Accounting AI and automation are said to help businesses save time, save money, improve consistency, and more. But is there any real evidence that this is the case? In other words, is it possible to prove the return on investment (ROI) that you can get from these advanced accounting technologies?
The short answer is yes. But there’s a lot to this interesting – and potentially game-changing – topic.
Proving the Value of AI
How do you prove the value of AI in the accounting department?
This is a complicated question, and there are many ways to answer it. For example, you can prove the usefulness of AI by citing specific success stories. With this approach, you’ll essentially study how other accounting departments have used AI in the past to observe whether or not they experienced a measurable improvement in productivity, efficiency, or reliability. It’s also helpful to compare any available metrics from those departments to metrics of comparable accounting departments that don’t use AI. Ultimately, if AI does live up to the hype, we would expect the majority of accounting departments who adopt AI to be thrilled with the results – and outperform their AI-less competitors.
We can also look at factors like conclusive improvements to individual processes. Imagine that an AI tool is designed to handle exactly one specific responsibility in your accounting department. If it measurably improves even this one specific responsibility, it’s worth considering as an investment. In this scenario, that would be able to reduce costs associated with the activity, streamline the activity so it’s more consistent, and get more done in the same amount of time. Even a single upgrade with these characteristics can make a massive difference in how your accounting department performs overall.
We can also estimate the overall return on investment (ROI) for using an AI tool in your accounting department. This is a bit trickier, since this incorporates so many variables, but it’s definitely worth ballparking if you’re considering purchasing an AI tool for your department. The idea here is to weigh all the costs against all the benefits and advantages; if the tool provides more value to your department then you spend on it, it’s almost certainly worth getting. For example, let’s say you pay $100 a month to gain access to this tool, but it’s capable of doing $1,500 of work every month in a way that’s more efficient than the people currently doing it. No matter how you look at it, this is a win.
The Value of AI in Accounting
To better understand these dynamics, let’s take a look at the different ways that AI provides value to your accounting department.
Time Savings
AI accounting tools are designed to replace manual effort, save time and free your staff members to focus on higher level, arguably more important responsibilities.
Cost Savings
Though most AI tools do cost money, they tend to save you money overall, since they reduce your staffing needs and expedite your accounting process.
Consistency and Efficiency
You’ll never have to worry about AI making a mistake; it behaves exactly the way it’s been programmed to. AI is incredibly consistent and efficient, making it superior to most of its human counterparts. As an added bonus, your clients, vendors, and other associates will be happier with your faster work.
Fraud Mitigation
Fraud costs consumers about $8.8 billion in 2022, marking a rise of 44 percent from 2021. If an AI tool can help you prevent even a small portion of the fraud your company faces, it can hypothetically pay for itself.
Limitations and Drawbacks
Of course, there are some limitations and drawbacks as well, but these typically pale in comparison to the overall value of AI in accounting.
Cost
AI tools do cost money. It’s possible to find free and open source AI tools, but if you want the most powerful tools for your accounting department, you’ll probably end up paying a monthly subscription fee. Still, these fees are generally reasonable.
Functionality Limitations
AI can’t do everything. It may never be able to fully automate your entire accounting department, especially at scale. But it doesn’t need to be comprehensive or all-consuming to make an impact.
Deployment and Integration
Figuring out how the tool works, testing its limitations, and training people how to use it can all take time. But this is just something you should consider as part of the initial investment.
The short answer is yes, AI in the accounting department does live up to the hype. AI isn’t a perfect tool, and no one is claiming that, but when appropriately applied, it can save you an absurd amount of time and money – in addition to helping your accounting department run more smoothly.