Why Artificial Intelligence is considered as the Future of Accounting: Study
Artificial intelligence (AI) is the intelligence displayed by machines, in contrast with the natural intelligence (NI) displayed by humans and other animals. After decades of research and study in laboratories, artificial intelligence is all set for prime-time, transforming if not troublesome, all the sectors of economy that are based on data generation, from tech to finance, communications, healthcare, banking, energy or manufacturing.
Just like other sectors, accounting hasn't seen much modernization since the foundation of double entry bookkeeping for maintaining records and is well thought-out one of the great advances in the history of business and commerce.
Conversely, the good thing is that applying AI and machine learning technologies for bookkeeping is turning into a reality with most of the major accounting software retailers who are presently offering capabilities to automate data entry, reconciliations and even more.
According to the upcoming research report on future of accounting, it is expected that by 2020, much of the accounting activities will be fully automated using AI based technologies, which will completely transform the accounting industry in a way it never was for the last 500 years, bringing together huge opportunities and serious challenges as well.
"Having machines to do all these tedious and repetitive tasks could sound scary for many accountants because they are also very time-consuming and thus very lucrative," explained Stephanie Weil, CEO of Accounteam, a Silicon Valley-based accounting firm.
In the study, automation capabilities of 4 of the most popular AI-enabled cloud accounting solutions available in the market today (OneUp, QuickBooks Online, SageOne, and Xero) and rank them against Accounting Automation Index (AAI), that evaluates the accuracy of the AI engines to automatically identify the transactions approaching in from bank feeds accurately with any human interference. As a result, OneUp proved to be ost effective of all with an Automation Index Rate of 95% after 5 months of use.
Although AI seems to be very promising, still the accuracy of the machine learning algorithms needs to be significantly improved in efficiency.