Why bookkeepers need to be emotionally intelligent

To remain relevant with advancements in artificial intelligence (AI), bookkeepers need to develop their emotional intelligence.

Throughout the modern era, technological innovations have been the key drivers of economic growth. The most important are what economists call general purpose technologies — the steam engine, electricity, the internal combustion engine.

For instance, the internal combustion engine gave rise to cars, trucks, planes, chainsaws, lawnmowers, big box retailers, shopping centres, and — if you think about it — suburbs. Companies as diverse as Kmart and Uber found ways to leverage technology to create profitable business models.

The most important general purpose technology of our era is artificial intelligence (AI), particularly machine learning (ML) — that is, a machine’s ability to keep improving its performance without humans intervening to explain exactly how to accomplish all the tasks its given.

ML is replacing common bookkeeping tasks

Bookkeeping is always flagged as a profession that AI will eventually replace, but machine learning is already replacing many of the common bookkeeping tasks.

First, a distinction between true AI and ML. ML is, as above, a machine’s ability to learn and improve, rather than being specifically programmed for a particular outcome. But AI is the machine’s ability to perform tasks at a level approximating human intelligence — that is, it can can plan, recognise objects and sounds, and problem solve.

For AI to be considered true AI, a machine must first pass what AI researchers call the “Turing test,” which, developed by computer scientist Alan Turing, is a test of a machine’s ability to exhibit intelligent behaviour that’s indistinguishable from that of a human.

In other words, a human should be able to have a conversation with a machine and not know they’re talking to one.

For AI to be considered true AI, a machine [requires the] ability to exhibit intelligent behaviour that’s indistinguishable from that of a human. In other words, a human should be able to have a conversation with a machine and not know they’re talking to one.

We’re a long way from that, but machine learning, which uses algorithms to learn and improve is already here. It powers your Netflix and Spotify suggestions, and it’s being used by your accounting software to eliminate the heavy lifting involved in myriad bookkeeping tasks — reconciliations, banks feeds.

What has to happen for autocoding to be possible?

For bookkeeping to become fully automated and for autocoding of transactions to be possible, machines would first need to be capable of true AI — to be advanced enough that you could communicate with a machine about your accounts, like you would a bookkeeper.

It would probably involve talking to a virtual assistant, like Siri or Alexa — “Alexa, can you do my bookkeeping every Tuesday?” and Alexa would then ask you all the things she needs to know in order to do your bookkeeping every Tuesday.

You’d need to be able to tell Alexa or Siri or Google things, such as:

Your business classification with ASIC
Type of business you run — building company, real estate agent, etcetera
The bank you hold an account with — although, if you use online banking, it’ll probably already know this
The accounting software you use.

AI won’t eliminate accounting software

AI won’t eliminate accounting software. But it will change how you use it. Currently, most people log in to their Xero or QuickBooks or MYOB account to do their bookkeeping. With AI, it’s more likely you’ll just ask a virtual assistant to do your accounts and it will access Xero to complete whatever tasks need to be done.

When AI is commonplace, banks and other companies will also use it to automate tasks.

Eventually, machines will end up communicating with each other about your accounts — the ATO will communicate with your accounting software, which will communicate with your bank and so on.

Will AI eliminate bookkeepers?

The role of the bookkeeper as it’s known today will probably be eliminated by AI. But as history has shown, the development of new technologies typically give way to new types of jobs and companies and a different way of doing things. (Who could have imagined accounting software — accessed on a mobile — would have replaced the abacus before the internal combustion engine?)

Bookkeepers should worry more about ML

Right now, ML is changing the way bookkeepers work. It’s already automating common bookkeeping tasks — bank feeds that marry payments from customers with invoices, for example.

To remain useful to businesses, bookkeepers need to focus more on providing services that require emotional intelligence, something machines are not yet able to replicate — identifying ways businesses can improve cash flow, for example.

To remain useful to businesses, bookkeepers need to focus more on providing services that require emotional intelligence, something machines are not yet able to replicate — identifying ways businesses can improve cash flow, for example.

Food for thought

Could your bank do your account coding for you with a cash business? Is this where PayPal and fintech can leapfrog over accounting software? What about contactless payments and invoicing? Cashflow lending with PayPal is now enabling PayPal to provide small business loans to somebody in business based on their past sales history. This leaves PayPal in a great position to become your bank, your credit providers AND your accounting software.

Need to refresh your bookkeeping knowledge?

Find out more about the benefits of one-to-one training as a supplement to an online training course

If you need to refresh your cloud accounting skills for MYOB, Xero or QuickBooks, we have the online training courses available to help you do this. We also have highly experienced and qualified bookkeepers able to train you face-to-face or remotely, anywhere in Australia.

Learn more about our one-to-one and face-to-face private training packages

The benefits of combining one-to-one with online training courses

I’ve been a Bookkeeper for more than 20 years and find more and more business owners are asking for training because today’s bookkeeping tasks aren’t quite as easy as the software companies make out. Learning how to use bookkeeping software one-to-one combined with an online course is a great way to learn because, as a trainer, I cover all the topics my clients need in a logical order which follows the flow of the course and which will also help them in their daily operations, but clients can also learn what they need to specific to their own situation.”

— Tracey O’Neill, Registered BAS Agent and Bookkeeper, QuickBooks Pro Advisor