Industries across the board are revolutionizing the ways that they do things by implementing AI software. It’s no surprise that the accounting industry is following this trend given its need to process large volumes of data and ensure complete accuracy.
If you work for an accounting firm and are wondering what benefits you can experience through the introduction of AI tools or just want to start exploring AI in accounting, you’re in the right place.
In this introductory post, we’ll explore some examples of AI tools you can use in accounting along with some guidance on how to run an AI pilot program in your accounting business.
Let’s jump in!
What types of AI are used in the accounting industry?
The accounting industry uses a range of AI tools for specific purposes. Here are a few of the most common types of AI in accounting, each of which works a bit differently.
| Nerd alert: We're about to dive briefly into some AI theory, but bear with us — it’s worth it! |
Robotic process automation (RPA)
RPA involves using bots to automate repetitive tasks that typically follow rules. Accounting firms use RPA for data entry, matching invoices, and other mundane financial processes that take a lot of time. RPA helps them be more accurate and efficient.
For instance, many finance teams use Blue Prism to automate rule-based processes like transaction matching, payroll processing, and tax compliance.
Natural language processing (NLP)
NLP is a type of AI that makes it possible for computers to understand, interpret, and generate human language. In accounting, NLP would be used to pull data from documents that have text in them, like invoices, receipts, and financial statements.
For example, Kira Systems is an AI-powered document review tool that relies on NLP to extract relevant financial data from contracts and reports. That way, Kira reportedly helps reduce contract review time by 50%:
Machine learning (ML)
ML is when AI uses algorithms to identify patterns and trends. Accounting and finance departments apply machine learning algorithms to financial data sets to pick out potentially fraudulent patterns, predict analytics, and forecast numbers.
Xero Analytics Plus gives us a good example of ML in action, as it successfully forecasts short-term cash flow and delivers financial insights for businesses.
AI tools accounting firms can use: From simple to more complex use cases
Here are just a few examples of accounting processes that can be optimized along with a list of AI accounting software to explore.
Claude for writing emails
Writing emails can be a special kind of pain, especially if you’re writing the same boring emails all over again. This is where Claude, a free AI writing assistant, can be a lifesaver.
Want to explain a complex accounting concept in plain English? Claude’s got you. Need to remind clients to pay an overdue invoice without sounding too harsh? Claude can help craft a firm but friendly message that gets the point across:
Fireflies for recording meetings
AI tools can come in handy for recording lengthy meetings and helping you locate important information that was discussed in the meeting later on. Tools like Fireflies are available to sit in on Zoom meetings and transcribe away.
A great feature of Fireflies is that it allows you to chat with the AI tool about the meeting itself. After the meeting has been transcribed and made searchable, you can converse with the tool to ask it things like:
- Did the client mention X in the meeting?
- Were rental properties discussed?
- Did I remember to go over last year’s tax return with them?
With smart search functions, it also lets you search for themes, topics, dates, questions, and sentiments.
AskYourPDF for locating information in large data sets & documents
In the event that you need to analyze a new bill, regulation, or any other large document, another handy ChatGPT plugin to make use of is AskYourPDF. Once you enable the plugin, all you have to do is enter a URL of a document into your ChatGPT conversation, or upload a document and ask for the specifics you’re looking for.
Content Snare for smart data request creation
Let’s be honest here — chasing clients for documents is no one’s idea of fun. You send an email, they ignore it. You follow up, they send half the info. You remind them again, and they’ve disappeared. Recent studies even show that document collection tops the list of challenges for accounting practices, with 69% of firms reporting delays.
This is where Content Snare comes in.
This tool allows you to create structured data requests that guide clients through exactly what they need to send, without the usual back-and-forth. You can use built-in accounting templates to speed things up or let AI handle the heavy lifting with Smart Requests that help generate tailored data requests in seconds based on your inputs:
Content Snare also sends friendly reminders, ensures that your clients submit the right format, and even lets your entire team track progress at a glance.
