If you hear about finance AI and your mind flashes to a dystopian future, hang on. Robots aren't taking over the world or even the role of your finance team.
But they provide an option for more accurate, less tedious financial work.
They improve the way human accounting teams work by transforming time-consuming processes into more accurate, less work-intensive applications.
Here's what to know about how AI fits into the future of the accounting industry and why your startup can't afford to skip it.
How Does Artificial Intelligence (AI) Fit Into The World Of Accounting?
When used properly, AI enhances human performance by removing tedious tasks from to-do lists and letting people focus on more high-concept aspects of the business.
It does so by providing access to real-time insights, supporting cash flow forecasting, automating manual accounting tasks, and simplifying tax preparation.
Providing Access To Real-Time Insights
Access to real-time financial data lets you have up-to-the-minute sales, revenue, savings, and forecasting data all in one place.
Imagine your company is preparing to raise a new round of funding. With your AI system, you pull up the most recent sales and drop them in the latest financial report. Automation helps prepare your financial reports in less time, leaving you more room in your schedule to prepare for your meeting.
It also provides more accurate, real-time data to provide to your investors, giving you a leg up while lobbying for funding.
Supporting Cash Flow Forecasting
Forecasting cash flow is essential to know how far your money can go and for how long. Automating this process with AI tools can save finance teams time and help redirect their attention to more pressing matters.
For example, AI data tools can give you a burn rate or a cash zero date. This eliminates calculation time for finance professionals, meaning CFOs and their teams can spend more time planning how to use the remaining cash flow strategically.
As you plan your budget for the next quarter, you need an accurate forecast. Artificial intelligence in accounting looks at your recent data and builds an accurate forecast. CFOs can then decide where and how much to invest based on analysis from your accounting procedures software.
Automating Manual Accounting Tasks
Many accounting tasks rely on compiled data. But ask any accountant, the act of compiling is one of the most tedious accounting tasks anyone has to do. Finding information from scanned documents and spreadsheets can take hours. Finding any data entry errors is like finding a needle in a needle stack.
Yet, when you use accounting software to automate tasks, an entire month’s worth of time-intensive tasks take minutes or even seconds. You may also see fewer errors, as AI programs are less likely than humans to transpose numbers or skip a line on a spreadsheet.
Now you can take a break, sip some coffee, and dive into more pressing tasks.
Simplifying Tax Preparation
Tax season is a dreaded time for many startups. Relying on AI can simplify the process by keeping your books up-to-date on a daily and monthly basis.
Your accountant won’t have to go back through the entire year to reconcile everything when tax time comes.
Instead, they will simply review the data and verify its accuracy, a much less time-intensive project.
Understanding The AI-Human Relationship In Accounting
Years of on the job experience taught accountants mental algorithms and heuristics.
Now with the power of technology, accountants can train AI on these mental algorithms.
The newest versions of AI programs are generative, meaning they can recognize key data points in accountants’ mental math and then work independently.
AI tools are not replacements for experienced accountants. Instead, these programs support your team of experts, helping to save time and achieve accurate results.
Why Startup Founders Should Take Advantage of AI In Accounting
Taking advantage of opportunities that save you time and money isn’t just easy. It’s smart, too.
Startups are constantly learning and adjusting to what their staff needs. You may not be ready to support a full accounting team. Some of your staff may be juggling accounting responsibilities with other tasks.
But when you provide tools like AI to your team, you reduce their workload.
When integrating AI into your financial toolbox, you can expect to see:
- Significant improvements in efficiency, accuracy, and scalability in financial operations
- More free time and unconstrained resources that you can direct toward strategic activities
- Sustainable growth thanks to more agile financial processes
Leverage AI In Your Startup's Accounting Processes
The right accounting software for your startup will integrate with AI. Your team will no longer spend hours or days on manual tasks that are too time-intensive.
Instead, they'll focus on more meaningful and complex tasks while having accurate, automated financial operations systems facilitate the process.
Finance teams don't need to worry about getting replaced by AI accounting tools. But teams that aren't using AI may need to worry about getting replaced by those that are.
See how a unified financial platform can help you embrace the future of accounting and AI.