It shouldn’t be surprising that artificial intelligence (AI) is playing a growing role in the accounting world. Between 2022 and 2024, more than 300,000 accountants and auditors in the U.S. left their jobs — many of them baby boomers who had reached retirement age — and because fewer students have been enrolling in accounting programs, there’s a shortage of new accountants to step in and fill the gaps.
Thankfully, companies seeking accounting help can now find it in AI-driven accounting platforms.
Artificial intelligence has already made significant inroads in the accounting space, with a wide variety of platforms available to help with everything from payroll processing to bill pay to expense reconciliation. By adding AI to their toolbox, accountants can expedite and enhance much of their work, freeing up more time in their schedules for the type of strategic financial planning that can help companies move ahead in the competition.
The following are some advantages companies gain by adding AI to their accounting workflows — as well as some disadvantages that make it essential to understand all the implications before diving too deeply into AI-powered accounting.
AI Advantage: Increased Efficiency and Accuracy
Automation is one of the key advantages AI has brought to the business world. In accounting, AI automation manages the day-to-day grunt work of data entry, among other tedious tasks. With companies struggling to find AI help, AI-powered automations are a godsend. They don’t just do the work; they do it in a way that allows companies to leverage their financial data better.
Additionally, AI empowers enhanced accounting because it adds speed without sacrificing accuracy. The automation AI empowers is fast — really fast. Past reports show that it increases the type of processes accountants rely on by 745 %. And it reaches those blazing speeds while keeping the decimal point in the right place.
For business leaders, the speed and accuracy of AI translates to real-time reporting that can drive better decision-making. Waiting until the end of the month to get a more accurate picture of financial wherewithal is standard practice with manual accounting. With the use of AI, they can bypass the wait-time entirely.
AI also manages data on a level that makes predictive analytics possible. By considering past financial activity in light of current business trends, it can project future scenarios and allow business leaders to plan more confidently.
AI Advantage: Capacity for More Strategic Engagement
In the ideal world, the work accountants do to ensure data is accurately input and analyzed empowers them to play a role in strategic planning. But in the real world, there’s little time left for anything once data entry and analysis are done. With AI, that changes.
As AI automations are unleashed, accountants are freed up for high-level accounting tasks, and can focus on understanding what a company’s financial activity means, figuring out how it should respond, and providing the type of guidance that empowers the business to grow and thrive.
Companies that leverage the power of AI are changing the role of the accountant. Rather than simply serving as technicians, accountants can become strategists, and companies that were once merely focused on balancing books can now discover fresh insights into their books that lead to better operations.
AI Disadvantage: Limited by ‘Off-the-Shelf’ Functionality
While accounting requires a certain level of standardization, most companies also put their unique spin on financial operations to fit their individual circumstances. AI can support that — provided companies are willing to get creative.
Bringing AI to life requires much more than simple coding. It’s a complex and expensive process that most organizations can’t afford to tackle alone. So, they turn to “off-the-shelf” platforms designed to serve generic business accounting needs. These platforms can surely boost efficiency, but they may not integrate well with the systems that are already in place.
For example, in a highly specialized field, workflows built around unique pricing models are not considered by standard accounting processes. Organizations may also be working with legacy systems that are outdated and unanticipated by AI platforms.
To leverage the power of AI without the need to orchestrate a full-scale re-engineering of accounting systems, one may consider a hybrid approach where AI automations manage basic accounting processes, while the more nuanced needs continue to be handled manually until platform developers catch up. Some platforms anticipate these challenges by providing a mix of up-to-date AI tools and access to expert accounting advisors.
AI is reshaping accounting by opening the door to unprecedented levels of efficiency and reliability. Companies that want to experience its power still need to navigate a tricky transition. They will likely find more solutions that understand and address the many nuances involved, but until then, they should be careful to understand their goals and find platforms that have already proven to help.
