Paving the Way Forward: AI’s Evolving Role in Construction Industry Accounting

Paving the Way Forward: AI’s Evolving Role in Construction Industry Accounting

While the role of artificial intelligence (AI) role in our personal and professional lives continues to evolve, one thing is certain: the technology is here to stay. As its capabilities continue to expand, construction companies will be able to leverage AI’s ability to analyze data, detect fraud, automate workflows, perform administrative tasks and more, streamlining their financial operations and cutting costs as a result.

Understanding How AI Works

To properly leverage AI within your organization’s financial operations, it’s important to have a basic understanding of how AI functions. AI works by combining large amounts of data with fast, iterative processing and intelligent algorithms, allowing the software to recognize patterns or trends in data and learn automatically from them. It runs on neural networks, which are networks set up to behave similarly to a human brain. Imagine teaching a child to throw a ball, learn a new language or complete a puzzle AI isn’t much different. When you provide it with data, it learns from patterns and trends to make predictions on how to behave in a variety of situations.

What This Means for the Construction Industry

By and large, the biggest opportunities to integrate AI across the construction industry’s accounting practices are in the areas of budget estimation, automating financial reporting and detecting fraud. Utilizing AI’s speed and accuracy to complete these tasks allows companies to unlock a revolutionary level of efficiency.

  • Budget estimation For many contractors, preventing cost overruns is crucial to maintaining revenue. Construction companies have a lot to consider when estimating the cost of a project, including labor, materials and overhead costs (office space rent, salaries of office workers, marketing and advertising, taxes, insurance, etc.). AI’s unique ability to analyze years’ worth of data sets in minutes means two things for companies: Unprecedented access to meticulous budget projections and project timelines, and highlights of areas within the budget projection with potential for improvement — either by recommendations to obtain materials elsewhere or swapping out a material for something more cost effective.
  • Automated financial reporting — Much of the discourse around implementing AI into daily tasks comes from a place of concern over AI replacing jobs normally done by humans. Most early adopters of AI tools have agreed, though, that a sweet spot exists. By utilizing AI to perform daunting clerical work (think of highly repetitive tasks, like data entry, organizing and managing lengthy spreadsheets, replying to basic customer service emails, etc.), construction companies can maximize their human capital, empowering workers to learn how to harness AI and spend more time interpreting the extensive financial data. In an industry struggling with attracting and retaining top talent, automated financial reporting might prove to be a valuable tool for more than just speedy and accurate data reporting.
  • Detecting fraud — Construction companies often find themselves susceptible to fraudulent billing practices. While dishonest business practices are prevalent in all industries, the complicated web of supply chains within construction has proven it especially difficult to mitigate fraud. However, AI’s algorithms have an opportunity to cross-check invoices and change orders, acting as a watchdog for suspicious activity. As a result, companies can quickly flag anything outside the norm when it comes to the cost of materials, project timelines or hours of labor, and proactively halt any double-billing practices.

Risks to Consider When Utilizing AI

Like any other powerful tool, AI comes with its own set of risks. Companies choosing to utilize AI to streamline their day-to-day operations have to weigh the risks versus the rewards and formulate a plan to mitigate risk.

The most universal risk for companies using AI is cybersecurity. Implementing AI can make your organization a prime target for hackers. Placing a high reliance on the output of an AI program makes it critical to protect the confidentiality and integrity of any sensitive data. Standard security and privacy measures, like multifactor authentication and up-to-date security patching are a good place to start. In instances where your AI program interacts directly with customers, like a chatbot, consider encrypting the conversations to make it more difficult for hackers to access the information if it were to be released into the wrong hands. Vulnerability management programs should be in place to detect any potential weaknesses surrounding data storage and transmission, and a security operations center could be utilized to monitor information security. Periodic penetration tests can also help organizations continuously improve data security controls.

Looking Ahead

An organization’s success with AI is not attainable overnight. It will take proper planning, resources and evolution over time. But by using AI’s speed and accuracy to their advantage to automate routine tasks, construction companies can let their employees shift their focus to more important matters and improve their bottom line in the process.

The opportunities for AI within the construction industry are endless, and the time is now to determine how best your organization could benefit from this rapidly evolving technology. Connect with one of our construction industry experts to learn more about safely implementing AI into your company’s day-to-day operations.


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CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

Paving the Way Forward: AI’s Evolving Role in Construction Industry Accountinghttps://www.cbiz.com/Portals/0/Images/FSArticle_Paving the way Forward- AI’s Evolving Role in Construction Industry Account_Hero-1920x1000.jpg?ver=magzdWBVO8pp0qslj-bayg%3d%3dhttps://www.cbiz.com/Portals/0/Images/FSArticle_Paving the way Forward- AI’s Evolving Role in Construction Industry Acco_Thumbnail-300x200.jpg?ver=aPl2NV2VseHSwM1XrgMwYA%3d%3dWhile the role of artificial intelligence (AI) role in our personal and professional lives continues to evolve, one thing is certain: the technology is here to stay. 2024-04-12T17:00:00-05:00

While the role of artificial intelligence (AI) role in our personal and professional lives continues to evolve, one thing is certain: the technology is here to stay. 

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