Page 58 - CMA Journal (Nov-Dec 2024)

Learning from ASEAN’s Focus Section

AI Adoption in Accounting

Artificial Intelligence (AI) is revolutionizing the accounting • Real-Time Financial
industry by automating complex tasks, improving accuracy, Analysis:
and providing valuable insights. This transformation is AI-powered tools
evident across various sectors, including commercial provide real-time
organizations, non-profits, and government agencies. In this insights and
article, we will explore the role of AI in accounting, how it analytics, enabling
helps achieve cost and operational efficiency, and what faster
Pakistan can learn from ASEAN's experiences. decision-making and
AI is revolutionizing the accounting industry by automating more efficient
complex tasks, improving accuracy, and providing valuable financial
insights across various sectors. Below are some key roles AI management.
plays in accounting: • Fraud Detection
a) Automation of Repetitive Tasks: AI can handle and Risk Humayun Habib, FCA
routine tasks such as data entry, invoice processing, and Management: AI Finance Leader
transaction categorization, freeing up accountants to systems can analyze Cargill Food APAC, Malaysia
focus on more strategic activities. large datasets to
detect anomalies and potential fraud, helping
b) Improved Data Accuracy: By reducing human error, AI
ensures greater accuracy in financial records. organizations mitigate risks and avoid financial losses.
Technologies like Optical Character Recognition (OCR) • Scalability: AI solutions can easily scale with
can automatically extract data from documents, organizational growth, ensuring that finance and
minimizing manual input errors. accounting processes remain efficient as transaction
c) Real-Time Financial Insights: AI-powered analytics volumes increase.
provide real-time insights into financial performance, Measuring ROI of AI in Finance and Accounting
helping businesses make informed decisions quickly.
This includes predictive analytics for forecasting To measure the return on investment (ROI) of AI in finance
future trends. and accounting, follow these steps:
d) Enhanced Fraud Detection: AI systems can analyze 1) Define Objectives and Goals – Clearly outline what
vast amounts of data to detect unusual patterns and you aim to achieve with AI, such as cost reduction,
anomalies, which helps in identifying potential fraud improved accuracy, or faster processing times.
and mitigating risks.
2) Identify Key Performance Indicators (KPIs) –
e) Cost Savings and Scalability: Automating tasks with Determine the metrics to measure AI success, including
AI reduces operational costs and allows accounting time savings, error reduction, and increased
processes to scale efficiently as the business grows.
productivity.
f) Better Client Advisory Services: With AI handling
routine tasks, accountants can spend more time 3) Calculate Financial Benefits – Quantify cost savings
providing valuable advisory services to clients, such as from reduced manual labor, increased revenue through
financial planning and strategy development. better decision-making, and fraud prevention.
Achieving Cost Efficiency and Operational Efficiency 4) Compare Costs and Benefits – Assess AI
implementation costs, including setup, training, and
AI can significantly enhance cost efficiency and operational maintenance, against the financial gains achieved.
efficiency for finance and accounting teams
across various types of organizations, including AI Adoption Process
commercial enterprises, non-profits, and
government agencies. Here's how: Stage Key Actions
• Automation of Routine Tasks: AI can 1. Assessment & Planning  Identify tasks for AI automation
automate repetitive tasks such as data  Set clear goals (cost reduction, accuracy, speed)
entry, invoice processing, and
reconciliation. This reduces the need for 2. Pilot Projects  Start small with AI in key areas
manual labor, leading to cost savings and  Evaluate outcomes and challenges
allowing staff to focus on more strategic 3. Training & Skill Development  Upskill employees for AI integration
activities.  Hire AI specialists if needed
• Enhanced Accuracy and Reduced Errors: 4. Integration & Scaling  Ensure compatibility with existing systems
By minimizing human errors, AI ensures  Gradually expand AI across operations
more accurate financial records. This
reduces the costs associated with 5. Continuous Improvement  Monitor AI performance regularly
 Optimize and update as technology evolves
correcting mistakes and improves overall
efficiency.
56 ICMA’s Chartered Management Accountant, Jan-Feb 2025 BACK TO CONTENTS PAGE