(800) 931-6557
(800) 931-6557
ASP
  • Home
  • Services
    • Accounting
    • Accounting FAQ
  • Recruiting
    • Services
    • Recruiting Team
    • Our Process
    • Recruiting Podcast
    • Top Candidates
    • Recruiting FAQ
  • Openings
  • Locations
    • Oregon >
      • Oregon Accounting
      • Oregon Bookkeeping
      • Oregon Team
    • Washington >
      • Washington Accounting
      • Washington Bookkeeping
      • Washington Team
    • Colorado >
      • Colorado Accounting
      • Colorado Bookkeeping
      • Colorado Team
    • Texas >
      • Texas Accounting
      • Texas Bookkeeping
      • Texas Team
  • About
    • Clients
    • Testimonials
    • Inclusion at ASP
    • Resources
    • Submit Resume
  • Blog
  • Contact
  • Payments
  • Home
  • Services
    • Accounting
    • Accounting FAQ
  • Recruiting
    • Services
    • Recruiting Team
    • Our Process
    • Recruiting Podcast
    • Top Candidates
    • Recruiting FAQ
  • Openings
  • Locations
    • Oregon >
      • Oregon Accounting
      • Oregon Bookkeeping
      • Oregon Team
    • Washington >
      • Washington Accounting
      • Washington Bookkeeping
      • Washington Team
    • Colorado >
      • Colorado Accounting
      • Colorado Bookkeeping
      • Colorado Team
    • Texas >
      • Texas Accounting
      • Texas Bookkeeping
      • Texas Team
  • About
    • Clients
    • Testimonials
    • Inclusion at ASP
    • Resources
    • Submit Resume
  • Blog
  • Contact
  • Payments

​In Pursuit of Profit

Read our expert article below or sign up to get articles sent to your inbox.​

11/3/2023

Comments

The Intersection of Accounting and AI – The Complete Guide to What Business Leaders Need to Know

 
Discussion around the proverbial water cooler for CPAs these days is about the increase in tax return errors that partners are seeing. As the tax season drew to a close for those filing extended returns, accounting managers reported noticing more mistakes than usual, citing fatigue and burnout as the most likely primary cause. 
Accounting and AI
It is situations like these that proponents of AI in accounting are hoping to reduce (or eliminate entirely) by using AI applications like automation and machine learning.

As our team explains when discussing the future of accounting,
Technology can be used to augment accountants’ responsibilities, increasing efficiency and improving job satisfaction. AI is currently the most transformative force in the accounting industry, and with good reason! AI allows accountants to do better work faster, improving accuracy, scalability, data availability, and collaboration to drastically improve business outcomes.
​But increased accuracy and efficiency are not the only benefits that AI has to offer. AI use in accounting can also improve job satisfaction, providing more fulfillment in the work that accountants do. Reducing the amount of busywork accountants are responsible for frees them up for more strategic activities, allowing them to act in more of an advisor role instead of just a number crunching capacity. This shift can greatly help to retain accountants amid the current labor shortage. 
​For those reasons, understanding where AI and accounting meet is going to be incredibly important for not only top accounting firms and accounting service providers but also for organizations of all sizes looking to retain their accountants.

Find out what you need to know about the current state of AI and get predictions for the future in this comprehensive guide to AI use in accounting:

Where do Accounting and AI Intersect?
AI is in use all around us constantly! It is in everything from personalized ads to traffic cameras to that email you just received from a colleague. (Yes, when you open an email and your email client suggests a response for you to use like, “Thank you!” or “See you then!” that’s an example of AI in use!) And yet, when it comes to accounting, using it necessitates a far more deliberate decision to do so – we must go out of our way to utilize it instead of just passively letting a traffic camera take our picture and invoice us for our toll road usage or clicking on an ad for an item we’ve been thinking about buying as a gift for a loved one. In accounting, we need to actively decide where we’re going to use AI to supplement our human efforts. To do this we need to have a firm understanding of what AI is and where it meets accounting.

While AI has a sprawling list of subfields including, automated planning, machine learning, robotics, expert systems, speech recognition, cognitive computing, and probably 20 more, there are three main areas that intersect with accounting most naturally: automation, machine learning, and natural language processing. Now, within each of those there are even more sub-subfields, but to keep this discussion focused and relevant we are just going to provide a high-level overview.

Automation is pretty easy to understand – it is the use of a program or algorithm to do something that otherwise would need to be done manually. Every time you access the “reports” area of your accounting software and a current income statement appears, that is automation at work. That platform has a built-in tool that pulls the most current data to propagate a chart template instantly. These types of uses make automation highly valuable across a wide range of day-to-day bookkeeping and accounting activities, especially those that involve multi-step precision.

Machine Learning uses a created algorithm to take some inputs and generate an output of some kind. What kind of inputs go in will depend on the use case and what kind of outcome is generated will depend on what you tell it to do. For example, using machine learning a retail company can flag potentially fraudulent customer orders to require manual review before they are processed. Analyzing the specifics of every order that a business receives would consume hours of work and possibly even require a dedicated team depending on the order volume-level, making it a wasteful use of resources. However, anti-fraud software can do the same thing in real-time, likely with even greater accuracy. Today’s AI capabilities make this kind of business decision a no-brainer. Machine learning can uncover hidden patterns in data as well, even when the data sets are extremely large. Some areas of accounting, like forensic accounting, lean heavily on this characteristic of machine learning to improve the accuracy of their work.

