How Will AI Transform your Accounting and Finance Functions?

​The last decade has ushered in a digital revolution across all business areas. However, many businesses are still dragging their feet when it comes to automating their accounting and finance activities. In fact, 58% of finance teams surveyed indicated that they do not feel their finance back office is “sufficiently automated.”

​Despite a plethora of tools and platforms available to help streamline these critical business areas, it seems many businesses are stuck in the past, relying on manual processes for their daily accounting functions. But organizations can use automation to drive profitability if they understand its benefits and can identify areas where AI will help them the most. 

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The Benefits of AI
In a recent study on financial automation finance teams indicated that their top priorities were a reduction in repetitive tasks and a reduction in manual tasks. It is no secret that AI can achieve these objectives, making employees’ jobs less painful by reducing or eliminating the kind of busywork that can bring down morale and lead to burnout. However, automation has many other benefits as well, including:

• Greater efficiency
• Cost savings
• Improved accuracy
• Scalability
• Faster onboarding of new employees
• Real-time data availability
• Increased collaboration
• Better continuity
• Risk management

Where Should You Use Automation?
Of course, understanding how AI can provide practical business benefits is meaningless if you do not know where to use automation.
Look at your current accounting activities for areas where automation can be integrated to enhance job satisfaction, ensure greater data accuracy, accelerate reporting, increase collaboration, and improve business outcomes. Common areas to focus on include:

• General ledger bookkeeping
• Reconciliations
• Invoicing
• Payables and collections
• Expense reports and reimbursements
• Payroll and benefits
• Vendor management
• Sales tax calculations
• Reporting
• Fraud detection

AI can be used to either automate manual processes or analyze large data sets, freeing up accounting and finance personnel to perform the kind of value-add activities that drive business growth.

Implementing AI
The main reason AI is not implemented when and where it should be is human resistance to change. Accounting and finance teams that are stuck in the past typically resist the opportunity to automate because they are fearful that it could make their roles obsolete. Unsurprisingly, even among process-heavy teams, only 1 in 5 people surveyed described their team as being “accepting of change and nimble.”

When professionals exhibit a distrust of automation or a skepticism around the benefits it can provide, it indicates a lack of understanding around AI because automation should serve to augment accounting and finance roles, not replace them when used correctly.

Therefore, the first step in implementing AI is educating teams on how automation can benefit them by reducing busywork and improving accuracy and results. Next, organizations should focus on replacing outdated processes and legacy tools that no longer fit business needs. These areas will likely provide the greatest value for businesses by getting rid of elements that are broken and putting more efficient solutions in their place.

After the damaged processes and tools are replaced, AI can be used to improve on what is already working but is not optimized for business efficiency – areas where repetitive tasks are being performed and information needs to be manually updated and communicated to key stakeholders. Leaning on the right software platforms, apps, and other automation options should streamline business operations to provide greater business value.

To summarize, the following steps should be taken to effectively implement AI at your organization:

1. Educate teams on the value of automation
2. Replace outdated processes and legacy tools
3. Optimize ongoing activities

If your company struggles with determining where to start, you are not alone. Business leaders and other key personnel may be too close to the organization’s daily activities to rationally determine where changes need to be made, who should be responsible for making them, and how to communicate those changes. Often the kind of objectivity needed to determine areas where automation should be used can only come from the outside. Hiring an accounting consultant offers not only objectivity but also the breadth of experience necessary to make the kind of strategic recommendations needed to drive long-term growth.

For more information on integrating automation, check out our article: Where Should your Accounting Team Use Automation