How AI is Reshaping the Accounting Industry

Understanding the rise of AI in accounting 

The advent of Artificial Intelligence (AI) in the accounting industry marks a significant shift, blending traditional practices with innovative technology. This deep dive into “AI in accounting trends,“, based on our friends at Karbon’s State of AI in Accounting Report 2024, taps into the insights of 595 accounting professionals, including from within the SuiteFiles community, to explore how AI is reshaping the industry. 

AI’s growing influence in the accounting sector 

The inevitability of AI in modern accounting 

AI is rapidly becoming an integral part of accounting, with professionals across the board acknowledging its potential to revolutionize the industry. The technology is not just enhancing existing methodologies but is also paving the way for new forms of financial management and data interpretation. 

Varied perspectives on AI based on roles

The enthusiasm for AI in accounting varies depending on one’s position within a firm. While senior-level executives are keen to adopt AI for its strategic benefits, junior staff and individual contributors are more cautious, often concerned about the implications of AI on their job security and role evolution. While those concerns are certainly valid, AI could also be an opportunity for junior staff to focus on tackling real problems that require complex solutions, without busying themselves with admin work.  

Current AI adoption rates and tool usage

Despite the buzz, the accounting world is taking a measured approach to AI. A recent Thomson Reuters report shows that while about three in ten firms are considering generative AI, nearly half have no immediate plans to adopt it. In fact, only 8% of tax firms are currently using these tools. This tells us that while the potential is recognized, many are still weighing the pros and cons before jumping in.

The firms that are moving forward, especially industry leaders like the Big 4, see a clear advantage. They use AI to automate repetitive tasks, which reduces human error and makes processes much faster. This isn’t about replacing accountants; it’s about freeing them up to focus on strategic client advice.

This move towards efficiency often starts with foundational tools. For instance, implementing a system with features that automate document filing and management builds a strong base for future AI integration. It lets your team get comfortable with technology that handles the busywork, paving the way for more advanced solutions.

AI reshaping accounting roles

The evolution of accounting roles in the AI era 

AI’s impact on accounting roles is profound. For instance, 59% of survey respondents believe that bookkeeping will undergo the most significant transformation, evolving from traditional data entry to more analytical and advisory roles. This evolution suggests a future where accountants will increasingly rely on AI to handle routine tasks, allowing them to focus on providing higher-value strategic advice. 

AI as a supportive tool, not a replacement

Let’s address the biggest question on everyone’s mind: Is AI coming for your job? The short answer is no. It’s more accurate to think of AI as a powerful assistant, designed to help you work better and faster, not to replace you. The technology excels at handling repetitive, time-consuming tasks, but it can’t replicate the uniquely human skills that are essential to accounting.

Instead of making accountants obsolete, AI is set to change what accountants do, shifting the focus from manual data processing to strategic analysis and advisory services. By automating tasks like data entry and report generation, AI frees you up to spend more time on the work that truly matters—interpreting complex financial data, offering valuable insights to clients, and building strong relationships.

Ultimately, AI lacks the critical thinking, professional judgment, and communication skills that you bring to the table. These are the abilities that clients value most. The goal isn’t to replace your expertise but to support it, allowing you to focus on high-impact work while technology handles the background noise.

Navigating the challenges posed by AI

Balancing technology with humanity

A major concern among professionals is the potential loss of the human element in accounting services. Despite the efficiency gains from AI, 56% of respondents worry about diminishing personal client interactions, highlighting the need for a balanced approach that combines technological advantages with human insight and empathy. 

The gap between AI enthusiasm and training

Despite the evident excitement around AI, there is a noticeable lack of investment in AI training and education, particularly in larger firms. This gap between interest and actual skill development points to a need for more comprehensive and accessible AI education within the accounting industry. This is another opportunity for junior accountants, early adopters to AI will be in high demand as they skillfully utilize AI to create efficient and effective strategies.  

