The sudden need for cloud technology due to the pandemic and introduction of Making Tax Digital (MTD) have meant that accountants are no strangers to technological change.
But we’ve only scratched the surface, and over the next five years, accountancy will ultimately be underpinned by new technology, revolutionising the way you work.
To help you plan for the future, we’ve identified the three biggest upcoming technological changes that will play a role in influencing the accountancy profession.
1) Machine learning
Machine Learning is when software utilises algorithms to produce predictive insights.
For example, in accountancy, Machine Learning is used to analyse data and behaviour, like predicting whether or not there will be a positive cash balance over a set period.
So, what does Machine Learning actually mean for the way you work?
While Machine Learning will predict where you’re going – it won’t take action; it’s purely a tool to provide accountants with insights.
However, these insights are incredibly useful and can help steer client conversations, making advisory far more effective.
Streamline front-end client relationships
With 68% of consumers preferring chatbots because they provide a quick answer – accountants could look to implement similar tools in their practice.
Machine Learning can help, playing a major role in supporting front-end client relationships.
Chatbots can utilise the predictive analysis from Machine Learning to quickly provide answers to simple questions such as tax rates, VAT return periods and filing deadlines, without the need for human intervention.
2) Artificial Intelligence
Artificial Intelligence (AI), in its simplest terms, does the same predictive job as Machine Learning, but the main difference is that it also takes action.
A real-life example of AI is tools such as Siri or Alexa, which will access your contacts/apps, identify words and then take actions such as calling ‘mum’ or playing a requested song.
Will AI replace accountants?
I’ve noticed a real fear in the accountancy profession that Artificial Intelligence (AI) will replace accountants.
Let me set it straight: AI will not replace accountants, it will augment them.
Technology such as AI and Machine Learning simply free up the accountant’s day, enabling them to focus on more value-added tasks.
Can AI and Machine Learning work together?
If you run all your big data via Machine Learning and put Artificial Intelligence over the top, I can imagine a world in the next five years where compliance output is automated.
Outputs such as a set of final accounts or tax returns could automatically be checked against the best possible tax outcome based on previous cases and calculations with AI and Machine Learning.
The joined-up approach of Machine Learning and Artificial Intelligence means accountants would no longer have to manually do calculations.
Instead, they’d review the findings and focus on working with their clients at a more intimate level.
In essence, Blockchain is a digital ledger of transactions that are securely shared across a network to avoid security risks and hackers.
While Blockchain is driving digital currency, it’s rarely seen elsewhere, with the occasional proof of concept in action.
But I believe Blockchain will play an enormous role in the accounting world.
If all the chains of data are linked together in a safe environment and automated, I can see a world where data can move freely between software without security risks.
How will accountancy adopt Blockchain?
With Blockchain, we’ll see far more transaction-level accounting but not by accountants.
Instead, the accountancy profession will utilise Blockchain to assess real economic interpretations, eliminating reconciliation and providing certainty regarding transaction history.
In fact, audits will potentially be a thing of the past with Blockchain.
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