Artificial Intelligence: A Gamechanger in the Accounting Industry

Did you know that the global AI market is expected to reach $190.61 billion in 2025? Many industries have adopted AI and have seen remarkable improvement in reducing cost and time, allowing human intervention in more productive work. The accounting industry hasn’t been left behind by this trend and is actively benefiting from products with AI capabilities inbuilt.

For instance, the vast data that accounting firms have access to can be used to predict future business trends and create an edge over the competitors. Accounting firms long for such products that automatically analyze the data and give accurate future predictions. Here are five applications of AI in accounting:

1. Data security enhancement

In the accounting world, where the financial data is most important, any data loss through hacking or fraud results in degradation of company reputation and monetary losses if the client decides to sue your company. It brings a bad name to the brand and creates trust issues with prospective clients.

AI comes to the rescue in this situation as it can detect fraudulent or hacking attempts in the initial phase made on the data, provide alerts on any unauthorized data access and blocks such attempts. It also helps in analyzing the kind of attempts made and identifying successful or unsuccessful attempts. AI aids in upgrading the security requirements and helps strategize to create better data security measures.

2. Business process automation

The traditional accounting industry works on repetitive manual tasks that need to be performed periodically. Tasks like accounts closure accounts payable and receivables, aligning accounting code with the expense code, etc. drain resources and time. These tasks aren’t only mundane and time-consuming, but also create more chances for human error.

With the help of AI, you can easily automate such routine processes and reduce the turnaround time from a few weeks to few days. For example, with the use of AI, several accounting organizations have been utilizing the time optimization feature in audit and contractual processing. They’ve successfully reduced the time from several months to a couple of weeks and with minimal chances of manual errors. This a significant change for accounting as it was always considered a human-centric industry.

3. AI and cloud computing

Most financial institutions have now opted for the cloud for storing their data and hosting applications such as QuickBooks, Sage and others on the cloud. However, most of the things are still manually managed by your IT team or the service provider. But with the advent of AI, multiple tasks can become automated and, eventually, self-sustainable.

For instance, you can easily integrate the data stored on the cloud with AI-based analytical tools to predict future trends and strategize business planning. Another area where accounting businesses can use AI and the cloud is to deliver real-time analytical reports to their clients. The same can be applied to guard the data stored on the cloud and identify any fraudulent activity.

4. Improved decision making

In the traditional accounting world, arriving and predicting the future financial numbers is a labor-intensive task and requires crunching large data sets. Missing out on even a tiny detail may result in a false prediction, eventually leading to a wrong decision.

Decision-making helps businesses grow and thrive in a time of competition. AI works as a forecasting decision-maker that can read the data from the past and present, identify business patterns from the financial data and predict the future forecasting almost perfectly, providing a base for correct and adequately informed decision making. AI implementation also helps in continuously training the system for future forecasting, and after a period of time the system can become self-reliant in predicting future trends automatically.

Final thoughts

As the demand for autonomous machines and automation increases, accounting will soon unlock the full potential of implementing AI to create near-automatic processes and reduce manual labor.

Accounting firms that don’t go with this trend will find it hard to survive in the market after a few years. So if you haven’t leveraged AI for your accounting tasks, now’s the time to do so.