How AI and Automation Technology Can Assist Accountants

AI is evolving, and with it, the role of accountants is expanding, too. AI and automation are transforming the everyday work of an accountant.

In August of 2022, EA discussed the relevance of accounting automation and AI. However, before we get into the discussion of how accountants can leverage AI and automation, there is still a conversation on the potential perceived dangers of this venture. Questions like:

  • “Will accountants be automated in the future?”
  • “Will AI steal accounting jobs from real people?”
  • “Will accountants become irrelevant due to AI and automation?’

are on everyone’s minds. And rightfully so. 

Let’s find out the answers.

Will Accountants be Automated in the Future?

The question is quite interesting, as well as concerning. With artists, writers, and even programmers protesting the integration of AI and automation in the workplace, accountants are rightfully afraid of their livelihood being taken away by our supposed machine overlords. 

This whole notion, however, is not quite so simple. Yes, AI and automation can indeed handle a chunk of the responsibilities that an accountant is typically expected to manage. Things like bookkeeping, invoicing, and financial forecasts are indeed possible through AI. This, however, is less a cause for concern for accountants and more a new opportunity to explore. 

Are mundane, automatable activities like bookkeeping and invoicing really what accounting is all about?

The truth has always been that anyone can do bookkeeping and invoicing. Many small businesses in the US currently operate without an accountant. A good chunk of e-commerce entrepreneurs are running a one-man show. These mundane tasks were never the real reason why businesses hired accountants. Accountants are so much more than that. A machine can record data, but it can never use that data to make complex decisions. 

Accountants of the future are looking to be more like financial strategists than the “bean counters” they have been labeled for. The only thing that has changed with AI and automation becoming prevalent is that accountants now finally have the opportunity to leverage their complete skill set. With the mundanities out of the way, accountants can naturally transition into their main responsibility: consulting. 

A business hires an accountant so that all that bookkeeping can be leveraged for the business’s benefit. A machine cannot tell you what to do with the data it records. It can create a financial forecast but not advise the best course of action based on said forecast.

And most importantly, accounting automation and AI in accounting cannot think critically. AI can tell you how much money you made but cannot tell you how to best spend that money. All these strategic decision-making activities are the true value accountants add to a business. 

IMA President Jeffrey Thomson (2018, p. 8) observed that “These changes [AI, machine learning, robotic process automation, etc.] are redefining and
expanding the role of accountants and making our cultivation of skills such as data analytics, data visualization, storytelling, and strategic management more important than ever before…”.

Just like the accounting industry accepted accounting software and started using it to their advantage, AI is no different. It is a tool to be used and is not going anywhere. So, instead of worrying about AI in accounting stealing your job, get excited at the prospect of opening new horizons thanks to AI assistance.

How AI and Accounting Automation Can Assist Accountants

Automated Data Processing Saves Time

Accounting automation is a revolutionary technology for the profession and not something entirely new. Automation in various accounting activities has been happening for over a decade now. But what is new is the ability to automate not just data collection, but also data processing.

Accountants no longer need to spend hours analyzing various kinds of data, such as marketing data, consumer trends, business financial performance reports, etc. Instead, AI and accounting automation can take all of the data from across the business and create a detailed report summarizing everything. Then, accountants need only spend their valuable time thinking of ways to leverage the processed information to the business’ benefit. 

Instead of doing all the mundane data processing and gathering, accountants can focus on adding value to the business with said data. They can spend more time in more complex activities for business growth.

Streamlining the Auditing Process

Audits are a very busy time for any business. The whole process can take weeks and months for larger businesses. Audits are all about collecting vast swathes of financial data and cross-referencing it with other records and statements to ensure no discrepancies or signs of misconduct. Audits are immensely important for businesses. The process keeps everyone involved honest and ensures that the business is not doing anything underhanded. Plus, it is a regulatory requirement for many in the US. 

With accounting automation and AI, the whole audit process can be streamlined. All of the necessary data collection and comparisons can be done through algorithms. Machines are incredibly adept at pattern recognition and can perform the same work in hours instead of days.

With audits being doable so quickly and easily, businesses can conduct them more regularly to weed out problems and save time from auditing. They can utilize their time in activities that drive business growth.

Enhanced Fraud and Error Detection

With streamlined audits comes the additional benefit of increased fraud detection efficiency. Internal financial fraud is a big problem in the business landscape, and trying to root it out can prove quite difficult. But with accounting automation and AI, things have become much easier. Just like with audits, accountants and business owners can leverage AI’s data processing abilities to get a report on discrepancies. 

This enhances not only fraud detection but also error detection. Sometimes, mistakes just happen, and by using AI as a financial control measure, accountants can save themselves the extra paperwork of rectifying a problem and correct it before it has a chance of making issues. 

Automated bookkeeping is also incredible for error mitigation. Human error is the most common, and removing people from the equation is a surefire way of curbing bookkeeping mistakes. A word of caution, however, is that should the automated bookkeeping program get a bug, there is a potential for multiple errors to happen. 

Encourages a Client-Focused Accounting Approach

Thanks to AI solving mundane issues, accountants can leverage the time they save to enhance the quality of their services. Tailoring your accounting services to a client’s wants and needs is very important and crucial if you want word of your practice to spread. We live in a day and age where clients are willing to pay a premium for a personalized experience. 

Accountants can not only enhance the quality of their services thanks to accounting automation, but they can also increase their clientele. All that saved time can be spent helping more clients. On a purely commercial level, this is a great investment. But also, on the ethical front, accountants can do so much more for the business landscape with AI than without it. The pros seem to outweigh the cons heavily. Anyone fearing for their career security can surely recognize that there is untapped potential waiting to be explored with AI and accounting.

Keeping the Discussion Going

These are just some of the new AI and accounting automation applications that have recently popped up. We still do not know much, and the possibilities are seemingly endless. So, instead of letting the discussion end here, let’s keep it going. We would love to hear what our readers think about AI in accounting and finance. All thoughts and opinions are welcome, and if you would like us to cover anything we missed in this blog, let us know!