Finance and Accounting

Will AI Replace Accountants and Bookkeepers With Automation

Throughout human history, we have had quite a few inflexion points, many of which have been triggered by technology – the Industrial Revolution and the evolution of the Internet, to name a few. Today, we stand at yet another inflexion point, namely the impact of Artificial Intelligence(AI). AI, as a technology, has been around for some time. However, its true potential is only now being realised with the emergence of Generative AI (Gen AI) models like ChatGPT and others.

Not surprisingly, a McKinsey survey titled The state of AI in early 2024 survey found that 65% of the respondents are using Gen AI regularly. Also, while adoption has been strongest in marketing, sales, and product development, high-performing organisations are increasingly integrating generative AI tools into legal, strategy, and corporate finance. Historically, the finance industry has always been cautious of technology adoption. However, as this survey establishes, measurable benefits and increased risk mitigation are helping high-performers to integrate Gen AI even in functions like finance.

A recent Gartner report further reinforced this shift, revealing that 58% of finance functions used AI in 2024. Some specific use cases are:

• Intelligent process automation
• Anomaly and error detection
• Analytics
• Operational assistance and augmentation

It appears there is real momentum on the ground pushing AI in accounting to evolve and grow. Mordor Intelligence predicts that the market size for AI in accounting will grow from USD 6.68 billion in 2025 to USD 37.60 billion by 2030. It further says that 83% of accountants acknowledge that AI is now a part of their workplace. The predominantly traditional finance industry is undergoing a slow and steady transformation. The conversations now veer towards a pressing question – Will AI Replace Accountants and Bookkeepers?

To answer this question, let’s first see whatAI in finance stands for.

The AI impact on accounting

Automation

Like in every other industry, routine and time-consuming tasks like data entry, transaction processing, reporting and auditing are being automated for increased efficiency and accuracy. To put matters in perspective, a Gartner survey found one-third of accountants made several errors in a week due to capacity constraints. AI can help reduce such issues, aid cost-savings, and improve financial reporting and compliance adherence. It also means finance professionals can focus their time on high-value tasks where their inputs matter more.

Fraud detection

AI-driven financial analysis provides firms with efficient and accurate tools to identify and prevent fraudulent activities, a growing concern in the era of digital transformation. AI can analyse large data sets to identify patterns and flag anomalies, increasing the efficiency of due diligence processes to catch incidents before they happen. It also helps analyse the root cause and take corrective actions to streamline processes to reduce the risks of such incidents occurring again.

Financial forecasting

As part of its AI strategy, the finance industry can leverage this aspect for financial forecasting, to better understand and prepare for market conditions, roll out customised services, identify new markets for expansion, and more. By analysing historical data and studying current trends, firms can use AI for decision making to aid better budgeting, investments and long-term planning.

With AI in accounting and finance driving change in these areas, what does it mean for accountants and bookkeepers in the AI era?

The enduring human value in finance and accounting

The human-in-the-loop policy has much going for it in the AI strategy for finance. Here are a few reasons humans can provide enduring value in this function, which AI cannot replace.

Context, judgement and ethics

Finance is a key function where decisions can often have a direct or cascading impact on the success of organisations. AI-powered decision-making depends solely on the data and the inputs and will not be able to understand the underlying context to make the right judgement. AI also won’t understand the ethical nuances while dealing with sensitive data and scenarios. Apart from data privacy and security, there are also concerns of unconscious systemic biases creeping into the algorithms. Additionally, there is the issue of accountability and transparency that AI systems need to have, without which they become black boxes leading to questions on how they arrived at certain decisions, conclusions or recommendations.

In fact, a Gartner report highlights the key role Chief Financial Officers (CFO) have to play by staying ahead of four common issues of enterprise AI adoption – cost overruns, misuse in decision making, loss of external trust, and a rigid mindset. All of these are factors to be addressed by humans in the enterprise AI adoption journey.

Managing complexity

In finance, one often encounters dynamic and complex scenarios that AI cannot handle. AI can only work with available data and inputs and provide recommendations. Human intelligence and experience are better suited to manage such situations.

The relationship angle

The accounting firm/accountant is a trusted advisor on many strategic business aspects for customers. Accountants build customer relationships over time, based on trust and integrity of the interactions and services provided. No AI tool can replace this.

What does all this mean?

The human-AI collaboration

AI can function as non-competing co-workers of accountants that will rid them of routine tasks, helping them become more productive and efficient. AI can be an augmenting tool that finance professionals can leverage for better risk management, decision-making, planning and enhancing advisory services. To ensure it augments their capabilities, accountants must upskill themselves to use it wisely and cautiously to derive value and enhance customer experiences.

How can Infosys BPM help?

Infosys BPM’sfinance and accounting outsourcing services help enterprises transform their finance function to deliver higher efficiency and user experience. Our services cover end-to-end finance operations across several industries to help you derive measurable business value.