Numeric's Complete Guide to AI for Accountants

It’s time to get intelligent about artificial intelligence. 

Beyond traditional CPA skills, AI acumen is becoming essential for accounting professionals both now and in the future. We’re past the buzzword phase – it’s clear that AI is not only here to stay, but will shape the accounting industry and financial operations for years to come. 

No matter your level of expertise, this guide is intended to be a go-to resource for essential AI knowledge that’s tailored for accounting teams. 

Is AI Going to Replace Accountants? 

In short, no. Despite the clamoring about AI-induced job obsolescence, AI systems will not fully replace human accounting teams. 

Instead, AI-powered tools are positioned to become “superpowered assistants” for accountants, helping to streamline the time-consuming and repetitive tasks they often dislike. With these advancements, accountants can turn to focusing on more strategic decision-making, such as financial planning and cash flow analysis. 

How else will AI impact the future of accounting? 

• AI will transform preparers into reviewers, handling routine tasks like data entry, bookkeeping, and standard calculations.

• AI will help accountants reach insights faster by quickly analyzing large amounts of data at speeds that far outstrip human effort and greatly reduce the risk of human error.

• AI will assist overworked accountants, addressing the industry's talent shortage.

To learn more about how humans + AI will work in tandem rather than in opposition, read our guide about why we think AI technology and machine learning won’t replace humans anytime soon.

What are the different types of AI that exist? 

Looking for a quick intro to the basics of AI? This article compiles easy AI explanations for accountants and explains how different types of AI will impact the tasks that accountants do. 

1. General Purpose vs. Embedded AI: Tools like ChatGPT, Claude, DALL-E & more represent general purpose AI products that can quickly generate text or visuals. Embedded AI is integrated into existing software platforms to assist with specific workflows like financial reporting, data extraction, fraud detection, and more. 
2. Natural Language Processors (NLP): These tools interpret and understand human language, including grammar, syntax, and semantics. Examples include voice assistants like Siri.
3. Optical Character Recognition (OCR): This technology converts text from images, PDFs, and handwritten notes into machine-readable text – a key benefit for tasks like invoice processing. 
4. Large Language Models (LLM): An evolution of NLPs, these AI models can interpret and generate human-like content. Examples include ChatGPT, Claude, Gemini, and Llama. 
5. Robotic Process Automation (RPA): While not strictly AI, RPA automates repetitive, structured tasks to improve efficiency.

How can accountants implement ChatGPT into their work? 

Accountants can use chatbots like ChatGPT to enhance their workflows in numerous ways. Its strengths span a wide range of accounting practices, including the following:

General 

• Reading, writing, and formatting table data
• Performing quick calculations 
• Running analyses on datasets 
• Drafting communication emails for clients & internal partners 
• Coding tasks – writing scripts, translating code across languages, etc. 

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Accounting-specific

• Creating checklist drafts
• Drafting journal entries & adjusting entries 
• Extracting invoice data from documents
• Writing & reviewing policies
• Referencing standards – GAAP, IFRS, etc.
• Conducting preliminary financial analysis

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Take a look at this ChatGPT accounting overview to see some example prompts and tips that accountants are already implementing in their work.

As a protective measure, accountants should maintain a comprehensive audit trail of all interactions with ChatGPT to ensure compliance and facilitate reviews. 

P.S. For a ready-made accounting bot built to provide support with technical accounting matters of all kinds, consider using the Numeric technical accounting AI assistant.

What practical value actually comes from using generative AI? 

Despite the surge of financial & strategic investment in AI applications, many CFOs admit to having limited understanding of how and where to use AI. To navigate this complexity, it's essential to grasp the practical value AI brings to various tasks and simply, how to use AI in accounting:

• Computational Swiss-Army Knife: AI excels in tasks like scanning, generating, polishing, and summarizing data. For example, Optical Character Recognition (OCR) swiftly converts printed documents into editable text, while Large Language Models (LLMs) like ChatGPT generate content and summaries rapidly.
• Data Recognition & Accuracy: AI reduces errors and speeds up accounting processes, as seen with the automation of data entry and reconciliation workflows, by virtue of its high-powered computing speeds. Instead of having to manually reconcile accounts, AI can pull balances from statements and automatically compare them to account trial balances, ensuring greater accuracy in financial processes. 

