Yes, AI Can Do Your Management Accounts. Here's What That Ad Didn't Tell You...
Unless you spend your spare time on accountancy LinkedIn (and let's face it, why would you), you've probably missed the ad that's had the whole industry talking this week.
An influencer, sponsored by one of the big accounting software companies, put out a post claiming she'd saved a fortune on accountant fees by simply connecting her accounting software to AI and asking it to produce her management accounts.
To be fair to the software company, the ad seems to have gone out without their knowledge. It was sponsored, but they've said it wasn't written or approved by them, it didn't go through their usual review, and it should never have run. They've apologised, and the post has been taken down.
But the damage was done, and accountants and bookkeepers were pretty hurt by it. Understandably so, because at the end of the day, we're usually the ones who recommended our clients onto that very software in the first place.
Feelings aside though, the ad raises a question that deserves a proper answer. Can AI replace your accountant or bookkeeper?
And here's the thing. It can produce your management accounts. I'm not going to stand here and pretend otherwise.
So is that it, then? Should I be packing up shop and retraining as a llama farmer? Not just yet...
AI can only work with the figures that are there
Management accounts don't create information. They summarise it. So if your bookkeeping is a mess, if figures haven't been checked, if accounting adjustments haven't been made, then those beautifully formatted management accounts mean nothing. Worse than nothing, actually, because now you're making business decisions based on numbers that look official but don't reflect reality.
Rubbish in, rubbish out. It's not a new problem. AI just produces the rubbish faster and with more confidence.
I've seen the aftermath first-hand
This isn't me guessing at what might go wrong. I've recently cleaned up after another accounting software's AI feature that codes transactions automatically. There were so many incorrect codings that I started the bookkeeping again from scratch, because that was quicker than going through and amending them one by one.
Let me say that again. Starting from nothing was faster than fixing what the AI had done.
That's not because AI is useless. It's because it can only work with what's in front of it: a date, an amount, a supplier name. And that's not enough.
Bookkeeping isn't just data entry
This is the bit people misunderstand. A professional bookkeeper's skill isn't typing transactions in. It's putting context to them.
Here's a real example. I used to do the bookkeeping for the tour assistant of a very well-known band. One day she'd be in Rome, the next Berlin, transactions popping up all over Europe. Now, was she swanning around on her holidays with the business card? No. The band was on a world tour, and every single transaction in a foreign city corresponded with their tour schedule. I knew that, so the books reflected it. Software looking at a card payment in Rome knows none of it.
And it doesn't have to be anything as glamorous as a world tour. Say a new transaction appears in the bank, a lump sum in that looks like it could be some sort of loan payout. Does AI know it's a loan? Or does it assume it's a sale? Because if loan money gets treated as income, your profit is overstated, and potentially your tax bill along with it. Your bookkeeper remembers you mentioning you were thinking about taking out some finance, so they ask you for the paperwork and make sure it's properly reflected in the figures, with the appropriate adjustments made.
And here's the really important part: even if you haven't had that chat with your bookkeeper, your bookkeeper knows when to ask. AI doesn't know what it doesn't know. It won't pause and say "hang on, what was that one for?" It'll just pick a category and move on, and you'll never know it guessed.
This isn't an anti-AI post
I use AI in my own practice, so I'm hardly going to tell you it's the devil. It's a tool, and a useful one. On top of solid, checked, properly adjusted bookkeeping, it can absolutely help you get more from your numbers.
But a tool is all it is. It's not a replacement for someone who knows your business, the context, spots the thing that doesn't look right, and asks the question the software never would. And remember, at the end of the day you're the one responsible for what goes on your tax return, not the software company and certainly not the influencer.
The short version
Can AI produce your management accounts? Yes. Should you trust them? Only as far as you trust the bookkeeping underneath. Get that right first, and everything built on top of it, AI-generated or not, actually means something (but it can still make mistakes!) .
And if your bookkeeping is in a bit of a state and you'd rather it wasn't, that's exactly what I do, without making it into a thing. No judgement, no lectures, just getting you sorted. Get in touch →