The following article discusses session one in the IR Global Virtual Series on 'The Advent of AI – Embracing technology in accountancy'.

Ireland – Damien Malone (DM) Since I started practising as an accountant, technology has greatly enhanced the work that we do here in Ireland.

We use software to generate accounts for all sorts of assignments and, in recent times, Sage has probably been the biggest worldwide supplier of accounting software. There is a product similar to Sage used in Ireland and the UK called Relate which has substantially brought on the efficiency with which practicing accountants can generate compliant financial statements for their clients.

I can remember the days when accounts production was very slow and cumbersome and the advances in software have made a big impact on this in our part of the world. In terms of time, we can probably complete the financial statements preparation process in a third of the time that we could have before under previous software types.

Another big part of our practice is bookkeeping, and, of course, that has always been labour intensive. Depending on the specifics of the client, this can be a very substantial overhead allowing for the cost of writing up transactions in the old double entry debit and credit format.

In the last couple of years there have been solutions entering the market where source records can be input by way of a scan on a practically live basis, without the need to have to manually write details in.

I recently spoke to some guys who have developed software for this that is very useful for businesses such as supermarkets and hotels where there are large volumes of repetitive transactions.

Once you scan a document from a supplier, the software memory automatically remembers the VAT (sales tax) code and all the particulars, so it’s just literally a case of feeding the invoices into a scanner and allowing the transactions to fall into the trial balance, without the need for staff to literally key it in.

One other thing I recently came across is a VAT tax bot, developed by a tax adviser in Dublin that I know. You can ask the bot any VAT-related question you want, and it's able to give you an answer.

India – Arvind Rao (AR) In India the picture is very different and things are moving much slower. Having said that, we are getting there. The government has made substantial changes, so that most records are now online and most payments online. Everything gets paid through the banks and some banks and large corporates even have bots answer basic questions.

Software such as SAP, Oracle, Navision and Tally are widely used by Indian companies. We are at the very beginning of machine learning, with nothing so advanced that you could call it Artificial Intelligence.

One of the main reasons for the slower adoption, is the use of intensive labour practices, which means well-educated cheap labour available to do the manually intensive work.

Oklahoma, U.S. – John Curzon (JC) We’re progressive from the standpoint of how AI fits into our practice. We take a client-focused perspective because we do a lot of consulting. We do some bookkeeping work, but that hasn't yet been a priority for implementing time saving AI software

Where we have really spent our time, is educating our staff on how AI impacts our current services and our current offering. We have several younger staff, who live and breathe cryptocurrency and AI and it just excites them.

I’ve had them start writing a blog that's just internal to our staff, but is part of that process of explaining AI to accountants who do what they do really well, but find new technology a challenge. The blog explains how all this new technology works, and how it impacts our interactions with clients. Part of this staff education is to enable our accountants to have these conversations with clients and understand how clients are embracing AI.

The other area where AI really impacts the service we provide, is our business valuation practice. This is about our understanding of AI and how it impacts the value of a business and, in particular, the value drivers that we need to identify to help our clients increase the value of their company.

Many of our clients are late stage businesses that have been around a long time, so they've been doing things the same way for many years. For them to be valuable in their market, they need to embrace how AI works. We need to understand it, so we can ask the right questions.

If we then have an opportunity to help them enhance their business, and make them more marketable for a future exit, then we can.

Switzerland – Florian Diener (FD) In general, the offerings for accounting practices have changed. A synchronised, cloudbased, single accounting platform, with online access 24 hours a day, seven days a week is the standard now, and is what you have to offer your clients.

But, in my opinion, the ability to master how to communicate with the customer is key.

Software that is designed to complete certain tasks and communicate directly with humans is ideal for accountancy practices in respect to their transactional service offerings.

Chatting via Facebook Messenger or using WhatsApp and Skype are part of everyone’s daily life, so software has to implement such channels for accountancy service offerings as well. Major accounting software vendors, have jumped on this disruptive trend already, and, as Damien mentioned, Sage are one of the companies doing this, with the world’s first accounting chat bot for entrepreneurs called Pegg. Other companies like Intuit, OneUp or Xero have also invented these chat bots, and intelligent digital virtual assistants are becoming the norm. We must support clients in implementing these kinds of systems.

AI-based technologies are disrupting the whole accounting industry in simple areas like accounts payable and accounts receivable processing. Artificial intelligence powered invoice management systems are already available, as are supplier onboarding systems that can vet new suppliers by checking credit scores or tax information automatically before setting them up.

Procurement and purchasing processes in organisations, usually mean a lot of paperwork contained in different systems and files which are not compatible with each other. AI programs help to integrate all those things and robots are ideally suited to track prices, and changes among suppliers.

We are also seeing more and more development in the audit environment, where digitalisation of the audit process helps to increase efficiency and security and you can now audit 100 per cent of all financial transactions instead of just a sample.

