There’s a hot question on every accountant’s mind, keeping them up at night. Will accountants become obsolete? Times, they are a-changing, and tech is emerging. The rise of the robot is causing many accountants to toss and turn with worry and distress. Thanks to Artificial Intelligence (AI), accountants are concerned about being replaced by high tech. Results from a recent 2017 PwC study show that 40% of the accounts payable process can be automated―including timely tasks such as billing and reporting.
Now more than ever, finance departments are exploring automation options to manage the accountant’s manual tasks. Humans may specialize in crunching the numbers for financial insight, but robots are revolutionizing the role.
The Revolution of the Robot
In the past, companies relied on accountants for accurate reporting, financial visibility, and long-term growth. For many accounting roles, the average day included manually entering invoices, writing checks, and chasing managers for approvals, not to mention creating countless spreadsheets and formulas to manage workflow statuses, approvals, and product purchases.
Miscalculations, typos, and correcting other human errors―otherwise known as the exception rate—weighed down the work hours. In a recent survey, Aberdeen pointed out that trusting the robot with AP processes boosts accuracy by 6.74%, decreasing the exception rate with a few clicks. They will be the finance department’s dream come true by cutting cost, increasing efficiency, and providing real-time reporting in a fraction of the time.
AP automation processes 4.11 times more invoices than accountants who cling to pen and paper. The rapid task completion rate explains why companies are paying for software and services to handle the procure-to-pay process and accounts payable automation instead of paying accountants.
Manual invoice entry comes at a high cost for company wallets. Studies found that the average cost per invoice ranges from $4.98 to $12.44. With automated processes like e-invoicing, invoices are stored digitally, regardless of how suppliers send them. Most invoice services make it easy to fill in the small, but significant, details while staying organized.
It’s Time to Meet Your Accountant’s New Assistant
The swift transformation to FinTech raises this question: How should businesses build a relationship with the robot?
The answer is simple. The Accountant role will not become obsolete but will transition to a more strategic role by focusing on growth and better ways to invest and spend, based on the robot’s daily duties and real-time reporting. Instead of hiring for manual, mundane processes, companies will focus on recruiting accountants for big picture responsibilities. They’re bringing in candidates who can analyze big data and provide real-time reporting with a technology and finance focus—not just manually entering invoices and processing paper checks.
PwC’s findings suggest AI’s role in finance will evolve. It’s argued that companies think of the robot as the accountant’s automated assistant, not a replacement.
“AI will gradually replace humans in some functions like personal assistants, digital labor, and machine learning.”
It’s critical for suppliers to find the balance between automation and accountants. The evolution of the industry opens doors to big data that reveals new metrics and financial data only accountants can analyze best for the business. US Analytics Group Innovation Leader, Anand Rao, supports PwC’s argument and weighed in on the best way to work with RPA.
“Artificial intelligence can help people make faster, better, and cheaper decisions. But you have to be willing to collaborate with the machine, and not just treat it as either a servant or an overlord.”
Any task that includes a set of steps and rules can be completed by the robot if the accountant enters the commands. Automation creates streamlined payment processes and time for accountants to focus on the industry’s challenges and opportunities to maximize efficiency and development. While the robot systematizes manual processes, the human can concentrate on digesting big data and providing real-time updates on vendor relationships, budgets, and financial threats for leadership and colleagues in minutes. Besides, top performers spend 20% more time focusing on studying data instead of gathering it. The two become a dynamic duo that can provide new financial clarity and confidence for decision making.
In a recent article, Rick Richardson, managing partner of Richardson Media & Technologies, stressed that accountants know and understand their role to win the war with robots by exploring new responsibilities for accountants.
“You need to understand this new world like you understand accounting. That new world is data quality, data analytics, business intelligence, data modeling, and data governance.”
Even though the robot has the capability to provide qualitative and quantitative data, the human is responsible for determining the quality of the data and the impact these results have on the business.
