Role of Artificial Intelligence in Accounting

What is Artificial Intelligence?

Artificial Intelligence is a well-known concept in the current scenario. It is a branch of computer science concerned with building machines and tools that can be used to perform the tasks which requires human intelligence. It can be used to replace the human skills and intelligence at a certain level.

What is Accounting?

Accountancy is one of the most important functions in any of the organization. Accountants prepares and analyses the Balancesheet, P&L, cash flow statements and other accounting records of a business. They are responsible for proper calculation and payment of taxes, manage treasury operations, cash flows and internal & external audits.

No matter how excellent an accountant is, there is always a chance of human error. AI (Artificial Intelligence) can be used to perform systematic accounting transactions to avoid this error and will also help in reducing the cost of accounting.

Why there is a need of AI in Accounting?

There has not been a much of automation in the accounting space till now. Artificial intelligence can help the accounting world in many ways. Some of them are:

• Reduction in Cost

Accounting Automation can be used to perform and automate the accounting entries at various levels thereby reducing the need to allocate a human resource exclusively to perform the accounting entries. If applied at every level in the organization, it will drastically reduce the overall cost of accounting.

• Minimize Errors

AI will be doing the accounting data entry in a structured way and since there is no human intervention, the chance of errors will be reduced to a great extent.

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As the data will be updated on real time basis with the help of technology, there will be no delay in the date of recording of transaction as compared to when it is happened. The real time updation of accounting records will help the business person to see the real time financial position of the company.

With the help of Accounting Automation, the business person gets all the financial reports on real time basis, using that he can take more effective and faster decisions as compared to earlier.

• • Real Time Accounting

  • Faster Decision Making

• Better Human Resource Utilization

As the manual task of recording each entry in the accounting software gets eliminated, the accountants can focus more on value added activities like financial analysis, reasons for deviations and meaningful interpretation of accounting data.

• Reduction in Frauds

If the accounting is fully done with the help of AI without any human interference, the chances of frauds in the financial statement can be reduced to a great extent. AI algorithm can be used in large data sets to flag potential suspicious activity and fraud.

• Increase in Audit Efficiency

AI can continuously learn from the audit flags and queries generated by the auditors. It can then make perfect judgements in the future for such transactions. Continuous reconciliation with the help of AI will make the books more accurate and will reduce the burden of auditors so that they can focus on more meaningful analysis.

AI (Artificial Intelligence) is currently being used in all areas of business, but it is proven revolutionary as far as accounting in concerned. Accountants can now extract whatever reports they need in the click of a button.

AI is not targeting to throw the accountants out of their work, instead it is focusing to create a more meaningful career for the accountants. It will increase the accountant’s ability to provide more accurate financial statements.

AI (Artificial Intelligence) is not something to fear but embrace. It doesn’t matter how advance the Artificial Intelligence (AI) gets in the accounting space but it can never replace the human skills required.

How to Prepare for the Future of Accounting Ahead?

Accountants and business persons should prepare themselves for the future of accounting automation. They should adopt the AI technology in the initial stage only to become better and more effective at their work.

Artificial Intelligence (AI) should be allowed to perform regular time-consuming accounting tasks to enable professionals to do more important work. Accountants should focus on building financial strategies that can take an organization to the newer heights.