Leveraging AI to Complete Your Bookkeeping

Artificial intelligence has enhanced many areas of business and made jobs more efficient and streamlined. Its impact on bookkeeping is no exception. AI has entered the bookkeeping and broader finance scene to help bring more efficiency and accuracy to tracking and predicting finances. For small businesses, this means there are now additional tools to add to your toolkit to ensure your books are being kept in their best shape, allowing you to assess the overall success of your business operations.

There are several ways AI tools can help you improve your bookkeeping tasks, from handling repetitive tasks to helping your business scale. Want to know more? Let’s take a closer look.

Benefits of Using AI Tools

Bookkeeping is an essential part of running a business as it allows you to track the income and expenses of operations. It provides tools for making informed business decisions and keeps tabs on the business’s overall financial health. This essential work can benefit from AI assistance in many ways, including:

Increased Efficiency

AI can perform routine, repetitive tasks such as data entry and processing receipts, invoices, and payroll. These tasks are essential to effective bookkeeping, but they’re also time-consuming and tedious. You can save time for other important work by using AI to take over these tasks.

Improved Accuracy

Errors can easily occur when entering or analyzing data. AI can detect or prevent them by accurately entering data and spotting anomalies that may otherwise go unnoticed. Spotting anomalies also assists with other important bookkeeping responsibilities, such as forecasting cash flow, financial reporting, and data analysis to guide decision-making.

Real-Time Financial Insights

AI can efficiently and accurately sort through vast amounts of data, including the latest data entries, financial trends, or other factors influencing a business’s financial health. This allows for real-time financial insights that can flag potential concerns and guide decision-making on how to address them.

Enhanced Fraud Detection

In addition to the above, AI is also well-suited for spotting anomalies that could be signs of fraud. When fraudulent activity is flagged, it can be dealt with promptly to reduce negative consequences, keeping the business and its cash flow operating smoothly.

Improved Tax Research and Compliance

AI’s ability to sort through vast quantities of data and recognize patterns means it can help identify potential compliance issues related to a business’s tax obligations to reduce tax or compliance risks.

Cost Savings

Since AI can reduce the time spent on repetitive bookkeeping tasks, it can help reduce the costs of hiring someone to do this, saving the business money. In addition, accurate bookkeeping records and financial reports can help identify areas where business operations can be adjusted to reduce expenses, leading to further savings.

Improve Client Service

AI chatbots can provide immediate assistance to clients or customers whenever needed, creating a positive experience for clients and helping build a positive client-business relationship. For more complex communications, AI can assist in communicating ideas or complex issues by creating drafts or outlines for communications such as emails.

Scalability

Just as AI can help identify areas to cut costs, it can also help identify opportunities for a company to expand and scale operations. AI tools can also help a business handle its growing bookkeeping responsibilities.

AI Technologies Benefitting Bookkeeping

How is AI capable of doing all this for businesses? The answer lies in three main areas of AI technology: machine learning, natural language processing (NLP), and robotic process automation (RPA).

Machine Learning

Machine learning helps identify patterns and make predictions based on existing data. These qualities allow the technology to audit your business’s records accurately and efficiently, catching data errors, identifying tax compliance issues, and detecting fraudulent activity.

Natural Language Processing

Natural language processing (NLP) can analyze the more nuanced aspects of data and information in bookkeeping, such as customer sentiment or understanding tax laws, to build reports crucial to business decision-making processes and answer questions about data or information collection. For instance, in the iGaming industry, where some online casinos offer no-wager bonuses, NLP technology could identify the rules surrounding these bonuses and explain how to use them to your advantage. In bookkeeping terms, this allows your business to ensure it understands its tax obligations by flagging relevant data and tax laws in its records.

Robotic Process Automation

Robotic process automation is the primary tool for repetitive bookkeeping tasks. It is a component of AI that takes over repetitive tasks like data entry and payroll processing. It enables the mimicking of a person’s actions to complete these tasks.

AI Tools to Utilize

With an understanding of the benefits and an overview of how AI assists bookkeepers, you might wonder how to integrate the technology into your workflow. That’s where AI tools come in. A variety of AI-based bookkeeping solutions, such QuickBooks, Xero, Zoho Books, and FreshBooks, are available to support businesses.

Challenges and Considerations

While AI certainly has the potential to streamline bookkeeping processes and reduce the workload for businesses’ daily operations, it also has several notable challenges and considerations. When it comes to financial data, there are concerns about data security. Businesses must ensure they’re taking precautions to protect their own and their clients’ data. Additionally, AI systems still aren’t perfect and may not always be accurate or reliable. Because of this, anything generated through these programs should be reviewed to ensure accuracy.