Businesses Aim to Harness

Generative AI to Shake Up
Accounting, Finance
CFOs have ambitious plans for AI to boost
efficiency, cut costs and ease a labor
crunch, but the technology’s promise
could take years to fulfill

Companies hope generative artificial intelligence will

transform their accounting and finance departments, areas
replete with repetitive tasks and ripe for using technologies
that can make human workers more efficient and
productive.

Chief financial officers, generally known to be risk-averse,

have concerns about data security and the technologies’
reliability, particularly in a sensitive area like finance. But
they are also curious about the efficiencies they could reap
at a time when many companies hunt for cost-cutting
opportunities, as well as the prospect of helping address
the worsening shortage of accountants.

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generative AI in finance.
Companies are starting small by employing the technology
to predict questions that analysts will ask on earnings calls,
research competitors’ earnings calls and answer employees’
queries on internal guidelines such as accounting policies.

In recent years, businesses have increasingly relied on

robotic process automation to streamline their finances and
operations, particularly by processing payroll data or
expense reports and reviewing legal documents. They have
also tapped other types of artificial intelligence including
machine learning to predict various financial scenarios and
forecast future cash flows. Generative AI promises to be the
latest tool to help companies improve their ability to
forecast their performance, close the books faster and
perform data analysis to strengthen investment decisions.

“We’re talking about things that will literally create a more

competitive company,” said Ross Tennenbaum, CFO at tax-
compliance automation company Avalara.

The tax team at videoconferencing provider Zoom Video

Communications is using generative AI to work up the first
drafts of tax documentation, particularly in crafting
agreements that set the compensation between the parent
and a subsidiary for certain services, said CFO Kelly
Steckelberg. The company then refines the agreements,
she said. “It’s always easier to react to a document than
have to draft it,” Steckelberg said.
Zoom Video Communications is using generative AI for early drafts of tax documentation.

Photo: Hollie Adams/Bloomberg News

Zoom is looking into expanding generative AI’s use beyond

taxes to help strengthen comparisons between its budget
and actual variances at the end of every month and quarter,
Steckelberg said.

Generative AI could eliminate many of the tasks long done

by accountants and auditors, resulting in the automated
generation of reports, documents and presentations. That
doesn’t necessarily mean positions will be slashed, finance
executives and corporate advisers said.

“Ten years from now, finance and accounting professionals

will have a totally different set of skills than the experienced
professional of today and will largely look more like data
scientists and systems engineers,” said Mark D. McDonald,
senior director at technology research and advisory firm
Gartner.

In fact, the technology could ease the pain of the deepening

shortage of these positions by enabling more work to be
offloaded to AI. This will let accountants take on greater
responsibility and decision-making authority than in the
past, making the profession more attractive to recent
college graduates, said Daniel Street, assistant professor of
accounting and financial management at Bucknell
University.

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“Our discipline becomes
one that is more
WSJ | CFO Journal strategic or that is
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insights on corporate finance from the CFO
Journal team. related,” Street said.
“Then I think we have a
chance at drawing more people into the profession.”

Many companies expect generative AI capabilities will be

embedded into their existing enterprise-resource-planning
systems. By year-end, more companies will likely be
employing generative AI for work such as crafting letters
and drafts for at least sections of reports, said Hari Sankar,
group vice president at software giant Oracle. “CFOs see
the potential,” he said. “People are not quite starting to use
it to its fullest extent because of some concerns, but it’s just
a matter of time.”

Fifty-nine percent of executives said their organizations are

using emerging AI technology in their finance or tax
departments, according to a KPMG survey released
Wednesday. Twenty-nine percent said they have plans to do
so in the next 12 months, while 12% said they are interested
in doing so but have no plans.

CFOs have various ideas

for generative AI, though
some might not be used
for another five to 10
years, as the technology
evolves.

Amrita Ahuja, CFO of

payments company
Block, said the
technology could
Amrita Ahuja, CFO of Block Photo: Preston provide support by
Gannaway/WSJ creating the first drafts
of journal entries
detailing the company’s business transactions, financial
reports and statements that employees can later revise and
improve. But Block, formerly known as Square, is still early
in its exploration of generative AI in finance, Ahuja said.

“We’re seeing that [exploration] now on the developer side,

where some of the entry-level, earlier stage development
can be aided through the use of generative AI,” she said,
referring to AI as a supportive tool. “The same can be the
case when you look at finance functions or other back-of-
house functions.”

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Nirupam Sinha, CFO at another payments business,

privately held Checkout.com, said tasking AI with the first
draft of financial statements could reduce the number of
days it takes to close the books, saving money. Such a move
is of interest to the company, but it isn’t experimenting with
that yet, he said.

“It would make it a more efficient process,” he added.

Many CFOs are wary of the risks related to data security

and accuracy in relying more on AI to handle critical tasks.
The company needs to figure out how to make sure that its
employees don’t put sensitive information into an AI tool
that is accessible to the public, said Clare Scherrer, CFO at
engineering company Smiths Group. “From a compliance
perspective, it can sound very obvious, but be careful what
 you put in,” she said.

Journal entries might

seem mundane but do
require accounting
judgment, said Zhi Li,
CFO at software
business Customer.io. Li
said he is very interested
in exploring AI in high-
volume transactional
Clare Scherrer, CFO of Smiths Group Photo: Hollie journal entries, such as
Adams/Bloomberg News the booking of travel
expenses, but entries
that require professional judgment will probably be the last
thing he tries.

The accountant’s role is also expected to transform in terms

of auditing companies’ financial statements. Generative AI
can summarize large amounts of data, including audit
results, and generate code for use in data analysis, among
other things, said Wes Bricker, vice chair and co-leader of
the U.S. trust solutions business at
PricewaterhouseCoopers.

PwC in April said it planned to invest $1 billion in generative

AI in its U.S. operations over the next three years, working
with Microsoft and ChatGPT maker OpenAI to automate
aspects of its tax, audit and consulting services.

Companies’ AI poses data, bias and other risks that auditors

need to consider in their assessments, Bricker said. “As
auditors, we then need to understand where AI has been
deployed and the context in which that risk has been
identified and managed,” he said.

Accountants play an important role in making sure that data

and the information has integrity, a particularly crucial piece
of AI’s integration into finance, said Ken Tanji, CFO at insurer
Prudential Financial, which he said is primarily
experimenting with AI in actuarial work, not accounting.

“I think there’s always going to be roles for accountants,”

Tanji said. “It’s definitely a discipline and a skill set that is
vital.”

—Jennifer Williams-Alvarez contributed to this article.

Write to Mark Maurer at mark.maurer@wsj.com