The use of AI in accounting is no longer a futuristic concept—it's becoming standard operating procedure.
A Gartner report predicts 90% of finance functions would be using at least one AI-enabled technology solution in the coming year. However, rather than using it to reduce employees, it will be primarily used to strengthen the workforce, ushering in a new era of efficiency and employee satisfaction. The same report predicted only 10% of finance job functions would see a reduction in headcount.
AI-powered solutions are enabling finance and accounting teams to process transactions much faster and significantly reduce manual data entry errors.
Waiting too long to start implementing it at your organization could result in missed opportunities for cost savings, risk mitigation, and strategic decision-making.
Here’s why it’s critical to act now and a few practical strategies CFOs can use to get started.
In the relatively short time since ChatGPT began making waves as a transformative technology, the AI marketplace has seen a rapid expansion. While AI tools still require human oversight, competition among AI technology providers has spearheaded evolution: today’s tools use larger context windows and multimodal capabilities, so they can incorporate different types of data rather than only text or only images), improving both their depth and accuracy. They also process significantly more data, connect to the Internet for real-time information, and integrate with a variety of applications.
The term “table stakes” has been used to describe the use of AI tools in finance, and recent data confirms that business leaders are prioritizing tech investment as a way to remain competitive with their peers.
According to PwC’s June 2024 Pulse Survey:
Employees want to work at innovative companies
According to “The Future of Time,” a global study fielded by Adobe Document Cloud, nine out of ten employees and SMB leaders are interested in tools to tackle the tasks that get in the way of doing their jobs efficiently. In fact, half of enterprise workers said they would switch jobs if it gave them access to tools to make them more effective at work. And many of the tasks they’re looking for assistance with are common to the finance function, including managing payments and invoices.
For the finance function, it isn’t just that AI has added a level of speed or accuracy to tasks that otherwise remain relatively unchanged. Instead, AI has had a transformative effect on accounting as a profession. It has taken some tasks out of accountants’ hands almost completely while providing the insights necessary to perform others at a depth that may never have seemed possible in the past. Here are just a few examples of how it’s being used today:
When paying a vendor invoice, a worker must not only manually copy the relevant data into the proper location in the company database; they also must solicit approval from the right person before paying the invoice.
Managing accounts payable processes manually can be a time-consuming, error-prone process, especially as your business grows to include multiple entities. But it’s a necessary one across all industries, making it an ideal space to use AI.
AI tools can automatically extract data from a vendor invoice, then use pre-set rules to determine whether, and to whom, the invoice needs to be routed for payment approval.
As a result of its ability to reduce invoice processing time by up to 50%, AP automation:
Depending on its size and the number of invoices being processed, automating accounts payable can save a company anywhere from a few thousand dollars a year to $225,000 annually, according to Gravity Software’s AP automation ROI calculator.
How many transactions does a small- to medium-sized business undertake in any given month? While the actual number may vary from company to company, it’s typically too many to manually reconcile.
Especially when it comes to a business that has multiple entities, credit cards, bank accounts and investments, it’s easy for transactions to become lost in the shuffle or for the task of bank book management to seem so overwhelming that bank reconciliation goes overlooked, allowing fraudulent transactions to pass by unchecked.
AI tools drastically reduce this by auto-matching transactions. Instead of hundreds of transactions to review each month, employees only have a handful of flagged outliers to investigate.
This helps companies mitigate fraud risks and speed-up month-end closing processes.
The Sunray Companies’ accounts payable administrator Stephanie Welborn described the process of settling intercompany transactions for the 47-entity hospitality enterprise as “grueling.”
Gravity Software’s multi-entity accounting software eliminates duplicate data entry as well as the need to constantly juggle among each entity’s database.
When an invoice is paid by one entity on behalf of other entities within an enterprise, there’s no need to manually enter each entity’s share of the cost into each individual database. Gravity auto-generates balanced due to/due from journal entries as well as intercompany invoices.
What was once a days-long ordeal for The Sunray Companies’ Welborn now takes about 30 minutes.
The Sunray Companies was previously using Sage 50 for their accounting needs, and found that Gravity Software’s multi-entity accounting capabilities significantly streamlined their financial processes. This transition helped them eliminate manual tasks and improve their intercompany transactions, saving time and reducing errors.
If you’re considering moving away from Sage 50, you can explore why Gravity Software is the ideal choice on our Sage 50 Alternative page.
