Future of AI in Accounting

The Future of AI in Accounting

Last night I watched the new movie “The Creator” which is all about the future AI could hold in our society. It was a phenomenal movie that got me thinking a lot about things such as what it means to be human and how dangerous AI may become. But for the purposes of this newsletter we will focus on AI in the accounting industry. Here are just a few of the ways that AI is impacting accounting:

1. Automating tasks. One of the main ways that AI is impacting accounting is by automating tasks. There are a number of tasks that can be automated with AI, including bookkeeping, data entry, and certain aspects of auditing. In my current role we use a tool called data snipper to extract data from thousands of pdfs we would otherwise have to sort through manually.

2. Improving accuracy. Another way that AI is impacting accounting is by improving accuracy. With AI, businesses can rely on machines to do many of the tasks that are traditionally done by humans. AI will never fat-finger a figure or overlook a comma. This improved accuracy will help reduce time spent correcting mistakes.

3. Data Analysis. AI can process vast datasets in real-time, enabling accountants to identify trends, anomalies, and insights that might be impossible or time-consuming for humans to discern. AI algorithms can analyze huge amounts of financial data instantly to detect fraudulent activities, assess risk, and provide valuable insights for strategic decision-making.

4. Improving efficiency. Finally, AI is also helping to improve efficiency in the accounting industry. By automating tasks and improving accuracy, businesses can save time and money. This allows employees to focus on improving other skills that can’t yet be completed by AI.

5. Fraud Detection and Prevention. Tools such as Kount and Darktrace are being used by firms and private institutions to detect cyber-threats and fraudulent transactions. I’m sure that frauds and cyber-attackers have pretty sophisticated AI as well so having tools that can counter that is extremely valuable.

In conclusion I will say that despite all that AI is capable of doing it still relies on humans to set up and put to use. AI is a tool (a very powerful one) just as a hammer or a tractor. However, a tool is nothing without a human to make use of it. Accountants will not be replaced yet, there’s still a long way to go until we reach that point. But we have reached the point where accountants and accounting firms will need to take advantage of the power of AI, or risk being left behind by competitors.

Notes/Recommendations

1. What Kanye taught us about accounting - link 👟

2. If you’re in need of an existential crisis go see “The Creator” 🧠

3. How many accountants does it take to screw in a lightbulb? How many did it take last year? (As someone who loves to roll things forward from PY this made me chuckle)

Have a great weekend!! 😊👋