The Role of AI in Accounting
Updated: Jun 24, 2021
AI allows computers to make predictions and adapt how they respond in certain situations. As consumers we come across artificial intelligence (AI) on a daily basis, we can ask Siri or Alexa what the weather will be tomorrow, or your Nest sets your air conditioner to 70 degrees every day at 6pm based on your patterns. We also experience AI when we log into a webpage and a chatbot addresses our customer service needs, and Netflix does a great job suggesting films you may like based on your previous reactions and choices of film. Coming across AI is almost inevitable in today’s modern world, accounting is no exception to the impact of AI.
What is the role of AI in accounting? The role of AI in accounting is to streamline the business, increase productivity, improve accuracy, and reduce costs.
Streamline
AI streamlines business operations by providing real-time data at all levels of the organization, it is likely that your organization already uses this by having a cloud-based software that allows authorized users to view accounting information from anywhere at any time. In addition, AI has allowed businesses to streamline the process of interpreting invoices and performing the accounts payable process. Some invoices are simple, other invoices are more complex and this is where AI learns over time how to process the more complex tasks. Machine learning algorithms with the support of business rules can identify and extract required data from documents, input data into required documents, link data for exception rules, and route documents to the appropriate individuals for validation.
Increase Productivity
According to Levi Morehouse, CEO of Ceterus, you can expect to use accounting AI and the cloud to compute massive amounts of data in short time periods and AI can amass data, as well as find patterns and anomalies, so that you and other financial team members can make better-informed decisions. AI analyzes large volumes of data at a speed much faster than human manual work.
Improve Accuracy
One of the main reason organizations hire accountants is for accuracy, AI complements this accountants’ attribute. A great example of how AI improves accuracy is reported by Sarah Ovaska-Few for the Journal of Accountancy where she states that “At Deloitte, the excitement about AI is shared by its clients, with auditors showing how they are using AI-based applications to quickly conduct accurate assessments of vast real estate holdings or analyze thousands of contracts to compile the risks a large company faces.” Moreover, on the audit and compliance side, digitizing files makes these files more accessible during audits and makes it possible to audit 100 percent of an organization’s financial transactions instead of a few samples.
Reduce Costs
The reduction of paper use does not only make your business more environmentally friendly, but it also helps reduce costs of office supplies and file retrieval fees. Automatic routing of documents to the proper individuals also reduces payroll costs and allows for better use of human capital to focus where attention is needed.
How do we prepare for it?
Ensure that your team is open-minded, can quickly adopt new technology, and is willing to embrace new learnings.Stay up-to-date with technology and future innovations. At CPA by Choice we know your business requires your attention and we can handle all your accounting needs, we use automation and AI in our processes and ensure that your business can take advantage of these technological advances so that you can streamline the business, increase productivity, improve accuracy and reduce your costs. Have questions? feel free to call us or send us a message.