How AI is transforming small business accounting

Artificial intelligence, or AI, refers to technology that simulates human intelligence and performs select tasks. You might associate it with the technology that can create texts, images and even websites. But it can be used for so much more than that, helping you run your business far more smartly and efficiently. Here’s how.

AI in accounting

AI in accounting, found in cloud-based accounting software and apps like Xero or Sage, helps automate and streamline several of the routine tasks that businesses have to handle as part of their financial management. These days, almost every accounting task has an AI tool designed for it.

Accounting AI tools are usually associated with the routine financial management tasks like data entry, bookkeeping and bank reconciliation. You can even use your phone to take a picture of a receipt or invoice; certain tools can then ‘read’ those documents and categorise your expenditure for you.

AI, however, can go beyond handling routine tasks like pulling data from accounts and generating reports. Whether it’s income statements, budget forecasts, fraud detection, or cashflow analysis, AI can process data and present it in a smarter, more efficient way.

Benefits of AI in accounting

AI can help businesses increase their accounting efficiency while providing them with insights they can use to grow their business. Let’s look at some of the benefits:

    • Saving you time: It may feel like routine accounting tasks won’t take long to do, but they often take longer to complete than expected. By automating the tasks with AI, you save yourself a significant amount of time that you can spend on your business strategy, clients and staff.
  • Accuracy: AI can analyse and transcribe a lot of data very quickly without sacrificing accuracy, which significantly reduces the chance of errors or fraud.
  • Real-time insights: As AI can compile data far quicker than any accountant could, you won’t have to rely on outdated figures. As a result, you can make smarter, data-driven decisions.

Successfully adopting AI solutions

Successfully adopting AI in your business means implementing a strategic approach. That begins with identifying which tasks you want to automate or improve with AI, such as bookkeeping or financial reporting.

Select an AI tool that integrates smoothly with your existing systems and workflows. Check reviews and make use of free trials to find the best fit. That said, the built-in AI features in software like Xero and Sage will likely cover most of your requirements.

Most importantly, ensure you know how to use your tools effectively and train your team to do the same. This is a common pitfall for many businesses. For instance, some owners invest in AI-powered cloud accounting software to generate financial reports, which is a great start. However, they manually enter financial data instead of automating the process – simply because they don’t realise automation is an option!

Will AI replace accountants?

If AI can take on so many of your accounting tasks and do them so well, why work with your accountant and pay all those accounting fees?

The idea that AI will replace accountants comes from seeing them as mere number crunchers and financial administrators. But accountants offer so much more – they deliver in-depth analysis, strategic decision-making, and expert advice. That’s why many accountants are embracing AI themselves. By automating routine tasks, they can focus on analysing your figures, identifying risks, and helping you seize new opportunities.

Want to get the most out of AI accounting tools? Get in touch with us. We’ll help select the right ones for you and provide practical advice on how to get the most out of each one.

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