Revolutionising Tax and Accounting: The Impact of AI and the Surging Generative AI Trend
Digital transformation encompasses far more than simply using tools to expedite processes. It constitutes a profound paradigm shift in the operational landscape of businesses, exploring trends such as customer experience, personalisation, data analytics and agility. John McGowan, CEO of HubSync discusses the impact of the expanding use of artificial intelligence (AI).
AI has emerged as a game-changer in the tax and accounting landscape, offering increased accuracy, efficiency and scalability. Businesses are witnessing transformative changes in managing tax compliance and financial reporting as client demand for AI integration surges. As such, they are making significant investments in technology to remain competitive and streamline operations.
According to a recent Thomson Reuters report, 78% of respondents expressed belief in the potential of generative AI tools, such as ChatGPT, to enhance legal or accounting work. This growing trend is anticipated to bring about transformative changes across industries. Implementing AI can simplify the tax, audit and advisory processes, while enabling preparers to focus on what they do best: providing insightful analysis and client support rather than burning time on redundant tasks such as data entry.
Enterprise-Level AI Investing
Companies are closing massive deals related to generative AI – Thompson Reuters announced a $100 million annual investment in AI, while PWC announced a $1 billion investment to expand and scale AI capabilities. In addition, Deloitte launched its own AI research center in 2020, integrating AI into its products, processes, and data-driven insights to help clients transform their AI integrations. HubSync is also making significant investments in Generative AI to enhance our platform.
Workload Reduction and Addressing the Labor Shortage
AI is also addressing the shortage of skilled professionals in the industry. According to Deloitte, 82.4% of hiring managers in public companies’ finance and accounting departments identify talent retention as a significant hurdle. This, combined with limited budgets and insufficient technology infrastructure, can further increase the workload for accounting administrators.
Automating manual processes like gathering signatures, routing, analytics, data entry, reconciliations and financial reporting, and implementing strategies like training and outsourcing, enables staff to focus on more value-added work. Accounting administrators can focus on more strategic endeavours such as financial analysis, forecasting and decision-making by streamlining repetitive tasks through automating steps in areas such as bookkeeping and tax preparation.
Generative AI algorithms enable machines to create realistic and original data, such as financial statements, invoices and expense reports. These AI models are trained on large datasets, allowing them to learn the underlying patterns and structures of tax and accounting data.
Generating synthetic data is invaluable for organisations to address data scarcity or confidentiality concerns. Generative AI can simulate datasets that resemble real-world scenarios, allowing tax, audit and accounting professionals to perform extensive analyses and simulations without compromising privacy or data availability. This is particularly useful for scenario planning, risk assessment and compliance testing.
Moreover, generative AI can assist in creating financial reports, streamlining the process and reducing the time and effort required. By training AI models on existing financial statements, these algorithms can generate accurate reports based on user inputs, ensuring consistency and adherence to accounting standards.
Streamlined Data Management with Diverse Data Sets
With generative AI, professionals gain access to diverse datasets, empowering them to expedite decision-making by evaluating scenarios and making informed choices. By utilising historical data, firms can accelerate the prediction of future trends, identify risks, and develop proactive planning and compliance strategies. Additionally, AI algorithms analyse vast amounts of data, identifying patterns and anomalies faster and more precisely than humans. This capability automates complex processes, minimises errors and ensures regulatory compliance.
The latest advancement in AI, generative AI’s ChatGPT, takes this technology to new heights and is now available for public consumption. In addition, it’s important to note that the implementation of generative AI in tax and accounting must be accompanied by robust data governance and ethical considerations. Ensuring the integrity and quality of generated data, addressing biases, and adhering to data protection regulations are crucial factors that need careful attention.
Overall, AI’s integration into tax and accounting has the potential to revolutionise the industry, streamlining processes, improving accuracy, and enabling proactive decision-making. With continued innovation and responsible implementation, AI will continue to reshape the tax and accounting landscape, allowing businesses to thrive in the digital age.
Main image: John McGowan, CEO, HubSync