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Artificial intelligence (AI) has quickly transitioned from niche research for tech companies to mainstream use, impacting many aspects of our daily lives and how we live and work. From virtual collaboration tools to marketing analysis and chatbots to accounting software, AI is now a mainstay in working life.
While AI can perform some tasks more quickly, accurately and at lower cost than if they were manual processes, it can only take you so far when it comes to managing your business finances and accounting and tax obligations.
For small businesses and the self-employed, the future of accounting isn’t about replacing accountants with AI, it’s about combining the expertise and insight of an accountant with the power and accuracy of AI to provide faster, smarter and more astute financial management.
Read on to explore why expert advice from an accountant can’t be replaced and how in partnership with AI, they can be a powerful driver for your business.
Personalised Support and Guidance
It can be challenging running your own business and you can come under pressure from many angles. From completing contracts, reconciling your transactions to meeting the filing deadline, but the support of AI can only take you so far. Human connection is important and although AI can process data, it can’t offer the support and understanding an accountant can.
An accountant is a strategic partner who listens to your concerns, answers your queries and gives you valuable support whenever you need it. They understand your business goals and will implement strategies to help you achieve them. There are always bumps in the road and an accountant can provide reassurance and help you navigate round them in a way AI never could.
Oversight is Still Needed
The accuracy of AI accounting software is dependent on the data that’s entered, so if your records are incomplete or inaccurate, the accounting software will return incorrect numbers. Many tasks can be performed through automation including tax calculations and bank reconciliation, but if transactions have been wrongly categorised or an incorrect receipt has been uploaded, the results will contain errors.
Expert review is therefore needed and that’s where an accountant comes in. They will check for errors and anomalies both in your records and your tax calculations, resolve them and ensure that everything is correct. AI can do the legwork but an accountant oversees the results so that you’re compliant with your obligations.
AI Doesn’t Understand Context
AI accounting software can generate real-time reports in seconds, categorise expenses, integrate with your business bank account to reconcile your transactions and more. But it doesn’t understand the context of the data, why things happen, what the implications are and what to do about it.
A sudden drop in income can be flagged by the software but it wouldn’t know why it happened or be able to advise you on steps to mitigate the squeeze on your cash flow. An accountant will see the bigger picture and with the data they can establish why income has dropped and the right action to take. They will understand your sector and business goals and the challenges you face to help provide strategic advice, and this is the value that AI can’t deliver.
The Complexity of Tax Legislation
It’s one thing being able to quickly calculate tax returns, but it’s another thing being able to understand the nuances and challenges of the UK tax landscape. UK tax legislation frequently changes and although that is reflected in AI accounting software calculations, interpreting the data and strategically planning needs the expertise of an accountant.
An accountant will understand and interpret the data generated by the software and use it to inform decisions based on your unique circumstances. They will also know forthcoming tax legislation changes and will strategize accordingly ahead of time to put you in the strongest position. Changes in thresholds and allowances will all be factored into an overarching tax strategy that aligns with your goals to optimise your tax position whilst remaining compliant. So the software can deliver the raw numbers, and the accountant uses that to inform the strategy.
Invaluable Experience
Although AI accounting software can quickly process data and generate reports, it can never replace the experience, judgement and knowledge of an accountant. It can’t, for example, advise you when to incorporate your business, register for VAT or devise and implement strategies to optimise your tax-efficiency.
Accountants have years of invaluable hands-on experience that can’t be replicated by code. An accountant understands your unique circumstances, your sector and the challenges you face and can develop the strategies and provide the insight to achieve your business goals. AI can play an important role to support the process but human experience from an accountant is invaluable and irreplaceable.
The Best of Both Worlds
The impact of digitisation and AI on the accounting world has been significant and that’s only set to continue with society as a whole becoming more reliant on tech, and also due to the Government’s Making Tax Digital programme. From an accounting perspective, we see AI as an opportunity rather than a threat with a firm focus on collaboration rather than competition and technology complementing our service.
AI accounting software is here to stay and we’ve long been advocating the benefits of technology having been partnered with FreeAgent since our inception a decade ago. There are huge benefits of leveraging technology and AI for our clients which is why it plays an integral role in our service. It’s not a case of accountants vs AI, it’s accountants working with AI to provide you a better, more accurate and efficient service.
Technology has already significantly changed how we serve our clients for the better, but it can never replace human experience and expertise. AI provides huge data processing power as well as speed and accuracy which does the legwork giving your accountant more time to focus on analysis, insight and developing actionable long-term strategies that deliver real value for your business.
This is why we provide all our clients with industry-standard FreeAgent or Xero cloud accounting software inclusive at no extra cost with all our accountancy packages. Both platforms utilise AI and machine learning to provide powerful automation meaning previously laborious tasks are handled by the software accurately and efficiently.
All your business and personal accountancy needs will be expertly managed by your own dedicated accountant who will provide unlimited support and advice with a guaranteed same working day response when you contact us before 3pm.Thanks to collaborative access, you can grant your accountant access to your accountants in the software so they can proactively manage your finances and tax affairs all year-round.
Request a callback today to learn more or get an instant online quote.
