AI has dominated headlines in recent years, with research from PwC finding that its sustained growth will drive global GDP 14% higher by 2030 and contribute over $6tr to the economy. This will largely stem from productivity gains in the workplace and the automation of routine tasks, enabling employees to focus more on higher level services and revenue- generating lines of business…
Research reveals that over 80% of businesses believe that AI will help them drive a competitive advantage, and that its adoption represents a ‘strategic priority’ for their rm. Technological awareness and trust remain obstacles to overcome for some, but in so doing, how can businesses leverage AI-based applications to drive valuable operating efficiencies and gain a competitive edge?
AI through the ages
AI is the development of software which can work and ‘think’ like humans, and it is an umbrella term for a range of associated technologies including ‘machine learning’ and ‘deep learning’. Whilst the history of AI dates back to antiquity, the term was actually coined in the summer of 1956 during a meeting of academics on the topic, now known as the ‘Dartmouth Conference’.
The following decades saw a boom into areas of research, including natural language processing (NLP) in which ‘Eliza’ was born. This was a computer program developed by MIT in 1964 which could hold conversations with humans, becoming one of our first examples of a chatbot. Another breakthrough came in 1997, when ‘Deep Blue’, a ‘supercomputer’ developed by IBM, beat champion chess player, Garry Kasparov. The computer had somewhat of a competitive advantage, by being able to evaluate up to 200 million positions a second!
Today, chances are you will be using AI on a daily basis, via email spam filtering, Google Search and through virtual assistants on your smartphone or in your home, such as Apple’s ‘Siri’ and Amazon’s ‘Alexa’. Technology which has been made possible in part, by advances in APIs (software which communicates requests between two different points) and algorithms which can both detect patterns within data and react intuitively to insights gleaned from this information.
That being said, we’re not quite at the stage where we’re living and working alongside robots in everything that we do. However, coupled with rapid advances in software capability and tech giants including Google and Microsoft pledging to devote billions of dollars into AI’s continued research, the next few years will almost certainly herald an exciting new era in technology.
AI driving innovation in business
AI is being applied in innovative ways across all business sectors, from healthcare and agriculture
to retail and financial services, as companies seek to transform back office operations and provide superior customer experiences. Some everyday examples include:
• Fraud prevention: Banks and credit card providers are adopting AI to fight fraudulent activity such as money laundering, by leveraging deep learning to uncover patterns in data and spot anomalies. Service providers are offering more digital channels than ever before, the scope of which, presents increased opportunity for threat. AI helps to combat this, by analysing large data sets from these sources in real-time, and spotting red flags the human eye may not notice.
• Energy consumption: Energy companies are leveraging AI to make power stations and electric grids operate more efficiently and to reduce consumption in a user’s home. The volume of data amassed from these grids across the country can also be analysed to predict when equipment may fail, in order to prevent power outages.
• Personalised shopping: Major retailers are increasingly relying on data analytics to strengthen their relationships with customers and boost revenues. For instance, AI can monitor online behaviours in order to recommend products to shoppers and by flagging instances of ‘cart abandonment’, allowing retailers to re-engage with the buyer regarding the purchase.
Leveraging AI as an accounting firm
As with other industries, AI is disrupting the accountancy sector and offering valuable opportunities for early adopters. Rome wasn’t built in a day, however the correct application of AI can transform how a firm works, enabling users to differentiate their services and expand their business. Here are some of the headline benefits:
• Greater operational efficiency:
AI makes users more productive and profitable by automating routine and time-consuming administrative tasks, such as accounts reconciliations, transaction matching or bookkeeping data entry. As well as relieving employees from the burden of long hours of paperwork, firms can both take on more new clients and nurture existing customer relationships with the time saved.
• Higher quality data: By leveraging in-built rules and algorithms, AI can process more client data than by hand, whilst also eliminating human error. This stands to have a huge impact on areas such as auditing and risk management, by enabling users to spend less time aggregating data and more time examining trends and insights.
• Faster customer support:
With an increasingly saturated market, business owners should put just as much emphasis on retaining customers, as they did in acquiring them. Increasingly, small businesses are making use of chatbots which can be applied to a firm’s website or social media pages to engage with new prospects and respond to queries faster.
• Better marketing: Word of mouth referrals are great, but a robust marketing strategy is essential
to keep new customers coming through the door. There are now a range of cost effective AI-based marketing tools which can manage marketing outreach. For instance, Buffer, which helps users optimise the visibility of their social media posts, and Crayon, which tracks competitor activity for a user’s business.
AI in practice: Automating data entry
One of the most effective and immediate ways accountants and bookkeepers can put AI into practice, is through the elimination of manual data entry. AutoEntry, a Xero add on, helps users do exactly that, by capturing and analysing scanned and photographed bank and credit card statements, bills, invoices, expenses, receipts and more, automating data entry into a user’s Xero account.
Powered by AI, AutoEntry helps users to work smarter with its broad range of features. For
instance, AutoEntry captures tax summaries by default and if requested, full line item details including description, quantity and unit price. AutoEntry also remembers how users categorise expenses, such as the relevant supplier account, nominal account and tax code without ever creating duplicate supplier accounts or posting duplicate invoices in Xero. AutoEntry even matches invoices to purchase orders.
AI in the years ahead AI is growing stronger and broader in its capabilities, and will automate more tasks both at home and in the office in the months and years ahead. Whilst this pace of change may seem daunting, greater understanding into how to apply AI in practice represents a considerable opportunity for accountants to improve the quality of their services and provide greater value to their clients. Ultimately, it can help accounting firms retire outdated processes and position themselves as indispensable business advisors. In this age of Technology, this approach will increasingly be key in helping firms to maintain customer loyalty and make a name for themselves in the industry.