I may not be an accountant, but as a freelancer who manages my own finances and estimated tax payments, I understand how frustrating accounting can be. Data entry alone can take up hours of my time, not to mention calculating and filing my tax payments.
Now multiply that labor tenfold and add in more projects like accounts payable, reconciliations, and expense reporting, and you’ve got yourself a busy accountant who’s bogged down with administrative tasks.
That’s where AI tools can help. AI works by using machine learning to analyze data, predict customer behavior, save time, and improve existing workflows, all of which are helpful optimizations for accountants. According to data from Accounting Today, 59% of accountants use AI to save themselves around 30 hours of labor a week.
Discover how you can leverage AI to improve your processes, too.
How AI Can Help With Accounting
Another report from Accounting Today found that 70% of accountants believe AI will impact their jobs; some believe it will help create jobs. If you’re an accountant who’s still unsure of how AI fits into your role, here’s how AI tools can help accounting professionals and small business owners with accounting.
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Free Financial Planning Templates
Manage your business and personal finances with these five financial planning templates.
- Balance Sheet Template
- Profit & Loss Statement Template
- Financial Projection Template
- And More!
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Improves Accuracy
With the amount of data accountants have to manage and process on a daily basis, there’s always a risk of human error that comes with manual data entry. And inputting one wrong figure can be the difference between cutting costs or overspending on tax payments. According to a report from KPMG, 50% of financial leaders believe AI tools will produce more accurate and reliable data.
AI-based accounting tools are designed to handle large amounts of data. They can detect duplicates, identify patterns, and even reference historical data to ensure accuracy and consistency in all of your financial reporting.
Creates Time for High-Level Tasks
Katie Ferro, CPA and host of the Profits + Prosecco podcast, addressed the use of AI for bookkeepers in a recent episode I listened to (it was episode 147, for anyone who wants to give it a listen). She points out that AI can help bookkeepers and accountants streamline their busy work so they have time for more important client tasks.
“We’re constantly asked for high-level analytics [from clients] that we don’t have the capacity for,” she says. “If books were streamlined and done for us, then what would we be able to do?”
Clients will always look to their accountants for strategic recommendations and insight. But oftentimes, repetitive manual tasks get in the way of strategizing. If you use AI to complete data entry and manual tasks, you can have a chance to step away from spreadsheets to work on high-level projects directly with clients.
Data Analysis
Andrew Dunkel, owner of DotOneSix Automation, suggests data analysis is one of the biggest benefits of using AI for accounting. The speed at which AI can process data provides a holistic, real-time view of financial health.
“The low-hanging fruit of AI in accounting is its ability to pull and analyze data from disparate sources seamlessly,” he says. “As transactions are recorded, AI tools can immediately analyze and categorize them, offering up-to-the-minute financial status and alerts about potential issues before they become problems."
Reduces Time Spent on Admin
One of AI’s biggest selling points is its automation capabilities. On average, accountants spend 45% of their time on administrative tasks like data entry, generating reports, and emailing clients, according to a report from Canopy. AI tools can reduce time spent on repetitive tasks by automating them.
Not only can AI accounting tools be used to pull data and create expense reports automatically, but they can also be used to streamline communications between you and your clients or team. According to Financial Cents’ State of Accounting Workflow Automation report, over 50% of accountants say it takes several days to get documents back from clients. From sending follow-ups to not receiving the correct information, doing this process manually takes a lot of time.
“AI is revolutionizing receivables by automating payment reminders and tailoring communication based on previous customer patterns,” says Dunkel. “This personalized approach not only enhances efficiency but also improves the customer experience and speeds up the cash flow cycle.”
Best AI Tools for Accounting
If you’re ready to explore how AI can help with your accounting practice, here are some of the best tools I tried. From task-specific tools to practice management software with AI integrations, there’s an AI accounting tool worth exploring for every need.
1. Docyt
Docyt’s AI accounting software offers real-time accounting in one unified dashboard. Docyt actively and passively collects data from multiple channels — meaning it’s running in the background while you can focus on high-level client tasks — and automatically organizes it into pre-established workflows. The best part is that the AI works 24/7, providing continuous reconciliation and updates. Docyt AI is also a self-learning system, which means it learns your clients’ accounts and can easily detect when something is different.
Best for: Accounting firms that manage multiple clients will benefit from Docyt’s passive 24/7 data collection.
2. Receipt AI
Tracking expenses is a frequent task for small business owners and bookkeepers alike. With Receipt AI, you can simply upload a picture of your receipt, and AI will take care of the rest. The receipt scanning tool uses SMS and email to process and manage receipts, saving users 97% of their time. This tool is compatible with Xero and Quickbooks so that you can upload your receipts directly to your accounting software in minutes.
Best for: If you frequently travel for your business and need to track expenses on the go.
