By Hannah Dolan Artificial intelligence How your accounting practice can leverage AI 25 Aug 2023 This content is brought to you by Xero. From automating bookkeeping tasks to generating forecasts and reports, artificial intelligence (AI) can streamline daily admin, and equip accountants and bookkeepers with reliable data and insights. It’s therefore no surprise that the accounting industry has one of the highest AI adoption rates in the UK. In this article, we explore how you can combine AI with human-led services in your practice. Learn about working with AI Our masterclasses, webinars and e-learning courses can help you make the most of artificial intelligence. Browse our collection How AI in accounting can benefit your practice Artificial intelligence simulates human intelligence. Today, these technologies can hold human-sounding text conversations, recommend new shows for you on streaming services, and even drive cars. For accounting practices, there are countless benefits to adopting AI. Here are five examples: Automation: AI-powered software can speed up data entry, bank reconciliation, and invoice processing – so you have more time to focus on advisory, business strategy, and value-adding services. Accuracy: Huge data sets don’t intimidate AI. Tasks can be completed accurately and quickly with this technology. Cost savings: Repetitive tasks can be automated, saving you hours and reducing labour costs to improve overall practice efficiency. You might even find that the extra time enables you to take on more clients. Real-time insights: AI gives you and your clients a real-time view of their finances. This means you can bolster your advisory with data-driven insights, and clients can make smarter financial decisions. Enhanced security: The fraud detection process is expedited by AI tools, which identify patterns and anomalies in data quickly. These tools can spot suspicious transaction data, helping protect the financial health of a business. Will AI replace accountants? Artificial intelligence could streamline some accounting tasks, but it’s unlikely to replace accountants and bookkeepers altogether. The insights generated by AI are only useful when they’re delivered by an advisor who can translate and contextualise them. Stuart Miller, Head of Product Compliance and Industry Engagement at Xero, shares his view: “Technology and AI have clearly changed how the profession operates, allowing accountants and bookkeepers to provide valuable insights into their clients’ business affairs. When I began my career in 2003, I was using adding machines, T-Accounts, and even teaming up with colleagues to call and cast accounts. Today, these tasks are handled by AI and technology, which allow us to focus more on advisory work and really adding value to help clients thrive.” Five examples of AI in accounting practices If the thought of implementing AI tools feels overwhelming – fear not. Here, we explain five simple ways practices can adopt AI. 1. AI in accounting software Some cloud-based accounting software providers already offer AI features that help accountants and bookkeepers to automate repetitive tasks, improve accuracy, and quickly generate reports. Take Xero’s suite of AI product features as an example. Strengthen your advisory services with deep insights and reliable data, using Analytics Plus. Speed through transaction matching with bank reconciliation predictions powered by machine learning. 2. AI in accounting audits Human auditors have to filter through reams of data to pick up on patterns and anomalies. AI can expedite this process, helping auditors focus their efforts on the areas most likely to contain material misstatements. Stuart explains: “AI-driven audit accounting software offers significant opportunities for driving efficiencies by automating tasks, improving data analysis, enhancing risk assessment, and facilitating real-time reporting. However, it’s important to note that AI should complement human judgment and expertise in the auditing process, rather than replace it entirely.” 3. AI in accounts fraud detection False positives are common in traditional fraud detection. But these cost time and money to investigate. AI tools can analyse customer data, transaction data, and other relevant sources to detect fraud and limit the number of false positives. Using machine learning, many of these technologies get smarter over time. This means they can deal with new and evolving types of fraud, which is useful given the growth of economic fraud and crime. 4. AI in predictive analytics Predictive analytics uses past data to predict the future. It’s useful in cash flow forecasts and other financial projections, as well as for reconciling accounts. You can find predictive analytics in Xero’s bank reconciliation predictions, which use data, algorithms, and machine-learning techniques to match and code transactions. It also features in Analytics Plus, which uses predictive analytics to create reliable cash flow forecasts and projections. 5. AI in automating tasks and data visualisation AI fares best with tasks that are formulaic and repeatable – like data entry, bookkeeping, and basic financial analysis. Clients can make better sense of their finances by seeing data visualisations like charts, graphs, and dashboards – all of which can be created using AI. This frees up time for you to focus on tasks that require human judgement, critical thinking, and advisory experience. Join forces for greater efficiency Make AI part of the team and give your clients the best of both worlds – accuracy and data-driven decision-making, partnered with human expertise and experience. AI-powered accounting software like Xero makes it easy to enjoy the many benefits of artificial intelligence. With intuitive features like Xero Analytics and bank reconciliation predictions, you can adopt AI at your own pace.Become a Xero partner today and join over 200,000 accountants and bookkeepers using Xero in their practice. Get the tools and resources you need to succeed. This content is brought to you by Xero. Learn about working with AI Our masterclasses, webinars and e-learning courses can help you make the most of artificial intelligence. Browse our collection Hannah Dolan is AAT Comment’s Content Editor.