Dwayne Bragonier, founder of BAI Bragonier & Associates Inc. also pointed out that automation saves time for accountants to improve internal processes, goals, and “properly identify issues.”
“There are a bunch of parameters that are, by their very nature, gray areas. They require a professional to figure them out because they can’t be coded.”
The role of the accountant will not become obsolete but rather be revolutionized to focus on the impact of the robot’s results. Businesses will ask accountants: “What does the quantitative and qualitative data mean for future investments?” Or even “How do these results impact growth goals or competition?”
Easing the Pain of the Procure-to-Pay Process
Accountants are also often tasked with purchasing products for production—also known as the procure-to-pay process. They’re charged with researching suppliers, purchase orders, and payment processing. Since robots can complete this task with a few commands, suppliers are focusing on automating this procedure, too. Accountants will no longer be responsible for managing the quality and quantity of goods as they will trust third-party companies and automation for the procure-to-pay process, including managing product selection, gathering data, and payment verification.
Leaving the procure-to-pay process in the hands of the robot comes with high concerns about risks and compliance. One of the top finance cybersecurity concerns is the security standards of vendors. As robots automate the purchase order process, it’s easy to overlook vendor liability, compliance, and verification. As accountants automate product purchasing, after a few simple clicks and little communication, payments have been processed, and your company could be oblivious to the vendor troubles and risks. It’s one of many concerns, including third parties protecting your supplier’s data, security with cloud integration, and payment protection.
What does all of this mean for the accountant? According to Kyriba, the top tactic to reduce risk and payment fraud is dedicated fraud detection and monitoring. Automation includes parameters that allow for accountants to enter compliance controls and set rules. Predictably, they’ll focus less on the manual tasks of product purchasing and focus more on relationship and risk management to follow supplier standards.
Real-Time Reporting Has Rewards
Keeping track of payable progress with manual, paper processes can be a pain for accountants, especially when it comes down to reporting. Chron highlighted the three most important reports for accounts payable: the voucher activity report, reconciliation of accounts, and history of payments. Each report focuses on the status of payments over time and greatly impacts the relationship with vendors.
The bottom line is each report comes with extensive detail and data to properly analyze the financial future of the company. With automation evolving, all quantitative and qualitative data can automatically be retrieved electronically. There’s more of a need to analyze the data rather than spend time manually calculating and configuring what each report means for the business.
The Reality of the Risk
Building a relationship with the robot comes with security and privacy concerns, especially when considering finances. Accountants are trained to understand in-house security and compliance measures firsthand, but how can robots block hacks and breaches?
On the bright side, automation comes with consistent robotic management and monitoring of contracts, compliance, and policies. A recent report, Overcoming Challenges in Compliance Management with Automation, explores the benefits of relying on the robot for automated compliance and procedure updates.
“Consistent monitoring of such changes allows employees to focus on better value-add tasks and drastically reduces the potential for missing even the most minuscule changes to existing, or newly enacted, regulations.”
Software and service providers put security first with methods such as encryption and authentication, but suppliers are still relying on accountants to be the second set of eyes and ears. It’s also critical to keep a backup plan in the event of automation errors—which only accountants can do.
PwC suggests focusing on cybersecurity first, including privacy and risk management in the exploration phase of new services. Accountants are still needed to participate in cybersecurity programs, learn common security trends and compliance to handle all data and reporting with caution and care―automated or not. Reviewing standards and updates from government agencies including CFTC, NAIC, or the FDIC keeps accountants ahead of the curve with their automation software and service providers.
The Bottom Line: There’s A Problem with Paper
It’s safe to say that suppliers are relying on robots for step-by-step processes and data generation, but accountants are still needed to work the magic of analyzing and strategy. Most businesses are still sticking to paper processes due to fear of change. To maximize opportunity, suppliers should fully embrace automation to ensure that their company is current with processes and digital development. Download our free eBook, The Problem with Paper, to learn how paper is a problem for accountants and the financial future. By the end, you’ll understand the similarities and differences for managing accounts payable.