© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - Empowering Your Accounting Software with AI Capabilities
Posted 3rd January 2024

Empowering Your Accounting Software with AI Capabilities

According to a recent study by KPMG, over 59% of large organizations already use AI in their financial, accounting, and tax departments and about 29% plan to implement AI-powered software within the next 12 months.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

Empowering Your Accounting Software with AI Capabilities

Accounting Software

According to a recent study by KPMG, over 59% of large organizations already use AI in their financial, accounting, and tax departments and about 29% plan to implement AI-powered software within the next 12 months.

In this article, we explore how AI popularity is gaining traction among accounting departments, talk through the main opportunities AI-enabled accounting software solutions present to financial specialists, and cover some concerns related to technology implementation.

Top AI use cases in accounting

Bookkeeping automation

With a natural language processing (NLP) component capable of recognizing and processing a vast amount of data from invoices, bank statements, or receipts, AI tools can automatically input that information into the bookkeeping software, reducing manual entry mistakes and speeding up the process.

In addition, artificial intelligence can speed up and enhance journal entries to update debit and credit balances. With deep learning capabilities, such advanced tools can learn to distinguish between various types of financial transactions, like expenses, revenues, or liabilities, and categorize them to make the organization of financial information more accurate and efficient.

AI can also enhance the reconciliation process by matching transactions from various sources, like bank statements and invoices, quickly identifying discrepancies or unusual patterns that may indicate errors.

Enhanced data analysis

Artificial intelligence surpasses humans in the efficiency and accuracy of data analysis. AI-powered tools can process large data volumes to identify patterns, correlations, or trends not apparent to the human eye. AI data analysis comes into use for various financial activities.

  • Forecasting and budgeting. Machine learning models can forecast future market trends, stock performances, currency fluctuations, and other financial metrics. Relying on these predictions and historical cash flow data, AI-enabled software can aid in budgeting and forecasting financial performance for the future fiscal year, making decision-making more accurate and precise.
  • Risk assessment and scenario analysis. By analyzing historical data and market trends, AI can help assess the risk associated with various investments, credit lending, or other financial decisions. To dive deeper into possible outcomes of multiple financial endeavors, AI can simulate various economic and business scenarios to predict their potential impact on a company’s finances, helping in strategic planning and risk management.
  • Real-time data analysis. AI-enhanced real-time analytics processes financial data as it is generated, providing immediate insights into cash flow, profitability, and expenses via real-time customizable dashboards. All that allows accountants and business owners to view the most relevant financial information instantly.

Tax calculation

Optical character recognition (OCR) technology can scan and digitize tax-related documents, such as invoices, receipts, and forms, and then automatically classify and enter this information into tax preparation software. Further on, AI systems can handle complex, multijurisdictional tax calculations, including different rates, rules, and treaties. Such tools are particularly handy for businesses operating in multiple countries.

One of the real-life examples of such AI-powered tax calculations is FlyFin. The tool uses artificial intelligence to find all necessary tax deductions, with certified public accountants (CPAs) controlling the process.

Error and fraud detection

AI-powered accounting and finance management tools continuously learn from the enormous number and types of documents and data. It allows them to quickly identify patterns and detect errors, anomalies, unusual transactions, or inconsistencies in financial data. AI can even flag potentially fraudulent financial activities, helping to prevent financial loss and maintain the integrity of financial records.

MindBridge financial risk discovery platform is an example of how AI analyzes financial transactions to detect anomalies and trends that would be difficult for humans to find.

Compliance monitoring

Ensuring compliance with government or state standards (like GAAP or IFRS) in financial operations is a top priority for many businesses, and artificial intelligence can come at hand. AI systems can monitor and interpret regulatory changes across different jurisdictions and update the compliance requirements accordingly. To top it off, AI can automatically generate financial reports that comply with financial or industry-specific standards, reducing human error and saving time.

Trust but verify

Data security and integrity are two of the most significant concerns associated with AI in finance and accounting. Is it safe to entrust confidential information to such a powerful instrument? While the answer to this question is equivocal, organizations can undertake certain actions in terms of the whole IT ecosystem to protect their data when implementing AI-enhanced tools.

