This article is too give the glimpse of how artificial intelligence is also changing accounting. It is important to understand that what is AI?as well as how AI is different from data analytics. Once we have clarity on AI it will be easy to understand how it is changing accounting world.
Before we compare data analytics against artificial intelligence, we should have a quick look of their definition first.
Data analytics are the processes to examine raw data to reach conclusions or derive insights to support decision-making or enable organizations with strong evidence for business resolutions. Data analytics consist of basic statistical models, business intelligence (BI), online analytical processing (OLAP) to various advanced analytics.
Artificial intelligence enable the computers to do things normally done by human beingssuch as visual perception, speech recognition, decision-making, and translation between languages.
Data to Analytics to AIcan explain by Gartner’s analytics maturity model to explain and prepare the transition to AI.There are four types of analytics:
• Descriptive Analytics (What happened?)
• Diagnostic Analytics (Why did it happen?)
• Predictive Analytics (What could happen?)
• Prescriptive Analytics (What should we do?)
Diagnostic analytics is about figuring out why did an event happen, but where things get really interesting is when trying to use predictive analytics to project what will happen. Typically, this is done by using existing data to train predictive machine learning (ML) models and this is why analytics is part of the evolution that leads to AI
AI future of accounting– Accounting is the creation of double-entry bookkeeping – a process of recording both profits and losses – but accounting has not seen much innovation in last 500 years.
The good news is that Artificial intelligence (AI) is ready for transforming if not disrupting all the sectors of the economy that generate lots of data (big data), from tech to finance, communications, energy, healthcare, mobility, manufacturing including accounting.
There are accounting software vendors, which are offering capabilities to automate data entry, reconciliations and sometimes more by applying AI and machine learning technologies to bookkeeping. The future of accounting, tax, payroll, audits, banking will be fully automated using AI-based technologies, bringing both huge opportunities and serious challenges.
One of the benefit other than time saving, that AI system can eliminate accounting errors that are generally hard to find and thereby reduce our liability and allows us to move to a more advisory role.AI will also help in generating new insights from the analysis of data; and freeing up time to focus on more valuable tasks such as decision-making, problemsolving, advising, strategy development, relationship building and leadership.Some of other benefits are improve on the accuracy, rules-based approaches, improving fraud detection, better prediction of fraudulent activities, forecast revenues.