3. Vic.Ai
Vic.AI is an accounts payable tool that goes beyond basic automation and templates and uses AI to process invoices from end to end. After submitting an invoice to the platform, AI extracts and reviews all data and automatically sends the invoice to the approval workflow if everything is correct.
What I like: Vic.AI is compatible with all major ERPs, so you can seamlessly integrate it into your current workflow.
Free Financial Planning Templates
Manage your business and personal finances with these five financial planning templates.
- Balance Sheet Template
- Profit & Loss Statement Template
- Financial Projection Template
- And More!
Download Free
All fields are required.
4. Karbon
Karbon is an accounting practice management software with AI capabilities. The platform thrives in connecting everyone across your accounting firm by increasing visibility in every task.
While its AI is currently in Beta and offers limited features, its current features can be useful for accountants who already use or are considering using the platform. Karbon’s AI tool can summarize email conversations, help you compose an email draft, and send automatic email updates to clients as you make progress on certain tasks.
What I like: The software is built by accounting industry experts, and its features reflect the challenges and needs of all types of accounting professionals.
5. Financial Cents
Financial Cents is an accounting practice management software with AI capabilities. The platform offers features like workflow management, capacity management, client automation, and even time tracking so accounting teams can stay on top of deadlines and projects.
Like the rest of the platform’s features, its AI capabilities are designed to improve productivity across your firm. You can use Financial Cents’ ChatGPT integration to create workflow and checklist templates, as well as streamlined client communication with AI-generated emails.
What I like: You can save frequently used email templates for future use.
6. Botkeeper
Botkeeper is an automated accounting solution that uses human-assisted AI to support accounting firms with bookkeeping tasks. The platform relies on machine learning, AI, automation, and the expertise of senior accountants to provide bookkeeping tasks such as data entry and reconciliations.
Botkeeper is a helpful solution for accounting firms looking to scale and create more capacity but needs more support to do so.
Best for: Accountants who are interested in using AI but want the reassurance of a human touch.
7. ChatGPT
I’m always amazed at the different use cases for ChatGPT. While the AI tool is usually thought of as a platform to generate ideas and text, it can also be used for accounting-related tasks like data analysis and calculations. Accountants can use ChatGPT to do anything from calculating standardized deductions to analyzing a dataset and identifying patterns.
ChatGPT can also step in when you need help drafting an email, which can be something that you can copy and paste for future use.
For example, here’s a snippet of the new accounting client onboarding checklist I asked ChatGPT to create for me:
The key is to use the right prompts. ChatGPT is only as good as the prompts you provide, so it’s important to be specific about what output you’re looking for. If you provide the chatbot with a specific dataset, prompt it with the exact formula you want it to use, and specify what you’re looking for, then ChatGPT can be a handy financial assistant.
Best for: If you’re looking for a free tool to explore the benefits of AI before investing in new software, you can easily start using ChatGPT without any commitment.
Adding AI to Your Workflow
Out of all the AI accounting tools I tried, Docyt is my favorite. I like how it passively collects data 24/7, working in the background to analyze data and send real-time alerts if anything is amiss. This can be especially helpful for accountants and business owners who are busy with high-level tasks on a day-to-day basis and looking for a way to stay on top of financial data.
I also like Receipt AI for its specialization in the specific yet repetitive task of submitting receipts for expense tracking. Vic.AI is also a good tool to add to your accounting tech stack. With its focus on accounts payable, combined with the fact that it integrates with all major ERPs, you can seamlessly add it to your current workflow to make your invoicing process more efficient and accurate.
To get the most out of your AI accounting tool, you must have goals for what you want it to achieve. Are you looking for a tool to help you reduce time spent on repetitive tasks? Look for a tool that automates the tasks or processes you tend to spend the most time on, like Receipt AI does for expense tracking.
Or, if you’re looking for a better way to stay on top of all of your clients’ data so you can perform better analyses, choose an accounting practice management software with AI features that can analyze data in real time.
You also must understand AI tools’ capabilities and limitations. Before you choose software to add to your accounting tech stack, make sure the AI features will address the pain points you have. AI is best at automating tasks, analyzing data, and even drafting emails to send to clients, but it also has its limitations.
For instance, AI tools rely on prompts. If the prompts you provide aren’t specific enough, it can take a few tries for AI to get it right. AI tools are also not very creative and can’t produce high-level strategies. As an accountant with in-depth knowledge of your field, AI tools won’t be able to provide the same level of expertise needed to advise clients on their accounting strategy.
As AI continues to evolve, so will the accounting tools that use it. If you want to familiarize yourself with the benefits of using AI in your workflow before the technology becomes too advanced, start small. Play around with ChatGPT prompts or use AI to complete small tasks like writing email follow-ups.
You can also use an all-in-one platform with AI already built in. Going this route is helpful if you don’t want to add more tools to your tech stack but want to be guided through using AI in your workflow.
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