Artificial Intelligence (AI) Optional / Existential (SPC Group)
TechnologyAugust 9, 2021 - SPC
This is a thought leadership article from PrimeGlobal member firm SPC Group (India) on the uses of artificial intelligence (AI) in accounting.
As the pandemic has basically virtualized day-to-day operations, every organization may have anticipated the impact of artificial intelligence on productivity of the industry, more so in accounting. With strategic deployment, AI can support the foundation of a firm by complimenting its business activities. In order to serve clients effectively, a firm must learn how to leverage AI.
However, due to distrust among the community and negligence on automating the back-office functions, there is still some hesitance seen among companies to trust AI and acknowledge its utility. Regardless of the reasoning, it is certain they are missing out on this opportunity due to their own short-sightedness.
Access our Technology Insights hub page to access similar articles about technology here.
On the basis of need for human interaction, AI tools can be classified into 4 broad categories:
- Automated Intelligence - No human interference is required because the tasks are repetitive and basic.
- Assisted Intelligence - AI provides recommendations based on set parameters, but decision making requires human judgment.
- Augmented Intelligence - Machine Learning algorithms adapt while learning from human experience, but it requires human decision-making.
- Autonomous Intelligence - The AI system is both adaptive and takes decisions without human involvement.
Certified Public Accountant (CPA) firms need to invest a huge number of hours to find pieces of evidence and verify the transactions while auditing a client’s financial statements. These statements require a lot of investment in terms of workforce, man-hours, and capital.
With the help of augmented AI, these can be done with relatively less effort. The augmented AI tool can read text on each of these invoices and use a relational data search to quickly find the supporting document. Even though these invoices can be unique for each supplier, the AI tool can identify important fields like unit cost, quantity, etc. in different invoices. Optical Character Recognition has been used by banks for many years.
However, complex Machine Learning (ML) algorithms, along with predictive analytics, could make the extraction of data irrespective of its format through natural language processing appear seamless in forthcoming years.
Companies also need to interpret and respond to tax notices issued by government and revenue agencies daily. We can successfully deploy AI by defining the parameters of the process to help companies with tax return discrepancies, payment requests, tax notices, etc. Whenever someone gets one of these notices, firstly they try to interpret the notice, then they verify its accuracy and applicability, catalog it, and finally respond, however, these responses can be prone to error. By using Augmented AI to help companies with tax notices, we can acquire the benefit of error-less responses and also no missed notices.
Handling digital data can be one of the issues where AI can also help. ML algorithms can tackle a data set and categorize it into distinguished classes according to set parameters, for example, using automated segmentation. Categorizing tax notices, letters, or contract clauses is also possible and can save enormous amounts of time which would otherwise be spent on reading these documents.
The same thing that makes an AI tool highly accurate also makes them nonsensical at times, and it therefore becomes an utmost necessity to loop a human oversight in to maintain quality in the output while model training, and also for final judgment whilst implementing these tools. A business must prepare a platform that combines automation, management, and human capital in the same string. There should also be a proper training module in order to upskill each individual in the organization so that we can fully understand the capabilities and limitations of AI. We should also know the risk associated with implementing these data extraction and time-saving tools.
Without turning a blind eye, we should confront the fact that AI with its many quirks will surely eliminate some tasks that were previously completed by middle managers. However, we should also focus on how this takeover in terms of efficiency may free these managers and direct them to tasks that require their human judgment and creativity.
All in all, AI may appear mundane on some level in an organization but, with its application, businesses can bring life into processes that were prior time consuming and error-prone. Firms can look beyond and identify opportunities for efficiency and contribute to long-term growth.
SPC is a technology-led multi-disciplinary group of reverent young minds, industry veterans and experienced professionals set up in 1949 to provide high- impact and cost-effective solutions to global businesses. Through our direct operations in India, North America and GCC, we serve a diverse range of clients, spanning multinationals, listed companies, privately owned companies, and family-owned businesses across the globe.Learn more