AI technology is bringing industries into the future, and accounting is no exception. In the past, AI was viewed simply as a way of streamlining the workday processes for the accounting industry, but today, we see accounting firms optimizing their use of the technology in new ways that are revolutionizing how the industry operates.
Are you about thinking about bringing more AI technology into your accounting firm? AI is the tool that you need to bring your firm into the future. Look at these ways that your accounting firm can take advantage of the latest in AI technology.
Risk Management
Accountants play a crucial role in helping clients with their internal controls and risk management. Part of this responsibility is dealing with mountains of data that needs to be analyzed to help business make the best decisions moving forward. The focus on data, and the intricate details of analytics make risk management one area of accounting where AI technology can make the biggest impact.
Pertaining to risk management, AI technology can reach into insights that are likely to be overlooked by the human eye. For example, AI uses algorithms that can sort through massive amounts of information, including unstructured data, to discover minute discrepancies that are often indicators of problems down the road.
This is important because currently auditors devote only about 25% of their time to risk management. As AI becomes more widely used, companies will be better protected against financial devastation, while accountants are able to use their own resources in more effective ways.
Additionally, AI is adaptable. Basically, AI is only as intelligent as the information you feed into it. Over time, it learns from the data and adapts to it. As it analyzes discrepancies, it also learns to recognize false positives to weed possible fraud cases, is previous analysis has proven those cases to not be risk factors.
Compliance and Recording
Accountants are often the only resource that a small business has for tax law, planning and compliance. It is essential for accountants to stay up to date on current changes in tax law and policy. Any accountant knows that the biggest challenge with compliance is staying up to date with ever changing tax policies and regulations.
AI technology will help accounting firms to monitor compliance issues, organizational policy and regulations, while remaining on top of the most current changes in tax policies. With the ability to pick up on discrepancies with current tax rules, AI can more quickly identify transactions that are suspicious or non-compliant, especially in high-risk areas.
Auditing
Many accountants would agree that auditing is a thankless task. Hours upon hours can be spent, meticulously pouring over data, inventory and spreadsheets. It is a necessary part of running a business, but the process can be a drain on time and other resources.
More accounting firms are adapting AI technology to assist with the auditing process. The implementation of technology allows for firms to perform auditing duties faster and more efficiently, but the automation frees up resources that can be redirected into areas where human judgement is needed.
For example, auditors need to access a large amount of business data before they can even begin the auditing process. After the data is gathered, time is spent aligning the data sources, and piecing them together into one cohesive snapshot that can be analyzed. How this data needs to be structured will vary from one industry to the next. AI can pull in massive amounts of data, more than a human could, and automatically align it in a way that makes the most sense from a data-analytical standpoint.
This one step that would have once cost an entire accounting team precious work hours, but instead, with AI technology, those resources can be used in areas where only human thought can prevail, such as in looking at the result of the data and interpreting the story behind it.
Why AI Is Great for Clients – and You
While AI technology streamlines the responsibilities of the accountant, and removes the drudgery of mundane tasks, it is ultimately the client that benefits from AI technology.
When skilled accountants learn to work together with AI technology, they can uncover small problems, produce more comprehensive analysis of the financial state of business and provide auditing results that are more accurate than ever before. On top of that, AI technology makes this all possible faster and at a lower cost.
Embracing AI technology is key to providing clients with the quality service that they deserve. Human and machines are learning to work together, and the future of AI technology is going to be a great thing for the accounting industry.
