🤖AI in Accounting: Real-World Examples and Practical Use Cases
Hey there, fellow accountants! Do you know what's hot right now? Artificial intelligence (AI).
It is moving fast and you don't want to be left behind.
In this article, we'll explore real-world examples and practical use cases for AI in accounting, including some tools you should definitely keep on your radar.
We'll also dive into specific use cases like marketing your firm, communicating with clients, building your accounting team, and automating bookkeeping.
And don't worry, we'll also talk about the risks of using AI and what's next for AI in the accounting industry. Let’s get into it ….
What is AI?
AI refers to the ability of a machine to mimic human intelligence.
ChatGPT is considered a generative AI language model. That means it was trained on massive amounts of data, so it can generate human-like responses to the questions we ask it.
Machine learning is a subset of AI that enables machines to learn and improve from experience without being explicitly programmed. For example, Xero uses machine learning to make coding suggestions like suggesting Telstra be coded to telephone expenses.
Tools like Dext and Hubdoc use OCR which is another type of AI to extract data like dates, amounts and transaction descriptions from receipts.
Table of contents
What is AI?
AI in Accounting: My top picks
AI Tools to Keep on Your Radar
AI in Accounting by use case
Marketing your firm
Communication with clients
Building your accounting team
Automating bookkeeping
What are the risks of using AI?
What is next for AI in the accounting industry?
AI in Accounting: My top picks
AI is revolutionizing the way we work, and these tools are leading the charge. Take a look at my top picks:
ChatPGT - Boost your writing and communication tasks with the help of an intelligent language model (and a huge variety of other use cases)
Fireflies.AI - Summarize meeting minutes with ease
Xbert - improve the quality of your bookkeeping data and prevent fraud
AI Tools to Keep on Your Radar
As AI continues to evolve, new tools are emerging to help professionals work smarter. Here are a few worth exploring:
HeadShotPro - Create professional headshots without a photographer
Descript - Edit audio and video content with text-based tools
My AkiAI - Create your own AI chatbot with ease
Elevenlab.io - Clone voices for content creation
AI in Accounting by use case
Marketing your firm
Here are some use cases for AI-powered tools that can help improve both the quality and quantity of articles you write.
Article creation with Jasper AI or ChatGPT
Research
Write an outline
Come up with different sub-heading options
Write the headline
Write the opening paragraph
Check out this video to watch an example
Communicating with clients
I’ve been playing around with different email topics and ChatGPT has done a decent job writing these emails based on a simple request.
You can ask for different variations and adjust the tone for example to be more formal or more empathic.
Here is an example prompt for ChatGPT
Draft an email to the client explaining that if they don’t answer queries by the 7th of the month we won’t meet their 15th of the month reporting deadline (use a kind and empathetic tone)
Check out this video to see the result.
Hiring your accounting team
You could use ChatGPT to come up with a list of potential interview questions.
Then you could record the interview with Fireflies.AI to create a transcript and have the key points summarised. This would enable a senior team member to shortlist candidates very quickly without needing to attend themselves and without the interviewer needing to write detailed notes.
Automate bookkeeping tasks and prevent fraud
Here are some examples of how Xbert’s powerful AI tools can help with bookkeeping tasks. It will flag things like:
Bills that don’t have a receipt attached
Tax registration checks - to catch when suppliers who shouldn’t be charging sales tax in fact have
Identifying fraud flags:
like when an employee and supplier have the same bank account
When bank account details have changed
How ChatGPT can help with coding unidentified transactions
Check out this video from Jason Staats with an example of how ChatGPT can help code unidentified transactions.
What are the risks of using AI?
JPMorgan Chase, Amazon, Verizon and Accenture staff have reportedly been barred from using ChatGPT for work. The companies are concerned sensitive information is being put into the chatbot.
Does that mean we should stop using AI at our accounting firms? NOT AT ALL!
I believe if we can appropriately manage the risks then there is the potential for huge productivity gains.
Staying Safe with AI: How to Lower Your Risk
Don’t put confidential information into ChatGPT
If uploading financial statements then remove client-specific information
If uploading bank data then remove dates and amounts
Educate your team on the risks and have an AI policy for your firm
Review information with professional skepticism
Some related reading - ChatGPT is a privacy nightmare and more here.
What's Next for AI in the Accounting Industry?
I believe there will be two main changes to the way we use AI in the future. It will be built into our everyday tools and we won’t have to provide as much context to the AI tools.
AI will be built into the tools we use
At the moment using ChatGPT is contained to the experience of logging into a browser.
I gave an example above of how ChatGPT can help to identify which accounts to code certain transactions. Now imagine that functionality was built directly into Xero rather than having to log into a separate tool, paste the transactions in, and then make the changes in Xero.
Canopy is a great example of a platform building ChatGPT into their tool.
Check out the article and video here
The power of context
At the moment we need to provide context for tools like ChatGPT to work.
For example, when ChatGPT suggests of account a transaction should be coded to, it’s not currently reviewing the receipt. It is based on the merchant name or transaction description. It’s not possible to upload files like a PDF into ChatGPT and instead you need to copy and paste in text.
Tools like Dext use OCR technology to read receipts.
What if Xero could read the receipt and review the transaction description and then use the power of AI to make coding suggestions? I wonder how far off that is?!
The Future of AI in Accounting: Opportunities and Challenges Ahead
From automating bookkeeping tasks to helping with marketing and communication, AI offers a variety of use cases that can enhance accounting firms' productivity and improve their clients' experiences.
However, the use of AI in accounting also comes with risks, such as data privacy concerns, which should be managed appropriately.
As AI technology continues to evolve, I hope that AI will become an integral part of accounting software and tools, allowing accountants to work even more efficiently and effectively.
