How AI is improving accounting efficiency without having to exchange jobs

A new study found that accountants use AI to streamline workflows and close books faster. Takeout: AI does not replace accountants, but when combined with human expertise, it enhances work.

Accountants have long been seen as an easy target for automation. Accounting often surpasses the list of most automated jobs due to its reliance on everyday tasks such as data entry and adjustment.

But working paper by Jung Ho Choi, assistant professor of accounting at Stanford University School of Business, and Dr. Chloe Xie’s ’20 of MIT Sloan School of Management, challenges the idea that AI is here to simply replace accountants.

Instead, accountants using generator AI have discovered that they can support more clients, close books faster and provide higher quality services. Rather than swapping bean counters and bookkeepers, AI helps you work more efficiently by automating repetitive tasks and automating problems in real time, making it easier to fill out reports quickly and accurately. And the accountants themselves say that AI makes work more manageable.

“AI helps multitasking,” says Choi. “To support each client, accountants need to pull out information, connect bank transactions, and track vendors. Many upfront AI helps them set up, meaning they can serve more clients more efficiently.”

The survey utilizes survey responses from 277 accountants from 79 small and medium-sized businesses using AI-powered accounting tools, as well as detailed task-level data. Analysis of both datasets shows that AI can take over recurring tasks such as transaction classification, allowing accountants to shift their attention to tasks of higher value.

Research shows that accountants using AI support more clients per week and complete monthly statements 7.5 days faster than those using traditional methods. They also spend 8.5% less time on routine back-office processing. Instead of shattering lines through transactions, you can redirect that time for business communication, quality assurance, and client advisory work.

Importantly, this capacity increase appears to not come at the expense of quality, even if everything improves. The study found that accounting firms using generator AIs had found a 12% increase in granularity reports and held more detailed records. Instead of grouping expenses into broad categories such as payroll, AI helped break them down into more specific categories such as bonuses, benefits, and meals. This makes financial reports more beneficial and makes them easier to analyze, audit and act.

“When you think about early adoption of something, there is generally some trade-off between quantity and quality,” says Xie. “In this example, perhaps surprisingly, the trade-offs are not that sharp, and that is probably most relevant to the fact that technology is not here to replace humans.

Human expertise remains important

Not all accountants enjoy the same performance improvements from AI. It depends on their level of experience. Advanced accountants tend to treat AI as collaborators. They are more discernible, intervene when the system’s reliability decreases and apply human surveillance where it is most needed.

Junior staff, on the other hand, are more likely to accept AI-generated output at face value, even when these outputs are flagged as uncertain. As a result, they have a smaller performance improvement. This study provides early evidence of errors generated in AI that could flow through human accounting systems within the loop.

Takeout doesn’t mean that AI is taking over the accounting. That’s what works best when combined with human expertise. “Accountants are often the subject of jokes because much of what they do is deeply routine, almost boring and procedural,” says Xie. “But there is a small percentage of the work of accountants that is very contextual and requires a lot of judgment.”

Accountants are aware of these risks. In a Choi and Xie survey, 62% said they were concerned about the errors generated by AI, while a considerable number expressed concern about AI’s impact on data security (43%) and job security (37%).

Despite these concerns, almost half of accountants said generative AI tools can help meet deadlines more reliably and improve accuracy. Almost two-thirds say that automating everyday tasks is the biggest advantage of adopting AI.

For now, the tool is primarily used for bookkeeping activities. This is a fundamental, everyday task involved in recording and organizing financial transactions in a business. More complex areas such as auditing, tax strategies, and assessments are largely untouched. But that could change, according to Choi.

“I’ve heard that AI will help integrate auditor information and standards. “But that final call for judgment. It’s still a human decision.”