The end of month-end: How AI is changing accounting for the better

We all have our time-honoured habits. The repeated actions or behaviours that can be good – a daily walk or morning meditation – or not-so-good – doom scrolling news feeds immediately after waking, say, or that delicious doughnut with your morning coffee. 

After a few months, these habits may become so ingrained that we do them almost without thinking. 

The accounting industry is no different. In fact, some of our habits – month-end close, reviewing and verifying information in accounts and financial transactions, annual audits, and quarterly tax filings − are centuries old. 

These working rhythms have certainly proved resilient and able to adapt to changing economic and business demand. But just because we’ve done something for centuries, it’s not necessarily good for us as individuals or the accounting industry. 

Many of these working practices in the accounting industry haven’t caught up with technology and we’ve not stopped, until now, to consider whether technology can unlock a better way.

Consider the stress and long hours compiling month-end reports that are almost immediately outdated once they are finished, or the tedious and repetitive search for financial and accounting data to reconcile.

We now know that there is a better way to do this. And that, change is possible, due to one technology − artificial intelligence (AI). 

Evolving AI…

AI, especially generative AI, can automate much of the drudge work of accounting. It can replace monthly closes with continuous accounting. And that can free up accountants to spend more time on higher-value and more interesting work.  

For instance, advising clients on the cost-benefit analysis of adding a new warehouse or helping a business department to understand whether they can afford to hire more salespeople or launch a new product in a new country. It can also be used to minimize business risks, such as erratic cash flow or rising debtor days. 

Moving away from these cycles would mark the biggest changes to accounting for centuries. There’s no denying that AI will have a big impact on how accountants in business and practice, think, work and create value for their clients. 

By 2030, wider use of AI will mean that accountants spend less than half the time they currently do on routine tasks.

The research, commissioned by Sage, also predicts that the monthly close will largely be a thing of the past by the end of the decade; three quarters (75%) of accountants in small and medium-sized businesses who were questioned predicted that real-time financial data would replace the month close.  

And despite predictions that AI will replace millions of workers in almost all industries, our research found that AI will be a job creator.  

How it’s working out

Every industry and finance team will benefit from AI-led change.  

Take agriculture, where farms rely on the research and development (R&D) of seed producers to continue improving the yields of their crops year over year. R&D development cycles are lengthy and suppliers who don’t deliver on time can be a roadblock.

AI-driven accounts payable processes offer dramatically greater financial oversight into the supply chain data and automate tasks like the matching of invoices with purchase orders and receipts.

This allows seed producers to understand and choose the suppliers that are more likely to deliver on time. In turn, the producers can put more human resources into research instead of fixing supply chain issues. 

AI software automation features can also reduce financial risks by flagging anomalies in ledgers early. It makes review and approvals easier and saves accounting teams time because they don’t need to cycle multiple times between data entry and reviews. 

The next step for the accounting industry will be to understand the new roles that AI will create over the next decade.  

What comes next in an AI-powered world?

AI is evolving quickly, and many firms are still experimenting with how best to use it, so while the full picture of future skills is still forming, one thing is clear: accountants will need to get comfortable working with AI tools, from crafting effective prompts to interpreting outputs.

But it’s not just about the tech itself; automation is also creating space to focus on the kind of strategic thinking and advisory work that’s long been sidelined by repetitive tasks. 

Established roles, such as financial analysts, are likely to lean more heavily on AI to analyse data and guide strategy.

Demand will grow for these and other new, AI-influenced roles, in accounting and finance departments. However, exact skills and job specs are currently unclear. 

Sage research predicts other new roles, including AI compliance specialists – i.e., those responsible for ethical and regulatory guidelines − and a systems integrator, who acts as a bridge between technology and finance departments, will drive ongoing digital transformation. 

Accountants, by their nature, are diligent and detail-oriented, making them suited to tackle challenges, such as AI’s tendency to fabricate information.

Far from overlooking risks, accountants are poised to lead the charge in ensuring AI is safe, ethical and reliable. With this approach, they can unlock AI’s potential to transform accounting, automating tasks and enabling real-time, data-driven advisory work.   

Now is the time to break some of the accounting industry’s age-old habits, and create some new and better ones.