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The Impact of AI on Accounting and Bookkeeping Processes

Posted by Kristoffer Roil on May 8, 2019 8:16:00 AM

The Impact of AI on Accounting and Bookkeeping Processes

Smaller accounting firms tend to be more forward-leaning than larger accounting firms. Smaller, more nimble accounting firms are adding AI to their businesses now -- which means they can easily outsmart the larger accounting firms if they’re going to be slow at adopting AI into their accounting services.

Why AI and Machine Learning

The impact of AI will be the most significant technological shift to date. Accounting firms that lack AI implementation in their accounting and bookkeeping processes will simply not be competitive going forward. This technology is moving fast. The capabilities of what AI can do today is very significant in terms of savings and accuracy.

AI and machine learning lead to:

  • Higher employee satisfaction
  • More robust recruiting
  • Happier clients
  • A superior service offering

The Impact of AI and Machine Learning

Firms that implement AI and machine learning are the only ones who will be competitive in the accounting landscape.

If you fast forward about three years, if you haven’t implemented AI technology in your accounting practice, you will not be competitive. We can already see very early signs of this. Companies that have successfully implemented a service like Vic.ai are pricing accounting services differently.

AI and machine learning are fundamentally transforming the way outsourced accounting services are priced, purchased by clients, and delivered to clients.

AI + Cloud Software

The days of charging higher hourly fees for repetitive tasks are numbered. If your firm is relying on offshoring and RPA, that is considered to be the old way of doing things. AI services will bring better accuracy and faster turnaround.

AI applications like Vic.ai work seamlessly with traditional cloud accounting systems -- augmenting and automating the human layer in the equation. The AI is constantly learning and growing better over time. There is no need to replace existing accounting systems.

You’ll likely deploy many different AI systems into your software stack over the coming years. Most AI systems plug into your core software stack.

Bookkeeping

If we're looking at more practical ways of implementing AI today, then bookkeeping tasks stand out. Using the top technology available, invoice and bank coding is simply a matter of reviewing the AI rather than actually performing the work. This is obviously a stepping stone to complete automation that we will see soon.

Deploying AI for invoice processing and bank coding requires a phased two-step approach:

  1. The AI makes suggestions (The Accountant decides whether to accept or correct those suggestions.)
  2. Once trained, the AI codes costs automatically (The accountant only provides feedback when the AI is below a certain confidence level.)

Goal: Automate the Entire AP Workflow

AI technology is already very close to performing this without any human intervention.

Today, we’re integrating AI and machine learning into AP process to automate the entire workflow which can read the invoice, extract the data, code the invoice to the proper general ledger accounts, approve the process, and pay the invoice.

This may be one area where people are underestimating the impact of AI on outsourced accounting. It doesn't just impact how you build your team or the kinds of clients you work with. It impacts your entire business model, how you market, how you sell services, how you deliver services, and how you price services.

One of the biggest leaps that we're seeing already with the early adopters is some very forward thinking, disruptive moves for how all of this is put together and packaged for clients.

One way to figure out how urgent this is for your firm and the potential for making a huge dent in your productivity and cost savings is by looking at the monthly invoice volume that you're currently processing for a typical client.

 

What does your firm need to do now to make sure that it remains relevant in the future? Share your thoughts in the section for comments below.

To learn how accounting and bookkeeping firms can prepare for AI and machine learning, watch the webinar recording on “Automating Outsourced Accounting: How Accounting and Bookkeeping Firms Can Prepare for AI and Machine Learning.”

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Topics: Accounting, Artificial Intelligence

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