Creating Efficiency and Effectiveness: AI in Finance, Accounting and HR
Artificial Intelligence (AI) has become a game-changer across many industries, offering innovative solutions to streamline processes and enhance productivity. AI – and generative AI (GenAI) in particular – has the power to transform the fields of finance, accounting and human resources as well, providing new, interesting opportunities for personal and professional growth.
First, let’s dispel some of the common myths around AI. With the launch of ChatGPT (developed by OpenAI) in November 2022, thousands of words have been written about the dangers of AI. Much of it anecdotal featuring chatbots and other AI-powered interfaces that serve up incorrect or inappropriate information. The overall media message? You can’t trust AI.
But let’s back up a minute and understand what’s going on under the hood. AI and machine learning are basically very sophisticated software programs. Despite their superior ability to process data quickly, they must still be monitored by humans. For instance, humans decide which data pools the machine draws from. ChatGPT, for example, pulls information from the entire Internet. It might be true, somewhat true or wrong – it all gets thrown into the pool. There’s an old saying, “Garbage In, Garbage Out” or “GIGO.” Herein lies the opportunity for professionals in HR, accounting and finance. Someone – with good critical thinking skills – needs to be at the helm of AI, asking questions about the data, testing the results continually and parsing the information that is most valuable. AI can be an incredibly powerful tool, removing mundane tasks, reducing errors and even spurring creativity. Instead of eliminating jobs, AI can redirect human efforts towards tasks requiring critical thinking and a personal touch ultimately giving professionals more time for valuable and strategic work.
AI in Finance and Accounting
Many accounting firms have recognized the importance of AI. Almost a quarter (24%) of top-performing client advisory services (CAS) practices currently use AI, reports the 2022 CAS Benchmark Survey.
It’s no secret that graduation rates for bachelor’s and master’s degrees in accounting are down – 7.8% and 6.4% respectively when comparing 2021-22 and 2020-21 school years. Consequently, any tool that can increase productivity and accuracy for accounting firms is welcome.
AI is also too big to ignore, says Jason Staats in the Journal of Accountancy. Because AI is hitting their clients, accountants need to be up to speed too.
Here are some examples of how AI is being deployed in accounting and finance:
- Expense management. AI can provide automation of receipt processing and accurate allocation. Clients can remotely input expenses, streamlining the process and saving time for accountants.
- Workflow automation. AI can automate tasks such as managing invoices, Accounts Payable and Accounts Receivable processes.
- ChatGPT and communications. GenAI can help compose emails and correspondence, conduct research and write tax memos.
- Predictive analytics. In financial planning and analysis (FP&A), AI contributes to more accurate budgeting, forecasting and strategic planning. This allows professionals to do more of what they want to do – not creating a bunch of pivot tables and running Excel sheets – but to look at the data and make recommendations to the business.
- Fraud detection. AI can revolutionize fraud detection by employing advanced algorithms for pattern recognition, offering a proactive approach to monitoring trends and identifying anomalies.
- Risk management. Instead of having to put countless tables together, AI can help do scenario analysis, enabling firms to simulate various scenarios and improve risk assessment in strategic planning.
Professional development is essential. Whether it’s through CPE coursework, podcasts, books and/or online media, today’s CPA must learn and keep up with how AI is being used in finance and in business overall.
AI in Human Resources
Human Resources is by definition about humans. Most HR professionals want to spend time with people, engaging them, growing them, all to the benefit of the organization. Again, AI can lift a lot of the nitty-gritty manual tasks, freeing up HR to contribute on a more strategic level.
Here are some examples of how AI is being used in HR:
- Payroll and benefits administration. Whether it’s pay and time management, open enrollment or answering queries, AI can automate many tasks in payroll and benefits making them more accurate and keeping employees satisfied. More serious or complex queries can be followed up by a human.
- Recruitment. AI can automate repetitive tasks like screening resumes, scheduling interviews and communicating with applicants. AI filters, if used appropriately, can also help remove bias from the recruitment process.
- Compensation benchmarks. AI can coalesce huge amounts of data about pay rates by role, industry or geography, enabling employers to offer competitive compensation in any market.
- GenAI Chatbots in inquiry. GenAI-powered tools informed by company-specific policies and data can answer employee questions more quickly, saving HR staff time.
- Onboarding. AI can personalize the onboarding experience, communicating with the new employee at different steps in the process, nudging to complete tasks, or connecting them with a buddy.
- Employee retention and recognition. By automating processes to recognize employee milestones, organizations can foster stronger engagement.
- Learning and development. Customized development plans can be created based on job role and industry. AI can analyze compensation data and identify typical career paths and the skills needed, then set up an individualized learning program.
Adapting to the Future
Whether it’s eliminating human errors in data entry, creating more time for analysis and strategic thought, or simply increasing time to connect with clients and employees, AI has the potential to dramatically change the way we work. By leveraging AI, we can enhance efficiency, foster innovation and stay ahead in a rapidly evolving landscape. Embracing AI is not about replacing jobs but empowering individuals to focus on meaningful tasks and interactions, ultimately leading to personal and professional success.
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