B2B Payments

Bots Enter The Uncharted Territory Of Accounting Compliance

Bots are marching steadily into the corporate accounting department as professionals feel more comfortable handing tasks to a machine. Since automation technologies have taken some of the burden of monotonous activities away from accountants, the profession has exchanged some of its anxiety about robots replacing their jobs with support for enhanced functionality and efficiency — though, not entirely.

The more bots make their way into the accounting department, the more concerns arise about jobs, compliance, trust and other industry-unknowns. And the more bots gain traction in accounting, and the more sophisticated their functionality becomes, industry players will have to begin answering new questions about their market’s future.

“The exciting part is that these questions will come and need to be answered,” said Jotham Ty, founder of accountant technology provider Gappify. “This is such new territory for everyone.”

Gappify will place itself front-and-center to some of those uncertainties, as it launches a new initiative to enable its current bot, Alan, to pass the CPA exam by 2020. The effort is, in part, to enhance Alan’s existing capabilities, which include data aggregation and analysis, vendor onboarding, and answering supplier payment questions. Arming the bot with the ability to answer CPA questions means it would be able to support more technical aspects of corporate accounting and finance, so as to support human accountants. On a broader scale, though, Ty said the effort is part of an attempt to position the accounting profession ahead of some of the inevitable changes coming its way.

Adding CPA functionality to a bot is likely to induce a new wave of concern that robots will replace accountants outright. Ty told PYMNTS that he doesn’t believe this is true, and, instead, bots like Alan can support professionals’ existing operations.

In addition to anxieties about the accounting profession’s future, more sophisticated capabilities of accounting bots are opening the door for noncompliance risks and questions over the reliability of these bots. The issue of whether corporates and accountants can actually trust a bot that has passed the CPA exam is one that comes up a lot in Ty’s discussions with clients and in the company’s strategy sessions, he said. It’s unclear exactly what the level of trust will be for a technology like this, but Ty said the accounting industry should be mindful of regulations and work with policymakers to support bots’ compliance, and work with accountants and corporates themselves to ease the industry into such drastic change.

Working with regulators will be a “necessary step to building the technology in the way we want to develop and deploy it,” he said. Working with accountants, though, may be a bit trickier, considering resistance to change.

The trick is “not to rush into things,” he said. It’s why Alan’s capabilities are limited so far: While the bot could potentially handle every part of the accounts payable (AP) process from start to finish, the industry would be more receptive to the solution if it could automate aspects of AP “piece by piece.” The bot can onboard a new vendor, but not yet make payments.

“That might be too overwhelming, in terms of change, for accounting,” said Ty. “It takes a long time for us [accountants] to get comfortable with change.”

It won’t only be regulators and accountants that bot developers and robotics automation technology providers will have to convince. Organizations’ C-Suites and boards of directors will have to invest in these tools, security experts will have to trust them and IT professionals will have to manage them. (Interestingly, IT professionals were least likely of all professional categories surveyed by Deloitte to embrace robotics process automation [RPA] implementation in their enterprises.)

Furthermore, accounting professionals are already struggling in some ways to embrace automation and robotics. Research from Bain & Company found that 55 percent of AP professionals aren’t using more basic automation tools like optical character recognition (OCR) or online invoice approval processes. At the same time, 66 percent of that portion said they plan to invest in RPA, despite possibly being unprepared to deploy such a sophisticated tool.

On the other hand, researchers from eft found last year that some areas of the enterprise, particularly the supply chain management department, are quite interested in bot technology.

It may be too early to tell how bot technology will be met by accounting professionals, but it hasn’t stopped solution providers from launching their own. In addition to Alan, for instance, Sage introduced its own bot, Pegg, to the world in 2016. As these machines continue to expand their features, Ty said he expects the regulatory community to keep a close watch while easing the industry into this shift.

“It takes a long time to get comfortable with change,” he said. “It’s about introducing automation features and assigning tasks gradually, piece by piece, versus big, sweeping changes.”

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