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Accounts Payable
May 13, 2024
Min Read

AI in Accounting: 5 Ways Companies Benefit from AI to Improve Efficiencies

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Rachel Heller
Contributing Author

The accounting industry today faces a concoction of challenges led by talent shortages, the imperative for cost reduction, and the necessity to stay secure amid rapid technological evolution and the increasing prevalence of fraud. Artificial Intelligence (AI) — and more recently, generative AI (GenAI) — is at the forefront of revolutionizing industries and business functions. Yet, despite its potential to streamline operations and drive significant efficiencies, the accounting sector has been relatively hesitant to adopt AI and automation, primarily due to prevailing concerns around data security and privacy.

However, it's high time to shake off the apprehensions and move into the future of accounting with eyes wide open. The integration of AI represents a strategic opportunity to empower accounting teams and unlock unparalleled efficiencies and capabilities.

So, what does that look like?

Strategic benefits of AI in accounting

  1. Increased efficiency: The most apparent benefit of AI integration is the significant increase in efficiency and productivity. With AI automating repetitive and time-consuming tasks, accountants can focus on more strategic and value-adding activities that require human judgment and analysis.
  2. Enhanced accuracy: With its ability to analyze massive amounts of data quickly and accurately, AI can significantly reduce the risk of human error in financial reporting and decision making. This not only improves the accuracy of financial information but also helps mitigate potential compliance issues.
  3. Streamlined decision making: By providing a comprehensive and real-time view of financial data, AI tools like data analytics, predictive analytics, and data visualization can streamline decision-making processes for accountants. This not only saves time but also improves the accuracy and effectiveness of decision making.
  4. Cost savings: With AI taking over routine tasks, accounting teams can save significant time and resources, representing both immediate and long-term cost savings for organizations. Additionally, with accurate business process and data analysis, AI can help identify areas where cost cutting can be implemented without sacrificing efficiency or quality.
  5. Competitiveness: As AI adoption increases, companies that embrace it in their accounting function will have a competitive advantage over those that don't. By leveraging AI to streamline operations and improve decision making, organizations can be better equipped to navigate the ever-changing global business landscape.

Where and how is AI increasing efficiencies and making an operational impact in accounting?

Areas where AI is making a significant operational impact in accounting and finance operations are wide-ranging. From automating repetitive tasks to identifying potential risks and opportunities, AI is transforming the way accounting professionals work. Some of the key areas where AI is increasing efficiencies in accounting include:

Fraud detection

Fraud is an ever-growing menace to organizations, looming large over finance and accounting operations. Monitoring and assessing risk in transactions and activities is nearly impossible to accomplish to the extent required by regulators, without the assistance of AI.

AI-powered tools can analyze massive amounts of data and flag suspicious transactions or patterns that may indicate fraudulent activity. AI's exceptional ability to detect patterns and irregularities make it a crucial asset in the fight against fraud. By analyzing large amounts of data, AI algorithms can identify anomalies and red flags that may indicate fraudulent activities.

Financial data analysis

Accounting involves a lot of data. It’s essential to have accurate and timely data for decision-making, financial reporting, and compliance. However, the process of analyzing large amounts of data is not only tedious and time-consuming for accountants, spreadsheet-based manual data analysis is limited in scope.

With the help of AI technologies, data analysis in accounting can not only be accelerated, but also expanded in depth and breadth by orders of magnitude. AI-powered tools can quickly analyze enormous datasets in a fraction of the time it would take a human accountant. AI can identify patterns and trends that may have otherwise gone unnoticed.

AI algorithms for financial budgeting, predictive analytics, and cash flow management, as well as technologies like data analytics and data visualization, can streamline decision making and provide a more comprehensive financial perspective.  This not only saves time for accounting professionals but also infuses decision-making processes with accurate information.

Regulatory compliance

Navigating the complexities of regulatory compliance is a daunting task for businesses, especially with the rapid pace of change in global financial regulations. Keeping up with compliance and tax requirements requires a proactive approach to avoid potential fines and legal concerns.

GenAI is a new ally in this arena, offering real-time regulatory update monitoring to inform adherence to the most current standards. GenAI can also support accountants in compliance efforts by scrutinizing transactions and flagging discrepancies in the context of constantly evolving financial regulations. In addition, accounting teams can apply GenAI to uncover tax-saving opportunities and streamline calculating tax liabilities. Overall, the integration of GenAI into regulatory compliance strategies not only fortifies a company’s compliance framework but also enhances operational efficiency and financial oversight.

Transaction processing

The bulk of corporate accounting teams' time is spent on transaction processing. Much of the day-to-day work of finance falls within this category, which includes general accounting, accounts payable and receivables, journal entries and invoices, producing financial statements, as well as responding to routine customer and supplier inquiries.  Unlocking efficiencies for these processes can return significant savings in cost and time and enable accountants to focus on more complex value-adding work.

AI-powered automation represents an enormous opportunity to transform nearly every process within transaction processing by completing routine tasks like data entry, reconciliation and invoice processing faster, more accurately, and at a much lower cost than human counterparts. Technologies that harness AI for business process automation, such as intelligent document processing (IDP), are securely automating document- and data-heavy processes, accelerating processing speed while at the same time reducing errors. Additionally, AI and GenAI-powered chatbots can handle routine customer and supplier questions with a high level of personalization, ensuring high-quality customer experience.

Transform accounting with AI-powered efficiency

Sitting out the AI-revolution is not an option for accounting and finance teams; the benefits of integrating AI-powered tools into accounting operations are too great to ignore.  By embracing AI, accountants can increase operational efficiency, improve decision-making processes and better manage risks and compliance. Accounting is ready for transformative change, and applying AI is the solution.

Other Tags:
Accounts Payable
Invoice Processing
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