By Jesse Onslow Norton Artificial intelligenceHow do humans fit into the world of automated accounting?2 Feb 2017 In the past, accountants with small business clients would mostly be required to perform basic bookkeeping and tax return filing tasks.It wasn’t unusual for months to pass between meeting clients or being bombarded with carrier bags full of receipts when self assessment time rolls around. But as software becomes increasingly sophisticated the role of the accountant is beginning to change.“We’re seeing an evolution in the accountancy profession, and technology is at the forefront of this change,” says Ed Molyneux, CEO and co-founder of FreeAgent, an accounting software provider. “Small businesses want to have immediate access to their financial information including how much money they are making, how much tax they owe, and who needs to pay them.”Cloud-based accounting software has changed the role of the accountant and the expectations of their clients. The availability of real-time financial data means there’s no more emailing spreadsheets back and forth, and no more waiting until year end to prepare accounts. Accountants are now expected to be available on-demand to check information for errors and offer professional advice.“As accountants are no longer having to perform basic data entry or bookkeeping, they can use their time to delve deeper into their clients’ accounts and provide in-depth expertise about their business finances,” Molyneux explains. “We’re already seeing many accountants taking on a more advisory role and I think this is a trend that’s likely to continue.“Software can help automate data entry and tie together important aspects of SME finances such as invoicing, banking and tax filing. But unless business owners are 100 percent confident about the accuracy of the information they’re entering into the software, they will still find it beneficial to have an accounting expert on-hand to verify their data and make sure everything is categorised appropriately.“With the government’s plans to implement digital tax by 2020, accounting software will soon be a necessity in the UK,” says Molyneux. “As things move forward, more high street banks will provide secure direct feeds that allow better transferring of financial data into accounting software, as well as providers developing deeper tax forecasting and filing capabilities.”The government’s Making Tax Digital reform will require all limited companies to file their tax returns digitally by 2020. With further government initiatives and advancements in accounting software, we could eventually see cloud-based platforms providing full tax and financial compliance functionality. But while the technology has come a long way, there is still more work to be done before accountants could be able to manage entire businesses from their smartphones.One growing area of interest is the integration of Internet of Things (IoT) devices with accounting platforms. Digital mapping company TomTom, for example, provides logging devices that can be used to record mileage, journey duration and vehicle location. Not only can this data be seen in real-time with Sage accounting software, but it can also be used to calculate fuel costs and automate expense reports without accountants even needing to press a button.“Working in the cloud opens a number of opportunities for accountants and their clients,” explains Rhys Bateman, product marketing manager at Sage. “The automation created through connections with products and services such as TomTom is just an example of what is possible. By working with partners across the finance, collaboration and inventory management areas we continue to find new ways to automate our clients’ accounting workflows.”Another area of interest for Sage is the development of digital chatbots that use artificial intelligence (AI) to automate accounting tasks. Pegg is a virtual accounting assistant that can respond to staff queries, have conversations about company finances and record business expenses. Since launching last year, Sage has seen more than 20,000 users chat with Pegg in over 150 countries around the world.“We’ve developed the first accountancy bot that acts as a business coach and helps our clients with their admin. Automated cloud accounting started with automatic bank feeds, was continued with open APIs, and has really been taken to a new level with Pegg,” says Bateman. “All the complexity is hidden in the conversation, and Pegg learns along the way so the bot grows more intuitive the more you chat about your expenses.”The development of smart technologies means that much of the bookkeeping and manual work done today will eventually disappear behind the scenes. This shift will give new meaning to the role of accountants as strategists and business advisors. As cloud-based accounting software continues to develop, knowing how to integrate tasks and data into these platforms could become the difference between securing new clients or being replaced by talking algorithms.Jesse Onslow Norton is a communications consultant specialising in finance and technology and will be hosting a workshop at the AAT Annual Conference.To learn more about how technology is changing the profession book your place now. Jesse Onslow Norton is a writer, editor and communications consultant at Flibl. A former coder, his editorial work focuses on fintech, digital transformation, policy and regulation. His clients include corporations, governments, startups and SMEs from across the world. Follow him on Twitter @JesseOnslow.