ChatCPA for client communication
AI-powered chatbots like ChatCPA can help accounting firms answer common questions more quickly. These tools help improve the customer service experience by providing 24/7 availability and faster responses. AI-powered chatbots can also help send out regular client messaging and reminders, saving on manual time needed to write emails.
What’s best, ChatCPA works across multiple platforms (SMS, Messenger, WhatsApp, etc.), which means clients can get in touch effortlessly:
Andrew Suttman, a Smartlink employee, wrote a LinkedIn post that clearly explained how AI chatbots transformed customer service for a renowned accountancy firm — worth checking out.
Kloo for autonomous invoice management
AI tools can automate the extraction of data from invoices and receipts, saving tremendous time on manual data entry. They can pick out data like transaction amounts, invoice numbers, invoice dates, and client info and feed this information directly into an accounting system.
One example is Kloo, an AI-powered accounts payable platform that streamlines invoice management from start to finish. Kloo’s automation capabilities allow you to process invoices with minimal manual intervention.
By integrating directly with accounting software like Xero and NetSuite, Kloo makes sure to accurately process and record invoices in real time, thus reducing errors and improving workflow efficiency.
Intuit ProConnect Tax Online for tax preparation
Intuit ProConnect Tax Online incorporates AI to improve multiple aspects of the tax preparation process. One notable AI-driven feature is the Intuit Tax Advisor, which generates personalized tax planning strategies directly from client tax returns. That way, it helps you offer tailored advisory services in a more efficient way.
ProConnect Tax Online also offers automated data entry capabilities, such as importing prior-year 1040 tax return data, to create new returns or update existing ones. This reduces manual input and potential errors.
MindBridge for risk identification
Accurate risk identification is critical for audits and financial reviews, but traditional methods often rely on sampling that leaves room for undetected anomalies. On the other hand, MindBridge uses AI to improve audit quality by analyzing entire datasets rather than limited samples.
This tool relies on machine learning and statistical analysis to pinpoint patterns that may indicate errors, misstatements, or compliance concerns. It also provides detailed insights into why a transaction is flagged as high-risk, so you can make accurate decisions with greater confidence.
What do you get from it? The benefits of using AI in accounting
Thanks to the benefits it delivers, AI allows accountants to focus on higher-value advisory services. These are some of the most important advantages of using AI tools in your business.
Saving time
AI-powered tools help accountants save plenty of time on routine tasks. Rather than having to manually extract information from invoices and receipts and then input the information into accounting software, AI can do this in a fraction of the time.
The same goes for data collection. According to the survey, firms using Content Snare spend 71% less time collecting information and documents from their clients.
Avoiding and reducing human error
Every accountant knows that manual accounting tasks like data entry are extremely prone to human errors — just think of all those typos in spreadsheets and numerical mistakes in journal entries. AI tools, on the other hand, help reduce (if not completely eliminate) these errors.
Increasing productivity
As a result of saving time on manual tasks, accountants can focus their time on higher-value and higher-impact tasks. For instance, Vic.ai reportedly improves invoice processing productivity by as much as 355%. Details like this help accountants get more done in a workday and achieve a better work-life balance.
Gaining valuable insights
Machine learning tools can analyze data in-depth and provide valuable insights they might not have the time or capability to gather otherwise. These insights can guide them in making more informed decisions on how to advise a client or what steps to take next in growing the business.
Improved client experience
Not only do clients benefit from having faster turnaround times, more accurate statements and tax returns, and reduced fees thanks to the help of AI accounting tools. But when these aspects are taken care of, it opens up the firm to do more with managing client relationships.
One example of a firm that has enhanced its client experience thanks to the help of AI is Goldstein Enright Accountancy. In an interview, Robert Goldstein, CPA and Managing Partner of Goldstein Enright, speaks about the ways the firm is now able to go above and beyond to support its clients thanks to delegating other tasks to AI:
“We want to help the client succeed. So we get more involved in their management decisions, interpreting a financial statement, tax planning, relationships with banks, helping a client sell their business, helping them buy a business. We get involved with more meaty consulting. And it's how it gets more fulfilling, to tell you the truth.”
