By Chris Tredwell, Chief Sales Officer and Charis Thomas, Chief Product Officer at Aqilla
The pace of innovation in accounting and finance software has been slower than that of solutions supporting other business areas. Although many major players have updated their UI and added new features, their software is not truly cloud-native. They may also have shifted to subscription-based models and updated their pricing structure, but the basic underpinning architecture may be more than 30 years old.
As such, their development cycles tend to be slow, and new features take considerable time to come to market. This has led to a flourishing industry that supplies and integrates third-party finance and accounting software plug-ins—helping meet demand for these missing features.
Potential issues with third-party plug-ins
Many organisations have turned to third-party plug-ins and extensions to improve processes, boost efficiency and get access to new features because their innovation cycles tend to be faster and more agile.
On the surface, this seems like a sensible plan, but it can cause some long-term problems. For example, if data resides in multiple systems, it isn’t easy to maintain a single source of truth. Finding the information you need can also be harder and more time-consuming—especially if you then have to re-enter it into the core system. This is one of the main reasons why so many organisations struggle with month-end reporting.
By all means, compliment your solution with a few pieces of specialist software, but don’t rely on a patchwork of third-party systems to underpin everything you do. If you find you’re actioning more tasks via third-party integrations and less in your core operating software, it’s probably an indication that your core system is no longer fit for purpose. It’s also likely to be an early warning that native AI functionality in your accounting and finance software may not be available for some time—if at all.
Don’t get left behind
Those with cloud-native solutions—supported by more agile development processes—are likely to benefit sooner from AI-based enhancements, more advanced automation and improved efficiencies.
This will create an even bigger disparity between teams that use more modern (and often cloud-based) accounting solutions that can quickly integrate AI-based components—and those that continue to use older (and often on-premises) solutions.
To counter these problems, some vendors might try to implement a quick fix with third-party AI enhancements. They might even sign formal partnership agreements and bring in systems integrators to present disparate software solutions as a single platform solution.
However, we believe that keeping AI, automation, BI, and analytics within the core product is a better and more viable long-term strategy and will ultimately help deliver higher-value services to users at a far more competitive price.
What kind of AI functionality is on the horizon?
Purchase-to-pay
From our perspective, AI is the means to deliver more advanced automation of core accounting and finance team processes. That might mean using AI to create a more reliable and dependable way of importing data than Optical Character Recognition (OCR) technology.
AI could also be used to capture invoices, allocate a supplier, and pay invoices below a certain amount or to pre-agreed suppliers. There is no conceptual reason this couldn’t happen very soon. However, AI is still a relatively new technology, and some users might not be ready to hand over all those decisions to a machine.
One solution could be to deliver zero-touch invoice management by default but give customers who are cautious about AI and automation the opportunity for manual, human involvement at each stage and at a level that suits them and their business. This approach would also allow the software to ‘learn’ the company’s processes and, over time, become even more accurate.
AI-driven reporting, analysis and data visualisation
It should also be possible to embed AI-driven reporting within accounting and finance software, perhaps delivering data interpretation, insight, and visualisation tools like Microsoft’s Copilot, but without going outside the platform—which can be risky without strict access, privacy, and data sharing policies in place.
It would allow users to ‘ask’ the software to display different graphs and charts rather than manually adding data to spreadsheets and creating the images. This would probably be similar to how users interact with ChatGPT using natural language processing. For example, users might type (or say), “Show me a balance sheet for the last quarter and highlight all outstanding invoices after 30 days.” This could be a game changer for preparing month-end and board reports.
Basic admin tasks
Plenty of other basic admin tasks could be handed over to AI, too, including reconciliations and the creation of new supplier profiles—all of which could save time and allow teams to focus on higher-value work.
Better tools to retain brighter talent
The technology to achieve all this exists right now. But cloud-native accounting and finance software providers have the edge in delivering AI functionality within the core product offering. For them, it’s a matter of configuring and implementing it in the most user-friendly way.
By contrast, it will be a game of catch-up for those vendors still offering solutions built on older technology—with some trying to fast-track functionality with authorised and recommended third-party plug-ins. We would not recommend this approach, and it certainly won’t bring the same long-term benefits for users.
The kind of advanced automation made possible by AI is also likely to make jobs more rewarding and less repetitive. Therefore, organisations using older software might see brighter, more forward-thinking, and ambitious people move to companies with more advanced finance and accounting software.
Newly qualified and tech-savvy university graduates coming on to an old system and having to do loads of admin when they’ve been trained to be accountants will also feel frustrated—as will those who have worked for a couple of years in the industry and don’t want to return to old systems. That’s bad news, as finding good people with the right skills is harder than ever right now.
It’s been decades in the making, but AI can finally improve account and finance team processes. If we’re being honest, no one wants to key in data anymore—even the most junior staff. Everyone would prefer to work on analysis and other high-value tasks, so let’s facilitate that change and make life better for us all.
Relying on third-party add-ons might provide a short-term fix, but it’s not a long-term solution. That’s why we hope it’s been helpful to look into the crystal ball, see what the not-too-distant future might look like and help you start planning that journey.