Merging AI and Accounting FunctionsAnkur Shah
Tech trends of the future have people anxious about many things, but nothing that seems to be so frightening as people watching robots and machines perform human-like activities and cognitive functioning. They may joke about the future world being dominated by robot armies or becoming slaves to machines, but these quips are often just cover acts for the unease and anxiety that is hidden deep inside. The entertainment industry has done very little to calm the unrest, considering the impact of films like “I-Robot”, “Transformers”, or “Age of Ultron.” However, there is more to artificial intelligence (AI) or higher functioning machines than the evil disposition than science-fiction followers would have you believe. While AI has exceeded the expectations of its developers, it has not become the new master nor has it become fully automated on its own accord. There is no fight for the rights of machines against human survival. In fact, improvements in human existence can be linked to the impact AI brings to many industries. Consider the field of healthcare.
Integration With Accounting
According to the United CPA Association, the field of accounting is also experiencing a movement of AI integration. A new workforce is needed to keep up with the increasing changes in regulations and an ever-demanding clientele, and the time-consuming tasks and complex operations of accountants is a good fit for AI systems. An accountant who works on their own may not have the funds to hire support staff, while accounting firms might wish to spend their resources in other areas. However, AI operating systems have an initial cost associated with integrating the devices or software, but their subsequent uses don’t ask for a weekly paycheck. This effective workforce isn’t human, but it can provide the labor of one or more employees.
The systems that rely on artificial intelligence are capable of taking computing activities to a highly complex and unmatched level. The systems are able to make predictions, calculate options, and make changes according to how humans would but with more accuracy and much more quickly. Computers have been improved to the point where machine-based learning has surpassed human capabilities. Within the realm of accounting, the mundane and rote tasks that can consume an accountant’s time can be completed more efficiently with the integration of AI. So far, incorporating AI into a business operation has been met with a fair amount of success. More than 80% of the individuals surveyed in a study conducted by the MIT-Boston Consulting Group believe that the use of AI will give their company a competitive advantage, while 79% of them feel that this technology can increase a company’s productivity. The special use of AI in accounting is beneficial for the analysis of large amounts of data that are difficult for even the most seasoned accountants.
Integrating AI and Accounting
One of the top areas of AI integration for many businesses is that of accounting. The positive results that AI is bringing to the field have been able to reduce operating costs, improving data accuracy, and increase task productivity. Although there are ways to assimilate AI into administrative tasks, there are many structural changes that can be made throughout accounting departments. When a company uses AI, the processing and handling of all data become completely automated. This provides a key benefit in the areas of compliance. The tax reports run by accountants contain massive amounts of data that need to be accurate at the highest of levels to avoid penalties and fines, but the accuracy check needs to be done quickly. Using AI, the data can also be recognized, sorted into categories, and sent to the right accounting parties. Some of the dedicated tasks of accountants, such as accounts receivable and payable, can be handled by AI. This can improve cost management strategies, as there is less overhead to contend with but with greater results.
Matching Tasks and Machines
More than freeing up human time by completing complex tasks, AI can help improve their business operations in other areas. Incorporating tech innovations will give an accountant an edge, as it will develop an expertise that can transform their business processes.
1. Quarterly or Monthly Closings
Many companies or accountants are required to conduct monthly or end-of-the-quarter reporting. This data is needed in order to develop strategies for the next accounting period. AI systems can deliver the data by pulling it from various sources, considering it, and merging it in a matter of moments. This speeds up the amount of time it takes to complete the month-end process and but it can also improve the accuracy of the results and consequential decision-making.
Companies can drown in paperwork, trying to move files between systems that might not be compatible with each other. In areas of tracking and procuring, API systems have the potential to be integrated, allowing unstructured data to be processed. A paperless procurement process is easier and less costly. Using AI, it easier to check the prices of products and materials across several suppliers.
3. Accounts Payable and Receivable
There are some AI-powered invoice management systems already in play within companies, but new developments will continue to make the accounts payable/receivable processing system more streamlined and in harmony with the digital workflow. These AI systems are able to develop recognition for accounting codes and associating them with the respective invoices.
Accountants deal with a lot of sensitive data, and audits are an important way to keep the accuracy of the information a priority. Digitization of information makes it easier to access information, as well as when the information was last accessed and by whom. This improves the efficiency and accuracy of audits and helps confirm 100% of a firm’s or accountant’s financial transactions. There is no need for searching through multiple filing cabinets and documentation, as a software system is able to generate reports with the push of a button.
Bringing AI into an accounting practice isn’t going to release an army of uncontrollable robots that will steal your job and destroy your clients. It will do the opposite. AI can improve the way you handle customer accounts, help save you money, and ease some of the mental and physical stresses of the job.