We've been hearing it for years, but especially in 2023 as generative AI rocked the world: Automation and artificial intelligence are here and they're coming for all the routine, mundane, repeatable tasks that have traditionally been accountants' bread and butter.
However, allowing machines to do this frees up human accountants for higher-value, strategically oriented tasks that will help firms do more with less in the face of a diminishing talent pipeline and outside disruption. Professionals will be able to work on the things that are really interesting to them and discard all the drudge work that no one ever wanted to do anyway.
Of course, regardless of whether or not anyone necessarily wants to do these things, there are still people whose job it is to do them — at least for now. Because as technology improves, the range of tasks that can be automated will only grow wider, increasing the risk for disruption. This, over time, will greatly alter the shape of the profession and the behavior of firms, which itself will alter career paths and force many out of their comfort zone with little choice but to adapt to these changing circumstances.
Prior professional precedents
It's not like this is unprecedented. While accounting has long prided itself on its stability and consistency, it has not been immune to the sweep of history. The daily work of an accountant from 1950 would be unrecognizable to one from 1980, whose daily work would itself be unrecognizable to professionals today.
Each era has different tasks associated with different jobs that, over time, have all come to see disruption from changes to both the technological landscape and the business environment.
Jim Bourke, managing director of the advisory practice at Top 100 Firm Withum, recalled that a large part of his duties as a young accountant involved writing up financial information — books, statements, reports and other records.
Today, though, the majority of businesses use software that collects and presents all that information for them. It's not really a job anymore, or even a thing that someone does as part of their job.
"So, the historical role of accountants preparing the monthly books and records — that has tremendously changed because of the advent of systems like QuickBooks Online, Xero and NetSuite," he said.
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Another example of a job that's nearly gone, said Chris Vanover, leader of accounting talent solutions provider CPA Club, is the audit associate. While one might at first find this puzzling, given the large number of people with that exact title today, he said that the audit associate of yesteryear — the one who manually pored over data samplings and documented the process — is more or less extinct.
While there may still be staff called "audit associates" today, he said that their job is entirely different. This is mostly because of the introduction of advanced analytics tools, including the recent crop of AI-powered audit software.
"So many of the routine tasks traditionally done by a new audit associate have now gone by the wayside … it may still be called an audit associate, but the traditional one is officially obsolete. So, I go back to the concept of the associate — does it exist, yes, but is it the audit associate I knew when I was at PwC, or what it was even five years ago? It's not, and have we retitled it, no, but could it easily be retitled into something different? Absolutely," said Vanover.
What examples like these have in common is that they involve jobs made up of relatively routine, repeatable and formulaic processes, especially around financial data. These tasks have been especially ripe for technological disruption, which is especially good at automating rules-based systems with an efficiency that is difficult-to-impossible to match manually.
Crunchers at risk
Looking forward, the jobs most at risk are — as in the past — those that rely on repeatable, routine processes. The kinds of things that, effectively, require accountants to act as human algorithms. A wide variety of different jobs and positions within the profession, even today, could be described this way.
Jody Grunden, partner and virtual CFO practice leader with Summit CPA, broadly described such workers as "crunchers." They can be found, he said, in many areas of accounting, and while they may all cover different practice areas, all are at risk of imminent disruption.
Grunden recalled a recent conversation with his firm's tax director on this topic: "The type of person he is looking for is completely different than the type of person we used to look at: a cruncher. Get in, get out, make sure it's done quick. Now he is looking for someone who can talk to clients, take the information and really show the next thing," he said.
A cruncher is someone who is concerned mainly with the mechanical aspects of preparing and processing accounting data, versus the more consultative aspects that use this data to create insights and actionable advice.
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Be they in tax, audit, financial statement preparation or some other area of the profession, what crunchers all have in common is that their field won't be viable for much longer, according to accounting career coach Douglas Slaybaugh.
"That number cruncher, the bookkeeper, the clerk, the data entry, the reconciler, those number crunchers — that is who we're talking about, and whatever category of number cruncher is really what's at risk," he said.
Jeff Phillips, who co-founded accounting recruiter Accounting Fly and is CEO of Padgett Business Services, said this also extends to anyone whose duties involve a lot of data input, as automation and data feeds have essentially written human accountants out of this process. Next, he said, those who rely on processing that data, such as accounts payable or receivable specialists, will start seeing similar pressures as technology improves.
"I would not want to be getting into the data entry career in accounting, because of automation and bank fees … I know AI is such a buzzword and that is what a lot of people talk about, but that will automate away any kind of data entry. Same with accounts receivable and payable clerks and how they're getting automated out of a job," he said.
So what will happen to crunchers now? If someone is early enough in their career, they have more room to upskill and pivot.
But Summit CPA's Grunden noted that many firms have longtime "rock stars" who got extremely good at these data input and processing tasks. This has served them well for some time, but as the profession undergoes its digital transformation, they will need to adapt to new conditions.
"A lot of these rock stars will be in trouble because those folks love doing what they're doing, but [there is] a limit on their capacity. We've got several individuals in firms who don't want to be a CFO. They love being that senior-level accountant because it fulfills what they want to do, but as technology improves those folks will be limited in their value and will eventually be replaced," he said.
