In this new era of AI, you may have heard whispers of job replacement or the end-to-end automation of all human processes.
The future of accounting is collaborative: AI will work alongside you to enhance efficiency, reduce errors, and help you focus on higher-value accounting tasks.
Accounting firms are using AI for tasks like data summarization, organization, and analysis, expense and payroll processing, reporting, forecasting, fraud detection, and workflow automation.
Actualizing the benefits of AI all starts with selecting the right AI accounting tool.
The reality is this—AI presents an opportunity to guide financial professionals and businesses toward a new era of efficiency, accuracy, and strategic prowess. And no, AI will not replace accountants.
If you can grasp the full extent of its impact and learn how to use it, you can unlock a treasure trove of opportunities in a world where data rules and precision is paramount.
This article will cover the most important topics about AI in accounting—from its current and future role in the financial space and your workflows, to key AI trends in 2023 and the tools that will help you meet your goals.
At the most fundamental level, AI empowers accounting firms to improve productivity and make well-informed decisions.
And it’s here to stay.
In fact, 71% of accounting professionals believe AI will bring substantial changes to the accounting industry.
AI will be used to level-up the incoming staff to be critical thinkers—not doers—right from the start. Profitability will skyrocket once we get our tech stack defined and perfected.
And according to a study from Mordor Intelligence, artificial intelligence in accounting is projected to grow 30% year-over-year through 2027. Plus, Gartner found that 80% of CFOs expect to spend more on AI in the coming two years.
Why?
Because accounting AI tools are built to boost efficiency, minimize the risk of human error, and enhance overall productivity.
More specifically, modern accounting firms are using AI for:
Forecasting
Scheduling
Managing cash flow
Workflow automation
Composing emails and inbox management
Invoice processing and expense management
Data analysis
Business communication
Project management
With its potential to increase productivity in every sector of the accounting industry, the adoption of AI in accounting is expected to accelerate in the coming years. Finance organizations are quickly realizing the potential it has to improve efficiency, drive decision-making, and increase profitability.
It’s the million-dollar question.
Is AI coming for your job?
While it's true that AI technology has brought about significant change, it's certainly not a harbinger of accountant extinction.
Here’s why:
Complex decision-making requires human judgment and expertise. Accounting requires understanding complex business transactions, regulatory frameworks, and industry nuances. AI, as advanced as it is, cannot exercise human intelligence, judgment, ethics, and creativity—things that are always needed to make complex accounting decisions in unique situations.
Client relationships and trust. Building trust and maintaining client relationships are integral to the profession, and accountants often serve as their client’s trusted advisors. Interpersonal skills, communication, and the ability to understand a client's unique financial goals and challenges are things that AI can’t replicate.
Oversight and interpretation. Human accountants play a pivotal role in guiding businesses through financial complexities. AI can automate data entry and analysis, but it cannot reliably interpret results, provide context, or advise on strategic financial decisions.
For these reasons and more, AI is more likely to complement accountants rather than replace them.
Not to mention that 66% of accounting professionals believe that the value of a firm drops if it doesn’t use AI.
AI will transform the business we have today and it’s important to be ready for the transformation.
You should feel confident that the future of accounting jobs is collaborative; one where accountants work together to provide comprehensive financial services, and AI works alongside you to enhance efficiency, reduce errors, and help you focus on higher-value accounting tasks.
Working with raw data in spreadsheets can be one of the biggest time sinks for CPAs.
Forward-thinking financial leaders are shifting the tides by using AI to analyze enormous quantities of financial data at speed and scale, providing real-time insights into a business’ financial health.
This is an incredible competitive advantage over firms that are resistant to embracing new technology in the accounting profession.
Jason Staats, Founder of Realize, uses ChatGPT to get structured data out of unstructured text, slashing the time it takes to synthesize important documents.
“It's literally as simple as dragging, copying, and pasting the transactions portion of a bank statement,” Jason says. “It doesn't show the account number, just merchant descriptions, which are the same for everybody. So that's, in my book, anonymized information. You can say ‘I want a CSV with this column, this column, this column’, and [ChatGPT] will give you structured information back.”
AI's ability to perform this type of work means that 59% of accounting and bookkeeping professionals believe bookkeeping will be the most disrupted function by AI.
I don’t believe AI will replace accountants or bookkeepers, but it will certainly change the way we work.
AI-driven algorithms can analyze vast datasets, identify patterns, and catch potential risks that humans might overlook.