 

The importance of human oversight

While AI can process data with incredible speed, it can’t replicate the nuance of human connection. A recent study from Accountancy Age found that 56% of professionals are concerned about AI diminishing personal client interactions. This highlights a critical point: technology should support, not replace, the human element.

AI is excellent at handling the “what”—automating data entry, identifying patterns, and flagging anomalies. But it’s the human professional who understands the “why.” Building trust, offering empathetic advice, and providing strategic insights based on a deep understanding of a client’s business are tasks that remain firmly in the human domain. The goal is to create a partnership where AI frees you up from repetitive tasks so you can focus more on high-value client relationships.

The risk of poor data quality

An AI tool is only as effective as the data it’s given. The old saying “garbage in, garbage out” is especially true here. As noted by Future Firm, AI can make incorrect assumptions when working with messy or incomplete data, a significant risk when dealing with sensitive financial information.

Before you can rely on AI for accurate insights, you need a solid foundation of clean, organized, and accessible data. This is where a robust document management system becomes essential. By centralizing your files and establishing clear organizational standards with a tool like SuiteFiles, you ensure your team is working from a single source of truth. This practice minimizes errors and provides AI with the high-quality data it needs to perform reliably.

Managing implementation costs and system integration

Adopting new technology always comes with practical considerations, and AI is no exception. While many tools offer free or trial versions, accessing their full capabilities often requires a paid subscription. Beyond the software cost, you also have to account for the time your team will spend on training and implementation.

Another challenge is system integration. New AI tools may not connect seamlessly with the legacy software your firm already uses. To avoid creating data silos or clunky workarounds, it’s important to choose tools that work well together. Prioritizing platforms with strong integrations, such as those that connect with Microsoft 365 or Xero, creates a more cohesive and efficient tech stack for your entire team.

Key areas where AI is making an impact

Enhancing communication and workflow 

Communication and workflow management are two areas where AI’s impact is most noticeable. 59% of accountants use AI to compose emails, streamlining client communications. Additionally, 36% are employing AI for workflow automation, highlighting its role in improving operational efficiency. 

Streamlining data analysis and reporting 

AI’s capabilities in data analysis and financial reporting are game-changing. 31% of professionals utilize AI tools for research, allowing them to process and analyze large datasets more effectively. This capability enables them to uncover insights and trends that would be challenging to identify manually. 

Automating bookkeeping and invoice processing

Let’s be honest, manual data entry and invoice processing can be tedious. AI is stepping in to handle these repetitive tasks, significantly reducing the chance of human error. As Thomson Reuters notes, this automation “allows accountants to spend more time on giving important advice to clients.” By letting AI manage the numbers, you free up your team to focus on higher-value strategic work. This shift is not just about efficiency; it’s about transforming the role of an accountant into that of a trusted advisor. When your documents are already organized in a central system, AI tools can access and process them even faster, creating a truly streamlined workflow. 

Improving tax preparation and compliance

Tax season often brings a wave of complexity and pressure. AI tools are designed to ease this burden by enhancing both accuracy and efficiency. They can scan vast amounts of financial data to identify potential deductions and credits that might otherwise be missed. According to Future Firm, AI can also check for errors to ensure tax filings are correct and compliant. This not only minimizes risk for your clients but also solidifies your firm’s reputation for thoroughness. When all your client’s tax documents are securely stored and easy to find, integrating an AI tool into your process becomes a much smoother experience. 

Detecting fraud and managing risk

In a landscape of increasingly sophisticated financial schemes, AI serves as a powerful line of defense. It can analyze massive datasets in real-time to identify unusual patterns or anomalies that could indicate fraudulent activity. A human might miss a subtle irregularity, but an AI algorithm is built to spot deviations from the norm. This proactive approach to risk management is a significant value-add for clients, offering them peace of mind. Combining AI-powered fraud detection with secure document management practices ensures that your client’s sensitive information is protected from every angle. 

