Financial reporting has evolved especially in recent years. From the manual collation of data with the use of ledgers and pencil to Microsoft Excel, then to cloud-based accounting software and the integration of artificial intelligence (AI) into the software, accounting on a whole, has taken on a completely different makeover in terms of efficiency and accuracy.
Gone are the days where accountants needed to bury their heads in tons of paper ledgers, churn out the numbers and compile the financial reports. Working overtime excessively when it comes to every financial closing for the month and year – this practice has been annihilated with the emergence of artificial intelligence.
Artificial intelligence allows machines (bots) to learn from user experience, interpret data, tweak the data and apply what they “know” to perform human-like tasks for optimal results. AI is inclusive of machine learning, deep learning, machine reasoning, natural language processing and computer vision etc.
Artificial intelligence reduces overall business costs by 80 percent and increases the efficiency of financial reporting by 80 to 90 percent. Why is that so? AI can take over tasks such as data entry and reconciliation which helps to minimise human error and reduce overall liability.
It also gives the accountants more time to interact with the clients or if the work is handled by an Accounts and Admin Executive, it gives them better time management and increased time to work on more meaningful tasks.
So how does it help business owners? Here are 5 reasons why artificial intelligence revolutionises financial reporting.
1. Overhead Costs
Instead of having a few accounting personnel for various tasks (accounts payable, accounts receivable etc), the manpower can be reduced and the company saves on salaries, compensation benefits and insurance etc.
Having a cloud-based accounting software helps to minimise human error and overall liability when the tasks of data entry and reconciliation are outsourced to the AI component.
Productivity works in tandem with automation and that is where artificial intelligence comes into play. AI excels at mundane and repetitive tasks which are reportedly taking up to 60% of employees’ time.
When AI takes over the cumbersome tasks, the employees would have time available to focus on more important tasks and core business goals instead, allowing them to continue to drive business growth while having the accounting work done at the same time. That is doubling the efficiency in half the time!
3. Security and Risk Management
A common reason for the increased popularity of using cloud based accounting software is due to AI’s capabilities in detecting fraud and/ or irregularities in the financials.
AI models that are built based on big data have the ability to detect and neutralise fraudulent activities by analysing the clients’ online transaction histories and financial behaviour. As such, red flags can be discovered faster and it enhances the security as well as decreases the risk overall, leading to improved compliance. The financial health can be monitored easily and closely.
4. Accessibility and Collaboration
When cloud based accounting software is used, it gives 24/7 access anytime, anywhere. Reports can be generated online within minutes for analysis or even for presentations with investors and stakeholders. Different types of information are available as and when you need them. Permissions can also be set accordingly for various employees.
It facilitates easier collaboration with colleagues or outsourced accountants if the company does not have an in-house accountant. Everyone is able to access and input their data at hand, allowing for greater efficiency and accuracy in real time.
5. Customer Experience and Personalisation
Customer experience is critically important in today’s business environment when most businesses have an online presence. With advancing technology and evolving consumer behaviour, customer engagement is increasingly crucial to ensure a good customer experience and continual business growth.
The component of machine learning in artificial intelligence helps to analyse large amounts of data and gives powerful insights based on various demographics. As the saying goes, knowledge is power and it definitely empowers the company for better tweaking and optimisation of business processes and strategies, as well as creating sales opportunities. Traditionally, it would take days to get a business or financial report but now, it is in a matter of minutes.
In summary, artificial intelligence provides numerous benefits and helps businesses gain an edge. Financial reporting is no longer a chore and the data is readily available at all times, breathing an element of agility for thriving in the business world today.