AI is becoming a major disruptive technology, poised to revolutionize just about every industry and help people make smarter, faster decisions. In fact, according to Forbes, AI has a projected annual growth rate of nearly 40 percent between 2023 and 2030, a metric that truly underscores the significance of the AI boom that we’re all currently in.

AI is impacting just about every business sector and every profession, and the bookkeeping and accounting industry are no exception. In accounting, it’s important to think of AI as more of a virtual assistant or co-pilot today. While it’s not advanced to the point where it can handle things fully on its own, it can automate various routine, repetitive tasks to streamline operations and help professionals work smarter, yet not harder. Utilizing bookkeeping AI can be especially beneficial for startups, who are still largely in growth mode and are looking for ways to streamline efficiencies so more effort can be put into the business.

AI in Bookkeeping

In many ways, AI bookkeeping is the future of the accounting profession as we know it. Many virtual bookkeeping services and accounting programs today have incorporated AI into their offerings, thereby allowing machines to complete tasks and make decisions in the same way that humans would. Some of the ways AI automates repetitive tasks and streamlines productivity include:

• Inputting and recording data
• Sorting transactions into various categories
• Placing data into the right accounting formats
• Matching receipts or invoices to their respective transactions and financial statements
• Tracking pricing changes
• Ensuring compliance

It’s important to note that AI isn’t intended to replace humans or put them out of jobs, but to complement their efforts. Just think of AI in bookkeeping as a virtual assistant that can help provide you (or your outsourced accounting team) with data so that you can make faster, more educated decisions about how to run your business.

Benefits of AI In Bookkeeping

If your startup is in need of outsourced bookkeeping services, the power of AI can help streamline everything from inputting and recording data to ensuring compliance when it comes to filing expense reports. The big benefit of AI in any field of work, let alone accounting, is in automating repetitive tasks to save time. Time is one of the most valuable resources that any business has, and any effort to save time is only going to allow employees to work more on growing the business.

Another big benefit of AI powered accounting software in bookkeeping is increased accuracy in various processes and less potential for error. AI bookkeeping software works to cross-reference information across a variety of sources to ensure optimum reliability and weed out any inconsistencies. The AI algorithms can recognize and flag potential issues, eliminating or significantly reducing errors and thereby eliminating time-consuming rework.

Automation of Repetitive Tasks

Time is money. It’s a resource. The less time you can spend on mundane, repetitive tasks, the more time you can spend in other areas of the business. One of the big benefits of AI in bookkeeping is how it can automate repetitive tasks for your accounting provider to free up more time and resources to focus on more complex tasks. It’s able to accomplish this via machine learning algorithms, natural language processing and computer vision, learning from large sums of data to mimic human intelligence.

Enhanced Accuracy and Error Reduction

Automating repetitive tasks and saving time is one thing – getting everything right is a whole other thing. The good news is that AI in accounting can do both. AI isn’t perfect, but when used correctly, it’s a tool that’s able to help reduce errors and improve accuracy in accounting operations. AI uses data to train algorithms to recognize patterns and identify any irregularities. Take an expense report, for instance. Your business likely has some sort of an expense report policy. AI can compare any submitted expense reports against the expense report policy to ensure accuracy and compliance with the policy. It’s just one example of how AI can further streamline operations, improve accuracy, and help any type of business save time and money.

Challenges and Considerations of Implementing AI in Bookkeeping

This all isn’t all to say that there aren’t challenges and considerations that must be weighed when it comes to incorporating AI tools for accounting into bookkeeping practices. Perhaps the biggest challenge is committing to it and embracing the value that AI can bring to such operations. Many professionals are still hesitant to fully embrace AI, and much of this is due to misconception. AI isn’t advanced enough to the point where it’s going to replace human jobs. Financial management and accounting are always likely to be a collaboration between humans and machines, regardless of how advanced AI becomes.

Other challenges involved with implementing AI into accounting practices include setup costs and learning curve and data and privacy concerns. Many of these challenges can be avoided by working with a specialized startup accounting firm.

Initial Setup Costs and Learning Curve

While financial projections are generally discussed when looking at business growth, it’s important to consider future expenses your startup may encounter as well. Like any new technology, there’s always going to be upfront costs and a learning curve associated with adopting it. AI is no exception. In addition to the cost of adopting the technology, there’s also the money you’ll spend training and educating workers on how to use the programs and utilize all the benefits that AI offers. Noting this, it can make more sense to outsource your bookkeeping to a partner who already knows how to use AI and the various accounting programs it integrates with.

