The future of accounting is changing fast, and artificial intelligence is at the forefront. With a projected compound annual growth rate (CAGR) of 32% by 2028, AI for accounting is quickly becoming a game-changer for companies of every size.
Why is demand rising so fast? Traditional accounting methods are often slow and prone to mistakes. AI tackles these issues by automating repetitive tasks, boosting accuracy, and delivering real-time insights.
By using AI for accounting, you’ll boost productivity, cut costs, and get real-time insights into your financial data. These insights help you make smarter decisions and plan more effectively, so you can stay ahead in today’s fast-moving business world.
How AI Benefits Your Accounting Team
Bringing AI into your accounting processes increases accuracy and operational efficiency, so your business can stay nimble in a shifting economy. Here are the main advantages of using AI for accounting:
Real-Time Data Analytics
Traditional financial analysis relies on manual work, which can slow down decisions and cause you to miss opportunities. AI lets your accounting team process and analyze large volumes of financial data instantly, so you can spot trends and patterns as they happen and get a clear picture of your company’s financial health.
Natural language processing (NLP) can review unstructured data—like emails, invoices, and other financial documents—to pull out key insights about your business’s financial performance. This means your accounting team can quickly access vital information, such as cash flow, accounts receivable and payable, and revenue, without digging through piles of paperwork or spreadsheets.
Smarter Decision-Making
AI uncovers connections in your data that people might miss, leading to more accurate financial forecasts. This means you can make better decisions about where to invest, how to allocate resources, and how to plan for the future—helping you stay flexible and respond quickly to market changes.
With deeper insights into your company’s finances, your accounting team can spot risks sooner and allocate resources to minimize potential losses. For example, AI-powered accounting systems can analyze cash flow in real time, so you can make more accurate projections and avoid surprises. Or, if your forecasts show rising demand for a product or service, you’ll know it’s time to seize a growth opportunity.
By using AI to analyze financial data faster and more accurately, you can also find ways to cut costs. This helps you pinpoint where to reduce spending or automate processes to make your business run smoother.
3 Ways AI Is Used in Accounting
AI takes care of repetitive tasks and streamlines workflows, so your accounting professionals can work more efficiently and focus on higher-value analysis. Here are some of the top ways companies are using AI in accounting.
1. Fraud Detection
AI can help detect fraud, reducing your risk of financial loss and protecting your company’s reputation. AI-powered algorithms spot unusual patterns or inconsistencies—like mismatched records or suspicious activity—so you can address issues before they become problems.
AI-enabled accounting software monitors transactions in real time and flags anything out of the ordinary, such as payments above a certain amount or made outside regular business hours. Machine learning also reviews past financial data to detect patterns of fraud, embezzlement, or other suspicious behavior.
2. Tax Preparation
AI can help you prepare and file tax returns more accurately by analyzing your company’s financial data and applying tax rules. This means you can claim tax credits and deductions you might not have realized you qualify for.
For example, Boast pulls data from all your systems to identify and categorize eligible projects, time, and expenses, making it easy to claim research and development (R&D) tax credits. This can significantly reduce your R&D costs and free up funds to reinvest in your business or lower your taxable income.
3. Invoicing and Cash Collection
AI can also automate invoicing and identify which customers are most likely to pay on time. With AI-powered accounting software, you can send automatic payment reminders, track payment history, and use predictive analytics to spot potential late payments or defaults before they happen.
For instance, machine learning can analyze customer payment habits—like how often they pay late, how much they owe, and how quickly they pay after receiving an invoice. Based on this, the software can flag high-risk customers and help you prioritize your collection efforts.
AI can also help you streamline your invoicing by automatically creating and sending invoices, reducing errors and delays. This leads to faster payments and healthier cash flow for your business.
4 Best Practices for Using AI in Accounting
Let’s review some best practices for bringing AI into your accounting processes, so you can successfully integrate this technology into your business:
1. Start Small
When adding AI to your accounting, it’s smart to begin with small, manageable projects. This lowers risk and helps you build confidence in the technology. You’ll see if the AI solution is effective, then make tweaks before rolling it out to bigger, more complex projects.
For example, you might begin by using AI for automated data entry in one department or process, then expand it across your accounting team. This approach also helps you show your team the value of AI and build support for further investment.
2. Pick the Right AI Tool for Your Needs
Not all AI tools are the same—some are better suited to certain accounting tasks. The right tool will fit smoothly into your existing financial processes and help your team work more efficiently, not add complexity.
Look for a tool designed for your industry or specific accounting needs, and make sure it works with your current systems and data sources. Check if the software can scale as your business grows and handle larger data volumes. Don’t forget to weigh the cost against the expected return on investment.
3. Focus on Data Quality
To get the most accurate insights from AI, you need strong data quality standards and processes for cleaning, normalizing, and validating your data. For example, if your supplier invoice data is incomplete, an AI tool may miss fraudulent invoices from scammers posing as real suppliers.
To ensure high-quality data, start by identifying all the sources you use in your accounting processes. Then, put data validation and verification processes in place to make sure your data is accurate and complete. For instance, you can set up automated checks to ensure data is entered correctly and consistently across your systems.
4. Track AI Performance
Inaccurate or unreliable insights can lead to poor financial decisions and hurt your business. By monitoring AI performance, you can catch and fix issues early, improving the accuracy and reliability of your AI insights over time.
Suppose you’re using an AI tool to automate invoice processing. You can track its performance by comparing the accuracy of the data it extracts to what an accountant would do manually. If you spot discrepancies, look into the cause and adjust the AI to improve its accuracy.
Leverage AI for Accounting to Reinvest in Your Business
AI is transforming accounting, and companies that embrace AI-powered tools will unlock valuable insights, streamline workflows, and make smarter decisions. Adopting this technology will help you save time and money—and keep you competitive in today’s data-driven world.
By taking advantage of AI for accounting, you can free up resources to invest elsewhere in your business. Sourcetable, the next-generation spreadsheet, first discovered the value of R&D tax credits when they partnered with Boast. After just two R&D tax filings, they boosted their cash flow and extended their product runway—an advantage that can make all the difference for a startup.
Want to learn how to get free funding for your company’s innovation? Check out our Ultimate Guide to R&D Tax Credits.
