Arming Accountants With AI To Meet SMBs' Urgent Digitization Needs
The small business accounting landscape is on an evolutionary fast-track thanks to a variety of factors, from the rise of B2B FinTech solutions to the global pandemic and remote working requirements.
Increasingly, the role of accountant no longer means number-cruncher, though unfortunately, so many small businesses today continue to face the burden of having to manually manage data and perform mundane administrative tasks just to settle the books and prepare for tax season. It's a reality that doesn't quite fit within the confines of what it should mean to be an accountant today.
The rise of automation and the emergence of sophisticated technologies like artificial intelligence, however, has the potential to make the idea of value-added accounting a reality for more small- to midsize businesses (SMBs).
"Overall, in the global accounting industry, the role of traditional accountants is changing," Osidon CEO Hennie Ferreira recently told PYMNTS. "Many of the tasks performed by accountants are now performed by artificial intelligence, which allows accounting professionals to focus on more advisory roles that bring greater value to clients."
As Ferreira explained, this industry shift has created new opportunities for FinTech solutions to accelerate the migration toward AI-powered automation, allowing small business owners and accountants themselves to focus on more value-added activities.
A Greater Urgency For Automation
While small businesses and their accountants have historically struggled with the hefty workload of traditional accounting — reconciliation, receipt capture, manual data entry — the last several years have opened up new opportunities for professionals to embrace automated solutions. The pandemic has only accelerated adoption as more entrepreneurs and accounting professionals face mounting pressure to digitize and remain competitive in a marketplace of agile, modern players.
According to Ferreira, one of the biggest barriers to alleviating the burden of manual accounting for smaller firms is cost.
"Accounting services are expensive," he said, noting technologies like the cloud can actually reduce the financial burden of acquiring external support to manage the books.
The coronavirus crisis has added intensity to businesses' need to embrace automation, especially in the financial back office, he said, noting firms are "under severe strain and pressure." Lifting the burden of manual financial processes is key to allowing business owners to allocate their precious resources to activity that can help the business survive and thrive, even when the market is in a volatile state.
On a more positive note, Ferreira did note that work-from-home mandates have actually opened opportunities for entrepreneurs to enter into new businesses, embrace new business models, and broaden their growth targets. Physical distance, in many instances, is no longer a barrier to hiring new talent, working with new partners or securing more customers. As such, he noted, embracing accounting automation similarly provides these professionals with greater time and resources to focus on that value-added activity.
Filling In The Gaps
Osidon, which recently announced plans to launch in the U.S., does not aim to replace human accountants, emphasized Ferreira. Nor does it necessarily plan to replace the financial platforms many small businesses already have in place.
Rather, the company is hoping to work alongside these resources to "enhance" what they already offer. For instance, the platform uses AI to automate the "heavy lifting" of invoice management, tax and payroll data management, enabling human consultants and accountants to refocus their energies on offering valuable guidance to their small business clients. Integrating with platforms like accounting solution Xero and payroll tool Gusto similarly aims to enhance existing functionality.
It's an example of the opportunity to mix both human intelligence with technology and AI to strengthen the ability for small businesses to manage finances without taking away from growth initiatives.
At the same time, however, the small business accounting industry is increasingly saturated, while more small- and medium-sized firms are suffering from "app fatigue" as they implement a rising number of FinTech platforms and solutions.
Still, Ferreira said that digitization is critical to today's small businesses.
"Technology is constantly developing and businesses cannot afford to be left behind," he said. "By harnessing and understanding the solutions available to them, businesses can operate more efficiently and competitively. This means less time is spent on tedious financial workflows."