How AI is Helping Companies with Accounting Services Automation
Accounting services automation is filling a mismatch between the supply of accountants and their demand. More companies depend on automation and software to prepare their bookkeeping, accounting reports and file their taxes today. The accounting services automation provides SMBs the peace of mind to operate their core businesses without worrying about the tedious accounting and regulatory procedures.
AI brings in the intelligence to help companies derive the benefits of automation for running their operations effectively. It gives companies the leverage to respond faster to clients, vendors and regulatory authorities. Here’s a look at how AI is helping companies with accounting services automation to build more profitable companies:
1. Order to Cash
The supply chain automation is often tested during the peak demand or any shortages due to global uncertainties. Accounting automation can provide end to end solutions from sales order to receiving the payments for products or services delivered.
AI enables organisations to look into the global trends and macro analysis of the key components involved in building a robust supply chain. It can help organisations track sales orders, time to deliver goods to customers, time for payments, sales taxes, account payables, automatic reconciliations of accounts etc.
The AI driven software can generate accurate reports for the management to analyse the sales with historical trends and events. The detailed data driven analysis can be used to build a better supply chain solution for the customers. For e.g. based on historical trends, the software can provide inputs on the inventory to procure items, thereby reducing customer waiting time for products or services.
2. Procurement Automation
The procurement of the inventory and goods needed by an organisation to serve its customers affects its bottom line. The procurement cycle can be automated using AI driven accounting software. It takes care of the organisational purchases, bills and payments made to vendors.
The accounting software can be used for managing inventory, goods procurement and ensuring that the sales orders are delivered on time for the customers. The AI driven software can be used for initiating the proactive procurements based on customer demands and sales projections.
The procurement automation can ensure the best times for supplying goods to the customers. It not only reduces customers waiting time for goods or services, but also ensures inventory carrying costs are optimised. A high inventory ratio not only blocks capital, but also incurs higher taxation for companies. The AI algorithms ensure that companies get automated alerts when their inventory is oversized and carrying costs impact its bottom line adversely.
3. Categorise Accounting Transactions using ML
Accounting services need companies to hire full time or part time bookkeepers. They reconcile banking, credit card and cash transactions every day, week or month. But most SMBs wait till their accounting deadlines to sort out their accounts. There are often more surprises than most companies anticipate in the process.
The AI accounting software can be used for automatic categorisation of every banking or credit card transaction. It can also mark all the cash transactions and send the list of unclassified transactions to the account manager or the management for reconciliation.
This is not a rule based classification, where every transaction is marked based on a rule, but done using machine learning. The more data that the algorithm processes, the better it gets at classifying the banking transactions. It prepares fully up to date reconciled accounting reports for companies. The final list can be vetted by the tax preparers or filers before these are submitted to the IRS.
4. Financial Forecasts
Companies need to stay ahead of their curve by anticipating what’s coming next. AI softwares can be used for predicting the financial forecasts based on the data, trends and industry analysis. They can be used to predict the revenues, sales projections, expenses, cash flow etc. based on the organisational data. It helps companies plan and prepare better.
Although financial projections may not be accurate, a fairly good estimate can be used for predicting the sales and revenue projections. These projections can be used for calculating the earnings of the companies in the future. These financial projections provide companies with lower bounds on the revenues, sales, earnings etc.
The AI software uses different valuation techniques and extrapolates the data points to come up with an accurate analysis. Once companies have the lower bounds or the floor on the sales projections, they can plan and prepare accordingly.
5. Fraud Prevention
Accounting automation can help companies detect and alert against malicious transactions. For e.g. companies can receive alerts against any malicious activities. The rules can be configured not to make any payments to unauthorised accounts, geographies, IPs, and limits.
If an employee submits bills that are not authorised expenses, the same could be highlighted by the AI software. If there are purchases made for items that are higher than the market price on a given date, the AI software can flag the correct prices. The accounting software can detect any unauthorised, malicious and dubious transactions to the management for fraud prevention.
The companies can configure the settings for banking transactions. For e.g. if there is a transaction over and above a certain threshold, then those transactions are put on hold for further approvals. The AI based system can be used for enforcing the checks and balances on accounting transactions, thereby reducing chances of frauds.
6. Smart Accounting & CFO Services
With AI driven automation, the bookkeeping and accounting can be done using automatic classification of accounting transactions. The financial reports can then be prepared based on the transactions for the year. The company can get its profit and loss, trial balance, balance sheet, cash flow, inventory and other reports etc.
The financial statements can be used for filing returns for state and federal authorities. The AI software can be used for financial analytics. It could show the company detailed analysis of the time it takes for them to receive payments, or make payments to its vendors, profitability of projects, earnings, growth avenues, etc.
The accounting automation ensures that all the financial reports can point out any irregularities or aberrations. For e.g. if any product is showing reducing revenues and increases expenses, it could lead to poor cash flows. Overtime, the company will need to evaluate its business model and it could be reported by the AI software. The performance assessment, bottlenecks or growth avenues can be discovered based on the data points in your accounting software.
The accounting reports often fail to go under the hood. It can cover up things and hide more irregularities than it reports. In this case, AI driven accounting software can be used to highlight any inconsistencies. For e.g. revenues generated from non core operations or asset appraisals etc.
The accounting services automation can provide the company with a framework for running its operations. It can also save time, penalties and human resources by taking care of applicable compliance reports.
Kreyon Systems provides business accounting software for SMBs. The solutions automate bookkeeping , accounting, compliance management & financial reporting. If you have any questions, please get in touch with us.