How AI Will Transform Accounting: A $100B Opportunity Explained

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  • เผยแพร่เมื่อ 19 ม.ค. 2025

ความคิดเห็น • 122

  • @jaredspencer3304
    @jaredspencer3304 หลายเดือนก่อน +132

    All respect to these guys, but the reason Accounting AI might be slow is that they have a fundamental misunderstanding of accounting. "It's all about numbers, unlike law." Very false; the majority of accounting work is classifying transactions or assets based on unclear government guidance paired against unique business operations. "The numbers have to be 100% correct 100% of the time." Also false; they need to be correct within the limit of "materiality", which might actually work in favor of LLM's; if they hallucinate every ten-thousandth transaction, that would still be better than human systems, and within materiality limits.

    • @ivansmiljkovic9097
      @ivansmiljkovic9097 หลายเดือนก่อน +7

      You can build system that prevents hallucinations (source: been building stuff since babbage). Hallucination or false positives are not the issue.

    • @A704T
      @A704T หลายเดือนก่อน +21

      Welcome to VC where investors pontificate about areas where they have no domain experience

    • @ivansmiljkovic9097
      @ivansmiljkovic9097 หลายเดือนก่อน +3

      @@A704T yeah seems like it

    • @Plan46beats
      @Plan46beats หลายเดือนก่อน

      I would like to see how this ages 😂

    • @pathmanathanajanthan9593
      @pathmanathanajanthan9593 หลายเดือนก่อน +3

      "The majority of accounting work is classifying transactions or assets based on unclear government guidance paired against unique business operations"-Thanks Jared for this enlightening words!

  • @t2p5g4
    @t2p5g4 หลายเดือนก่อน +47

    I also disagree with the claim that accounting is about numbers. It is about exercising professional judgements to determine how to classify those numbers. Usually it is about the classification of the transactions under both accounting standards and tax law.

    • @CONTINENTALSONGS
      @CONTINENTALSONGS 27 วันที่ผ่านมา

      They need humans to check of these are correct. For now ai will be like interns not the head

    • @pradyraghav
      @pradyraghav 27 วันที่ผ่านมา

      It is still largely a set of rules that can be clearly defined. Not today but for sure, judgements can be made.

    • @edbradley6815
      @edbradley6815 16 วันที่ผ่านมา +1

      If it were all about the numbers, you could give 10 accountants the same information and they would come up with the same results. Those in the know understand that never happens.

  • @skhyd3090
    @skhyd3090 หลายเดือนก่อน +9

    We're working with structured data, and the fun challenge is creating AI that can bridge accounts payable and accounts receivable, along with a few other areas. Plus, we want it to truly understand the context! Nothing out there is capable of that as of today

    • @rahuindo
      @rahuindo 12 วันที่ผ่านมา

      Totally aligned and hence we have built a platform to match the organization data across AP, AR, and GL using the erp, domain and organizational context. AI can then read on top of this data model to do the bridge.

  • @t2p5g4
    @t2p5g4 หลายเดือนก่อน +24

    I wouldn't agree that Reagan Era software is still being used. I've being doing accounting since 1988. Back then spreadsheets didn't even have tabs. You couldn't just download your transactions from the bank and have it automatically reconcile. If there were ETL systems back then they weren't on every user's desktop like Power Query.
    LLM's are still of great value. I can translate a German Tax return to English, I use it to record transactions from paper bank statements. It was pretty hard to do with OCR software. I can easily generate code if I need to. I can cook up new functions and behaviors in Excel.

    • @sanesanyo
      @sanesanyo หลายเดือนก่อน +1

      What is your typical workflow to convert paper bank statements or even PDF bank statements to correct structures data entries? I am building something in this space thus wondering how users are currently doing this. Thanks a lot in advance.

