Leveraging NLP & chatbots in accounting software

In recent years, the role of artificial intelligence (AI) has expanded across various industries, with accounting software being no exception. One of the most notable advancements in this area in particular is the integration of chatbots powered by natural language processing (NLP).

The rise of NLP in customer support is evident. A recent Paro survey reports that 40% of finance and accounting executives and a notable 60% of small businesses under $10 million in revenue are embracing the technology.

This blog will explore how chatbots equipped with NLP capabilities are revolutionizing the accounting software landscape, the benefits they bring to accounting, and the inevitable risks that come along with it.

What is NLP and how can it be used for accounting?

NLP is a branch of machine learning that allows humans to interact with computers using simple, everyday language. Instead of needing to communicate in complex code or binary, you can just ask questions in plain English and get the answers you need. This makes powerful computing tools more accessible to the average person, even without any advanced technical knowledge, and helps simplify tasks in daily life.

Automates repetitive tasks

NLP is transforming how businesses handle routine work. Smart chatbots powered by NLP can take over repetitive customer service queries, giving human agents more time to focus on complex problems. It also helps with language translation, ensuring the original context and tone remain intact. On top of that, NLP can streamline document processing by automatically categorizing key information, cutting down both errors and turnaround time. Hence, NLP-powered chatbots can act as on-demand virtual assistants, offering support without the need to consult manuals or wait for customer service representatives.

Real-life application

Invoice management: A business owner can ask the chatbot, “What’s the status of the invoice from the last project?” and it pulls the relevant data or guides the user through the process, eliminating the need for repeated manual explanations or waiting times. The user can also ask the chatbot to create an invoice for their last consulting project, and the chatbot will pull the relevant data from previous records, generate the invoice, and send it to the customer, automating an otherwise tedious manual task.

Derives better insights from data analysis

With mountains of unstructured data out there, from raw data in reports to customer feedback, NLP makes it easier to comprehend insights that might not be obvious when looking at large datasets. Using techniques like text mining and sentiment analysis, NLP can identify patterns, track trends, and even detect emotion, humor, or confusion in written content. These insights help businesses make more informed decisions and understand their customers better.

Real-life application

Expense tracking: Users can ask for a summary of their expenses from the last couple of months, and the chatbot can quickly analyze expense reports and provide a summary or even categorize expenses automatically.

Enhances search results

Search engines are getting smarter, thanks to NLP. Instead of just matching keywords, NLP focuses on understanding what a person really means, even if their query is vague or poorly phrased. This creates more relevant results and a smoother search experience, and lowers the barrier to entry for non-accountants, making it easier to use the software effectively.

Real-life application

Finding customer or transaction data: A user could type “January payments to vendors” or “Mark Anthony last invoice” or "customers who have had made 5 or purchases in May" and the system understands the intent behind the request instantly without needing exact keywords or navigation through menus and finds the intended query.
 

The inevitable risks of AI in accounting

While NLP-powered chatbots offer undeniable convenience and efficiency, they also come with a set of risks that can't be ignored.

Misinterpretation of queries

NLP chatbots rely heavily on understanding the context and intent behind human language. In accounting, where precision is everything, even a small misinterpretation can lead to inaccurate advice or errors in financial documentation. Although NLP chatbots are programmed to understand nuance, AI is still in its nascent stage, so slight misinterpretations will always be a possibility as the accuracy isn't 100%. A casual phrasing of a tax-related question, for instance, could trigger the wrong response, potentially leading to non-compliance or financial misreporting.

Data privacy and security concerns

Accounting involves handling highly sensitive financial information. Chatbots, if not properly secured, can become a weak point in data protection. Poor encryption, lack of access controls, or integrations with insecure platforms may expose client data to breaches or leaks.

Over-reliance on automation
 

Relying too much on NLP tools can lead to the under utilization of human expertise. While chatbots are great for handling FAQs or retrieving information quickly, they should not replace qualified accountants when it comes to decision-making, analysis, or client strategy.

Conclusion

NLP-powered chatbots are transforming the way accounting software works, creating a more intuitive, efficient, and user-friendly experience. From automating repetitive tasks to delivering real-time insights, these tools help businesses manage their finances with greater accuracy and speed. As NLP technology continues to advance, we can expect even more intelligent features that make accounting smarter, faster, and increasingly personalized.

That said, it’s important to remain mindful of the risks, such as potential data privacy concerns or an over-dependence on automation. While chatbots can streamline operations, they should complement, not replace, human judgment and expertise.

Still, this marks a major step forward in making powerful technology more accessible for day-to-day business tasks. If you're looking for an accounting solution that strikes the right balance between automation and control, Zoho Books might be worth checking out.