How is AI Changing Small Business Accounting for the Better?
It doesn’t really matter how you view it — money is a mission-critical component of every small business. If you’re running a company, you cannot afford (in any regard) to let your finances get out of control, or everything you’re trying to achieve will be undermined. This produces the persistent headache of accounting — getting all the figures lined up.
When you’re juggling countless important tasks every day, you don’t want to be dealing with complex spreadsheets of monetary calculations. So why not find ways to automate the process? AI-enhanced systems are steadily transforming the world of small business accounting. Let’s take a closer look at what’s going on.
1. Cash flow calculation is getting easier
Position all the money that’s entering your business against all the money that’s leaving it (on a monthly, weekly, or even daily basis), and you determine your cash flow. Positive cash flow means you’re getting ahead, while negative cash flow means you’re heading for trouble — it only takes one missed payment due to insufficient resources to send you into full collapse.
AI-led systems are not only great at handling the basic cash flow calculation, but they’re also excellent at providing visual representation. In a few clicks, you can see a full breakdown of your costs, yield some smart financial forecasts for the next few months, and even entertain counterfactuals by toggling or moving specific payments to see how your operation is affected.
Over time, the level of sophistication on offer will only increase. One day, the classic position of the CFO (Chief Financial Officer) — at least in its current form — may be rendered obsolete, with a battery of AI tools entrusted with pushing businesses towards their financial goals. Big data is transforming the business world across the board, so there should be no shortage of source material from which to draw useful insights.
2. Security standards are improving
Keeping financial information safe is extremely important, no matter the nature of your business. If your details get leaked, you can have your money stolen, be subjected to blackmail efforts, or even see your reputation torn to shreds following the public release of customer data. In a time of data leaks and major privacy concerns, you can’t afford to be casual about security.
Because AI accounting draws heavily from the cloud, it brings with it an added layer of protection. This might initially seem counterintuitive, because connectivity invites vulnerability, but think about it — software that functions over the internet needs to be extremely secure, and the SaaS model allows all the challenge to be outsourced to account service providers (instead of needing it to be handled by small business owners themselves).
3. Costs are getting massively cut
Ultimately, the key benefit of AI-driven small business accounting is the significant cost reduction it provides. AI tools not only take tasks away from business owners, allowing them to spend their time working on projects that better suit their skills and inclinations, but also get them done much more cheaply.
Some tools are free, while others require subscriptions or one-time fees. You can check through numerous options here, but the costs almost always pale in comparison to the cost of a busy business owner spending hours manually working through basic calculations. How much is an hour of your time really worth? What would you charge for a consultation?
The bigger your business gets, and the more networking opportunities open up to you, the more value every moment of your time holds. By automating everything you can, you can save that value for the work that requires it — and since accounting comes down to mathematical analysis, it’s perfectly suited to essentially-logical computer systems.
As things stand, practical AI is all about mimicking human actions that are fundamentally predictable, which makes it perfect for handling accounting. Implement well-designed automation tools throughout your business, and you’ll save time to spend on other things, render your operation vastly more secure, and save money in the process. What good reason do you have to stick to your old-fashioned method?