Is Artificial Intelligence Future of the Accounting Industry? Or It’s Already a Part of the Financial World!
In the words of Kai-Fu Lee, a Chinese venture capitalist, technology executive, writer, and an artificial intelligence expert – AI is the pursuit of performing tasks usually reserved for human cognition.
The most important AI breakthrough in on deep learning which is a wider term of machine learning. For example, the output retrieved from deep learning could be the decision like –
- How much risk is involved in the venture?
- What type of profit is this?
- How to calculate the taxable amount?
If we carefully observe the decision making a science of AI, then it is clearly evident that AI can fit perfectly in accounting and financial services. That’s because, in accounting, we are looking for answers to make fruitful decisions.
Presence of Artificial Intelligence in Accounting
AI is a technology that is transforming the norms of accounting and finance industries drastically by bridging the gap between tedious tasks and advancements. Today, we might think that AI is part of fairy tales or Hollywood movies only, but in reality, we are using numerous components of artificial intelligence in our day to day activities. Especially, accounting machine learning is something that is gaining lots of momentum.
It is just due to the lack of understanding about the subject – accountants won’t realize that they are massively using AI. To understand the present influence of the AI in financial services, CPA and accounting firms need to streamline their daily activities and they will observe that AI is a prime part of their operations such as;
1. Data Entry & Analysis
Today, accounting firms don’t have their data spread over various documents and files. Instead, accountants are using PDF, Excel sheets and other digital formats to record financial transactions. And, all these digital bookkeeping formats are part of an AI which automatically extracts data from receipts and classifies it based on the revenue and expenditure head and record in the analytical report at the right place. Following are some examples,
- People using QuickBooks must have noticed that on posting receipts from customers, QuickBooks suggest that against which Sales this Deposit can be offset.
- We have also observed an element of AI in bank reconciliation using accounting software like QuickBooks.
- Moreover, accountants can scan the receipts submitted by their clients into their computer and AI-based accounting software can easily record the transaction. When entire data is compressed in one place, then it becomes very convenient for accountants to draw insightful conclusions.
2. Digital Payment Methods
The digital payment methods like net banking, e-cheques, UPI transfers, bitcoins, etc., are new ways of conducting business operations. All these digital payment methods are also a branch of the Artificial Intelligence that has been making the life of CPAs very easy and eliminating the chances of internal fraud.
For instance, earlier accountants can easily influence financial records with their biased attitude as all transactions are mostly based on cash. But, with the cashless system, every single entry is executed by the computer system and backed by proof that eradicates the chances of internal frauds.
3. Automating transactions and alerting on possible errors
Today, all the popular accounting software which are used by most of the accounting firms like QuickBooks, Zoho, and others are trained to follow the basic accounting principles and generate future entries based on previous data. Like, if accountant mistakenly adds the wrong amount of rent from the receipt, then the software will automatically pinpoint it to drag the attention of the accountant. Moreover, as we all know that accounting is a dual entry system, but software accountants just have to enter one entry and the software will automatically create a dual entry.
And, everything is possible because of the learning using Artificial Intelligence which stored in the accounting software which is present on your computer.
4. Artificial Intelligence in security management
The security has been always a concern for the accounting organizations because they have a responsibility to protect the valuable financial data of their clients. However, today there are plenty of different security tools and software are available which accounting companies are using to safeguard their digital data. Some advance accounting organizations like CapActix use an SSL encrypted document management portal to transfer sensitive data. Moreover, some companies assign photo identity or retina scan ID cards to their employees to exceed the data.
Apart from this, dynamic antivirus and anti-malware software are used by companies to beat the external security threats. It will be easy to fathom that all the latest accounting security technologies used by accounting organizations are designed on the pillars of AI.
5. Artificial Intelligence in Credit Score assessment
A credit score assessment system is a new way to access the capacities of the borrowers which is keenly adopted by accounting companies to examine the credibility of their clients. The credit score is created on the terms of AI where financial records and history of a person are processed to rate the creditworthiness of a person according to which he or she will be able to take a loan in the future.
Leading automobile companies in the US have reported that AI-generated Credit Score has cut down 23% of their annual losses. And, all this because financial institutions used AI to rate the credibility of a person.
AI is the Future of Accountants
The examples discussed above have made it crystal clear that AI is playing a role and will going to play a major part in the accounting and finance industry’s future. It’s just that we are so used to technology now which makes it possible to observe the components of AI. Today, it is impossible for accounting firms to execute their task without using any of the AI components.
The present of AI in accounting is glorious, but now we should focus more on the future which is going to be more glamorous as the machine learning, supervisory learning, and other AI technologies are going to even a major part of the accounting world like blockchain, robotics, cloud computing, and such other technologies.
AI is an integral part of accounting so if you are looking for an accounting firm that possesses AI components, then contact CapActix at email – [email protected] or can call on (201) 778-0509.