Competitive advantage
Staying up to date with technology and integrating it into existing workflows is one way to gain a competitive edge against competing accounting firms that might be experiencing slower processing times by doing things the old way. Being early adopters of AI accounting tools can also help accounting firms stand out and attract clients who want to work with tech-savvy partners.
How to run an AI pilot program
1. Identify your goals
You don’t want to buy software that you hear is working for other firms, only to find out later on that it’s not what your firm needs to solve its specific challenges. Before making any impulse buys, determine what you’re looking to solve by adding AI technology. Do you want to:
- Save time on manual tasks?
- Reduce how often you experience human errors?
- Get insights you need to make complex decisions?
- Deliver an improved client experience?
Knowing your goals will help you narrow down what type of AI software you need to shop for so you don’t invest in things that you don’t need.
2. Audit current performance and determine KPIs
Measure how you’re performing without the accounting AI first. For example, if your goal is to save time on manual tasks, complete an audit to quantify how long you are currently spending on those tasks. That way, you’ll be able to come back to it later and see how much time your accounting AI tool helped you save.
3. Explore software options
Now that it’s time to explore what’s on the market, you might want to ask other accountants what they use or go through review sites like G2 to compare user reviews, pricing, options, and features.
| Pro tip: Many AI software solutions offer free versions that will suffice for smaller teams. Don’t hesitate to test these before committing to more expensive tools. |
As you explore your options, remember to check whether or not the software can integrate with your existing systems, otherwise it might not go as smoothly as you planned. Here are a couple of our blog posts on popular accounting software to help you get started too:
- Accounting automation software: Industry experts reveal their favorites
- A guide to the best software for accountants
4. Invest in training
Once you’ve chosen your software, it’s time to get your team on board because the software won’t just run itself! Set up a couple of onboarding meetings to introduce your team to the software, explain how to use it, and share how you foresee it improving day-to-day processes for the better. This will help maximize your team's success with the new tool.
5. Collect feedback throughout the pilot project
Set up a feedback meeting or use a feedback tool a couple of weeks or a month into using the new AI technology to get timely feedback on how the team is adjusting to the tool. Team feedback will help you determine whether it’s helping them solve problems, creating new issues that are slowing them down, or just isn’t the right tool for the tasks at hand.
6. Compare results
After your trial period for using the tool has come to an end, it’s time to evaluate whether or not it provided any benefit. Consider the feedback you collected from your team's experience and re-measure the KPIs you measured before the pilot project began. You’ll now be able to compare data side by side to see if the tool did indeed help you save time, improve the customer experience, or reach the goal you set.
Will AI replace accounting professionals?
Whatever the industry, when it comes to AI, there’s always the question of whether or not AI-based tools are on their way to replace human expertise. So will artificial intelligence replace accountants eventually?
The short answer is no.
Even though companies may hire less staff for the routine and manual tasks that software can take care of instead, such tools are not suited for:
- Complex decision-making, like considering the emotional and psychological aspects of financial decisions
- Critical thinking, like considering a company’s unique financial situation or a client’s personal needs and goals
- Considering business ethics, like complying with rules and regulations, or doing the right thing in challenging situations
- Finding creative solutions to financial challenges
- Performing certain accounting tasks that involve working with unstructured data sets
For all these reasons, human expertise is still essential to the accounting field. As we look forward, we can expect the near future to see AI and human accountants working together hand in hand to optimize financial processes and management.
Final advice for introducing AI technology in accounting
Helping to save tremendous time on accounting processes, guarantee accuracy, and deliver valuable insights, accountants are already seeing significant benefits by embracing AI technology.
With many accounting AI options on the market and more emerging by the minute, it’s crucial to choose AI software wisely according to the needs and goals of the business.
Don’t forget that although AI sometimes requires minimal human intervention, staff needs to be trained on how to work with the software to reap its benefits. By being open to the introduction of AI without forgetting the value of human expertise, accounting firms can enter their next evolution and start gaining the competitive advantage they need for business growth.
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