The science of accounting is centuries old. However, numerous tech tools and resources make accounting easier, more accurate and more reliable. For example, combining accounting, artificial intelligence (AI) and automation can help businesses find a balance between human brainpower and modern technology.
Machine learning is consistently being built into the technologies that humans rely on for sending and receiving information, and the future of AI is built on the presumption that “smart” machines will continue to reduce the need for human labor.
AI is the only software that can draw conclusions from large quantities of data and adjust its activities based on those conclusions. But it’s also a system that can learn quickly in real time and be applied to an entire organization.
We’ll explore the relationship between AI and accounting and share how to use AI to automate and streamline accounting while supporting skilled accountants and finance teams.
Not every business owner is familiar with accounting. Accounting tips to help business owners stay on the right path include separating business and personal expenses, classifying workers properly, and creating regular profit-and-loss statements.
AI and accounting
AI has had a significant impact on the accounting industry by automating numerous tasks and increasing efficiency. For example, AI can create invoices, analyze financial data, generate reports, and identify patterns and anomalies that suggest accounting fraud. These services can help businesses save money and improve their financial reports’ accuracy and timeliness.
Here are some other ways AI is affecting the accounting industry:
- AI may replace some accounting jobs. Because many of the jobs previously done by humans can now be automated, AI has the potential to replace specific jobs in the accounting industry. Accountants are already finding it hard to bill for traditional services such as data entry or audits because software can handle these tasks.
- AI may prompt new accountant specialties. If AI and automation take over some tasks, accountants with extra bandwidth can and should find ways to add more value elsewhere. For example, by offering more holistic financial consulting, accountants can continue to improve their bookkeeping accuracy and accessibility while diversifying the services they offer to clients.
- AI and automation can provide new insights for accountants. Many cloud-based accounting platforms are moving beyond transaction automation toward analysis. As a result, machine learning can give many accounting professionals detailed data about their clients, and accountants can use this insight to provide expert advice.
- AI and automation may change accountant job functions. The need for accountants won’t disappear. However, their job functions will likely evolve. For example, a traditional bookkeeper will become more of an information systems manager — someone who helps clients feel in control of their data and cash flow management.
- AI and automation may prompt accountants to be more proactive. While machines work on data entry and organization, accountants are free to seek out more business endeavors. For example, they can ensure that their clients are ready for significant financial transactions, such as initial public offerings, mergers and acquisitions, business loans, strategic reviews, or restructuring. Accountants often navigate these transactions in real time. However, AI will help them benchmark, track and improve clients’ businesses before a transaction starts.
It’s essential to choose the right accounting software to handle your needs, including sending invoices, receiving payments and monitoring cash flow. Check out our reviews of the best accounting and invoice software to get started.
Accounting activities that AI can perform
AI can assist with many accounting-related tasks. Consider the following examples:
- AI can help enforce corporate policy. AI can help enforce company policies and reduce the time it takes to uncover noncompliance issues in financial data. For instance, AI can scan employee receipts, credit card transactions and travel bookings for any purchases made outside company policy. This makes it possible for auditors to assess errors quickly and ensure that employees follow all policies.
- AI can streamline data entry and analysis. AI can help financial managers track time-consuming and tedious transactions. For example, AI facilitates expense tracking. It allows you to extract data from receipt images and classify an expense automatically based on the spending category. It then populates reports so managers can analyze expenses in one place.
- AI can reduce the risk of fraud. Given that AI can audit up to 100 percent of spending reports, it can predict patterns and detect a wide variety of irregularities in financial data. This allows auditors to spot fraudulent spending before expense reimbursement occurs. And given that it’s scalable, AI can also easily manage influxes of data without compromising the overall accuracy.
- AI can perform budget forecasting. AI can predict a company’s future financial performance and create a budget forecast. It analyzes historical financial data to identify patterns and predict future income and revenue. AI can combine financial data with other sources to create more accurate forecasts.
- AI can facilitate tax preparation. AI software can automatically extract relevant information from financial documents and use it to create tax returns. AI can be programmed with tax laws and regulations to ensure a company remains compliant.
The ability to connect with accountants is a valuable accounting software feature, giving customers the best of both worlds — technology and personal human attention.
How accountants can stand out against AI
While there are many benefits to using AI, it will never be able to replace certain aspects of business accounting. For example, AI doesn’t have soft skills, like communication, problem-solving and critical thinking. And unlike a human accountant, it won’t be able to proactively improve accounting skills with courses and other educational tools.
Here are some other ways accountants are more valuable than AI:
- Accountants can consult and advise. One of the top ways accountants can stand out against AI is by offering consultations and advising services. Clients who require a consultation will undoubtedly seek out human intelligence over AI.
- Accountants can specialize in various areas. Accountants will be in higher demand if they specialize in specific areas, like tax law or forensic accounting.
- Accountants can incorporate AI tools. Instead of seeing AI as a threat, accountants have an opportunity to embrace these tools to supplement their capabilities. For example, you can use AI software to automate routine activities, allowing you to focus on higher-value tasks.
- Accountants can learn to use complex software. Using complex software is a skill that AI cannot offer. Although it can perform specific functions, it can’t do it alone. Moreover, a human eye is still required to ensure things are being done correctly.
- Accountants provide the human touch. One of the primary ways accountants can stand out from AI is to remain personable and compassionate. No matter how efficient AI may be, most people prefer interfacing with a living, breathing person who’s capable of understanding their needs and concerns and empathizing with them.
AI is a valuable accounting tool
AI is a valuable accounting tool that can streamline data entry and analysis and help business accounting systems become more accurate and reliable. However, AI can’t replace many financial sector elements that require a personal touch.
Accounting professionals and businesses can strike a balance between AI and human intelligence, directing how the technology benefits clients while making their lives easier and giving them more freedom to pursue more extensive opportunities.