How AI helps accountants deliver forward-looking insights and how AI and Machine Learning can help accountants stay competitive.
Artificial intelligence (AI) and automation have brought the accounting profession to a point of pivotal change, and it is about to revolutionise the way that accountants work.
AI is already good at automating repetitive accountancy tasks, which increases accuracy and efficiency, and helps firms to discover hidden insights and trends that affect their clients’ businesses. It can automatically upload documents, understand entries, and classify them using the right accounting codes.
This has allowed accountants to do more with fewer resources and has freed up time and energy for creativity when it comes to analysing and interpreting data to extract real value for clients.
Many professionals are excited by the benefits that AI can offer. In fact, according to Sage’s Practice of Now report, the majority of South African respondents (82%) agreed that they need to increase the pace of technology adoption to stay competitive.
Now, as advances in AI and machine learning (ML) pick up the pace, three additional benefits have emerged: invisible accounting, continuous auditing, and active insights.
Benefit 1: Invisible accounting
At the beginning of 2020, over half (54%) of South African accountants were moving away from traditional service models and were reinventing their core technologies, recruitment approaches, and skillsets to offer customers an end-to-end consulting service.
They were able to do this because AI had eliminated repetitive tasks from the daily workload and increased the amount of readily available data and, therefore, intelligence to understand the current health and direction of their clients’ businesses.
Take Bank Rules from Sage as an example. By applying rules and ML to banking transactions, accountants can seamlessly bring banking account information into the accounting system to automate transaction reconciliation and processing. This means the books are always balanced, and the account status is updated in real-time.
They can create their own rules or use those automatically generated through ML and AI to improve business productivity and save time. We’ve calculated that, if the average manual transaction takes 20 seconds to capture, Bank Rules can save a business more than five years of manual data entry time.
And, the more you use Bank Rules, the faster and more efficient the system becomes, because it continuously learns from inputs and user feedback.
All this happens in the background – hence, invisible accounting. AI automatically manages the process of gathering, sorting, and visualising pertinent data in a way that helps the business run more efficiently.
Benefit 2: Continuous auditing
Nearly all South African accountants (90%) say that the ongoing effects of technology advancement and digitisation are forcing them to move faster and invest more to keep pace with the market.
Artificial intelligence can help accounting firms to build trust through better financial protection and controls.
As the volume of online transactional data increases, so does the potential for financial fraud, manual accounting errors, and dishonest payments. This has made compliance a lot more complex. But AI can review the data at speed.
It can detect anomalies like duplicate invoices, determine links between seemingly normal (but not) payments, and assign expenses to the correct categories, so the business doesn’t pay out for items it shouldn’t.
Automated anti-fraud and finance management systems help practices to significantly improve compliance procedures. In implementing predictive, strategic services to protect their own and their clients’ finances, they’ll also be able to pick up on potential issues before they arise.
What’s more, AI lets accountants capture business activity in real-time, perform continuous reconciliation, and make adjustments such as accruals throughout the month, which reduces the reporting burden at the end of the financial period.
Benefit 3: Active insights
Two-thirds (65%) of South African accountants said that investing in technology had enabled them to provide a faster service, which positively impacts customer relationships, and nearly a third (29%) have invested in emerging technology in varying degrees.
AI’s ability to analyse large quantities of data at speed and at scale allows it to deliver actionable insights in real-time.
In pulling data from customer demographics, past transactional data, and external sources, AI helps accountants to optimise their workflows, make better business decisions, and puts them in a position where they’re looking forwards with clarity, rather than backwards with obscurity.
For example, by using data to perform cashflow forecasting, the business can predict when it will run out of money and act before that happens. And, by uncovering patterns in customer behaviour before they churned, AI can help businesses to understand why customers leave and how they can improve their retention strategies.
This means that accountants can help clients to respond to financial challenges before they become acute, by adjusting spending or processes as required. And, as AI evolves, accountants will soon be able to provide predictive consultancy beyond pure financial planning to incorporate other areas of the business.
Same, but different
The accounting profession is modernising and becoming more sophisticated. While the rules of finance remain the same, the rules of how the work is done are shifting.
AI can turbocharge the profession from a backward-looking “bookkeeping” function to delivering forward-looking insights that can drive strategic decisions and transform accountants from number-crunchers into true changemakers.
AUTHOR | PJ Bishop, Vice-President for Partners, Accountants & Alliances, Africa & Middle East at Sage