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ROBO ACCOUNTANTS ON THE WAY ?


Lee B

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The Robo-Accountants Are Coming

Brian Peccarelli

A recent story in The New York Times story sent shivers throughout the alleyways of downtown Manhattan with its bold headline, “The Robots Are Coming for Wall Street.” Conjuring images of Arnold Schwarzenegger, armed with scientific calculator and a mandate to snuff out armies of analysts, the story painted a picture of a not-so-distant future in which half of Wall Street loses their jobs to automation software.

Further evidence suggests that the phenomenon is unfolding beyond Wall Street, affecting the broad professional services sector. The Boston Consulting Group predicts that by 2025, up to one quarter of jobs will be replaced by either smart software or robots. A separate study from Oxford University suggests that 35% of existing jobs in the United Kingdom are at risk of automation in the next 20 years. Among the top 10% of  jobs most likely to be automated: insurance underwriters, tax preparers, loan officers, credit analysts, and accounting professionals.

Does that mean we’ll all be getting our tax advice — or, for that matter, financial and legal advice — from robots while we look for new jobs? In some ways, it’s already happening.  Robo-advisers have become a fixture in the financial services space, and automated tax preparation apps have been the subject of a tax season advertising blitz.

While some of this transformation has already begun, the future of robo-enabled professional services is not quite as dystopian as the rebellion scene from Terminator or as stark as the research consultants have projected. Instead, we expect to see the industry evolve significantly as it increasingly marries powerful technology with the human element to create a hybrid — a cyborg if you will. This new breed of professional will be powered by big data and enhanced productivity tools.

Consider, for example, the impact of new artificial intelligence innovation on the current job market.  Last year, approximately 4.4 million IT jobs were created to support the types of big data and data science initiatives that power artificial intelligence development, generating 1.9 million jobs in the U.S. alone. It is projected that every big data related role in the United States will generate employment for 3 additional people outside of the IT function. That means over the next four years, 6 million jobs in the United States will be generated by these kinds of initiatives.

Clearly, this type of evolution will have a major impact on the day-to-day lives of professional services workers, upending many traditional ways of doing business, while making way for new ones to flourish. But, ultimately, the process will drive further growth across a wide variety of industries. Based on our work leveraging technology to help accounting professionals gain better insights, we see automation playing the biggest role in helping professional services in the areas of connectivity and information filtering and analysis, ultimately allowing accounting professionals to become more proactive rather than reactive in managing client relationships.

Some of the basic building blocks are already in place today. For example, in accounting, advanced document processing and secure document transfer portals now make it possible for accounting firm clients to directly upload all of their information through a secure file transfer. At the base level, this could sound scary. With many of the customer touch-points being automated, how can individuals and firms differentiate themselves and add unique value?

The answer is by inventing new, better touch points. The fact is, for every new technological advance that makes it easier for machines to handle mundane administrative tasks, a thousand new complex issues are cropping up for customers that they don’t quite know how to deal with.

Consider data from eBay which finds that more than 90% of U.S. businesses selling their wares using ebay.com are trading internationally. On average these businesses sell to 30 different countries. It didn’t used to be this way. Mom and pop businesses rarely sold outside of their own zip code just 15 years ago. Now, they need to contend with a tangled web of international trade and tax laws, government regulations, and compliance needs. These are precisely the kinds of areas that great human accounting professionals are ideally suited to address.

What that means is accounting professionals will be spending less time combing through spreadsheets and more time cultivating the kinds of valuable insights that will help their customers anticipate hurdles and alter course before those hurdles become real problems. They will also have to nurture a decidedly different skill set that will prioritize trust, creativity, communication, and interpretive insight over mathematical acumen, mastery of tax law, or old-fashioned bookkeeping proficiency.

Workers and the workplace will need to evolve to address the growing demand for training and constant retraining on new technology solutions and we will need to become extremely proficient in the soft skills, nurturing relationships with clients, co-workers, and partners to expand our influence.

Most of all, though, the major evolution for professional services firms and workers will be a laser focus on summoning the ghost in the machine — that insightful story that’s hidden among the data — and translating that insight into actionable information for clients. These kinds of insights are the keys to building trust, which is an attribute that’s sorely lacking in a purely robotic relationship.

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It's the modern version of the Carousel of Progress (64/65 World's Fair and now Disney's Tomorrowland).  Companies doing all they can to make a cheaper product, increase profits, market share, and stock price at the expense of people's jobs.  I feel for all the future college graduates.

So what do we do?  If you have money you can invest some of it in these companies and receive the dividends for income, then if and when the market crashes use the rest of it to buy more, just like the big guys do (at the expense of the little guy).  If you have no money you need to find a way to get some, hopefully legally by finding a field or building a business that a robot won't takeover.

Maybe the lyrics by Zager and Evans "In the Year 2525" are not so far off.

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Hmmm...it would be nice to automatically import all W-2s, 1099s (especially the consolidated brokerage ones), etc.  Even if you do some of that now, though, isn't there a need to double check the input?  I doubt that automation will void the rule of "garbage in, garbage out.  And I believe I'm not the only one who does certain forms in complex situations by hand so I can check them against the software, usually to be sure I checked the boxes right and put the right numbers in the right places.  In other words, I figure out the answer by hand and then try to coax the software to agree with me.

Can robots handle employer contributions to an HRA when the employee is over 65 and on Medicare? How about amending from MFS to MFJ?  How about when spouses work in different states?  Live in different states?  How about when brokerage statements say "N/A" for cost basis and/or date purchased?

Fear not, we'll always have jobs in customer service. Someone has to answer the client who wants to know how much he can make before paying back Soc Security. Or the one who wants to know why his home is assessed so high. Why just today we had a landlord client who wanted us to evict one of his tenants.  And the one who called because someone rang his doorbell but no one was there. Someone has to give these folks the phone numbers of SSA, the town assessor, the marshall's office, the police.  Or can robots figure that out too?  If so, I want one.

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On ‎7‎/‎27‎/‎2016 at 2:49 PM, Abby Normal said:

I wish there was an artificial intelligence that I could ask tax questions.

 In computer science, an ideal "intelligent" machine is a flexible rational agent that perceives its environment and takes actions that maximize its chance of success at some goal.

Rational agent concept makes this whole idea as impossible in this universe.  Sorry to ruin your day (or remaining life).

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10 hours ago, Abby Normal said:

How could it ruin my day when I have no idea what you just said. ;)

Neither do I. I plagiarized the first paragraph from Wikipedia and should have given them credit.  Since I an am not a politician and therefore will be held to higher standards for my sttnkin falsifications that I posted,  give me a break, I was only being serious. :spaz:

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On ‎7‎/‎28‎/‎2016 at 4:05 PM, cred65 said:

 In computer science, an ideal "intelligent" machine is a flexible rational agent that perceives its environment and takes actions that maximize its chance of success at some goal.

Rational agent concept makes this whole idea as impossible in this universe.  Sorry to ruin your day (or remaining life).

Just watch out for that white truck trailer that looks like the sky.

 

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