The U.S. accounting shortage is at a critical juncture. The Bureau of Labor Statistics estimates that approximately 126,000 accounting positions will need to be filled each year between now and 2032 to meet the growing industry and fill the vacancies left by retirees. Since 2020, more than 300,000 accountants left the profession and university enrollments in accounting programs continue to decline.

Labor shortages, coupled with inefficient accounting processes –– such as manual reviews for data accuracy and compliance –– lead to oversights that are often costly, according to a March report from Bloomberg. In addition to inaccurate data and reporting, accounting errors can result in business losses, fines and reputational costs.

The right technology, primed by AI, can help financial and accounting teams fight the resource gap. Financial leaders who integrate these tools into their business operations position themselves to stay ahead of workforce uncertainty, often uncovering additional efficiency gains and cost savings in the process.

Catch more HRTech Insights: HRTech Interview with Sam Naficy, Chairman and CEO at Prodoscore

Maximizing the Potential of Generative AI

Despite its advances, AI’s analytical capabilities have not reached the Artificial General Intelligence (AGI) stage. Therefore, the most efficient use of AI in accounting comes from its ability to streamline workloads and improve efficiencies for highly structured and repetitive tasks, like reporting and auditing, with a high degree of speed and accuracy. Recently, ChatGPT-4 and Claude Opus passed multiple sections of the CPA exam, displaying proficiency with auditing and financial reporting. This performance affirms that many accounting tasks can be automated, freeing up time for trained accountants to perform more forward-looking and complex analytical work. AI’s ability to learn from exceptions to the rule and variations from patterns continues to evolve with use.

Supporting Accounts Payable Teams with Automation

One area of accounting that is primed for automation is Accounts Payable (AP). AP processes such as reporting and data entry play to AI’s strengths while eliminating the potential for human error. But AI’s capabilities in AP do not stop there.

Data extraction, document processing, approvals, processing invoices, purchase orders and initial auditing of transactions can all be streamlined and simplified with the help of automation. In a workflow, the AI can be programmed to find information needed, extract the data and report. Consider the everyday task of using phones to deposit checks, where an app extracts the routing numbers and payment amounts from an image. With AP automation, businesses can do the same, on a much larger scale.

AP or expense management solutions can also capture and automate business travel expenses. Rather than the employee missing several days of work to attend a conference or event and returning only to spend several hours reporting their expenses, the employee can capture their receipts in real time as they attend the conference. Technology reports their expenses and moves them forward for approval, while they turn their focus towards more meaningful work.

Improving Adoption

Organizations worldwide use an average of 130 software as a service (SaaS) applications and that number is growing year over year. To ease adoption, enterprises should select AI solutions that easily integrate into platforms their organization is already using. This familiarity improves adoption, shortens the time needed for employees to learn the tool and reduces the need for data extraction and manipulation between systems.

Reducing Costs and Increasing Employee Satisfaction

Erroneous data costs U.S. businesses $3.1 trillion per year, which brings added value to businesses that implement AI. Furthermore, when employees have more time to focus on meaningful tasks, they’re more likely to report better productivity, higher job satisfaction and less stress. Transparency, trust and communication offer a return that can’t be quantified. By improving efficiency and accuracy of tasks like data entry, transaction processing and reconciliation, AI can replace the need for overtime and lead to better work-life balance.

Streamlining Processes to Fight the Labor Gap

Automation and technology fill businesses’ administrative needs, which reduces fixed overhead costs. Their leaner accounting team can therefore focus on higher-value activities – including upskilling. Using AI-powered tools to analyze large volumes of financial data, identify patterns, extract valuable insights and make predictions enables quicker, more informed decision-making and more insightful financial analyses from a skilled accounting or finance team that is based on data-backed trends, risks and opportunities.

In short, AI solutions help accounting departments optimize their resources, enabling them to bridge the labor gap while adapting to the evolving demands of the industry.