What is AI bookkeeping and how AI helps to shape the future of bookkeeping?

Bookkeeping dates back to many centuries. Every country follows their own way of accounting principles but only in the last century a generally accepted accounting principle model was introduced and many countries are synchronizing themselves to this with tweaks.

The role of bookkeeping & accounting has morphed over the years and their prominence has grown taking center stage of the firm. Financial reporting, data & trend analysis serves as an anchor for critical thinking and decision making to the management. With the advent of computers and mainframes the accounting industry also had a facelift to accommodate the changes of times. Many accounting desktop or online software namely, Quickbooks, Xero etc. came into existence to help maintain accounting and bookkeeping records digitally.

Furthermore, apart from the internal role change, accountants are expected to do more from the client side beyond traditional accounting practices. They anticipate the consultancy and advisory part to be fulfilled to make their partnership worthwhile. On the other hand, accountants are inundated with routine work in the form of clearing the discrepancies, making journal adjustments, sorting and processing information etc. Therefore, the time required to provide other consulting services is lacking.

This need triggered a requirement of time management in accounting firms' dimensions to upgrade to keep in par to the modern trends in accounting & bookkeeping. The catalyst of change emerged in the form of ‘robotic automation’ powered by Artificial intelligence to give meaningful results for tasks that absorb time, are fault prone, dull in nature and lack creativity.

Before moving further on the subject, let us understand the role of Artificial Intelligence Bookkeeping and how it shapes the future of bookkeeping.

Also Read: Is robotic accounting automation the ‘beast of burden’ for bookkeeping?

What is Artificial Intelligence?

Artificial intelligence is a branch of computer science that conditions itself to perform tasks that require cognitive abilities where humans excel. The core areas where artificial intelligence is teaming up with humans is learning, pattern recognition, data analysis and problem solving. In its component’s it includes machine learning, deep learning, automation, natural language processing, computer vision etc.

How Artificial Intelligence strengthens bookkeeping functionality?

Artificial intelligence in collaboration with automation bots does mimic human actions at a non-core level. Therefore, bookkeeping service tasks that are recurring in nature are taken care inclusive of

• Documenting and recording of numbers in the correct accounting set-up.
• Classification of transactions into classes and subclasses as per the chart of accounts as per the rules configured more accurately.
• Reconciliation of firms' bank accounts with the accounting ledger/books.
• Recognizing and matching the scanned invoices with the right vendor and exact amount.
• Comparison of employee expenditure accounts against the firms’ policy guidelines for strict compliance purposes.

Artificial intelligence in association with machine learning (ML) enhances its sense of reasoning utilizing algorithms, statistics etc. Therefore, using AI in bookkeeping gets an edge with

• Recognise income and expenditure statement items from previous months where variations occur.
• Identify items and classify them exactly according to the chart of accounts.
• Produces in real time, various formats of financial statements and provides trends analysis with its huge set of data giving a good path for decision making.
• Suggests and recommends to the management what can be best solutions.

The capacity to recognise patterns, study from previous occurrences and learn persistently from both structured and unstructured data better equip AI to change the future of booking and accounting tasks.

Also read : How do Accounting firms and bookkeeping practices ensure their data security during deployment of robots?

What is the future in store for AI leveraged bookkeeping?

No professional becomes redundant due to the latest innovation. The same applies to bookkeeping as Al in bookkeeping is rapidly penetrating the market. It is on the verge of changing accounting practices. This demand will enable this area to improvise more and more and convert a larger area of bookkeeping tasks to be handled by Al.

In the future, bookkeeping will be based on equal participation between machines and human intellectual prowess. The intricacies of strategic decision making and interpretations of results from the big data is yet in the hands of the human race.

If you are interested in adding out more clients and enhance your consultancy services while benefiting with additional revenue it generates. Then we are the right partners to discuss with.

Call us to get a free consultation about AI bookkeeping. We will help you implement it in your organization.