accounting made sense

Will Bookkeepers be Replaced by AI?

Will Bookkeepers be Replaced by AI Featured Image

Table of Contents

The conversation about artificial intelligence (AI) replacing jobs is prevalent, especially in the realm of bookkeeping. While there’s a belief that AI could soon replace bookkeepers, the truth is more nuanced. Let’s delve deeper into this debate.

Related reading:

Will Tax Accountants Become Obsolete or be Replaced by AI?

Accounting Unemployment Rate: Is Job Security a Myth or Fact?

What can AI do in bookkeeping?

Before we look further into the role of AI in bookkeeping, let’s address the less pleasant side of the story.

AI has made significant advancements in fundamental tasks in bookkeeping, such as processing invoices and recording routine journal entries. Various AI technologies can now handle some basic bookkeeping tasks quickly and efficiently, which poses a challenge for bookkeepers whose work revolves around these routine tasks.

Let’s take a look at some of the ways AI is making an impact in bookkeeping:

  • Data Extraction and Entry: Some AI tools are designed to swiftly extract data from sources like invoices, sales agreements, and receipts. With just a snapshot of the receipt, those tools capture the necessary information, significantly reducing the manual data entry work for bookkeepers while eliminating human errors.
  • Journal Entry Recording and Ledger Coding: Properly implemented AI technology makes tasks such as journal entries and ledger coding substantially easier. Depending on the situation, AI can also provide suggestions that can be accepted or rejected by the bookkeeper. Once trained, AI can code the transactions automatically, saving time and ensuring accuracy.
  • Automating Back-Office Tasks: Some AI tools can automate back-office tasks such as document management and financial statement preparation, eliminating the need for manual input from the bookkeepers.

AI is reshaping bookkeeping, especially the routine parts. It’s clear this trend is likely to continue, making the road ahead a bit rocky for bookkeepers. To stay ahead of the game, bookkeepers should consider strengthening their skill sets to handle more complex scenarios, which are less likely to be disrupted by AI anytime soon.

What can’t AI do in bookkeeping?

Judgment

AI is smart, but it can’t think like us. In bookkeeping, there are times when things aren’t black and white. Maybe a transaction seems off, or an invoice doesn’t quite make sense. That’s where a bookkeeper’s judgment shines. They can look at the bigger picture, understand the nuances, and make a call based on their experience.

Here are some scenarios where human bookkeepers take the lead:

  • Discrepancy Resolution: When discrepancies arise, whether in reconciliations or from mismatched invoices, a human can investigate, liaise with relevant parties, and address the issue. AI might only flag the discrepancy but won’t resolve it. For example, suppose there’s a discrepancy between the bank statement and the company’s cash account. A human bookkeeper can identify the source by investigating unauthorized charges or deposits that may not have been recorded, ensuring the books are accurate and reconciled.
  • Handling Exceptions: Bookkeepers can manage exceptions or unique transactions that don’t follow the regular pattern. AI might struggle with anything that deviates from the norm. For example, when an expense doesn’t fall into the standard categories, a human bookkeeper can use their understanding of the business to create a new category or decide where it fits best, ensuring accurate expense tracking.
  • Ethical Considerations: There could be scenarios where ethical considerations come into play in bookkeeping. Humans can weigh the ethical implications, while AI operates solely on data and algorithms. For example, if there’s an attempt to manipulate financial data for fraudulent purposes, a human bookkeeper can identify and report these unethical practices, ensuring integrity in financial reporting.
  • Data validation: Good bookkeeping relies on accurate and complete data. AI can help, but it needs the right information. AI’s results won’t be trustworthy if the data is wrong or missing pieces. Humans can spot mistakes in data just from work or industry experience, such as a missing sales journal entry that the other clerk forgot to book. They can also understand and interpret data based on real-world knowledge, something AI can’t do. 

AI doesn’t always understand context, and it certainly can’t solve every unique problem a company faces. So, when transactions get tricky or when there’s a need to interpret financial information with a sharp eye, human bookkeepers hold the edge.

Personalized Service

Bookkeeping is more than just number-crunching; it’s about tailoring a service to each client’s distinct needs. Bookkeepers often build relationships with their clients, understanding not just their finances but their business goals, challenges, and the industry in which they operate. This personalized service is something AI simply cannot replicate.

Here are some examples:

  • Client Understanding: A bookkeeper who has worked with a client over several years will understand the seasonal ebbs and flows of their business, which could be crucial in providing accurate financial advice or forecasting. They can also provide tailored advice to help clients make informed decisions.
  • Trust and Security: Bookkeepers often build trust with their clients through years of reliable service, which can lead to a more fruitful working relationship and better financial management. For example, when handling sensitive financial data, clients want assurance that their information is kept confidential. A human bookkeeper can provide that assurance through professional conduct and adherence to privacy laws. In contrast, AI is under scrutiny nowadays for its data privacy concerns. There is still a long way to go before people fully trust how their data is handled in the cloud.
  • Responsive Service: When a client has a question or concern, a human bookkeeper can provide immediate, personalized responses, unlike AI which may provide generic responses or be unable to comprehend complex queries. Think about a personal assistant or concierge. No matter how advanced the technology is, we still prefer human-to-human interaction when it comes to asking for assistance or a service.

AI, despite its incredible capabilities, simply can’t offer personalized service. The ability to understand, empathize, and respond to individual client needs is a human trait that is unreplaceable by AI.

How to up-skill as a bookkeeper

For bookkeepers to continue thriving in this new landscape, upskilling is the key. Here’s a deeper dive into how bookkeepers can stay ahead of the curve:

  • Learn the Tech: Get comfortable with AI and machine learning tools that are becoming prevalent in the bookkeeping domain. Understanding how these tools work and how to interact with them will be crucial. A boat still needs a captain, no matter how advanced it is.
  • Get Certified: Pursue advanced certifications in accounting, financial analysis, or even AI and machine learning for accounting and finance. These certifications can provide a competitive edge.
  • Boost Analytical Skills: In a world flooded with data, being able to interpret this data, spot trends, and provide useful insights is invaluable. Sharpening analytical skills can make a bookkeeper indispensable.
  • Advisory Skills: Develop the ability to provide tailored financial advice to clients based on a deeper understanding of their businesses, aiding in better financial decision-making. Remember, AI can’t replace human-to-human interaction, which will always be needed in the client-serving industry.
  • Network: Develop a strong network with other finance professionals. Sharing knowledge and experiences can provide new insights and keep you informed on the latest tools and best practices.

Upskilling not only ensures relevance but opens doors to new opportunities, enabling bookkeepers to offer a blend of technological efficiency and human insight. This dual competency can significantly elevate the value they bring to their clients and the broader financial community.

Key Takeaways

  • AI will take over routine bookkeeping exercises. AI is stepping up in taking care of the everyday bookkeeping chores like data entry, sorting out invoices, and basic matching of figures, doing them quicker with fewer mistakes. 
  • But AI has its limits. It can’t apply judgment as adequately as an experienced bookkeeper does. It can’t offer personalized advice or be capable of helping clients with their unique challenges. That personal touch? AI’s nowhere close.
  • Upskilling Opportunity: With AI handling the basics, bookkeepers have more time and resources to develop more demanded skills such as data analytics or accounting/finance advisory.

AI’s changing the scene, but bookkeepers aren’t going anywhere. It’s the mix of AI’s quick and accurate handling of routine tasks with the human brain for judgment, interpretation, and personalized service that can really steer businesses toward smarter financial decisions. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Table of Contents