Such people are not necessarily at risk of being laid off, however. Based on what he has seen as a recruiter, Phillips feels it will be more of a slow attrition than a sudden wave of firings. Hiring will slow down and whatever positions are left will likely be sent overseas or given to software.
When asked about the aforementioned "rock stars," Phillips thought it would be more likely that they'd retire before they get laid off. But even if they don't, he felt firms would still be loath to let them go.
"We want them to take a more progressive approach because you can't get more margin, but good talent at any skill is hard to find, and the owners won't [want to] lose good talent," he said.
However, Jack Castonguay, vice president of learning and development with CPA exam prep company Surgent, and a Hofstra University accounting professor, said this might depend on the size of the firm.
"I think for the larger firms it would be a sudden thing. … If you're one of those local or statewide type firms, perhaps with a smaller footprint, I think it will be more gradual. They may just have a different client set than the ones who just want efficiency. So I think in the smaller firms you see more attrition, but they will run into the same issue once their clients learn about [how technology can help]. They will ask, 'Are you doing this?' and will push for it," he said.
Slaybaugh, the career coach, noted this might point to a larger cultural change within the profession, from one that advantaged extreme introverts to one that needs a little more extroversion for client engagement and business generation.
"There's going to be a lot of upset introverts is maybe how we look at it. You know, a lot of folks that are really comfortable with the spreadsheets in the quiet of their offices and the nice Saturday with nothing but a reconciliation to do — those days, unfortunately might be gone. I'm going to have to flex those extrovert muscles," he said.
Meet the crunchers
So who exactly are these at-risk crunchers today? Whose jobs are still overly involved with routine, repeatable tasks that are especially vulnerable? One commonly cited example was anyone involved in basic bookkeeping tasks that rely on scale to generate appreciable amounts of revenue, such as accounts receivable or payable specialists, financial report compilers, and payroll professionals.
"Anything that seems like basic tracking and reconciling information is very much ripe for disruption, such as payroll, all those low-level services that firms breached, started to pursue because they were looking for other ways to increase profits besides audit and tax, and they will have a day of reckoning where I don't need your firm to do this stuff for me. And you see the large players like ADP and Gusto who will take that and absorb it for anyone who wants it done," said CPA Club's Vanover.
Grunden called services like these the "1.0" version of client accounting services, or CAS, and noted that many professionals, especially at smaller firms but even some larger ones, make a good amount of income from them. The prudent ones, though, will abandon this and move on to what he called "CAS 2.0."
"CAS 2.0 is basically the consulting time, so everyone just doing payroll or bookkeeping is highly at risk. So, when the big firms get into it, it scares me — you're not doing consulting, you're doing something that probably won't be there in 10 years. Do you really want to invest in that?" he said.
Padgett's Phillips added that any bookkeeping job not at risk from technology will be at risk from offshoring instead.
About four years ago, he said, his company saw a lot of remote bookkeepers being hired by accounting firms that did CAS work, and while there is still some demand for talented professionals in this area, he predicted it's getting more risky to enter this area due to the rise of offshoring.
"You can hire a bookkeeper in the Philippines who can be trained up on QuickBooks Online for a fraction of the cost of someone in the U.S.," he said.
Beyond basic bookkeeping, another area people generally agreed was eventually on its way out was individual tax preparation. Phillips stressed that this doesn't mean tax work in general but, rather, the process of gathering client data to fill and file a basic return — while this is something that can already be automated, he felt the scope and scale of this capacity will only grow with time.
"This doesn't mean we won't need tax people — there's a lot of businesses out there and a lot of complicated individuals that need advice. So, the tax individuals who come into our profession will serve a greater role by advising our clients on positions to take, on hoping to minimize their tax liability. How are they going to do that? By leveraging generative AI, by leveraging technology, to give them that knowledge to get them in a better position," he said.
When it was pointed out that many firms derive the majority of their business from basic tax prep and seem to be doing OK, Withum's Bourke agreed that this is the case today, but it isn't sustainable for firms over the long run, and many leaders know it.
"At Withum we do thousands of individual tax returns. Why? Because there is still a market. People still walk into H&R Block to get them to prepare individual tax returns. It's still big business today … but will that be a viable revenue stream well into the future? I honestly don't believe so. I believe they have to keep their eyes and ears open for changes," he said.
Castonguay, from Surgent, had a similar viewpoint, saying that while tax prep remains vibrant today, it is unlikely to remain a viable revenue source in the long term. With this in mind, he said he would advise any student who is thinking about going into that field to consider another path.
"I would advise students who want to go into tax preparation to stay away from personal income tax prep. A large portion of that is being done by TurboTax and H&R Block, and [they've] rolled out new AI platforms, they're getting more advanced. We can envision that only super-complex high-net-worth individuals will need an actual person doing their tax returns," he said.
Generative AI will further eat away at tasks that form major parts of many accountants' jobs. Castonguay, for example, noted that accountants today spend a great deal of time analyzing and summarizing financial accounting standards, a task that takes a senior associate about three to four hours.
