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Here’s what you need to know about AI and accountancy

24th Apr 2024
Brought to you by
xero

Xero is an easy-to-use platform for businesses and advisors.

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Artificial intelligence has made quite the splash in the accounting industry. It’s easy to see why – from automating bookkeeping to generating reports and forecasts, AI can ease the administrative burden and equip you with reliable data and insights. It’s no wonder the accounting industry has one of the highest AI adoption rates in the UK. 

Cloud-based software is making AI more accessible, which means you don’t need to be a tech expert to use it. Let’s explore how you can combine human and artificial intelligence to get the best out of these tools. 

Reasons to use AI in your practice

AI is here to stay. And there’s so much it can do to raise practice efficiency. 

Starting with automation – for data entry, bank reconciliation, and invoicing. AI features in cloud-based accounting software will automatically match and code your transactions, or chase up overdue invoices. And when you’re spending less time on admin you can put those hours to better use, providing high-value advisory or expanding your client base. 

AI can analyse data quickly. It’s great for spotting patterns and anomalies in data that would otherwise go undetected. It’s no surprise many fraud-detection tools are incorporating the technology. And using AI means you won’t need to rely on outdated figures or patchy data for advisory – many tools offer real-time insights into your clients’ financial performances. 

While it’s true that AI can support many of the daily tasks practices perform, the human touch isn’t going anywhere any time soon. After all, the valuable data insights provided by AI still need translating and contextualising for clients. Business owners will seek trusted advisors who can make sense of the metrics and advise them on strategy. 

How to make AI work for your practice

The good news is: you probably already have access to AI tools. If you’re using modern cloud-based software for accountants and bookkeepers, existing features likely include AI to automate tasks, improve accuracy, and generate reports. 

Xero has an entire suite of AI product features. Take Analytics Plus, which can give you deep data insights to support clients with financial decision-making. Inbuilt functionality (like bank reconciliation predictions) uses machine learning to code transactions that don’t match up with invoices or bank rules.

One of the best things about using the AI tools in your existing software subscription is that you don’t need to pay for extra tools or products. You’ve got AI that’s tailored to your practice requirements, right at your fingertips.  

But when it comes to integrating AI into your practice workflows, there are a few things to bear in mind. Firstly, with AI taking care of more data admin, you can focus on high-value advisory services and building skills that enhance these services – like critical thinking, problem-solving, and communication. 

With access to reliable live data, you can also expand your services. Think: strategic advice, financial planning, and risk management. Here, reliable data from your AI tools and the learned experience you bring to the table go hand-in-hand.

And lastly, treat AI like a coworker, not a replacement. Call on AI for accuracy and data, then pair it with your own experience and judgment. If an AI tool provides the cash flow projection, use your experience and advisory skills to develop a cash flow management strategy for your clients. You’ll get better at AI by experimenting with it – so don’t be afraid to test new features and techniques. 

The power of AI for your practice

We’ve only scratched the surface of what AI is capable of in accounting. There’s accounts fraud detection, where AI tools can analyse financial data and spot fraudulent activity. And predictive analytics, which uses past data to predict the future using AI. Then there are data visualisations, constructed by AI, that help your clients understand their finances better. We cover all this and more in our comprehensive guide to AI for accountants and bookkeepers. 

Find out more about the future of AI