Artificial Intelligence (AI) has been a buzzword for years, but it wasn’t until OpenAI came out with Chat GPT in November 2022 that AI came to the forefront of the accounting and other professions.
There was no doubt that AI was going to impact accounting, but most of us, including myself, thought we were 10 to 20 years away.
As it turns out, I think we’re a few months away from there being a large-scale adoption of AI to help accountants with their work.
Case in point: I asked ChatGPT a simple question: How is AI going to revolutionize accounting? In approximately 10 seconds, it came back with this synopsis, which I think is spot on:
Artificial intelligence (AI) is already transforming the field of accounting and has the potential to revolutionize it further.
Here are some key ways AI is impacting accounting:
- Automation of repetitive tasks: AI can automate routine and repetitive tasks, such as data entry, transaction categorization, and reconciliation. This frees up accountants’ time, allowing them to focus on more complex and strategic activities.
- Enhanced data analysis: AI algorithms can analyze large volumes of financial data quickly and accurately. This enables accountants to gain deeper insights, identify patterns, detect anomalies, and make more informed decisions. AI-powered data analysis can also help in fraud detection and risk assessment.
- Improved financial forecasting: By leveraging historical financial data, AI algorithms can generate accurate forecasts and predictive models. This helps organizations make better financial decisions, plan budgets, and optimize resource allocation.
- Streamlined audit processes: AI can enhance audit procedures by automating data extraction and analysis, enabling auditors to identify potential errors or discrepancies more efficiently. This can lead to faster and more accurate audits, reducing the risk of fraud and ensuring compliance.
- Intelligent virtual assistants: AI-powered virtual assistants can assist accountants in answering routine inquiries, providing real-time financial information, and offering guidance on accounting standards and regulations. These virtual assistants can improve productivity and provide on-demand support.
- Risk management and compliance: AI algorithms can continuously monitor financial transactions and detect suspicious activities or non-compliance with regulations. This helps in pro-active risk management and ensures adherence to regulatory requirements.
- Cost savings: The automation and efficiency gains provided by AI can result in significant cost savings for businesses. By reducing manual effort, minimizing errors, and optimizing processes, organizations can achieve greater productivity and resource utilization. However, it’s important to note that while AI offers numerous benefits to the accounting field, there are also challenges to address. These include data privacy and security concerns, ethical considerations, the need for upskilling the workforce to leverage AI tools effectively, and ensuring proper governance and accountability in AI-driven systems.
Overall, AI has the potential to revolutionize accounting by transforming traditional processes, enabling accountants to become more strategic advisors, and improving the accuracy, efficiency, and insights derived from financial data.
As shown above, AI can already draft and respond to prompts very well. It’s easy to see how just this can be useful: it can draft e-mails, help with writer’s block, and respond to questions pretty accurately. And this is literally only the beginning—ChatGPT how only been out for six months.
I don’t think it’s far-fetched to say that by next tax season, every accountant will be using AI in some corner of their practice to help with efficiency.
The bottom line is CPAs should embrace AI and let it help them do their jobs. Like the internet, AI is going to revolutionize how we do business—but it’s not going to put us out of business. We should look at this opportunity as a way to help bridge the talent shortfall we have in accounting by allowing AI to take over mundane tasks so that CPAs can focus on the highly profitable portion of the business, which is consulting and advising.