This is why AI-powered predictive analytics is enabling accountants and finance professionals to move from the time-consuming (and often monotonous) role of generating the reports themselves and into the role of evaluator.
So when AI spits out a prediction or an output, it’s your job to evaluate its accuracy and reliability by benchmarking against known outcomes, employing cross-validation techniques, using appropriate evaluation metrics, and assessing for bias and fairness.
Artificial intelligence tools by themselves (think ChatGPT, Google Bard, and others) are most useful when they are integrated into the tools you already work with.
This is because you’ll spend less time switching back and forth between apps, and when AI is in the context of your workflow, it can be prompted by all of the current and historical data that you work with every day.
Accounting teams are discovering that embedding AI into their practice management solutions is bringing key advantages like:
A more streamlined workflow. Accountants can access AI-powered features within the same interface they use for client interactions and project management. This reduces the need to switch between applications, making the entire process more efficient and user-friendly.
Efficient client collaboration. Accountants can share AI-generated reports and insights directly from the platform, enhancing transparency and client communication.
The future of AI for accountants should spark plenty of excitement for finance teams. It holds loads of potential for getting more (and better) work done with less.
But to reap the benefits, it’s crucial to determine which accounting processes can and should be automated or augmented with AI.
Properly incorporating AI into your accounting workflows involves a systematic assessment of your current workflows:
Workflow analysis. Begin by thoroughly understanding your existing accounting processes. Document each step involved in tasks, from data entry to financial reporting.
Identify manual and repetitive tasks. Highlight tasks that are repetitive, manual, time-consuming, or prone to human error. These are prime candidates for automation or augmentation with AI.
Assess data volume and complexity. Consider the volume and complexity of data involved in each process. Tasks that require handling large datasets or complex calculations are often suitable for AI assistance.
Evaluate data variability. Determine whether the data you work with follows consistent patterns or if it exhibits variability. AI is particularly useful in handling data with variable patterns.
Analyze task suitability. Assess whether a task requires human judgment, interpretation, or discretion. Tasks that involve strategic decision-making or complex analysis may benefit from AI support rather than full automation.
Then, based on your assessment, prioritize processes that stand to benefit the most from automation or AI augmentation.
Here are some of the most impactful ways that AI can fit into your daily workflows:
Accounts payable/receivable: Streamline accounts payable and receivable by automating the extraction of data from invoices, verifying accuracy, and routing them for approval or payment.
End-of-month reconciliations: Automate end-of-month reconciliations by matching transactions, identifying discrepancies, and generating reconciliation reports, reducing manual effort and errors.
Financial reporting: Analyze large datasets swiftly to generate customized financial reports, graphs, and visualizations.
Budgeting and forecasting: Create more accurate budgets and forecasts by analyzing historical data and considering various scenarios.
Fraud detection: Put AI on the frontline of fraud detection with AI-powered algorithms to monitor transactions and financial data.
Email communication: Use AI to draft, edit, respond to, or even summarize emails to tame your inbox.
Workflow automation: Automate approvals, notifications, and document management, reducing the need for manual intervention across your workflows.
Client service: Use AI-driven chatbots or build your own virtual assistants to provide 24/7 support to clients, answering common questions, and potentially assisting with account inquiries.
It’s important to remember that just like the rapid development of artificial intelligence, these AI tools are also new and rapidly developing—the information below will be updated as more information, feedback and reviews are provided.
Karbon AI is an award-winning artificial intelligence feature within Karbon’s practice management software. It combines the revolutionary power of generative artificial intelligence and GPT technology with the context of your accounting firm—specifically within email and task management.
https://karbonhq.wistia.com/medias/18sakrabtyWith Karbon AI you can:
Summarize long email conversations and internal discussions. Rather than spending time combing through a long email chain, a bite-sized summary can show you what’s important and actionable before you choose to dig deeper.
Compose an email draft. Karbon AI can create the first draft of an email based on short prompts or keywords. You can then review and adjust before sending.
Provide personalized updates to your clients as their job progresses. Set a task within your Karbon work item to automatically draft an email reflecting your progress and any other prompts you provide.
Improve your writing. Improve outgoing client emails by making them more conversational, direct, apologetic or neutral. With one click you can adjust the tone to suit the situation.
Pros
Karbon AI is directly embedded into the Karbon platform, G2’s #1-rated accounting practice management solution. This means that everything you need is all in one place—no switching back and forth between apps.
