Posted by Angelica Garcia
Aug 02, 2023
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Accounting by definition is the ability to keep and maintain financial accounts and records. For companies, this encompasses all their transactions, serving as the backbone of their operations.
Through proper accounting, a company is able to record and monitor their financial transactions, operational costs, income and overall financial stability.
In fact, studies show that start-up companies who take the time to set a good foundation for their finances and financial management strategy are more likely to last longer than those who focus solely on their operations first and their finances second.
On a macro scale, accounting also serves as the best way to maintain transparency within institutions, governments and private entities regarding finances. Proper accounting keeps stakeholders informed, mitigates fraud, and helps in effective tax planning and budget allocation. For both private and public institutions, accounting remains a key function in economic growth and business sustainability.
Accounting as a Profession
In recent years, the demand for proper financial management for both private and public institutions have increased. With this, the field of accounting has since developed into a profession where finance and accounting experts help private individuals, entities and even governments with their financial management needs.
From simple bookkeeping, budget forecasting, managerial accounting, audit to the complexities of taxation, the different disciplines under accounting as a profession serves separate roles to helping entities with their finance and accounting needs such as preparing financial statements to advising businesses on tax strategies and conducting audits to ensure compliance with legal and ethical standards.
As companies grow, diversify and their applicable regulations evolve, the field of accounting continues to expand, integrating new methodologies and technologies to enhance accuracy and efficiency. The demand for skilled accountants remains high, requiring professionals to adapt to emerging trends and technologies that reshape traditional accounting practices.
The Rise of Accounting Technology
With the rate of evolution in today’s technological landscape, we are seeing an increase in technological integration into all aspects of our daily lives – whether it be in our professional career, school and even personal responsibilities. This change is also evident in the field of accounting as accounting technology continues to advance.
From simple bookkeeping software that allows accountants to track expenses, smart software that fully integrates automation, data analysis and forecasting features has streamlined accounting processes as whole – reducing manual work for accountants and improving overall accuracy.
At present, one of the most impressive advancements of accounting technology remains to be AI (artificial intelligence) integration in accounting and computing software.
AI allows for real-time financial reporting, tracking and analytics for all involved parties, making it the ideal software for finance and accounting professionals to analyze financial data from anywhere and maintain transparency with their clients as clients can also always access it.
Additionally, blockchain technology – technology heavily assisted by AI – is being explored for its potential to enhance security and transparency in financial transactions. With this, it is undeniable that the rise of accounting technology has paved the way for financial management efforts to be optimized to its fullest extent.
AI in Finance and Accounting
It's important to fully understand AI before digging into its impact in accounting. Artificial intelligence, as defined by Britannica, is the capacity of digital computers or computer robots to carry out tasks that are typically performed by intelligent beings.
which means?
AI is the simulation of human intelligence in computers that are built to think and learn in the same way that people do. AI has a tremendous impact on the accounting profession because of its ability to evaluate large volumes of data and deliver helpful insights for decision-making.
Will AI take over Accounting Jobs?
No. It is unlikely that AI will completely replace accountants in the near future. As AI continues to develop, it is likely to have a significant impact on the accounting profession. However, AI is likely to automate many of the tasks that accountants currently perform, a study by Oxford University predicted that by 2033, more than 40% of jobs would be automated. This means that accountants will need to be skilled and keep up in using AI-powered tools in order to stay competitive in the job market.
Furthermore, AI-powered tools cannot currently provide the same level of critical thinking and judgment as humans or accountants do, as they will still need to be supervised and maintained by accountants.
Here are some ways that accountants can utilize the benefits of AI in Accounting.
Discover artificial intelligence and how it is used in accounting. There are a range of resources available to help accountants learn about AI, including online courses, webinars, and professional periodicals.
Develop skills in using AI-powered tools. There are a variety of AI-powered technologies available to assist accountants in automating activities, analyzing data, and making forecasts. Accountants who can properly use these technologies will be more competitive in the job market because it has a direct impact on their profession.
READ: Beyond the Buzz: Why Embrace Innovation in Accounting?
How is AI changing the way we work?
One thing to note as the world of finance continues to integrate AI is that AI will not replace finance and accounting professionals. Instead, it will become a tool to help professionals such as you to be able to increase the quality of your work and perform value-adding tasks that benefit your company and clients.
Here are some of the ways AI integration helps a finance and accounting professional’s daily tasks:
Benefits of AI in Accounting
Automation of Routine Tasks
AI-powered software can handle tasks such as data entry, invoice processing, and bank reconciliations, reducing human error and freeing up accountants to focus on strategic activities.
Enhanced Data Analytics
AI software and blockchain technology can process large volumes of financial data quickly, identifying patterns and providing actionable insights that help companies make informed decisions. This feature is an asset for a company given that updated financial data and insights will be available at all times – giving management accurate information when making decisions on company growth or handling and navigating market turbulence.
