Bruce Penson, managing director at business IT support provider Pro Drive IT, explores how accountancy firms can leverage artificial intelligence to remain competitive in an increasingly tech-advanced industry. There are some useful tips for insurance brands here too, on AI admin, anti-fraud, data handling and more.
From healthcare and banking to entertainment and manufacturing, companies in many industries have started to dip their toes into artificial intelligence (AI) software — driving efficiency and empowering decision-making.
Around 27% of finance and accounting firms have already embraced AI technology, with a further 20% looking to adopt it in the future.
However, with so much conversation surrounding artificial intelligence, it’s easy to be swept up in the hype, buying into ‘trendy’ tools and programmes without knowing how the technology is actually benefitting your business (if at all).
Wondering if AI has a place in your accountancy firm? Discover how artificial intelligence can improve your business processes — and five steps for implementing it effectively.
How can AI enhance accountancy processes?
If your accountancy firm already has a strong foundation of documented processes in place, AI is well-equipped to lend a helping hand and enhance your operations. Here are some examples of how your firm could use these evolving technologies to its advantage…
Invoice processing and data entry
The accounting profession is detail-oriented, with no room for mistakes. AI tools can introduce precision and speed into daily tasks.
Invoice processing and data entry, for example, is an essential but time-consuming job. Not only is manually completing these tasks inefficient, but it also leads to a greater risk of errors.
However, sophisticated AI-powered algorithms can identify and categorise vital information, such as invoice numbers, dates and amounts, before inputting this data directly into the company’s accounting system. With fewer hours spent on manual work, your team can dive into the more interesting and lucrative facets of accounting, like strategic planning, analysis and relationship building.
Budgeting and forecasting
Thanks to its ability to analyse financial data, AI can help your firm develop accurate and reliable financial forecasts.
This advanced technology can provide real-time insights into a company’s financial performance, giving you a head-start in identifying potential risks and economic opportunities for your clients.
Fraud detection
Traditional fraud detection methods often generate lots of false positives, which becomes costly and time-consuming for accountants. Meanwhile, AI-powered fraud detection systems can process massive amounts of data in real time to identify patterns and anomalies that point to fraudulent activity.
Using machine learning algorithms, these systems continuously improve their accuracy and effectiveness — adapting to the increasing volume of digital transactions and rising sophistication of fraudsters.
Tax compliance
AI algorithms can analyse data to pinpoint trends and patterns that suggest potential tax issues for your clients — enabling your team to proactively address compliance issues before they become more serious.
Upcoming changes to tax laws or financial regulations? AI can also help you gauge the impact on clients, allowing them to plan for tax liabilities, identify growth opportunities and become more flexible.
Administration and proofreading
Investing in automated spelling and grammar-checking platforms is a time and cost-effective way to avoid hard-to-spot mistakes that could have disastrous consequences for your firm.
From proofreading financial forms and crafting engaging letters with tools like Grammarly to translating documents and transcribing audio with solutions like Smartcat, AI can boost the productivity and efficiency of your accountancy firm’s administration operations — without compromising quality and consistency.
Some proofreading platforms like WProofreader even have advanced security features like on-premises deployment, which can help highly regulated industries like accounting meet financial data processing and storage standards imposed by GDPR, ISO/IEC 27001 and PCI DSS.
Marketing
Marketing is essential for your accounting firm if you want to promote your services effectively, but it takes a lot of time and effort. So, why not automate the process with AI tools?
More and more businesses are using generative AI algorithms like the ChatGPT platform to create personalised copy, code, images and videos. Utilising these tools could save your firm the cost of outsourcing a marketing professional or the time it takes to create content in-house. However, you may want to tread carefully to avoid issues with accuracy and legal compliance…
What are the considerations for implementing AI effectively?
More and more accountancy firms are realising the opportunity for AI to unlock opportunities for streamlined operations — especially as budgets become tighter and industry markets grow more competitive.
But remember: AI is no silver bullet. For it to be truly effective within your business, there are a few things to consider…
1. Do your homework
Conduct a thorough assessment of your firm’s existing accounting processes, workflows and pain points before identifying areas where AI could bring the most value — such as automating repetitive tasks like bookkeeping or generating reports and forecasts.
Next, define specific and measurable objectives for implementing AI within your company. Whether it’s enhancing data accuracy or providing improved financial insights, having precise and actionable targets can help you evaluate whether AI is a worthy investment.
2. Shop around
Once you’ve identified these key areas, you must choose safe and efficient tools.
Assessing your AI software’s security and privacy requirements is crucial. What are the tool’s data handling practices, encryption methods or compliance standards?
You may also benefit from looking at reviews from other businesses. How user-friendly is the AI technology? Does your chosen platform provide training and support? Did other accountancy firms face any problems during the implementation process?
3. Administer ethical guidelines
Establish and implement clear policies for the responsible use of artificial intelligence technologies in the workplace. Whether through codes of conduct, checklists or audits, ensure your firm complies with the legal and ethical requirements when using AI tools.
The UK Government’s Department for Science, Innovation and Technology (DSIT) published a detailed plan for implementing a regulatory framework that all businesses should use as a guide — but it’s up to you as a business leader to make sure AI tools are monitored and concerns are addressed as they arise.
4. Educate your team
Inefficient use of AI tools can result in higher operational costs, with employees requiring more time to complete tasks. Similarly, without understanding how to navigate the technology and its data, employees could expose your company to costly security risks that could bring operations to a halt.
Luckily, there are plenty of ways to get teams up to speed with these advanced technologies — from webinars and training workshops to online resources.
5. Monitor and evaluate performance
Introducing AI isn’t a set-it-and-forget-it situation.
For real success, you must continuously monitor AI performance to make sure it’s really worth investing in. To do this, measure key performance indicators (KPIs) against your predefined objectives and regularly evaluate the AI implementation’s cost-to-benefit ratio.
Monitoring how your staff get on with these new technologies is also essential. Opening the dialogue and encouraging feedback can help your team understand the purpose of AI within your business and how it’s being used to support them rather than replace them — leading to better buy-in from everyone involved.
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