AI can also review and approve expenses, to ensure they are compliant with organisational policy, which is normally very time-consuming. Speed and tremendous amount of data analysis is the thing that artificial intelligence really helps with, freeing people to do tasks they are better suited for.

Netherlands – Roland Rompelberg (RR) When it comes to accounting in the Netherlands or Benelux area in general, we are quite a lot like Ireland as Damien described it. We see a lot of efficiency in accounting and data entry system integration.

As corporate service providers, we are not a pure accounting firm, but we have many challenges in complying with anti-money laundering (AML) legislation. Adequately monitoring all the transactions made by the companies we manage, means the need for real engagement. Any payment made or received should fit within the transaction profile of the company, which is a relatively recent area of automation.

A somewhat more typical line of business for us, is mergers and acquisitions and related due diligence. We often manage companies that are part of international groups where accounting is done in different countries with different statuses of technological development. These firms have subsidiaries throughout the world and the challenge very often is to create efficient consolidation of the figures prepared by different accounting software in a short period of time.

We have done a couple of due diligence project with big four firms, and I was impressed by the data mining tools they use, and the results they come up with in a relatively short period of time.

Everything I've heard sounds very promising to me and I hope we will all benefit from that.

Australia – Bruce Saward (BS) We’ve been early adopters of automatic data processing for some time, with products like Xero, QuickBooks Online and NetSuite which we fully embrace. Cloud-based services like ReceiptBanks are also useful, so we not only get automated data feeds that can be coded and pre-processed, but also accounts payable invoices are fed directly to the accounting package ready for approval and payment. That's about bypassing data entry, and it has enabled us to offer services to clients that we haven't been able to provide before, because we are now cost competitive. This actually takes the pressure off offshoring, which has been a pressure point for accountants in Australia for some time. We find that we're now more competitive as a result of AI.

Our main frustration is with vendors not moving fast enough for us. This can be seen in the way in which artificial intelligence is embraced in things like optical character recognition (OCR) recognition of documents associated with client data, enabling matching tax assessments to be done. That has been happening for a while, but we'd like to see it move through into better integration with our office systems. That would deliver substantial benefits and efficiencies and enable us to automate no or low value tasks and focus on things that deliver real value.

We are also seeing automatic prefilling of data from the tax office being fed directly to our software. There's certainly the trend towards online completion when it comes to compliance and regulation but that is often also open to clients directly so accountants will not be the only people with access to smart tools to help with compliance. This requires us to rethink our role and how we deliver value to clients.

In terms of the preparation of financial statements, we haven't seen the tools for automation available at this stage and perhaps that's one of the areas where we'd like to see a little bit more progress. From an efficiency point of view, working on live data with clients, rather than transferring and updating files, brings great advantages to us.

It also means that our staff can be a little bit more mobile and the auditors in the field have software that synchronises via the cloud with our main server. We can go through seasons where we don't see our auditors for weeks and weeks on end, because they just don't need to come back to the office.

Spain – Joan Luis Hereter (JLH) Classic accountancy won’t be efficient or viable in a short period of time, not only for big companies, but also for small and medium ones. Audit and accountancy firms, and tax consultants will have to adapt their methodology to embrace and incorporate new resources in the market to their practices. AI is a clear example, although not the only one.

OCR (Optical Character Recognition or Optical Character Reader) is a very useful tool that most of the accountancy and tax firms should already be using. Not in the near future, but in the present!

OCR is the mechanical or electronic conversion of images of typed, handwritten or printed text into machine-encoded text, whether from a scanned document, a photo of a document, invoices, bank statements, computerised receipts, business cards, mail, or printouts of static data.

This means, basically, that by scanning a standard invoice received from suppliers, the system will recognise the main concepts, such as VAT numbers, name of the company, products, units, amounts, and VAT amounts and process the invoice automatically into the accounting system.

The system is able to read a bank statement and match the payments and collections with the data in a client’s books, simplifying to a few non-identified transactions the process of the bank reconciliations.

By using an OCR system, we save significant amounts of time, increase productivity and improve the quality of the information gathered, decreasing drastically the number of manual errors. OCR will require a process of text standardisation and learning, which is one of the main reasons we started using this tool a couple of years ago.

CONTRIBUTORS

Florian Diener (FD) Diener Advisory GmbH – Switzerland www.irglobal.com/advisor/florian-diener

John Curzon (JC) CCK Strategies, PLLC – U.S. – Oklahoma www.irglobal.com/advisor/john-curzon

Damien Malone (DM) Malone & Co.– Ireland www.irglobal.com/advisor/damien-malone

Bruce Saward (BS) Saward Dawson Chartered Accountants. – Australia www.irglobal.com/advisor/bruce-saward

Joan Lluís Hereter (JLH) HyC Consulting Empresarial SL – Spain www.irglobal.com/advisor/joan-lluis-hereter

Arvind Rao (AR) August Consulting Private Limited – India www.irglobal.com/advisor/arvind-rao

Roland Rompelberg (RR) Maprima – Netherlands www.irglobal.com/advisor/roland-rompelberg

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