Artificial Intelligence (AI) is quickly making its way into almost every field and industry. You’ve almost definitely already interacted with AI at some point today!
Perhaps you asked Siri to search for this article, used Google Maps to plan your commute to work, or your spelling was automatically corrected by your phone. But, as with many forms of revolutionary technology, there is a fear of what it may represent. Just as the first mobile phones caused concerns about radiation and electric shocks, the advance of AI has created fears of robot uprisings and has provoked uncertainty about the implications for human jobs.
While the latter isn’t without foundation (an estimated 800 million jobs worldwide are predicted to be replaced by AI before 2030), it’s important to inform ourselves about what AI actually is and to be aware of the extraordinary benefits that it brings.
What is Artificial Intelligence?
Artificial Intelligence, or AI, refers to machine processes that simulate the way humans think. They are able to analyse data and make decisions based upon it. AI systems are able to process huge amounts of data extremely quickly, – much faster than the human brain – detecting patterns that give businesses greater insight.
It’s not only their ability to analyse enormous quantities of data which make AI systems valuable. They are far more consistent decision-makers than people. They never get tired or bored and don’t exhibit human biases. Using AI to complete tasks reduces the danger of human error or prejudices – such as confirmation bias and discrimination.
What is machine learning?
Machine learning is a subset of AI, by which computers can learn from the data they are given without being explicitly programmed to do so. A common example of this is online advertising, which uses your browsing and purchase history to personalise adverts based on what it thinks you are most likely to be interested in.
AI and machine learning are used like this across many industries, from music to transport and healthcare. Some examples include:
- Facebook no longer needs you to manually tag your friends in each photo. Facebook uses facial recognition to ask you if a photo is of a particular person. It then uses machine learning to become more accurate. Eventually Facebook can tag people accurately without human input.
- Uber now uses AI to predict arrival times and will suggest pick up locations to you based on the activity and feedback of previous users.
- Ever listened to a playlist that Spotify or Apple Music has created for you? Machine learning is used to establish your likes and dislikes. This information is used to offer you song suggestions and create personalised playlists.
- In a similar way, Netflix uses machine learning to study what type of TV shows and films you like and then uses the data it gathers to recommend programs to you. Netflix’s AI has been valued at $900 million due to the success of this in improving their user experience.
- In health care, trials have begun using computer doctors to triage. These AI doctors have been shown to be faster and more accurate than human doctors in diagnosing patients.
How is Artificial Intelligence affecting accountancy?
It is estimated that by the year 2020, many manual tasks such as audits, data entry and banking will be fully automated through the use of AI-based technologies. This has made many workers wary of their development, but AIs are not coming for our jobs! Or at least not anytime soon.
Within accountancy, rather than making accountancy jobs redundant, it’s believed that AI will simply take over monotonous, time-consuming tasks and free up human finance professionals to complete more lucrative, higher value tasks such as tax planning, advising and counselling.
Larger accountancy companies have long been using AI software. KPMG have been using AI in their auditing processes since 2015, using predictive analysis to gather evidence and produce data reports, as well as using AI to automate accounting systems and financial reporting.
Artificial Intelligence has been used successfully in fraud detection. AI can learn which data patterns are normal and therefore detect irregularities and predict possible fraudulent behaviour. It will then automatically alert users so security situations are constantly monitored and can be actioned upon where necessary.
Many smaller accountants – as well as individual small businesses – use services such as Fluidly which utilise Artificial Intelligence to create machine learning-based predictive models to forecast revenues and cash flow. AI can analyse far larger quantities of data better than humans (or our old friend Excel!) and can detect very complex or subtle patterns. This allows them to make more precise predictions in more complicated environments. Machine learning also learns from the errors it makes in its predictions, meaning the forecast becomes increasingly accurate.
In conclusion, Artificial Intelligence in accounting is not something to be afraid of. AI represents an opportunity for accountants to take on more valuable, high level work becoming strategic business advisors able to provide key insight to clients. AI can make accounting more efficient while reducing mistakes and taking the time-consuming, boring work out of our hands. We should embrace it.
How Fluidly uses AI
Fluidly is an Intelligent Cashflow engine, that gives accountants and their business clients the ability to review cashflow in real-time, while also providing forecasts of your cashflow position.
Fluidly combines AI with financial modelling to produce a forecast that’s always up to date. Fluidly connects to your choice of accounting software and applies bespoke cashflow algorithms and machine learning to automatically build a detailed baseline cashflow forecast.
This removes the need for complex and time-consuming modelling – the AI simply crunches the numbers and predicts your clients’ financial future. This allows accountants to offer cashflow forecasting at scale to their whole client base.
AI integration partners
Fluidly integrates directly with a range of leading accounting packages, including popular platforms such as Xero and QuickBooks. The AI capabilities of today’s accounting software are fundamental to offering additional value to your clients.
- Xero – Xero’s AI focus has been on improving the unproductive and inaccurate process of manually coding transactions. Xero has improved it’s automated bank reconciliation processes and ‘Find and code’ function – and the current product now uses AI and machine learning to provide consistent automated coding of transactions – removing the need for corrections and recoding.
- QuickBooks – Intuit’s QuickBooks accounting platform has gone a long way to embracing AI. Using AI and machine learning algorithms to get financial insights quickly, in real time, QuickBooks is helping businesses to increase their financial understanding. QuickBooks Assistant provides an AI-driven chatbot to help businesses control their finances and get answers via voice or typed commands – improving a company’s ability to make informed, smart decisions.
By embracing AI in your core accounting platform, and within your client’s choice of app integrations, you can remove much of the time-consuming manual data work, and free up time for a more customer-focused kind of accounting advice.
The true opportunity of artificial intelligence
In conclusion, Artificial Intelligence in accounting is not something to be afraid of – in fact, the potential benefits far outweigh the negatives.
AI represents an opportunity for accountants to take on more valuable, high level work becoming strategic business advisors able to provide key insight to clients. AI can make accounting more efficient while reducing mistakes and taking the time-consuming, boring work out of our hands. We should embrace it.