How are family offices using AI accounting tools?


In an era where technology is the backbone of innovation, family offices are increasingly considering artificial intelligence (AI) accounting software like AI-powered accounts payable and more to streamline operations, enhance decision-making, and foster deeper client relationships. The strategic integration of AI with family office accounting software is transforming traditional financial management, positioning family offices to capitalize on efficiency and precision.

However, investments in AI need to be aligned with strategic goals, not haphazard experiments.

Here's a closer look at the benefits of using AI in accounting and some examples of how family offices are beginning to incorporate it into their processes.

What are the advantages of using AI in accounting?

AI accounting software and machine learning offer tremendous benefits for accounting firms, CFOs and family office financial advisers. It can automate or simplify accounting tasks like data entry, invoice processing, and financial reporting. It can also analyze financial data to provider deeper insights into the best new investment opportunities or the best wealth management strategies.

Other significant benefits of AI accounting software include:

  • Streamlining accounting processes
  • Reducing repetitive tasks, enabling a better experience for accounting professionals
  • Giving finance teams more time for strategic accounting tasks
  • Reducing manual data entry errors
  • Improving cash flow
  • Reducing costs
  • Making it easier to identify patterns and use predictive analysis
  • Simplifying financial reports and enabling real-time financial insights
  • Improving your business's financial health

The adoption of AI within family offices must be deliberate and goal-oriented. Experts from EY suggest a balanced approach, recommending the deployment of AI and machine learning in areas that promise the greatest impact.

How are family offices using AI tools for accounting today?

Family offices have traditionally been slower to embrace technology even as the accounting industry has undergone a full digital transformation. Many have become overly reliant on Excel spreadsheets, which can put them at risk, family office strategy company owner Francois Botha said in a recent Forbes article.

"Key-person risk looms large: what happens if the person who built your Excel systems leaves?" he said. "Control risks proliferate: can one ensure accuracy, transparency, and accountability within an Excel-based system? Visibility risk intensifies: are you missing the bigger picture without a consolidated overview of activities?"

In the AI accounting software revolution, however, even later adopters can have an advantage by learning from those who have implemented it earlier and made mistakes.

Here are a few examples of how family offices are beginning to introduce AI accounting tools.

Accounts payable automation

AI-powered AP automation software helps companies save significant time on invoice processing, reducing manual data entry while giving advisors more time to engage with clients on a strategic level.

AI's capabilities extend well beyond simplifying financial tasks.

Scott Lamont of F2 Strategy emphasizes the pivotal role of client engagement, asserting that it significantly influences overall satisfaction, perhaps even more than portfolio performance. AI accounting tools, particularly in accounting, are invaluable in this respect, enabling advisors to devote more time to client interaction by automating routine tasks.

Elevating investment strategies

Freed from the constraints of manual processes, advisors can explore novel investment opportunities more aligned with the unique values and goals of their clients. This personalized approach not only enhances the advisor-client relationship but also distinguishes the family office as a progressive and value-oriented firm.

Improving auditing efficiency and quality

The Review of Accounting Studies conducted a study of the eight largest auditing firms and determined AI tools are highly effective at improving audit quality. The study found a 5% reduction in the number of restatements at firms that used AI for the past three years.

Regulatory compliance

As regulatory landscapes evolve, family offices face the growing challenge of staying compliant while managing complex portfolios. AI tools equipped with regulatory technology can automate compliance processes, ensuring family offices meet all legal requirements efficiently. This section explores how AI can monitor changes in legislation and automatically adjust compliance protocols, minimizing the risk of regulatory breaches.

Data extraction

Accountants are increasingly using AI accounting software for data extraction to streamline operations and enhance the accuracy of financial data analysis. In addition to supporting auditing, an AI accounting tool can read invoices, analyze financial statements, and more.

Fraud detection

AI-powered fraud detection is beginning to become integrated into financial processes at banks and accounting firms.

AI accounting software can recognize patterns in financial data and detect anomalies that may indicate fraud, such as a sudden change in the frequency or amount of transactions. When combined with accounting software that has a full audit trail, it becomes easier to identify potential internal theft or issues with bookkeeping and expense tracking.

