Technology advancement has affected every business present out there, and accounting isn’t an exception. Artificial intelligence in accounting had a significant impact on this industry too. From saving both money and time to providing all the required insights, AI does everything essential and required in the finance field. Finance professionals and their firms need these AI-enabled systems to attract customers and stay in business for the long run by beating the competition.
Artificial intelligence can reduce costs by 80 % and time taken by a particular task by 80 % to 90 % in the finance industry, and it is not something the firms can just ignore right! There are a lot of benefits to AI in accounting and finance. In this article, you will know how it impacts the entire industry and the essential things you have to know about it.
How is AI Transforming Accounts and Finance?
Before we dive into the benefits offered by AI in the accounting and auditing stream, we have to know what kind of impact it has and how effectively it is transforming the entire accounting and finance world.
Apart from computers, there is not much change in the accounting stream despite significant advancements in technology for a long time. However, the entire scenario changed with the help of AI. Accounting and finance are all about number games, and the best way to tackle these numbers is with the help of artificial intelligence. This AI will help the processing of all the data quickly and reduced a lot of time as well as costs that were consumed to get a particular task done.
The accounting and finance department always relied on humans for entire data management, and humans indeed did excellent work. But now the times have changed, and being quick with work is a mandatory thing lately. So, the best way to get this done is with the help of AI alone. AI is developing pretty quickly, and the best part about it is that it has machine learning that will back it up. Both machine learning and artificial intelligence can do wonders when combined, and this is what helps the accounts and finance department in the end.
The predictive analysis that AI does and machine learning is another essential thing you have to know about to go in detail. It uses all the data that you provide and provides predictions with the help of machine learning. You will find some essential things that usually humans overlook at times.
Human beings committing errors is a common thing. No one is perfect, and although how careful you are, there are some times when you commit a mistake. However, this is not the case with artificial intelligence. It won’t determine any kind of human errors, so you don’t have to worry about that.
Bots in Business
The artificial intelligence and robotics are now reinventing the workforce and bringing in some significant changes in it. There are many businesses out there that are already using a robotic process automation system that will help in crunching the numbers and sift data on a daily basis. There are two bots in business that are pretty famous – Kensho and Arria.
So, how do these two work, and what are the benefits of it?
- Kensho – This is an intelligent computer system. Most of the stock traders and people in the share market usually invest in Kensho because of its high reliability. This software is the world’s first computational knowledge engine crafted for the finance industry, and it indeed works like a wonder. The situation of stocks can change in a second and the best way to keep up with them and, at the same time, using human knowledge for automation is done with Kensho. There is no need or requirement of a particular human operator even for translating and inputting the data with Kensho.
- Arria – Arria is the UK-based software, which is an NLG (natural language generator). This software solution has been used across a wide range of industries to humanize and simplify the analysis of all the substantial data reports. The human behavior is emulated in this software to get the most out of it rather than just performing number crunching. At the same time, the software will be quick and every time provides all the required information in the given time. It is nothing less than the best of both worlds.
This scenario is how the bots are helping in the accounting and finance domains. They are saving up colossal time and human efforts as well as with the use of limited resources.
Implementation of AI in Accounts
There are three simple yet effective ways to implement artificial intelligence in the finance field.
1. Streamlining the data entry
The financial managers go through a lot of complicated stuff on a day to day basis. And they have to be on top of the transactions at the same time. No matter what kind of expenditure it is, it must be noted and put into the right category so that all the things are specifically mentioned. This scenario is a tedious task without any doubt. Instead of spreading the financial information over different documents, spreadsheets and PDFs, it is possible for the managers to have them all at the same place. The artificial intelligence will gather all the data present in different receipts, classify the information, and upload it in the respective category without any human intervention.
2. Reduce Fraud
The technology has lately provided people with various kinds and categories of spending methods. The employees recently have so many chances to spend the organization money in different departments and domains. However, according to a study, the companies are losing at least 5 % of their total revenue due to internal fraud. And this is indeed alarming in different scenarios.
