There seems to be unrelenting discussion about the machines taking over. The accounting profession seems to always be mentioned as one of the professions where there will be significant impact. Yet in reality there is very little evidence that the machines are taking over.
Possibly the biggest impact of machines on the profession continues to be transaction memorisation, now with the fancy moniker of machine learning. Yet this concept is almost 30 years old having been pioneered by BankLink (now part of MYOB) and now adopted globally by almost every computerised accounting system. It’s a great concept and delivers significant productivity improvements but it’s nothing new. As Australia launches its New Payments Platform in the latter half of 2017, there is potential for this simple machine learning concept to be enhanced further to achieve even more sophisticated accounting automation. While not available in version one of the new payments platform, consider the ability to improve automatic transaction coding if the invoice being paid is part of the feed that you receive from your bank.
On another front, a number of the small business accounting vendors are implementing their own equivalents to Siri, Google Assistant, Alexa, Cortana, Bixby. Why won’t someone call one of these things David? So what, I can now talk to my accounting system. Is that really such a big thing? Most of us struggle to get these things to understand us and do what we ask. Maybe it will catch on more with the millennials but is it really all that special? Is it really machine taking over from man? I think not.
The big opportunity that takes up column inches in the press is the promise of Big Data. Woollies watching what I’m buying and nudging me to spend more or to stay loyal. It does have great potential to provide significant insights for businesses to compare themselves to other similar businesses, and to see trends in their own business that may not have been readily recognisable. Initiatives like CA ANZ’s project Kairos, are attempting to provide tools to accountants to enable them to apply these concepts and provide insights to their small business clients, but it is not as easy as one might think.
Part of the problem is that almost every accounting ledger is different. Unless one embarks on some form of account mapping it is difficult to directly compare businesses. It gets worse when one understands that Big Data’s benefits only really click in when thousands or hundreds of thousands of businesses are compared. Who wants to map all that? Without a way of providing a consistent structure to the data we’re caught by the inability to generate meaningful insights. Interestingly, the government’s Standard Business Reporting initiative might be the means to achieve this end, but it would require all software vendors to incorporate consistent SBR (essentially a form of mapping) into their ledgers. So for the moment in SME land the promise of big data is stuck in the slow lane.
A good example of the potential can be found in the SMSF space. Due to the highly structured ledgers in the SMSF admin ledgers, we’re seeing more analytics emerging from these platform suppliers than in the general world of SME accounting. These insights have been helpful in recent times to identify clients impacted by the recent superannuation changes.
Another area where data is consistently structured in the world of accounting is tax return data. Everything categorised by item numbers. It’s probably here that we might see further innovation in the use of Big Data. Wolters Kluwer’s CCH iQ Predictive Intelligence tool is one example. It utilises the CCH iKnow content (Changes to case law, legislation, ATO rulings etc) and scans the tax return data to determine clients that may be impacted by those changes. And then provides tools to assist the practitioner efficiently provide services to those affected clients. It’s only early days but tools like this have promise…all enabled by the structured tax return data.
In subsequent articles I will explore how Robotic Process Automation may be where tech’s biggest impact may be made on the profession, the importance of digital dashboards and how auditing is perhaps destined to be transformed the most by new tech.
Come to ATSA on October 16/17 in Sydney to learn more about how tech will transform the profession and to see the latest developments from the key suppliers. Hear representatives from the New Payments Platform and talk about how it will impact small business and your firm. CLICK HERE for further information
David Smith | Smithink