Supporting audits, budgeting, and forecasting

AI is also making its mark on forward-looking financial activities. During audits, AI tools can accelerate the process by automating sample selections and cross-referencing records for inconsistencies, leading to a faster and more accurate review. For budgeting and forecasting, AI moves beyond historical reporting by analyzing past data and market trends to generate more reliable financial projections. This empowers accountants to provide clients with data-driven insights that can shape their business strategy. A clean, organized digital filing system with clear audit trails, like the one provided by SuiteFiles’ document management features, is the perfect foundation for these advanced AI applications. 

Strategic benefits of AI in accounting practices

AI as a competitive advantage 

AI is increasingly seen as a critical component of a firm’s competitive strategy. 54% of professionals believe that the absence of AI in accounting practices devalues a firm, while 66% view it as a significant competitive edge. This perception underscores AI’s strategic importance in the accounting field. 

Attracting and retaining talent

AI is also playing a crucial role in talent management within the accounting sector. 46% of professionals agree that AI can help attract and retain more talent, particularly among the younger generation who are drawn to technologically advanced and innovative workplaces. 

Reducing errors and improving accuracy

One of the most immediate benefits of bringing AI into your practice is the significant drop in manual errors. Let’s be honest, repetitive data entry is a recipe for mistakes, no matter how careful your team is. AI systems are designed to handle these repeated tasks with precision, day in and day out. Automating these processes reduces human error, making financial data more reliable.

This newfound accuracy isn’t just about clean books; it’s about building a stronger foundation for strategic decisions. When your team spends less time double-checking numbers, they have more time to analyze them and provide the kind of high-value advice clients are looking for. This shift is easier when your tools work together seamlessly. For example, having a document management system that integrates with your other software minimizes manual data handling and further improves accuracy.

Saving costs and creating new opportunities

Automating tasks doesn’t just save time; it directly impacts your bottom line. Every minute your team gets back from manual work is a cost saving for the firm. These savings can be reinvested into growth initiatives, new technology, or simply a healthier profit margin.

While some worry about AI replacing jobs, it’s more accurate to see it as a force for creating new roles. As firms adopt AI, they’ll need professionals who can develop, manage, and interpret these systems. This opens up new career paths for accountants who are willing to adapt and learn new skills, shifting the focus from data entry to data strategy.

Improving work-life balance for teams

Let’s talk about the daily grind. Tedious, repetitive work is a major cause of burnout in the accounting profession. AI can take on many of these monotonous tasks, like sorting expenses or filing documents, which can make the job much more satisfying for your team.

When people are freed from the boring stuff, they can focus on problem-solving and client relationships—the work that likely drew them to the profession in the first place. This increased efficiency and job satisfaction can lead to a better work-life balance, reducing the pressure and long hours, especially during tax season. It’s about creating a more sustainable and engaging work environment for everyone.

How leading firms are using AI

Lessons from the Big 4

It’s one thing to talk about AI in theory, but seeing it in practice provides a much clearer picture. The “Big 4” accounting firms—Deloitte, EY, PwC, and KPMG—are at the forefront of integrating AI into their operations. While your firm might not have the same budget, the principles behind their strategies are universal. They’re using AI to increase efficiency, improve accuracy, and manage risk. By looking at their examples, you can find inspiration for how to apply similar thinking within your own practice, regardless of its size.

Deloitte’s approach to document review

Think about the hours spent combing through contracts and financial documents. Deloitte uses AI to automate this process, allowing its teams to review documents and pull out critical information in a fraction of the time. This frees up their professionals to focus on higher-value analysis and client strategy instead of getting bogged down in manual searches. It’s a powerful example of how AI can handle repetitive tasks, leading to faster and more accurate outcomes.

EY’s use of AI in auditing

In auditing, AI is a game-changer. EY has integrated AI to analyze massive datasets to better identify risks like financial fraud. Instead of relying on small samples, AI tools can scan entire transaction logs to spot anomalies that a human might miss. This doesn’t replace the auditor’s judgment; it enhances it by providing deeper insights and a more comprehensive view of a client’s financial landscape.

