Intuit CEO Brad Smith made some striking remarks last November when speaking at the QuickBooks Connect conference about the potential for artificial intelligence to disrupt the corporate accounting space. In short: Accountants must get on board, or be left behind.
"Anyone who wants to stay in the business of, 'Send me your shoebox, and I'll type it in, and I'll charge you by the hour,' I think those will be the ones who will be struggling in five years," the executive said.
Accountants, it seems, have already heard the message. A few weeks prior, researchers at BlackLine published a report on how the profession is preparing for artificial intelligence. The company surveyed 150 Australian CFOs, accountants and other financial executives, and found that 60 percent expect AI to automate accounts receivable and accounts payable functions, and nearly half (49 percent) predict the technology will automate reconciliation.
Now, BlackLine has released new research on Monday (Jan. 8) about AI's disruption of corporate finance.
A survey of 300 financial executives at U.S. companies with annual revenues of more than $150 million found that nearly half (46 percent) say artificial intelligence is already a part of their business today. Nearly a third said they are at least exploring use of the tool.
"The responses underscore the growing power and use of AI tools and the implications for the finance organization," said BlackLine founder and CEO Therese Tucker. "The finance department of the future will be a very different place."
Similar to the Australian survey, U.S. executives told BlackLine they expect AI to disrupt AR and AP functions (56 percent), reconciliation (49 percent) and the financial close (31 percent). And while artificial intelligence is often discussed in the context of automating manual, repetitive tasks like number crunching and data entry, nearly a quarter of financial executives said AI technologies could take on strategic financial decisions, too.
Large organizations aren't the only ones ready for AI disruption. Separate analysis from SMB accounting firm Xero released last May found that small business owners want their own accountants to have access to high-tech tools, including AI.
“We are entering a period of rapid technological change within the accountancy profession,” reflected Colin Timmis, Xero’s South Africa head of accounting, in a statement. “From automation to artificial intelligence, accountants are having to upskill and evolve their offering.”
Researchers for Xero's 2017 State of Accounts report found that 87 percent of small businesses prefer to have tech-savvy accountants, and more than half anticipate technology to change the role of accountant, too. More than a fifth of SMB accountants said artificial intelligence is "intriguing." Xero CEO Rod Drury stated in the report that "AI is the new frontier for accounting technology."
But the emergence of AI and other sophisticated technologies in the accounting department has led to a new challenge, BlackLine said, of shifting liability.
"As more decisions are taken out of the hands of humans and entrusted to software, the question of liability becomes important," Tucker stated. "Clearly, this is something that will need to be carefully considered at the board level before key finance decisions are made by AI."
Only 16 percent of survey respondents said the liability should fall on the shoulders of the developer of AI software in the event that the technology makes a decision that results in regulatory noncompliance, a fine or a fall in share value. Nearly half (45 percent) said, instead, the CEO and/or the finance and accounting group should be held responsible.
The research suggests that financial executives aren't without caution when implementing AI in their companies. Issues like the shift in liability, as well as the threat of job displacement, mean that implementation is not always an easy task.
Still, BlackLine's Tucker said the technology could be instrumental in helping financial executives and professionals elevate their roles within their organizations.
"Job roles and workflow processes will alter as AI becomes more widespread," she said. "But these intelligent tools will free finance and accounting staff from processing low-level tasks to become engaged in higher level, strategic activities."