Predictive analytics

AI accounting software can transform investment strategies and risk management in family offices. By analyzing vast datasets, AI tools for accounting can forecast market trends, identify investment opportunities, and anticipate potential risks, allowing for more informed decision-making. This section delves into how AI predictive models are applied in financial analysis and investment strategy development, offering a competitive edge to family offices.

Personalized wealth management

AI's ability to process and analyze personal financial data enables the delivery of highly personalized wealth management services. From customized investment portfolios to tailored financial planning, AI accounting software enhances the advisor's ability to cater to the unique needs of each family member. This section examines the tools and techniques used in AI-driven personalization and their impact on wealth management strategies.

Tax compliance

Accountants are using AI and machine learning to enhance tax compliance, analyzing large volumes of tax regulations to offer recommendations or provide faster tax calculations. AI accounting software can even integrate realistic modeling data to provide a more accurate assessment of tax liabilities. Some countries are even exploring the use of AI to modernize the tax administration system. A 2022 article in Artificial Intelligence and Law outlined a framework showing how Indonesia could potentially use AI to help enforce tax law while reducing costs.

What are the best AI accounting software tools for family offices?

Microsoft Copilot and Power Automate

Microsoft Copilot is an AI assistant capable of extracting data from emails, chat, and documents to help family office accountants and others find what they need faster. It's available for those who use Microsoft 365, Microsoft Power Automate, or Windows 11.

For years, accountants have also used Microsoft Power Automate accounting software to build low-code or no-code workflows to streamline processes like accounts payable, approvals, or financial reporting. Now with Copilot, these processes are becoming even easier to use in natural language. For instance, accountants can ask prompts such as asking what percentage of expenses were attributed to a certain type of asset or entity.

This could help tailor reporting and communications to meet each family member's unique preferences. One family member may only be interested in one aspect of the business, while others want to see a full overview.

Accounts payable automation software

Accounts payable automation streamlines the process of matching purchase orders to invoices, approving them, and scheduling payments. Gravity Software is built on the Microsoft Power Platform, so it uses Azure Form Recognizer to read invoices, allowing accounting teams to process dozens of bills at once and match them with their own internal records. You can use dimensions to categorize expense types, vendors, or projects, integrate with payment software including, and gain real-time visibility of your financial performance.

ChatGPT for accounting

A study in the Journal of Accountancy found nearly 25% of top-performing client advisory services were already using AI in 2022, and that has likely increased significantly with the introduction of free or low-cost AI tools like ChatGPT. OpenAI, the creator of ChatGPT, is already being integrated into software to simplify tax filing, client communications, fraud detection, and more. This is especially helpful for family offices and accounting firms with a large number of journal entries that need to be analyzed to detect fraud. In addition to analyzing data, ChatGPT uses natural language processing to generate original summaries of reports, emails, and more.

Embracing AI accounting software solutions in family office management

The integration of AI accounting tools into family office management promises to improve the efficiency and quality of operations, giving accounting professionals more time to focus on personal relationships and strategic priorities. Family offices that embrace AI technologies today will set the standard for innovation, efficiency, and client service excellence tomorrow. The benefits of AI come with their own set of challenges, including data confidentiality and the accuracy of AI-generated content. It's crucial for family offices to adopt AI solutions thoughtfully, ensuring the selection of reputable tools and maintaining human oversight to safeguard operational integrity.

Combining AI with accounting software like Gravity allows for a smooth implementation and adoption process while mitigating potential risks.

Gravity Software uses Microsoft's latest technologies, including AI-powered invoice processing, and integrates natively with many of the Microsoft applications family office teams already use — including Teams, Excel, Power Automate, and Power BI.

Gravity is designed to support the unique needs of family offices and other mid-sized, multi-entity businesses. In addition to including all the basic accounting features, it makes it easy for family offices to:

  • Manage financial reporting and maintain data transparency
  • Simplify approvals and purchase orders with automated workflows
  • Manage investments and fixed assets
  • Manage transactions in multiple currencies...

...and much more. Learn more about Gravity's family office accounting software.

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