The digital age of accounting: How is AI transforming the industry?
By Stuart Brown - Head of Technical and Compliance at Duncan & Toplis
The growing development and adoption of artificial intelligence (AI) across all facets of business and wider society is transforming many industries, including accountancy.
In the UK alone, the AI market is believed to be worth north of £21 billion, and the US International Trade Administration forecasts it to grow to £1 trillion by 2035, so it is safe to say that AI is going nowhere for the foreseeable future. With this in mind, it is crucial that businesses integrate AI into their processes, or risk falling behind their competitors.
How AI can assist accounting
In the accountancy industry, where attention to detail and meticulous analysis of data is paramount, the rise of AI could prove to be a huge boost for the workforce. Automating tasks like reporting and invoicing will not only make processes more efficient, it will also eliminate human error, and free up time for team members to focus on their fields of expertise.
With the number of AI companies increasing by over 600% in the last 10 years, the type of artificial intelligence available has also expanded, varying from a limited scope to full automation. AI-powered tools can analyse large datasets, such as financial transactions, and provide insights on historical trends from previous years, but it can also do the repetitive, more mundane tasks as well. That could be governing accounts payable processes, managing invoices, or anything else with an administrative or repetitive slant to it.
AI can also be utilised as a research tool to quickly collate data and provide answers from trusted sources, or even to generate predictions for future years and trends. This helps financial advisers prepare for what could be around the corner, plan for financial decisions and offer a more strategic approach to clients.
Potential risks
There are concerns around what AI might do to the job market and to job security for existing roles, and those concerns are not without merit. While many use AI to augment human jobs, new training or reskilling is required to allow for automation to manage the more administrative tasks of their role.
Another worry is giving AI software access to potentially sensitive information which could leave your business vulnerable to cyber attacks if any issues arise. This means that alongside investing in the latest AI technology, you will also need to improve data security measures alongside it.
Lastly, it is also vital not to rely upon AI too heavily. Accuracy is absolutely essential in accountancy, and AI is known for its occasional misunderstandings, miscalculations and ‘hallucinations’ where it simply makes things up.
It’s important to remember that AI is meant to make life easier, not replace human thinking and judgment entirely.
Increasing your reliance on AI can breed complacency that can impact your performance. As a result, using AI could end up being more time-consuming and costly if it’s used incorrectly.
The verdict
AI technology is here to stay and will only grow in efficiency, and those in the accounting industry will need to adopt it in some capacity, or else they’ll fall behind their competitors and be unable to reap the rewards of a streamlined, automated service.
Humans will always be needed in the accountancy sector, and technology serves to complement personal adviser interactions. The sheer vastness of datasets it can analyse in short spaces of time means accountancy practices can invest their time into more creative, critical thinking, high-value assignments. The key thing is to ensure that measures are in place to ensure that accuracy and reliability are never compromised and that AI is used to support the work of real people, not the other way around.
Ultimately, AI is becoming very intelligent, but the role of the accountant who provides expert advice tailored to their client’s personal needs, is not showing signs that they will be replaced anytime soon.
If you would like some support in automating your accounting services, visit the Duncan & Toplis website for more information on how we can help.
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