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Artificial Intelligence and the Future of Accountancy: What Do You Think?

Artificial Intelligence and the Future of Accountancy

Artificial Intelligence and the Future of Accountancy: What Do You Think?

When most of us consider artificial intelligence (AI as those in the know say), we tend to think of futuristic robots, self-driving cars, virtual entertainment systems and other sophisticated computer-centric industries beyond our daily realm.

But the truth is that AI is impacting every sector of society, and the accounting industry is no different. Finally! Accounting is getting more cutting-edge. It’s what we’ve all been waiting for. So, here is a look at the evolution of AI and what this means for the future of accountancy.

What is Artificial Intelligence (AI)?

This is a field of computer science that enables problem-solving in machines and consists of sub-sets of machine learning and deep learning. Basically, AI is a science devoted to making machines think and act like humans.

A History of AI

The ‘father of computer science’, AKA Alan Turing, first questioned whether or not machines can actually think in his paper ‘Computing Machinery and Intelligence. He then put forward the now-famous ‘Turing Test’ where a human interrogator was tasked with distinguishing between computer and human text responses. There have been a number of subsequent studies in AI, as well as technological advancements, that question whether computer systems differentiate on the basis of rationality or acting.

AI Terminology

Understanding some of the terminology related to AI will help you better understand its role in accountancy as we read on.

  • Weak AI: Also referred to as Narrow AI or Artificial Narrow Intelligence, this is AI is anything but weak! It’s trained to perform specific tasks and is used in Apple’s Siri, Amazon’s Alexa and self-driving vehicles.
  • Strong AI: This consists of Artificial General Intelligence (AGI) and Artificial Super Intelligence (ASI) but is largely theoretical at present.
  • Artificial General Intelligence: This is theoretical AI where a machine is equally as intelligent as a human, with the ability to problem-solve, learn and make plans.
  • Artificial Super Intelligence: This is where AI eventually surpasses the ability of the human brain.
  • Machine Learning: This is a subset of AI where computers are able to think and act with less human intervention while using structures modelled on the human brain.
  • Deep learning: This is a subset of machine learning where a machine can analyse images, videos and unstructured data which machines can’t easily do.

What Are AI Applications?

Before we delve into the specifics of AI for accounting, here’s a look at the current AI applications. Then we’ll get into how these can enhance the future of accounting.

  • Computer vision: This is where AI technology analyses digital images, videos and other visual elements to derive information. This is being used in social media photo tagging, radiology imaging and self-driving cars.
  • Speech recognition: This is a natural language processing (NLP) application that processes human speech into a written format as seen in speech-to-text and Siri.
  • Recommendation engines: AI algorithms can check past consumption behaviour data to uncover trends for sales’ strategies.
  • Customer service: These are online chatbots that assist you with online questions, shopping and other retail- or service-related information.

What Are the Benefits of AI for Accountancy?

So, now that we have a fairly solid grounding in AI applications, we can narrow it down to the area of accounting. Here are the many advantages you can expect when implementing leading software:

1.     Increased productivity

AI can assist accountants in improving efficiency and productivity by drastically reducing the time it takes to perform manual tasks required for every client. This automation will also decrease the risk of error and improve the quality of work. In a field like accounting where even one error can have a major impact, this is great news!

2.     Attracting new clients

The new generation of clients has grown up with technology so they’re much more likely to work with an accounting firm that adopts the latest in AI. Data insights will assist accounting firms in better understanding their younger clientele and developing ways to attract their business.

3.     Automation

By combining AI with other technologies – such as robotic process automation (RPA) – accounting firms are able to automate everyday manual tasks such as purchasing, invoicing, purchase orders, accounts payable and receivable. This means more time can be directed on high-value, strategic tasks that increase the abovementioned productivity. Machine learning tools can also read through lengthy contracts and documents which assists auditors by reducing administrative time.

4.     Real-time updates

Using AI, accountants can gain real-time updates on financial information through natural language processing. This valuable insight into current trends and proficiencies can then be used for enhanced decision making so that companies are more proactive.

5.     Legal compliance

Accounting firms need to adhere to stringent local, national and international regulations which are constantly changing while working for different companies with complex internal and external requirements. Fortunately, AI-enabled systems have machine learning capabilities to sift through extensive data and maintain compliance with necessary regulations.

6.     Minimise error

Through AI implementation in accounting operations, businesses are able to minimise the risk of human error. When it comes to accounting, even a minor error can snowball into a real problem later on, which makes AI hugely impactful.

7.     Fee reductions

Because AI is able to provide accountants with much faster, more valuable data insights, there is a significant reduction in time spent per client. This means that firms can take on more clients at a lower cost, saving them money.

8.     Better security

The ability of AI to sift through vast quantities of data at one time means that any discrepancies or security concerns are quickly identified and flagged. With cybersecurity a major concern heading into 2022, and the incredibly sensitive data dealt with by accounting firms, AI appears to be a valuable solution for secure data storage and protection.

9.     More opportunities

The introduction of AI for private and public accounting firms means more in terms of career opportunities. This is because accountants can focus on higher-level duties suited to humans rather than machines. This paves the way for more innovation in the accounting sector.

10.  AI gets smarter

At the risk of entering the sci-fi realm of robot overlords, AI continues to get smarter and learn from errors through feedback loops. This makes the system that much more effective over time which improves accounting operations.

What to Consider When Implementing AI in Accounting

Whatever way we look at it, the pandemic has precipitated the fourth industrial revolution and accounting firms need to embrace this new reality. Here are three tips for making this change.

Tip #1: Learning about AI

Accountants need to be fully briefed on the role of AI and how it can be best implemented into day-to-day operations. There is not enough understanding about how AI is becoming immersed in almost every sector, and a lot of reluctance to adopt AI technology. With a proper briefing and informative display, accounting firms will certainly get on board.

Tip #2: Incorporating human skills

It’s important to note that AI technology is not about replacing humans, but rather complementing the skills but removing the timeous, repetitive tasks and freeing up time for more value-adding projects. Accountants can now focus on non-automation tasks including communication, relationship-building and identifying areas of opportunity.

Tip #3: Getting a head start

AI is coming, one way or another, and delaying its implementation just means the firm is going to lag behind when the time does eventually come to adopt this innovative technology. The best move now is to start researching AI software to find the right fit.

Leading software supplier, Omni Accounts is undoubtedly your best starting point. They have a team of industry experts ready to assist you with sourcing the best solution for your accounting needs, implementing it and providing the necessary ongoing support that ensures you maintain a competitive edge.