Did you know that the global economic growth provided by Artificial Intelligence (AI) will likely reach £11,308,003,500,000 by 2030?
AI in accounting is a fast-growing market. As AI expands its foothold in the finance industry, accountants have the opportunity to transform their daily operations to provide faster and better services to give clients what they want.
This guide will cover:
- What AI is and how it works in accounting and other fields
- Five use cases for AI in the accounting profession
- How to make your accounting smarter with Countingup’s AI
How AI works in accounting and business in general
Before we get into the use cases for AI in accounting, let’s quickly recap what it entails.
Artificial Intelligence describes computers that solve problems on their own without help from humans. These computers are often based on ‘neural networks’ designed to resemble the structure of the human brain.
As such, these networks reorganise themselves to achieve higher accuracy and efficiency. This way, AI builds an artificial brain that identifies and solves issues faster and more accurately than human beings.
Machine learning is a type of AI where computers recognise patterns in data and learn from them. It can be either unsupervised or supervised.
Unsupervised machine learning involves feeding your computer with data, asking questions and waiting for data analysis and results. In supervised machine learning, you give the computer additional knowledge, such as indicating that a batch of documents is fraudulent and another is clear. The commuter then looks for patterns to distinguish one from the other.
The five main uses for AI in accounting
This type of technology has several advantages when it comes to accounting processes. Below we’ve listed the primary use cases AI has in accounting that firms can include in their digital transformation strategies:
- Eliminating repetitive tasks
The accounting profession comes with a number of repetitive tasks like bookkeeping and tax compliance. AI can eliminate some of these tasks from your workload through robotic process automation (RPA) tools. These software tools manage the process of gathering, organising and input of relevant data to help the businesses run more efficiently. This allows you to increase and hasten the amount of readily available data you have at your fingertips.
In turn, AI software overlays then provide faster summaries and analysis you can use to understand the health and direction of a client’s business at any given time.
- Automating invoices and bills
Using similar mechanisms, RPA and AI solutions like AutoRek can review income and expenditure records to detect duplicate mistakes and overpayments. This allows accountants to reconcile the financial accounts of clients faster, and record patterns of mistakes during data entry.
Critically, accounting firms can use AI to proactively respond to challenges their clients encounter before they become too severe. Using insights derived from AI, you can adjust your clients’ financial methods to prepare their businesses for the future and avoid the emergence of systemic problems.
- Supporting cash flow analysis and forecasting
Regardless of the sector, AI can detect irregularities in the system and optimise workflow by assisting with business decision-making in real-time. As the technology evolves and refines, AI in enabling accountants to not only look into past information but forecast what’s to come with more clarity than ever before.
This function is perfect for cash flow analysis and forecasting and already, providers like Fluidly are leading in this area. AI helps you by sifting through endless numbers and transactions to predict if a business might run out of money and when. You can use this information to help clients take appropriate action to reassess their situation and avoid any pitfalls.
- Reducing fraud
AI can also help reduce fraud (accidental or otherwise) by providing perpetual financial auditing processes to ensure businesses comply with local, national, and international regulations (where applicable). Using its algorithms to sort through large data sets, AI flags potential fraudulent and suspicious activities. The technology combs through past transactions to highlight odd behaviours, such as withdrawals or deposits from abroad that are larger than regular sums.
Additionally, AI helps to reduce fraud in digital banking, especially as the number of transactions and volume of data increases. AI looks for suspicious payments or patterns that humans might have missed. AI also continuously learns from human-made corrections or flagged transactions, which allows it to make better judgements in the future.
Even if you run a small practice, ensuring this protection for clients can be an invaluable selling point – especially with AI available to make the process easier..
- Managing expenses
As an accountant, you’ll have experienced the time-consuming and complicated task of revising and finalising expenses to make sure they comply with a company’s business model. Managing expenses manually takes a lot of time and leaves a lot of room for errors.
Software like expensein can monitor and review expenses quickly and efficiently while minimising errors, freeing you up to focus on optimising your client’s financial plan. For example, you can use AI to read all receipts, audit the costs and alert you when a breach occurs.
Therefore, implementing AI as part of your expense management system helps save time and money and ultimately reduces the need for manual intervention from yourself and your accounting team.
- Serving customers with ChatBots
One of the most common uses of AI in accounting and other businesses is ChatBots. Companies use ChatBots on their websites to automate simple tasks and provide an easy and efficient way for site visitors to ask questions. For example, the ChatBots may provide an answer to simple queries, guide the visitor to an appropriate web page, or share relevant contact details.
The main perk of ChatBots is that they’re always active, meaning a client who visits your site outside business hours can still get their questions answered.
Work smarter and save time with your small business clients
You can save time on manual admin and help your clients keep organised records with Countingup’s free accounting software.
Countingup’s free accounting software has been built specifically to help practices manage self-employed and sole trader clients. While your clients get an excellent value business current account with in-built accounting software, you can save your practice time on manual admin.
Countingup helps your clients keep organised records so that you receive structured data in real-time. The MTD-compatible software enables you to review and manage accounts efficiently, with direct access to clients’ real-time organised data. Find out more here.