Karbon AI is powered by Microsoft Azure OpenAI Service, giving users premier data security and reliability. With data security being a concern for 76% of accounting professionals when evaluating AI tools, this is critical.
Constant innovation and frequent product releases across the whole platform.
The software is built by a team of passionate accounting industry experts who understand the pains and needs of CPAs, bookkeepers, tax, and accounting professionals.
Offers a free trial.
Cons
As Karbon evolves its AI tool based on customer feedback, the first version of Karbon AI is largely focused on email.
Karbon is saving each individual user an average of 16.5 hours every week. Book a demo or start a free trial to learn more about Karbon and Karbon AI.
Vic.ai is a process-oriented AI automation platform designed to help accountants streamline various workflows from invoice processing to payments.
With Vic.ai, you can:
Automatically process invoices. It automates the extraction of data from invoices, coding, and approval workflows, making it ideal for organizations that deal with a high volume of invoices.
Perform in-depth financial reporting. Vic.ai's accurate data entry and coding can enhance the accuracy and speed of financial reporting.
Stay in policy compliance. The platform can cross-check expenses against company policies and compliance rules, flagging any discrepancies or violations.
Streamline audit preparation. Vic.ai's ability to maintain accurate records and audit trails makes it valuable for preparing for financial audits and compliance checks.
Uncover expense analytics. Vic.ai maintains a comprehensive audit trail of all expense-related activities so you can gain insights into spending patterns and financial health for more strategic financial planning.
Detect data anomalies. Its AI can detect anomalies in financial data, helping accountants identify potential errors or fraudulent activities.
Pros:
Has a strong emphasis on data extraction and compliance.
Customization options allow businesses to adapt to their unique financial processes and approval hierarchies.
Can handle a large swath of expense reports and data, making it suitable for businesses of all sizes.
Cons:
Does not offer a broader set of tools for managing and coordinating work across teams and projects.
High initial setup costs (up to $25,000 USD) makes it difficult for small businesses and startups to pay out of pocket.
Limited integrations with less popular accounting software or proprietary systems.
Docyt (pronounced ‘docket’) is an accounting automation software that offers a comprehensive suite of tools powered by machine learning algorithms and artificial intelligence. Its AI tool is bundled into two independent AI systems: Precision AI and Generative AI.
Here’s how it helps you get work done:
Automating bookkeeping workflows. Docyt’s Precision AI automates G/L data entry, accounts payable processing, transaction categorization, bill payment, and reconciliation.
Extracting information from documents. Docyt AI reads and understands your expenses and extracts the relevant information from your receipts and invoices.
Building financial reports. Based on your stored financial data, Docyt AI generates personalized and informative financial reports.
Enhancing collaboration. Through Generative AI, Docyt contextualizes and summarizes your internal and external conversations into accounting coding and actions.
Categorizing transactions. It recognizes and categorizes 80% of your transactions and uses generative AI to assist you with the remaining.
Supporting revenue reconciliation. Get all of your transactions automatically matched to connected bank feeds to reconcile.
Pros:
Customizable to your specific business progress and builds knowledge about your business every time you use it.
Known for its user-friendly interface and ease of use, making it accessible to businesses of all sizes, including small to medium-sized businesses.
Offers secure document storage so you can centralize and organize records.
Cons:
Not specific to accounting businesses.
Pricing for the bookkeeping automation features can be costly.
Reports of delayed responses from customer support.
Blue Dot is an AI financial platform for employee-driven transactions in European markets. It provides views into employee spend by assessing value added tax (VAT) spend, taxable employee benefits, and corporate tax income.
You can use Blue Dot and their AI models to:
Analyze and manage your VAT processes. Identify and calculate any eligible and qualified VAT spend based on countries’ tax regulations, court decisions, companies’ tax rulings, and gain insights as AI pulls from past trends of submitted VAT refund requests.
Assess taxable employee benefits. Blue Dot automatically detects and analyzes consumer-style spend that is subject to Taxable Employee Benefits (TEB).
Analyze top vendors. Gain a clear view of your vendors’ performance, broken down by expense types, spend trends, number of transactions, and overall performance.
Maintain high compliance. Ensure the highest compliance rate with a triple QA mechanism that extracts, matches and analyzes every invoice.
Gain visibility on multiple countries' tax regulations. Blue Dot offers a full employee benefits platform that displays and updates default rules per country.
Pros:
Uses multiple data sources in its AI.
Easily implemented by in-house IT professionals.
Incorporates secure audit-trail functionality.
Cons:
Unclear pricing model.
