Inside track: AI for accounting
It’s the acronym on everyone’s lips. AI, short for Artificial Intelligence, has arrived and it’s here to transform the way every industry works - including accountancy. Business Control’s Richard Starkey runs through how it can help accountancy firms and CFOs thrive.
It’s easy and understandable to see new technology as a threat as it overhauls the processes we know. However, AI has arrived to help and improve accountants' work rather than replace them.
By completing repetitive, time-consuming tasks with precision. By visualising data to tell a compelling story. By generating reports and analysing vast data sets for anomalies. AI can be used to streamline the accounting process, freeing up more time to focus on clients and saving money without sacrificing accuracy.
What do we mean by AI in accounting?
Artificial Intelligence (AI) refers to technology that uses algorithms and machine learning to make decisions and complete tasks like a human would. From an accounting perspective, this can take the form of anything from automating tax filing to predicting future financial trends.
At the moment, most AI in accounting is focused on reducing day-to-day admin tasks such as data entry, reconciling client books and real-time data transformation. This helps accounting firms save time, increase accuracy and generally boost productivity. However, AI is also making bold inroads into financial data visualisation, providing real-time financial insight and enhancing security through fraud detection.
Advantages of AI in accounting
Automate time-consuming tasks
Leaving the repetitive jobs to AI will increase efficiency by freeing accountants up for more meaningful work. Data analytics, business strategy or client management, for example. Automating this area of the accounting industry has been growing for some time and has already saved many hours of manual data entry and invoice processing. On the horizon, look out for automation coming into more complex processes such as client onboarding.
Increase data accuracy
While AI means technology that ‘thinks’ like humans, it isn’t actually human - which means it won’t succumb to human error. It also has the advantage of greater precision. Vast data sets can be analysed quickly to recognise patterns and identify anomalies which can be corrected or challenged in real-time. This means greater service and value for your customers.
Improve communications
As the marketing industry already knows: “facts tell, stories sell”. To sell financial advice to clients or board members, AI can create data visualisations that transform hard numbers and complex information into engaging narratives. This approach to presenting financial information will deliver clear and actionable insights that improve decision-making. A valuable and under-utilised skill.
Speed up insights
AI tools work in real-time. Access to real-time client financial performance allows accountancy firms to give better advice on up-to-date figures. On the other side, AI’s knack for identifying patterns and anomalies comes in handy for spotting number gaps, places where figures don’t tally and other clues that accountants recognise as suggestions the rules maybe aren’t being followed. Speeding up a traditionally time-consuming process, AI tools can flag potential issues in real-time to resolve the matter quickly.
Enhance financial forecasting
Strengthen predictive analytics with AI tools to deliver more reliable financial forecasting. AI algorithms can factor in a wide variety of variables, such as seasonal trends and market conditions, to produce quick and accurate financial projections. This helps clients understand the health of their finances and make better financial decisions.
The Human and AI partnership
Bringing AI into accountancy is not about seeking to oust humans but making them more productive. There is no substitute for nuanced expertise, relationship management and emotional intelligence.
Instead, AI tools can help accountancy firms provide a better service. By processing vast swathes of data with absolute precision, AI systems can take care of basic day-to-day tasks such as calculating invoices and ensure that numbers all add up. This frees valuable time for accountants to leverage their experience and knowledge to provide deeper financial advice and strategy. Make your current services more streamlined and introduce new ways to add value to clients with fewer resources.
Ultimately, client relationship management remains a core accountancy skill. No AI system can build secure, trust-based relationships with clients. What it can do is help accountants transform and visualise financial information to communicate insights clearly and concisely.
The trick to the human-AI partnership will be to find the perfect balance between the two.
Future focus for AI in accountancy
So what can you do to stay ahead of the AI curve? It’s essential to understand where AI tools can speed up and strengthen processes and where the human touch will be needed to add extra value.
Here are some areas for future focus to make the most of AI in accounting:
Develop deep industry knowledge
Finance industry veterans will have a level of industry knowledge that can’t be found in AI systems. Each industry will have its own intricacies and require specialised expertise in different areas of the business. While AI can deliver general data process power, insight and analytics, these will need to be contextualised with industry-specific expertise.
Improve soft skills and client management
Having the keenest financial insight in the world won’t mean a thing if you can’t communicate it clearly to other stakeholders. Successful accountancy requires the ability to forge strong, long-lasting connections with clients, to learn their business goals and support them in the right way. Emotional intelligence and creative problem-solving are often needed to adapt to the unique challenges that inevitably spring up.
Learn narrative techniques
This may seem like an odd one but the fact is that humans tend to remember stories, not hard facts. The complexity and volume of financial data can be overwhelming to finance professionals, let alone clients. Presenting financial data in the form of an engaging narrative with clear and actionable insights will help clients understand their financial situation. An underappreciated and invaluable element of accountancy.
If you want a more comprehensive overview of what online accounting can do for your business, download a copy of our free accounting software smartguide.
If you're interested in finding out more about changing accountants, have a look at our smart guide which is all about busting myths where switching things up is concerned. It’s a lot easier than you might think.
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