What is an 'AI Agent' and what does it mean for accountants?

What is an AI Agent?

So you’ve probably heard the term ‘AI Agent’ thrown around loosely over the past few months, and you’d be forgiven for assuming it’s not all that different from ChatGPT. However, while the two are built on the same technology, the automation potential differs significantly.

AI agents are advanced AI systems designed to interact with their environment autonomously. Unlike traditional AI platforms, such as ChatGPT, which rely heavily on user prompting, AI agents utilise a comprehensive ecosystem of infrastructure and tools. This ecosystem includes access to external knowledge bases (acting as long-term memory), evaluation capabilities (self-reflection on task performance), and various tools like internet browsing and email inbox extraction.

source: https://www.youtube.com/watch?v=Q-uEhJMu3ak

For example, an AI agent can remember user corrections over time, ensuring continuous improvement and accuracy in repetitive tasks. This long-term memory function is crucial for personalised and context-specific workflows. AI agents also have the capability to evaluate their performance. They can assess how well they performed a task, such as evaluating the accuracy of data extraction. If an AI agent detects low confidence in its output, it can notify a human for review, ensuring high standards and reducing errors.

Additionally, AI agents can leverage the internet to retrieve up-to-date information or obtain additional context from other data sources, such as an email inbox. This ensures that no critical information is overlooked, enhancing the completeness and accuracy of processes.

What does this mean for accountants?

Imagine this: an AI that learns from your corrections during bookkeeping tasks. Over time, this AI becomes increasingly adept at handling client-specific details, reducing the need for manual interventions. It can evaluate its own performance and alert you when something needs a closer look, ensuring that nothing slips through the cracks.

For example, suppose an accountant is managing invoices and receives an email with an attachment. An AI agent can analyse the attachment, read the email content, and cross-reference this information with existing records. If there are discrepancies or additional details needed, the AI can flag these issues for human review.

The implementation of AI agents in accounting promises a significant shift in efficiency and accuracy. By leveraging their ability to learn, self-evaluate, and access comprehensive information, AI agents can take on more complex and nuanced tasks, freeing up accountants to focus on strategic decision-making and client advisory roles.