AI continues to transform multiple industries, having become an intrinsic part of day-to-day operations for many businesses. Content creation and marketing activities are some of the most impacted areas, but the financial sector is undergoing a transformation as well.
Accounting in particular stands out due to innovative AI-focused software. Many features associated with bookkeeping lend themselves to automation of various tasks, freeing up accountants to focus on work that requires attention to more minute details.
This allows firms to provide more value to their clients with quicker turnarounds, leading them to outgrow competitors, whether they’re big players in the industry or small independent establishments.
AI accounting software uses Generative AI (GenAI) to automate, auto-populate, review, audit, and research. While traditional bookkeeping software may offer similar tools, AI-first software takes the accounting process to another level.
Through previous routing and rule sets, AI can automate multiple processes, optimizing procedures and potentially increasing accuracy. By easily accessing all the relevant information, AI can rapidly collate and analyze data, efficiently providing reports and forecasts. In the same way, any anomalies can quickly be detected and dealt with, alleviating pressure and workloads.
The following table highlights some key differences between AI accounting and cloud-based accounting.
| AI accounting software | Traditional accounting software |
|---|---|
| Fully automated data entry | Manual data entry with some automation |
| Real-time reporting and insights | Manual, time-consuming reporting and analysis |
| Automated error detection | Prone to human error that requires manual checks |
| Simplified integrations | Integrations require manual input |
| Automatically check for compliance issues | Human labor required to stay compliant |
| Easily scales with growing businesses | Business growth requires additional manpower |
| Cost-efficient | More costly due to multiple human factors |
The implementation of AI in accounting can greatly improve the results of both accounting firms and small business owners who take bookkeeping into their own hands.
Every day tasks can easily be streamlined by automating and optimizing certain processes. To achieve this, AI accounting software seamlessly automates data entry and reconciliation, allowing accountants to focus on less menial tasks. In the same way, it carries out real-time reporting and assists bookkeeping teams in data analysis by providing valuable insights.
AI can also play a critical role in fraud detection and reduce the likelihood of errors, ensuring greater accuracy and trust in the financial data presented. Managing multiple clients and communications can also be facilitated by this type of accounting software. Not only that, but AI generally simplifies integrations with other tools and software.
Through multiple optimizations, accounting businesses that choose to implement these tools can gain a competitive advantage against other companies, while small businesses can benefit from additional peace of mind.
Well-established online accounting companies have already started providing users with more value by implementing AI features. This allows them to stay ahead of competitors, aiming to increase user retention and acquisition.
A well-known player in the accounting software market, Quickbooks offers users Intuit Assist, an AI assistant that helps them manage, categorize, and predict invoices. This tool also gives users insight into their data, offering even more value.
It is quite unbelievable that U.S.-based online accounting company Intuit Inc. has already been on the market since 1983. But the success of its main product, QuickBooks shows that they aren’t just simply lucky. The software exists as downloadable software for desktops, and a cloud-based accounting solution dubbed QuickBooks Online, which the company quite aggressively promotes. This latter version, of which we will be talking about, is ideal for everybody from simple sole-proprietors to bigger companies. Regardless of the chosen subscription, you can create invoices, expenses, and estimates with a few clicks, quickly manage sales receipts, create and print checks, payrolls, have multiple tax rates, real-time banking and reports. You can integrate the software with over 300 third-party solutions, and be entitled to full customer support. You also have the option to try out the software completely free of charge for 30 days. Skipping this trial period you get a discount from the monthly subscription fee for six months or a whole year. But if you don’t like the software, you still have a 60-day money back guarantee.
Similarly, Xero has also implemented its own AI assistant, Just Ask Xero (JAX), although it is still in Beta. Additionally, this software seeks to streamline processes by making use of AI-driven bank reconciliations and providing timely insights.
Xero is a progressive and innovative online accounting solution that enables you to manage your accounts more effectively and make your accounting hassle-free. Some of its features include invoicing and quotes, bank reconciliation, inventory, mobile capability, third-party apps, purchase orders and payroll. The mobile version of the software, Xero Touch, makes it possible to access all your accounting data instantly from wherever you may be. Xero integrates and works well with many other third-party applications (such as advanced solutions for CRM, point-of-sale, e-commerce and more). You have a choice of three pricing plans – Starter, Standard and Premium – all of which have slightly different features and a reduced price for the first six months. Xero also provides a 30-day free trial. Customers enjoy efficient and reliable support from Xero online teams. Xero’s US headquarters is in San Francisco, but this publicly listed company’s products are used in over 180 countries. The company has garnered impressive experience in the area of cloud computing and accounting and has continued to innovate and create new products for the market.
FreshBooks users can benefit from AI-automated expense tracking and receipt scanning and receive valuable information about their financial data.
