Andrew Lester, CEO of Tablespoon, presented at the 2023 Restaurant Finance Development Conference (RFDC). He spoke with Craftable's Samuel Zats about achieving a continuous close and insight with AI tools in accounting. Below is a recap of the session.
A New Era in Accounting
Accounting has entered a new era with a revolutionary type of artificial intelligence (AI) called Generative AI. This new technology can reason, comprehend the world's workings, and interpret context. What was once considered a far-fetched concept in science fiction is now a reality, and this technology is available for anyone to use. I recently saw a quote from Aaron Harris, the Chief Technology Officer at Sage. He believes this technology will be as transformative as the internet or smartphone. To further illustrate this point, AI is being adopted faster than any other technology in history. ChatGPT reached 1 million users just five days after its launch last year and 100 million users in two months.
Some of you may already be using this technology at work, and if you're not, you likely will soon. According to research from OpenAI, about 80% of the workforce will have at least 10% of their work tasks impacted by Generative AI. The remaining 20% will have at least 50% of their work affected.
Examples of AI Products for Accounting
Microsoft just launched their AI Assistant called Copilot; it's embedded in all the apps we use daily at work, like Excel and Word. Sage Intacct has a product called Inbox that allows the accounting team to route all of their incoming emails into one place and has an "Auto Responder AI" that looks at the intention of the email and then suggests an action or a response. For example, a vendor sends an email asking about the payment status of a bill, and the AI tool can go into the accounting system, determine the payment status, and suggest a response to the vendor.
These are some examples of AI-powered products that are currently available. They can enhance your productivity and help you achieve greater efficiency, faster decision-making, and more robust controls.
How AI Will Elevate Accounting & Finance
What does all of this mean for accounting & finance? Is AI going to put accountants out of work? As discussed earlier, this technology is evolving quickly; it is going to be disruptive, and it is going to change how we work. But instead of being a threat, the AICPA believes this technology represents an opportunity to elevate the accounting profession. And much of this opportunity comes from the ability of AI to automate the manual work that consumes so much of what accountants do today.
For example, in addition to automating specific tasks, AI can automate entire workflows. Making accountants more productive frees up time for more strategically valuable work.
But there's another essential aspect to this, which is accountability and trust. As great as it would be to automate all those mundane compliance tasks, humans will always be accountable for the results and all of the risks of non-compliance. So, accountants will continue to have a vital role in providing trust and confidence in financial information, and humans, not AI, will always sign audit reports.
Where to Implement Financial AI Today
Let's get into some specific examples of how you can implement financial AI in your organization today. The good news is that this technology is already embedded in many accounting and operational systems.
If you're still entering AP manually, doing file imports, and printing checks, you have an immediate opportunity to benefit from AP Automation. Sage Intacct has an AP Automation feature that automatically processes and codes bills, and customers who have implemented this have reported a 50% reduction in AP processing time. And implementing this couldn't be any easier – it just needs to be turned on.
The following example gets a bit into the accounting weeds, but there is a cool feature in Sage Intacct called Outlier Detection. This monitors all the transactions flowing through the system and leverages AI to develop an understanding of the normal patterns in the business. When a transaction falls outside the norm, it flags it for review.
Your General Ledger probably has thousands of transactions per month, and the reality is humans don't have time to review and validate every single entry. This is where AI comes in and can help do that work for you.
If this flags even one entry with an error that would've gone through otherwise without review, AI is helping make your financials more accurate. This feature is available today in Sage Intacct.
Generative AI and a Look Ahead
Let's talk about the role of Generative AI in this context. The productivity tools mentioned earlier are mainly designed to improve communication. However, in the near future, we can expect AI assistants to incorporate these AI skills and advanced reasoning abilities, becoming an almost integral part of the accounting team. These assistants will be able to perform human-like tasks and answer questions with great accuracy.
This is still a way off into the future because Generative AI is a new technology. There are still significant risks around the accuracy of its responses and whether it will be able to overcome so-called "hallucinations" and bias in decision-making. So, we're still in the very early stages, but Ventana Research recently came out with a report predicting that by 2026, all of the major ERP vendors will be using AI technology to drive continuous accounting.
Takeaways
Here are a few takeaways and recommendations for where to start implementing AI.
- First, identify where the biggest opportunities for automation exist in your organization and what you want to prioritize. For example, if you're not leveraging AP Automation, you can implement this quickly and generate immediate time savings.
- Second, it's important to have the right tech stack. This isn't just about accounting software or restaurant management software. When creating a tech stack to take your business into the future, there must be collaboration between Finance, IT, and Operations, aligning with a clear strategy.
- Third, if you're already stretched thin, engage outside help! Evaluating the various solutions out there, trying to separate reality from the hype, and making informed decisions can be very intimidating. But there is help available.
- Finally, give ChatGPT or Copilot a try and learn how these tools work and how they can help increase your personal productivity.
In conclusion, we must embrace the change that is most certainly coming, and the opportunities new technologies will bring to our business. Of course, there are risks, and we must proceed cautiously, but those who successfully leverage AI will most certainly have a competitive advantage over those who do not in the years to come.
