Automation, prediction, analysis: how artificial intelligence is revolutionising accounting

Artificial intelligence is undoubtedly the latest technological revolution to have had a profound effect on the world of work, forcing businesses to reinvent their processes.

Thanks to the integration of AI into business tools, but also to the development of ChatGPT and its competitors, the various departments within organisations now have real assistants, capable of carrying out certain tasks for them. A godsend... but not without raising a number of concerns.

And that includes the accounting function, which is also having to come to terms with this new reality.

What impact will artificial intelligence have on the accounting profession , given the many challenges and specific features it faces? What are the benefits, but also the challenges?

Welcome to the accounting of the future! 🦾

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What exactly is artificial intelligence?

Definition of artificial intelligence

Before we talk about artificial intelligence in accounting, let's agree what we mean by artificial intelligence.

Artificial intelligence, often abbreviated to " AI ", refers to technologies capable of simulating certain human cognitive abilities. Observing, understanding, learning, reasoning, predicting... it involves using algorithms instead of neurons.

In this sense, it differs from traditional computing (where the steps to be taken are already known from the outset), since it evolves and adapts on the basis of data.

An ever-evolving technology

Although the beginnings of artificial intelligence appeared (at least as an autonomous field of research) in 1956 with the Dartmouth Conference, orchestrated by John McCarthy and Marvin Minsky, it has made considerable progress in recent years.

Indeed, with the explosion of Big Data and the increasing power of processors, the 2000s saw the birth of a new era: that of machine learning. Algorithms now learn directly from data.

Then came the deep learning revolution. Inspired by the workings of the human brain, this model uses artificial neural networks to process colossal volumes of data (automatic translation, voice recognition, image analysis, etc.).

It's only natural that artificial intelligence is now making its mark in all areas of business, including finance and accounting.

☝️ Of course, OpenAI's ChatGPT , a generative AI capable of understanding human language and predicting words to create text, has contributed to this democratisation of AI.

How can artificial intelligence be used in accounting?

The use of artificial intelligence in business has become much more widespread in recent years, where it was previously the preserve of powerful groups. This is due to :

• the industrialisation and increased computing power of the machines used to deploy this AI ;
• the development of the cloud, which provides massive access to data.

We are therefore seeing the development of software with artificial intelligence for accounting and finance, for two main purposes:

• automation ;
• analysis and prediction.

Automation

Historically, accounting has been based on manual, repetitive and time-consuming tasks. Entering invoices, reconciling entries, filing supporting documents... these are all essential tasks, but they add little value.

Where artificial intelligence changes the game is that it automates these tasks with unrivalled speed and reliability.

👉 Take the example of reading supplier invoices. Thanks to optical character recognition (OCR), coupled with learning algorithms, software can automatically extract key information: name of supplier, amount exclusive of VAT, payment date, etc. There's no longer any need to enter these elements by hand; AI does it in a matter of seconds.

The same logic applies to bank reconciliation. The algorithm compares bank statements with accounting entries and matches the corresponding movements.

This category also includes :

• intelligent filing of accounting documents
• automatic preparation of VAT returns
• checking compliance by applying up-to-date tax rules.

What's at stake? Saving time, reducing the risk of error and freeing up accountants for higher value-added assignments.

💡 Automation is one of the great strengths of electronic invoice solutions such as Yooz. Thanks to AI, as well as a powerful big data database, this software lets you industrialise the entire process of handling customer and supplier invoices, without any human handling. This includes automatic data capture, allocation and reconciliation, all without data entry.

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Analysis and prediction

Automation is just the tip of the iceberg. Behind it, artificial intelligence reveals an even more valuable skill for accountants: their ability to analyse and predict.

Traditionally, accountants and finance managers work with a retrospective vision, producing financial documents that reflect what already exists. But AI is changing this paradigm. By analysing massive volumes of historical data and detecting trends, it helps to anticipate the future.

In practical terms, how does it work? Artificial intelligence combines several sources of information:

• past accounting information (AI can analyse the balance sheet, for example) ;
• pending invoices
• recurring bank flows;
• economic or sectoral indicators.

Thanks to its predictive algorithms, artificial intelligence is then able to :

• forecast short- and medium-term cash flow, by simulating different scenarios ;
• detect accounting anomalies by spotting unusual patterns;
• assess the solvency of customers or suppliers, by combining payment history, recurring behaviour and external data;
• create intelligent dashboards that not only display figures, but also explain trends and suggest corrective action.

