As with most industries, artificial intelligence (AI) is making its way into the world of tax and accounting now too.
Through the use of technologies such as natural language processing (NLP) and robotic process automation (RPA), AI is cutting the time it takes for audits to be carried out considerably.
The famous Big 4 tax and accounting companies are: Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and KPMG, and each one of them has a different approach when it comes to developing AI technologies.
However, one of the best ways of using AI in accounting is in reviewing large volumes of contracts. In employing new AI techniques firms like Deloitte have cut down the time it takes to complete tasks by no end.
Other ways in which AI can help accounting firms is through the evaluation of potential procurement synergies during mergers and acquisitions. Traditionally, this required looking at hundreds of millions of accounts payable and receivable and reconciling it to make sense of it all. You can imagine how much time this takes.
Now, using AI, companies can do in just one week, what used to takes humans four or five months to do.
Anomaly detection is an application of machine learning that involves the identification of outliers in data.
Using this AI technique, fraudulent invoices can be detected in a similar way to how a credit card company identifies potentially fraudulent card charges. EY uses this service and finds it particularly useful for one of its global clients that processes millions of invoices every year.
Using the system also helps to ensure that companies are adhering to anti-bribery regulations and other financial policies.
Deloitte on the other hand focuses on using natural language generation (NLG) to help its thriving tax business.
NLG is essentially the creation of text by computers and is particularly useful in accounting and tax when it comes to creating detailed narrative reports of individual tax returns.
Most businesses are beginning to realize that without AI they face a very tough ride ahead.
“If you don’t innovate, the kid in the garage down the street will. Her technology may not be there today, but it will get better over time and soon replace your human-based processes,” says Steve Toy, Innovation Lead at EY. “You need to innovate, or you will become obsolete.”