A new CEDA report I attended the Brisbane launch of at BCEC yesterday, Improving Service Sector Productivity, highlights the threat to accountants from machine learning, a type of artificial intelligence (AI), a topic that I posted on last year (see my post The future of the professions). As many accountants are already aware, AI means they will have to become insightful business advisers offering more than the usual number crunching for reporting and tax purposes. In a highly informative chapter of the report, “Productivity in accounting services”, Karen McWilliams of Chartered Accountants Australia and NZ surveys recent developments and offers some hope to accountants that they can survive the advance of machine learning.
In her article, McWilliams provides a good example of the use of AI by cloud-based NZ accounting services company Xero, quoting its founder Rod Drury:
“Because accounting is a fairly low vocabulary, tight domain, (Xero) is getting extraordinary results from basic machine learning. So much so that we think over the next few years we can get rid of coding. Small businesses won’t need to code transactions anymore.”
After analysing more than three million transactions – and correcting the data that had already been collected – Xero Founder, Rod Drury says Xero is nearly in a position to offer automatic coding.
In Drury’s brave new world, the accountant’s role becomes one of quality control and certification of the automatic accounting processes, rather than that of number cruncher.
Xero and similar cloud-based services are major threats to traditional accounting businesses. However, they do provide opportunities for businesses with new business models, such as the Gold Coast-based Bean Ninjas which provides fixed-fee bookkeeping services for businesses using Xero.
Our economies will still need accountants, but probably many fewer accountants in the future given improvements in AI. Ultimately, we should all be better off, as AI makes our economies much more productive, and new jobs will eventually be created to replace those rendered obsolete. But there is no doubt AI will cause massive disruptive changes, not welcomed by many, to accounting and other professions over the next few decades.
Other chapters I would highly recommend in the new CEDA report include the chapter on tourism productivity by my former Treasury colleague, Dr Andreas Chai, now at Griffith Business School, and a chapter on road congestion charging by Michele Huey of Transurban.
Finally, thanks to Griffith Business School for inviting me along to the report launch.