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      I mean here in Asia lot of us are using CSV from bank, we don't get OFX files or they aren't yet common, but yeah there are converters for CSV to OFX then the accounting programs can import them and then need to match based on reference field or description or enter it as new transaction

    • @krishsangs6610
      @krishsangs6610 หลายเดือนก่อน +1

      It’s the tech hyperbole

    • @RavarsenBlogspot
      @RavarsenBlogspot 28 วันที่ผ่านมา +1

      Why won’t ai be able to make those judgements?

  • @Anurag-cs9js
    @Anurag-cs9js หลายเดือนก่อน +13

    Great vid. Have a feedback though,,,, the way captions show up is way too distracting ! For a non native speaker, I end up reading them a lot, even though the content is very clearly put across

  • @TheDoubleMvp
    @TheDoubleMvp หลายเดือนก่อน +10

    Timely video. Basis AI just announced a Series A today, building AI agents for accountants

    • @stanleyt6003
      @stanleyt6003 หลายเดือนก่อน +2

      Timely or timed?

  • @Data_CPA
    @Data_CPA 22 วันที่ผ่านมา +5

    I love when tech people discuss accounting. I'm a CPA that has moved into coding around AI. I can say 90% of accounting can be done generative AI agents. Unfortunately, the most pivotal aspects are human decision making. The real opportunity is building your own accounting infrastructure for clients and integrate blockchain, AI and data science. Accountants are literally training the AI for software companies and paying subscription fees that lock you into the platform.

    • @zeusjuice7566
      @zeusjuice7566 2 วันที่ผ่านมา

      How did you made the transition? I’m implementing AI tools at my current client and am interested in diving deeper

  • @travelinggreek
    @travelinggreek หลายเดือนก่อน +21

    AI will definitely ease accountants' pressure by handling repetitive tasks that take up a lot of time.

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      @@travelinggreek true. To say in theory and even practice Block Chain is a public ledger, reconciliations will be public data, so there will be privacy issues which now people are not realizing transacting on Blockchain. They already have built De-anomyzing tech for reconciling Bitcoin tranfers they use it in battling financial crime, it's just hidden from general public to give a facade of privacy.

    • @Ray_eddi
      @Ray_eddi 28 วันที่ผ่านมา +1

      What are the most tedious repetative tasks?

  • @larryrichards2534
    @larryrichards2534 27 วันที่ผ่านมา +7

    Reagen era software bla bla bla.. Did you ever work on consolidation, mergers and know about how each firm and task is different on these matters and require human capital with accounting knowledge. Yes there is certain section of financial reporting and audit is repetitive and being taken care of automated “robotic” process. However, when you promote this for the entire profession. It is wrong. You are either not that knowledgeable about this profession or want to promote your product so much. Accounting is using Reagen era software huh!! The most irrelevant video on accounting profession.

  • @moazzamjadoon4436
    @moazzamjadoon4436 20 วันที่ผ่านมา +1

    I totally agree with people who say accounting is about classifying transactions. Machine learning would be of great help However I don't know any ML models that can 100% accurately classify things after they have been trained. A 90% accuracy would even be a challenge. Eve deep learning models may not be up to the challenge. However, AI can greatly speed up the drudgery of more mundane and routine transactions. You will need a person to constantly audit the entries by AI. Also, the Business Process Management models can be used to help AI with routine entries and leave less routine entries, such as Long Term Assets classification to humans. What I mean is, for example with BPM model in place, the routine sales entry can easily be left to the AI. We can use Process Mining to check if these routines and routine entries are being accurately entered.
    Lastly, I would like to say
    While AI isn't perfect, its ability to handle repetitive tasks at scale can free up human resources for higher-value work.
    Also, BPM and process mining not only help ensure accuracy but also offer a feedback loop for continuously improving AI models.

  • @reinhardtbezuidenhout1242
    @reinhardtbezuidenhout1242 27 วันที่ผ่านมา +1

    Another issue is also the fact that accounting firm's clients use multiple different accounting software and use that in very different and personalised ways. Resulting in the source data to be very difficult to work through and understand, and most of the time there's no real pattern to it. So the data that is fed to AI for processing is actually inherently difficult to train ai on...
    When we see AI in accounting, it will be in the reviewer seat - where data has alteady been understood and put into a sanitised format. As opposed to the seat of the person actually doing the work. This is inline with the pattern we've seen AI utility follow - it replaces work from the end of the process first.

