When it comes to industry disruption, accounting doesn’t exactly top anyone’s list for most affected. Arguably the last great industry disruption came in the Middle Ages with the advent of double-entry bookkeeping (the early 1960s invention of the calculator might be another!)
That is, until today.
The 21st century has brought with it a new form of industry disruption, one which will have just as much – if not more – of an impact on the accounting industry. I’m talking about AI.
Over the last several years, popular software tools like Quickbooks, Xero, Wave and Freshbooks have upended the industry by making accounting manageable for small businesses.
But this is only the tip of the iceberg. After all, these tools still require human interaction. We’re tip-toeing towards a not-too-distant future when all accounting will be fully-automated.
Picture this scenario: You’re a small business owner in need of regular bookkeeping and annual tax preparation.
Instead of going the traditional route and interviewing a host of prospective service providers, you simply download an AI software onto your hard drive.
The software connects to your bank account and credit statements, and automatically records every transaction into a digital ledger the instant that transaction takes place.
No more face-to-face meetings; no more quarterly or annual reports. Now business owners can access up-to-date accounting information in real time.
And because the software comes pre-programmed with the entirety of the tax code, it takes all of the guesswork out of what business owners will owe when it comes time to file.
This new software sounds like a god-send for small business owners… but a nightmare for accountants! Are accounting jobs really doomed to be automated away?
The short answer is… yes and no.
While traditional accounting responsibilities will inevitably be automated, the role that accountants play within an organization will evolve.
As a result, there will still be a demand for accountants, albeit to fulfill a slightly different need than traditional bookkeeping and auditing.
The Accountants of Tomorrow will be more than just accountants, they will be trusted advisors and consultants.
Given their penchant for number-crunching and their experience combing through balance sheets and P&L statements, accountants can X-ray a business faster than anyone.
An experienced accountant understands a business on a forensic level. That makes accountants invaluable when it comes to corporate strategizing and financial planning.
One thing AI won’t be able to do is consult with business owners (at least not for a very long time).
So in the near term, there will still be a demand for experts who can make sense of the numbers. Accountants can visualize the daily capital inflows and outflows of a business’ moving parts, and provide an accurate assessment of a firm’s position and performance.
Where human accountants will continue to triumph over AI is in identifying which levers to pull in order to improve company performance.
If accountants are to excel in this brave new world, they must shed the generalist mindset that holds so many of them back.
Generalism is a honeypot; it sounds fruitful given the range of industries you can service as a generalist, but in reality it's a trap.
Generalists are stuck in the vicious cycle of downward pricing pressure as they struggle to differentiate from the competition (for more on the generalist trap, check out this post on “4 Client Acquisition Strategies Every Accountant Needs to Implement Right Away”)
The Accountants of Tomorrow will be specialists.
They will narrow their focus on a core industry, which will afford them depth, wisdom and expertise.
Every business owner has a core problem they need to solve, whether that be growing the business, acquiring competitors, building a retirement fund, or even downsizing.
In spite of automation, human accountants with industry-specific expertise will be called upon by business owners to forecast industry trends and help analyze cost/benefit analyses of strategic decision-making.
By repositioning themselves as advisors and consultants, specialized accountants can focus on fixing a business owner’s core problem, and in turn make themselves invaluable to a growing organization.
To learn more about how to become an Accountant of Tomorrow, contact Anthony today for a Free consultation.