As part of a recent project by Nexia, The Future of Accounting: Exploring the Impact of Artificial Intelligence and Automation, James Berridge, our Audit Technology and Analytics Director, explores current trends in the integration of AI in accounting, and how automation is key to reshaping the profession.
In recent years, there has been a huge upsurge in automation in accounting, with many firms making the move to the cloud or offering cloud accounting services. This is largely due to software vendors’ use of machine learning and a wave of interest in AI infused products. With data capture software available, like Xero’s Hubdoc and Dext, accounting teams are able to upload hundreds of invoices at once, and with minimal human interaction they can be posted into the connected accounting system with all the relevant details extracted from the invoice. This improves both speed and accuracy of the postings, helping to reduce any administrative burden. The uptake of these products is extremely high due to ease of setup, the ability to disseminate real-time data (and therefore meeting Making Tax Digital requirements), and banded pricing models.
In the audit market however, changes have been much slower. The likes of MindBridge, an AI powered financial risk discovery platform, has developed sophisticated AI for anomaly detection. Many firms, including us at Saffery, use the Inflo platform, which standardises the document portal and general ledger ingestion processes from a client perspective and enables various data analytics to be generated automatically. This provides us with a huge efficiency gain over similar quality analysis than if performed manually. The issue in both cases is that larger firms have been able to rewrite methodologies to efficiently utilise audit data analytics (ADA), but methodology providers have remained aloof, meaning most of the firms using these methodologies are unable to efficiently integrate these tools into how they work. This, combined with regulators not enforcing the use of ADA, means many mid-market and smaller audit firms are not using it at all.
Automation tools such as DataSnipper use machine learning to help automate data extraction and verification processes within audits and accounts preparation. The uptake of this tool has been extremely quick across mid-market firms in the UK.
In vogue tools like ChatGPT and Bing Chat are being used by several mid-tier firms for drafting emails, performing initial technical research and summarising text. There is growing excitement and anticipation for Microsoft’s Copilot product to launch so that these generative talents can be used within MS Word and Excel.
Out of the limelight of generative AI, many firms have been trying to optimise their data infrastructure. This often revolves around entering data once and having it pushed into child systems. This is always easier said than done, but with some of the legacy software that is still used by accounting and audit firms, the only way this is possible is by using sophisticated robotic process automation (RPA). The adoption of this across the mid-market is fairly mixed due to often high entry costs with RPA development and robot licenses.
How we can help
With an unprecedented rise in AI tools and products, it could be time to revolutionise the way your business manages its finances. If your business is ready to re-evaluate its accounting system and make the move to the cloud, get in touch with Becca Durrant.