Natural Language Processing deals with the interaction between computing and human language. It uses complex algorithms to enable computers to interpret, generate, and respond to human language in a way that is beneficial to real humans. Natural language processing is used in chat bots, text classification (like flagging spam), and text generation. In accounting it can be used to create formal policies and other helpful documents to provide support across the organization.

As you can see, AI is not simply the new buzzword in accounting, it has important real-world applications!

AI Uses in Accounting
One of the easiest ways to support your accounting and finance staff is to implement automation strategically to address their pain points. Determine where your accounting team is spending the bulk of their time and which activities they dislike the most, and then find ways to automate tasks that can lessen the burden on them in those areas. The most common places to automate your accounting functions are:
  • General ledger bookkeeping
  • Customer invoicing
  • AP (Accounts Payable) and collections
  • Expense reimbursements
  • Financial reporting
  • Month-end and year-end close

Additionally, AI machine learning can be used to analyze large data sets with accounting applications across:
  • Sales tax calculation
  • Bank and credit reconciliations
  • Payroll and benefits management
  • Fraud detection

These kinds of AI use case scenarios can clearly offer significant benefits, and yet they still do not encompass the breadth of key uses for AI in accounting. Accounting teams can also benefit from the natural language processing component of AI usage to generate text for use in:
  • Onboarding and training
  • Workflows
  • Accounting policies and procedures handbooks
  • Contracts
  • Vendor management

As AI usage becomes more common, the extent of its capabilities will likely grow as well, offering additional benefits for accounting departments that have not yet been realized.

Understanding the Future of Accounting AI
It’s impossible to predict where the future of AI is heading exactly, but what we do know is that every day improvements are being made to this kind of technology to expand its capabilities. Technology we once thought was impossible has now become commonplace, and AI is going to continue to evolve in response to business needs.

There has already been speculation about AI making a zero-day close a reality in the somewhat near future. And if automation can be used to make the single more prevalent pain point for accountants a thing of the past, there’s surely nothing it can’t do in the world of accounting!

AI’s Limitations
It would be irresponsible to have a conversation around AI without also mentioning the ways in which AI is limited. While there are a variety of ways that AI can benefit the accounting industry, we must also acknowledge that is not objective in nature. AI cannot think on its own, which means that incorrect data or biased information will lead to inaccurate outcomes. For this reason, AI should be used with oversight and AI outputs should be regularly audited. Do not carelessly rely on AI to do the work for your team and never allow it to replace the well-trained staff entirely. Remember, the human element is still profoundly important!

When you want outsourced accounting help that can keep up with the times, please reach out to us! Our team of highly qualified accountants is ready to come alongside your business as soon as you need us. Using our fractional accountant model, we can offer you as much or as little support as you would like based on your needs. Whether you want to have ongoing accounting and bookkeeping work done or need one-time help to set up accounting automation (or anything in between), we have the expertise needed to support your team!
Comments

    SUBSCRIBE:

    DOWNLOAD:

    The Ultimate New Business Formation Checklist

    DOWNLOAD:

    Accountant Evaluation

    Categories:

    All
    Accountant
    Accounting
    Accounting Systems
    Artificial Intelligence
    Audit
    Bank Reconciliation
    Benefits
    Bookkeeper
    Bookkeeping
    Brand
    Budgeting
    Business Analysis
    Business Trends
    Career
    Cash Flow
    Change Management
    Checklist
    Closing The Books
    Colorado
    Community
    Contracts
    Controller
    Depreciation
    Ecommerce
    Economy
    Finance
    Fraud
    Government
    Hack
    Hiring
    HR
    Infographic
    Internal Controls
    IRS
    Laws
    Leadership
    Legal
    Local Economics
    Manuals
    Market Trends
    News
    Nonprofit
    Online Bookkeeping
    Oregon
    Outsource
    Payroll
    Payroll Taxes
    Planning
    Procedures
    QuickBooks
    Record Keeping
    Recruiting
    Recruiting Market Reports
    Remote Workforce
    Reporting
    Restaurants
    Risk
    Sales Tax
    Scam
    Security
    Small Business
    Social Media
    Software
    Startup
    Statistics
    Strategy
    Taxes
    Technology
    Texas
    Time Management
    Washington State

    Archives:

    June 2025
    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    June 2015
    February 2013
    October 2012
    November 2011
    May 2011



    RSS Feed

Services

Accounting Services
Recruiting Services

​

Company

About
Oregon Team
​Washington Team
Colorado Team
​Texas Team
Clients


Support

Contact
CC
FAQ
​Resources
​Blog
​

ASP

Your resource for accounting & recruiting services. Serving Seattle, Bellevue, Redmond, Kirkland, Portland, Beaverton, Hillsboro, Lake Oswego, Denver, Lakewood, Aurora, Dallas, Frisco, Fort Worth, and more.
Contact us today for a free,
no-obligation consultation:
Toll Free (800) 931-6557
WA (425) 492-1901
OR (503) 473-0122
​CO (720) 572-8211
TX (214) 396-7403

[email protected]
© COPYRIGHT ASP - ALL RIGHTS RESERVED 
 A CFO Selections Company
Privacy Policy
Photos from Pricenfees, Debbieallendale