Automation, prediction, analysis: how artificial intelligence is revolutionizing accounting

Artificial intelligence is undoubtedly the latest technological revolution to have had a profound impact on the world of work, pushing companies to reinvent their processes.

Thanks to the integration of AI within business tools, but also to the development of ChatGPT and its competitors, the various departments of organizations now have real assistants, capable of carrying out certain tasks for them. A godsend... but not without its share of concerns.

Even for the accounting function, which has to come to terms with this new reality.

What is the impact of artificial intelligence on accounting ? What are the benefits, but also the challenges?

Welcome to the accounting of the future! 🦾

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What exactly is artificial intelligence?

Definition of artificial intelligence

Before we talk about artificial intelligence in accounting, let's agree on what we mean by artificial intelligence.

Artificial intelligence, often abbreviated to " AI ", refers to technologies capable of simulating certain human cognitive abilities. Observe, understand, learn, reason, predict... it's all about making algorithms work instead of neurons.

In this sense, it differs from conventional computing (where the steps to be taken are already known from the outset), since it evolves and adapts based on data.

An ever-evolving technology

While the beginnings of artificial intelligence appeared (at least as an autonomous field of research) in 1956 with the Dartmouth Conference, orchestrated by John McCarthy and Marvin Minsky, it has made considerable progress in recent years.

Indeed, with the explosion of Big Data and the increasing power of processors, the 2000s saw the birth of a new era: that of machine learning. Algorithms now learn directly from data.

Then came the deep learning revolution. Inspired by the workings of the human brain, this model uses artificial neural networks to process colossal volumes of data (automatic translation, voice recognition, image analysis, etc.).

It's only natural that today, artificial intelligence is making its way into all professional fields, including finance and compatibility.

☝️ Of course, OpenAI's ChatGPT , a generative AI capable of understanding human language and predicting words to create text, has contributed to this democratization of AI.

How can artificial intelligence be used in accounting?

The use of artificial intelligence in business has become much more widespread in recent years, where it was previously the preserve of powerful groups. This is due to :

• the industrialization and increased computing power of the machines used to deploy this AI ;
• the development of the cloud, which facilitates massive access to data.

We are therefore seeing the development of AI-powered software for accounting and finance, serving two main purposes:

• automation ;
• analysis and prediction.

Automation

Historically, accounting has been based on manual, repetitive and time-consuming tasks. Entering invoices, reconciling entries, filing receipts... all indispensable actions, but with little added value.

Where artificial intelligence changes the game is that it automates these tasks with unrivalled speed and reliability.

👉 Take the example of reading supplier invoices. Thanks to optical character recognition (OCR), coupled with learning algorithms, software can automatically extract key information: supplier name, amount excluding VAT, payment date... No need to enter these elements by hand, AI does it in a matter of seconds.

The same logic applies to bank reconciliation. The algorithm compares bank statements with accounting entries and matches the corresponding movements.

This category also includes :

• intelligent filing of accounting documents;
• automatic preparation of VAT returns;
• compliance verification by applying up-to-date tax rules.

What's at stake? Saving time, reducing the risk of error and freeing up accountants for higher value-added missions.

💡 Automation, in particular, is the great strength of invoice dematerialization solutions such as Yooz. Thanks to AI, as well as a powerful big data database, this software lets you industrialize the entire process of handling customer and supplier invoices, without human manipulation. This includes automatic data capture, allocation and reconciliation, all without data entry.

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Analysis and prediction

Automation is just the tip of the iceberg. Behind it, artificial intelligence reveals an even more valuable skill for accounting: its ability to analyze and predict.

Traditionally, accountants and finance managers work with a retrospective vision, producing financial documents that reflect what already exists. But AI is changing this paradigm. By analyzing massive volumes of historical data and detecting trends, it helps to anticipate the future.

In concrete terms, how does it work? Artificial intelligence combines several sources of information:

• past accounting information (AI can analyze the balance sheet, for example) ;
• pending invoices
• recurring bank flows;
• economic or sector indicators.

Thanks to its predictive algorithms, artificial intelligence is then able to :

• forecast short- and medium-term cash flow, by simulating different scenarios ;
• detect accounting anomalies, by spotting unusual patterns;
• assess the solvency of customers or suppliers, by combining payment history, recurring behavior and external data;
• create intelligent dashboards that not only display figures, but also explain trends and suggest corrective actions.

