Automation has brought significant changes to the accounting profession over the last decade. While some tools have made accountants’ lives easier, others have chipped away at their roles as startups seek to disrupt a legacy industry. The tech companies that developed these tools have also created and perpetuated a false debate about whether automation will overtake the industry completely and make accountants irrelevant.
It’s time to end that debate. A valued accountant is a holistic business advisor to clients, solving human problems that technology simply cannot — and will never be able to — solve on its own.
The question should not be whether automation will take over accounting, but where its real value lies. This technology has an important role in upleveling accounting, but there are clear limitations for its use. ScaleFactor offers an example of these limitations and a cautionary tale. The startup promised to replace human accountants with software and AI, but it was mostly smoke and mirrors, with people doing much of the work behind the scenes. The irony was palpable.
No software stack can match the financial acumen, critical thinking and trusted counsel that a human advisor offers. That’s particularly true today, as valued accountants have become business partners, not just number crunchers. Where software is limited to evaluating concrete inputs, accountants also leverage their financial acumen, understanding of clients’ business goals and observations of communication subtleties like the inflection in a client’s voice to make decisions. This allows them to serve as advisors to their clients, whether by adjusting business models in real time, building balanced and inclusive teams, or managing employee wellbeing.
The COVID-19 pandemic has underscored the importance of this advisory role in the face of high-stakes decisions. As many businesses have navigated changing unemployment laws, federal aid initiatives and revenue loss over the past several months, accountants have stepped up. The accountants I’ve spoken with emphasize that their clients increasingly rely on them for much more than “numbers” problems, like payroll. They are solving the “people” problems that can make or break a business and its employees’ livelihoods, like hiring or conducting layoffs in the midst of a crisis. Accountants need technology to solve the former so they can focus on the latter.
Brooksley Born is the former chair of the Commodity Futures Trading Commission.
Prof. Johnson is the Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management. He is also a senior fellow at the Peterson Institute for International Economics in Washington, D.C., a co-founder of BaselineScenario.com (a much cited website on the global economy), a member of the Congressional Budget Office's Panel of Economic Advisers, and a member of the FDIC's Systemic Resolution Advisory Committee. He is also a member of the private sector systemic risk council founded and chaired by Sheila Bair in 2012. Prof. Johnson is a weekly contributor to NYT.com's Economix, is a regular Bloomberg columnist, has a monthly article with Project Syndicate that runs in publications around the world, and has published high impact opinion pieces recently in The Washington Post, The Wall Street Journal, The Atlantic, The New Republic, BusinessWeek and The Financial Times, among other places. In January 2010, he joined The Huffington Post as contributing business editor. Professor Johnson is the co-author, with James Kwak, of 13 Bankers: The Wall Street Takeover and The Next Financial Meltdown, a bestselling assessment of the dangers now posed by the U.S. financial sector (published March 2010) and White House Burning: The Founding Fathers, Our National Debt and Why it Matters to You (April 2012). In his roles as a professor, research fellow and author, Professor Johnson's speaking engagements include paid appearances before various business groups, including financial institutions and other companies, as well before other groups that may have a political agenda. He is not on the board of any company, does not currently serve as a consultant to anyone, and does not work as an expert witness or conduct sponsored research. His investment portfolio comprises cash and broadly diversified mutual funds; he does not trade stocks, bonds, derivatives or other financial products actively. From March 2007 through the end of August 2008, Prof. Johnson was the International Monetary Fund's Economic Counselor (chief economist) and Director of its Research Department. He is a co-director of the NBER Africa Project, and works with nonprofits and think tanks around the world. Johnson holds a B.A. in economics and politics from the University of Oxford, an M.A. in economics from the University of Manchester, and a Ph.D. in economics from MIT. He won the Nobel Prize in Economics in 2024.
Johnny Poulsen is the CEO of Income Lab, a company that wants to revolutionize the way retirement is planned and experienced.
With over two decades of experience in financial services, Poulsen co-founded Income Lab to equip advisors with better tools to help clients retire with clarity and confidence.
Empowering and supporting employees will become an increasingly important driver of business success, as studies continue to prove. Using software to automate repetitive processes gives accountants the freedom to focus on advising their clients through tough moments by leaning into their most human skills, like problem solving and relationship building.
Tech-driven tools and insights can’t replicate these skills, but they can enable them. As the transformation of industries like health care and manufacturing have shown, automation is most effective when used to save time, ensure compliance and improve accuracy by handling routine, tedious, time-intensive tasks. By using software to automate payroll, tax filings and payments, accountants can focus on their clients’ higher-level business challenges and opportunities. They can also more easily identify trends based on recent and historic data, then apply these insights to make recommendations informed by data.
This is tech at its best. At its worst, technology makes accountants’ jobs harder and can erode their clients’ trust. Software might generate recommendations based on broad generalizations, failing to account for a business’s nuanced situation or economic context. During the pandemic and ensuing recession, we’ve seen that much of the data and algorithms feeding into advanced business tools have been built for a world that no longer exists. They fall short of helping businesses solve the complex, intersectional problems they face in 2020 and beyond.
Accountants can add tremendous value in this new world by leaning into their advisory role. A strong accountant is pivotal to maintaining a client’s business, which in turn supports employees’ livelihoods and helps economic recovery. It’s good for accountants’ businesses, too: it’s estimated that practices providing advisory services can generate 50 percent more in monthly client revenue. Technology has a role to play, but only as a boost to the advising, problem-solving and business strategy accountants already do on a daily basis.
