The Impact of AI on Accounting Practices in 2024

“Accounting has evolved from simple record keeping to sophisticated systems of checks and balances. Key developments, according to BSC and Medius, include:

Around 3300 B.C. — Tax records on clay tablets.

1458 — Double-entry accounting system.

1494 — First book with accounting concepts.

1854 — First professional accountant organizations.

1880s — Adding machine.

1955 — First computer for accounting.

1978 — First spreadsheet software.

2000 — Accounts payable automation.”

— Maryville University

The above table now includes artificial intelligence-driven accounting practice. Rapid technological advancements over the last two decades have revolutionized and continue to revolutionize accounting services. Manual processes such as data entry, bookkeeping, and invoice processing are today, things of the past. Automation tools, artificial intelligence, and machine learning have brought in levels of efficiency and accuracy hitherto considered impossible. They continue to streamline operating models thereby reducing errors and saving time. There is more to it such as:

• cloud computing enables remote access and collaboration
• blockchain ensures secure and transparent transactions
• data analytics provides valuable insights for decision-making
• mobile technology allows professionals to manage financial data on the go

Going a step ahead, the integration of digital payments, augmented reality, and virtual reality into accounting processes reflects the industry’s commitment to innovation.

Over the past decade, technology has driven a profound shift in the way accountants work. From tax workflow automation and tax strategy to data analytics, CPAs who embrace accounting technology trends are well-positioned to thrive long-term.

— ThomsonReuters

Accounting and AI — Predictions for 2024

As we look ahead to 2024, the intersection of accounting services and artificial intelligence (AI) is poised to bring about transformative changes in various aspects of the profession.

• Enhanced financial reporting and auditing:

Advanced AI algorithms are anticipated to further refine financial reporting and auditing processes. Automation and machine learning capabilities will further improve from their current levels bringing in more accuracy, speed, and depth in the analysis of financial data. Accountants will leverage AI-driven tools for real-time insights, improving the reliability of financial reports and increasing overall transparency in compliance and auditing practices

• Personalized tax compliance and advisory services:

The trend toward personalized tax preparation services is expected to intensify in 2024. With more sophisticated AI, accountants will be able to tailor tax compliance strategies more precisely and match individual client needs. Automated tax software will offer not only compliance efficiency but also sophisticated advisory services, providing clients with personalized, strategic financial guidance based on their unique circumstances

• Increased adoption of AI-powered tax software:

The adoption of AI-powered tax software is set to rise significantly. With rapid strides in technology, accountants will increasingly rely on intelligent automation for intricate tax calculations, data analysis, and compliance tasks. This shift will not only drive operational efficiencies but also empower accountants to focus on higher-value tasks such as advising clients on tax optimization and strategy

• Emergence of AI-powered fraud detection systems:

In 2024, AI-powered fraud detection systems will become integral in safeguarding financial integrity. AI algorithms will evolve to detect and prevent sophisticated fraudulent activities in real-time, providing accountants with robust tools to strengthen security measures. This proactive approach will be essential in mitigating financial risks and ensuring the integrity of financial data

• AI-driven insights for strategic financial planning:

The integration of AI-driven insights into strategic financial planning will reach newer heights. Advanced analytics tools will offer accountants predictive capabilities, allowing them to predict market trends, identify potential risks, and optimize financial plans. These insights will help businesses navigate uncertainties and make informed decisions in their long-term financial strategies

• Continuous learning and upskilling for accountants:

Continuous learning and upskilling will become an unavoidable imperative for accounting experts in 2024. With the evolution of AI, there will be mass-scale investment in ongoing education by accountants to stay abreast of the latest advancements. Online platforms, workshops, and specialized training programs will play a crucial role in equipping accountants with the skills needed to effectively integrate AI tools into their practices, ensuring they remain at the forefront of the evolving accounting landscape

2024 accounting technology trends  

According to the 2023 Intuit QuickBooks Accountant Technology Survey, accountants plan to spend an average of $15,800 on technology improvements and upgrades over the next year. According to the same survey, 82% of accountants say technology is creating more meaningful client interactions; 48% plan to invest in automation tools and artificial intelligence over the next 12 months.