"The big difference is, right now, you still need someone who can go over and take that analysis, but you need way fewer people to do that now," he said.
Similarly, Bourke noted that generative AI will soon make another major task for accountants obsolete as well: research.
"The area that's really ripe for that has to do with the amount of time we spend doing tax research, the amount of time we spend doing audit research, on technical issues. Now, through the use of generative AI, we have tremendously streamlined the process. So a young staff accountant who today would be tasked with that research could now be in another position of reviewing the memos prepared by generative AI," he said.
Vanover raised another example that may seem unintuitive at first: auditors.
Not to say that the entire audit profession will soon go away but, rather, there will be far fewer audit positions at firms, to the point where they go from one of the more common specializations in the profession to something more niche.
He pointed to the shrinking number of firms offering audit services as evidence. Many smaller firms have exited the auditing space completely, he said, because they can't compete with larger players who can drop millions on AI and machine learning tools.
"Unless firms can get clients to recognize there's more to it than just price and compete on things like quality and other aspects, it is very difficult for these small, local firms to compete in this area because of the commodity prices, and they don't have infinite resources to invest to make it make sense for them, so they exit entirely. And so that is where the audit associate of the local firm goes by the wayside," he said.
One might be tempted to say that, like basic tax returns, the most vulnerable audit jobs are entry-level. Though this is the case now, Vanover predicted that the disruption will start moving its way up the hierarchy soon.
"Everyone is like, 'Oh, a good senior is worth their weight in gold,' but their value proposition is very much diminishing in my view, and it's because automation will continually creep up the ladder. Seniors are obviously above the associate but they're below a manager, so they don't have the ability to think as critically as you might need them to, so you see some of those seniors, if they rest on their laurels and don't reinvent themselves to be more of that critical thinker, they're also very much ripe for disruption and ultimately an exit from the profession," he said.
Slaybaugh, the career coach, theorized another area of accounting may also see some disruption due to AI: "Advisory services might be in trouble in a few years," he said.
What is to be done?
This means that anyone who is in a cruncher position, or anyone who aspires to be in one, should think seriously about reskilling to better understand how technology works with the profession so that their skills can remain relevant. This applies not only to the veteran "rock stars" who've built a career on ticking and tying, but also to young accountants who still carry an outdated model in their head.
But what if someone is happy being a cruncher? Is their age well and truly done? While the answer is yes in many places, according to Mike Policicchio, Americas assurance transformation leader and audit partner at Big Four firm Ernst and Young, there are some places where they can still hang on.
Many firms are choosing to automate basic tasks and outsource the rest. Where are they outsourcing these tasks to, though? Policicchio said at least some of them are going toward centralized delivery groups, such as those maintained by his own firm.
He said the proportion of U.S. audit hours performed by EY staff at such centers has grown from 18% in 2021 to 22% last year. But these are not accounting assembly lines full of people reading receipts: Instead, EY fills them with professionals with specialized proficiencies, so that the centers handle not only routine work traditionally reserved for first years, but also complex tasks that call for specific skills a firm might lack on its own.
"If they want to be an expert in business combinations, guess what — you've got an opportunity to become a really deep expert in business combinations because now we have a center specializing in that … Big picture, it's centralization: Stuff is moving from the traditional audit team to an offshore or onshore center," he said.
He still sees a role for crunchers — "If you want to call it that," he said — noting that while some routine tasks can be automated, they can't all be. For everything else, you need a person, ideally one who is comfortable with repetitive, routine work.
"If you think of what our profession as a whole is doing, taking tasks and moving to central groups, there are certain tasks that are more routine, more rote, lower-risk, and there are people who thrive on that type of work. They like the routine, they like doing the same thing … . We can move the routine tasks to them. [And] people who thrive on getting deeper on a topic, we are able to be flexible and move those tasks to them," he said.
Slaybaugh, the career coach, said that people who enjoy routine work can also maintain that part of their practice while also expanding past it — they don't need to stop doing that, they just need to find additional ways to add value.
"Will you be the one doing the billing, putting in the invoices, putting in the journal entries? If that's your definition [of bookkeeping], we've got some bad news for you. … So how do I redefine this? By being someone great at analyzing this information, translating it for the business owners, being part of making adjustments not just to the books but the business, so it can become more what the owners want it to be, it can be the same title but the number crunching is a lot less," he said.
Regardless of the path, Castonguay said that the jobs of the future, even the ones focused on routine tasks, will require tech literacy. People may not like this, but there's no getting around it, and so those who wish to advance in their careers likely will need to develop at least passable familiarity with the most commonly used technologies.
Castonguay spoke of a student at one of his seminars who said she didn't want to learn "this tech stuff," saying, "'I am an accounting major and I want to learn accounting.'"
"And I came back to say accounting is now tech. If you don't have the tech skills or the ability to learn tech skills, you will be left out in the cold," he explained. "We can no longer say, 'You handle the tech work and I handle the tax work. You handle the data analysis and I'll focus on this accounting standard.' It doesn't work like that anymore," he said.
