Embracing the power of artificial intelligence Embracing the power of artificial intelligence

Embracing the Power of Artificial Intelligence

  • 25 April, 2022
  • By Jim Harper

AI has revolutionized every industry and has become an indispensable part of our everyday lives. It has transformed one such industry- Accounting. AI has brought tremendous benefits to the accounting world. Artificial intelligence (AI) has emerged as a game-changer for the bookkeeping and accounting industry. With its ability to automate tedious and time-consuming tasks, such as data entry and categorization, AI is changing how businesses manage their finances.

Let’s delve into the fascinating fusion of AI and accounting and discover how AI can revolutionize the accounting landscape by automating and optimizing accounting processes for unprecedented accuracy.

Growth of AI in the Finance Sector

The Artificial Intelligence in Accounting Market is expected to register a CAGR of 30% over the forecast period (2022 - 2027).

Growth of AI in the Finance Sector

The Artificial Intelligence in Accounting Market is expected to register a CAGR of 30% over the forecast period (2022 - 2027).
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The Fintech industry experienced significant growth over the years, but 2020 proved to be a particularly noteworthy year. The global pandemic brought about a wave of change everywhere, and the Fintech sector was no exception. With governments and authorities encouraging the use of digital payments to limit the spread of the virus, businesses needed to adapt it quickly. AI-based accounting software made it possible for businesses to manage their finances remotely and securely without the need for physical contact.

According to a study carried out by MIT Boston, accountants worldwide are contemplating using artificial intelligence (AI) to complete various accounting tasks. These tasks include precise automatic data reconciliation in clients’ accounts (50%), handling HMRC (44%), and avoiding clients from entering inaccurate information (45%).

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As a business owner, it's natural to feel overwhelmed with managing the ins and outs of accounting, especially if numbers aren't your forte. You don't have to let accounting tasks consume all your precious time and energy. One solution is to outsource your accounting needs to professionals who can handle everything from business bookkeeping to tax preparation.

How is AI Simplifying Accounting?

The impact of Artificial Intelligence (AI) on the accounting industry has been nothing short of a transformation. In the past, accountants would spend countless hours manually processing invoices, analyzing financial data, and generating reports. In recent years, Artificial intelligence (AI) has emerged as a game-changer for the bookkeeping and accounting industry. In addition, AI can help identify potential errors or inconsistencies in financial records, enabling businesses proactively address issues before they become significant problems.

Here are the following ways AI is simplifying bookkeeping.
  • 1. Invoice Management
  • Artificial Intelligence has transformed our daily lives. From Ok Google, and Alexa to chatbots, AI has made everything faster and more convenient. And now, AI is also revolutionizing the accounts payable process of businesses. AI-powered automated invoice processing has helped in faster invoice processing, enhanced data accuracy, and increased productivity.
    One of the invoice data capturing solutions is Template-based invoice OCR (Optical Character Recognition) software. OCR-based invoice data capture is a powerful tool that allows businesses to convert images into text. With this technology, companies can quickly and accurately capture important invoice data, streamlining their processes and improving efficiency.

  • 2. Reconciliation
  • Say goodbye to the tedious task of reconciliation with AI technology. Bank Reconciliation is a critical step in ensuring the accuracy and completeness of financial records. It involves comparing the transactions recorded in the accounting software with those reported by the bank on the monthly statement. With the ability to compare transactions in accounting records to those of financial institutions, errors are easily identified and quickly pointed out, saving bookkeepers valuable time.

  • 3. Auditing
  • The advent of AI is revolutionizing industries, particularly in auditing. AI-powered systems effectively analyze data, detect fraud, and expedite the auditing process, providing unmatched benefits. Certified Public Accountants (CPAs) are continuously seeking innovative ways to improve the efficiency of their auditing and risk assessment processes. By integrating the latest technology, such as Artificial Intelligence (AI), CPAs can analyze massive amounts of data and enhance their overall audit performance.

  • 4. Data Entry
  • By utilizing OCR technology, AI can extract data from invoices and receipts to quickly and accurately record transactions in ledgers. There are several AI-based data extraction tools that can simplify accounting.
    With the power of AI, you can take advantage of predictive analytics and forecasting to anticipate potential payment issues before they arise. It allows you to take proactive measures and avoid unnecessary delays or disputes.
    As a business owner, you understand the importance of timely payments to suppliers and vendors. However, tracking and managing accounts payable can quickly become overwhelming. Fortunately, with the help of AI systems, you can minimize the risk of defaulting on payments and keep your business running smoothly.

Big Four's Implementation of AI

The top firms in the sector have also implemented AI and ML in accounting.
  • KPMG
  • KPMG, a renowned accounting firm among the Big Four, used McLaren Applied Technologies (MAT) AI technology in 2015 to improve its auditing processes. The utilization of AI enabled the thorough scrutiny of all documents. KPMG suggests that businesses embrace improved forecasting techniques.

  • EY (Ernst & Young)
  • EY, a renowned consulting firm, has partnered with Microsoft to incorporate artificial intelligence (AI) in its consulting services. At that time, their collaboration streamlined over 250 processes.

  • PwC
  • PwC utilizes advanced technologies such as predictive analytics, cognitive computing, and machine learning. Its GL.ai service evaluates and examines all fraudulent activities.

AI-powered Software in Bookkeeping

Quickbooks, Oracle, Zoho Books, and other accounting and bookkeeping software make it easy for businesses to manage finances. With their help, businesses can easily track their income and expenses, manage cash flow, generate financial reports, and perform other accounting tasks.
One of the key benefits of using accounting software is the ability to automate repetitive tasks. The integration of AI technology into accounting software has taken automation to the next level. AI-powered platforms can automatically identify patterns in financial data, predict future trends, and even make recommendations based on that data. This allows businesses to make more informed decisions and stay ahead of the competition. Here is a list of some accounting software.

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Here are some of the top players of AI in the Accounting Market

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Final Thoughts

It’s undeniable that the future of bookkeeping, along with Bookkeeping Outsourcing services is linked to the advancement of artificial intelligence (AI) and machine learning (ML). Those who refuse to embrace this change may fall behind. However, accountants who welcome automation and incorporate it into their operations can achieve greater specialization and efficiency than ever before. Businesses will be on the lookout for tech-savvy accountants who can offer rapid response times and expert financial insights. While the shift towards AI may seem daunting, those willing to take the leap will ultimately find the most success in the field.

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