You cannot ignore technology in today’s world of automation, where everything is becoming digital. There is no option left other than to embrace technology, especially after the rise of generative AI chatbots. Like other areas of development, the field of accounting is no different; AI has become a key technology for accounting firms. AI in accounting brings a wide range of advantages, from helping firms streamline operations to delivering automated workflows. According to the GenAI professional services report of 2024,30% of accounting firms are considering implementing AI solutions. So, how are they going to incorporate AI into their existing systems? This article will discuss the approach for AI in accounting, giving you a complete walkthrough of modern-day accounting.
Organizational Use of Generative AI in Accounting
Businesses are moving towards automated solutions, and it is not limited to large-scale firms only. Even small-sized startups are adopting AI models from the start, and large giants are increasingly transitioning towards AI, freeing up accountants to focus on other operational and advisory tasks. According to the same research, about 8% of accounting firms are already using AI as their main accounting engine, which is industry-specific and dedicated to their business, while 27% of firms use AI at open-source levels, like using Chatbots for assistance.
How Large-Scale Enterprises Use AI in Accounting
Large-scale accounting firms or the giants of the industry, such as KPMG and PwC, are winning the AI accounting race. While these firms have long chains of operations and much larger business models, they leverage the power of AI differently. Here is how these firms are using AI to their advantage:
Annual Audits
Using AI in audits is an innovative way of working faster and accurately. Large-scale enterprises like EY implement AI in auditing. They analyze large amounts of data on their annual reports through AI technology. This helps in responding to the associated risk faster and prevents fraudulent listings. This improves the quality of the audit, increases value, and uncovers any anomalies in the data.
Document Review
Documentation is another time-consuming process where AI can shine. Firms like Deloitte have incorporated AI to review accounting documents automatically. The company uses cognitive solutions to analyze sets of documents. It enables the firm to process unstructured and unorganized data and convert it into a verifiable data document format. Moreover, the dedicated solution developed by Deloitte blends into the business workflow and improves effectiveness.
Client Satisfaction
Some large-scale firms like KPMG have solutions that solely focus on the clients. Their AI framework allows customers to design, create, and deploy AI accounting for their business records. Moreover, the customers can implement AI solutions (in an ethical manner) and maintain their accounts with satisfaction and loyalty.
How Small-Scale Businesses Leverage AI in Accounting
On the other end, the small-scale businesses use AI solutions differently as they lack the same resources as the big giants. However, they still stay competitive in the market by implementing AI for reporting and other operations. The key services they provide using AI are as follows:
Bookkeeping
Bookkeeping is a critical process that requires a full-fledged accounts manager to keep records and categorize expenses and charts. AI software can help significantly in this regard as it feeds into the business data and automatically reconciles the accounts, summarizes expenses, and keeps records securely. This allows the business to save time and resources while reducing manual error risks and record loss.
Research
Research in accounting is a time-consuming task that requires extensive analysis. Small-scale firms use AI software for research across different areas of accounting operations, especially for taxes and human-edited content. AI models provide dedicated tax research tools that can offer accurate and precise answers to other research queries. Moreover, AI lists the sources for referencing, allowing the business executives to dive deeper into the context. Documentation also becomes easy using AI software as it summarizes key highlights from contracts, invoices, and other human-edited paperwork that require further investigation.
Tax Returns & Advisory
Tax returns and advisory services are the differentiating factor in the approach of large-scale and small-scale firms. Filing tax returns and providing advisory services are the core operations of accounting firms that take up most of the business revenue. Small-scale firms implement AI solutions to create data analysis summaries as AI automatically extracts information from different financial documents. Generative AI processes the data to provide advisory solutions by predicting future insights. This helps the clients and business partners to plan tax rates and make financial decisions intelligently. Moreover, AI becomes a complete assistant for tax return professionals in SMBs, allowing them to offer rich responses and value-added services.
Final Thoughts
AI in accounting is a game-changing technology that empowers firms of all sizes. Businesses should take it as an opportunity rather than a threat for their accounting solutions, as it significantly improves efficiency and future decision-making. The way large-scale enterprises use AI is different than SMBs. However, each firm has its own set of rules and working principles on which they can create a customized AI approach that can help them in day-to-day accounting tasks. In a nutshell, AI in accounting is dominating the sector, especially in the startup stages of business, as it provides them a kickstart in most of the accounting operations that require upfront investment and professional expertise, such as tax filing and advisory. Embracing the AI trend will keep the business relevant in the competition.
