Artificial Intelligence In The Accounting Industry
Accounting solutions that are both cloud and artificial intelligence enabled are becoming a reality – are you prepared for how this will affect your firm and your industry as a whole?
Artificial intelligence, as a term, can still often sound like science fiction – but it’s not.
Not anymore, at least.
Over the past few years, developments and leaps in the furthering of machine-learning have led to the integration of artificial intelligence into products you already use or future versions of products you use.
And it’s likely here to stay.
According to an MIT-Boston Consulting Group survey, a vast majority (more than 80%) of surveyed executives report that they believe artificial intelligence to provide a competitive advantage, and nearly the same amount believe it will increase their company’s productivity.
Whether artificial intelligence is truly beneficial or not, with that kind of popularity among those in charge, it’s not going anywhere.
But we’re getting ahead of ourselves…
What Is Artificial Intelligence?
Artificial intelligence is a technology that allows computers to correctly make decisions that would otherwise be left up to users.
The two primary popular forms this has taken in the consumer and business worlds to date include:
- Machine-learning, which exponentially improves the frequency with which it makes correct decisions by accumulating data and repeating processes (i.e., it “learns” by rote)
- Speech-based technology that can understand spoken word in multiple languages, allowing it to execute tasks by verbal input (e.g. Siri, Alexa, Google Assistant)
That’s all well and good, but the real question is…
Why Does Artificial Intelligence Matter To Accountants Like You?
In a nutshell, for the same reason it matters to any industry in which the technology can be introduced and applied: automation.
Bridgewater Associates, one of the most prominent hedge fund managers, is using AI-backed trading that can predict market trends based on historical data. This is good for investors, but faster AI-backed trading decisions can offset entire markets. This could result in adverse effects on entire markets because it will affect capital flows and macroeconomic policies.
When it comes to basic tasks that fall relatively simply into an algorithm (that is, perform a set action when given a specific input, or, “if a then b, if b then c” etc.), machine-learning allows an artificial intelligence to eventually perform those tasks as accurately as a human counterpart would, if not more accurately.
The Top 3 Benefits Of Artificial Intelligence For Your Accounting Firm
Now that we’ve covered the basics, let’s examine the real, applicable effects that the introduction of artificial intelligence will have on the accounting industry and firms like yours:
Artificial Intelligence Enabled Software
Many of the line-of-business apps you already rely on offer artificial intelligence capabilities, primarily in terms of automating simple tasks.OneUp, QuickBooks Online, SageOne, and Xero are all prime examples – however, you should note that the effectivity of these features can vary.According to an Atherton Research study, the testing of the automation capabilities of these four solutions broke down as follows after five months of use when ranked against the Accounting Automation Index:
- OneUp – 95%
- QuickBooks Online – 77%
- Xero – 38%
- SageOne – 30%
Artificial Intelligence-Based Security
One of the more threatening aspects of cybercrime is that criminals can adapt their methods to ensure effectivity. Most hackers change up their attack method for each target, which limits the effectiveness of defenses based on known files and attacks. This means that businesses whose security focuses on signatures and perimeter defenses need to reevaluate their approach to cybersecurity.This is where artificial intelligence comes in. Security based on advanced algorithms that can adapt and learn creates a system that can become familiar with the normal patterns associated with each user and device, detecting anomalies in those patterns quickly.For example, U.K.-based company Darktrace has developed technology based on the human immune system – detecting and responding to foreign threats without compromising your business’ key operations and functions. Threats that would normally be able to hide their presence are instead found and neutralized, buying IT personnel time to get ahead of the situation. Like a digital antibody, the program can slow down or even stop compromised connections or devices within a network.
Analysis Of Large Data Sets
Artificial Intelligence technology is also quite capable of crunching the numbers, and quite a bit better at it than their human counterparts when there are a lot of numbers to crunch.For example, professional services company Deloitte uses artificial intelligence to interpret thousands of contracts and deeds, extracting key terms, analyzing risk, and compiling all the information for review. This kind of capability will drastically reduce the time it would take to perform the work otherwise.
Now, all of this may sound a little scary to you – after all, if machines can handle all of that, what would we need accountants for?
Similar to the advent of cloud accounting, disruptions in the accounting industry are to be expected. This means that you must rethink your services. This is according to a report by Dr. James Canton entitled Imagine Tomorrow: A New World for Accountants.
Not to worry – although machines are getting better and better at handling the mundane, human counterparts will still be needed for review, in advisory capacities, and otherwise.
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