This article provides a high level introduction to AI and accounting, covering best practices, use cases, and inspiration to achieve a new strategic level in your accounting operation.
January 30, 2024
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As a finance leader, you know that artificial intelligence (AI) is top-of-mind for many of your executive peers. But many are unsure exactly how it works, how it benefits the accounting function, or how it could impact the team. This article provides a high level introduction to AI and accounting, covering best practices, use cases, and inspiration to achieve a new strategic level in your accounting operation.
Understanding artificial intelligence (AI)
In the realm of technology, artificial intelligence (AI) stands as a beacon of transformative capabilities. Defined by Oxford as the "theory and development of computer systems able to perform tasks that normally require human intelligence," AI, in simpler terms, mirrors human-like thinking. HCLTech aptly describes it as the "science of making machines that can think like humans." Going beyond, generative AI (GenAI) employs learning algorithms to organically create content, bringing forth new possibilities in text, images, and code.
Bridging AI and accounting for strategic growth
AI's rapid evolution is reshaping both technology and business landscapes. It replicates complex human reasoning and task-oriented thinking, offering a significant impact on day-to-day operations. As Bain and Company notes, AI not only changes how companies deliver value but also supercharges productivity. For accounting and finance leaders, embracing AI is an opportunity to transcend task-oriented work, elevating teams to indispensable financial advisors, fostering business growth, and enhancing profitability.
According to a Gartner CFO poll, four out of five finance leaders said they expected to devote more money and effort into deploying AI over the next two years.
Applications of AI and accounting
AI presents a revolutionary shift in accounting practices, mitigating manual work, reducing errors, and fostering operational efficiency. The outdated manual processes drain resources, hinder audit and compliance, and pose risks. AI intervention is evident in areas such as data analysis, expense management, payroll processing, invoice management, fraud detection, and workflow automation.
A successful implementation journey begins with automating repetitive tasks, which frees up resources for strategic initiatives. Vic.ai, an autonomous AI solution for accounts payable (AP), exemplifies the potential to streamline invoice processing, reducing errors, accelerating payment cycles, and enabling staff to focus on strategic financial tasks.
Use cases for AI and accounting excellence
AI solutions play a pivotal role in enhancing various accounting functions. In invoice processing, AI streamlines the entire management process, significantly reducing processing time and minimizing errors. AI's prowess extends to payment processing, data accuracy, and analysis, ensuring financial statements' precision. Moreover, AI contributes to security and compliance, offering an additional layer of protection against fraud and cyber threats. Real-time insights, fraud detection, improved forecasting, and optimizing investments showcase AI's multifaceted potential. The integration of customer service chatbots further exemplifies AI's contribution, enhancing customer service while reducing the need for extensive support teams.
In essence, the symbiotic relationship between AI and accounting is not just a technological evolution; it is a strategic imperative for businesses looking to thrive in a dynamic and data-driven era. Embracing AI heralds a new chapter where financial operations become not just efficient but strategic catalysts for business success and achieving human potential.
In a Vic.ai Maturity Gap Report, these are the top 5 reasons finance leaders chose to implement AI:
- Increase employee efficiency by reducing time spent on repetitive tasks
- Improve accuracy of routine tasks
- Improve employee productivity
- Save money
- Reallocate resources to more strategic work
Navigating concerns and uncertainty for AI and accounting
As the transformative potential of artificial intelligence (AI) in finance gains momentum, finance leaders are grappling with uncertainties surrounding implementing AI in accounting. From concerns about job displacement to liability risks and data privacy, this section explores the multifaceted landscape of AI implementation in finance. While the fear of job loss is addressed through retraining initiatives, the importance of governance, testing, and transparency is highlighted to minimize risks. Thorough planning, adherence to best practices, and a strategic approach are emphasized to ensure companies effectively harness the power of AI in their financial operations.
The strategic accountant in the era of AI and accounting innovation
In the realm of finance evolution driven by AI and accounting innovation, a new era is emerging for strategic accounting teams. Generative AI and large language models will have a transformative impact on the accounting function, unlocking the true potential for accountants.
According to Deloitte, “talent transformation will be the most challenging speed limit on institutions’ implementations of AI, putting at risk the competitive positioning of firms and geographies that fail to effectively transition talent alongside technology.”
Beyond the clear cost and time savings, AI adoption has a significant impact on human potential. With AI working alongside the accounting team to tackle mundane tasks and fill efficiency gaps, individual team members can take on more advanced and strategic work, such as strengthening relationships with vendors, negotiating better payment terms, finding more sustainable solutions, monitoring and forecasting market trends, and driving innovation and growth.
Ready to dig a little deeper? Your team can process invoices faster and more accurately than template and rules-based accounting automation solutions using Vic.ai’s proprietary AI model and deep financial intelligence. See it in action here.
