Automation and artificial intelligence (AI) are among the latest technological advancements being pursued by executives in the accounting industry. That’s because AI and automation gives companies the power to sort data faster, create more sophisticated reporting and reduce human error. These benefits can be a real boon to accounts payable companies, particularly as leaders seek opportunities to gain an edge in an increasingly crowded market.
Given the potential benefits, it’s little surprise that venture capitalism in AI accounting has exploded since 2013 and that the Big Four accounting firms have committed $9 billion to investment in AI over the next few years. In fact, 85% of executives expect AI to give their organizations a competitive advantage in the future.
For organizations looking to bring AI into their accounting functions, it’s important to understand the positive ways this technology can affect their accounts payable teams — as well as potential implementation challenges — before evaluating the solution that would work best for their needs.
What is AI?
In short, AI is the ability of machines to perform tasks intelligently. Everyday examples include smartphones that suggest spelling edits or responses to email messages, face recognition in photos and Amazon’s list of products relevant to your search.
When it comes to accounting, AI creates a pathway for smarter, quicker and better task management, including enhanced decision-making, improved forecasting and decreased potential for compliance hazards.
How can AI and automation make accounts payable more effective?
AI is a flexible technology that can work within the accounts payable department of most companies and be easily adapted to meet an organization’s individual needs.
- Analyze and store large amounts of data, which can be used to boost efficiency and decrease mistakes
- Virtually eliminate late payments by automatically paying on accounts when certain criteria are met
- Reduce the number of manual tasks completed by a human — such as updating spreadsheets, downloading emails and keying in data — which are often time-consuming and prone to error
- Read and translate multiple languages, which can benefit international firms or those that work within bilingual environments
- Act as an additional safeguard to protect organizations against fraud
- Enhance the basics of accounts payable automation, including e-invoicing and dynamic discounting
- Use neurolinguistic programming to discern tone and meaning from a written document (determining if it’s a letter of complaint or praise, for example) so that an appropriate response can be selected
- Help mitigate a skills gap, particularly during times of low unemployment
In short, many organizations are initiating AI to reduce errors, improve consistency and create additional opportunities for enterprise-wide improvements. That said, many executives are left questioning how this change could affect employee morale, operations and relationships with key stakeholders.
What effect could AI have on your workplace and operations?
Technological advancements have the potential to create workplace environments that are more open, dynamic and even fast-paced. Still, that kind of progress brings change. Consider the advent of the electronic spreadsheet in 1980, which led to the loss of about 400,000 bookkeeping and accounting clerk jobs. At the same time, though, the number of accounting jobs grew by about 600,000.
The advancement of AI within the workplace — and within accounts payable specifically — will naturally bring change too. If your organization is considering implementing AI to help bring efficiencies to your accounts payable, you probably have questions.
While evaluating a potential AI solution, consider the following ways AI might affect your workforce and operations:
Will the use of AI decrease the number of accounts payable–related jobs within an organization?
Today’s employees spend 10%–20% of work hours on dull or repetitive computer tasks, and at least 13% admit they find those tasks to be a waste of time. These numbers point to an area that’s ripe for change. As AI technology is synthesized into workflow, employees are likely to move away from rote, mundane roles and focus instead on tasks that involve discernment and judgment. In short, productivity is likely to change — but so will employee skill sets.
Leadership tip: Many employees will fear potential job loss; share management’s vision for the new system, including the advancement of current employee roles.
Would it be difficult and time-consuming to implement an AI-focused solution?
New system implementation challenges can be multifaceted, despite long-term benefits that can far outweigh the costs. In the short term, many outdated invoice-processing systems aren’t user-friendly or customizable and are sometimes built into existing enterprise resource planning tools. This can create a sizable financial hurdle for some companies looking to upgrade.
On a longer horizon, an effective implementation strategy is often dependent upon strong management support, proper employee training and corporate receptivity — at all levels — to the change. To create a conduit for successful implementation of any new system, it’s imperative that key stakeholders buy in before any new process is initiated. That includes senior managers at the firm but also external partners like key vendors.
Leadership tip: Talk early and often with all important internal and external stakeholders to make sure changes within your organization won’t adversely affect vendor operations or key processes. Also, invest in employee communication and training programs, which should include information about how AI implementation can benefit workers. Those benefits may include less time spent on tedious tasks like data entry and more time focused on the development of higher-level job skills like the interpretation of data trends.
How much control should AI have over key financial processes?
Even in a self-learning environment, mistakes by an AI solution could be costly, particularly in an area like supplier payment. One solution could be to create a system of human oversight, to make sure the AI system doesn’t cause any adverse effects or undermine human autonomy.
Leadership tip: Even when an AI-based system can help businesses make quicker, fairer and unbiased decisions, an AI system or algorithm works best when it’s partnered with human oversight, whether that supervision is minimal or total.
Would the cost savings associated with AI implementation be worth the time and resources needed?
While there’s little doubt that a new system and process can be costly in the short term, effective change management can also bring about a host of long-term efficiencies that can benefit a company for years to come. Enhanced efficiencies can improve client satisfaction and create new opportunities for growth. And eliminating repetitive tasks can create opportunities for employees to better use their talents and skills on behalf of your organization.
Still, in the end, long-term efficiencies and cost savings will depend upon how your organization manages any inevitable disruptions, facilitates open lines of communication and sets the tone during the period of transition.
Leadership tip: Successful change management hinges upon management’s ability to help teams embrace new systems and processes.
In the end, the effectiveness of any high-level organization change — including the implementation of AI —depends on a company’s ability to conduct a cost/benefit analysis; identify and overcome possible roadblocks; and effectively communicate upcoming changes (as well as benefits) with leaders, employees and external partners.