What will the accounting department of the future look like?
It’s probably not a subject you’ve really thought about – understandably!
But it’s one that I think about the whole time. And I believe it is of interest to every business owner, because after all, everyone employs accountants.
The financial sector is already experiencing a huge shift in the way we work.
According to a Mordor Intelligence statistics report, Artificial Intelligence is projected to grow 30% year-on-year in the accounting industry between now and 2027. It’s already impossible to ignore.
You can see it when you try to speak to someone at your bank and have to go through an automated chat before you can reach a human being. And it’s already creeping into our accounting platforms, for example with software that can recognise text in documents, helping with data entry.
In the future, it’s clear that AI will fully or partially take over many basic, repetitive tasks that bookkeepers and accountants perform, from data-entry to auditing, which involves looking at patterns and spotting anomalies in data.
Understanding these trends and figuring out how to adapt to them in order to make our services more effective takes up a lot of my attention. I’ll be honest – it can be a struggle to find the time, but things are evolving so quickly, it’s impossible to ignore.
And ultimately, I’m optimistic that AI will result in serious wins for our clients.
Why? If you’ve been reading my emails for a while, you’ve probably already heard me describing the ideal, well-functioning finance department. I think of it as a pyramid made up of three blocs – bookkeeping, accounting and Finance Director:
At the bottom of the pyramid, bookkeeping takes up the majority of the time and effort. It involves processing all your transactions, invoices, expenses and investments and ensuring that complete, accurate, timely data is accessible to those who need it.
The accounting function, in the middle, takes those numbers and makes sense of them, turning them into your management accounts, annual accounts, submitting your taxes and so on.
Finally at the top comes the specialised work which many companies are missing, but which is crucial for growth and which is our forte. The Finance Director takes all the information produced by the bookkeeper and accountant, and uses it to properly understand the business.
This allows you to understand what might happen in your business financially over the next few months, plan accordingly and make better business decisions.
Most businesses have the bottom two levels of the pyramid, but a world-class accounting function will have all three parts. And each one depends on the one below it. You can’t have a fantastic Finance Director with shoddy bookkeeping – they just won’t be able to do their job without good-quality data.
AI is going to change that pyramid. That’s because as AI becomes more prominent, much of the time-consuming work at the bottom of the pyramid will become automated.
This will free up our time to do more of the work that really boosts your company – namely giving you advice and insights on how to maximise your profitability and grow faster.
In other words, we’ll be spending more of our time at the top level of the pyramid, perhaps turning it into more of a square… or even turning the pyramid upside down.
This will make us even more valuable to our clients, because our focus will be even more heavily on value-added work that generates real improvement for your business. AI simply will not be able to manage this bespoke advice any time in the foreseeable future.
I think that’s exciting.
And the good news is that you don’t have to wait until 2027 or 2030 for a glimpse of that future.
At Insight Associates, we already work with companies to install all three parts of the pyramid in their business. We ensure that the bottom two – bookkeeping and accounting – are running efficiently and producing accurate financial information, which is very often not the case before we start our work.
We are already working with state of the art software which is increasingly having AI built into these processes where possible, so you can already start to reap the rewards of today’s technology.
And we work with you personally as your outsourced finance department, to leverage that financial information to grow faster and produce more profit.
Although it’s the smallest part of the pyramid, it’s by far the most valuable. And it’s the one that will really transform your confidence as CEO, as you come to grips with the financial side of your business and take decisions that are based on real numbers and that have been well-thought-through financially.
To find out more, get in touch with me today. Simply email garry@insightassociates.co.uk or call us on 01279 647 447 for a no-obligation chat about how we can help you.
Warmly,
Garry
