Accounting and Finance Departments in the AI Era: “Judgment”, “Creativity” and “Foresight” Hold the Keys

In Section 1, we introduced the background to calls for the use of AI technology in accounting and finance departments and clarified the challenges faced in practice in its implementation. In this section, we will build on that to organize the roles that AI can take on in future in accounting and finance departments, approaching the matter from its functional aspects.

To begin with, we have organized the roles from the perspective of the “functions that AI performs in accounting and finance departments,” based on the document “Types of Problems Expected to be Solved by AI Systems,” published by the Japanese Society for Artificial Intelligence. We thus categorized the problems into five areas: “(1) Forecasting,” “(2) Analysis,” “(3) Estimation,” “(4) Selection,” “(5) Generation” (see Figure 2).

Thinking about how to apply these five categories of “functions that AI performs” to accounting and finance departments, we believe that the following applications can be anticipated going forward (see Figure 3).

• Simulations of future financial impacts: Forecasting how business activities will affect future financial figures and how future performance will change with what sorts of policies. We expect such simulations could be provided to hands-on departments as materials for considering measures and used as drafting materials for projecting where results will land. This could streamline the work of making forecasts of where results will land and improve the accuracy of such forecasts.

• KPI monitoring: Summarizing and surfacing analytic results taken from automatic aggregation and variable adjustment of various KPIs. We believe this could be used for offering reporting, suggestions and advice to hands-on departments and leadership.
• Automatic referencing of documentation of financial transactions: Analyzing documentation of financial transactions and transaction data to check for inconsistencies. This will streamline collation work.
• Fraud/falsification detection: Identifying irregular data patterns tending towards fraud or falsification. This is expected to improve the accuracy of detection based on objective data and streamline the work involved in finding patterns.

• Fraud/falsification detection: Based on transaction data and settlement information, selecting regular and fraudulent transactions, then estimating the chances of fraud or falsification. We expect this will improve the speed with which countermeasures are implemented and streamline traditional fraud monitoring work.
• Automatic determinations of accounting rules: Based on past transaction details and financial data, estimating and selecting accounting rules that should be applied. This is expected to streamline the work involved in making such judgments.

• Document drafting: Drafting documents for internal and external disclosure, proofing documents and automatically generating graphs and tables. This is expected to improve the efficiency with which various documents are drafted.
• Automation of accounting FAQ response: Automatically responding to internal queries to the accounting department about how matters are treated in accounting terms and about inputs to internal regulations. This is expected to save time on traditional inquiry response work.

In terms of generation, recent years have seen the rise of LLMs and generative AI, leading to a growing focus on “automatic response” and “natural language generation.” This means that “generative” functions such as automatically responding to accounting FAQs or drafting documents can go beyond mere form responses and simple report drafting to offer more complex, enhanced responses and to generate content that better suits the business.

For example, automatically responding to the accounting FAQs would now be able to go beyond handling simple questions to address more complex case-by-case questions, allowing it to effectively address even questions that would have been difficult to deal with using a traditional rule base. Even when drafting documents, we can now draft content that is more accurate and better suited to operations, by, for example, using AI to automatically generate enhanced reports or financial analyses based on accounting standards.

In either case, we can expect new applications of the technology to grow as the technology advances. However, for companies to be able to incorporate the features of AI into their accounting and finance work, they will need to clarify the division of roles between AI and people, and properly design their operations.

As we saw in Section 3, the skills expected of accounting and finance personnel in the AI era are those of personnel who can show “judgment” and “creativity” from an accounting point of view. While in some cases this will overlap with the skills of existing team members, we believe it will be rare to have personnel who combine both sets of skills, so, to some extent, companies will need to separate them and take measures to improve their skills.

The first skill expected of accounting and finance personnel is “judgment.” This skill specifically requires the ability to tell whether proper journalizing has been performed, the ability to read financial statements, the ability to understand and judge company budgets and projections, and the ability to decide if the outputs of accounting work performed by AI were done correctly.
Put briefly, we believe these skills are extensions of traditional accounting and finance work, as they are skills developed in the course of performing accounting and finance work, namely bookkeeping ability, theoretical understanding of financial accounting, theoretical understanding of management accounting, and a grasp of the trends of one’s own company’s accounting figures.

When we consider that accountants traditionally got a sense of their own company’s trends through the process of issuing vouchers and drafting various reports themselves, it will be a challenge for the future to figure out how to foster accounting skills specialized in “judgment” and understanding of company accounts without direct experience of the actual work of accounting.

At the same time, “creative” skills, while still called for in traditional accounting and finance work, were not skills that were subject to great focus traditionally, so we expect there will be gaps in the know-how for developing them. We believe the “creativity” called for in accounting and finance work specifically includes the ability to streamline processes when surveying the company as a whole from the perspective of accounting operations, the ability to imagine and execute on ways of effectively using new technology such as AI, the ability to coordinate with other departments and push through work, and the ability to solve problems, as well as the ability to support the launching of new businesses from a financial perspective in the medium to long term.

If we think of the above as the skills of foundational accounting and finance personnel, the question arises of what would be the skills expected when developing section and department heads, or those expected of leads who decide overall departmental policy and drive forward work. We believe that accounting and finance departments should be expected to contribute to the overall development of a company’s “business” from a background of accounting expertise. In other words, it is up to accounting and finance team members to drive operations using their accounting knowledge and insight (particular insight into the company), using AI and other tools. Managers who lead such departments should understand the environment in which their company’s businesses operate, “create” by, for example, incorporating accounting insights into measures to develop their company’s businesses, “judge” the feasibility of such measures, and lead their accounting and finance departments as a whole to contribute to the organization. If we take such a perspective, the skills needed by accounting and finance department leads include “foresight” vis-a-vis their company’s businesses on top of “judgment” and “creativity.”

Such “creativity” and “foresight” are not things that can be developed overnight. We believe that to master such skills, a person would need to experience countless efforts in which they seek to find answers to problems that do not yet have solutions in the world. This would be difficult to achieve in the course of a company’s normal operations. Such personnel could thus, for example, take part in gatherings of entrepreneurs and find colleagues to frankly debate their ideas with, or use consultants from consulting firms like ABeam as sounding boards.
From a team member development perspective, there is also the option of working with a consulting firm like ABeam to re-skill (in terms of creative skills) accounting personnel. At ABeam Consulting, we have worked on countless projects to support the development of personnel to have standout problem solving skills through personnel development programs based on the development schemes and methodologies we use for our own consultants. We thus believe that, with that know-how, we are well placed to contribute to personnel development in accounting and finance departments in the AI era.