PS In-Voice Podcast Series, accounting process, automation, future of accounting
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This is The In-Voice, the podcast series of Process Solutions. Discussions with PS experts on accounting issues, topical issues, professional and technological challenges.
Timing and Main Questions
00:42 What we call automation, what we mean by this, and where does this come from… ?
01:54: Where are we in the automation of accounting? What are the processes that are automated or that can be automated?
03:19: Why is it so challenging to automate book-keeping and accounting at all?
04:35: Can artificial intelligence and similar “sci-fi” technologies be used today in accounting automation, Attila?
06:37: How do you see the future of the profession, how will you do book-keeping, say, in 2030 or 2050?
09:48: What advice would you give to a student who is palpating the profession now, and who wants to engage in it? What should be focused on if one wants to be successful in the future, too?
János Körömi (JK): Today’s guest is Attila Sólyom, process optimisation expert of Process Solutions, and we will discuss automation and the future of accounting.
Attila Sólyom (AS): Hi, hello, Jani!
JK: Attila, tell us a few words about what we call automation, what we mean by this, and where does this come from… ?
AS: Uhum. Well, we call it automation, say, anything that is done by machines rather than by people, they may be very simple things, and they may be very complicated, and it goes back to a very long time. We know before Christ, we say, a candle in which they cast nails, and these nails, as the candle was burning, fell out and tinkled on a metal tray like this, and that was the alarm clock for the ancient man, if it was necessary and they did not wake up with the rising Sun. This is a very simple automatism, but it is, let us say, more complicated, and what everyone knows, let us say, the widespread automatisms in the industrial revolution, which is represented by the machines, weaving machines, steam engines, etc., and perhaps even in modern times we associate these machines with automatism, these machines, which are primarily used at large car manufacturers, say. In accounting, automatism would rather mean that we do something – by computer, by definition – instead of people, and that work usually done by man by hand, is carried out instead by a computer.
JK: Where are we now? Where are we in the automation of accounting? What are the processes that are automated or that can be automated?
AS: It would sound very easy, because it is a highly regulated area, but in fact there are pretty good technologies in accounting automation and there are technologies that sound well, but we cannot necessarily apply them. Let us say that it is relatively easy to apply anything that does not require so-called human judgement, such human consideration and thinking is, if you like, for example, to record data from an invoice/account, a point that might be a difficult task, but say, to organize data, I do not know, to produce reports, the production of which is subject to very strict rules. If we distinguish between what part of accounting we are talking about, so let us say, the downstream is simpler, downstream, when we want to do something from a booked record, financial statements, management reports, simple information or transform somehow the information, then this is an area that can be automated more easily, while the upstream, which creates a record of some kind of economic event, is an area that is more difficult to automate, but also there is, say, information gathering, digitalisation; there are, however, opportunities to make progress in this regard.
JK: Why is it so challenging to automate book-keeping and accounting at all?
AS: I said just now that it does not seem to be so challenging at the first sight, because it is accounting, only rules, and then the rules, of course, would be easy to program – but the rules are not such that are relatively easy to program. And I will give you an example of the fact that I do not know how to talk about the OCR, which is character recognition and optical character recognition, that is when you recognize from the invoice what is on it, so what are the digital data that are on it is, and it is not difficult to recognize that there is a date and here it is 2020. 01. month 20., but to tell what this 2020. 01. month 20. is in fact, so to put the data and information in context, is really very difficult and to this day it is a challenge for all the OCR solutions in the market, from the largest to the smallest.
JK: We do not have to fear yet that the robots will take away our jobs.
AS: Well, I am not afraid of it so much. The time may come for work to change, it is OK, but I do not see it in the short term, in the very short term that this type of work can be replaced. OCR technology has evolved a lot, but it has not done sufficient progress so far so that it can process anything completely.
JK: So there is still a need for colleagues at any rate. – Can artificial intelligence and similar “sci-fi” technologies be used today in accounting automation, Attila?
AS: It is a very good question, because we are experimenting with things, but the fact is that, even though you think that artificial intelligence will solve everything, modern tools, I do not know, predictive analysis, these tools will solve everything, but I think that this is now very cumbersome, the reason for this is that there is a condition in accounting that is not liked by statistical solutions or IT solutions, which requires full accuracy. Unfortunately, book-keeping cannot afford to make a mistake at the end of the day, so full automation with artificial intelligence, for example, would be possible only on a very large sample, and the situation currently is that, by the time we collect so many economic events or so many samples, the regulations will change by then, and then a new sample and pattern is needed, and it needs to be reconfigured. However, I am not saying that it cannot be used, but I would just like to point out that the idea that artificial intelligence takes the work of the accountant completely away is inconceivable to me for the time being. It is possible, let us say, that is will restructure your work, that statistical solutions will be used, say, to keep accounts, if we have posted this invoice ten times out of ten, ten million out of ten million, to this general ledger account, we are going to to post it there now, too, and it will be very good many times, and the point is that we can provide some control process then, what is unfortunately or… is impossible to do by machine at this point, so you will have to do it by man, and then it will mean that man has to intervene, it will be slower, but control will mean that one can understand the mistake and make it correct at the last point, say, that financial statement or report.