With various spending methods and options, it is not easy to know and track where the money is actually going. But with the help of AI, this issue can be catered and solved. It follows 100 percent of the spending methods, no matter where an employee spends the money and in any of the domains. Detecting the spending patterns and already provided data makes it easy to identify the frauds and reduce it swiftly.
3. Enforce the Corporate Policies
Every organization provides its own set of perks for the employees. From travel allowance to health care, there are different added benefits that employees get. But there are some employees who may misuse these benefits. The organization needs to track such things, and artificial intelligence can be their go-to option in such situations. Any policy violations can be determined and taken care of immediately.
Benefits of Artificial Intelligence Technology
- Attracts Millennial Employees and Clients – The millennials are all about technology, and having the best technology at your organization can be a significant addition to attract millennial employees. Flexible working schedules, remote working, and whatnot. There are many things that attract this latest generation, and with the help of artificial intelligence, it is pretty easy to keep them on the bay. The same is applicable to clients too. The new generation clients would want to use technology as much as possible in the work that they are doing, and you can use artificial intelligence for them too.
- Enables to Compete with other Companies – The world is moving fast, and every organization needs to stay on top of the competition, or they are out of the game. It is nothing less than a race, and without the help of artificial intelligence, you wouldn’t be able to pull through it. So, it is always essential to ensure that you are using the latest technology and are keeping up with the latest trends from time and again to sustain the competition out there.
- Saves Time – The Robotic Process Automation or RPA is a process that works with the help of artificial intelligence. Robotic Process Automation is a time saver for the employees. It helps in completing the repetitive and time-consuming tasks. From document handling to analysis, there are plenty of jobs that take up all the time and causes huge issues. With the help of robotic process automation, it is pretty easy for organizations to get the work done without any hassle. Once this RPA is in place, the accountants will get a lot of time to spend on strategy making and taking care of various other tasks rather than burying themselves in repetitive tasks.
- Up to date always – The artificial intelligence stays up to date on all the tasks. And further, it ensures that the work is done effectively without any delay. From gathering the information to providing the insights after analyzing all the details, everything will be done with ease with artificial intelligence. This way, companies can be proactive and ensure that they are taking all the decisions effectively without fail.
- Compliant to Rules – There are so many rules and regulations that the organizations have to follow in the accounts and finance department. They can’t neglect any small thing as it can lead to some massive issues. Investing in the right AI technology will aid the companies in following all the rules and regulations provided by the government. This scenario will ensure everything is done according to those rules without fail.
Human vs. Machines
When people talk about using the robots in organizations, it turns into an issue saying that humans are going to lose their jobs and that being a one-time investment will bring more significant ROIs to the organization. This debate has been in place for so many years. Although introducing robots into the workforce can do many jobless jobs, it is not entirely accurate in the accounting and finance field.
Accounting and finance is an entirely different field, where human intervention is essential. It is not a secret that some of the people will have to be let go, but this is not going to get everyone fired out of their jobs. The AI and all the other technologies can just help in understanding the work done, but they cannot actually replace the accountants completely. All the routine and repetitive tasks will be automated, which gives financial professionals a lot of time to get more work done.
Some people may become out of a job, while some people will be changed, and then there are some new roles that will emerge. This way, there will be no considerable elimination of the human workforce in the accounting and finance department just because of the AI.
AI will just take over the menial tasks, whereas the accountants themselves handle all the critical functions. People, at least the ones who are working in accounting and finances, shouldn’t worry a lot about this sudden shift. AI is making progress pretty slowly, and although it changes a lot of things in the field, it won’t take away all of their jobs. It is crucial for them to embrace the new technology and make the most out of it.
According to a prediction by Forbes, the AI technology completely disrupts the accounting and finance field by the end of 2020. It is going to play a crucial part in the automation processes like payroll, accounting, tax filing, audits, and banking.
Artificial intelligence and accounting has the power to make an entire 360-degree shift in the accounting and finance industry. It can analyze, predict, and process the process quickly, leaving a lot of time to spare. This way, all the works can be done promptly with a lot less cost too. The accountants and other workers will get a chance to devote more time to other vital tasks and increase their productivity.
I’m CTO at Technostacks Infotech, helping the team to adopt new technologies, interests in learning and sharing IT technology news trends.