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How Artificial Intelligence And Machine Learning Will Revolutionize Small Business Accounting
Artificial intelligence will revolutionize accounting practices. Here's how AI can help your small business compete with bigger companies.
According to a recent study, 62% of finance leaders have adopted artificial intelligence (AI) technologies into their current work efforts.
As automation and machine learning continue to gain traction in this sphere, it stands to reason that the remaining 38% won't be far behind. In fact, by 2020, experts predict that robotics will account for 40% of basic accounting work.
What makes artificial intelligence and machine learning an ideal fit for handling small business accounting? The answer hinges on the vast amount of data that accountants must process on a daily basis.
Compiling, collating, presenting, and using this information in an accurate manner can be overwhelming at best and often impossible to keep up with.
The good news? Automation bridges that gap.
Today, we're sharing a few ways this technology is set to transform the small business finance sector.
Ready to learn more? Let's go!
In-Depth Data Analysis
Technologists have long heralded AI and machine learning as key assets in data analysis.
How does this translate to small business accounting?
In short, it's rendering mind-numbing, line-by-line reviews a thing of the past.
Consider contract analysis, for example. While a basic computer program can meld pre-defined logic with structured data, it cannot perform advanced analytics.
This is where the role of human intelligence comes in.
Previously, an accountant would need to review each contract to discern which clauses were important to clients, then check for accuracy and highlight them for analysis.
Now, based on the concept of repetitive learning, AI technology allows machines to "learn" this same function. Over time, they discover what's important within the unstructured data and can mine it for insights.
More Efficient Auditing
Traditionally, internal auditing required extensive manual work and individual review. Moving forward, these processes could benefit from AI intervention.
Through deep learning, the machines are able to review even the largest set of unstructured data and identify risks within it.
Moreover, throughout this process, AI technology allows auditors to ask informed questions and interact more with CFOs and other stakeholders. This improves the quality and value of each audit.
Reduced Manual Work (and Errors)
Despite the belief of some, robots aren't coming to take over all of our jobs. Rather, they're intended to complement human functions and make them as successful as possible.
One way they do so is by eliminating the limits of cognitive learning.
Human error and bias are inherent, even when we try our best to avoid them. We also grow tired and weary, leading to a dip in mental clarity and production levels. That said, if there were any industry in which accuracy must reign supreme, accounting is it.
From confirmation bias and discrimination to simple finger slips on the keyboard, there's no shortage of ways to introduce error. With AI and machine learning, accountants can help control against these inaccuracies.
From tax planning and bookkeeping to invoicing and billing, there are myriad processes that can benefit from this automated approach. This also frees up your teams to focus more on client-focused tasks rather than administrative ones.
Smarter Fraud Alerts
Anyone who's ever received a phone call from their bank when trying to use a credit card overseas can appreciate fraud alerts that keep our financial information safe.
Yet, as helpful as this system is, it's not perfect.
Moving forward, AI tools will be able to detect normal data patterns and identify any irregularities to predict the possibility of fraud. From there, they will alert users automatically so they can take real-time action.
More Accurate Predictive Models
If you're a small business leader, you know that every penny counts. As such, routine meetings are required to forecast both revenue and cash flow.
Artificial intelligence is capable of processing large quantities of data and doing so at a quick pace. It also translates them more accurately than the most robust Excel spreadsheet. Working within that dataset, it can identify even the most subtle patterns.
From these insights, the machines can make precise and specific predictions. In the event that reality deflects from these forecasts, the machines learn from their errors and apply those lessons to the next analysis. This means that reports become increasingly accurate over time.
The Rise of Voice Recognition Technology
In a small business, everyone wears multiple hats to keep the workflow going. Yet, not everyone has time to field multiple client requests per day on top of existing job duties.
Enter voice assistants.
Voice recognition technology helps systems engage clients on their terms, with machine learning operating in the background to retrieve the critical information they need. In the next few years, expect to see more artificial intelligence apps that cater to those seeking answers to their most pressing accounting questions.
While this application can be client-facing, it's also useful on an in-house basis. Improved chat functionality between team members improves efficiency, reduces scheduling conflicts, and enhances decision making thanks to quick data access.
Artificial Intelligence and Machine Learning in Accounting
As the technology behind these solutions continues to grow, expect to see even greater applications of artificial intelligence and machine learning focused toward the accounting process.
This is indicative of the sector's shift as a whole from manual-based processing toward a more digital future.
As your small business considers ways to optimize operations, improve accuracy and enhance productivity, we'd love to help.
With CORE, you get a comprehensive accounting software with powerful automations that allow you to manage all of your financial activities in one place. From account reconciliations to report generation, you can do it all from our unified platform.
Click the banner below to start a 15-day free trial of CORE (no credit card required) and see the difference for yourself.