AI has eliminated many repetitive tasks, but should we be wary of too much innovation in accounting?
In 2014, the American historian Jill Lepore wrote a fantastic history of ‘disruption’. Not of instances of disruption, mind you, but the literal concept of disruption as popularised by Clayton Christensen.
Lepore was highly critical of “the gospel of innovation” and its obsession with disruption. She picks apart Christensen’s cherry-picked arguments with a historian’s eye for nuance and effectively exposes ‘disruption’ as poor guidestone to our past and future.
In one part of her essay, Lepore wrote that the word “innovation” always had negative connotations. “It signified excessive novelty, without purpose or end,” Lepore observed. “George Washington, on his deathbed, was said to have uttered these words: ‘Beware of innovation in politics’.”
In the last few years, accounting has been subject to all manner of innovation. AI has been a particularly fruitful and exciting area of growth. The many repetitive tasks in filing your accounts are great use cases for automation.
Xero’s vision of “code free accounting”, where businesses no longer have to worry how they classify transactions in the software, is an example of this. Instead, AI will draw on Xero’s user data, finding patterns of behaviour, and then mimic those patterns or use them to predict outcomes.
AI is exciting -- but Xero’s Damon Anderson cautions against the idea of runaway innovation. To paraphrase George Washington, beware of innovation in accounting software. Anderson, Xero’s director of partner product, emphasises timing.
“What’s important with AI is doing at a stage where the market is ready,” said Anderson. “We don’t want to completely automate things overnight, to the point where you have accountants and bookkeepers and finance teams that might suddenly lose control. The market needs to be ready for it.
“Timing is absolutely everything. If you try and introduce automation into an industry that’s established that’s trying to come to grips with MTD and regulatory change. Automation can cause angst and concern. We have to be careful where we introduce it.”
In essence, we have enough disruption: Brexit, Making Tax Digital, a stuttering economy. With this background, Anderson’s vision of disruption-free AI feels welcome. No Christensen-esque Silicon Valley bluster, just a case-by-case application of technology.
“Automated software is a leap of faith,” said Anderson. “As suppliers, we have an obligation to help businesses land softly into the world of digital software.”