How AI and Automation Technology Can Help Accountants

How AI is affecting accounting

AI tools are transforming accounting 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 the accuracy and timeliness of their financial reports. 

Here are some other ways AI is affecting the accounting industry:

• AI may replace some accounting jobs: AI’s automation functions can potentially 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 their clients are ready for significant financial transactions, such as applying for a business loan and dealing with initial public offerings, mergers and acquisitions, 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.
• Financial analysis: Karl Threadgold, managing director at Threadgold Consulting, a NetSuite enterprise resource planning solution provider, sees numerous people using AI for financial analysis. “Instead of manually going through reports like P&L [profit-and-loss] statements, people are copying and pasting the data into ChatGPT and asking it for insights on where savings can be made or how efficiencies can be improved,” Threadgold explained. “This not only saves a lot of time but also helps identify opportunities that could have been overlooked.”

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 like 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 various 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 also 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. 

How accountants can stand out against AI

Although AI is a helpful tool, Edward Tian, CEO of GPTZero, emphasizes that it can’t replace accountants outright. “Accountants don’t just run numbers,” Tian explained. “There is so much to the job that requires human interaction and specialized skills.” 

Here are some 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 often work with business leaders when it comes to budgetary planning and brainstorming,” Tian noted. “Only human accountants are going to be able to fully understand the vision and goals of a company.”
• Accountants can specialize in various areas: Accountants will be in higher demand if they specialize in specific areas, like tax law or forensic accounting. “I think specializing in a certain industry and being the expert within a niche will help to set them apart,” Threadgold said. “People might be able to automate mundane tasks, but you can’t automate expertise.”
• 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 primary way accountants can stand out from AI is to remain personable and compassionate. No matter how efficient AI may be, most people prefer interfacing with someone 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.