VC firms are pioneering a new investment strategy: acquiring established businesses and optimizing them with AI to boost efficiency and customer reach.
The idea of AI accounting is so fucking funny to me. The problem is right in the name. They account for stuff. Accountants account for where stuff came from and where stuff went.
Machine learning algorithms are black boxes that can’t show their work. They can absolutely do things like detect fraud and waste by detecting abnormalities in the data, but they absolutely can’t do things like prove an absence of fraud and waste.
LLMs often use bizarre “reasoning” to come up with their responses. And if asked to explain those responses, they then use equally bizarre “reasoning.” That’s because the explanation is just another post-hoc response.
Unless explainability is built in, it is impossible to validate an LLM.
For usage like that you’d wire an LLM into a tool use workflow with whatever accounting software you have. The LLM would make queries to the rigid, non-hallucinating accounting system.
I still don’t think it would be anywhere close to a good idea because you’d need a lot of safeguards and also fuck your accounting and you’ll have some unpleasant meetings with the local equivalent of the IRS.
The idea of AI accounting is so fucking funny to me. The problem is right in the name. They account for stuff. Accountants account for where stuff came from and where stuff went.
Machine learning algorithms are black boxes that can’t show their work. They can absolutely do things like detect fraud and waste by detecting abnormalities in the data, but they absolutely can’t do things like prove an absence of fraud and waste.
LLMs often use bizarre “reasoning” to come up with their responses. And if asked to explain those responses, they then use equally bizarre “reasoning.” That’s because the explanation is just another post-hoc response.
Unless explainability is built in, it is impossible to validate an LLM.
For usage like that you’d wire an LLM into a tool use workflow with whatever accounting software you have. The LLM would make queries to the rigid, non-hallucinating accounting system.
I still don’t think it would be anywhere close to a good idea because you’d need a lot of safeguards and also fuck your accounting and you’ll have some unpleasant meetings with the local equivalent of the IRS.
ERP systems already do that, just not using AI.
But ERP is not a cool buzzword, hence it can fuck off we’re in 2025