    • @rahuindo
      @rahuindo 12 วันที่ผ่านมา

      Totally aligned that data fragmentation is a big issue and creates the biggest headache when performing the accounting tasks. Having worked with various clients, we at Midoffice Data have built a platform that harmonizes the data across the Enterprise ERPs to give a single source of truth that is fed to the AI to give out the best results. AI can then read on top of this data model to understand the context and automate the task.

  • @kornflakesjunkie
    @kornflakesjunkie หลายเดือนก่อน +23

    awesome. but please remove these distracting subtitles in the video.
    the ones we can activate are sufficient.

    • @alexatedw
      @alexatedw หลายเดือนก่อน +1

      Make your own channel, then you can create vids however you want

    • @HurricaneChise
      @HurricaneChise หลายเดือนก่อน +3

      @@alexatedw so people should never give feedback?

    • @alexatedw
      @alexatedw หลายเดือนก่อน

      @@HurricaneChise only if asked

    • @2u610
      @2u610 28 วันที่ผ่านมา

      subtitles are required, so that I can see the video in the office silently 🤫

  • @contemarinovillas8332
    @contemarinovillas8332 หลายเดือนก่อน +1

    Excellent video!

  • @salahsaada9561
    @salahsaada9561 24 วันที่ผ่านมา

    Thank you Mr Hesham

  • @rkusri
    @rkusri หลายเดือนก่อน +7

    Hmm...didn't realise a16z also has a 'moderator' panel to delete comments that counter this hubris

    • @sanesanyo
      @sanesanyo หลายเดือนก่อน +2

      I know. Don't forget Marc is also throwing hubris & no one moderates him.

    • @Ray_eddi
      @Ray_eddi 28 วันที่ผ่านมา

      Lots of us found it very informative

  • @clementgavi7290
    @clementgavi7290 7 วันที่ผ่านมา

    Financial statements are obtained via transactions recorded by bookkeeping, the basic accounting operations,
    Let's imagine a code bar on a product sold in a shop for 100. The information of this transaction refers to inventory, account of class 3, customer, account of class 4, cash, account of class 5, sale, account of class7. etc. The balance sheet is concerned with three accounts here, 3, 4 and 5, and Income statement with account 7.
    If AI can make a code bar that include all these information and generate financial statement accordingly, the salesperson who serve the customer does the job. Because there is no more need an accountant to record the transaction, etc. The same goes with the analysis of the statements.
    Anyone who understand how the statements come about, understand that technology can transform accounting.

  • @dertynan
    @dertynan หลายเดือนก่อน +8

    Why is A16Z so out of touch, these days? Accountancy is first and foremost about accuracy. AI hallucinations and errors are well-documented. How many CFOs want to sit in front of a Senate Subcommittee because the AI doing their accounts made a grievous error?

    • @SSSS7-p8f
      @SSSS7-p8f หลายเดือนก่อน

      Not to mention the accounting standards board is run by people who have negative infinity interest in making themselves and the industry at large financially worse off. Do these people not understand basic economics?

    • @manonamission2000
      @manonamission2000 29 วันที่ผ่านมา

      Let them find out...An airline paid dearly for a misconfigured LLM-based support system, and the hyperbole around what LLMs are capable of for fields requiring accuracy and precision is out of this world.... let them have their 15 minutes 😂

    • @bzb8554
      @bzb8554 26 วันที่ผ่านมา +1

      How is it possible for any competent CFO to review an AI summary and miss a grievous error?

  • @embarq12
    @embarq12 26 วันที่ผ่านมา +1

    Automation is the need. Not necessarily using Gen AI but even traditional AI / machine learning can be useful

  • @Jonathan2x6
    @Jonathan2x6 หลายเดือนก่อน +2

    Its amazing how software testing which is soo repetitive is not automated. Google , Microsoft anyone?

