Mansoor Sarwar, Regional Director at Sage Middle East explains how AI can create a difference in the field of Accounting and in the lives of Accountants.
Artificial Intelligence (AI) has evolved in ways similar to the advancement of locomotives since steam engines first appeared in 1698. Within a few short years, steam trains were rushing along at 100 mph. Following the initial breakthrough, we have witnessed a scramble to develop the next iteration of AI that is the Japanese bullet train equivalent. AI is undoubtedly going to revolutionise the way we work. What effect exactly will it have on accounting?
Years of training and practise are required to qualify as an accountant. Given the nature of the profession, it is quite easy to imagine that it doesn’t need any major change or transformation. However, the reverse is true. Accounting is the ideal candidate for disruption due to the nature of its many repetitive tasks. AI can drive the industry from a backward bookkeeping function to one that delivers forward-thinking insight to inform strategic decisions. Machine learning, when applied to data, can enhance trust, detect fraud, and increase compliance. The profession is on the brink of an exciting new era that can leverage the myriad benefits of AI to offer greater value to today’s customers.
AI is changing everything
As programmers continue to write codes and algorithms to resolve problems and learn from evolving scenarios presented to them, we are still some distance away from true AI, which will see computers “thinking” for themselves. We can already rely on AI to automate repetitive tasks, increase accuracy and efficiency, and discover hidden insights and trends. For instance, it now understands the best path to finding an answer and can learn the routines that offer the best outcomes. AI enables the automatic upload of documents, assessment of data entries and categorisation under the correct accounting codes. AI doesn’t make mistakes, never gets worn out, and never needs to sleep.
AI allows us to do more with the resources at our disposal. It will enable accountants to devote more energy and time to analyse and interpret the data to extract real value for the business and its customers. Sage’s Practice of Now report suggests that up to 58 percent of accountants strongly believe that AI will improve their firm in the future. As we progress with the application of AI, we see three areas of benefit for the profession: continuous audit, invisible accounting, and powerful insights.
It enables businesses to capture all activity in real-time, continuously reconcile, and make adjustments where needed, such as with accruals, as the month progresses. Doing so allows companies to ease the load at the end of the month. Finance professionals will reap the dividends of integrating AI into accounting in the months and years to come.
AI can eliminate repetitive tasks from an employee’s daily workload and increase the amount of readily available data. It means there is now an increase in the intelligence available to understand the direction and health of a business at any given time. For example, it has become possible to bring banking account information seamlessly into the accounting system by applying machine learning to banking transactions.
AI automatically manages the gathering, sorting, and visualising of important data in a way that enables businesses to run more efficiently. It allows staff the time to focus on more productive tasks to drive the business forward.
Better financial protection and control builds trust
AI can minimise accounting errors significantly and reduce financial fraud. While online banking has brought with it several advantages, it has also created a platform for financial crime, such as fraud. As the volume of data grows, the chances of a dishonest payment slipping through increases. It means that the accountant’s compliance tasks now become much harder to complete. AI allows all data to be reviewed at speed. It can detect anomalies like duplicate invoices and pick up connections between seemingly harmless payments and other known risks. It also helps to allocate expenses to the right categories, meaning the company won’t pay for items it has not requested.
Implementing automated anti-fraud and finance management systems can help practices improve compliance procedures, protecting both their own and clients’ finances. Therefore, accountants and AI can collaborate to offer a more predictive, strategic service, using data to pick up on potential issues before they come up.
Drive better decisions with active insights
AI can be used to analyse vast quantities of data quickly, and at scale, in every possible sector. Finance professionals can make better, real-time business decisions with AI, based on actionable insights derived from customer demographics, past transactional data, and external factors. AI will enable accountants to report and forecast with greater clarity than they ever have before. In addition, companies can use data to forecast cash flow, predict when the business could be short of money, and take the necessary action to avoid problems before they arise. AI can help companies predict customer churn and look at adding value to encourage them to renew their contracts. It means accountants will be able to assist clients in responding to financial challenges before they become critical – adjusting processes or expenditure as required.
As AI assimilates more significant business information flows into the accounting mix, accountants will be able to broaden their predictive consultancy to include other areas of the business. For example, if a manufacturer sees a rise in supplier costs, an accountant equipped with AI will be able to predict the impact on the business in the near future. Accountants can now suggest the best course of action to address the potential shortfall before it becomes a problem. We still marvel at the bullet train speeding through a station. This sophisticated train service can now alert travellers if there is a problem with the schedule before boarding and offer alternate routes or connections.
The accounting profession is the same – it’s becoming increasingly modern and sophisticated. While the rules of finance might not have significantly changed, the practices of getting the work done efficiently are evolving. With the benefits of AI under their belt, accountants will be true changemakers in the era of 4IR.