Institute of Certified Bookkeepers

It is really about “Automated Intelligence”!

In the world of Artificial Intelligence, how does a bookkeeper prove that they are a valid contributor?

The answer comes out of the following questions:

  • Why do we do what we do?
  • Why do we do bookkeeping?
  • Why does bookkeeping exist?
  • Why do bookkeepers care so much?
  • Why do businesses engage bookkeepers?

Doing business automatically imposes a series of obligations on the things you must do in order to legitimately conduct business: compliance, record keeping, GST, taxes, etc.

Doing business properly means knowing what is going on in the business: using the records of what has happened to provide information about what is working, (or not).

Doing business efficiently means using the one system to do all of these: to conduct the business, meet the obligations and provide information.

Bookkeeping is about all of these outcomes. We help businesses with meeting their obligations, we help businesses to understand what is going on and we help them have the right systems in place to run their business intelligently and effectively.

Typically it is a better business result if the business owner uses an expert, i.e., the bookkeeper, to achieve these outcomes.

We also do it because the business person doesn’t generally want to do it. We do it because the business person isn’t the expert, (a polite way of saying they aren’t any good at it anyway).

The development of software, computer learning, machine learning and the increased availability of “big data” are all decreasing the friction in achieving the best outcomes quickly. These examples of Artificial Intelligence are not replacing bookkeeping, they are enhancing it.

Artificial Intelligence does not Replace all the Bookkeeping

As the tools get better, we get better.  As the tools get better, we provide more insight and achieve the previous outcomes more efficiently.

Previously we bookkeepers created the process, looked for the information, entered the data, computed the results of the data, formatted the information and if we had time provided the information and the analysis.

It has been taking too long.

With computer assisted techniques, we are able to do each of these tasks quicker. “Computers can process significantly faster than the human brain”.

Artificial Intelligence is the Wrong Term

The term “Artificial Intelligence” implies that the computer will be able to think and do and replace the human. There is significant debate and discussion about the dangers of allowing artificial intelligence to be the only determinative process, (a discussion for next month).

In our world of doing bookkeeping, the application of Artificial Intelligence is actually misleading.

If we set aside the actual establishment of the systems in the first place: the setup, the customisation, the linking of programs and apps; all of this is performed by professional bookkeepers and is required before the computer can do its thing.

A better term about what is happening in our space is that software is increasingly bringing us “Automated Intelligence”.

  1. Data is swapped rather than created.

    We are in a world that is already developing such that data can be electronically exchanged. More of the business transactions are performed by computer to computer rather than, for example, computer to paper to postal service to person to computer.

  2. Records can be electronically saved rather than hard copy filed.

    Today’s document management solutions allows less time on filing and indexing, and less time on finding or retrieving documents. Once upon a time, when asked to find a particular invoice, you had to know if it was filed by supplier or item or date or some other protocol.

  3. Searching document names, within documents.

    Computer search engines scan the folders, the documents or files within folders, the words within documents, in a fraction of the time that a human would be able to perform the same task.

  4. Collation and computation of data: manual vs computer.

    Remember the manual spreadsheet? After allocating numbers into the columns we would then add up the columns; now the computer coding allocates it to the columns electronically and adds them up in a fraction of the time.

  5. Provision of information: typewriter vs computer.

    Previously, we had manual design of each and every report, with each iteration being another manual creation, (even when following a standard). Now we go to “print report” and the computer has followed its reporting template, (even customised versions), and prints the information in the format in a fraction of the time.

Developments in Artificial Intelligence

All of these developments are the beginnings of what “Artificial Intelligence” has brought us so far. Note what actually was happening in the past: previously manual and time consuming tasks are now performed by a computer in a fraction of the time. Someone has still requested the task or the information, but rather than a lengthy process of compilations, the task has been automated and performed by machine. The intelligence of the computer brings us “Automated Intelligence”

I watch NCIS LA and I watch the “Ops” people perform miraculous searches, finds, facial recognition, phone searches and identity traces in a matter of seconds. Go back ten years and that would have been more like look at the street directory, open the filing cabinet, scan photo albums, retrieve paper statements of phone calls, (although I am not even sure those records were kept), request personal information from other government agencies, etc etc; all of which would have taken weeks to obtain the same data and information that now takes seconds.

What does a Bookkeeper now do?

We use computers to process the same information we always have and reach the same outcomes in a fraction of the time. We use computers to automate previously manual tasks.

The greater expertise we now have in knowing how to use software as “Automated Intelligence” tools to produce meaningful outcomes, efficiently allows us to spend more time on certifying the outcome as correct and providing understanding and analysis about the data, rather than just creating the data.

The Automated Intelligence of the future should provide us with better “review and amend” tools; that is, the ability to quickly detect anomalies and the ability to quickly provide information based on the data. We will still play with data, but we will use better tools to play with it and make better use of it.

Related References

  • Updated: 22nd November, 2016