Technology is enhancing rapidly, and day by day, we are witnessing innovations in all types of businesses. Artificial intelligence and machine learning are automating every sector. It is also affecting outsourced accounting services. Several accounting outsourcing companies are in a dilemma, will AI disrupt outsourcing services startups or not? In this post, you will come to know the effect of AI on accounting outsourcing services. But before knowing about the impact of AI, first, let’s see what robotic process automation (RPA) is.
What is Robotic Process Automation?
A robot refers to an AI application that possesses the capability to share and assist in the activities of a human interacting with a computer system.
The software works on the user interface in a similar way as that of humans. It is substantially an upgrade, from traditional types of IT integration, which has been machine to machine forms of exchange of thoughts, built on layers of data that operate at a layer of architecture under the UI.
Once you educate RPA software to understand any specific process, it is capable of automatically routing transactions, working with data, collaborating with other systems, and starting responses.
The technology is designed in a way that it can provide an alternative to perform high volume IT support, workflow, and processes of the back office such as accounting, financing, management of supply chain, and other human resources-related processes.
RPA does not require any prior experience of coding and does not interrupt the existing environment. Also, it is extremely user friendly, consisting of features that are convenient and easy to deploy.
The potential for adoption around RPA varies based on the volumes and transactional business processes.
Finance and Accounting services such as accounts receivable, general ledger, banking services, and financial services, and manufacturing industry have high adoption potential. In contrast, human resources functions have a low adoption potential of artificial intelligence.
Impact of AI on accounting outsourcing company
In the coming time, outsourcing contracts will be affected by the service provider capabilities around AI.
In the past, more work meant more workforces, but AI had changed this method. Computer programs are equipped with automation and sophistication, resulting in much better processing capabilities than those humans could ever have.
AI has created a difference in cost in the outsourcing engagement models. But, the differential cost does not directly result in loss of jobs as companies would shift the freed staff to more complex jobs, increasing the productivity of their organization.
The emergence of AI gives businesses the possibility to extract higher costs from their staff. At this point, around half of the business process outsourcing companies are based on traditional models. However, large numbers of companies are expecting transformational changes to this model in the coming years.
Although it does not mean that the traditional engagement models will become obsolete, it enables saving of costs and operational efficiency opportunities for service providers that are supporting change and are adding automation capabilities to their portfolio.
The future outlook of accounting outsourcing companies
In the future, AI capabilities will be one of the most crucial factors while selecting an outsourcing vendor.
Companies have started to build their trust and compliance with robots over humans. They are taking into account an onshore plus automation solution as a substitute to a completely offshore solution.
The BPO landscape is evolving day by day, and that is why service providers are including AI capabilities as early as possible so that they can gather huge advantages from the emerging BRP trend.
AI enables cutting costs substantially, which is why it has led to a boom in the outsourcing industry. It can bring out visible alterations in business and pricing models in ITO and BPO spheres. It supports outsourcing service providers to offer new service abilities to existing clients.
Industry experts say that traditional outsourcing would not run out of business soon. Instead, AI is expected to build even stronger existing relationships.
Cost- No longer a differentiator
Software robots are very sophisticated, and more and more processes are automated. By this, the outsourcing companies will begin to cut down the cost as robots will cost less.
Gradually, they will have to look beyond cost and focus more on advanced services. However, before landing on the capabilities of AI, service providers will be required to perform an objective assessment of these capabilities.
The decision to implement AI should be put to work strategically in only those areas as required by the businesses.
AI should be implemented into processes based on requirements and feasibility, not based on the hype created around it.
AI is a blessing for an accounting outsourcing company as it is automating the outsourced accounting services. Businesses interested in outsourced accounting services can contact FinAcc Global.
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