04 Sep How is AI going to Impact Accounting and Bookkeeping Processes?Email This Post
Typically, small-sized accounting firms are more forward-leaning as compared to larger accounting firms. Smaller-sized and more nimble accounting companies these days are introducing AI to their businesses nowadays. This means that they have a big chance of easily outsmarting the larger accounting companies if they remain slow in implementing AI into their accounting services.
The positive news is that the innovations and development in AI and applying machine learning technologies and AI into bookkeeping, is becoming a reality with majority of accounting software companies which are currently offering competencies for automating data entry jobs, reconciliations or even more with their online accounting and bookkeeping services.
By next year, it is possible that accounting jobs such as audits, tax, payroll, banking, etc. would become fully automated by using AI-based technologies and that would disrupt the accounting field in a big way like it has never happened in the last 500 years, thus opening up huge opportunities but some serious challenges also.
Why AI and Machine Learning?
The impact of AI in the near future would be the most significant and huge technological transformation till date. Accounting companies that lack or don’t accept AI implementation particularly in their bookkeeping and accounting processes would not remain competitive in the future. This technology is advancing very fast. The abilities and capabilities of what all AI can achieve today is momentous in terms of both accuracy and cost savings.
AI and machine learning result in:
- Greater employee satisfaction
- More robust recruitment process
- Delighted and happy clients
- Top-quality service oﬀering
What is the Impact of AI and Machine Learning?
Companies which go ahead and implement AI and machine learning will be the only ones who would remain competitive in the accounting field.
In the coming three years, if you still haven’t employed AI technology in your accounting processes, then you would not stay competitive. For example, the companies who have implemented a service such as Vic.ai successfully are now pricing their accounting services differently.
AI and machine learning are primarily altering the way in which outsourced accounting services are assessed, priced, purchased by clients, and also delivered to clients.
AI and Cloud Software
Nowadays, it is getting next to impossible to charge higher hourly fees for any repetitive tasks. If your company is depending on offshoring and RPA, then that is considered as an old way of operating and doing things. AI services is expected to bring more accuracy and even faster turnaround.
AI applications such as Vic.ai work impeccably with traditional cloud accounting systems — enhancing and automating the human element in the equation. Even AI is continually learning and expanding over time. Thus, there is no need for replacing current accounting systems.
You would probably deploy various different AI systems in your software stack in the coming few years. However, the good news is that most of the AI systems usually plug into your fundamental software stack.
If you are looking at more practical manner of implementing AI, then bookkeeping jobs stand out. If one uses the best technology available, then invoicing and bank coding is just a matter of reviewing the AI as compared to actually performing the task. This, no doubt, is a stepping stone to thorough automation that we would see soon in future.
Employing AI for tasks such as invoice processing or bank coding involves a phased two-step approach:
- The AI gives suggestions (The accountant determines if there is a need to accept or correct the given suggestions.)
- Once trained, the AI codes would cost automatically (The accountant would then only need to provide feedback in case the AI is below a specified conﬁdence level.)
Changes that come with AI
The procedural changes that AI is fetching may eventually trigger some controversy regarding the security of things due to the transition. However, as accounting benefits would still be felt as the final approvers of all the jobs that are performed by AI, they can keep control of any delicate or sensitive information that they want. Therefore, if all the information is backed up in the cloud, then they’re good to go.
Accounting is a very important part of any company – may be big or small. Due to the continuous evolution of technology nowadays, it’s imperative for any industry to update itself on the latest innovations and technologies if they want to stay ahead of their competition.
AI is revolutionizing the world today, and in particular how data is being handled or used. The potential of AI in the accounting field is immense. The value of AI is predicted to reach the $400 billion mark by 2020. In addition, almost 49% of all paid activities are expected to be automated by AI.
Automating the entire AP workflow
AI technology has already reached quite close to automating the entire AP workflow without any human intervention.
These days, AI and machine learning is being integrated into AP process for automating the entire workﬂow, which would be able to read invoices, extract the needed data, code the invoice to the accurate general ledger accounts, and then approve the whole process, and finally pay the invoice.
This actually seems like one area where we are underestimating the power of AI on outsourced accounting. It not only impacts how a team is built or the kinds of clients one works with. It also impacts the complete business model, how the product is marketed, how services are sold and delivered, and how they are priced.
One of the biggest advantages that are observed already with some early adopters is very advanced thinking and disruptive changes for how all of it is amalgamated and packaged for clients.
One way to determine how crucial this is for your company and the potential it has to impact the productivity and cost savings is by analysing the total volume of monthly invoices that you are processing currently for a typical client. You could also hire professional accounting and bookkeeping services in Dubai to do this analysis for your firm.