Using Artificial Intelligence (AI) in accounting is no longer a “nice to have.” It’s essential if you want your accounting firm to compete and thrive.
But, a sense of unease and fear often comes with change, especially when you’re not sure how new technology will impact your firm’s future.
It poses the question: Does the rise of AI in accounting mean the traditional accountant’s role is at risk of becoming obsolete?
The answer? It’s complicated.
“AI can process vast amounts of data at a rapid pace, it is not capable of the critical thinking and decision-making that human accountants are trained to do.”
Teresa Gallagher, Finance AI Senior Manager, EY Ireland
AI, while disruptive, is also a catalyst for evolution and opportunity in the accounting industry. Advanced technology helps you become more efficient, reduce errors, and open new revenue streams.
You just need to know how to adapt the way you work and figure out how to use the tools to your competitive advantage rather than fear it.
“AI will look to automate some of the compliance and technical tasks that accountants currently perform. Accountants will need to shift their skill set to analytical, strategic and soft skills rather than pure technical accounting knowledge.”
Keith Stafford, IT Audit Partner, KPMG Ireland
The Benefits of AI in Accounting
Do you remember the disruption to the music industry in the early 2000s when technology created new ways to select and listen to music? In the beginning, record labels fought against the change but were forced to embrace new technologies like streaming platforms to keep up with the demands in the market.
We are seeing the cycle repeat itself with AI – what might initially scare the status quo promises significant mid to long-term benefits for those firms and individuals who can harness the opportunity.
AI is forcing the accounting sector to revolutionise and redefine the essence of accounting practices. And it’s critical because accounting firms risk being left behind if they’re too slow to react.
Here are some ways using AI in accounting and finance can have a significant impact on your firm and cashflow:
Automation of Data Quality Checking
What is the most mundane part of an accounting professional’s job?
- Data entry on complex spreadsheets.
- The risk of errors.
- Endless repetition.
- Switching between different systems
Yet many AI solutions, including Silverfin’s Assistant solution, can help you automate routine tasks in accounting and financial processes to reduce the time you and your teams spend on tedious tasks.
Let’s look at an example.
Working papers
Preparing working papers can take several hours or several days, depending on the complexity of your client file.
But with Silverfin’s AI copilot at your side, the integrity and consistency of your client data is automatically checked as you work, drastically reducing the time spent on these tasks, removing errors and easing resource pressure.
Tasks that once took hours are now done in minutes, leading to greater efficiency and capacity in your firm.
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Reduces Human Error
Relying on spreadsheets? Then you know it’s not a foolproof system.
Human input inherently means it’s susceptible to mistakes.
When dealing with sensitive financial information and stringent compliance protocols, errors are costly.
It can result in you having to repeat tasks, pay fines, or lead to a client cancelling their contract with your firm.
AI can be used to automatically flag any inconsistencies for you to review. All you need to do is review any suggestions, dismiss or create a to-do.
When you combine AI with a centralised data hub, you’re setting your firm up for greater accuracy. You’re always using the real-time numbers from your client’s bookkeeping software, helping you save time and reduce human errors.
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Enhances Data Analytics
A connected data hub with AI capabilities does more than automate the preparation of working papers. It helps you create a proactive financial planning and management environment.
AI in accounting software can analyse vast amounts of data in real-time, identifying anomalies, risks, and opportunities that you might miss or take too long to identify.
When you set up real-time alerts, your firm can immediately respond to market changes or financial anomalies.
Armed with the right data and insights, you can have meaningful advisory conversations with clients, improving their financial health and delivering powerful advice that leads to better, longer relationships.
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Frees Up Time to Focus on Advisory Services
Each benefit of AI in accounting leads to increasing your profitability.
With AI taking on the heavy lifting of repetitive tasks and streamlining workflows in the accounting profession, you can dedicate more time to developing new revenue streams from advisory services.
As accountancy fee pressure mounts, focusing on value-adds to justify your prices and demonstrate your ROI to clients is paramount.
Your role as an accountant isn’t becoming obsolete. It’s evolving from a number-crunch into a strategic partner, and your ability to provide comprehensive, consultative services is invaluable.
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How Is AI Used in Accounting?
So, how is AI used in accounting? Now that you understand the benefits of AI accounting software, let’s look at how artificial intelligence is changing how accountants work.
Efficient Accounts Preparation
Compliance regulations are constantly changing, but there is one constant.
You need to analyse and reconcile large volumes of financial data when performing recurring tasks, such as preparing your client accounts.
The AI algorithms can survey financial transactions and reconciliations to quickly identify anomalies, patterns, and unexpected values that may indicate discrepancies or areas needing further investigation.
AI makes the accounts preparation process more efficient and reduces the effort it takes to complete.
Tax Compliance and Preparation
AI simplifies tax season.
By ensuring the base accounting data in your working papers is accurate, you can complete tax computations faster and ensure compliance with the latest regulations. Reducing the time and effort to complete tax-related tasks.
For example, AI can analyse vast amounts of bookkeeping data and your subsequent reconciliations, making sure there are no omissions or errors.
It assures your tax preparation is efficient and accurate, removing the risk of costly errors.
Identify Opportunities in Data
Before AI in accounting, you had to rely on manually scouring financial data to glean the insights you need to have meaningful data-driven conversations with your clients.
With AI by your side, you’re in a better position to offer advice to your clients and help them manage or grow their businesses. AI can instantly spot opportunities in the data, helping you offer proactive advice to clients.
Training Juniors
AI in the workplace means there is always on-the-job training for junior staff. You AI assistant can highlight what to look out for when analysing a file and give clear and detailed explanations on the checks it’s carried out. This way, when you hire new staff, they can instantly see best practices for working on a client file.
The best part? It is always available, 24×7, and isn’t subject to simple human foibles like forgetting things or making mistakes due to time pressures. Your juniors are in safe hands!
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Faster Reporting
Traditional reporting methods are often manual and time-consuming.
Using AI, you can accelerate the preparation of your client files and the subsequent creation of management account packs.
First, data is auto-populated into your working paper and then analysed in the background using a wide range of AI algorithms and Machine Learning rules. With the data integrity assured, it’s easy to create repeatable management account packs for the whole firm to use, with just a couple of clicks.
These automated reports save you time, allowing accountants to concentrate on data analysis and interpretation rather than repetitive report generation.
Will AI Take Your Accounting Job?
Far from replacing accountants, Artificial Intelligence (AI) is revolutionising your role in the financial industry. It’s steering you away from mundane, repetitive accounting tasks and empowering you to do more meaningful work.
Instead of number crunching, you’re interpreting complex scenarios, identifying real-time trends and threats, and nurturing client relationships.
Trevor Hartshorne, the chairman of cloud-based predictive accounting platform Jazoodle, sums it up aptly: “The future of accountancy is in the value accountants add to a business.”
The Future of Accounting is Artificial Intelligence
As you can see, the rise of AI or artificial intelligence in accounting is an opportunity.
Figuring out how to weave new technologies into your firm is a competitive advantage. When done right, it leads to enhanced decision-making, personalised client services, and unmatched productivity.
So, how is AI used in accounting? The answer lies in the synergy between AI and human expertise. It paves the way for a promising dynamic of innovation and indispensable human insight, opening new avenues for growth and stronger client relationships.
Discover how Silverfin can help your firm reap the benefits of AI and evolve to meet and exceed client expectations. Book a demo today and take the first step towards future-proofing your accounting practice.
