Artificial Intelligence (AI) is the hot topic of 2025, expected to impact every industry worldwide. But how can AI specifically benefit the accounting profession, and what are the risks?

As businesses increasingly adopt digital solutions to streamline operations, AI emerges as a powerful tool, promising significant efficiency gains in the accounting sector. It holds the potential to transform mundane tasks into automated processes, allowing professionals to shift their attention toward strategic decision-making and analysis.

However, alongside these advantages come notable challenges and potential pitfalls. Integrating AI requires careful consideration of its limitations, particularly regarding accuracy, oversight, and the human expertise needed to interpret and validate AI-driven outputs. This article explores the practical implications of adopting AI in accounting, examining both its promise and the caution necessary to implement it effectively.

Can AI Automate Data Entry Effectively?

There’s a general consensus that AI significantly automates data entry. A recent article in Accounting Today by Chris Gaetano highlights that AI excels at simple tasks but can struggle with complexity.

Instead of spending countless hours manually entering income, expense transactions, and credit card charges, modern accounting software platforms can automate these processes. This automation frees staff to focus on higher-level tasks such as cash flow forecasting, budget analysis, and strategic planning. However, are there any downsides?

Risks of Automated Transaction Posting

Users of online accounting software like QuickBooks Online are sometimes not formally trained accountants. Often, a family member might handle the bookkeeping without understanding basic accounting principles, such as debits and credits. While QuickBooks can link to checking accounts and company credit cards, there’s a risk that automatically uploaded transactions might not be posted to the correct accounts.

Reviewing these transactions is crucial for reconciling the trial balance accurately. This review provides an opportunity for the in-house bookkeeper to correct account postings. For instance, a loan from an officer initially classified under common stock can be quickly adjusted.

Necessity of Understanding Double-Entry Accounting

An understanding of double-entry accounting is vital at this stage. Determining whether a transaction represents an asset or an expense, whether funds originate from sales or represent liabilities such as sales taxes, and correctly handling complex multi-account transactions, like payroll, requires well-rounded accounting knowledge.

Bookkeepers must also be aware of company accounting policies during this verification stage. They need to discern when an expense should be capitalized and added to a depreciation schedule or ensure that payments align with the approved vendor list.

Complexities of Managing Company Credit Card Transactions

Company credit card statements are another area prone to time-consuming errors. Bookkeepers must verify who holds company credit cards and ensure charges are legitimate business expenses, not personal expenditures such as meals or entertainment. 

Accurate posting of these charges is essential for maintaining precise records. Additionally, if a single credit card account serves multiple companies or departments, correct postings to due/from intercompany accounts on the balance sheet are required.

Importance of Internal Controls in Automated Systems

Internal controls become critical when accounting systems are automated. Owners need assurances that only legitimate bills are paid and that cash receipts originate from actual customers. Effective internal controls can be established during software setup and regularly updated during regular account reviews.

For instance, expense payments might only be authorized from the checking account upon approval by owners or other authorized personnel via email, allowing for remote and timely approvals.

Similarly, handling cash payments from customers requires robust internal controls. Setting up customers in the accounting system with predefined credit terms and automated stop-work orders for unpaid invoices provides additional control layers. With the proper system and rules in place, both owners and managers can remain informed through automated email notifications.

These Internal oversights and automation errors do not just affect your internal records. They also create significant downstream issues for your external partners. One of the most critical consequences is the impact they have on your relationship with your CPA firm, especially during tax season or when preparing for financial audits.

The Impact of AI-Powered Bookkeeping Automation on CPA Firm Relationships

When financial records are filled with misclassified transactions, unreconciled accounts, or incorrect postings, CPA firms are often left with the burden of cleaning up the books. Given the widespread staff shortages across the accounting profession, many firms no longer have the time or resources to perform this type of cleanup work. As a result, clients who cannot provide clean and accurate financials are often deprioritized or even turned away.

This situation reveals an important truth. Although AI may eliminate hours of manual data entry, it cannot replace the need for experienced oversight. When businesses rely too heavily on automation without proper accounting knowledge, small issues can quickly escalate into larger problems that affect tax filings, audits, and compliance.

Final Takeaway: Automation Is a Tool, Not a Replacement for Expertise

AI can streamline bookkeeping and reduce time spent on routine tasks, but it still requires a well-trained team to ensure accuracy. Accounting knowledge remains essential to confirm transactions, interpret financial data, and apply judgment where software cannot.

As CPA firms raise their expectations for client readiness, having a solid accounting foundation supported by careful oversight is not just helpful, it is essential for maintaining credibility and securing long-term professional relationships.

Get Expert Support for Your Accounting Operations

If your business is ready to improve the quality of its financial records and reduce the risks of automation errors, our team is here to help. At Global Accounting Solutions, we combine expert oversight with efficient bookkeeping processes to ensure your records are accurate, compliant, and audit-ready.

To learn more or schedule a free consultation, visit gasaccountants.com/contact-us or call us directly at (303) 746-0586. Let’s make sure your accounting systems support your success, not hold you back.