Accountants & Bookkeepers, Obsolete? No; Outsourced? Yes.
Will Accountants and Bookkeepers become obsolete? Some argue that with advances in technology and AI, there won’t be a need for Accountants or Bookkeepers, evidently, because these advances will have evolved to the point where even the small business owner/operator or partner will be able to complete this work on their own. You can find articles posted everywhere (from non-Accountant authors) that are convinced of the impending demise of the profession urging young students to avoid Accounting in favor of career choices that they believe will not be impacted by automation. In my opinion, the argument should be restated.
I don’t believe that AI will replace the need for Accountants or Bookkeepers. Rather, I believe that technology will create increased opportunities for those that will and can adapt and incorporate these productivity advances into their firms to free these service providers toward delivering higher value tactical and strategic advice – targeted to each clients’ needs. In my opinion, these advances will continue to accelerate outsourcing opportunities toward experienced and knowledgeable Independent Contractors. The following points support this trend:
- Time constraints on small business. There are an estimated 28M small businesses in the U.S. Of that, 22M are businesses with no employees. (Article: Townsquared Resources, Small Business in the U.S. by the Numbers, May 14th, 2017). Small business Owners/Operators and Partners are consumed with a myriad of tasks, every day, arguably the most important-delivering on their current commitments to their clients/customers and effectively marketing their products or services to increase their top line growth. Because of these demands on their time, I believe it is unlikely that a significant percentage of small businesses would be willing or able to do their own Accounting or Bookkeeping work despite these advances.
- Cost effectiveness and efficiency of outsourcing accounting and bookkeeping work. Self-explanatory. Rather than incur the costs of hiring a dedicated employee (with benefits, etc…), businesses will continue to outsource this work to contractors. Business decision makers will also benefit by controlling the type of services they need, when they need them and at a cost within their budget.
- Technology limitations and cost. Businesses are not homogenous…two different businesses delivering near identical products or services in the same geographic area, could be structured and operate differently and as a result, have different reporting or Bookkeeping needs/requirements. The thought that any technology could easily replace human judgement and be flexible enough to address every nuance, need or reporting requirement strains credulity. Of course, there will be a place for AI, especially for large quantitative and repetitive tasks, but even if technology could be made that flexible, it would be expensive and difficult to scale to small businesses to make it affordable and user-friendly, unless and until there are huge advances in intelligent decision systems.
- Data encryption and safeguards. Cloud-based services, such as QuickBooks Online offer 128-bit encryption which is the same level that banks and credit unions offer for online banking services. This means that with password protected encryption, and virtual private networking, eavesdroppers or hackers (even in public WiFi spots) would find it nearly impossible to scan or penetrate these protected work sessions. Company data is automatically backed-up in the cloud and the software offers control as to who can view or access company data. This provides a level of assurance to the client that (trusted and vetted) contractors can remotely access their data, safely.
- An independent contractor is no longer tethered to working at his or her clients’ site. Contractors will be able to complete much of the work without tying-up clients’ workspace and face to face discussions could be reserved for more critical, tactical or strategic matters.
I don’t believe that Accountants and Bookkeepers will become extinct any time soon, as long as Accountants and Bookkeepers continue to be adept at using advances and technology that demonstrate value to their clients. I do believe that businesses will continue to outsource their Accounting and Bookkeeping requirements to independent contractors and in all likelihood, this trend will accelerate during slower economic periods.