Getting Started With AI: A Practical Guide for Accounting Firms

Accounting firms are evolving drastically. As an accountant, imagine taking the age-old manual data entry and reconciliation approach to meet increasing demands and evolving customer expectations. Not only your productivity, but also your reputation can go for a toss. This is where AI comes into the picture. 

AI transforms accountants’ functions by automating repetitive tasks and offering deeper insights. That’s why 59% of accountants stated that adopting AI saves 30 hours of labor weekly.

Furthermore, a survey by Thomson Reuters reports that 82% of accounting and tax professionals believe AI can be a positive force.

Although you might be eager to jump on the AI bandwagon to reap all its benefits, adoption can be a challenge if not planned properly. Here is a guide to ensure accounting firms adopt AI efficiently. 

Applications and Benefits of AI in Accounting 

Let’s examine the areas in accounting where AI can make a significant difference.

1. Expense Management  

AI tools can automate the expense management process with automation workflows to manage the accounts payable process. With technologies like OCR (Optical Character Recognition), relevant data, like invoice numbers and vendor details, can be extracted automatically from an invoice.   

2. Predictive Analysis and Forecasting

AI tools analyze historical data to provide deep insights and predictions. It helps accounting firms identify cash flow issues, detect patterns, and provide more strategic advice to clients.

3. Client Communication 

Effective client communication is vital for a service industry like accounting. AI/ML technologies, like NLP (Natural Language Processing), help generate automated responses and schedule meetings, reducing the total turnaround time.   

4. Auditing and Compliance

Advanced AI-native solutions can enhance compliance management by automating tasks like reporting, data monitoring, risk detection, and more. 

5. Fraud Detection

According to ACFE, $3.1 billion was lost due to fraud worldwide. AI tools help detect fraud by identifying discrepancies in invoices, purchase orders, and bills. It can also automate the reconciliation process, reducing manual errors.   

6. Advanced Reporting

AI can generate advanced reports based on large data sets, which offer valuable insights like spending patterns, unusual behavior, and vendor payment trends. It can also consolidate multiple reports to create actionable suggestions.  

Best Practices to Get Started with AI in Accounting 

To implement AI in your accounting firm and utilize its full potential, it is essential to follow a refined approach. Here are some best practices for you to consider.  

1. Analyze the Current Accounting Process

Before embarking on the AI journey, accounting firms must analyze their current process. You need to identify the pain points that hamper productivity. Moreover, it lists all time-consuming manual tasks that require automation. Focus on areas where AI can deliver quick wins. Furthermore, you must make a report of all tools currently used in the firm and identify the ones that need to be replaced. 

2. Draft an AI Strategy

Once you have evaluated the current accounting process, it is time to draft an effective AI strategy. An AI strategy ensures all adoption roadblocks are addressed, and procedures are created for the same. Moreover, it also helps you set timelines for adoption and ensures optimum productivity.  

To create a foolproof strategy, all major stakeholders in the accounting firm, including the CIO, CTO, and CPAs, must be involved. Take their feedback to build a long-term roadmap. 

3. Choosing the Right Tools

There are diverse AI tools available in the market that cater to different accounting requirements. You must choose the right AI tools and platform for your firm. Consider the tools that can integrate well with your existing technological stack. 

Moreover, check the tool’s scaling capabilities and whether it can accommodate your future requirements. You must also consider factors such as ease of use, vendor reputation, customer support, and ROI.   

4. Train Your Team

Adapting to change is never easy for humans. Therefore, before introducing AI and automation in your firm, creating a comprehensive AI training program that inducts the workforce into AI-based tools, procedures, and methodologies is vital. Neglecting proper and regular training sessions can lead to increased adoption time, operational bottlenecks, and errors.  

5. Ensuring Data Security and Compliance 

The efficiency of AI training modules depends heavily on processing large data sets. However, handling large amounts of data brings security and compliance challenges. 

Therefore, you must ensure that the chosen AI tools implement advanced security protocols to protect critical client data from data threats. You must ensure vendors comply with all regulations, such as GDPR, HIPAA, or SOC2. 

Furthermore, you must establish data governance policies in your firm to ensure the ethical use of AI and accountability mechanisms. It is also imperative to update clients about the use of AI tools.   

6. Run Pilot Tests

Introducing AI in the accounting process can be a big development for accountants. Therefore, before jumping all in, it is recommended that you put a toe in and run pilot tests first. 

Start by identifying the low-risk processes where AI can be implemented. If the implementation goes well, gradually scale by moving to high-risk processes.   

Case Study: Deloitte Adopts AI and GenAI for Internal Audit

Deloitte introduced the features of Artificial Intelligence to its internal audit process. Deloitte’s proprietary tools for Dynamic Risk Assessment, Controls Monitoring, On-Demand Product Oriented Delivery (POD), Assurance Mapping, and Internal Audit Reporting have AI capabilities now, enabling audit teams to achieve high productivity, detect critical errors, and draft effective strategies.    

Gabriela Rodriguez Elesgaray (Associate Director in Algo & AI Assurance) said, “I feel excited to be riding this wave of innovation at the firm. These GenAI capabilities will allow our team to harness more sophisticated data analysis, and by combining these insights with our professional expertise, we will be able to inform more effective and efficient decision-making.”

The Impact: 

1. Complete Data Coverage

Where, previously, accountants used to sample transactions manually, Deloitte’s AI infusion enabled full-population testing. It empowers them to inspect all transactions in real time.

2. Time Savings and Efficiency

Deloitte has streamlined data intake and caught errors more quickly, minimizing the time spent on tasks that don’t add much value. This lets auditors concentrate on understanding the findings and giving more strategic advice.

3. Enhanced Accuracy

Machine learning tools help them spot mistakes faster, reducing the chances of risks in sensitive accounts.

4. Client Insights

Clients can receive more insightful reports with dashboards showing real-time trends, risks, and actionable recommendations.

Best AI Tools for Accounting Professionals

Here are some AI tools accountants can adopt to automate their accounting processes.

Vic.ai

Vic.ai is an AP automation tool that optimizes spend management by automating invoice processing. Vic.ai integrates with accounting solutions like QuickBooks Enterprise and Sage to help you create a comprehensive accounting solution.

Zeni

Zeni integrates AI into your bookkeeping process. It is designed for startups and small businesses and offers AI-based expense categorization, vendor verification, reconciliation, receipts analysis, and more.  

ChatGPT

ChatGPT has gained immense popularity in a short time. It helps accountants summarize reports, communicate with clients, conduct market research, and more. Moreover, accounting firms can use ChatGPT to create marketing materials like newsletters, brochures, and websites. 

Docyt

Docyt is another AI-powered tool that automates expense management, bookkeeping review, document processing, and data management. You can create accounting workflows and customize them as per requirements. Docyt also offers an intuitive dashboard that provides accountants with actionable insights. 

Activeloop 

AI PDF Summarizer – Automatically extracts and highlights key ideas from dense documents like tax reports, audit files, and financial analyses, saving time and enhancing accuracy when digesting large-scale reports.  

Recommended Reading: 9 Best AI Tools for Accounting Professionals

Checklist: Best Practices To Get Started With AI In Accounting

AI in Accounting Can Be a Game Changer

Artificial Intelligence is transforming various industries worldwide, including accounting. It enhances accounting accuracy by reducing human errors. Moreover, it helps save accountants’ time by facilitating automation. The above guide will ensure a hassle-free transition to AI tools. 

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