The accounting industry is always ripe for innovation, yet has remained fairly stagnant for a number of decades. But the evolution of artificial intelligence could mean big things coming down the pipeline. Are you ready for a revolution?
What is Artificial Intelligence?
Artificial intelligence is a big, fancy word with a definitive two-letter acronym that’s thrown around loosely in a variety of contexts. But as much as the term is used, few people outside of the tech industry really have a firm grasp on what artificial intelligence, or AI, actually is. As a result, they fail to understand its utility in the accounting industry. So before we do anything else, let’s make sure we have the basics fleshed out.
In the most basic sense, artificial intelligence is a branch of computer science that focuses on the creation of intelligent computers and machines that act with many of the same intelligence patterns as human beings. Computers and systems outfitted with AI can perform tasks like learning, planning, problem solving, and speech recognition.
At the heart of traditional AI is something known as “knowledge engineering. This is a core part of how machines access information and use it to make intelligent decisions. Over the years, the growth and development of machine learning (ML) has opened up doors to make AI even more autonomous and impactful. With certain elements in place, learning allows computers to improve decision-making without any direct supervision or reliance on a limited knowledge base. Instead, it can make choices based on independent deductions and the combination of past experiences. It’s at this convergence of machine learning and artificial intelligence that the future of technology is found.
While we’ve yet to reach the pinnacle of AI and ML, there’s already a powerful revolution underway. Industries like cybersecurity, manufacturing, retail, construction, business intelligence, education, and supply chain management are all experiencing significant change for the better. And it appears as if we can add accounting to that list.
6 Powerful Ways AI is Reshaping the Field of Accounting
“With the exception of computers brought to us by the digital revolution, accounting and finance haven’t changed very much in the past hundred or so years. That is until AI came into the picture and brought its many abilities and capabilities into play,” Innovation Enterprise notes. “In other words, accounting firms used to favor humans for data processing and similar tasks, they’re now looking beyond a human workforce and into one powered by AI.”
We’re only at the tip of the proverbial iceberg at the moment, but here are some of the powerful ways AI is reshaping accounting and enabling it to evolve:
1. Changing Job Descriptions
For many inside the accounting industry, the fear is that too much automation and AI will replace human workers and limit the potential for skilled accountants to make a living. But don’t let the rumors worry you. For the most part, they’re overblown and exaggerated.
“This steady influx of intelligent machines into the finance workforce will not overrun humans, but there is a tipping point for finance jobs on the horizon,” Accenture explains. “As routine tasks become automated, finance professionals will be freed up to focus on more judgment-intensive activities. Some jobs will disappear, others will transform, and new roles will emerge.”In other words, AI won’t render accountants obsolete, but it will change the job description and create new roles. In many ways, it’ll make the career more exciting and compelling.
2. Reduction of Human Errors
According to a survey conducted by Robert Half, 78 percent of senior financial managers believe an increased reliance on technology has had a positive impact on their accounting and finance employees. When asked for their reasoning, the top response was, “[It] eliminates human error.”
“AI presents a tremendous opportunity for companies to improve functions by reducing error and boosting efficiency,” says Steve Saah, executive director of Robert Half Finance & Accounting. “Implementing technology to address routine tasks also frees up employees' time to take on strategic work that adds value to the business.”
In a field like accounting, where a single error can result in fines, penalties, audits, and serious legal consequences, the reduction of human errors is a big deal. As AI accounting solutions get smarter, they’ll play an even more significant role.
3. Mitigation of Repetition
So much of accounting is based on repetition. Data entry, spreadsheet work, reviewing receipts, verifying line items on invoices…the list of tasks goes on and on. Over the years, improvements in accounting software have reduced the amount of time accountants have to spend doing these repetitive tasks. However, there are still thousands of thankless hours dedicated to tedious tasks every single year. AI aims to change this.
With AI, systems are in place to streamline not only the entry of data – but also the review and verification of accuracy. With the right solution, AI and ML can work together to detect and proactively correct errors before they create a problem. And if they do create a problem, it can fix the entire chain reaction – not just the original oversight.
4. Smart Categorization
Data categorization is undergoing significant changes at the hands of AI. Bots are now capable of determining and systematically organizing information into separate accounts without any sort of outside help or influence. In other words, AI is performing a solo performance of sorts.
The newest and most advanced bots are capable of intuitively understanding not only the type of data (or the value), but also the source of the data and how it fits into the larger accounting system. In other words, it’s capable of telling the difference between two different charges from a vendor – one for an ongoing service and another for a one-time purchase a physical product. This may seem like a small perk, but it’s actually very important. It speeds things up and reduces errors.
5. Better Client Support
AI is innovating customer service by improving client satisfaction at the hands of smart chatbots that are capable of assisting in automating responses to client requests on accounting issues. They’re capable of engaging in business dialogue and then directing clients to the best resource or approach. If the bot isn’t capable of resolving the issue, it can put the client in touch with a human accountant or company representative.
6. Improved Cybersecurity
When it comes to cybersecurity threats, concerns, and issues, accounting is one of the industries that’s most heavily impacted. With as much confidential information and data as accounting firms store, there must be significant improvements in security over the next few months and years. AI will lead this charge, helping to protect, secure, and encrypt data so that it doesn’t end up in the wrong hands. This is one area of AI to really keep an eye on. Expect tremendous innovation in the next six to eight months.
Contact Taxfyle for a Free Demo
At Taxfyle, we aren’t waiting for a revolution to occur – we are the revolution. We’ve developed proprietary solutions that are designed to make tax preparation easy for businesses, individuals, and organizations that don’t have the time, resources, or expertise to approach this complicated responsibility on their own.
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For more information, or to try our system with no risk, please feel free to contact us today!