FreshBooks was founded in 2003 in Canada as an invoicing, billing and time tracking software, but over the past years it became a full-fledged online accounting solution ideal for sole proprietors and smaller businesses. With this neat cloud-based software, which underwent a thorough overhaul in 2016, you can easily and quickly create and customize invoices (whether using the desktop account or the Android/iPhone apps), record expenses, plan and realize projects, and track your time. You can integrate a decent amount of third party applications and services, and check reports FreshBooks automatically creates for you. You also have the option to enable fast online payments, set up recurring invoices, and even customize your account. Regardless of your chosen plan, almost all features remain available during and after the 30-day trial period. Furthermore, you also get unlimited customer support with your subscription, which can be as low as $15 per month. So if you need an accounting solution that includes all major functions and you work with a small number of clients and employees/contractors, then FreshBooks is your choice.
Across its various products, Zoho has introduced Zia, an AI assistant for smart insights. From reporting to anomaly detection and forecasting, Zia can increase productivity on various tasks.
No company reaches the value of $1 billion by developing bad software. Zoho is the shining star of the digital business tools industry, offering over 50 business apps. Zoho Books is an excellent example of how online accounting software should operate.
Brimming with features and intuitively designed, Zoho Books is a great option for any business wanting to take its accounting processes to the next level. Even though it takes a while to get your head around the software due to the high number of features, tools, and reports, the platform is well worth the time investment.
Small businesses can take advantage of Zoho Books' free version to access all the basics. Meanwhile, companies that are ready to invest financially can get Zoho Books for as little as $15 per month and use the company’s 14-day free trial to try everything out before committing.
Sage has also introduced its own AI companion, Sage Copilot. This tool helps with automation, insights, compliance, accuracy, and promises even richer features in the future.
When it comes to online accounting solutions there is one company that is considered to be the alpha and omega of all things accounting: Sage, a company founded in 1981 in the UK. Despite its origins, the company’s best-known solution, Sage Business Cloud Accounting, is ideal for businesses based in the U.S. thanks to the fact that it is a powerhouse when it comes to accounting features. With this software on board, accounting becomes a much simpler experience – and not just because it covers all the needs of a striving business, like the easy creation of invoices, quotes and estimates, well-detailed summaries of the business’s performance and automatically created reports. Sage Business Cloud Accounting also boasts an extremely intelligent inventory with real-time tracking, plus it saves newly created items to Google Drive without the need for any third party add-ons – which can still be applied if you want to further automate tasks. And if that’s not enough, Sage Business Cloud Accounting can be purchased for affordable prices or trialed for free for the first 30 days of use.
As the value of using AI for accounting purposes continues to increase, new software emerges to fill in the gaps in the market. AI-driven accounting software aims to revolutionize finance, mainly by speeding up and increasing the accuracy of as many bookkeeping tasks as possible.
Some AI-first software companies, such as Vic.ai, Botkeeper, Docyt, and Zeni already stand out from the competition.
Vic.ai seeks to eliminate manual entries and accelerate workflows. From invoice processing to record matching, approvals, and insights, Vic.ai offers to do everything for you while reducing time, effort, and errors.
Botkeeper offers up a scalable, affordable, and accurate automated solution to tackle manual work and the lack of valuable analytics. Instead of trying to eliminate accountants from the equation, Botkeeper wants to elevate accounting.
Docyt sets out to provide real-time data that streamlines decision-making and enables business growth. This AI-driven software proposes to simplify bookkeeping, from the usual manual entry tasks to expense management and revenue reconciliation, and then present timely insights for optimal planning.
Zeni combines AI with finance experts to simplify accounting, increase accuracy, and provide clarity on your business’s financial data. The support and education provided by Zeni’s expert team are a strong selling point.
While the use of AI for accounting is certainly enticing, some still question how trustworthy this type of software can be in the long run. Most skeptics believe a human accountant will have to step in at some point to clean up after the software. Others are concerned about data privacy and compliance, fearing their financial data will be easily accessible to third parties and used for general machine learning.
There is also the concern for the added weight of this software’s cost and the learning curve for someone used to manual tasks. Can the benefits outweigh the risks of potential errors?
A less often considered challenge is the tendency for biased AI algorithms. If there aren’t enough examples for the AI model to learn from, biased and inaccurate results may pop up. However, this can be minimized by regularly auditing and updating AI models.
Whether AI accounting software can replace accountants will depend on a business’s needs and budget. A small business might be able to get a lot of value from affordable AI accounting software and forego a human accountant, while medium to enterprise-sized businesses may opt for the additional peace of mind that human experts can offer.
Software like Zeni that emphasizes the use of AI tied together with human expertise can offer a solid middle ground for companies, while accountants can find additional help through tools such as Botkeeper.
If you’re exploring the possibilities of AI-driven tools, it’s important to research and try out multiple options, ranging from leading online accounting software with AI features to AI-first accounting software.
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