Artificial intelligence (AI) is rapidly changing the way we live and work, and there has been an increase in the number of companies using AI powered chatbots for business activities such as Chat GPT and Google Bard to produce marketing content. The accounting profession is no exception with AI already being used to automate many of the tasks that accountants traditionally do, such as data entry, analysis, and reporting. As AI continues to develop, it is likely to have an even greater impact on the accounting profession, freeing up accountants to focus on more strategic and value-added work, and at LWA we’re also helping clients to embrace AI when it comes to their inhouse accounting and tax processes.
Accountancy software, automation and integration
A number of cloud-based accounts software programmes such as Xero and Dext have been available to businesses for several years, allowing bookkeeping to be more automated, quicker and easier, and therefore massively impacting an organisation’s efficiency and productivity in their accounts departments. At LWA, we have been successfully using these tools to help clients become more efficient and able to make better business decisions through management accounts forecasting.
Business Matters magazine recently reported on research by Open Banking Limited (a body set up by the Competition and Markets Authority), confirming that at least 750,000 SMEs have adopted ‘open banking’ technology by integrating their bank accounts with third party services, helping to reduce the cost of transactions and to manage cashflow.
There were 68 million open banking payments last year – more than double from the year previous year. Through its Making Tax Digital (MTD) programme, HMRC have required digitally submitted quarterly VAT reports from businesses since April 2019 with heavy penalties for delayed or incorrect submissions.
In December 2022, it was announced by Victoria Atkins, financial secretary to the Treasury, that the next phase of MTD requiring self-employed individuals and landlords to submit their accounts information quarterly, will be effective from April 2026.
How can I use Chatbots for my accounting tasks?
Recently in the USA, a test was carried out asking ChatGPT to produce a tax return for an individual, and whilst it got the basis right, it didn’t quite work out the tax due correctly. Hence why AI alone is not enough when it comes to carrying out important legislative accountancy-related tasks. Chatbots can be successfully used to assist you in some of your accountancy related queries for example, if you’re looking to set up a business or change the formation of your current trading style, you could ask “What are the differences between becoming a sole trader vs a limited company?”
Again, it would be advisable to then discuss the answer with an accountant to ensure the data the Chatbot has given is up to date and accurate for your specific circumstances. Here are some additional ways in which AI can be used in accounting and that LWA are already using to support clients:
- Data entry and analysis: AI can be used to automate the process of entering data into accounting systems. This can save accountants a significant amount of time and effort, and it can also help to improve the accuracy of data entry. AI can also be used to analyse financial data and identify trends. This information can be used to help businesses make better financial decisions.
- Reporting: AI can be used to generate reports on financial data. This can save accountants a significant amount of time and effort, and it can also help to improve the accuracy and timeliness of reports.
- Fraud detection: AI can be used to detect fraudulent activity. This can help businesses protect their financial assets and ensure that their financial statements are accurate.
The importance of a (human being) qualified accountant
Overall, AI has the potential to revolutionise the accounting profession. By automating tasks and providing accountants with new tools and insights, AI can help accountants and their clients to be more productive, efficient, and effective. However, whilst accountancy software might allow automation of many sales related tasks and can speed up your bookkeeping process, you still need to have this information assessed and reported to HMRC by a qualified accountant. This helps to avoid charges payable by your company to HMRC and it is worth noting changes to the new HMRC VAT Penalty System that became effective on 1st January 2023.
At LWA we have received many Google Reviews and Client Testimonials specifically commenting on the personalised and supportive work of our accounts and tax teams in helping to improve business efficiency and forecasting through our use of innovative accounts technology, as well as our ability to amicably work with HMRC to challenge and appeal penalties charged where paperwork may have been completed without the support of an accountant.
We would love to hear your thoughts about AI and chatbots and to learn about your experiences using new technology – connect with us on social media and send in your comments! To learn more about how LWA are embracing innovative solutions to assist clients in all areas of accountancy, tax and our other business support services, read our range of blogs online at lwaltd.com or speak to our in-house experts –
Matt Jones in our Manchester office on 0161 905 1801 / matt@lwaltd.com
and Bradley Allen-McKenna in our Warrington office on 01925 830 830 / bradley@lwaltd.com
Les Leavitt, Leavitt Walmsley Associates Chartered Certified Accountants
