How to prepare your business for AI-assisted accounting and financial reporting

How is AI used in accounting and bookkeeping?

Small and medium-sized enterprises (SMEs) can use AI to help them with accounting as well as financial and operational reporting in a number of ways. Although still relatively new to the market, many SMEs who use AI do so as part of their accounting software, since building custom AI tools and models from scratch remains difficult and costly.

According to Pastrikos, “Several popular accounting and business software already offer embedded AI capabilities, and their sophistication will continue to increase. The quickest and easiest way for your accounting team to start leveraging AI is to harness the embedded AI capabilities of modern accounting or business software.”

One key area SMEs can benefit from using AI is data capture. For companies with high transaction volumes, manual data entry is a tedious, repetitive and low-value task. By using AI to automate this work, SMEs can save time, effort, and free up their accountants to work on higher-value activities.

Many accounting applications, for example, allow you to scan documents and automatically create transaction records in a fraction of the time it would take a human. They can accurately identify the customer or vendor, dates, product descriptions, dollar values, as well as many other details, then categorize the transactions and even match the invoice to the purchase order. Once completed, the accountant can review, edit and approve the generated transactions.

Can AI replace my accountant or bookkeeper?

AI cannot replace accountants, but it can allow for accounting teams to spend their time on higher-value tasks.

“AI does not replace accountants,” stresses Pastrikos. “It’s a tool to complement their work, augment their capabilities, and help them work better and faster so they can focus their efforts on deeper analysis and strategic initiatives that can help the business grow.”

For instance, with AI tools accelerating data entry, time is freed up for your accountant to analyze your company’s financial data in depth, looking for opportunities to improve the company’s position. How are sales trending for various products, services, or channels? How are sales doing in certain markets? What adjustments can you make to reduce costs and increase profit? Do the financials support our strategic plans?

It is also important to note that AI technologies are not foolproof. They can and do make mistakes. For this reason, it is critical to rely on an accountant to validate and verify the work completed by AI tools.