If you’re an accounting professional or a small business owner, you’ve probably heard the buzz around “Predictive AI” and “Generative AI.” But what in the world does this mean? How does this affect accounting software? What’s the difference between Predictive AI and Generative AI, and why should you care? Let’s dive right in and demystify the differences in AI technology and how this benefits you whether you are all in or just flirting with the accounting profession.
Predictive AI Explained
Imagine your accounting software was a magic 8-ball and all you had to do was close your eyes, shake it up, and ask a question to predict the future. How much more confidence would you have making decisions or building strategic growth plans if you knew, with a high degree of certainty, what the company’s cash flow would be next month or even next year? Predictive AI is a magnificent tool that can be built into AI-powered accounting software to identify trends and patterns found within past transactions so business owners can make more informed decisions.
Generative AI vs. Predictive AI
While predictive AI is responsible for financial forecasts, generative AI will take it even further. Instead of just predicting outcomes, it goes beyond generating real-time reports and leveraging available data to offer fresh solutions or suggestions for a given scenario.
How does this happen?
Generative AI employs algorithms to analyze existing data, learn from it, and generate new and creative ideas. The ability to create scenarios that generate unique ideas and solutions is human-like, and would not be feasible with predictive AI alone. Moreover, generative AI can produce realistic simulations applicable in real-world situations. In essence, Generative AI models extensively analyze complex data sets, which yield concise, high-quality data and actionable insights in real-time to empower and elevate your business strategies.
So Which AI Is Better?
It’s not a matter of one being superior to the other- it’s about identifying the specific needs unique to your business.
If you aim to use financial data to gain actionable insight into future business trends, then the best solution is predictive AI. Predictive AI is a powerful technology that equips you with valuable information to prepare you for future challenges and enable educated decision-making. As an example, you can think of predictive AI like a math tutor who presents a story problem and gathers the necessary pieces for you to determine and apply the correct formula on your own.
Alternatively, if you desire to fully harness the potential of AI-powered accounting software to analyze data, create scenarios, and generate unique, actionable strategies, then Team Generative is your team.
For example, using the same scenario where you face the same mathematical story problem, but this time, your tutor provides you with the formulas to tackle the same math problem.
Your Predictive and Generative AI-Powered Solution
Docyt is an AI-powered accounting software leading the AI accounting revolution; and is an indispensable tool for accounting professionals. Through a powerful combination of AI technologies, Docyt offers businesses more powerful insights and human-like problem-solving capabilities. So, whether you are a proud member of Team Predictive or Team Generative, there is no denying that AI technology has transformed the accounting industry and offers significant benefits to any business. With an ally like Docyt, you reap the rewards of both predictive and generative AI and know you have a partner by your side taking on the twists and turns of the AI revolution.