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Tax and accounting

Would you take tax advice from a robot?

Brian Peccarelli  President, Tax & Accounting, Thomson Reuters

Brian Peccarelli  President, Tax & Accounting, Thomson Reuters

A robot, according to the Oxford Dictionary, is “A machine capable of carrying out a complex series of actions automatically, especially one programmable by a computer.”

Though you might not immediately think of it like this, consider tax software widely used in the market today. That software is technically a machine capable of carrying out complex actions. It’s, in effect, a robot.

There are a lot of conceivable benefits to robots: precision, automation of low-value tasks and the ability to generate high volumes of data. It sounds pretty good, so what’s the problem?

A robot lacks the creative insight – the human element – to provide sage advice.

A robot does what it is told, and while it can do some problem solving thanks to advances in artificial intelligence, it does not – and cannot – be a thoughtful, self-aware and empathetic entity.

You could say, regardless of what kind of relationship you may have with Siri, that robots are not known for their interpersonal skills – while they can crunch numbers, they can’t understand and relate on a personal level to the needs and goals of their clients.

But the limit of the type of work that robots can handle is expanding constantly. The stuff of science fiction only a few years ago is the work going on in laboratories or even beta testing sites now. Self-driving cars are a frightening reality. Increasingly intuitive GPS apps are becoming indispensible. Shopping apps that really know what you like are changing the grocery experience altogether. The line between truly creative thought and synthetic thought is a blurry one, and getting blurrier.

Technology is here to stay, and its advances are radically changing the professional landscape. Many of the tasks that an accountant is relied upon are assuredly being disrupted and overtaken by machines.

According to a report from the BBC, the likelihood of an accountant or taxation expert’s job becoming automated is 95%. So what does the future of accountancy look like?

There are four major trends that will significantly impact the tax and accounting landscape in the next five years.

  • We are in the midst of a global transition to cloud software, driven by the need for interconnectivity and mobility. This move to the cloud, along with increasing regulatory requirements, will drive the technology adoption/replacement cycle — requiring intelligent investment, training and resource allocation.
  • A technology evolution that automates knowledge tasks like bookkeeping and tax preparation will drive market disruption. This will create urgency – and an opportunity – for accountants and tax managers to deliver advice, counsel and other high-value services.
  • Governments worldwide will implement stricter compliance and reporting requirements to fight ambiguity and aggressive tax planning by multi-national corporations. This will create the need for software and services that provide global oversight, workflow and seamless interfacing with global accounting firms. The industry also will see more mid-market companies adopting technology to enable tax compliance (sales and use tax administration, e-invoicing, e-reporting, property tax administration, etc.)
  • Information will become increasingly commoditized; there will be an increased demand for data analytics to generate insights from vast amounts of data, as well as more scalable advisory practices. Tax professionals will be increasingly faced with budget pressure to raise revenue more efficiently through the increased use of technology and data analytics to access actionable insights, rather than unrefined data.

What does an accounting professional do in the face of all this disruption?

We must become accounting cyborgs.

Cyborgs? Isn’t that the same thing as robots?

A cyborg is “a person whose physical abilities are extended beyond normal human limitations by mechanical elements.”

Understood in the context of the tax and accounting industry, a cyborg would be a professional whose abilities have been enhanced by working, not in competition with, but in collaboration with technology.

What does the accounting “cyborg” of tomorrow look like?

Looking ahead, there are several traits that will be greatly prized by tax practitioners in 2020, which cut across all tax disciplines. In the next five years, tax professionals in all industries and geographies will require:

  • Greater mobility, particularly making it easier to advise clients when away from the office.
  • Increased automation of time-consuming administrative tasks.
  • Time for high-value work.
  • Insight — and less “noise” (i.e. distracting, high-volume, low-value content.)
  • Global connectivity.
  • Comprehensive, integrated and reliable software platforms.
  • Effective compliance and reporting capabilities.
  • And resonance with new generations of tech-savvy customers and employees.

These professionals must be able to change rapidly in how they do their work. They must take action now to anticipate tomorrow.

H.G. Wells, famous for things such as writing The Time Machine, once said, “Human history becomes more and more a race between education and catastrophe.”

I think Wells touches on, with incredible foresight, the ever-accelerating helix of technological advancement and professional and commercial well-being – and the attendant risks of failing to keep pace.

His quote resonates with me, as it speaks to the increasingly complex and technological world we live in – the same complex world in which we staff and manage teams, create differentiation in the marketplace and drive a sustainable and growing accounting business.

This really came home to me last Fall, when I was in China at the World Economic Forum. I was asked to be a Discussion Leader at two sessions, one of which focused on Mapping Solutions for Employment, Skills and Human Capital.

We examined the diversity of geographies and demographics that business leaders encounter, especially in light of the dramatic shifts in technology occurring around us.

For instance, we focused on the potential redundancy of certain jobs – that is, the invasion of the robots…

  • 47% of all existing occupations are at risk of becoming redundant
  • By 2020, it is estimated there will be a global surplus of 90 million low-skilled workers, and a shortfall of 85 million high-skilled workers – a race between education and catastrophe!
  • More than 500 million new jobs will need to be created by 2020 to absorb those currently unemployed and provide opportunities for the youth entering the workforce
  • Over the next decade, millions of new jobs will be created that don’t yet exist

– from the Future of Jobs Executive Summary, IBC 2015

The ramifications of how we market, service and relate with our customers, potential customers, and the general public are enormous.

It’s not enough to serve up information and data – more and more, tax professionals will be called upon to deliver INSIGHT. And we’re going to have to be creative in how we deliver.

So what is the key to becoming a cyborg and remaining relevant in a world that is exponentially digitized?

  • Get ready to be regularly retrained, embrace new technologies and adopt a mastery of soft skills.
  • Learn how to nurture relationships with clients, co-workers and regulators.
  • Learn how to identify the ghost in the machine – that insightful story hidden among all the data.
  • And learn how to make that story work for your constituents.

Don’t be a robot. That job’s already taken.

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