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Technology Used in Accounting Firms: 5 Ways AI is Transforming the Industry

22nd May 2024
Brought to you by
sliverfin

Silverfin’s cloud platform is used by over 800 firms to automate core accounting work, making it faster, easier and better.

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Have you found this content useful? Use the button above to save it to your profile.

Accounting firms are under pressure to manage vast amounts of data while maintaining accuracy and meeting tight deadlines. These challenges can lead to costly errors and inefficiencies that impact financial reporting and client relationships. 

AI offers many benefits
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Artificial intelligence (AI) offers a promising solution in response to these issues. By updating the technology used in accounting firms, AI can automate routine tasks, improve data accuracy, and provide real-time financial insights.

This alleviates the burden of repetitive, number-crunching tasks on accountants and enhances their ability to serve as indispensable strategic advisors. Let’s delve into how AI is transforming the industry and how accounting firms are implementing this new technology.

5 Ways Artificial Intelligence Accounting Software is Transforming the Accounting Industry

Let’s explore the impact of artificial intelligence accounting software with these five transformative ways it is reshaping the accounting industry.

Enhancing Data Accuracy and Reducing Errors

AI-assisted precision is not just a luxury but a necessity for accounting firms looking to make informed decisions. Once you have deployed artificial intelligence accounting software like Silverfin Assistant, it continuously analyses client files to find unusual balances, missing transactions, and outliers, ensuring the highest level of data accuracy and reducing errors. 

Once the algorithm finds an issue, it flags it and suggests a solution, helping your team save hours on manual checks while improving accuracy and data quality. These tools also provide real-time monitoring and analysis of transactions for enhanced fraud detection and risk management, securing the firm’s and client’s financial interests.

McKinsey report indicates that up to 50% of accountants’ activities have the potential to be automated using technology like AI. With less room for human error, machine learning can improve your firm’s overall reputation and efficiency of accounting operations.

Russell Frayne, Director of Transformation at Gravita, shares his experience with using an AI tool to spot and reduce errors, “Using Silverfin Assistant is like having a friend looking over your shoulder, saying: Have you reviewed this? Don’t miss that. This looks a bit strange, don’t you think?“. This is just one example of how AI can enhance the work of accounting professionals, making their jobs easier and more efficient.

Erik Van Looy, Partner at Van Looy Accountants, further illustrates how AI can spot discrepancies: “We recently had an item in an annual statement of around 12,000 euros for a company car. The year before, a similar figure was in the accounts. That seems logical, so you don’t immediately question it. But the Silverfin Assistant signalled something was wrong using AI.”

“In the first year, 1,000 euros was booked each month, while in the following year, a global invoice of around 12,000 euros was booked. What had happened? In year one, it concerned leasing. In the next year, it concerned the residual value for which the car could be purchased. So, it’s not leasing but a purchase of a used car. And that is not a cost but something that must be included in the fixed asset. I wouldn’t have spotted something like that, and certainly not with the same speed as AI.”

Read More: The AI Advantage: Why AI and Accountancy Goes Hand in Hand

Providing Cost Effectiveness and Financial Insights

The sooner you adopt a new technology like AI, the better your chances of dominating the market. First, it helps streamline your operations and reduce manual labour costs. Second, it identifies opportunities in client data that you can use to unlock new revenue streams and have proactive conversations that position your firm as a trusted advisor.

With AI, accounting professionals can access and analyse current data without delays, allowing for quicker and more informed strategic decisions. This immediate data availability is crucial for agility in financial management and advising.

These benefits give you a strategic advantage your competitors cannot undermine with lower accountancy fee prices. Many firms are already moving away from time and materials pricing and focusing on outputs with fixed pricing, something AI and automation technology can help you achieve.

“Budgets have been halved on the majority of stuff. And I do expect that it will just get quicker and quicker, especially with tools like Silverfin Assistant, which further reduces those review points,” says Rosie Cooper, Director, PM+M.

According to various McKinsey studies, early adopters of digital technologies outperformed their industry peers by a factor of 2 to 3 in revenue growth, and high-performing AI organisations report a bottom-line impact of 20% or more from AI usage.

This substantial revenue increase showcases AI’s role in cost reduction and potential for driving substantial top-line growth.