JK: How do you see the future of the profession, how will you do book-keeping, say, in 2030 or 2050?
AS: A bit different than now, but there will be similar elements in it, but there are elements that, say, will be more pronounced and more will be needed to be done, which really requires human intervention and human thinking. Let’s take, for example, giving advise, viewing information, creating very fast reports that are not readily available, communication with the customer, creating a relationship of trust with him, so that he will give us all the information and request us to return something from it, and that will not die out. What can be lost is that, say, I am sitting on 12 invoices all day and trying to process them because there are so much data on it and I have to record them. You probably will not have to record all the data from it. It will probably not be necessary, say, to export the data from booked records, say, from a book-keeping system, and then, by manipulating it by hand, I will temper it and solder it until it becomes, say, a tax return. This tax return is likely to be generated for me by some kind of automatism. In addition to the changes, it is perhaps also important to point out that there will still be a need for solid, well-founded accounting and book-keeping knowledge. So we will not be able to avoid that someone will have to know what to do. The machine alone does not know what to do, it does what the programmer says to it or what the programmer is building up and configuring, and the programmer can only do what the accountant, the accounting professional tells him. So a solid accounting knowledge will continue to be necessary, I cannot imagine that it will not be necessary until there is a level of invoice automation so that there do not exist invoices, let us say, because the whole is managed by the state, I do not know, in a futuristic solution in fifty or a hundred years’ time, which is still relatively far from us. I think it is also important that accounting professionals should open up to other professions in such a way that the basic accounting knowledge in itself is important, indispensable, but it will not be enough in itself, if we look at it in this way, because it will be a fundamental requirement for everyone to have, and those will be truly successful, who will be able to integrate this knowledge with different systems or processes that can create genuine added value. For example, if we are a bit winking toward IT, accounting professionals who are very skilful in telling us how to write a report, what this system should do otherwise so that we have to intervene even less in order that the customer can get the data faster, to be able to make no mistake even at this point, it may be a great advantage in the future, but if someone does not have such an IT affinity, I might have said earlier that the relationship of trust, the fostering of the relationship with the client, and these kinds of social skills, too, I do not say that they are alien to the profession, because it was always there in it, but they will be much more important than, say, in the present age.
JK: What advice would you give to a student who is palpating the profession now, and who wants to engage in it? What should be focused on if one wants to be successful in the future, too?
AS: Well, don’t be afraid of our work being taken away by the machines, because they won’t for a while. It will be transformed, that is all right, and we will do a little more different than we are doing now. Many like to use this to alert you, that there comes artificial intelligence and it will take away all the work of everyone, but we do not yet see that it could take the work away a great deal in book-keeping and accounting, so it is worth learning accounting and accounting will be needed everywhere while the economy is in operation in the country, and accountancy specialists will be needed, so that is good news. There is a shortage of skilled accounting professionals and we are also constantly looking for people, I know that it is difficult on the market too, and perhaps it is worth looking for IT or social skills, in addition to sound, really thorough accounting knowledge, but it does not need to be thought that all accountants should be programmers. No, it is not absolutely necessary, but one must not be afraid of the Excel software. An accountant must be able to use the Excel software, and Excel, unfortunately, will not go for a while, I think. We would very much like it and we remove it from a great many places, but it will not go for a long time and it will be necessary. You don’t need to be able to know Visual Basic, you don’t have to do ¤programming, but don’t be afraid of Excel, this type of IT knowledge, and that’s what you need to preserve. Social skills, which are good, if we can exercise them in trust relationships and any knowledge that is associated with reporting and information production from data, or even practice. In fact, I think that the important thing in the future will not be whether I can book this invoice, but how many invoice I can book. It is not important that I can solve an invoice completely, that is the fundamental requirement, but, whether I can solve ten or a hundred or a thousand or ten thousand, and what kind of process I have so that I can supervise a system that is able to process, say, ten thousand invoices with one man, and not two or three or five or ten by hand.
JK: Attila, thank you for having been with us!
AS: Thank you very much that I could be here.
JK: And the following parts of the PS In-Voice Podcast will come with equally exciting topics. Thank you very much, bye!
AS: Thank you, bye!