How your small business can adapt to AI

What is artificial intelligence?

AI is the ability of software to perform tasks that typically require human intelligence – like learning from data, recognising patterns, and making decisions. Unlike traditional software, AI improves over time as it processes more data. A simple example: in the past, it would require a human to eyeball a bank transaction and determine what category it applied to. AI-powered accounting software can predict and categorise transactions without manual input.

The advancements in AI

One of the most exciting aspects of AI today is that it's so cheap, and much of it is accessible for free. The speed of innovation – generative AI, large language models (LLMs), and AI-driven automation – is making massive leaps. AI is not just optimising workflows but creating new ways to work and interact with technology.

That said, there are concerns. Will AI make us lazy? Will we lose cognitive function? Sometimes, when I'm not in the mood to think, I will get ChatGPT to help me with an email. While AI is a fantastic tool, balancing automation and human engagement is essential.

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What AI cannot do

AI struggles with authentic creativity, emotional intelligence, and nuanced decision-making that requires human judgment. It also lacks common sense or opinions – AI can recognise patterns but doesn't 'understand' things like humans do. For example, AI will struggle to answer if you ask, 'What is the best weather?' because it requires an opinion.

AI cannot replace human relationships, trust, and intuition - especially in fields like accounting and finance, where expert judgment is crucial. In sports, for example, great coaches do more than analyse tactics; they build relationships, trust, and understanding with their players.

Becoming AI-ready

The best way to prepare for AI is to start using it. Businesses should begin by digitising their processes, as AI thrives on clean, structured data. It is crucial to identify areas where automation can provide the biggest impact—such as customer support, finance, or marketing. Training employees on AI tools is also key, as successful adoption depends on how well teams leverage AI.

Businesses should follow a structured approach when implementing AI, just as with any other software. Evaluating competitors, capabilities, pricing, and data storage locations can impact purchasing decisions.

Navigating legal and ethical considerations

Businesses need to be transparent about how they use AI, particularly when handling customer data. Implementing safeguards ensures AI remains ethical, unbiased, and secure to prevent misuse or compliance issues. For example, you need to train team members not to upload sensitive customer data into AI tools like ChatGPT, as that information becomes available to the system.

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Key AI concepts

Understanding the differences between AI, machine learning, and deep learning is helpful. AI is the broadest concept, encompassing all software that mimics human intelligence. Machine learning (ML) is a subset of AI, where systems learn from data without explicit programming. Deep learning, a subset of ML, uses neural networks to process complex data, such as images and speech.

Challenges in AI development

Talent shortages are a significant challenge, as AI expertise is in high demand. AI models can also inherit biases from historical data, requiring careful monitoring. Data privacy and security remain critical, especially in industries like finance. Another challenge is AI explainability – many models function as 'black boxes', making it difficult to understand how they make decisions.

AI's impact on industries

AI is transforming industries across the board. It automates bookkeeping, fraud detection, and financial forecasting in finance and accounting. Healthcare benefits from AI-driven diagnostics and drug discovery, with companies like Harrison.AI leading the way. In marketing, AI personalises campaigns, optimises ad spend, and enhances customer engagement.

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Practical AI applications

AI is already making a big impact in many areas, including:

• Automated bookkeeping: AI-powered systems like Thriday categorise transactions, reconcile accounts, and generate tax reports.
• Customer service chatbots: AI handles inquiries instantly, freeing up human agents for complex cases.
• Fraud detection: AI analyses real-time transaction patterns to identify suspicious activity.

The future of AI

AI is expected to contribute $30 trillion to the global economy by 2030. Businesses that adopt AI will experience increased efficiency, cost savings, and revenue growth. In financial services alone, AI reduces fraud losses and improves compliance, saving billions annually.

Will AI replace human jobs?

While AI will automate repetitive tasks, it will not replace human expertise. Instead, it will create new roles, such as AI specialists, data ethics officers, and AI integration consultants. The key is upskilling – businesses and professionals who adapt will benefit from AI rather than be displaced by it.

The next 5–10 years

AI will become more human-like, with improved reasoning, decision-making, and conversational interactions. AI assistants will integrate seamlessly into business operations, handling increasingly complex tasks. Regulation and ethical AI will also take centre stage, ensuring AI is used responsibly.

Final thoughts

AI presents an incredible opportunity for small businesses. By embracing automation, staying informed about ethical considerations, and continuously learning, businesses can leverage AI to streamline operations and drive growth. The key is to start now – the future belongs to those who adapt.