PwC’s custom AI software

PwC has taken things a step further by developing its own AI software to support employees with internal IT tasks, including writing and checking code. This move has reportedly made their teams significantly more productive. It shows that AI’s benefits aren’t limited to client-facing accounting work. It can also be a powerful internal tool to streamline operations and support your team across various functions.

KPMG’s framework for trusted AI

With any new technology, trust is essential. KPMG is addressing this head-on with its “Trusted AI framework.” This initiative helps clients use AI tools in a way that is both safe and responsible. It’s a crucial reminder that adopting AI isn’t just about the technology itself. It’s also about establishing clear guidelines and ethical standards to ensure it’s used correctly and maintains client confidence.

Preparing for an AI-driven future in accounting 

Adapting to new roles and skills

The integration of AI in accounting is driving a need for new skills and role adaptations. Accountants are required to become more tech-savvy and develop capabilities in areas like data analysis and AI interpretation to remain relevant in an increasingly automated environment. Given the scarcity of work sponsored AI training, we predict accountants possessing these skills will be in high demand.  

Addressing ethical and security concerns 

Ethical and data security issues are front and center in the discussion around AI in accounting. 76% of respondents express concerns about data security when using AI tools, while 49% are wary of potential ethical dilemmas and biases that may arise from AI usage. 

The role of continuous learning and adaptation

Keeping up with the rapid advancements in AI technology is a challenge for 46% of accounting professionals. This underscores the importance of continuous learning and professional development to stay abreast of the latest AI trends and applications in the accounting field. This could potentially lead to new jobs being created, ones solely dedicated to training others to use AI effectively.  

A practical guide to implementing AI

Bringing AI into your firm doesn’t have to be a massive, overwhelming project. When you break it down into manageable steps, you can introduce new technology thoughtfully and effectively. This approach allows you to build momentum, get your team on board, and ensure you’re choosing solutions that genuinely fit your needs. Here’s a straightforward guide to get you started on the right foot. 

Identify tasks that can be automated

The best place to start is by looking at your team’s daily and weekly routines. Pinpoint the repetitive, time-consuming tasks that don’t require complex judgment or deep strategic thinking. This could include data entry, categorizing transactions, or pulling standard reports. According to research from Thomson Reuters, AI is excellent for automating these kinds of tasks. This not only reduces the chance of human error but also frees up your team to focus on higher-value work, like providing strategic advice to clients. 

Choose the right tools for your firm

Once you know what you want to automate, you can look for the right tools. Not all AI solutions are created equal, and the best one for your firm will depend on your specific needs, budget, and current software. Consider how a new tool will fit into your existing workflow. Finding a solution that integrates with systems you already use, like Microsoft 365, can make the transition much smoother. Do your research, read reviews, and don’t be afraid to book a demo to see the software in action before you commit. 

Start with a small pilot project

Instead of a firm-wide overhaul, begin with a small pilot project. Choose one specific process or a small, enthusiastic team to test the new AI tool. This approach minimizes disruption and creates a safe space to learn. It allows you to work out any kinks, gather initial feedback, and build a success story you can share with the rest of the firm. A successful pilot project makes it much easier to get buy-in from everyone else when you’re ready to expand the use of the technology. 

Monitor performance and adapt your strategy

Implementing AI isn’t a “set it and forget it” task. Before you even start your pilot project, define what success looks like. What metrics will you track? It could be time saved on a specific task, a reduction in errors, or faster report generation. Regularly review your progress against these goals. Gather feedback from the team using the tool and be prepared to adapt your strategy. The goal is to ensure the technology is truly serving your firm and helping you achieve your objectives. 

Navigating AI in accounting trends

The integration of AI in accounting represents a significant shift in the industry. Understanding and adapting to these “AI in accounting trends” is crucial for firms seeking to remain relevant and competitive. Embracing AI as a tool that enhances, rather than replaces, human capabilities is key to leveraging its full potential. 

Stay informed about the latest AI in accounting trends and prepare for the future by embracing new technologies and skills in your practice. Book a demo with our team today to learn how SuiteFiles helps you stay ahead of the competition.