Boosting Productivity Through Automation

By automating routine tasks such as data entry, invoice processing, and financial reconciliations, AI allows accounting professionals to dedicate more time to meaningful work. This doesn’t mean that AI will replace accountants. On the contrary, it enhances their capabilities, allowing them to serve as strategic advisors and provide more value to their clients.

Research by Accenture predicts that by 2034, AI could elevate productivity in enterprises by up to 40%, highlighting a clear trajectory for growth and efficiency in accounting practices.

Phil Hobden, Senior Product Manager at Silverfin illustrates the productivity gains firms can expect from AI accounting tools, “Through Silverfin, 500,000+ general ledger accounts were mapped using AI in the UK in 2023. Assuming manually mapping an account takes several minutes, using AI for this task saved UK accountants thousands of hours in 2023. And that’s just scratching the surface!” 

Improving Client Services and Personalisation

AI revolutionises client service for accounting firms by offering more personalised analytics and insights.

By harnessing the power of machine learning, your firm can respond to client needs and anticipate them, providing tailored advice and solutions before the client even realises they need them. This proactive approach to client service enhances satisfaction and loyalty, positioning your firm as an indispensable partner and carving out a unique differentiator.

“Silverfin Assistant enables us to be proactive about our clients’ needs instead of reactive,” explains Lynne Walker, Partner and Head of Business Advisory at Johnston Carmichael. “We can easily access need-to-know information at any time or any place. It’s a lifesaver.”

Furthermore, AI’s ability to process and analyse large volumes of data quickly ensures that firms can offer these personalised insights promptly and accurately. This is crucial for quickly responding to changes in the market and identifying compliance issues before they become major issues.

Read more: The Future of Accountants: How AI is Reshaping Your Role

Addressing Junior Staff Knowledge Gaps 

AI can offer junior staff continuous, on-the-job training, presenting them with real-time feedback and learning opportunities as they process data and interact with the system.

This learning method helps embed best practices. It deepens understanding of complex financial processes without the constant need for senior staff intervention, reducing the time it takes to ramp up junior team members.

“Another knowledge gap the Silverfin Assistant helps to bridge is that of junior accountants who still have a lot to learn”, says Russell Frayne, Director of Transformation at Gravita.

“There are clear and detailed explanations on the checks performed by the tool, highlighting why they were made and why they matter. These invaluable insights supercharge the progress of junior-level staff and their performance simultaneously.” 

Besides training, the technology used in accounting firms also affects staff retention.  AI reduces routine workload, allowing staff to engage in more meaningful and rewarding tasks, improving job satisfaction and promoting professional growth within the firm.

Harnessing the Power of AI Technology Used in Accounting

The role of AI in accounting transforms how firms operate and interact with clients. From boosting efficiency and accuracy to enhancing client services and ensuring compliance, the impact of AI is extensive.

For accounting firms who want to remain competitive and reduce manual workloads, Silverfin’s built-in AI tool can help you refine your operational frameworks, reduce errors, and spot new opportunities for revenue growth.

Interested to see how AI can benefit your firm? Then request a Silverfin demo today and see firsthand how our built-in tools, like Silverfin Assistant, can transform your firm with greater consistency, capacity and opportunities to thrive.

Frequently Asked Questions

How can AI improve client relationships in accounting?

AI enhances client relationships by enabling more personalised and efficient communication. For example, AI-powered chatbots can provide clients with instant responses to queries, and predictive analytics can offer tailored financial advice based on unique client data, making interactions more relevant and valuable.

Can AI handle complex accounting tasks like tax preparation and audit?

Yes, AI is increasingly capable of handling complex tasks such as tax preparation and audits. AI systems can analyse large datasets to identify discrepancies, calculate taxes based on the latest regulations, and even predict audit risks. This helps firms ensure accuracy and compliance while streamlining these intricate processes.

How do accounting firms ensure the accuracy of AI predictions and analyses?

To ensure the accuracy of AI predictions and analyses, firms should use high-quality, clean data and continuously train and test their AI models against new data and scenarios. Additionally, combining AI insights with human oversight and expertise is crucial for validating AI-generated recommendations and ensuring they are practical and reliable.

How does AI impact the role of accountants in the long term?

In the long term, AI is expected to shift the role of accountants from traditional number-crunching to more strategic advisory roles. As AI takes over routine tasks, accountants will focus more on interpreting data, making strategic decisions, and providing personalised financial consultation, which adds greater value to their roles and enhances career development opportunities.