24 April 2023

How Is Artificial Intelligence Changing the Accounting Industry?

AI for accountants

Artificial Intelligence in Accounting – Challenges and Benefits

It is not news that technology is continuously revolutionising industries. In the coming years, disruptive technology such as artificial intelligence will profoundly impact the employment landscape. It is no surprise, then, that the era has been dubbed the fourth industrial revolution. To that end the accounting and business advice industry is no exception. Artificial Intelligence for accounting is gradually becoming a central feature in the industry, and businesses that are yet to adopt this emerging technology risk being left behind. Ai has sophisticated data analysis capabilities that can make accounting tasks faster, less complex and less prone to errors. As an accountant or business advisor, understanding h ow Ai can enhance your work and drive change in the accounting industry is critical.

Ai systems cannot replicate human intelligence. Indeed, some experts would dispute the use of the term ‘Ai’ at all to describe current machine learning systems. However, despite not yet matching the capability of a human brain, many machine-learning systems can outperform humans when it comes to accuracy and consistency on specific tasks.

What Are the Advantages of Artificial Intelligence in Accounting?

Reducing time spent on non-core skills.

The main benefit of Ai technology is that it can collect and analyse data at a much faster rate than humans. So if you’re a sole trader or small business, it has the potential to reduce time you spend wearing various “hats” such as marketing, invoicing and general admin. Tools such as Canva and ChatGPT can become your very own mini marketing department. What these tools won’t be able to do however, is work out marketing strategy or create, plan, and execute regular campaigns. For this you will need a human!

Transcription tools such as Otter Ai can massively help with remembering key points in meetings and turning meetings into action. It can be particularly useful for remembering key issues raised by potential new clients in discovery meetings.

Automation of repetitive tasks:

Some of the routine accounting tasks, such as data entry and reconciliation, can be tedious and time-consuming. Ai-powered automation tools can make these tasks faster and more accurate, freeing up accountants to focus on more critical issues. Automation can also help manage large data sets by providing a quicker and more efficient ways to classify and organize information. Software such as Free Agent for example, allows finance professionals to speed up processes such as payroll and processing expenses.

Improved accuracy

One of the significant concerns in accounting work is the possibility of errors, which can cost businesses in reputational damage and lost revenue. Ai-powered accounting tools can reduce the chances of mistakes and offer more accurate results. For example, Ai-powered tax preparation software can collect and analyse data, identify tax deductions and errors, and ensure that tax returns are completed accurately. Xero Tax for example, helps accountants to manage tax preparation, lodgement and compliance tasks for their accounting or bookkeeping clients, even if they’re not using Xero.

More insight faster!

Ai allows accountants and business advisors to extract actionable insights and patterns from financial data that would take too much time for a human being to identify. These insights can lead to more meaningful recommendations for clients and enable accountants to provide valuable advice to businesses of all sizes. Software such as Clearview speeds up budgeting, cashflow forecasting and business planning, so you get to the key insights quicker for your clients.

Enhanced auditing

Auditing is one of the most important aspects of accounting work that demands accuracy and attention to detail. AI-powered auditing tools can quickly identify patterns and anomalies in financial data that may go unnoticed by human auditors. These analysis tools can make the auditing process quicker and more efficient and offer a level of analysis and insights that may be challenging to achieve with manual processes.

Advanced Fraud Detection

Accounting firms are now using Ai-powered analytics tools to detect fraudulent transactions and identify potential risks. Ai-powered fraud detection systems can keep a close eye on large sets of financial data and quickly identify anomalies or fraudulent activities. This not only helps accounting firms to take corrective actions but also prevents fraud from happening in the first place.

Streamlined Financial Reporting

Ai-powered accounting and financial reporting software such as Clearview can automatically retrieve and process financial data, removing the need for accountants to do repetitive jobs such as manually entering individual transactions. So Ai enables accountants to generate financial statements, cash flow forecasts, management reports, budget reports, and other documentation swiftly, freeing up time to focus on business strategies and advisory roles.

Predictive forecasting:

Predictive analytics is one of the most significant advantages of Ai for accountants. By analysing past accounting data, Ai-powered tools can generate insights and projections that can help businesses make better decisions about the future. Predictive analytics can help businesses predict future expenses, revenue, and cash flows that can be critical for budgeting and forecasting.

Clearview provides a full set of integrated reports that are visually pleasing for advisors to share with their customers. With profit & loss, balance sheet and cashflow statements, businesses can generate reports on the fly and understand where the numbers come from. Simply put, Clearview helps accountants and business advisors serve more clients, quicker.

Personalised advice:

Ai-powered chatbots and virtual assistants are becoming popular in the accounting industry. These tools can provide personalised advice and support to clients, assisting them in navigating financial decisions and offering insights into their financial health. Additionally, these chatbots can carry out automated tax calculations, track expenses, and provide daily reports.

Should Accountants Be Worried About Ai?

It’s understandable that accountants and business advisors would see Ai as a threat. Ai enables us to process data at lightning-quick speeds, however the field of accounting requires far more than that—it calls for critical thinking and decision-making abilities honed through experience. Accountants must possess knowledge in intricate financial regulations, laws, and ethical dilemmas which can only be acquired with study and practice.

As with all new disruptive technologies there will be gains and losses and accountants have plenty of reasons to be excited about the dawning age of artificial intelligence. Ai can take tedious tasks off our hands and free up valuable time; so, there is a lot for accountants to gain with this revolutionary technology! Nevertheless, it’s understandable why some may view these advancements as causing disruptions in job security. However, accountants and business advisors will remain vital for individuals and businesses for many years to come. Until there is a technology that can help make business-driven decisions, accountants and tax professionals needn’t worry.

By taking steps now and embracing automation software you will remain relevant within the industry moving forward. As with most professional services these days from HR to marketing to law, as long as you stay up to date with the latest technologies, you can be sure that you will still have a career in accountancy or advising.

Ai systems are revolutionising every aspect of our world. With ever increasing capabilities and a unique set of skills, they’re unlocking possibilities previously unthinkable – all without replicating what makes us human in the process!