Once rightly said by Benjamin Franklin, ‘a Penny Saved is a Penny Earned’. Amid rising fears of a global recession in 2024, accounting firms are emphasizing more on cost-cutting measures. This strategic approach aims to reduce expenses, preserve funds, and enable them to navigate through the challenges of a precarious economic environment. Artificial Intelligence (AI) has emerged as a panacea for the accounting industry in its mission of cost reduction. The prowess of AI reigns supreme and extends far beyond merely defeating human champions in games like chess or poker. Accounting firms that overlook the integration of AI into their practices are unwittingly hemorrhaging thousands of dollars every day.
AI has proven to be a formidable force, surpassing humans in almost every domain. Several studies conducted across the globe, including the one recently conducted by Accenture Consulting, cast their trust vote to the idea of implementing AI in the accounting process to curtail the cost by 80-90%. Artificial intelligence offers a gateway for accountants to enhance productivity and efficiency. Beyond the common advantages of time-savings, error reduction, real-time insights, improved security, scalability, and compliance lies a plethora of unique reasons why AI is indispensable in the accounting landscape.
Let’s find out the top 7 reasons to embrace AI in your existing accounting process.
1. Reduction of Staff-Hours
The implementation of AI creates a robust accounting intelligence and automation solution by integrating advanced Generative AI features to simplify and accelerate the accounting processes for clients. Automated Bank Reconciliation streamlines the financial management process for accounting firms by enabling them in early detection of expense and revenue errors which always keeps their accounting books up-to-date for tax purposes. Docyt streamlines data collection by connecting with over 12,000 financial institutions through direct bank feeds and supporting manual uploads of CSV files from non-supported institutions. This saves them hundreds of staff-hours spent every month on manual bookkeeping.
Docyt’s platform automates transaction categorization and detects duplicates from live feeds to aid accountants in month-end reconciliation by flagging uncleared items and undocumented transactions for user attention.
2. Easy Management of Expenses
According to data from the International Monetary Fund (IMF), the average global inflation rate in 2022 was 8.9%, with the inflation rate in the US surpassing 9% in June 2022. As inflation rises, accounting firms grapple with higher operating expenses which adversely impact their net revenues and profit margins.
Docyt’s Automated Expense Management and Accounting service enables accounting firms to efficiently manage their expenses and accounting in real-time through user-friendly mobile and web apps which automate their workflows and reduce transaction costs. Docyt simplifies employee expense reimbursement by allowing clients to use the mobile app to snap photos of their receipts. Our platform also facilitates employers to review and reimburse expenses via Docyt’s accounts payable module by automatically matching the receipt and payment. Docyt then syncs the two conveniently to the client’s accounting software. Docyt’s platform also automates 1099 tax filing by collecting vendors’ W9 information to facilitate clients in easy year-end export for compliance.
3. Risk Mitigation Through Precise Data Analysis
AI serves as a potent tool for accounting and finance teams, enabling them to perform precise data analysis to identify potential risks. Through the examination of buyer payment patterns and financial indicators, AI detects patterns indicative of market declines, allowing proactive risk mitigation. Additionally, AI facilitates the creation of credit lines for sales growth, balancing the potential benefits and risks. Its capacity to analyze extensive data ensures well-informed lending decisions, crucial in addressing rising payment delays and promoting financial resilience.
4. Personalization Through NLP
According to Forbes, data that is defined as unstructured is growing at 55-65 per cent each year. To cope with this influx, accounting firms are turning to Natural Language Processing (NLP). NLP, a subset of AI, which aids in understanding human language and enables efficient data analysis.
NLP applications in accounting involve classifying financial documents, recognizing entities, and extracting relationships. Accounting firms use NLP to automate reports, transcripts, and filings, swiftly analyze markets, extract key information, and offer personalized insights, investment recommendations, and cost-saving strategies for informed financial decision-making.
5. Strategic Supplier Relationship Management
AI-powered tools excel at analyzing supplier data to identify trends, assess performance, and optimize relationships. Accounting firms neglecting AI in their accounting practices may overlook opportunities to negotiate better terms with suppliers, identify alternative cost-effective sources, and streamline the procurement process, inadvertently leading to higher expenses and missed savings.
6. Simplifies Multi-Location Accounting
It is pivotal to manage accounting effectively from multiple business locations for sustained success. Operating in different places introduces unique challenges, such as – payment processing, supply chain management, data continuity, and navigating diverse tax regulations.
Docyt empowers businesses with efficient, automated tools to navigate the intricacies of multi-location accounting effortlessly. Our centralized accounting platform addresses these complexities of operating through multiple locations through the Multi-Location Business Accounting feature. Our platform effectively leverages AI to automate complex expense splitting, journal entries, and cash transfers between companies for streamlined operations. Docyt’s platform ensures accurate financial reporting through continuous ledger updates and by providing insights into individual business performance or consolidated views. Docyt’s flexibility extends to on-demand reporting options, allowing businesses to adapt to dynamic business requirements.
7. Overcoming Staff Shortage
According to The Wall Street Journal (WSJ), more than 300,000 U.S. accountants and auditors have left their jobs in 2021 and 2022, a 17% decline i.e., 1 out of 6 accountants quit the profession in the last 2 years. The data from the U.S. Bureau of Labor Statistics finds that approximately 136,400 openings for accountants and auditors are expected each year between 2021 and 2031.
Artificial Intelligence (AI) stands poised to address the workforce gap in the accounting industry. By integrating AI-powered automation and refining workflows, the sector can diminish its dependency on staff members. This not only streamlines processes but also enhances productivity, efficiency, and, ultimately, profitability. The transformative impact of AI lies in its ability to optimize routine tasks, allowing human resources to focus on more complex and strategic aspects of accounting. This shift in focus from manual to intelligent accounting automation not only mitigates the workforce shortage but also positions the industry to adapt to evolving demands.
Why Choose Docyt?
Docyt, a cutting-edge, AI-driven accounting automation software platform, revolutionizes the accounting industry by offering a unified solution for multifaceted challenges. With a focus on improving the accuracy of the accounts and compliance, Docyt employs advanced algorithms to analyze financial data, flagging irregularities and enhancing security protocols. Docyt’s platform enhances compliance by rapidly producing highly accurate and clean books which also enables businesses to file taxes, secure business loans, buy & sell businesses, and prepare reports for shareholders.
Docyt is venture-funded and based in Santa Clara, CA. For more information, visit – www.docyt.com or call our sales team at (877) 400-1088.