What Are AI Agents? A Practical Guide for Accounting Teams

In an industry facing an extreme talent shortage, combined with rapidly evolving technology, Artificial Intelligence (AI) agents should be a top priority for all accounting departments to evaluate this year. While the industry evolved significantly over time – shifting from handwritten ledgers to the arrival of spreadsheets, accounting software, and cloud-based platforms – AI agents represent the next “technology leap” your department must embrace to stay competitive and withstand the talent shortage. 

But what exactly are AI agents, how can you use them, and what are the benefits? 

Let’s dive in!

What are AI Agents?

AI agents help accounting teams do their work by automating various accounting, compliance, and reporting workflows across their organization. In doing so, they transform accountants from preparers into reviewers, empowering them with data and insights to add even more value to the organization.. 

They work by ingesting unstructured data from various third-party sources. This could be a document, an email, a feed from another system, etc. From here, the agent transforms such data using natural language inputs. Once the data is processed, the agent applies relevant accounting assumptions based on historical patterns and your department’s specific rules to contextualize the content. 

From there, the agent delivers the data to its intended destination. Agents connect across multiple accounting functions, working seamlessly across processes, rather than being confined to a single, isolated task. The more agents work, the better they learn and improve over time. Furthermore, they adapt to business changes over time, whether it’s incorporating new data sources, adjusting to process updates, or adapting to changing regulatory requirements.

Now that you understand what agents are, it’s time to look at their use cases.

Use Cases of AI Agents

AI in accounting is not new, although there have been significant advancements in recent years. Over 50% of companies use AI to varying degrees. In accounting, strategic use cases prove to be very beneficial.

Some of the many use cases for AI agents in accounting departments today are:

Assisting with the Financial Close

The financial close takes a lot of time, is rife with discrepancies, and is where AI agents are extremely impactful. You can set an agent to:

• Analyze data
• Identify patterns
• Pinpoint anomalies

An agent can, without human intervention, reconcile accounts, suggest adjustments, create journal entries, and flag discrepancies that even an experienced accountant may overlook. These agents can also create tasks on your behalf. 

Reporting, Forecasting and Strategic Decision-making

Data is where AI thrives, because it can analyze it faster and more efficiently than humans. Agents work exceptionally well with reporting, strategic decision-making and forecasting because they can:

• Analyze historical data
• Review market trends
• Consider economic indicators

All this data can then be used to provide accurate reports, forecasts and insights that key stakeholders can use for decision-making.

Audit and Fraud Detection

AI agents can run night and day, performing continuous monitoring tasks to identify:

• Risks of fraud
• Historical data trends
• Comparative analysis
• Anomalies in the data

If any anomalies are present or the analysis finds a discrepancy, an internal team notification can be sent for further analysis.

From an efficiency, compliance and scalability standpoint, AI agents offer many benefits, although they’re not all the same.

The Benefits of AI Agents for Accounting Teams

AI agents offer many advantages for accounting teams, including but not limited to:

• Greater accuracy: AI-powered tools minimize the risk of errors in financial reporting, reducing the risk of misstatements and costly inaccuracies.
• Improved efficiency: Automation of redundant tasks like data entry, reconciliations, and invoice processing can improve your accounting processes and free up time for accountants to focus on more strategic tasks.
• Enhanced compliance: AI agents can be directed to scrape regulations to automatically detect changes and adjust accordingly. 
• Fraud detection and risk management: AI never sleeps, which means agents can continuously scan for anomalies and detect fraud risks to bolster internal controls.
• Improved financial insights: Real-time data analysis provides actionable financial insights. 
• Cost savings: By reducing errors, streamlining workflows, and minimizing the risk of non-compliance, AI agents can help lower operational costs.
• Scalability: Automation of accounting functions supports growth and reduces the need to hire new team members as transaction volumes rise. During times of talent shortage, scalability can help teams meet growing demands without overburdening staff.
• A competitive advantage: Teams that leverage AI agents work faster and more accurately, but also gain deeper insights and agility to respond quickly to market changes.  By turning preparers into reviewers, these AI agents enable accounting teams to focus on high-level analysis and strategic decision-making, giving accounting departments a competitive advantage. 

These are just a few of the many advantages AI agents bring to the table, but teams must adopt the right solution to maximize them. Because ultimately, not all AI agents are created equal.

Not All AI Agents Are the Same

New AI tools are constantly emerging and evolving, including AI agents. Although there are several options, not all agents are the same.

More importantly, not all agents are purpose-built or customizable for accounting purposes.

That’s where FloQast stands out. FloQast AI Agents are designed with accountants to automate workflows and empower teams through:

• Bespoke automation to streamline your unique processes and automate the exact steps relevant to your business without generalizing context.
• Auditable results and accounting  guardrails to prevent Agents from fully acting on behalf of the accountant. Verification requirements and custom conditions ensure accounting teams stay in control, while providing trusted, verifiable results for accounting teams.
• Dynamic workflows that automatically adjust to changes based on predefined rules and accounting parameters to ensure accuracy and reliability as your organization changes.
• Uniquely flexible solutions that enable organizations to develop their own bespoke agents.

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FloQast’s AI Agents can automate workflows across their products, allowing easy integration and functionality that makes an accountant’s life easier.

Challenges and Considerations for Accounting Teams

AI-powered tools offer many advantages, but adoption is not without challenges and considerations. Some top concerns include:

Data Security and Compliance

Data security and compliance are top priorities for accounting teams. AI tools must align with relevant regulations, such as IRS requirements for U.S. tax professionals. Strict access controls and regular audits of AI tools to ensure compliance adherence can help teams overcome this challenge.

Human-AI Collaboration

AI tools can automate and streamline tasks to save accounting teams valuable time. However, getting accounting teams on board can prove challenging. Steps must be taken to build trust and motivate teams to adopt AI-driven workflows.

Integration Into Existing System

Like any new technology, integration is essential to ensure seamless and effective adoption. However, it can be challenging to find AI agent solutions that can easily integrate into legacy software. Teams must carefully weigh their options to find tools that can be seamlessly integrated into their workflow.

Accuracy

Although AI models have come a long way, accuracy remains a challenge. We stilll encounter instances where they do not work as expected or provide incorrect information, so cross-referencing and fact-checking is essential. AI isn’t deterministic either. Even with the same exact prompt, the response isn’t always the same. 

The Takeaway

AI agents are reshaping the accounting landscape by optimizing workflows, automating redundant tasks, and freeing accountants to focus on higher-value tasks. The shift not only helps accounting departments survive the talent shortage and organizations gain competitive advantage, but also transforms traditional preparers into reviewers. From forecasting to assisting with closing, strategic decision-making, and fraud detection, AI agents can tackle challenging, time-consuming tasks while reducing the risk of error and non-compliance.

While AI agents offer many advantages, their adoption is not without challenges. Leaders should help accounting teams adopt these tools. Frameworks should be implemented to ensure that AI-powered tools continue to drive efficiency without compromising security or accuracy. 

And FloQast is leading the way with tools by accountants, for accountants.

With the release of FloQast’s AI Agents, accounting teams can leverage the power of automation and optimization through features and functionalities designed specifically for accountants. These agents are designed to deliver operational efficiency while ensuring auditable results and transparency, essential for organizations to meet compliance and regulatory standards.