In 2024 therefore, the accounting landscape is poised for continued transformation. Several technology trends are set to reshape the industry.

• Accounting automation:

The adoption of accounting automation is set to increase the incidence of streamlined routine tasks such as data entry, reconciliation, and transaction processing. Organizations adopting automation will bring in more accuracy, efficiency and productivity into their processes

• Artificial Intelligence (AI):

Accounting AI software will play a pivotal role in accounting, offering advanced capabilities in data analysis, pattern recognition, and decision-making. AI-driven tools will contribute to enhanced accuracy in financial reporting, predictive analytics, and personalized client services

• Cloud accounting technology:

Cloud accounting solutions will continue to gain prominence, providing flexibility, scalability, and real-time access to financial data. This trend enables remote collaboration, facilitates seamless updates, and enhances overall agility in accounting processes

• Blockchain technology:

The adoption of blockchain in accounting is expected to increase, particularly for its role in ensuring transparent and secure transactions. Blockchain’s decentralized ledger system will contribute to enhanced traceability, reduced fraud risks, and increased trust in financial data

• Data analytics and forecasting tools:

Data analytics tools will evolve to provide deeper insights into financial data. Enhanced forecasting capabilities will enable accountants to make more informed decisions, identify trends, and proactively address potential challenges in financial planning

• Remote work and collaboration tools:

Remote work and collaboration tools will remain integral to the accounting profession. Virtual collaboration platforms, video conferencing, and project management tools will support seamless communication and collaboration among accounting teams, even when working from different locations

• Data security:

With the increasing reliance on digital platforms, data security will be a top priority. Robust cybersecurity measures and encryption technologies implementation will safeguard sensitive financial information, protecting it from cyber threats

• Accounting workflow automation:

Beyond basic tasks, accounting workflow automation will become more sophisticated, encompassing end-to-end processes. This trend will optimize workflows, reduce turnaround times, and enhance overall operational efficiency in accounting practices

• Chatbots and Robotic Process Automation (RPA):

Chatbots and RPA will continue to integrate into accounting processes to automate interactions, answer queries, and handle routine tasks. This not only improves customer service but also contributes to time and resource savings for accounting professionals

These trends collectively represent the dynamic evolution of accounting technology in 2024, fostering a more agile, efficient, and technologically advanced industry landscape.

Challenges and considerations in implementing AI in accounting

• Protecting sensitive financial data from unauthorized access
• Addressing ethical concerns, such as bias in algorithms or unintended consequences
• Bridging the gap in skills and knowledge among accounting professionals to effectively use AI tools
• Ensuring seamless integration of AI technologies with existing accounting systems
• Overcoming resistance to AI adoption and effectively managing organizational change
• Maintaining high data quality is essential for accurate AI-driven insights and decision-making
• Overcoming resistance to changes in traditional accounting practices
• Ensuring accurate interpretation of AI-generated insights and preventing misinterpretation
• Managing the costs associated with AI implementation, including training, infrastructure, and ongoing maintenance

How you can embrace these trends

To embrace the above-mentioned AI software trends for accounting, accounting companies will require a thoughtful and strategic approach. Their successful adoption will involve addressing challenges like data security, ethical considerations, skills gaps, and change management. Organizations will have to invest in continuous learning and upskilling for their workforce, ensuring they can effectively use AI software. Thereby, justifying the investment made in them. AI accounting systems will bring in large scale need for innovation. Hence, accounting firms will have to drive openness, improve collaboration internally and create an environment.

Cogneesol, a business process management company, provides comprehensive and strategic approaches to embrace the transformative trends in accounting technology. We can partner with you in your journey of accounting transformation. Our deep domain expertise, years of experience in accounting outsourcing services and global exposure enable us to integrate advanced tools and address numerous challenges.

Get in touch with us at +1 833-313-3143 or email us at [email protected] for an overview of the solutions we can tailor it for your organization.