Artificial Intelligence (IA), being one of the most talked-about concepts in recent years, rapidly changes the way we work in many industries and the way of thinking for many professionals. AI stands pretty much behind digital transformation, and though, at large, the change that they both bring sits well with the businesses, debates keep arising about AI threatening certain professions, including those in the sphere of finances, such as bookkeepers, accountants, financial consultants, etc.
The concerns about replacing professionals by robots or some kind of artificial brain have the color of reason at some point. It’s kind of inevitable as progress always comes together with the change, and some occupations may pass away with the outdated techniques and ways of doing the job. But they might as well profit from the change and transform, absorbing all the good offered by technology.
So at this point, the fears of finance specialists can be easily played down because transformation brings more good than bad for them. Let’s take a closer look at AI and how it can power up finance management for both small business owners and accounting specialists that work with SMBs.
What is AI, and how does it work?
Though at large people are familiar with the term AI, there can be many misconceptions about it. So let’s break down the term to have a bit clearer idea of what the beast is AI and how it works.
By simple definition, Artificial Intelligence (AI) is an imitation of human intelligence by machines that are programmed to think and act like humans, including such processes as learning and problem-solving, to find the best way of achieving the set goal. The concept bases itself upon the assumption that human intelligence can be precisely described for machines to understand and simulate it.
The notion first appeared back in 1955 as an academic discipline and has survived several periods of optimism and disappointment about it. The major goal of AI research is to build up technology that would allow a machine to function human-like. It’s an extensive problem that comprises various sub-problems responsible for different sides of it, including robotics, machine learning, natural language processing, and more.
Today, the use of AI techniques is prevalent when it comes to dealing with computer power, large volumes of data, various kinds of forecasting, and simulations, etc.
How can AI help small businesses?
A recent global survey of small and mid-size business CEOs showed that about 44% of US CEOs look positively at AI, believing that it might have even a larger impact on the world than the internet revolution. However, there is also a pretty high level of skepticism about it (33% of the surveyed). This fact might explain that businesses are still not making the most of AI implementation. Thus, only 5% of the surveyed business owners confirmed to be using AI initiatives to a large scale in their companies or having them fundamental for their operations. While about 40% admitted to having introduced AI in their business, but only for limited uses. And more than half have no short or long-term plans of implementing AI into their processes.
Howbeit, leveraging AI technologies can help small businesses in various ways: from customer experience, HR, and recruiting to sales, marketing, and project management. One of the basic challenges that SMBs face is the ability to cover all the necessary business needs in the conditions of tight budgets and lack of resources. So often, SMB employees and even business owners themselves have to wear several hats, being responsible, for example, for both marketing and sales, or customer acquisition, support, and retention, and so on. At this point, implementing AI-based solutions can drastically facilitate their lives by automating great loads of work, from searching, analyzing, and shortlisting CVs for HR to playing the role of the first-line support for customer communication (think of the various chatbots), and many more.
One of the areas where SMBs can make the most of AI-based tools is finances. Usually, finance management requires the accuracy of the data to be able to reflect the full picture of a business’ financial health and to ensure a business has all the necessary insights for future growth. However, processing loads of data manually can highly be error-prone, not speaking about how much time it might take.
And here, AI-based solutions can be of great help, taking full responsibility for consolidation and analyzing the necessary data.
A great example here is accounting solutions, such as QuickBooks or Xero, etc. AI behind some of their algorithms allows for automated data categorization in the books, receipts capturing, creating basic accounting reports, such as cash flow statements or balance sheets, etc.
Many small business accounting solutions allow for integration with third-party apps that facilitate data integration, eliminating the necessity to do it manually. The biggest advantage of the latter is the improved accuracy of the data that you bring into the books, which is vital for accurate reporting, having a true picture of your finances, and faster and easier reconciliation.
There are many AI-based options available in the market. Usually, they differ in functionality and the amount and quality of the data that they integrate. Synder, for example, allows for connecting multiple online payment processors to QuickBooks or Xero accounting. Besides, it imports online transactions with all the transaction details, such as taxes, processor fees, shipping costs, discounts, etc. The granularity of the imported data helps categorize the data in the books more efficiently and streamline the process of reconciliation, as it’s highly unlikely to lose some necessary data.
How can AI help accountants?
Taking into account the above said, it might look like accountants cannot profit from the AI implementation, as it really looks like AI-based solutions tend to steal their work. However, it’s one of the biggest misconceptions about AI in accounting. On the contrary, AI-based solutions today prove to be powering up the accounting practice for many professionals.
Any accountant may tell you how tiresome it may be to enter their clients’ financial data into the books, and how much time it takes to verify that the data is complete and accurate. Having clean books is critical for providing accurate reports, including tax reports. And we all know how badly inaccurate tax reporting can backlash business owners.
However, backed up with AI that takes the burden of data integration and ensures its accuracy, categorization, and reports consolidation, accountants can increase their capacity on the one hand, and on the other hand – provide more quality service to their clients and do it more efficiently.
To sum up
So summing up all that was said, AI – notwithstanding the myths and debates around it – can drastically improve various processes for small businesses, giving them a helping hand in the areas where they might lack the necessary skills or resources. And for the accounting and finance specialists, AI can provide solid assistance in bringing more value to their customers. There are many AI-based options available on the market that both businesses and accountants can leverage and are already leveraging. So the question is not whether AI can positively impact businesses or accounting practice but mostly how to do it most efficiently.