Artificial Intelligence and Future of Accounting

Accounting is an important sector or a part of the business. You invest a large sum of money in your business, and your ultimate aim is to attain maximum profit out of this investment. Without proper accounting, you can’t achieve your goal. The organizations lack usual accounting may have to face many consequences in the near future like tax issues with the government or else it may also affect the payroll system of your company. 

What is Accounting?

According to the American Institute of Certified Public Accountants [AICPA], “Accounting is the art of recording, classifying and summarizing in a significant manner and terms of money, transactions and events, which are, in part at least, of a financial character and interpreting the result thereof”. The process of accounting includes reporting, analyzing, and summarizing the accounts of an organization by using regulators and tax collection entities. Accounting is the process of recording financial transactions in an account book. The Certified Public Accountant mainly deals with these accounts of the organization for us to maintain proper track of income and expenditure. Precise accounting helps you to reduce your tax burdens and increases your profit level. The eight main branches of accounting are;

• Financial Accounting: Financial accounting is the process of categorizing and documenting financial transactions for your business, and it mainly deals with external regulation.

• Cost accounting: The cost accounting used to calculate the internal performance of the company. The manufacturing industries deal with a lot of resources, so it is necessary to keep records regarding their transactions. We can record these transactions by using the cost accounting method.

• Auditing: Auditing is an independent third-party process that takes place in every company to check whether the details presented to the certified public account are correct and comply with GAAP. The internal and external auditing are two divisions of auditing in a company.

• Managerial Accounting: It is also known as the management account because it provides data regarding the company’s operations to the management side for evaluation.

• Accounting Information Systems(AIS): It involves the storage, collection, and processing of accounting and financial data.AIS is the detailed report submitted to the investors and tax authorities.

• Tax accounting: This type of accounting helps to figure out the income tax returns and other similar taxes of an organization in a systematic manner.

• Forensic accounting: It is a type of accounting that deals with legal affairs such as a dispute, claims resolution, and legal cases.

• Fiduciary Accounting: The fiduciary accountant deals with the activities of a custodian appointed by the court or government to maintain the guardianship and administration of third party property. 

The Future of Accounting

Accounting is a type of job which holds a bright future. Some studies state that there must be at least a 10% increase in accounting job opportunities between 2016- 2022.  The developments in the technologies not only make the feature of accounting but also boosts the rapid evolution of small scale industries. Many software and applications introduced by different companies to the market increase the quality level in the field of accounting. In the future, an accountant will have to learn more technical knowledge to stick with this field of accounting. The development attained in this field of accounting helps you to overcome many issues that we have faced by using traditional methods of accounting like:

• The modern technologies will provide you with well-organized data that help you to make quick decisions.
• The application developed for accounting will create new insights from the data already collected in the spreadsheet.
• The new technologies present in the field of accounting will help you to finish your work on time or even faster. You can use this extra time for some other activities which help to boosts our companies like problem-solving, strategy development, decision-making, etc

The developments in the field of artificial intelligence have some positive impact in the field of accounting. Artificial intelligence will provide high quality financial and non-financial information by analyzing data provided to the database of that application or system. The outcome or the result from this process will help the accountants to make better decisions quickly. 

What is the need for Artificial intelligence or modern software in the Future of Accounting?

The traditional methods used in the field of accounting have many drawbacks because it directly depends on human labor. The conventional method of accounting will create more mistakes when compared to modern methods. Some other factors which negatively affect the outcome of traditional accounting are: 

• The physical or mental condition of the worker: The strength of an organization is their efficient workers. If something happens to their mental or physical conditions will increase the chances of creating mistakes while accounting.

•  The working environment: If the company provides a proper working environment for the workers makes them work more efficiently and will decrease the chance of creating mistakes.

• A large number of data to work: If the workload or the work pressure on an employee increases, then the probability of making a mistake will also increase.

These drawbacks of the traditional accounting system will badly affect the organization. To overcome these situations, the accountants have been expanding the technology that provides them with extra support while accounting. As a result of these continuous efforts, they develop some software or application like FreshBooks, QuickBooks, Wave Accounting, etc. The accounting application can work with a large number of data and will give you a stable result every time. By introducing artificial intelligence to these applications gives a breakthrough in this field. Now the system software can directly access the information from the spreadsheet. You can use these applications to scan the receipts or bills, and the data scanned gets transferred to the corresponding payrolls quickly. You can securely access the data or information stored in the cloud platform from anywhere by using an android or IOS device. The artificial intelligence used in the field of accounting will help the entrepreneur to keep track of the day-to-day activities of his organization even from a remote distance.

The human wants to complete their work easier to make this possible they keep on introducing new applications or software. The companies demand dedicated professionals for accounting jobs in the future, and they also want them to evolve according to those conditions. The workers keep on expecting new applications or software that gives the organizer more space for us to expand his business.