jobs is not a foregone conclusion, there is no question that artificial intelligence will impact how accountants go about their business.

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Artificial intelligence is the simulation of human intelligence by machines. An example of this would be computer programs that can answer questions, predict stock market trends, or make medical diagnoses.

Leslie Haoen Shen, a financial executive, feels that while artificial intelligence plays an increasingly large role in the lives of average people, some are asking if it will play a part in accounting as well.

It’s important first to understand what behaviors are associated with artificial intelligence versus patterns developed by software developers instructing computers to follow certain rules for specific purposes.

One common example found on websites like Facebook is facial recognition technology used for tagging friends’ photos. This type of processing is not classified as artificial intelligence.

It involves following a series of predetermined steps to reach one result – identifying a face – instead of making decisions based on reasoning.

What is Artificial Intelligence?

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Artificial intelligence is typically used to describe the simulation of human intelligence processes like learning, problem-solving, perception, and language by machines.

Leslie Haoen Shen understands that it also involves software programs that use methods like machine learning (exposure to large data sets with subsequent analysis) and deep learning (the ability for a computer system to apply what it has learned from the data set in the future).

One example of this technology that may become increasingly prevalent in accounting is robotic process automation.

This method allows businesses to send certain tasks – inputting expenses into spreadsheets or scanning receipts for expense reporting purposes are common examples – over to robots who perform them faster than man-operated machines can manage while making fewer mistakes.

A Brief Overview of Business Accounting

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Accounting is the process of reporting information about financial transactions and preparing financial statements, like balance sheets and income statements. The data collected can be used to make business decisions.

Once a business establishes itself as an official entity, it must appoint one or more individuals as the ‘principal.’ They will legally represent and be financially responsible for the company.

Leslie Haoen Shen understands that the primary purpose of accounting is to provide information that reports on the economic decisions and its managers using reporting tools like balance sheets and income statements. 

The statement of financial position provides information about what resources (assets), claims against those resources (liabilities), and net worth (equity) a business has at any given point in time.

Income statements track revenues and expenses over periods. Businesses may also prepare cash flow statements that detail how much money is coming in versus going out over certain periods, usually months or years.

Accounting is an essential part of any business. Many businesses rely on software to help them record and report their financial information, whether they choose a paid option or the free, open-source alternatives.

The rise of technology has transformed accounting from a paper-based process into one that may be almost completely automated in some fields. Software programs have been developed to perform tasks like double-entry bookkeeping, which accountants performed manually.

How is AI Used in Accounting?

Computer software is not the only use of artificial intelligence to impact accounting. Automation can be achieved by offloading man-operated activities into machines that perform them faster than humans.

Still, the larger area where these techniques are being used has less to do with robots and more with machine learning.

Machine Learning

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Machine learning occurs when a data set is fed into an algorithm that digests it and provides information based on what it learned from parsing the data.

One example is fraud detection in credit card companies, where machines learn which transactions display characteristics commonly associated with fraud (unusually large purchases at unusual locations).

Another would be natural language processing programs like Siri or Alexa, which allow people to ask questions about specific subjects without completing a form and waiting for a response.

Machine learning can also be used to improve existing software programs by making them more efficient and capable of completing their tasks without requiring human intervention.

The software can suggest ways in which an accountant or bookkeeper could achieve better records management and provide additional insights based on all the data it can process, not just the information entered into it by the user.

Deep Learning

Unlike machine learning, deep learning does not use predefined data sets to implement its results.

It uses neural networks (networks modeled after the network pattern of neurons within our brains) to create its own associations between bits of inputted data to configure itself and provide outputs accordingly.

Deep learning has been used with great success in computer vision and is expected to increase the pace of automation in a wide variety of fields, including accounting. 

According to a recent study, deep learning will be used in two-thirds of all AI applications within the next three years. One area where it has already been implemented is automated customer service call centers.

What Effect Will This Have on Accounting Jobs?

Already there are concerns that artificial intelligence will replace some accountants as more businesses rely on software programs that can perform tasks manually by those professionals.

In addition, “bots” have begun answering simple questions from customers about business operations with little human intervention, replacing live chat with computerized answers or refusing to let people speak with a real person at all.

Final Thoughts

While the complete automation of jobs is not a foregone conclusion, there is no question that artificial intelligence will impact how accountants go about their business.

At the very least, it seems probable that basic bookkeeping tasks may be performed with less human assistance to save time and resources.

Expanding AI technology like deep learning and machine learning could make this change more widespread and increase automation in other areas such as accounts receivable and payable.

Whether we see a net decrease or increase in available jobs due to these changes remains to be seen, but many experts predict that while AI will affect many different professions, it will not spell the end of work as we know it.

Have any thoughts on this? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.

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