AI in Accounting: How To Transform Your Processes

In 2022, OpenAI launched ChatGPT, their GPT-4 powered language model. And in the months since, they've completely how we work and get things done.

Among other things, you can use ChatGPT to:

• Generate code snippets, draft scripts from scratch and complete existing code.
• Draft emails, job descriptions, explainers and briefs.
• Identify trends, inconsistencies or potential areas of concern within the data.

Not surprisingly, ChatGPT has ignited the conversation on how artificial intelligence can integrate with accounting to take over repetitive work. AI models can generate reports, analyze financial data and pinpoint patterns indicative of fraud—tasks that would normally take a human controller hours, days or even weeks.

AI is available 24/7, costs a fraction of what you'd pay a human, and can process data non-stop using pre-programmed rules.

So, should you consider using AI to build more efficient accounting and financial management operations? Definitely... and for more than you think. Using AI to generate text is great, but ChatGPT can do so much more.

TL;DR: Accounting AI

• What are the challenges of traditional accounting? Relying on humans to handle routine tasks is time-consuming, lacks standardization and relies heavily on manual workflows.
• What is AI in accounting? Using artificial intelligence technology to automate and streamline accounting processes.
• How AI can help your accounting processes.Accounting AI can extract unstructured data, highlight errors, automate repetitive tasks, and flag instances of fraud.
• Introducing Scribe. Learn the benefits of using an AI-powered process documentation tool to create detailed guides and SOPs for accounting tasks.
• The AI experience. Using AI in accounting can increase efficiency, reduce errors and provide valuable business insights.

So‎, what are the challenges of traditional accounting?

Traditional accounting depends greatly on direct human input for recording figures, approving transactions, preparing statements, and balancing accounts.

That system creates a lot of room for human error and fraud, especially as your company scales up and you start to grow your finance team.

Time-consuming & expensive

Traditional accounting places a high premium on accuracy. Finance controllers have to go over figures manually, code transactions by hand and cross-check every expense report and receipt employees submit to catch any fraudulent claims.

Lack of standardization

Another challenge of traditional accounting methods is the lack of standardization.

Without standardized processes and documentation, businesses may struggle to maintain consistency and accuracy in their financial management.

For instance, if your organization deals with 100+ suppliers and contractors, each one of them might submit invoices in different formats, such as PDF, Excel spreadsheets, Word documents, etc.

And each of those might be formatted differently, with unique content arrangements that make it difficult to copy out the data from them and enter them into your AP platform.

Manual workflows & processes

Accountants often have to share data manually with their co-workers by sending spreadsheets via email and creating multiple copies of the same document.

Reviewing and vetting accounts by hand also creates many steps, like the need to run requests by several decision-makers before flagging a transaction, approving spending or grouping a transaction.

Manual processes can slow down your company’s operations, making it hard to work with external partners, secure deals and give your employees access to the necessary tools and finances.

📌 5 Ways to Boost Your Accounting Efficiency with AI

What is AI in accounting? 

AI in accounting means using artificial intelligence technology to automate and streamline processes in accounting. This includes data entry, invoice processing and financial analysis. AI can help reduce errors, increase efficiency and provide valuable business insights.

The advantages of AI in accounting processes

Artificial intelligence works like a second brain that you can outsource repetitive tasks, tedious processes and quality control to, and it’ll keep doing it without losing interest or getting distracted.

That makes AI an ideal innovation for accounting since it frees up accountants to act as controllers instead of obsessing over every tiny detail in their financial operations.

Leveraging NLP to extract unstructured data

An accountant manages payables and tracks your business’s income and expenses. That means they process a wide roster of documents, including cheques, receipts, invoices, etc. They are often submitted in different formats before being transferred into your accounting platform.

Traditionally, an accountant/bookkeeper would have to manually extract all that data by hand and move them into a digital platform (e.g., Excel).

Now, you can use natural language processing and OCR to recognize and extract data from different file formats and transfer them into your accounting platform with a few clicks.

Error detection & prevention with AI

Since accounting deals with keeping track of a business’s lifeblood, there’s a low tolerance for error. This usually requires a human in the loop to approve every transaction manually and perform lengthy calculations to ensure every sum adds up.

But, it’s time-consuming and expensive to maintain such a large staff of accountants to double-check every figure. Thankfully, with the help of artificial intelligence you can:

• Examine the digital trail of every transaction.
• Ensure books are balanced.
• Highlight human error.
• Make it easier to close books every month/quarter.

Automating repetitive tasks with AI

Accounting involves a lot of mind-numbing repetitive work:

• Manually copying figures into spreadsheets.
• Updating ledgers.
• Managing and balancing accounts.
• Reconciling errors.