  • @theshaneburns
    @theshaneburns หลายเดือนก่อน +1

    IRS expense deduction categorization is the most abundant, thoughtless work in accounting.

  • @amishthaker7270
    @amishthaker7270 28 วันที่ผ่านมา +1

    Feedback - the subtitles are SUPER annoying. If I want subtitle I will turn them on on youtube. Why reinvent the wheel?

    • @Farsath999
      @Farsath999 27 วันที่ผ่านมา +1

      True , my eyes automatically goes to the subtitles 😬

  • @IMDBADMAN
    @IMDBADMAN หลายเดือนก่อน +8

    We Finance and Accounting people are intelligent enough to create new ways to keep us employed for next 50 years 😁

    • @ravirajac
      @ravirajac หลายเดือนก่อน

      No

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      Yep that really depends on the technology as well but anyway it's not technology going to replace rather it's another person who uses that technology. But with AI models keep safety of data privacy like everything someone asks an AI can be recorded and information is passed on to outside while using those services. One way to resolve is to use self or private hosted AI

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      But yeah like lot of changes learn more on how to be review and reporting will help to handle much more transactions, data entry jobs will be affected a lot, lot of encoding work will be removed and more value for people who have much higher and more understanding of books of accounts and who are trustworthy even more trustworthy than an AI model on truthfulness they will win in accounting

    • @IMDBADMAN
      @IMDBADMAN หลายเดือนก่อน +1

      @timexpeachtree Not saying not to learn but I know for sure lot of organizations don't trust third party AI as they can't see where data is going and how safe it is to share data , that's where we come in , learn as much as possible but learn application rather then technical aspects that's what I would say, many can and should differ from me, leading AI for one of top 10 US multinational globally that's how I see it and my background is CFA, CPA, CA & ACCA with MBA so you can understand Finance and Accounting is my bread and butter.

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      @@IMDBADMAN yepp exactly so u get it. Finance will become optimized NGL especially for people who do bare minimum data processing only it will be difficult once Ai is entrenched within software lot of data processing will become redundant, only assurance and compliance and validation and of course trust will be needed from a Halal person, rest all the system and ecosystem will take care. Finance will become a powerful field only for those who want to achieve and be controlling and energizing their organizations.

  • @HurricaneChise
    @HurricaneChise หลายเดือนก่อน +5

    Captions are brutal

  • @reinhardtbezuidenhout1242
    @reinhardtbezuidenhout1242 27 วันที่ผ่านมา

    About 2 years ago, Microsoft and KPMG signed a mutli-billion dollar deal where Microsoft develops KPMG's AI and Microsoft gets to use their (client's) data. It's been 2 years, and nothing worth while has been rolled out yet. Doing AI for accounting requires a very strong and smart base model. Which doesn't exist yet.

  • @danielgrayling5032
    @danielgrayling5032 19 วันที่ผ่านมา

    "Reagan era software"
    Wow. I bet that runs fast. No one wonder no one has been able to replace it.

  • @mrbabyears
    @mrbabyears 29 วันที่ผ่านมา

    This sounds good in theory. Yes, Ai will make accounting more efficient. Accountants will just do more with less. The only the price wars happen in accounting is if there were an over abundance of accounts that used Ai. Then they have have to compete for business. But this isn't the case. This is interesting. You would think, technology would make things cheaper. There are so many things that should be cheaper due to technology advances but this isn't the case. Infact things have become more expensive because companies pass those profits to their top executives and their share holders. Companies use technology to enrich themselves, cut jobs, eliminate pensions, etc.

  • @Data_CPA
    @Data_CPA 22 วันที่ผ่านมา

    The profession does not run on billable hours ...majority of firms have moved to value billing. If accounting firms weren't run by accountants they would already have full divisions that built accounting platforms. I think there are a few firms moving that direction. They are not going to give their revenue away to software companies much longer.

