There is no doubt that Artificial Intelligence has changed technology in the past decade. AI has almost transformed every industry and some significant changes are also brought in the accounting industry by the AI. There are various aspects that certainly improved by AI in accounting as it helps in collecting and analyzing lots of data in a short period of time, with the use of AI accountants can get better insights that further helps them in making a better decision. In this article, we’ll discuss how Artificial Intelligence is changing accounting industry.
What does Artificial Intelligence mean in Accounting?
Artificial Intelligence means improving the abilities of machines in such a way that they can act and make decisions like humans. Developers trying to achieve that by enhancing the machine’s capability to think creatively, independently, and learn from their mistakes so they can make decisions just as humans.
An improved AI can easily perform complex work like analyzing lots and lots of data in much less time as compared to humans and that so with higher accuracy. In the accounting industry, AI can be proved as a big game-changer if used efficiently.
5 Ways Artificial Intelligence can Positively Impact Accounting
In this section, we’ll focus on how the introduction of Artificial Intelligence in the accounting industry can impact the performance of the sector positively. As we know innovation and technology both are very important factors for succeeding in a business or company in the modern era.
We’ll discuss some daily, weekly, and yearly activities that can be enhanced with the use of the latest AI technology.
Accountants Tasks Performed by Artificial Intelligence
- Monthly and Quarterly Procedures
With the use of Artificial Intelligence, it will become a lot easier for the accountants to collect, organize and analyze financial data from various sources faster than any human. The data provided by the machine is undoubtedly more accurate than ever which further helps in the making strategies and monthly or quarterly reports more efficiently.
- Faster Procurement Process
In financial businesses, there is an involvement of lots and lots of paperwork with different formats like excel sheets, balance sheets, and annual reports, etc. Tracking and procurement of all these papers are like an endless nightmare for the accountants. Some software-based on Artificial Intelligence like APIs can easily maintain and process all this data.
- Account Receivable/Payable
There are many accounting software available in the market that uses AI technology for the invoice generation and management process. You can feed a specific account code for every invoice in the software in that way your account receivable and payable will perform more smoothly.
Before the introduction of AI in the accounting and financial sector, auditors need to search for the files in the cabinets for tracking which file is accessed by whom and when. But now it is not necessary, with AI integrated software it becomes very simple to access these files digitally which further ensures that the security and data remain safe as well.
- Expense Management
Accountants need to check and review all the expenses that were made and make sure that all expenses should fall under the company policies. This process is very simple but time-consuming as well. But Artificial Intelligence can perform these kinds of tasks very quickly and accurately than humans.
- Artificial Intelligence Customer Support
Resolving customer queries should be the number one concern of any business. There are a few common queries of many customers that can be resolved easily via chat support based on AI. This can save a lot of money for business therefore many industries have adopted this method to help their customers.
Artificial Intelligence as Smart Assistant
You may have familiar with the smart assistant before like Apple’s Siri, Google Assistant, Bixby, and Amazon’s Alexa. They can perform a specific set of tasks and then analyze your pattern for future decisions.
In the accounting and financial sectors, one can use even smarter assistants than any of the mentioned above as their first line of customer support. AI-based Smart Assistants can also provide clients their information as they requested like amount in the bank account, current asset account status, etc.
There are mainly two types of smart assistants are available right now. The first is Scripted Bots or Chatbots and second is the natural language bots.
The difference between them is that the Scripted Bots or Chatbots look for a keyphrase and then answer the queries from the pre-recorded response.
On the other hand natural language bots are more developed and intelligent ones. They can learn more and more with time and enhance the user’s experience with time. They recognize the human voice and then process each word and after that, they come up with a relevant answer in natural language.
Automatic Allotment and Tagging of Transactions
There is a branch of Artificial Intelligence known as ‘Machine Learning’ in which the system collects data from the past and then identifies the patterns to make decisions. This is a process based on data analysis and making decisions without much involvements of humans.
Some accounting software uses this method for tagging transactions and then assigning them to the correct account. They collect the data from previous tagged transactions and then identifies patterns to make decisions.
With the advancement in AI technology, the ability of decision making by computers will become more precise, relevant, and reliable with minimal human intervention.
Detection and Removal of Abnormalities
Detecting and resolving any anomalies will become much easier and quicker with the help of Artificial Intelligence and machine learning.
Benefits of AI machine learning are that you can perform the full audit of the previous year’s data instead of just a few samples, and obviously, in that way you can find more anomalies that were existed and damaging the data.
Enhances Optical Character Recognization (OCR)
Optical Character Recognization (OCR) is a process of converting handwritten text or printed text into digitized machine-encoded text so they can be edited and stored electronically.
Undoubtedly, AI can open new ways for OCR and helps in enhancing the ability to read text from the documents.
Before the introduction of AI, OCR is only able to detect the numbers but cannot differentiate the importance of the numbers and also if there is even a slight change in the layout of documents than further instructions are required from the humans.
For example, in a receipt, there are many numbers like Date of invoice, credit card number, total amount, etc but all those numbers do not hold the same importance. An accountant can easily recognize this but for a computer to tell the difference between those numbers.
But with Artificial Intelligence integrated with Optical Character Recognization (OCR), the software will become capable to differentiate the documents such as a receipt or invoice on its own.
Effect of AI on Accountants Jobs
According to various surveys and reports, it has been projected that accounting tasks like invoicing, tax, payroll, auditing, and banking will be done by software based on AI.
Now, these studies have arises a question that, How AI will affect the accounting profession?
This means accountants will be free from performing time-consuming tasks like checking receipts and then categorize them according to dates and VAT numbers. Because we all know that tasks like this can be performed more quickly and accurately with AI.
Now, accountants have to focus more on the work that brings value to the company and help the business to grow.
Since AI is able to process data at a faster rate that means there are more data available than ever more decisions has to be made. No matter how much technology evolves there will always be a need of a human to analyze all data and then derive a conclusion from it.
The role of the accountants will surely increase in making financial plans, consulting, capital optimization, process improvement, and many other decision-making areas.
Artificial Intelligence and the Future of Accountancy
We have to accept the fact that AI is slowly but surely changing the accounting industry. The change might not be overnight but it is happening in small increments.
Maybe right now not all the Small and Medium Businesses (SMBs) are able to use AI-based accounting software but this situation will change in the future. Repetitive tasks like auditing will be done by machine learning and with more precision and at a faster rate.
But to utilize Artificial Intelligence to its maximum potential and take advantage to the full extent you need to provide all available data which will only be possible with cloud computing.
We hope that you found this article on how artificial intelligence is changing accounting industry and the future of accountancy. This article is for making you aware of the changes that have been occurred and what future holds for accountants. So you can avail of all the benefits from the changes and be prepared for all the changes that artificial intelligence and machine learning will bring to the accounting industry.