AI impact on Finance & Accounting and Best Practices for Managing Your Transition to AI
What do you think of when you hear the term “Artificial Intelligence,” or AI? Do you think of robots taking over the world like the “Terminator” films? Hopefully the outlook of AI isn’t that dire, but those in the finance and accounting industries are definitely questioning the changes and challenges AI may bring to our industry.
What does AI mean to finance and accounting careers? Are there security concerns through the implementation of AI? These are valid questions those within our industry have voiced to us.
The capabilities of AI are nearly endless and are restructuring our industry: from streamlining processes and reducing human-made errors, to ensuring regulatory compliance and giving us financial insights in real-time. How? That’s what we want to discuss in our February blog.
AI’s impact on finance and accounting can be an exciting venture, but there are best practices we will discuss here that will help you manage your own transition to AI. That way, you are using AI efficiently and accurately to better manage your financial processes. In addition, you will be better prepared to make the shift to AI and embrace this important change.
Today’s Role of AI in the Finance and Accounting Industries
The implementation of AI has not overlooked the world of finance and accounting. In fact, a recent study found that 7 out of 10 accountants believe AI will enhance their work rather than replace them entirely. Does that surprise you? It shouldn’t – the projected market size for AI use in accounting is in the billions of dollars.
At Critical Connexion, we learned early that we needed to help our clients proactively welcome the changes that come with AI. First, we found that three changes needed to occur so that an organization could successfully implement new technologies and ensure their finance experts had the skills to use them:
- The changes that come with AI needed to be incorporated into an organization’s goals, and those at the top needed to provide executive support of these changes.
- A focus needed to be placed on how to navigate any AI-related risks and ethical issues, including an understanding of the complexities of using AI in finance and accounting, data security issues, and the financial implications.
- The existing workforce needed the proper training and development to learn these new skills to properly embrace the real-time data analyzed by AI.
So, finance and accounting experts must first learn the skills of using AI with support from everyone at the top – the CEO, CFO, and any other executives who are leading your team. Once your finance experts have the support from the top, they can then embrace a strong understanding and awareness of the use of AI technology so that they can properly apply it to enhance all of your financial operations.
How to Apply AI in Finance and Accounting
Although there are many benefits of using AI in finance and accounting, we will be discussing three best practices here: automation, real-time data and forecasting, and the optimization of compliance, security, and fraud detection.
- Automating data entry and routine tasks
One of the main benefits of using AI is the automation of many routine, tedious, and mundane tasks, such as data entry, invoice processing, reconciliations, and the categorization of transactions. This automation comes with four main benefits:
- Automates everyday routine tasks
- Saves time and money
- Reduces human-made errors
- Increases productivity
For example, AI can eliminate the time-consuming tasks of manually inputting financial data and processing invoices so that your employees can focus their time on more crucial and strategic tasks.
Not only does this use of AI save time and effort but also reduce the risks of human error in data input and entry. In fact, using AI can ensure your financial experts can guarantee the accuracy of data down to the very last decimal. And if accuracy isn’t enough, estimates are showing that using AI to complete e-invoicing in particular will save $28 billion in the next 10 years.
- Real-time financial analysis and forecasting
Since AI gives you data in real-time, this will empower your financial team to analyze the current financial performance of your company, spot trends in the industry, and proactively confront any potential challenges and concerns.
How is this done in real-time? AI uses precise algorithms that analyzes your past data and real-time so that you can make accurate forecasts of any upcoming financial and accounting patterns, trends, and opportunities. This instant access to accurate data allows you to be proactive – not reactive – when it comes to making important decisions about your company’s financial future.
- Optimizing compliance, security, and fraud detection
We mentioned the importance of staying proactive in your financial analysis, and this also equates to using AI to streamline your company’s compliance with any and all financial regulations, while also making your data more secure from cyberthieves.
Minimizing fraud is a main concern in today’s technologically connected world, and AI can ensure your data is safeguarded against thieves through robust cybersecurity protections. This is because AI can analyze massive amounts of information much faster than even the most financially-sound human.
For example, there are AI technologies out there today that monitor and analyze financial data so that it can immediately find any irregularities or anomalies in order to detect and flag any fraudulent behavior instantly.
Not only is your data more secure, but AI tools are constantly monitoring regulatory changes to ensure your finance experts and accountants are keeping up with the these changing regulations in our industry. Streamlining your company’s financial compliance will ensure your data and records adhere to the newest regulations.
Embracing AI in Finance and Accounting
We understand that there may be challenges in the embracing of AI in finance and accounting. As we discussed, your financial team will need to be trained in working with AI and (sometimes more difficult) will need to be persuaded to embrace it in their workday. This means you should assure them that their jobs aren’t going away; instead, AI is there to save them time so that they can embrace more exciting and strategic opportunities.
Your company will also need to do some research on what AI computing, data storage, and security processes will work best with your organization. Yet, with the correct AI technology and skilled personnel who see the opportunities AI can bring to your organization, you can embrace the benefits of AI in finance and accounting.
Integrating AI into your financial and accounting organization is not an option; it is a critical shift your company will need to make in the near future. AI is already changing the financial landscape and helping our industry through the automation of routine tasks, offering real-time data, and improving regulatory compliance and fraud detection. How will you embrace these benefits of AI in your organization?
Yes, we must adjust and adapt to this new world of AI, but rest assured financial and accounting jobs aren’t being replaced with AI. Instead, AI is providing exciting opportunities that elevate the roles of financial experts today.
About Critical Connexion:
Critical Connexion is a distinguished business management & consulting firm that focuses on leveraging a foundation of leading finance, HR management, strategic sourcing, risk & operations experts to accelerate brand success for clients.
We specialize in navigating the evolving landscape of corporate growth by adeptly addressing changing systems, processes, and people requirements. Recognizing the substantial nature of technology and changing business needs, we ensure that these resources are directed with foresight and expertise. We are your extended partners for business growth, scaling seamlessly and brand elevation.
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Ph: 213-798-6676
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