The prospect of integrating AI in accounting work is met with giddy abandon by some and overwhelming trepidation by others. Fortunately, there’s plenty of room to meet in the middle and adopt practices that integrate AI where it’s most beneficial—ideally through methodical integrations that provide proof-of-concept.
For businesses ready to embrace AI, will AI replace accountants? In short, no. While AI won’t replace accountants, your business should possess or look for talent with skills that enable them to turn AI into an effective business partner.
The Future of Accounting Is Automated
Accounting departments are accustomed to working with a lean staff, so adopting and integrating AI into their work accomplishes three things:
- It sets a great example of adaptability within the business.
- It provides their team with enhanced tools to take on strategic initiatives.
- It affords accountants the opportunity to move into the future with greater acumen and confidence.
The ongoing decline in graduating accounting students will remain a concern—particularly as boomers retire. But companies that lead the way with automation will be the first to attract bright, creative individuals who are eager to make a difference to the bottom line.
What Types of AI Will Accountants Work With?
AI allows the automation of routine, repetitive tasks and frees up humans to do the intellectual work of problem solving, evaluating the context of decisions and serving as advisors.
There are many subsets of AI, but a couple in particular are accessible to most companies, and they can make an immediate difference upon implementation.
- Machine learning (ML): Algorithms analyze, interpret and process data. Ad hoc query and financial modeling are refined as more data is added.
- Natural language processing (NLP): Generative AI—such as OpenAI’s ChatGPT, Google’s Bard and IBM’s Watson—use large language models to accept queries and generate responses using conversational language. NLP is widely used in customer service and many other applications.
Accounting experts and data scientists work together to develop the guidelines, feedback and oversight that make AI systems valuable to businesses.
Accelerating Value: Use Cases for AI in Accounting
After the wildly popular launch of ChatGPT, millions of users found endless ways to play with the tool before settling in to determine its usefulness in their business. The launch heralded a new era of possibilities and solidified that AI was no longer a promise of the future, but reality here and now.
The following AI use cases substantially improve workflow efficiency and enable accountants to hold a greater seat at the table as strategic support.
Communications
Using generative AI in accounting is ideal for creating communication templates, such as formulating responses to billing questions, developing a month-end close schedule or generating talking points for a board meeting presentation. It’s imperative that all generative AI output be viewed as templates or suggestions. They should never be taken as is without review or modification. Fact-checking is always required.
Automated Document Processing
Employee expense reports and invoice processing can be streamlined by scanning or uploading documents with supporting receipts. Optical character recognition (OCR) can read the text from the images and learn to identify which system fields to populate with their values. Pre-defined rules can route the documents for approvals or allow payment processing when amounts are within a defined range.
Fraud and Unauthorized Access Detection
AI can process enormous amounts of data and identify patterns and anomalies that can be routed for manual review or subsequent action—such as contacting a customer through email or by phone to request activity confirmation. AI can also be used to review system access logs for irregularities and automatically lock out suspicious actors.
Supply Chain Management
Those who carry physical inventory for their business can greatly benefit from supply chain advancements that help predict demand, optimize inventory levels and streamline processes. Reduced inventory expense, shorter delivery time and lower labor costs can help to offset the expense of implementing AI solutions.
Reporting, Budgeting and Forecasting
AI-populated dashboards and financial models can outshine any accountant’s ability to do computational and administrative work. Pulling in data from unrelated sources provides immediate user relief from manually completing the tedious—but complex—task. AI can then instantly analyze the results, draw conclusions and provide valuable insights for management to discuss with accounting professionals.
Every area of accounting and finance can be improved through the use of AI. From transaction processing to cash management and tax compliance, there are countless ways to cull more information from our data and produce reports more efficiently.
Accountants Have the Power to Optimize AI
CPAs, analysts and advisors continually adapt in their professions. Being knowledgeable in accounting regulations, current tax law and new software systems is always needed. Adaptation is the primary skill that they already have, which will be fully utilized when adjusting to AI.
Accountants and financial analysts with an affinity for technology have the opportunity to enhance their technical skills with advanced data integration and analytical processing knowledge. They will define the order of calculations and map application programming interface (API) links. Their expertise in financial modeling is critical to the AI development and training process. Businesses should seek these skills as they adopt AI in accounting workflows.
In addition, the depth of knowledge and experience of accounting professionals is needed to interpret AI outputs and insights. With countless variables and data sources, accountants must go far beyond simple fact checking to fully understand AI results. For example, the AI could propose new product pricing that contradicts intuition. Skilled analysis is required to determine if the option warrants consideration or if additional context is needed in the AI model.
Will AI Replace Accountants?
AI—much like the first computers—will dramatically change the way accounting work is done, but it will not replace the intelligence, drive and experience of its human counterparts. What it will do is enhance their ability to do their work efficiently and effectively, speeding up some tasks and eliminating others completely. Those who don’t adapt within the profession will always be at risk, regardless of the presence of AI, which is true for any profession.
Accountants have a thorough understanding of accounting principles. They apply their well-honed judgment to unique situations and can interpret data with cross-industry expertise. They can assess the relevance of transactions and determine if strategic priorities are being followed.
Applying ethical integrity and developing and maintaining relationships are responsibilities that should never be relegated to an automation tool, regardless of how sophisticated they become.
Leverage AI to Win
AI is disrupting every industry, and accounting is no exception.
Auditors, controllers, CPAs, tax professionals and every other type of accounting professional will see profound changes in their work over the coming years. Companies that embrace AI in accounting will derive even greater from their accounting teams. And those that understand the limitations of AI will continue to derive value from the intuition and professional experiences of human accountants.
Paro helps companies find fractional accounting services expertise that can help your business fill the gaps needed to streamline and automate workflows, as well as skills to help you prepare your finance function for a data-driven future. Find vetted professionals to match your exact business needs.
