There's a lot being said about the pros and cons of generative AI, but while we can all agree that it's widely applicable and disruptive, we can also agree that it's not the first (and won't be the last) emerging technology to be applicable and disruptive – it's just the technology we're currently looking at.
To understand the potential of generative AI and the broader AI technology ecosystem, it's best to start with the basics. If you look up the definition of the technology, it says “the application of scientific knowledge to practical ends.” There's a lot of scientific knowledge being shared in generative AI. But across all the industries currently studying it, I don't think many people fully understand how it can be truly practical and useful.
Take for example the small business owners who are some of the largest workers in the global economy. While many entrepreneurs are hard at work running their day-to-day operations, many others are looking to find ways to leverage AI to boost their productivity. While there are certainly immediate benefits that AI can provide today, like quickly creating basic marketing materials or speeding up responses to some customer service queries, there is so much more potential. But much of that potential requires more time, resources, and expertise to be realized.
Instead of trying to figure out how to make everything work on their own, small business owners should embrace the emerging world of technology as it shapes to their needs. If you run a small business, you're already dealing with a myriad of tasks just to keep your business running. And of course, you don't have to do it all by yourself.
Who can fix this?
The onus should rightly fall on the service providers in the SME ecosystem who are building the platforms and apps that business owners use. This applies to specialist companies like Xero, but also to the big consumer tech companies and platforms. We all have a role to play in that shaping process: we need to develop scientific knowledge like generative AI into applications specific to SME use cases, and shape the “raw material” of technology into something that directly benefits SMEs. This means that there should always be open lines of communication between us in the tech space and our SME customers, focused on helping them with the tasks they care about most.
Additionally, understanding the key day-to-day tasks of small business owners and putting them at the forefront of the AI tool development process is the best way to ensure that AI adoption isn't tackled as another job, but rather makes it easier for small business owners to leverage the technology in their daily work.
How can I fix this?
Technology companies need to focus on identifying, highlighting and promoting the uniqueness and value of small businesses. Coming from the New Zealand and Australian tech ecosystems, our geographical distance from the rest of the world has historically allowed us to approach these challenges from a different perspective, making it a little easier to zero in on and identify the tedious, laborious tasks that small business owners would be happy to outsource or even eliminate.
If technology leaders at all levels can step back and give small business owners a chance to air their grievances, their technology solutions have a huge opportunity to accelerate productivity in the global small business ecosystem.
What does that feel like?
Massive productivity gains may sound overly optimistic, but with the right approach, it's certainly possible. When we talk to accountants and bookkeepers as part of their work at Xero, we hear that generative AI already plays a big role in some of their workflows – for example, they leverage generative AI to sift through client data and quickly generate reports. From preparing detailed forecasting meetings with clients to creating “partial CFO” practices, many accountants and bookkeepers are looking to eliminate the tedium of entirely manual data interpretation and find the freedom to take on the role of knowledgeable financial advisors.
But accountants and bookkeepers don't need to become AI experts overnight. To unlock these capabilities, they're looking rightly to the platforms they use, such as Xero, to bring these capabilities to the fore. With the help of curated technology platforms and tools, accountants can now afford to overturn the common misconception that accounting is simply a number-crunching role, and provide even more value and actionable insights to the business owners they support.
This is just one example of applying generative AI solutions for practical purposes in a specific industry.
What does the future hold?
The question remains: Will this new technology mean that jobs as we know them will never be the same? Or will AI replace jobs in small businesses and across the economy? A look at past “revolutionary” technologies like email, spreadsheets, and smartphones shows that while the former may be true, the latter is unlikely. Rather than entire jobs changing, the tasks that make up those jobs will evolve and change.
So generative AI is not about replacing, say, accountants, but about giving accounting professionals the capacity and ability to focus on their higher value advisory responsibilities. Moreover, the trust that accountants have built with their clients will not be easily lost or replaced, no matter how smart the algorithms are. Because when the stakes are high and your financial life is on the line, you want someone by your side to partner with; someone you can hold accountable for advice and guidance. After all, who could be more accountable than an accountant?
Looking at the broader SMB landscape, the same logic applies. There is much talk of “putting humans in the loop” in the AI world, but this is a bare minimum. Humans are not just in the loop as a necessary safeguard, they remain central to any business and its value proposition. Generative AI does not take the wheel away from SMB owners, but rather acts as a valuable ally augmenting their capabilities and significantly increasing their productivity. Until the next unpredictable, revolutionary technology comes along to take us to the next level.
We have compiled a list of the best accounting software for small businesses.
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