Artificial intelligence is rapidly becoming a part of more businesses’ daily operations, with AI chatbots and product recommendation engines already in widespread use.
According to a study by Big Four firm PwC, 72% of business decision-makers say implementing AI lets their employees focus on more meaningful and creative work.
Major accounting firms have taken note, recognizing the potential of AI for the business accounting industry and pledging to invest billions of dollars in adopting and developing new AI and data analytics technologies.
The use of AI accounting automation isn’t limited to global enterprises: Some modern firms offer AI bookkeeping and accounting services that benefit businesses of all sizes.
So, what does the growth of AI mean for the future of businesses’ finances? How will the widespread adoption of AI transform the role of the finance professional for the better?
Faster processes and improved accuracy
One of the core tasks of traditional bookkeeping and accounting is manual data entry, which, when done by humans, is slow and prone to mistakes. Leveraging AI enables computers to complete tasks and make simple decisions with greater speed and accuracy than humans.
Within the accounting world today, AI is most commonly used to complete repetitive tasks, such as recording data, sorting transactions, reconciling accounts, inputting and matching data from scanned receipts and invoices to transactions, comparing employee expense reports against company policy, and tracking price changes from vendors and subscriptions.
With minimal human oversight, AI can complete these tasks with greater efficiency and accuracy, accelerating access to accurate data used to inform business decisions.
Finance professionals can take on a more proactive, strategic role in your business when manual data entry tasks are performed by AI. Your finance team will have more time to spend analyzing financial data, and building and updating financial models, and have a better line of vision to make proactive recommendations related to your business’ bottom line.
More timely reporting, and advanced financial insights
Traditionally, financial statements are delivered a few weeks after a month closes because of the time it takes to enter data, reconcile bank statements, and prepare the accounting records to create financial statements. Using AI considerably reduces the amount of time finance professionals need to perform the month-end close activities, in turn allowing them to finalize and deliver monthly financial statements in a more timely manner.
When used in conjunction with machine learning and natural language processing technologies, AI can even provide next-level insights into a business’s financial data automatically. The software can interpret the data and help explain the “how” behind the “what” so finance professionals and business leaders can proactively address potential issues or opportunities at a much faster clip.
Instant access to data and real-time financial insights could impact a business’ sales negotiations, hiring decisions, expansion plans, fundraising efforts, vendor partnerships, infrastructure investment strategy and so much more.
Encourages business growth
Using AI within your financial ecosystem unlocks access to more accurate and up-to-date information. But a secondary effect of AI is that it encourages business growth. With real-time access to accurate financial data, a business can move from reactive to responsive.
Instead of making changes at the end of the month, the end of the quarter, or end of the year, businesses can adjust at the moment. Using AI changes the way a business is run. The technology still needs human oversight and financially savvy team members to make high-level strategic decisions about finances. But you can make better decisions faster.
AI technology and the data it provides is becoming a cornerstone of how modern businesses operate.
And by creating a more efficient and strategic finance team and improving their access to data, AI also helps them gain the ability to more closely manage and control money. With that level of transparency and efficiency, businesses can cut costs where they’re inflated and save money. Estimates show that implementing AI within an accounting department can reduce costs by 80%.
The future of AI bookkeeping
While AI tools have become widely accepted in customer service and marketing, their application within finance and accounting is still new, but growing quickly. By some estimates, the AI finance software market will grow to $10 billion in the next few years. This expectation and customer demand is driving innovation and development to improve the technology and apply it to more and more complex tasks.
While some fear the AI technology and worry it will eliminate jobs, it can actually do the opposite. AI completes rote tasks and lets the humans get back to what they’re good at: strategic thinking, creativity and planning. Businesses will always need the critical decision-making capabilities of accountants and bookkeepers, whether they’re using AI technology or not. With strategic implementation, AI can benefit a company in any number of ways.
When you choose to implement AI technology within your finance department, you must do so with intention. AI-powered platforms are there to automate repetitive tasks, not solve big-picture problems. And it goes without saying that leveraging AI to manage elements of a business’ finances can pose risks if it is implemented incorrectly; it’s important to consider how your human finance professionals will work alongside AI to properly manage and maximize efficiency of both ends of the finance management spectrum.
New technology can be intimidating, but when it comes to AI in finance, the benefits far outweigh the costs. When correctly adopted, AI can benefit your finance team and entire company by saving you money, increasing efficiency, and providing access to real-time financial data.
Article published by Accounting Today | 4 June 2021
Author: Swapnil Shinde