The reality of today’s (and tomorrow’s) world is that AI is here and it isn’t going anywhere.
Much like the dawn of the internet a few decades ago, there is a strong feeling that we are at a moment in human history where once again, we evolve how we do things, in all aspects of life – including Accountancy.
1️⃣ 1. Data Processing
One of the biggest pros of AI is with data processing. Many accountancy systems have already begun incorporating AI for things such as uploading purchase invoices. By reducing bookkeeping admin work, this can help accountants to focus on more complicated client needs.
🔍 2. Research
AI can be very helpful with research – especially when you don’t know exactly what tax question you are asking. It can point you in the right direction and even highlight areas that you may not have been aware of.
For accountants, it can be a double-edged sword. Clients are increasingly using AI to look up tax questions, which often turn out to give inaccurate or incomplete information – resulting in a lot more time spent correcting the information given by AI.
🔒 3. Confidentiality
Before using AI, you need to be aware of where the data is stored as this can impact client confidentiality. Those that store data in the EEA are likely to be compliant with UK GDPR but a lot store data in the US, which is not always automatically UK GDPR compliant.
You also need to be careful what you input into AI. You must make sure not to enter any identifying information about clients – though there have been some cases recently where companies were able to work out information on bids that their competitors were making, even though no client information had been entered.
⚖️ 4. Responsibility
There’s also the question of responsibility. If an AI tool makes an error or provides incorrect guidance, there’s no one to hold accountable. A qualified accountant, however, is bound by professional standards and regulations, and should have Professional Indemnity Insurance.
Ultimately, we stand behind the advice we give. That’s an important distinction that technology simply can’t replace.
✅ 5. Accuracy
The main bugbear is still accuracy. AI is still in its infancy and does not always get it right. It is dependent on the data it has been trained on and so can often produce the wrong answer.
For example, one AI model thought that the income tax rate had been reduced… It turned out that the AI model had been trained on the infamous mini-budget proposals of 2022 – many of which never actually came to fruition.
It can be a very handy tool, but we recommend treating it as you would a junior employee: check its work and verify its sources. The UK tax system is also one of the most complicated in the world, so next time you look up a tax question, double check where the information is coming from.
📝 Summary
When it comes to online information, it’s hard to know what to trust. Much like Googling (or asking ChatGPT!) about your medical symptoms, when it comes to tax advice, we highly recommend speaking to a professional. (Ideally, Jupps Accountants! 💡)
#AI #Accountancy #ArtificialIntelligence #UKTax #Accountants