The Use of AI in Accounting

The uptake of AI in accounting practices has created an opportunity for evolution within companies and has cast some fear and doubt for those in the field. However, AI is not here to take the jobs of accountants, nor is it something companies should ignore. Integrating AI into accounting processes can have many benefits and is starting to change the role of accountants as we know it. Further, AI can be useful for CFOs during internal accounting work before those transactions and processes are reviewed or audited by external accounting firms. So, let’s get into how AI can be used by accountants and CFOs and how it will change their roles.

AI in External Accounting

AI cannot take over the accountant’s job; instead, it frees up humans from handling time-consuming and repetitive jobs. AI can also be used to automate administrative tasks, analyze complex data streams, or extract value from customer information to improve your output.

The integration of AI can even go beyond streamlining time-consuming tasks and have benefits such as reducing the risk of fraud, assisting with predictive analysis, and even extracting information for taxes. Performing budget forecasting and other predictive tasks becomes faster and easier with technology that is able to sort through the large amount of data that accounting firms collect. Auditing processes and reviewing documents are just a couple of tasks that large accounting firms are finding ways to automate – and it’s keeping them on top.

AI and Humans

Despite the many uses of AI in accounting work, it is essential to remember what humans can add to data that technology cannot. Accountants give data structure, communicate it effectively to clients, and can strategically and critically analyze data in ways that AI cannot.

Instead of being replaced, the role of accountants will shift from routine work to strategic thinking. With the knowledge of how to use the information that AI sorts through, accountants are still essential – their job is simply made faster by the use of automation. Further, data must be fed to AI in a way that creates greater and more useful end results; humans are essential for this data preparation. AI may prompt new accountant specialties or alter the accountant’s job function, but it is not replacing them.

Challenges of AI

Unfortunately, these benefits do not mitigate the challenges that can come with the implementation of AI. These potential barriers are just as important to understand as companies alter their workflow to integrate automation. AI processes require regular maintenance to ensure the platforms are functioning correctly and there have been no procedure changes. Staff resistance can be another challenge during this process, and it is necessary to be prepared for this possibility. Further, smaller accounting firms can have issues with data limitations if they collect insufficient amounts of data to build models around specific areas for analysis. Finally, with the use of automation technologies, there is the possibility of cybersecurity or data risks that must be understood and planned for.

AI in Internal Accounting

In the position of a CFO, AI can be used to do monotonous tasks like in external accounting agencies, as well as to reduce human error, detect patterns, and represent and forecast complex scenarios. AI can detect issues such as inflated numbers and budget padding to prevent mistakes that humans would miss. As well, the representative and predictive technology can generate scenarios, budgets, and forecasting instantaneously and without the use of unnecessary resources. More effective and efficient processes prevent errors and allow CFOs to focus on tasks and decisions that require the lived experiences that they were hired for.

The technological advancements of AI are not something that can just be ignored. According to The Access Group, any accounting firm that is not actively leveraging AI is already behind the competitor. TCOBI has been providing senior financial and leadership expertise for 40+ years. Let us help your company stay in the competition.