But, these manual tasks take up a lot of time, and there’s a huge risk of human error, either by omission or oversight.

Alternatively, AI-powered accounting tools can automate many repetitive tasks:

• Data entry.
• Payroll.
• Spend management.
• Processing accounts payables.

Creating automated workflows with AI

Artificial intelligence can automatically vet or disapprove transactions using pre-set rules.

For instance, your spend management workflow might require employees to upload receipts for every transaction before it’s approved

You can also set up email alerts that update finance controllers on pending transactions, including details such as where they’ve been made and the estimated fraud risk for each transaction.

Preventing fraud with AI-powered rules

The best way to make a case for AI-powered accounting is to examine some common abuses it can pinpoint and eliminate, especially in growing companies where everything’s in flux.

In 2007, Georgia Tech employee Donna Gamble was busted for using payment cards issued by the university for over 3,800 personal expenses, including a popcorn machine, video games, a waverunner, football tickets, etc.

All told, she embezzled $316,874 and manipulated accounting records with fake receipts to hide her theft for five years before she was caught.

Likewise, an executive assistant at IT company HP defrauded the company of $954,292 over four years by simply using company-issued cards to pay for her lifestyle, including nearly $150k spent at luxury resorts, thousands of dollars in airfare for trips to Hawaii and Europe and $350k worth of transfers to her brothers business.

In both of these cases, it would have been easy for an AI-powered spend analysis solution to flag some or all of the purchases:

• Pre-set rules restricting card usage to certain vendors.
• Analyze the differences between employee spending.

AI’s superpower is in the name "artificial intelligence." It can rapidly process astonishing volumes of data to find patterns that might suggest misuse, using preset rules or conditioning. 

Scribe—the ultimate AI solution for accounting

‎Scribe is a process documentation tool that helps growing companies create detailed guides, training manuals, FAQ slides, and SOPs, all within seconds. Simply click Record and run through your workflow as usual—Scribe will capture every step, including the pages you visit, buttons you click and how you interact with UI elements.

Scribe uses AI to capture your entire user journey and everything you interact with on-screen, break it into slides and format it as a step-by-step guide, complete with an AI-generated title to go. That way, you can coach new hires faster, guide employees through routine accounting tasks and create reusable SOPs quickly.

Hear from Sarah from Ignite Spot Accounting on how she's using Scribe to document processes for Quickbooks and payroll tools for hundreds of clients.

Save time documenting repetitive processes with Scribe

Scribe helps you document repetitive processes with a few clicks and generates how-to guides that can help you:

• Teach employees, contractors and partners how to submit invoices.
• File a support ticket with the accounts team.
• Flag a transaction (or ask for priority processing).
• Get enrolled for payroll and benefits.
• File for reimbursements.

Embedding self-help content with Scribe

Scribe is versatile and can be embedded into hundreds of SaaS tools and platforms where you already work. For instance, if you manage freelancers and contractors in Airtable, you can embed a Scribe doc that explains how to submit invoices inside the Airtable UX.

You can also embed your Scribe docs explaining how employees can file for reimbursements inside SharePoint with a few clicks. Scribe is infinitely versatile and integrates with hundreds of third-party applications.

Scribe: your cost-effective AI solution

According to data from Glassdoor, an accountant in the U.S. earns $61,631 annually as of May 2023. That comes in at $27 per hour, although freelance accountants and consultants can charge anywhere from $60 to $400 per hour.

For a fraction of that amount (i.e., $12/month), you can generate detailed guides, SOPs and how-to guides for every process and use AI to eliminate busy work from your accounting workflow.

Scribe transforms accounting with AI-powered process documentation

Whether you're trying to:

• Onboard a new accounting intern,
• Draft an SOP for approving accounts payables, or
• Create step-by-step guides for routine tasks such as calculating payroll or submitting invoices,

—Scribe helps you document every step you take in detail, without spending time screenshotting and editing individual pages. Best of all, it’s free to get started and integrates with the rest of your accounting and finance tool stack.

Whether you’re a freelance bookkeeper serving SMBs or a CFOs who’s in more of a supervisory role, Scribe transforms accounting process documentation with AI and helps you create detailed guides for your team, employees and partners with little work.

Scribe automatically creates beautiful step-by-step guides by capturing your clicks and keystrokes as you work 🪄 so that you don't have to spend 20 minutes explaining to Brenda from Accounting how to do that thing in that software again.

🌟 Stop taking screenshots and fighting noble battles in docs trying to make tutorials. Scribe does the work – while you work! Start using our free Accounting Manual Generator today!