Thanks to this predictive skill, the accountant becomes a powerful strategic partner, providing much more relevant insights.

What about ChatGPT and accounting?

Obviously, the question that many of you are asking is: can ChatGPT be used for accounting?

Indeed, it's hard to talk about artificial intelligence without mentioning ChatGPT. Although it is not an accounting tool in the strict sense of the word, it would be a shame to miss out on its main asset: its ability to understand natural language and process accounting information instantly.

In practical terms, it can help even the smallest structures to understand concepts, processes to be applied, etc. Use it with a critical mind, of course! Don't forget to double-check everything 😉

You can also use ChatGPT to :

• write customer emails (invoice reminders, account explanations, etc.) ;
• create checklists for the annual accounts closing or VAT control;
• analyse figures and transform them into understandable reports;
• automate the drafting of financial comments based on balance sheets or income statements;
• check entries or suggest standard accounting schemes.

By cross-referencing your accounting data with its encyclopaedic knowledge, ChatGPT helps you save time and make certain analyses more reliable... but that doesn't mean it can replace human expertise!

What are the 4 advantages of artificial intelligence in accounting?

In accounting and finance, as in many other business functions, artificial intelligence promises its share of benefits.

Let's take a look at them. 👉

#1 Significant time savings

Automating many manual tasks (data entry, charging, validation, etc.) inevitably results in time and performance savings for a company's finance and accounting department, or for accounting firms.

By eliminating these low-value operations, professionals free up bandwidth to devote to more strategic tasks, such as consulting or financial analysis.

#2 Lower costs

This time saving goes hand in hand with a reduction in costs, particularly operational costs (costs relating to time spent on data entry or verification).

What's more, by limiting errors and tax adjustments, artificial intelligence avoids the expense of corrections or other disputes.

#3 Process security

The risk of error remains the bête noire of accounting firms and finance departments.

This is where artificial intelligence comes into play once again, to make your processes more secure and your data more reliable. And with good reason: the machine doesn't tire, doesn't make mistakes or lose documents.

But AI goes even further!

We're thinking in particular of everything to do with fraud detection, made possible by technologies such as :

• graphometry (the analysis of handwriting to detect anomalies) ;
• frequency analysis (analysing the recurrence of certain amounts, the distribution of figures or the frequency of certain transactions).

#4 Informed decision-making

In accounting, decision-making is often based on the observation of historical financial data. With artificial intelligence, these analyses become faster, more refined and, above all, more predictive.

By cross-referencing accounting flows, performance indicators and external economic data, AI can detect trends that are invisible to the naked eye. It can even :

• warn of cash flow risks;
• simulate the impact of a decision (recruitment, investment, etc.);
• suggest alternative scenarios.

As a result, accountants, CFOs and managers no longer steer their businesses solely on instinct, but on the basis of reliable, quantified information that is updated in real time.

The challenges and limits of AI in accounting

But while AI represents a godsend for accountants and finance managers, it needs to be implemented with caution!

Integrating it into accounting and finance means mobilising real expertise in the field: artificial intelligence is only effective if it is used properly. So you may need to :

• call on experts with specific skills in handling this technology ;
• improve the quality of the data injected (no matter how intelligent AI is, it remains dependent on the data it is given).

There is also the question of the security of the data used to feed your artificial intelligence system, all the more so if you are handling sensitive information. You need to pay particular attention to the data you provide to the tools, especially to a system such as ChatGPT.

Finally, it's not surprising that we think of the risks to professionals, some of whom feel threatened by this technology. But in reality, and especially in accounting and finance functions, artificial intelligence needs to be properly guided. Human verification is always necessary. We are therefore witnessing a transformation of the accounting and finance departments, which are dealing with a docile AI co-pilot... rather than a replacement!

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Artificial intelligence and accountancy and finance: what's in it for us?

We might be inclined to think that the accounting function, given its responsibilities, cannot trust a machine. However, artificial intelligence is proving time and time again that it can provide invaluable assistance to these professionals by automating low value-added tasks.

It goes even further, proving to be a formidable analytical tool, helping accountants to make the right decisions. And the good news is that, often at no extra cost, AI is naturally gaining ground in most of the solutions used by companies and firms: accounting software, invoice processing software, cash management software, and so on.

These solutions, enhanced by artificial intelligence, add even more value to the accounting profession, which is moving towards more consultancy and strategy.