Robot AI Image by Tumisu from PixabayXero has published findings from a survey about adopting AI amongst small businesses. Alongside the survey, the vendor has published a new guide in the Future Focus series, “Xero’s AI guide for accountants and bookkeepers.”

The research highlights that 64% of small business owners believe that AI will impact their business within the next five years. However, there are concerns, with 77% believing that AI development and adoption is outpacing regulation. Regulating AI is a challenge, and different countries are taking divergent approaches. The recent EU AI Act became the first regulation specific to AI. In the UK, the government is appending regulation on AI to other laws. In the US, it is mainly voluntary codes. While in China, regulations are more about having companies declare their use of AI.

The big challenge is the cat is already out of the bag, and regulating something that criminals already have easy access to will not be straightforward. The EU AI Act will not come into force until at least 2025. It is a fast-moving world of technology. Where the explosion in popularity and use of generative AI shows that new types of AI may redefine how businesses work quickly.

AI exploration continues

Despite the fear, SMB leaders are at different stages of AI adoption:

  • 24% of SMB leaders plan to experiment with AI
  • 16% are already investing in AI
  • 16% are dedicating more resources to AI use
  • 14% are working with third-party AI experts

The UK is behind the global curve on AI adoption; 46% of UK SMBs are not taking any steps towards AI adoption, compared to 32% globally.

Though many have reservations, 32% want more training and resources to support their AI use, and 32% are concerned about data privacy issues. While the survey did not dive into the details around this, firms may be concerned that by sharing personal data with AI platforms, they risk breaches in Data privacy laws.

To address these concerns, SMB leaders are taking action.

The top three are:

  • Providing training to employees on identifying biases or inaccuracies (20%)
  • Creating policies and guidelines for employees (18%)
  • Establishing procedures for any AI-related incidents (17%)
Alex von Schirmeister, EMEA Managing Director at Xero
Alex von Schirmeister, EMEA Managing Director at Xero

Alex von Schirmeister, EMEA Managing Director at Xero, said, “Our research shows that UK small businesses are recognising the benefits of AI, but more knowledge, training, and regulation is needed to ensure the nation’s smallest firms are not left behind and can continue to thrive. Xero’s always looking at how we can bring new technology safely into the hands of customers, in a way that will make a positive difference in their lives. It’s about putting the customer first, not shipping lots of AI features for the sake of it.” 

Xero AI guide addresses the need

With 32% of respondents feeling that training and resources on using AI to increase productivity are necessary for their business, Xero has published its Guide to help accountants and bookkeepers guide customers on AI. It also provides some insights relevant to small businesses.

von Schirmeister, commented, “We wanted to cut through the hype and answer a really simple question: what does AI mean for your typical practice? The Xero guide is intended to help accountants and bookkeepers make well-informed choices when it comes to using AI tools, to help manage the risks and realise the benefits for them and their small business customers.”

The Guide is twelve pages and divided into five sections.

Understanding the world of accounting in the age of AI

Introduces the concept of AI, what it is and what the Guide covers.

Using AI in your practice

The largest section reveals ten ways AI can help accountants within their practice. It looks at the opportunities and risks of using AI. There is a box out that gives three tips on the use of generative AI. It ends with two case studies of how Australian advisory firm BlueRock uses AI and how the professional accounting community Realize, Founder Jason Staats views AI.

How accountants and bookkeepers feel about the emergence of AI

Surfaces insights from a small survey of accountants on how they feel about AI. It identifies three main benefits: efficiency, faster answers to questions and improved data accuracy, alongside the greatest fear, losing control of an AI.

The opportunities and challenges for small businesses

Surface the current thinking of SMBs. This includes data from the survey highlighted above, which included 3,000 participants. It uses the global average rather than the UK figures used at the start of this article. The Guide highlights the same concerns and approaches but with higher percentages. It also highlights the priorities of SMBs over the next 12 months.

The top five are:

  • Growing business revenue – 65%
  • Attracting new customers – 61%
  • Managing rising costs – 56%
  • Reducing business spending – 41%
  • Finding and retaining talent – 30%

Building AI-powered products across the Xero platform

This concluding section highlights the Xero approach to AI. It notes the Xero approach to responsible data use and the three domains it is currently investing in:

  • Understanding financial documents
  • Recognising historical patterns to predict future transactions
  • Classifying transactions for accounting purposes

Enterprise Times: What does this mean

A wealth of information in the Guide gives a solid background of understanding for both advisory firms and small businesses within the Guide. While much of it is common knowledge, it is a well-rounded guide that will fill in gaps that many may have in their knowledge of AI. It is not, however, comprehensive. For example, it omits prescriptive analytics. It also advises the reader to take professional advice for a more comprehensive overview.

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