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July 2024. Do you run a small business? Or maybe you're a senior financial manager. You want to leverage AI to improve your accounting and finance operations and increase employee productivity. What are your options today? Here's what you need to know.
AI startups
There are many startups that are using AI to do different things in the accounting field.
For example, Ember, Layer and Teal are developing applications to embed into existing platforms to eliminate data syncing with accounting software; Rows, GPTExcel and Numerous.ai offer AI-based smart spreadsheets (or formulas for spreadsheets) that they promise will help you “build better spreadsheets, faster”; and Basis, Materia and Tutti are deploying large-scale language models to perform tax and financial research for both financial managers and external accountants.
H&R Block has an “Assist” feature that leverages AI to help with filing tax returns. Startups like Lili’s AI accounting platform, which targets very small businesses, promises that “managing accounting and payments on one platform simplifies bookkeeping and gives you a clear view of your financial situation.” A number of AI-based bookkeeping startups, including Kick, Pilot, and Puzzle, have also entered the space. And there are vertical applications like FundGuard, which raised millions of dollars for its AI-based application focused on wealth managers.
Most of the applications mentioned above, while promising, are still in a relatively early stage and under development. If you want to get in early, then by all means go for it. But this year, buyer beware.
If you're a financial manager, or even an accountant (like me), you're probably conservative and don't like cutting-edge technology unless there's a big business demand for it. My clients use established accounting software applications and, naturally, they're asking these vendors to introduce AI capabilities to increase productivity and run their business more efficiently. So what can we expect from these larger, mainstream accounting software companies this year in terms of AI capabilities?
Zero Jacks
Xero, which boasts over 4 million subscribers in over 180 countries, has introduced Just Ask Xero (JAX), an AI assistant that can create and edit quotes via voice command, alert you when invoices are past due (helping you craft the appropriate response), prepare payroll in advance for review and approval, assist with cash forecasting, and more.
Intuit Assist for QuickBooks
Late last year, Intuit released Intuit Assist for many of its products. For its flagship small business accounting platform, QuickBooks, it offers natural language reporting and analytics tools (“How much revenue will I make this year?”, “Who are my biggest customers?”) as well as AI advice on trends, issues and observations gleaned from a company's financial data. Like Xero, it helps identify past due invoices or invoices that may be overdue and creates actionable recommendations based on customer relationships.
Wise Man's Co-Pilot
Though it hasn't been released yet (but you can add your company to a waiting list), Sage's popular accounting software, Intacct, will soon have its own AI assistant called Copilot, which also promises to perform similar functions to JAX and Intuit Assist, such as preparing payroll and providing data and analysis of your company's financial operations via voice commands.
SAP JOUR
Joule is SAP's AI assistant that performs many of the functions described above, but also provides users with a more advanced workflow-oriented experience. For example, Joule has a very sophisticated process for resolving customer disputes and returning goods that includes both a conversational interface and intuitive expectations of what needs to happen next in the process. This is more advanced than what Intuit, Xero, or Sage offer, but it lays the foundation for the future.
And that's the key word: future.
Most of the AI features these companies offer today are just beefed-up versions of ChatGPT. But they are built using the companies' data as large language models. When you start digging into these features, you'll see words like testing, preview, waitlist, beta, trial, and experimental. This is software companies telling you not to trust the results of their AI features. Yes, they're just as nervous about this as we are.
I've tried these products, as well as Microsoft Copilot and Google Gemini, and the results are erratic and unreliable. Sometimes the queries spin. Sometimes the results are inaccurate. And even when the AI features work as expected, the results are predictably unsatisfactory due to incomplete and poor data in the accounting system (which is my fault).
The good news is, we can see where the train is going. Some of the startups mentioned above will fail, but others will succeed, and their AI tools will change the way accountants and financial managers do their jobs. AI products offered by smart technology companies like Xero, Intuit, Sage, SAP, and others will continue to evolve, get better, and become more reliable. Right now, media, PR, and marketing are driving AI products. Within a few years, customers and competitors will be telling them what AI capabilities they need. As with all emerging technologies, this will improve rapidly with more use.
We haven't even seen the tip of the iceberg yet, and from these early stages, the future of AI in finance and accounting looks exciting.