When I visited my brother last weekend, first item on my agenda was to try out his new Amazon Echo.
“Alexa, where is the nearest bowling alley?” I asked the cylindrical device. “How long will it take us to get there?”. Alexa, hidden inside the innocuous-looking smooth cylinder, directed us to the Chesterfield Bowl 23 minutes away.
These kinds of new user interfaces are revolutionising the way we interact with technologies and services. But it is not just entertainment or home tasks which can benefit. What if we could also make mundane business matters, like payroll and bookkeeping, more efficient, too?
That day may not be so far away. A spectrum of technologies and trends, due to go live in the next five years, is set to revolutionise accountancy.
AI For Reconciliation
One of your bookkeeper’s main tasks is likely the correct categorisation of your business spending… Is that new computer a capital purchase or an expense, is that business lunch claimable or not? But what if the computer could answer these questions for you? Advances in machine learning suggest the answer may be “yes”.
Anyone who uses cloud accounting software knows that they can categorise transactions themselves. But platforms are next likely to deploy artificial intelligence algorithms to do so automatically.
Detection will rely on an understanding of a business’ spending habits, but also effective matching of payee and price data against known expense items. For example, that £339 purchase at Apple Store last week could only be for a new office iPad, an allowable hardware expense.
Current data is not yet detailed enough to support auto-reconciliation, but machine learning power is progressing fast, bringing the elimination of this chore within grasp.
Big Data For Insights
How healthy is your business? The answer is personal, but also relative. When judging your business performance and outlook, your accountant only has his or her own experience and pool of a few hundred clients to compare against, few of which may be relevant comparators in your own industry.
But future cloud accounting systems will give businesses ongoing feedback on their business health, and pro-active advice to tailor their approach.
Companies like us at FreeAgent have tens of thousands of businesses on board whose own accounting data, when anonymised and aggregated, represents a remarkable snapshot of high, low and average performance in many industry verticals, as well as the spending and income patterns that, over time, prompt consequential performance peaks or troughs.
Many energy suppliers, for instance, already do this when their websites show customers their electricity usage relative to their neighbourhood. Applied to accounting, I think Big Data will help catalyse an improvement in business performance.
Chatbots And Voice Control
MasterCard recently launched an initiative to help people for goods and services insight Facebook Messenger. Coupled with a raft of new smartphone assistants and in-home voice-powered concierges, it is clear that anthropomorphised AI is the hot tech trend.
Is there really accounting application here? Sure, there is. Chatbots will enter accounting through notifications – alerting you to required tasks, performance summaries and next-step advice. But it is easy to imagine more – business owners using chat to ask bots to send invoices, reconcile transactions or process payroll.
You can even conceive of constructing a tax return form as a question-and-answer session with a chatbot, so structured are the required responses.
And, for all those savvy business owners who are already using cloud accounting to keep up-to-date books, don’t be surprised if you wake up one morning to hear your Amazon Echo chirping: “Tomorrow is self-assessment deadline day, would you like me to file your return?” Live data will make the answer as simple as a “Hell, yes!”
Rebooting The Banks
Simplifying the way businesses interact with their accounts in these ways will depend somewhat on a banking revolution. Today, getting your data out of your bank and in good enough condition is not straightforward. But these changes are, indeed, around the corner.
The European Payment Services Directive 2 (PSD2) and last year’s report of the Competition Markets Authority have each converged to require banks to make customers’ account data more easily available to third-party software services, with account holders’ permission.
This will mean an end to the current workaround with which many such services ingest customers’ bank data, the intermediary service Yodlee, and a burgeoning of the services which will connect into bank accounts. The result will be more services that provide more intelligence on your financial performance.
Sadly, that won’t change the quality of data out immediately. Today, a typical transaction description is still as cryptic as something like: “GOOGLE *SVCSAPPS_c IRELAND ON 01 MAR///£3.30”. But new challenger banks like Monzo are driving the provision of much richer data about retailers, locations and, eventually, products from points of sale – helping power all the above innovations that crave it.
The Accountant’s Dead, Long Live The Accountant
If you think all of this will represent a challenge to your book-keeper or accountant, you would be right.
Soon, technology will be at the point of being able to collect, categorise, process, submit, revise and advise on your business’ financial affairs.
While business owners will gain from efficiency, many of the bread-and-butter functions of a typical small business accountant are going to quickly become commoditised.
The key to survival for accounting professionals will be to move up the value chain. To retain relevance and customers, they will need to provide higher-value services, to serve as a front-footed, pro-active business strategy consultant to businesses for who reconciliation and receipts have become low-hanging fruit.
Smart accounts will be looking, today, at what technology may not be able to accomplish. For those whose clients will make demands of digital butlers and assistants, the answer will be to become a senior sidekick.
— This feed and its contents are the property of The Huffington Post UK, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.