It is paramount to ensure unauthorized users don’t have access to sensitive financial data to prevent its leakage. Therefore, companies should encrypt sensitive data both at rest and in transit, implement strict access control and authentication methods, use data masking techniques as well as conduct regular audits to check for anomalies or errors in the data that can lead to incorrect financial statements or decisions.

However great the technology is, human control throughout its usage is essential. Take, for instance, the case of a New York lawyer who relied on ChatGPT and submitted a brief in a federal lawsuit containing decisions and quotations from the AI tool. As it turned out during the process, ChatGPT invented more than half a dozen relevant court decisions, undoubtedly putting the lawyer to shame. This example shows that despite the growing adoption of AI, the technology requires human control and guidance, whether we deal with everyday journal entries or complex tax calculations.

Summing up

While AI will not replace accountants and financial departments, it will significantly transform the accounting and finance sectors along with multiple other industries. The technology proved effective in various financial operations, from automating the bookkeeping processes to detecting fraud, empowering real-time analytics, and improving compliance. Therefore, AI represents a great opportunity rather than a threat, and if properly implemented and wisely used, the return on investment won’t take long.

Categories: Finance, News


You Might Also Like
Read Full PostRead - Eye Icon
Nordic Region Rivals US and Europe for Process Excellence Adoption
Innovation
17/02/2015Nordic Region Rivals US and Europe for Process Excellence Adoption

Nokia Labs Head of Operations Jarkko Pellikka, Ph.D says the Nordic region boasts some of the finest examples of process and operational excellence in the world today.

Read Full PostRead - Eye Icon
Ambienta Acquires a Majority stake in SF-Filter AG
Finance
09/02/2016Ambienta Acquires a Majority stake in SF-Filter AG

Ambienta, the largest European private equity fund specialised in environmental businesses, today announced it has acquired a majority stake in SF-Filter AG, Zurich, a successful specialist for filter solutions with sales of about CHF 80 m.

Read Full PostRead - Eye Icon
6 Things to Do Before Implementing An ERP System
Strategy
23/11/20216 Things to Do Before Implementing An ERP System

Usually, when an individual or organization plans to implement new software or system into their infrastructure, preparation is necessary, and that’s especially true when it comes to ERP systems.

Read Full PostRead - Eye Icon
Do You Need a Cryptocurrency Wallet to Trade bitcoins?
Finance
17/11/2021Do You Need a Cryptocurrency Wallet to Trade bitcoins?

A lot of people are asking the same question, "Do you need a Cryptocurrency Wallet to trade Bitcoins?" and they are all too common. The reason for this is that the technology behind the trade of bitcoins is incredibly complicated and it takes time to learn how

Read Full PostRead - Eye Icon
European Headquarters On The Way Out of London?
Finance
29/05/2018European Headquarters On The Way Out of London?

Along with Brexit causing a mountain of problems for every business in the UK, the much larger and market defining corporations are not exempt from the potential changes being made, this has seen many industry giants head out the Brexit door to mainland Europe

Read Full PostRead - Eye Icon
Leading the New Frontier of Private Investment Management
Finance
05/08/2022Leading the New Frontier of Private Investment Management

Industry FinTech, the ‘Best Fund Administration’ for 2022 in Florida, has made a name for itself across the United States of America with its front-running, highly technologically enabled, and legally compliant services.

Read Full PostRead - Eye Icon
The Prudent Group
Finance
25/10/2016The Prudent Group

The Prudent Investment Fund seeks to provide long-term capital appreciation by offering an attractive yield. The Board of Director’s approach in selecting investments for the Prudent Investment Fund is focused on individual company analysis.

Read Full PostRead - Eye Icon
Are you doing your #duediligence?
Legal
06/10/2015Are you doing your #duediligence?

When acquiring a target company or business, the due diligence (“DD”) exercise is a core part of the acquisition process. This gives the buyer the opportunity to delve into the business from a legal, financial and commercial perspective while providing ins

Read Full PostRead - Eye Icon
Most Dedicated Cultural NPO Funding Organization – USA
Corporate Social Responsibility
14/06/2022Most Dedicated Cultural NPO Funding Organization – USA

The arts are a powerful way to send a message – music, literature, theatre, fine-art, and more, are consumed by people daily. Puffin Foundation West is a non-profit funding organisation that supports cultural and artistic projects, such as prison choirs, dan



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow