AI use is now firmly entrenched in finance teams. In a recent KPMG report, 70% of companies surveyed indicated they currently use AI in reporting, and 100% expect to incorporate it shortly. This is a far cry from a few short years ago when many companies struggled to understand how AI might be used in finance and accounting. Now, it is ubiquitous in business, with most common accounting platforms incorporating some form of AI into their basic package.
However, some organizations also leverage stand-alone AI platforms. Using these platforms comes with certain risks you should be aware of and plan for accordingly. Ensuring that your team uses AI responsibly is a big but necessary task. It’s likely that your team is using it now, and it is important to put safeguards in place to ensure ethical, responsible, and compliant use.
The Biggest Benefit of AI in Financial Reporting
One of the interesting findings from the aforementioned KPMG report is where AI can make the greatest impact. According to Edward Moran, Managing Director of the Audit Innovation Group at KPMG, AI can fill lower-level talent gaps.
Many companies are finding the workload is increasing while the talent pool of newcomers to the accounting and finance profession is shrinking. New hires may not have the experience to fully understand how to prepare financial reports. AI can fill that talent gap. When used properly by newcomers to the profession, it can be used to prepare first drafts of reports, analyze data, and organize and sort data.
Human Oversight Is Essential With AI
AI is not “set it and forget it.” In other words, you can’t just input a query into an AI model, take the results, and run with them. AI makes mistakes. It “hallucinates” or outputs incorrect or garbled data, especially when outlier questions hit blind spots in its training data.
Seasoned financial professionals should review AI-generated output for mistakes, hallucinations, and corrections. Even if the information is correct, AI may not present it in the best light. For example, you may need to add data visualizations to help your audience understand financial data and its impact on the organization. Or you may choose to present it differently.
Putting AI Safeguards in Place to Protect Sensitive Data
Another important consideration is implementing “AI guardrails” or safeguards to protect sensitive data—that is, rules to govern its use among employees.
Many common AI tools, such as Microsoft Co-Pilot, ChatGPT, and so on, ingest the information shared in its chat window and add it to the system’s training data repository. While this may not be of concern if you’re using Co-Pilot to write the text of the company’s holiday greetings, it would be of great concern if an employee fed confidential information into the system and inadvertently exposed it to the public.
Creating rules and safeguards for your company to protect sensitive financial data, proprietary marketing and operational data, and other confidential company information is vitally important. Staff training should include acceptable AI use once you have established the guardrails and rules. People may need reminders that anything “fed” to the AI chat can be spit out later by a competitor!
Learn and Embrace New Technology
AI is just the latest technology to enter the financial profession. Somewhere in the past 100 years, calculators replaced pencil figures, and computers replaced hand-created ledgers. As technology changes, finance professionals should learn all they can about it and embrace what makes sense to enhance the efficiency of their teams.
Welter Consulting
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.
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