Why it is time for accounting in India to welcome AI
Finance and accounting have long been the quiet and hardworking supporters of the business by spending most of their energy on processing transactions. They require going through the drudgery of collecting each invoice, sharing it with the accountants and tallying it with different books. While this worked for businesses until the last decade, the model is not able to handle the vagaries of modern business dynamics. Global consulting firm, Accenture, in its recent study, claimed that adoption of AI and ML by accounting firms could reduce costs by 80 per cent and time consumed by up to 90%. Since there has been widespread acceptability of these systems in large part of India, the accounting firms cannot stay aloof for long. This would mean the impending shift for finance and accounting professionals to a more strategic partner role that focuses on value creation for the business.
One of the biggest challenges for accountants has been the massive number of transactions that both the businesses and the accountants must deal with, especially in the current globalised scenario that presents hundreds of customers and tens of thousands of invoices. The accountants must fetch each transaction and go through it. The current system requires teams to deal with these transactions manually which eats up most of their time. More than that, it forces the human intellectual capital into doing non-value adding repetitive work instead of focussing on data-based insights and solving key business problems.
The impending knock on the door
It is no surprise that Artificial Intelligence (AI) and Machine Learning (ML) have radically transformed everything that they have touched. From Alexa’s at homes to auto-generated emails at work, from smart education for kids to personalized healthcare services, from selfdriving cars to online shopping, they are present everywhere. And this presence is only going to increase. This smart reconfiguration of processes for increasing efficiency has allowed AI to transform the accounting industry with advancements that are eliminating dreary tasks and allowing human professionals to unlock greater intellectual potential. AI promises to boost both productivity and quality of outputs while permitting greater transparency and auditability. Besides, AI algorithms will allow more precise forecasting of financial statements and find patterns that usually go unnoticed and can be pathbreaking for the business. Let’s look at some other ways in which AI can help accountants:
► Self-learning programs: ML-based systems that automatically suggest or complete accounting codes eliminate errors and save a lot of time. This allows easy allocation of transactions and automatic correction of errors.
► Reduced clutter: There is a lot of paperwork involved when it comes to filing the organization’s procurement and purchasing methods. A huge amount of records needs to be maintained on the systems that are not in connection with each other. As AI machines process unstructured data using APIs, the procurement process will be automated.
► Chatbots: Use of AI-based chatbots for instant data access and addressing common queries like last updated financial data, account balances, bill dues, advisory, etc. will make it easier for managers outside the Finance department to get this information.
► Easy Integration: AI-powered systems can collect data from various sources and integrate that data. The AI-powered machines make your monthly/quarterly cash flows collected in no time and consolidate them easily.
► Easy Auditing: ML algorithms can review data, recognise anomalies and compile the list of outliers. Thus, making it easier to identify errors and outliers for auditing purposes. This can contribute towards reducing the human-error element to a large extent.
► Unlocked human potential: While these systems do their job of data heavy lifting, accountants can focus on judgment-intensive tasks. Machines cannot think likehumans. They do not have our emotional intelligence either. Technology makes accountants more efficient and productive so that accountants can interpret data to provide better insight and business advice to their clients.
Thus, these smart systems can take care of the mind-numbing and monotonous tasks, while human accounting and finance professionals will be free to take on the tasks they are better suited for. These professionals will be aided by the real-time status update of financial matters by Natural Language Processing systems, making their companies proactive and agile to adjust course as and when required. Needless to say, it is time for Indian businesses to adopt these smarter and efficient solutions or else they will end up losing their competitive edge in attracting the next generation of customers.