Ai for accounting

Ai Accounting Will Bring Changes Most Haven’t Considered.

Ai Accounting is going to change the world for small business owners. They’re in an interesting place right now. As they say in French, “fait accompli“. The deed is done; we just have to identify the date.

Below, I’ve broken the issues into chapters so you can choose your specific interest. In the last chapter, I offer a path for small business owners to prepare.

Ten years from now, banks will be using AI to evaluate the creditworthiness of applicants almost in real time. They’ll tap directly into your QuickBooks company file and will no longer ask you to provide them with 3 years of (likely modified) financials; they’ll already have the answer. They’ll see all the personal expenses you’re running through the business, how lumpy your cash flow really is, and the journal entries you make to fix errors.

Your competition will use AI to get to new opportunities 40% faster than they do today. They’ll also use AI accounting to lower their overhead costs by 40%. Your competition will be using AI to become the first and best mover. You won’t lose your company to AI; you’ll lose it to a competitor who uses AI better than you do.

Insurance companies and Regulators are a bit of a wildcard right now. We’re already seeing insurance companies publish exclusions for AI-powered decisions in the HR and Marketing arenas. Will they do the same in the world of accounting and finance? Health insurance companies no longer rely on personal health questionnaires (a.k.a. “Liars questionnaires”). Instead, they use AI to evaluate your health prospects based on your profession, your approximate age, and your home zipcode.

One can see a future when a new profession is created where an Expert testifies during a trial as to the biased nature of a particular large language model on matters such as hiring or financial projections. The insurance company will likely say that the business owner chose that AI and so the fault lies with them.

Regulators and the rules they follow are a complete unknown as of this writing. According to Elon Musk, Congress is 10 years late to the game on regulating AI. It’s likely that most members of Congress really have no idea what AI is fully capable of. We haven’t really even begun to litigate issues around autonomous vehicles, much less bookkeeping. Which regulation would you use to determine fault? Would the insurance company pay?

And lastly, there is the structure of the Accounting profession itself. Two-thirds of accountants and bookkeepers are either very near or past the age of retirement. Their AI skills are really no better than the average business owner, executive, or key manager who might read this document, and they aren’t interested in acquiring them; They’re simply trying to get to retirement while doing things the way they’ve been doing them. What this means is that many aren’t taking the time to prepare their clients for a world where AI drives many of the decisions that will be made by their competition, their insurance company, their bank, and regulators.

What follows is a discussion of the various elements that need to be resolved to get to our destination: a Full-scale move to Ai accounting. None is permanent, and they will be resolved. AI isn’t going to replace your Accountant or Bookkeeper in the next 10 months, but it will significantly alter the professions over the next 10 years.

Some of what you’re about to read won’t age well; some of it will. The forward-looking business owner will take this as a guide to navigate their financial world over the next 5 or so years and prepare their business.

You are now “on the clock”.

How I Used Ai

You’ve likely quickly flipped through the chapters in this document, seen how long it is, and thought, “he didn’t write this; AI wrote it.” The truth, like the topic being discussed, is in between.

Because of the profession I’m in, the constant noise about the topic, the comments from unknowing business owners who say I’m implementing Ai accounting this week”, and the experiences of our clients, I’ve done a significant amount of reading lately and amassed references around what I see as the more significant hurdles that we will overcome as we move toward the inevitable full-scale Ai implementation in every profession, and certainly the white-collar professions.

I developed the framework, a list of questions, a list of resources, individual thoughts about how each element affects the Ai revolution that is on our doorstep, and then used Ai to put my stream-of-consciousness ramblings into a thoughtful and coherent document. My references are included at the end of each chapter. Feel free to click through them and read them on your own to see if you come to the same conclusions I have.
Ai will be implemented upon your business; It’s up to you as to when it will be implemented in your business.