Does not offer a free trial.
Offers limited integrations compared to competitors.
Botkeeper provides automated bookkeeping support to accounting firms by using a combination of machine learning, artificial intelligence, and skilled accountants.
Here’s how Botkeeper works:
Custom reporting and dashboards. Botkeeper’s automated bookkeeping software combines various data sources and provides you with insightful reporting and dashboards.
Human-led. An accounting team monitors the automation and focuses on complex accounting, data integrity, and interpretation.
Handles the bookkeeping. Botkeeper extracts data from receipts, processes payroll, pays bills, sends invoices, reconciles accounts, and generates reports.
Pros
Unlimited reporting.
Accountants ultimately oversee the AI component.
Can work hand-in-hand with your current team, or the software can step in to automate manual tasks to allow your team to focus on high-value work.
Cons
Doesn’t offer a free trial.
Initial set up can be complex.
Involves a steep learning curve.
Rows AI is a modern spreadsheet editor that uses artificial intelligence to analyze, summarize and transform data. It leverages a direct integration with OpenAI, the creators of ChatGPT.
https://youtu.be/dQ0N-gbhOjQWith Rows AI, you can use its AI Analyst function to:
Simplify your data. Rows AI will summarize the key takeaways from your dataset.
Deep deeper into your data. You can analyze and extract data trends and patterns.
Structure your data. Tag and classify any type of text automatically.
Clean up your data. Perform tasks like capitalize text, remove unnecessary text, and parse email domains.
Enrich your data. Rows AI can generate dummy data or public data points for things you already have on your spreadsheet, like countries and company addresses.
Pros
Robust support content to help you set up and make the most of Rows AI.
Offers a free plan.
Wide variety of templates and integrations (although not many are specific to accounting businesses).
Cons
Not accounting-specific.
The direct integration with OpenAI means that your data is being sent to OpenAI and is used to train it, which can be concerning especially if you’re working with identifiable data.
Because Rows AI is relatively new, especially compared to Microsoft Excel, some users report that it lacks certain features.
Receipt-AI is a receipt management tool that allows users to take a picture of their receipt and upload it via emails or text messages. Receipt-AI uses AI to retrieve key information from receipts, and it claims to save users 97% of their time compared to manually uploading receipts.
WIth Receipt-AI you can:
Upload receipts from anywhere. Simply take a picture of your receipts and upload them via SMS or email.
Directly integrate with GLs. Receipt-AI uploads your expense information directly to Xero and QuickBooks.
Automatically categorize your receipts. Receipt-AI will prompt you to select a folder based on the information it has read on the receipt.
Pros
Receipt-AI claims to process receipts ~50% faster than other expense processing software.
No need to leave notes to contextualize receipts—machine learning handles that.
Supports bulk uploads.
Cons
Currently only supports text message uploads in the US and Canada.
Unclear pricing.
Difficult to find ratings and user reviews.
Chat Thing allows you to create AI chatbots powered by ChatGPT. It uses your existing data from uploaded files, YouTube, your website, and Notion so you can ‘chat with your data’.
You can use Chat Thing to:
Summarize lengthy and complex documentation, such as tax code updates. Upload the information and ask ChatThing to summarize it or extract key takeaways.
Create a chatbot for your clients. Help your clients find answers to common questions by uploading your support and help documentation and creating a chatbot that references that information.
Create a chatbot for your team. Upload your internal process and policy documentation and let your team ask a chatbot questions like, ‘What’s our parental leave policy?’ Rather than searching for the information, they can just ask the chatbot.
Pros
ChatThing will only reference the information you provide, so it’s less likely to hallucinate and provide incorrect information—it will simply tell you that it doesn’t have the information to answer you.
You can password protect any bots with access to sensitive information to prevent public access.
Offers a free option that allows you to test out Chat Thing for personal use and small projects.
Cons
Difficult to find ratings and user reviews.
Notion is the only workspace that directly integrates with Chat Thing.
GPT-4 is only available in the higher pricing tiers.
Actualizing the benefits of AI all starts with selecting the right tool.
Consider the information above when assessing relevant tools, choose the one that works best for you, and train your team to use them with online courses, workshops, hands-on projects, and mentorship. Encourage continuous learning and provide access to tools, fostering a culture of peer knowledge sharing to empower employees in leveraging AI effectively.
And there’s no better way to begin than with the ultimate collaborative practice management platform.
Book a demo of Karbon today to bring your team together in one, AI-powered space.
