At first, I thought I might start this newsletter by inspecting the recent Budget, but two things stayed my hand. Foremost in my mind was how badly burned I’d been by my previous judgements about changes to the public finances. Secondly, Jeremy Hunt’s announcements amounted to little we didn’t know already. Maybe the changes to the lifetime pension ceiling might warrant comment, and the tweaks to the R&D tax reliefs might be worth examining in more detail at some point.
But overall, the Budget didn’t get my blood racing. Or boiling, for that matter. So let’s just move on safe in the indifferent knowledge that most of us will continue to garnish the depleted coffers of the exchequer for the foreseeable future. What’s the phrase? Keep calm and carry on.
Instead, I want to talk about something that’s excited us all of late.
Of course, I’m talking about artificial intelligence (AI). Software like ChatGPT and similar applications will impact all our lives. Rapid technological change has arrived now the AI cat’s out of the bag. As Steven King wrote: “There are no maps of the change. You just come out the other side. Or you don’t.”
So what are the implications for the accountancy profession? Let’s see what we have in store. Shall we?
It’s Already Here
It’s worth saying that AI is already embedded in our everyday lives. Apps like Alexa or Siri are interactive conversational AIs we use daily, but we don’t spend too much time wondering how they work.
In finance, many of the underlying processes in Xero, QuickBooks or Sage, plus a raft of online banking apps, already have a degree of AI to manage their operations. So whether we realise it or not, AI is here and has been for a while.
As we advance, we can expect these capabilities to grow.
What’s changed recently is our awareness of this tech and the amazing things it can do. For example, who would have thought an app could write an essay, develop content or paint a wonky picture before Chat GPT dropped?
Big 4 AI
The best indicator of where AI is going in finance is the announcement by accounting giant PWC of its partnership with Harvey, a Chat GPT-powered legal platform.
They plan to use this AI’s ability to review and summarise dense documentation in their tax and legal services division to do contract reviews, claims assessments and undertake due diligence.
The general thinking is that big consulting firms will begin building, training and commercialising proprietary AI platforms. However, I might argue that this move also recognises future AI’s power to automate complex accounting and legal processes and the implications for ongoing billing revenues.
We can expect to see many more of these strategic partnerships as the AI roller coaster gets up to speed.
So will AI cut the number of accountants? Richard Anning, head of IT for the Institute of Charted Accountants of England and Wales, thinks so. But he qualifies this when he says:
“But you have to define what an accountant is. If you’re looking at some of the more repetitive bookkeeping or process-driven tasks, those are more likely to be subject to automation than the higher value tasks,”
Ahead Of The Game
In many ways, I agree with Anning, but I also think AI is unlikely to (immediately) provide the creative, innovative and strategic guidance that firms like Enso offer. This is how the profession adds value based on the human instincts and industry experience of time-served finance experts. It’s where Enso’s ongoing competitive advantage lies as we increasingly move away from the nuts and bolts of finance to an emphasis on holistic business growth and the adoption of emerging technologies.
In many ways, I recognised this when I launched Enso. Because we pursued a strategy that uses tech to rationalise processes, we remain ‘ahead of the curve’ in differentiating our offer to current and future clients (see Ensomatics below).
As Bob Dylan sang, ‘the times they are a-changin’,” and AI is showing how quickly things can move. The key here is whether one embraces changes or rails against them. It would depend on how wedded you are to the orthodoxy. At Enso, we see this new technology as an opportunity to spend less time pouring over spreadsheets and more time having productive conversations with our clients.
Bring it on, I say. Unless…
Hasta La Vista
Perhaps the only time we should be concerned about AI is if, one day, as you’re wandering around, a nude Arnold Schwarzenegger turns up in a ball of flaming plasma. Suppose he turns his glowing red eyes to you with murderous intent.
Then, maybe we should turn the AI off!
Introducing Ensomatics
Ensomatics is something we’ve been developing on and off for a while with one or two of our clients. Now it’s time to put a spotlight on it for everyone.
I suspect there are still a few businesses whose main encounter with their accounts (and their accountant) is just before their annual tax return. This is when your business numbers are crunched and transformed into an unappealing log of papers that make little sense. Unless you’re financially savvy, documents like your P&L, Balance Sheet and the like will remain a mystery. But still, you sign them to verify you agree until you do it all again a year or so later.
Businesses need an ongoing, easy-to-understand way to see how they’re performing, and that’s what Ensomatics are designed to do. Ensomatics are visual dashboards showing all the useful metrics a firm’s management needs to understand to promote growth, improve customer satisfaction or drive profitability.
The term ‘dashboard’ derives from the dials and gauges in a car. These give drivers all the information they need regarding the quality of their driving and the ability of the vehicle to complete the journey. Necessarily the layout is easy to read at a glance and allows for proactive changes required to ensure you reach your destination, such as adding fuel, recharging or inflating the tires.
And because every business is different, we build an Ensomatics suite to show not just the basics but also the unique things your firm needs to measure to stay on top of its game. These will be very different between, for example, an online retailer and a restaurant.
At Enso, we think having real-time financial information at your fingertips is the way forward. That’s why we can design an Ensomatics dashboard to give you the numbers you need anytime, anywhere! So get in touch if you want the power of Ensomatics for your business.
It’s No Laughing Matter, Or Maybe It Is!
There’s one thing AI doesn’t have (yet): a sense of humour. So before it finally takes over the world and bans laughing, let’s have a giggle at its expense.
What do you get when you cross a wall unit with artificial intelligence? Shelf-awareness.
What is an AI’s favourite music? Algorithms
What do you call artificial intelligence that’s shy? Self-conscious.
Son asks his father why does he speak so lightly at home? Father replies because there is artificial intelligence that listens to everything we say. Son laughs, dad laughs, and Alexa laughs.
If you want human guidance on how tech can transform your business finances, call me on 0161 511 2143 or email: adam@meetenso.co.uk.
OK, that’s it for this month.
All the best
Adam NurbhAI