The future of accounting: How to embrace cutting-edge technology
January 9, 2024
Technology is transforming the accounting profession. When businesses moved from paper ledgers to spreadsheets, it improved the timeliness, accuracy and integrity of accounting-related data. Likewise, cloud computing and the ability to remotely access real-time data have allowed accounting departments to be far more responsive to an increasingly distributed workforce.
Artificial intelligence (AI) is the latest technology to hit the accounting field. AI solutions can automate data entry by:
• Reading and processing paper and electronic documents, and
• Extracting and uploading relevant data to accounting systems.
AI can also analyze historical data to generate robust forecasts that support budgeting and financial planning. Sophisticated AI solutions can even help businesses achieve regulatory compliance and uncover suspicious fraud-related activity.
No substitute for human ingenuity
A primary objection to adopting AI is the concern that it will replace humans. While AI can improve the accounting department’s efficiency and effectiveness, that doesn’t mean it will reduce headcount.
In most accounting departments, AI can enhance employees’ capabilities and help them perform their jobs more efficiently and accurately. This can allow your in-house team to take on more sophisticated tasks that involve higher-value analysis.
7 steps
Similar to adopting other forms of technology, embedding AI in your company’s accounting department requires the following seven-step process:
1. Learn what’s possible. Research creative, cost-effective ways other companies are using AI to streamline their financial reporting and planning processes. Then, brainstorm how those solutions could improve your accounting department. For example, if your organization needs help detecting fraud, find out how AI can uncover patterns and anomalies.
2. Define clear objectives. Create a list of quantitative and qualitative goals for AI. For example, if you aim to reduce the time to complete the month-end close, identify a target number of days.
3. Evaluate vendors. Identify AI solution providers that can help achieve your goals. Invite proposals and participate in demos. Ask vendors how they train and support their customers’ use of their solutions.
4. Launch a pilot project. Consider a pilot project using a subset of your data to ensure the solutions function as advertised. Organize and clean your data before granting access to prospective providers. Evaluate each solution’s performance and document the results.
5. Select the winning vendor. Having verified the AI solutions’ abilities to meet your goals, select the best-performing provider and expand the use of that solution within the accounting department.
6. Invest in employee education. The success of AI depends on employees understanding its purpose and supporting its usage. Employees should be trained on how the solution can streamline and improve their workflow. Wherever possible, incorporate employee feedback to improve how the technology performs.
7. Monitor and optimize. Keep track of your AI solution’s performance and optimize its usage by providing new data and working with the vendor to improve accuracy.
Transformative potential
Staying on top of the latest AI developments and embedding AI into your accounting systems can help your business develop a sustainable, competitive advantage over its competitors. Contact us for help researching AI solutions that could transform your accounting department.
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