Fraud Detection and Risk Management
AI-powered analytics can detect anomalies and unusual transactions in real-time. Meaning, should threats occur outside of the office hours of your accountants, they are able
helping accountants identify fraudulent activities and mitigate financial risks.
Improved Compliance and Regulatory Adherence
In every industry, government and regulatory bodies constantly amend rules and regulations to keep up with the current market trends and landscape. With this, one of the main problems that finance and accounting professionals encounter when it comes to compliance is being unable to keep up with all these changes.
Through AI-powered accounting software, accurate financial reporting and compliance can immediately be achieved as the software analyzes changes in regulations in real-time (as soon as it occurs) and cross-checks it against your company’s financial statements and legal requirements.
Personalized Financial Advice
With the ability of AI to analyze large sets of data and real-time financial information, they are able to provide personalized financial recommendations depending on your company or your client’s situation. You can tailor this software according to your needed industry, metrics and financial goals for them to be able to give tailored insights that can help in your financial planning and decision making.
In general, the integration of AI in accounting is reshaping the profession, allowing accountants to move from traditional number-crunching roles to more strategic decision making roles. As AI continues to evolve, it is essential for accounting professionals to embrace technological advancements and develop digital skills to stay relevant in the ever-changing landscape of finance and accounting.
What are the challenges that accountants face in the age of AI?
While both private and public companies and entities will feel the changes brought by AI, it is likely that finance and accounting professionals will be the ones who are first needed to adapt – being the ones who perform the daily tasks to be supplemented by AI integration to various accounting software. Because of this, some accountants have reservations regarding AI integration, believing it to be a development that not only challenges their field but also renders their specialty and expertise disposable.
The challenges that accountants face in the age of AI include:
- The need to upskill and reskill to fully utilize the benefits of AI.
- The need to manage the risks associated with AI, such as system and security.
- The need to ensure that AI is used for accounting tasks in a responsible and ethical way.
READ NEXT: Should My Accounting Firm Be Worried About AI?
What are the potential benefits of AI for Accounting Professionals?
The potential benefits of AI for accountants include:
- Increased efficiency and productivity
- Improved accuracy and insights
- Enhanced decision-making capabilities
- Increased opportunities for specialization and upskilling
While there is an added demand for finance and accounting professionals to now become adept in AI and accounting technology aside from just mastering accounting principles and knowledge, aspiring professionals can view this as an opportunity to become a valued employee – leveraging AI proficiency to make them a desirable candidate.
In the coming years, AI will not be going anywhere as more and more companies invest in software that allows them to integrate AI into their company processes. Because of this, being proficient in accounting technology and software that uses AI gives you the upper hand in the saturated job market, making you a desirable candidate for any finance and accounting role you wish to fill.
By utilizing AI technology, accountants can concentrate on more challenging tasks that call for analytical thinking and problem-solving abilities. This change will increase efficiency and accuracy while also giving accountants the opportunity to contribute valuable insights and pursue possibilities to succeed in their profession. Accounting will be strengthened by AI in the future and professionals who embrace this transformation will succeed.
Ethical AI Use in Accounting
As the integration of AI in the accounting industry marks a transformative shift for both accounting as a whole and accounting technology, it is important to ensure the ethical use of AI. Meaning whether you are an employee or an outsourced accounting provider, it is important that you remain transparent in the scope of which you use AI.
For example, one constant concern when it comes to AI use is the security of privacy and confidentiality. With the sensitive information that comes with one's finances, it is important to implement secure safety procedures alongside AI use to keep the trust and confidentiality for your concerned stakeholders.
With the capabilities of AI being endless, finance and accounting professionals, private and public entities and even regulatory bodies are all tasked with being able to keep up with this development -- to use it responsibly and according to the standards set by our organization.
Outsourced Accounting as an Effective Growth Strategy
For companies without the manpower and resources to continuously train their accounting team to adapt to the changes in accounting technology and AI integration, an outsourced partner who makes it a priority to do so is the best way to remain competitive.
How so?
With the continuous changes that AI will bring to the field of finance and accounting, outsourcing one’s accounting needs has now become a sustainable way to keep up with the constant changes. By having an outsourced accounting partner who takes the time to learn and integrate new developments in accounting technology to their accounting processes, you are assured that your own accounting processes and finances remain evergreen – up-to-date with the market’s current demand and standards.
Need Partners in the Continuous Evolution of Accounting?
As a trusted finance and accounting service provider, we have a wide expertise in handling the numbers of companies across various industries.
We are committed to remaining up to date with the latest in accounting technology, helping you manage your accounting needs. Contact us today and we’ll help you find the right solution for you.
You may download our Outsourcing: How to Make it Work guide today and know how we are to help when it comes to your company’s assets.
First Published on Aug 02, 2023 and edited on February 26, 2025 by Aly Tagamolila