  • @WealthyChronicle
    @WealthyChronicle หลายเดือนก่อน +3

    AI could save accounting firms billions, but at what cost? Fewer jobs? Cheaper services?

    • @manonamission2000
      @manonamission2000 29 วันที่ผ่านมา

      insurance policies, if the AI gets it wrong

    • @trailerhaul8200
      @trailerhaul8200 26 วันที่ผ่านมา +1

      Fewer jobs for sure. Cheaper if there is a fierce competition

  • @DC-uc4sh
    @DC-uc4sh 27 วันที่ผ่านมา

    Right, a "contributor" would be less motivated to train an AI to take over its work.

  • @sergiocayuqueov
    @sergiocayuqueov หลายเดือนก่อน +3

    Interesting

  • @stevenpcopley
    @stevenpcopley หลายเดือนก่อน +2

    The bloke said it, unlike creative industries, there is zero tolerance for errors or hallucination in accounting. And accounting deals with numbers not words, and each number needs to be considered in context. This all beyond llms at this stage.

    • @sanesanyo
      @sanesanyo หลายเดือนก่อน

      I won't say it's beyond but certainly needs work.

    • @alexatedw
      @alexatedw หลายเดือนก่อน

      Hallucinating is all but gone now

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      LLMs have to take a back seat and give it over to rule based or logic based AI on this subjects. A fundamental problem of AI hype is people assuming LLMs are the complete of AI.😅 There are lot more areas of AI that need to be updated and then it will be within the software they will be able to automate lot of details.

    • @alexatedw
      @alexatedw หลายเดือนก่อน

      @ lololol

    • @festusogbechie1777
      @festusogbechie1777 29 วันที่ผ่านมา

      Hilariously true

  • @trailerhaul8200
    @trailerhaul8200 26 วันที่ผ่านมา

    AI won’t replace human accountants, but it sure does eliminate certain roles and responsibilities. So it won’t “replace all” but “replace some”

  • @seymorebizz7950
    @seymorebizz7950 หลายเดือนก่อน +1

    Literally Automation Anywhere and UiPath exist and already ran this thesis/playbook down to death.... This sounds good, but is utterly missing reality

  • @SRTendulkar999
    @SRTendulkar999 24 วันที่ผ่านมา

    Cheaper prices is always a pipe dream

  • @ApolloGemini11
    @ApolloGemini11 16 วันที่ผ่านมา

    It seems these two experts don’t have any deep experience in Accounting. In most large companies, software such as SAP, Peoplesoft, Oracle, etc. are used for accounting. Most of the processes are complex with integration across supply chain, sales, HR, and other business functions.

  • @amishthaker7270
    @amishthaker7270 28 วันที่ผ่านมา

    This industry is ripe for disruption. CPA outsourcing is HUGE. There are literally thousands of people hired in India doing CPA accounting for US + UK + Australia.

  • @BRichard312
    @BRichard312 14 วันที่ผ่านมา +1

    The reason the accounting space has been slow to adopt automation is because the people in that field have NO clue how to automate their process models. This requires, wait for it - PROGRAMMING. It also requires knowing what a primary key is as DATABASES are also an important part of the accounting process. Ask almost any CPA though what a primary key is, and you will get a deer-in-the-headlight look. The accounting space is completely ready to be disrupted but it will NEVER happen with the current CPA mindset. You are going to need Data Scientists and Software Engineers to make that happen.

    • @aaronrey2658
      @aaronrey2658 14 ชั่วโมงที่ผ่านมา

      if you ever work around audit, accountants, finance they are automating all the time
      they build macros, excel, VBA, plus SAP/ERP GL rules to automate
      maybe spend real time around monthly close in complex global enterprises with full consolidations requirements

  • @GrowStackAi
    @GrowStackAi 27 วันที่ผ่านมา

    Building smarter futures with AI-driven solutions 💥

  • @Grumbo991
    @Grumbo991 25 วันที่ผ่านมา

    I find it amusing how everyone keeps talking about there not being enough people when education has been made affordable and these companies don't event want to invest into their own people.

  • @andrew8531
    @andrew8531 28 วันที่ผ่านมา

    How do you review if you never done? That is the problem with AI taking over these input jobs.

  • @sputnik8543
    @sputnik8543 หลายเดือนก่อน

    Finance functions are primed for disruptive through AI; big and bloated with too much SG&A attributed to them

  • @vaportrails7943
    @vaportrails7943 หลายเดือนก่อน +1

    I’m not sure what AI can do that isn’t already being done by existing software. As you recognized, there is no room for error.

  • @jaimitojoe7747
    @jaimitojoe7747 29 วันที่ผ่านมา

    Accounting can very much benefit from AI. People cling to, only humans can do it, because we have the right judgement, just BS. Less accounting errors and in realtime.

    • @queensgambit4982
      @queensgambit4982 26 วันที่ผ่านมา

      Accounting is not getting the numbers right , in many cases it is about getting them wrong but in your favor by bending the rules.

  • @alexanderbSpeaker
    @alexanderbSpeaker 26 วันที่ผ่านมา

    It’s just cutting jobs in this case

  • @AB-qk6uk
    @AB-qk6uk 3 วันที่ผ่านมา

    The Accounting industry has been resistant to technology and change because firms are still LARGELY led by Baby Boomer Patriarchy who are still obsessed with Hierarchy, titles, and outsourcing to sweat shops in India. It’s about time AI disrupts a bloated and inefficient industry.

  • @RussoConcerned
    @RussoConcerned 6 วันที่ผ่านมา

    Accounting for whom? So many of us will unemployed in the next 2/3 years.

  • @DrFractal123
    @DrFractal123 หลายเดือนก่อน

    AI should easily replace VCs and podcast hosts interviewing VCs before CPAs 😅 - back in the day this was a good old sales patch, now it’s some kinda pseudo intellectual content 😮

  • @MoneyballUSA
    @MoneyballUSA 22 วันที่ผ่านมา

    No first principles thinking here. Automating unnecessary work isn’t innovation.

  • @ravikurup8350
    @ravikurup8350 7 วันที่ผ่านมา

    Yes accountants will lose their jobs 😂😂😂

  • @AIrtesan
    @AIrtesan 10 วันที่ผ่านมา

    Yes. YES! Y▪E▪S!!! Accounting needs to "get artificial," hahaha!

  • @krishsangs6610
    @krishsangs6610 หลายเดือนก่อน +1

    You can say Everything needs ai ..I mean common guys, let’s get some serious analysis

  • @cerebralparasite9238
    @cerebralparasite9238 หลายเดือนก่อน +4

    Say goodbye to all the back offices in India

    • @De-tw7by
      @De-tw7by หลายเดือนก่อน +4

      The back office will only increase in India.

    • @timexpeachtree
      @timexpeachtree หลายเดือนก่อน

      ​@@De-tw7bywon't be offices of people this time around it will be servers and mainframes in datacenters with lakhs of automation agents running and your traditional chartered accountant overseeing the books of 100x without paying anyone else, making their mind how to extract most value from AI while minimizing the cost of operation and thinking up new algorithms or the next new government subsidy. Bear in mind those who thought to survive my doing minimal or lite work will be automated, no more number punching and clock-punching it will be accuracy and validations, and staying withing bounds of accepted deviation

    • @SSSS7-p8f
      @SSSS7-p8f หลายเดือนก่อน

      @@De-tw7by Exactly lol. the last mile of tech will remain in the west, everything else is outsourced. SWEs in the west will be the cause of their own dmeise.

  • @azizulhaouqe4150
    @azizulhaouqe4150 24 วันที่ผ่านมา

    Fake voice fry accent is terrible tortured to my ears

    • @d-omish9210
      @d-omish9210 24 วันที่ผ่านมา +1

      Once worked in a company where this young VP spoke like a Kardashian with a really pronounced vocal fry. So irritating...