There’s no question how artificial intelligence is fundamentally changing how the accounting profession functions, but it should be noted that most AI-based tools require a predefined workflow to function. While the human component is minimal, it’s still essential for reviews and modifications.
Agentic AI is the next wave of AI that aims to drastically reduce human interventions and build an autonomous system. For accountants, it is the clearest signal yet of how their roles can shift from functional and transactional, to more review and advisory-based. In short, agentic AI is already helping accountants add more value to their services and contribute to the decision-making process for clients.
What is agentic AI?
Think of agentic AI as the difference between a tool that helps you and a system that works like a junior accountant you supervise.
Generative AI works only when you ask it to. You tell it what to do, it gives an answer, and then it stops. If the result needs changes, you step in again. It helps with speed, but it cannot think ahead or take responsibility for the outcome.
AI workflows follow a fixed process, much like a checklist. Once rules are set, the system repeats the same steps every time. This is useful for routine tasks, but the moment something changes, new rules must be added by a human.
Agentic AI works with a goal in mind, not just a task. Instead of waiting for instructions, it keeps watching the data, understands what is normal, notices what is not, and decides what to do next. It adjusts its actions as business conditions change, without needing constant input.
Applications of agentic AI in accounting
“I heard a really good use case for an agent, and I thought, ‘That’s pretty smart.’ Everyone hates IRS notices, right? I came across a case where a top 400 firm built an agent that responds to IRS notices.” – Jody Padar, The Radical CPA, in conversation with Seth Fineberg
Agentic AI is all set to revolutionize the accounting industry, as it offers a level of intelligence and a proactive approach that minimizes human interventions.
Here are some areas of accounting where agentic AI can be most effective.
Compliance assurance
Complying with multiple regulatory bodies is one of the most challenging aspects of working as an accountant. Keeping track of amendments to labor laws, financial standards, and tax regulations can be a daunting task.
Traditionally, compliance management has been dependent on manual review and monitoring, leaving room for errors and oversight. However, agentic AI monitors regulatory changes continuously and updates workflows accordingly. Moreover, they flag any incidents of non-compliance, be it incorrect tax treatments or unclassified expenses, according to the compliance rules.
Client communication
Client communication is a major responsibility of accounting firms. Clients do not like waiting for answers to their queries, including filing deadlines, document status, or compliance requirements. Responding to client queries takes a significant amount of an accountant’s time, which can be utilized in other core processes.
AI agents can offer automated responses to clients that are not much different from a human response. They offer context-aware and personalized interactions based on available company and regulatory data, unlike the generic responses of a traditional chatbot. Moreover, based on the workflow, AI agents are capable of sending automated reminders, task progress reports, and document requests.
However, in certain cases, where an accountant’s response is still required, AI agents can help them gather the relevant data to streamline conversations.
Financial forecasting
Financial forecasting is a periodic process performed at the end of every quarter or year, depending on the available data. Even the AI-based forecasting tools often require manual workflow modifications and human intervention to adjust models when business conditions change.
AI agents facilitate round-the-clock financial forecasting with 24/7 monitoring of market conditions and internal controls. Financial data, including revenue, expenses, cash flow movements, and external economic indicators, is constantly analyzed to create relevant and effective strategies. AI agents empower accountants to contribute to the client’s financial decisions with a data-driven approach.
Smart audits
The traditional audit preparation and readiness process is laborious and requires extensive planning and execution. With reconciliations done quarterly or annually, audit readiness becomes a reactive process due to the impending deadline. Agentic AI tools, on the other hand, make audits a proactive process.
They offer a continuous audit trail, with automatic data organization and expense categorization. AI agents complete most tasks, including data validation, evidence collection, and risk identification, before the audit process, reducing complications.
Cash flow management
Delayed receivables, overheads, and poorly timed payments are some of the cash flow challenges that accountants regularly face. Agentic AI systems track the cash flow ecosystem (accounts receivable, accounts payable, payroll, etc.) in real time to identify issues, such as late-paying customers and cash fluctuations.
Moreover, they can also forecast the cash positions with high accuracy. Implementing agentic AI can lead to healthier liquidity, reduced dependencies on emergency financing, and stronger financial resilience.
Best practices for implementing agentic AI
Set clear objectives
Agentic AI looks promising to many accounting firms. Hence, they make the mistake of deploying it abruptly without a problem statement. It can lead to several integration and adoption challenges. Therefore, accounting firms must analyze their current process and set clear objectives.
Focus on data management
AI agents require data from multiple sources to analyze, react, and make the right decisions. Hence, you must ensure that the data flow from different sources is structured. Otherwise, it can affect the agent’s capabilities to produce the best outcome. You must ensure standardized documentation processes, specify ownership, and establish data management protocols.
Ensure advanced security
Agentic AI systems can be susceptible to cyber threats, as they process high volumes of data. Therefore, accounting firms must deploy advanced security infrastructure to protect AI systems against data breaches, insider threats, unauthorized access, and ransomware.
Integration with existing tools
According to a Deloitte survey, one of the top challenges of agentic AI adoption was integrating it with existing systems. Hence, adopting AI agents calls for in-depth research and planning. You must analyze the current IT infrastructure and identify tools that can have compatibility issues with AI systems.
Focus on governance and ethical implications
Agentic AI is a fully autonomous system capable of making its own decisions. Hence, you must establish a strong governance policy to ensure that it does not cross any ethical boundaries. Agentic AI systems should maintain detailed logs of actions taken, decisions made, data sources used, and rationale applied. Moreover, there must be a human review of the agent’s functioning.
Conclusion
Agentic AI is here to stay. As such, for accountants, it is imperative to adapt it quickly and get a head start over competitors. Agentic AI is a support system that helps accountants advance into more critical advisory roles while eliminating the hassles of menial tasks. However, before adopting agentic AI tools, you must draft a thorough plan with a detailed analysis.
ABOUT THE AUTHOR:
Dr. Sangeeta Chhabra, co-founder and executive director of Ace Cloud Hosting, is a leader and innovative entrepreneur with more than 20 years of experience in the IT sector. She has positioned the company as a leading global provider of IT and managed cloud services, celebrated for its QuickBooks hosting tailored for the accounting sector, managed security services, Desktop as a Service, and public cloud offerings for SMBs and enterprises. Under her leadership, Ace Cloud Hosting was honored as the Best Outsourced Technology Provider at the CPA Practice Advisor Readers’ Choice Awards 2023, among other accolades. Beyond her professional successes, Dr. Chhabra is a passionate advocate for women’s empowerment and is committed to fostering an inclusive environment at Ace Cloud Hosting.
Photo credit: ismagilov/iStock
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