Many use cases for AI involve freeing up workers so they can shift their attention to tasks where human insight can’t be substituted. While that’s not to be underestimated – enterprise workers and small- to medium-sized business leaders responding to Adobe’s survey said about one-third of their work week was spent on unimportant tasks that got in the way of doing their jobs effectively – AI can also enhance human insight by providing better, deeper data.
In its October 2024 Pulse Survey, 92% of CFOs cited accurate forecasting as a challenge for their business. Some were already deploying AI to assist with forecasts, as the technology can assist with predictive analytics such as cash flow and revenue projections. Business leaders can let AI gather data and piece together forecasts while they skip ahead to scenario planning and proactive decision-making, leading to companies that are better prepared to weather the challenges on the horizon.
As with any new undertaking, it can be difficult to know where to begin when implementing AI tools for your business. Here are some tips as you get started.
A good rule of thumb when implementing any new technology is, if it’s not broken, don’t fix it. If a process already runs smoothly, then it may not be the best candidate for AI solutions.
Seek employees’ input with regards to the pain points that would be best alleviated by AI. Not only do they have firsthand insight into the processes made most sluggish by manual work, but involving employees in the decision-making process can achieve buy-in and reassure workers of their value.
Here are some areas to explore for possible early AI deployment:
AI can be a game-changer, but rolling it out too quickly or without a strategy is more likely to create confusion and inefficiencies. Here are a few quick tips:
As with any third-party software vendor, it’s imperative to carefully vet any AI applications before allowing them access to your customer data, workflows and processes, and other sensitive company information.
It’s best to choose an accounting solution with AI-powered applications already built in, rather than scouring the internet for third-party vendors that are potentially less reliable or secure than one incorporated into software you already trust.
Prioritize vendors with deep accounting expertise, as their software is likely to feature natively built AI applications in the spaces where it’s the most beneficial for the finance function.
Gravity Software features AI-powered AP automation and Help System while also allowing users to benefit from innovations of Microsoft Copilot.
It’s impossible to gauge the success of any tech rollout without measurable performance indicators. Prior to implementing AI for a specific task, establish a baseline for comparison once the technology is more established.
Potential KPIs to help determine AI’s return on investment include:
Using software with AI-powered features already built in allows your company to experiment without a large upfront investment.
Deployed mindfully, AI can save time, mitigate common frustrations and drive better decision-making. AI deployed without forethought and care, however, can spell disaster at many levels of your organization. Here are some ways to ensure responsible AI implementation.
While it’s true that many AI applications are designed to be used by those without a tech background, cutting your IT department out of the implementation process is an unwise move.
AI rollouts should include all relevant departments, including IT and legal, so they can ensure the tools comply with data privacy regulations such as HIPAA and GDPR.
Compliance certifications similar to SOC2 may be on the horizon for AI applications. Even though it’s not legally required now, The American Institute of CPAs states, in a letter providing input to government entities, that “independent third-party assurance of AI systems will become increasingly relevant as market participants seek confidence in those systems.”
The consensus among finance and tech experts is that AI is an excellent tool for enhancing – not supplanting – the skill and insight of human workers. There are multiple reasons why human oversight is still needed when AI takes the reins of a task.
First, generative AI specifically is prone to “hallucinations” – unreliable results that to the untrained eye may seem accurate and rationally produced. Because of this, a finance professional should always supervise any material AI-powered transactions, tracking entries and flagging anomalies.
Second, while AI can accelerate decision-making by gathering and analyzing data, humans must make and implement the decisions that are truly best for the company in both the short and long term. These decisions are based not only on numerical data but on other factors, such as workplace culture, that simply can’t be quantified.
AI isn’t a “set it and forget it” type of technology. Employees are still needed to:
For this reason, it’s important to maintain communication with your team on what the AI can and cannot do, how to handle any technical glitches that arise and other ways to make the most of the new technology.
Without adequate training and foreknowledge, employees may come to view AI and other emerging technologies as obstacles, not enhancements, to their ability to perform their jobs effectively.
AI tools require the right parameters to be at their most effective, and so do the people using them. Here’s how to create clarity and security throughout your tech rollout:
What better way to get started with incorporating AI and automation into your company’s finance function than with an accounting solution that has the technology baked right in?
Gravity Software includes AI features out of the box, including:
Gravity also features built-in Microsoft Power Platform integration. This includes:
With comprehensive multi-entity capabilities including consolidated financial reporting, intercompany billing, multi-currency accounting and more, Gravity is an ideal financial management solution for small- to medium-sized businesses with growth in their future.
Schedule a demo today to see how you can benefit from AI in accounting.
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