When you think of accounting, manual ledger entries and endless spreadsheets may come to mind. However, the industry could soon prompt a completely different mental picture as more firms adopt cloud computing and artificial intelligence (AI). These technologies are revolutionizing how financial data is processed, analyzed, and applied—and could drastically change how accountants spend their workdays. For example, using AI to streamline workflows means CPAs have more time to deliver strategic guidance and exceptional service to their clients.
To date, the adoption of AI has been a slow build across the accounting industry. Only one in ten accounting and tax professionals use generative AI or are planning to integrate these technologies into their operations, according to a Thomson Reuters survey. Still, more than half of accounting professionals believe ChatGPT and generative AI should be applied to tax, accounting, and audit work. After all, ChatGPT did recently pass a practice CPA exam.
If you’re an accounting professional—or someone curious about what goes on behind the scenes of your annual audit or tax filing—we’ve compiled a list of seven ways AI and cloud computing are driving improvements across the industry.
1. AI can save bookkeepers time on data entry.
AI-powered tools are alleviating the burden of manually inputting financial data, saving accountants time and helping them reduce the risk of human error. Optical character recognition (OCR) technology extracts data from invoices, receipts, and other financial documents, eliminating the need to type the information out by hand. The technology can quickly read even the lowest-quality documents, organizing and importing data into relevant fields within tax, audit, and accounting programs. What’s more, AI can flag data or fields that may require human verification, enhancing the overall accuracy of a process.
2. AI automates routine tax, audit, and accounting tasks.
Through another AI-based technology called robotic process automation (RPA), bots perform specific accounting tasks, such as invoicing, cash flow forecasting, budgeting, audit support, and tax preparation. These bots work alongside humans who essentially supervise their work. Because AI is becoming instrumental in helping identify errors in financial statements and reports, RPA can help accountants improve their accuracy and efficiency. What’s more, by automating the repetitive tasks central to day-to-day operations, accounting professionals can redirect their focus toward higher-level activities like cultivating client relationships.
3. Cloud-based solutions produce higher-quality audits.
Cloud computing allows accounting professionals to store their data online and access it from anywhere there is an internet connection, eliminating the need for software installation on servers or individual devices. The technology lets external auditors perform audits without joining their clients on-site. According to a survey from KPMG and Forbes, 80% of finance executives consider the cloud indispensable for external auditors.
Cloud computing also allows firms to integrate AI tools into the audit practice, improving quality and reducing risks. AI can automate routine tasks, aid auditors in gathering and testing data from IT systems and help them detect anomalies based on pre-set parameters. When auditors spend less time in the weeds, they can focus on delivering strategic advisory services and deeper analytics to their audit clients.
Related: The Future of Audit in 5 Predictions
4. AI helps accountants streamline their research processes.
I can help accountants effectively and efficiently research tax codes and accounting standards. Programs incorporating AI-powered features can provide anticipatory prompts based on client data and evolving regulations, significantly reducing the time needed to conduct research, verify sources, and understand their implications.
When new tax codes or accounting standards enter the picture, AI can help accounting teams summarize the information and create client-specific messages that explain the research implications for their unique tax situations.
5. AI can strengthen data security.
Accounting firms have a fiduciary duty to protect clients’ financial information, but the growing number of data breaches is making this task increasingly challenging. In 2023, the number of data compromises increased by 78% from the year prior, according to a report from the Identity Theft Resource Center. The research found that the financial sector was among the most affected industries.
While data security is often cited as a top concern around incorporating AI and cloud computing into the accounting process, these technologies can help accounting professionals safeguard their clients’ financial data in several ways.
First, AI-powered bookkeeping systems are being designed to detect irregularities and potentially fraudulent activity within financial data. By continuously monitoring data and identifying patterns, these systems can help alert businesses and their accountants of risks in real time.
AI-powered tools can also help ensure that a company’s financial data is compliant with accounting standards and regulations, reducing the likelihood of errors and costly penalties.
Finally, cloud computing requires strict security protocols, including password policies, multi-factor authentication, multiple access levels to select from, and regular security updates. Additionally, its backup and recovery systems offer additional data security through automatic backups and multiple levels of encryption, protecting data from hacking attempts and ensuring access to work files despite potential hardware failures.
6. AI helps accountants deliver key insights in real time.
AI-powered programs can process large volumes of data quickly, equipping accountants with the real-time insights they need to move beyond assumptions and toward more precise forecasting models as they make recommendations to their clients. With powerful algorithms and predictive analytics, AI can also help accounting teams better understand their clients’ needs and create strategies that are tailored to their unique financial situations.
7. AI empowers accountants to deliver exceptional client service.
A big part of an accountant or tax professional’s job is keeping clients abreast of regulations and legislation that could impact their business or financial situation. Clients expect timely and accurate advice, and AI-powered tools can help them deliver. AI uses natural language processing and machine learning to:
- Help CPAS simplify complex tax and accounting concepts and respond quickly and insightfully to client questions.
- Monitor the tax and accounting landscape to identify issues and money-saving opportunities, helping CPAs provide proactive, customer-focused insights and recommendations.
- Alert clients of regulatory changes and their potential impact.
Migrating to cloud-based technology further strengthens client relationships at accounting and audit firms. Secure client portals enhance collaboration, and access to real-time data allows CPAs to answer questions with greater accuracy and speed. Cloud solutions also facilitate predictive modeling, forecasting, and scenario planning, which helps firms deliver more insight-driven audits and strategic advice.
Looking for a team of tech-savvy humans to handle your accounting?
As accounting firms like Perkins begin to embrace AI, cloud computing, and other transformative technologies, we will not only optimize our operations but also redefine our role as strategic advisors equipped with real-time data and predictive intelligence to help our clients navigate an increasingly complex business environment. Curious about what a partnership with Perkins looks like for your business? Reach out to us today.