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Embracing AI and automation can greatly reduce a team's reliance on manual work and provide initial content generation or data analysis, giving teams a head start on task completion.

What are the limitations of AI? What workflows & accounting tasks can AI not replace? 

Limits of Accounting Automation and AI

AI can't replace human creativity, adaptability, or context understanding. Examples:

• Analyzing suspicious transactions
• Reclassifying expenses based on business context
• Communicating financial impacts
• Analyzing budget variances
• Decision-making on complex accounting issues
• Collaborating on data architecture
• Executing the audit process with qualitative judgment

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Human expertise and judgment remain crucial. As such, it’s increasingly important that accountants understand how accounting will be automated and how they will have to adapt in response.  

Can AI solve the accounting shortage?

AI accounting tools may not fully solve the current accounting shortage, but they can definitely help accounting teams that are strapped for time, resources, & personnel. 

AI alleviates stressors for accounting teams by: 

• Automating repetitive tasks: This takes place across data entry, flux analysis, and generating first-draft variance explanations, freeing up accountants for strategic work.
• Supporting overworked teams: AI reduces the burden on existing staff, preventing burnout and improving job satisfaction. 
• Evolving roles: Accountants will evolve into strategic roles like editors, interpreters, and architects, focusing on refining AI outputs, translating data for stakeholders, and designing financial systems.

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In fact, AI adoption might be the key to making the accounting industry more attractive and sustainable, as teams learn to better manage their workloads. Read more about how AI will impact the accounting shortage. 

How should accounting teams understand AI risks?

AI offers significant benefits to accounting teams, but like any new technology, it also brings certain risks that need careful management. By having a strong foundational understanding of AI’s risk profile as well as implementing sound risk management practices, accountants can approach AI usage with a sense of security. 

Here are some ways to mitigate common risks: 

1. Risk #1 – Data Security 
   1. Verify how AI providers use your data. Ensure your data won’t be used to train models without your consent. 
   2. Use non-sensitive dummy data when testing scripts. 
   3. Educate your team on AI data precautions to avoid accidental data leaks.
2. Risk #2 – Trusting AI Outputs 
   1. Always verify AI-generated information, as AI may produce incorrect data. 
   2. Provide clear, reliable sources to reduce the chance of AI “hallucinations” (false information). 
   3. Give detailed instructions and context to improve AI output accuracy. 
3. Risk #3 – Audit Impacts
   1. Document all AI interactions, including prompts, responses, and generated code, for audit purposes. 
   2. Work with auditors to explain your AI use and provide necessary documentation. 

AI’s potential in accounting is vast, but balancing innovation with caution ensures its benefits are fully realized. 

What AI tools can I actually use? 

With a seemingly endless list of accounting software on the market, many of which claim to be AI-driven, it can be difficult to determine which tools will actually help with your business processes. To help you make informed decisions, we’ve put together a list of ten applications that actually leverage AI to help accountants. 

For cutting down on the month-end close, we recommend Numeric which uses AI across its platform such as with its flux analysis writer and technical accounting AI bot. With each of these features that are buoyed by Numeric’s real-time sync with ERP financial data, accounting teams can generate meaningful insights about their business context. 

The remaining list of tools covers a series of other accounting processes – extracting data from financial statements, automating the AP workflow, writing expense reports, and more. 

1. ChatGPT – for rapid calculations, summarizing text, and other general tasks 
2. Claude – for tackling text generation: writing policies, drafting emails, etc. 
3. BILL – for managing accounts payable and accounts receivable tasks in one place 
4. Glean.ai – for optimizing AP work with automation and machine learning algorithms
5. Klarity.ai – for making document review easier with seamless data extraction 
6. Trullion – for simplifying financial reporting, with a focus on lease accounting 
7. Ramp – for managing expense tracking and automating corporate card recs 
8. Brex – for spend managing with real-time expense tracking and robust integrations
9. Mercury – for providing banking services, business accounts, and more for startups

With these general-purpose and embedded AI technologies, accountants will be able to automate routine or manual workflows and free up time for more higher-value work.