Is artificial intelligence a threat or a productivity lever for the finance sector? It’s hard to say, but in all likelihood, it is in the interests of finance professionals to include AI in their digital transformation process. By saving time and improving data reliability, finance departments can focus on analysis and decision-making.
But while most managers and boards of directors are convinced of the usefulness of AI, they sometimes find it difficult to determine how to implement it. In this article, we invite you to take a closer look at the concept of artificial intelligence as applied to accounting.
1. What is artificial intelligence?
Artificial intelligence is a scientific field. According to the definition of the European Parliament, it encompasses technologies able “to display human-like capabilities such as reasoning, learning, planning and creativity”.
The concept of AI was born in the mid-20th century with Alan Turing, and the first programs focused on chess. The ’90s saw a boom in machine learning, where machines learn and adapt according to a database and past experience. Voice recognition, visual recognition, and robotics all benefited from this major breakthrough.
But AI really took off after 2010. Advances in learning algorithms, access to vast amounts of information, and increased computing power have helped to drive deep learning.
Today, AI is present everywhere in our daily lives. Here are a few examples:
- automatic sensors in cars to detect hazards and warn the driver;
- search engines;
- so-called “smart” thermostats to save energy, etc.
From now on, any reflections on digital transition must include “artificial intelligence”. Otherwise, companies risk being left behind by competitors who have already integrated the latest innovations to make their production processes more efficient.
2. How can AI be used in accounting?
Artificial intelligence has many applications in accounting, particularly in repetitive, time-consuming tasks based on standardized rules. The major accounting firms are fully aware of this, and are making massive investments in highly ambitious programs. This is particularly true of Ernst & Young, which has invested $1.4 billion in the launch of a platform to help companies go digital.
Regardless of the finance department’s size and resources, AI offers opportunities for automation through technologies such as Robotic Process Automation (RPA). RPA software can, for example, handle bank reconciliation, supplier invoice entry, and VAT declarations, leaving CFOs free to concentrate on control and analysis.
Other solutions are based on optical character recognition (OCR) scanning. These solutions facilitate the mass processing of documents such as invoices, contracts, purchase orders, etc. They are able to extract the information needed to accomplish a specific task, such as recording accounting entries.
AI can also be used to perform predictive financial analyses and support managers in their decision-making. The data collected are fed into reports or dashboards that are updated in real time.
3. What are the benefits of AI for the finance department?
For accounting departments, artificial intelligence is synonymous with performance and increased productivity. Automated processes save considerable time. For example, during the period-end close, staff can rely on AI to speed up preparatory work.
Accounting data is now identified, analyzed, and integrated directly into IT systems. It is much simpler to classify, validate, or search for relevant information on an invoice according to the company’s needs.
You also minimize the risk of losing a receipt or of making data-entry errors, and can detect potential fraud more quickly. Intelligent automation can check the reliability of a document, monitor non-compliant expenses, and detect suspicious invoices or expense reports.
4. What impact will AI have on the accounting profession?
The imminent arrival of electronic invoicing is forcing companies to digitalize their finance departments. Artificial intelligence plays a central role in this digital evolution, enabling finance departments to achieve their objectives, particularly in terms of collecting and processing invoices.
But the use of AI cannot be improvised, and companies must plan to train their staff in these new tools. This is an essential step in digital transformation, to ensure that staff do not feel overwhelmed. It also ensures that you benefit fully from all the functionalities offered by the various software solutions.
Training is also essential to support the necessary upskilling of teams. With AI now in charge of data entry, reconciliation, and summaries, finance departments have more time to devote to control and analysis. We are witnessing a redefinition of roles and missions, which implies adapting production processes and employees’ work scope.
5. AI and accounting: what are the challenges?
However, artificial intelligence is not exempt from shortcomings or bias, and it is important that humans retain control over automated processing. There are many sources of error, including:
- the design of the tool, particularly if the algorithms have not been sufficiently trained;
- conditions of use, when faced with poor data quality or a hardware fault;
- human error.
Like any IT system, AI is exposed to hacking or to the failure of internal or external infrastructures.
Artificial intelligence also raises ethical, confidentiality, and data security problems. Regulatory texts such as the Digital Markets Act (DMA) and the ePrivacy regulation aim to impose rules to safeguard citizens’ information or to force platforms to be more transparent.
When choosing a tool or software, it is essential to ensure the reliability of the solution and the publisher. You need to know how it leverages AI when implementing its services.
Our N2F expense report management software uses artificial intelligence, OCR scanning technology in particular. To find out more about how we integrate AI into our services, contact our teams!
