Artificial Intelligence in Accounting Market Report

Market Insights

The global artificial intelligence in accounting market is expected to grow from USD 0.85 billion in 2022 to USD 8.69 billion by 2029 at a CAGR of 39.4% during the forecast period.

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What is Artificial Intelligence in Accounting?

Artificial Intelligence (AI) is being increasingly used in accounting to improve accuracy, efficiency, and decision-making. AI algorithms can automate repetitive tasks such as data entry, bookkeeping, and financial statement preparation, freeing up accountants to focus on more strategic activities. AI can also analyze vast amounts of financial data to provide insights that can inform decision-making, such as predicting cash flow, identifying trends, and detecting anomalies.

In addition, AI can assist with auditing, risk management, and regulatory compliance by providing real-time monitoring and analysis of financial data. Overall, AI in accounting is transforming the industry by making it more efficient, accurate, and strategic. As the technology continues to advance, even more innovative applications of AI in accounting are expected in the future.

Key Players

The major players operating in the global artificial intelligence in accounting market are:

• IBM
• Microsoft
• Xero
• Intuit
• Sage
• AWS
• OSP
• UiPath
• Kore.AI
• AppZen
• YayPay
• Google
• EY
• Deloitte
• PwC
• KPMG
• SMACC
• OneUp
• Vic.AI
• Hyper Anna
• Botkeeper
• MindBridge Analytics
• Bill.Com

Market Dynamics

Due to the COVID-19 pandemic in 2020, the entire Fintech industry experienced a surge in market growth. The demand for AI-powered accounting software also increased significantly as governments and authorities worldwide promoted the use of digital payments in response to the pandemic. With the rise of remote work, digital payments became more popular, as did the adoption of telemedicine, teleconferencing, online food delivery, and telebanking.

Over time, the accounting profession has seen significant advancements in Artificial Intelligence, which have transformed its focus from manual paper and pencil entry to software-based entry. AI technology is now being applied to all crucial aspects of accounting operations. Its capability to minimize the laborious and rigorous nature of the accounting profession is revolutionizing the way financial institutions operate, resulting in increased efficiencies.

AI can analyze vast amounts of data, identify abnormalities in the system, and optimize workflows while maintaining speed and scalability. As a result, financial professionals are adopting AI to help with real-time business decision-making based on insights derived from accounting data, such as transactional data and customer demographics.

The integration of AI technology allows companies to perform various tasks such as cash flow forecasting, bankruptcy prediction, and fraud detection. This enables accountants to assist clients in responding to financial challenges proactively, adjusting their expenditures accordingly before the situation becomes severe. Additionally, it expands the scope of predictive consultancy beyond traditional financial planning and allows for the incorporation of other critical business areas.

Moreover, an AI-powered system can assist accountants in auditing and compliance by continuously monitoring documents against laws and regulations and flagging any issues that arise during audits. As frauds cost companies billions of dollars annually, machine learning algorithms can rapidly sift through vast amounts of data to detect potential scams that may be missed by humans. For example, the IL&FS fraud case, which resulted in INR 91,000 crore losses, was due to severe audit irregularities in IL&FS accounts.

Natural language processing technology to drive the market growth

Natural Language Processing (NLP) is a subfield of AI that focuses on enabling communication between humans and computers. It addresses the inherent problems that arise when human communication is ambiguous and imprecise. NLP applications are often used to extract insights from end-user industry documents. Since the accounting domain frequently deals with textual documents, such as management assessments, financial performance reports, domain standards, regulations, compliance, and supporting evidence, NLP technology can help companies extract insights, inferences, and methodologies to advance their knowledge and prevent potential risks.

Additionally, it enables enterprises to automate various accounting tasks, such as data entry, processing financial reports, invoices, and receipts, eliminating time sinks and ultimately saving business costs.

NLP is a crucial component of the AI domain that enables enterprises to automate various accounting tasks, such as data entry, financial reports, invoices, and receipts, among others. For instance, Botkeeper, a bookkeeping solution from Botkeeper Inc., is helping organizations worldwide to automate accounting tasks.

The company claims to have automated more than 1.2 million working hours for its 1,000 clients, resulting in significant cost savings. According to the company's estimates, automation of 240 working hours can result in a savings value of USD 9,240. The financial benefits of such automation are driving the growth of the market. Many of the big four accounting and legal firms have already deployed AI-driven NLP with robotic process automation to automate auditing tasks that would otherwise require several weeks of work.

Segment Analysis

Regional Analysis: North America holds major market share during the forecast period

North America is a significant market for AI and machine learning technologies in the accounting industry, with the US playing a crucial role in driving regional demand. The country is expected to dominate the global market over the forecast period due to its dominance in AI and machine learning technologies.

Moreover, most of the vendors operating in the market are based in the United States, giving the region an innovative advantage. The US government is increasingly promoting the adoption of advanced technologies, such as Artificial Intelligence, machine learning, and natural language processing, which provides ample opportunities for players in the market to expand their presence in the region.

The Bureau of the Fiscal Service (BFS) has launched several data-centric initiatives, including USASpending.gov, FiscalData.Treasury.gov, and DataLab.USASpending.gov, to provide visibility into government spending since the Federal Funding Accountability and Transparency Act of 2006 (FFATA) was signed into law on September 26, 2006.

The utilization of AI has been a significant investment for BFS, which is expected to be a driving factor for growth in the studied market. According to the US Department of Labor, accountant and auditor jobs are included in the list of the most new jobs, with an expected industry growth rate of 10% from 2016 to 2026.

This growth is further supported by the increasing preference of accountants towards AI. Additionally, a survey conducted for the Jobs and AI Anxiety report revealed that AI is predicted to have a significant impact on the accounting and finance functions of businesses. The survey, which involved approximately 250 accounting and finance managers in the country, identified payroll as the function expected to benefit the most from implementing AI (predicted by 47% of CFOs), while budget and analysis are also anticipated to be affected by 45% of respondents.

Research Methodology

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.

More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.

We conducted more than 15 detailed primary interviews with the market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the market dynamics and will enable strategic decision making for the existing market players as well as those willing to enter the market. The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market Environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Product Portfolio, New Product Launches, etc.
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: product portfolio, geographical reach, regional presence, and strategic alliances

Custom Research: Stratview research offers custom research services across the sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@Stratviewresearch.com

Recent Developments

• In December 2022, EY announced partnerhsip with EXL to support digital transformation initiatives in financial services, insurance, and health care sectors. The objective is to combine industry-leading data analytics, digital transformation , and operations management capabilities to drive growth and reduce costs.
• In November 2022, PwC acquired Sagence, a data-focused consulting firm. It was the fourth tech acquisition by PwC in 18 months as it grows its consulting-services business.
• In October 2022, Deloitte acquired the business of SFL Scientific, a leading, award-winning AI strategy and data science consulting firm.