Applications of AI in accounting include both sophisticated and mundane tasks that will streamline operations for your accounting practice.  

Given the accounting industry's heavy reliance on numbers and data, it is time we challenge traditional ways of thinking and embrace all the advantages of AI tools for accounting can offer us. 

What are the challenges of AI in accounting? 

First, let us look at the potential barriers that can stop AI in accounting in its tracks before they potentially hamstring your accounting firm's operations.  

From data management and analytics platforms to defining and overseeing a governance model to staff training, systems monitoring and algorithmic performance – AI is a living, breathing solution that requires regular maintenance. 

These are the three major barriers to artificial intelligence in accounting: 

1. Staff resistance: Even the most future-forward organisation will have detractors of modern technologies. The benefits of AI in accounting tools can be made abundantly clear, but the implementation of such technologies in financial management and getting buy-in from all staff can be both challenging and frustrating for business leaders. 

2. Data limitations: While rarely an issue for larger firms and multinationals, smaller accounting businesses may find they collect insufficient amounts of data to build models around specific areas for financial analysis. Collecting and housing that data can be not just an expensive process but one that requires new cases and tools to be integrated and the establishment of key financial processes.  

3. Cybersecurity and data risks: As with any innovative technology, there are always fears, whether they are valid or otherwise, about the risks of potential exposure to cybersecurity for accounting firms. Hackers do understand the value of data and will exploit poor internal practices to steal personal data or confidential client information. These malicious actors are particularly interested in the value of data from the accounting and finance sector. 

Is AI a threat to accountants?

Artificial intelligence solutions cannot do their jobs without humans who support them.  

As reported by Accountants Daily, a study by KPMG found that almost 60 per cent of Australians distrust the use of AI at work, for example, the hugely popular generative AI tool ChatGPT. 

The fear of automation technologies eliminating the human worker, particularly in accounting firms, is untenable when you consider what humans can add to data that robots simply cannot. According to a recent study by OpenAI, creator of ChatGPT, accountancy is one of the occupations most exposed to AI. Through accounting intelligence, accountants can interpret and analyse relevant data about their clients' finances and provide business advisory services to their clients.   

Humans can give the data structure, which is why data preparation is such a critical and context-sensitive task. This element of ‘data science’ demands that human workflows feed smart data to machines in a way that supports their activities for greater end results.   

Accountants can take a proactive approach to our ever-growing reliance on artificial intelligence when they identify the essential soft skills they'll need for their long-term financial performance.

For more information on the benefits of accounting automation on your practice's financial health, refer to our blog: What is accounting automation?

The benefits of artificial intelligence in accounting 

Artificial intelligence could be the technology that drives your firm into the future.

A 2019 study by EY found that 84% of US CEO's and business leaders see AI as an essential driver of their companies' success. However, this is not without risks, especially for Australian accounting firms that implement AI technologies without understanding the associated challenges. 

The continual evolution of AI technologies means accounting, bookkeeping and finance professionals armed with the right knowledge can adapt to changing responsibilities and roles within their firms. AI in accounting can indeed streamline its own day-to-day accounting processes, and workers are still required with competencies beyond traditional accounting jobs.  

The mindset of ‘routine work’ must now shift to ‘strategic thinking’, and this will be achieved by knowing how to analyse and interpret the data that AI accounting software parses. Moreover, employees will be able to develop a new set of expertise, all revolving around data.  

Thanks to the rise of artificial intelligence, the accounting and finance professional of the future will be one with robust data skills, an understanding of how to interpret disparate data streams, and data analysis for critical decision-making. 

How is AI used in accounting? 

Whether it’s automating administrative tasks, analysing complex data streams, fraud detection, or extracting value from customer information to improve your output, any firm that is not actively leveraging AI in accounting software is already behind the competition.  

There's no getting away from the fact that AI systems are helping the accounting sector to evolve. Far from being the technology that replaces accountants (something that has been debated for decades), accounting AI applications are instead freeing up humans from handling time-consuming and repetitive jobs.  

Artificial intelligence accounting uses means you can focus on more important opportunities, such as client-facing duties or tasks that require the application of soft skills.  

When combined as part of a single intelligent strategy with predictive analytics (PA), AI in accounting and PA have the potential to do more with the resources we have and the ability to parse the enormous amount of valuable financial data that your accounting firm collects.  

Accounting firms with an auditing function or division may also see a more comprehensive and efficient audit process with AI in the mix. Learn more about the impact of AI on auditors in our article: How AI is transforming auditing.

For more information about how ChatGPT can be used by many accounting firms, check out our blog: ChatGPT in accounting firms.

How does the Big 4 use AI? 

The accounting profession has rapidly adapted to AI technology to get ahead of the game.  

All the Big 4 accounting firms: Deloitte, PwC, KPMG and Ernst & Young (EY) have fingers on the pulse of AI, and they are continually investing heavily in AI-powered tools and solutions to give their clients advanced, insightful accounting services.  

Here are some accounting use cases that demonstrate how the big players have recently employed AI: 

• Deloitte: Developed an AI-enabled document-review platform that automates review and extraction processes from contracts, freeing up time-consuming human efforts.  

• PwC: Invested significantly into AI-driven natural language processing (NLP) to parse “complex lease agreements, revenue contracts, and board meeting minutes to form meaningful insights for clients.”  

• KPMG: Used NLP to predict future events and convert customer calls to “unstructured text” within its call centres.  

• EY: Automated its auditing processes, allowing AI to handle up to 80% of a simple lease's contents electronically, leaving only a small remainder for human employees to manage. 

Artificial intelligence and the future of accounting

The evidence is clear: AI in accounting, especially when deployed in tandem with predictive analytics, is an incredibly valuable tool that different accounting firms of all sizes should be leveraging.  

From smaller accounting firms to the largest accounting firm powerhouses, there's no escaping the fact that data is now our most valuable commodity. 

To derive the most value from that exponentially expanding mountain of data, more accounting firms must adapt their way of working.  

AI's role in accounting can be the bridge between old and new. It is a way to free up time-strapped staff from unnecessarily mundane and repetitive tasks like data entry while simultaneously using smart practice management accounting software with AI to parse huge data sets for key business insights.  

This is no longer a prediction for the future – AI in accounting is essential for any firm that wishes to stay competitive today. The best time to adopt this critical technology was yesterday. The next best time is now. Are you ready to push your accounting data to its limits?