Data Security and Privacy Concerns

Since the AI boom in the spring of 2023, there have been various news stories about how the technology has revealed private information on companies and their best practices. Keep in mind that many of these instances occurred when professionals from companies used open-source AI tools, like ChatGPT. Open-source tools rely on human activity to grow and improve their databases. So, if any confidential information is input into such systems, it’s going to become a part of their database and risk being shared with others if prompted.

There are always data security and privacy concerns with any technology, but AI in bookkeeping tends to be safe considering businesses are working with a specific accounting software program, and not in an open-source medium.

Real-World Applications of AI in Bookkeeping

From improved record accuracy to helping to create advanced financial insights, AI is revolutionizing the way bookkeeping is carried out – helping to provide insights faster and helping companies work smarter, not harder. Though AI is still a fairly new technology that’s only going to improve over time, many businesses – from startups to large companies – are already using it to their advantage.

Page One Formula has used it to automate repetitive tasks, prepare reports and for compliance monitoring purposes. Rigits has implemented AI to automatically collect transaction data from clients and input this data directly into QuickBooks to streamline operations. Many other businesses share similar success stories. There are many ways that businesses can use AI in their bookkeeping – and there are also value-added benefits, like tax credits – that those using it may be able to take advantage of.

The Future of AI in Bookkeeping

AI in bookkeeping is only going to become better over time. Think of it like this: AI is based on machine learning, so the more learning that is done, the better it’s going to become. AI is still a relatively young technology, and there’s a lot of potential for what this technology can do in the future.

However, it’s important to reiterate that AI in bookkeeping is not intended to replace humans – but to assist them. Any business is still going to need human oversight, no matter how advanced AI becomes over the coming months and years. While AI may be able to provide the data and help humans make strategic decisions about the direction of their business, it’s not going to be able to ever fully replace the decision-making that must be done. Only trained, educated financial professionals can recession-proof your startup.

How Graphite Financial Can Help

If you’re looking to take your bookkeeping to the next level, Graphite can help. If you’re a startup that’s still in growth mode, it may be more feasible to outsource bookkeeping to a qualified partner that’s already using AI for such practices. As a qualified, experienced bookkeeping and accounting services firm, we incorporate the latest technologies to enhance the service and expertise we provide our clients. We’ve made it our mission to partner with startups of all shapes and sizes to streamline their operations and support as they go through various growth stages. By utilizing AI in our tools and programs, we can further help to streamline accounting.

For more information on Graphite Financial and how we use AI in our bookkeeping and accounting services, contact us today.

Final Thoughts

If you want to take your bookkeeping and financial data analysis to the next level, AI can represent a solution. If you want to utilize AI to the fullest extent in your bookkeeping and accounting, Graphite Financial is the partner to work with. As experts in all things accounting, we’re always staying on top of the latest trends and technologies to work harder for you – and AI is one technology that we’ve fully embraced.

For more information on Graphite Financial’s service offerings and how we use AI, contact us today to schedule a consultation. We have various price points available to ensure your needs are being met.

FAQs

What are the main benefits of using AI in bookkeeping for startups?

The main benefit of using AI technology in bookkeeping for startups and small business accounting is streamlining efficiency and allowing leadership to make faster, smarter decisions. AI can help automate various repetitive practices – from recording data to sorting transactions to ensuring compliance – to help companies work smarter, not harder.

How does AI improve the accuracy of bookkeeping processes?

AI uses machine learning to automate various tasks, like data entry, which can also help improve accuracy and minimize errors. AI uses data to train algorithms to recognize patterns and identify any irregularities. One example is ensuring compliance with expense reports. AI can compare and contrast any submitted expense reports up against the policy to ensure they’re being done correctly.

What challenges should startups expect when implementing AI in their bookkeeping?

There are certainly upfront costs and a training investment that startups should expect to make when implementing AI accounting tools into bookkeeping operations. However, the biggest challenge is likely to be committing to AI and embracing it for its benefits. Many people are still scared off by AI and its potential. The benefits largely outweigh the upfront costs and risks – it’s just a matter of understanding and seeing it.

Can AI completely replace human bookkeepers?

Any business is still going to need human oversight, no matter how advanced AI for bookkeeping becomes over the coming months and years. It’s unlikely that AI will ever replace human bookkeepers. AI is intended to serve as a virtual assistant to humans.

What are some popular AI-powered bookkeeping tools for startups?

Some of the common AI-powered bookkeeping tools that professionals are using today include QuickBooks, Zeni, ADP, Bookkeeping.ai and Truewind.

How can Graphite Financial assist startups that use AI in their bookkeeping?

Graphite Financial combines its expert accounting and bookkeeping services with AI to offer a well-rounded, comprehensive solution to its partners to help them take things to the next level. For more information on how Graphite Financial can assist startups that use or are interested in using AI in their bookkeeping, contact us today.