How Artificial Intelligence Will Impact the Accounting Industry?

Faced with increasing regulations and demands from clients, many accounting firms are now moving to a new kind of workforce to help them with their time-consuming tasks. This new supply of support can help companies with the most complex tasks without asking for a monthly salary. That’s because this new workforce isn’t human, but artificial.

So, What is AI?

Artificial Intelligence (AI) extends the capabilities of computing to a whole new level. It lets systems to make predictions and make changes accordingly – just as humans would. It enables computers to perform machine-based learning, which earlier was left to humans.

In the accounting profession, where people deal with rote tasks, AI is a replacement of human capabilities for the better.

According to a recent survey conducted by MIT-Boston Consulting Group, nearly 85% of people believe that AI leads to competitive advantage, and 79% believe that technology increases the productivity of the company.

Artificial intelligence is being used by many accounting firms where it analyzes a large volume of data at high speed, which would not be easy for humans.

AI in the Accounting Sector

Companies today are embracing and implementing new technologies to streamline their business operations, and one of the operations which is on the top of their list is accounting. That is because AI is providing positive results such as increased productivity, improved accuracy, and reduced cost.

With so many benefits, AI is used increasingly for administrative tasks and accounting, resulting in various structural changes.

With AI, all the data handling and processing is completely automated and is, therefore, one of the key benefits of AI in the area of compliance. So, the data generated by any tax report would have assured accuracy levels and will be generated quickly.

Additionally, with the help of AI, data can be recognized and categorized from different sources to the right accounting head. Many other dedicated tasks that were done by accountants like processing of accounts payable and receivables are easily handled by AI. This leads to improved cost management by companies.

Accounting Tasks Which Machines Can Do

Along with freeing up humans from complex tasks, AI would also help businesses improve their operations. Accountants who embrace the latest innovations in technology will gain expertise, which would make them valuable in business process transformations.

1. Monthly or quarterly close procedure

The sooner you get the numbers, the more time your company has to create strategies about what can be done with the numbers. AI can provide you data from various sources, consolidate, and merge it. This would not only speed up this monthly process but would also be more accurate because of the involvement of machines.

2. Procurement

The tracking and procuring method for many companies is filled with paperwork and use different file formats which may not be compatible with each other. However, machines with APIs can be integrated, and unstructured data can be processed. This makes the procurement process paperless and easier. With the help of AI, one can easily track the changes in price among multiple suppliers.

3. Accounts payable/receivable

The existing system already has an AI-powered invoice management process which can make accounts payable/receivable processing more streamlined with the help of digital workflow. They can learn the accounting code for the respective invoice.

4. Audit

Digitalization tracks which file was accessed by whom and when, which increases the security of data and files. During an audit, auditors need not search file cabinets for documentation as they can easily have access to the digital files.

This, in turn, increases the accuracy and efficiency of audits and makes it possible to audit 100 percent of a firm’s financial transactions instead of just samples.

5. Expense management

Reviewing and approving all the expenses to make sure that they are compliant with the company’s policies can be a time-consuming process. AI makes it much easier as machines can check receipts, review expenses, and warn people if there is any breach.

6. AI chatbots

With AI, machines can efficiently resolve common queries from users, such as when bills are due, the latest account balance, and status on accounts.

AI Doesn’t Mean Job Losses

According to a study, it is expected that accounting tasks such as tax, payroll, audits, and banking would be completely automated using AI. So, what will accountants do now, and how will AI transform the profession?

Artificial intelligence is definitely freeing up accountants from doing menial tasks, and this allows them to widen their roles. We can take an example of auditing of expense claims where AI can be used to remember and implement a company’s expense policy.

This would mean that accountants would no longer have to look through the receipts and categorize dates and VAT numbers. Similar to cloud accounting disruption in the accounting sector, accounting professionals will have to rethink their profiles.

This relieves the number of hours spent on administrative tasks and allows them to deliver more value and better service to clients, as well as focus on the growth of the company and overall success.

What is Left for Accountants?

Having better technology wouldn’t mean anything if one cannot act on it. That’s where the role of an accountant comes. Even if machines can perform all the calculations or initial audit-related tasks, someone would be needed to analyze the process and draw a meaningful conclusion.

With the rise of AI, accountants are expected to move their roles into consulting and advising to ensure that they are taking full advantage of automation while helping their business grow. Moreover, accountants have to focus more on strategic tasks like planning the financial budget, capital optimization, process improvement, and more.

What’s Ahead?

SMBs don’t have the same resources as compared to bigger firms to create their own AI products. However, experts believe that in the coming years, AI would be widely available even for smaller firms at a standard fare.

Artificial Intelligence is already impacting the marketing sector and would also bring radical changes in the accounting sector with a huge possibility of the reduction in costs and increased productivity.

This is in addition to the accuracy and precision which AI can bring in any menial and repetitive manual tasks which have been automated.

In view of the remarkable progress made by AI, this new world would be well-known to accountants long before self-driving truck drops invoices in their office.

Do you agree that AI will change the way accountants work for good? Share why (or why not!) in the comments below.

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