Thanks to this predictive competence, the accountant becomes a powerful strategic partner, providing much more relevant insights.

What about ChatGPT and accounting?

Obviously, the question on many of your minds is: can ChatGPT do accounting?

Indeed, it's hard to discuss artificial intelligence without talking about ChatGPT. While it's not an accounting tool in the strict sense of the word, it would be a shame to overlook its main asset: its ability to understand natural language and process accounting information instantaneously.

In concrete terms, it can help even the smallest structures to understand concepts, processes and so on. To be used with a critical mind, of course! Don't forget to double-check everything 😉

ChatGPT can also be used to :

• draft customer emails (invoice reminders, account explanations, etc.) ;
• create checklists for year-end closing or VAT control;
• analyze figures and transform them into comprehensible reports;
• automate the drafting of financial comments, based on balance sheets or income statements;
• verify entries or propose standard accounting schemes.

By cross-referencing your accounting data with its encyclopedic knowledge, ChatGPT helps you save time and make certain analyses more reliable... but that doesn't mean it can replace human expertise!

What are the 4 advantages of artificial intelligence in accounting?

In accounting and finance, as in many other business functions, artificial intelligence promises its share of benefits.

Let's take a look at them. 👉

#1 Significant time savings

Automating many manual tasks (data entry, allocation, validation, etc.) inevitably saves time and performance for a company's finance and accounting department, or for accounting firms.

By eliminating these low-value operations, professionals free up bandwidth to devote to more strategic missions, such as consulting or financial analysis.

#2 Lower costs

This time saving goes hand in hand with a reduction in costs, particularly operational costs (time spent on data entry or verification).

What's more, by limiting errors and tax adjustments, artificial intelligence avoids the expense of corrections or other disputes.

#3 Process security

The risk of error remains the bête noire of accounting firms and finance departments.

This is where artificial intelligence comes into play once again, to secure your processes and make your data more reliable. And with good reason: the machine doesn't tire, doesn't make mistakes or lose documents.

But AI goes even further!

We're thinking in particular of everything to do with fraud detection, made possible by technologies such as :

• graphometry (the analysis of handwriting to detect anomalies) ;
• frequency analysis (analysing the recurrence of certain amounts, the distribution of numbers or the frequency of certain operations).

#4 Informed decision-making

In accounting, decision-making is often based on the observation of historical financial data. With artificial intelligence, these analyses become faster, more refined and, above all, more predictive.

Indeed, by cross-referencing accounting flows, performance indicators and external economic data, AI detects trends invisible to the naked eye. It can even :

• warn of cash flow risks;
• simulate the impact of a decision (hiring, investment, etc.);
• propose alternative scenarios.

As a result, the accountant, CFO or manager no longer steers by instinct alone, but on the basis of reliable, quantified information, updated in real time.

The challenges and limits of AI in accounting

But while AI represents a godsend for accountants and finance managers, it needs to be implemented with caution!

Its integration into accounting and finance implies the mobilization of real know-how in the field: artificial intelligence is only effective if it's used properly. You may therefore need to :

• call on experts with specific skills in handling this technology ;
• reinforce the quality of the data injected (no matter how intelligent AI may be, it remains dependent on the data it is given).

There is also the question of the security of the data used to feed your artificial intelligence system, all the more so if you are handling sensitive information. You need to pay particular attention to the data you provide to the tools, especially to a device such as ChatGPT.

Last but not least, we're not surprised to hear about the risks to professionals, some of whom feel threatened by this technology. But in reality, and especially in accounting and finance functions, artificial intelligence needs to be properly guided. Human verification is still essential. We are therefore witnessing a transformation of the accounting and finance departments, which are dealing with a docile AI co-pilot... rather than a replacement!

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Artificial intelligence and accounting and financial expertise: what's in it for us?

One might be inclined to think that the responsibilities of the accounting function would make it impossible to trust a machine. However, artificial intelligence is proving to be an invaluable aid to these professionals, by automating low value-added tasks.

It goes even further, proving to be a formidable analytical tool, assisting accountants in their decision-making. And good news, often at no extra cost, since AI is naturally gaining ground in most of the solutions used by companies and firms: accounting, invoice processing, cash management software, and so on.

These solutions, augmented by artificial intelligence, bring even more value to the accounting profession, which is evolving towards more consultancy and strategy.