At Maxwell Locke & Ritter, we're seeing our clients harness AI as a powerful tool to enhance their financial operations and risk management processes. Organizations are particularly finding value in AI-enabled solutions for complex accounting tasks like lease accounting under ASC 842, where the technology efficiently analyzes agreements and extracts key terms - not only reducing manual tasks that are time-consuming and error-prone, but also allowing finance teams to focus more on strategic analysis and decision-making. AI is transforming traditional financial processes across organizations. From streamlining month-end close to automating account reconciliations, AI helps standardize workflows and identify potential issues earlier in the process. This enhanced efficiency allows finance teams to shift their focus from routine tasks to providing more valuable strategic insights for their organizations. And the technology strengthens the control environment when properly implemented, creating clear audit trails, ensuring consistent application of accounting principles, and centralizing data for more comprehensive financial reporting. This combination of automation and control helps organizations maintain accuracy while improving the timeliness of their financial information. However, we advise our clients that AI should enhance rather than replace professional judgment. Success lies in thoughtfully implementing AI solutions while maintaining robust controls and professional oversight. This balanced approach allows organizations to capture technology's benefits while ensuring the quality and reliability of their financial reporting.
AI is fundamentally changing the way accounting teams manage and interpret data—moving from manual review and judgment-heavy processes to intelligent automation. For example, AI can now extract key terms from contracts to distinguish between lease and non-lease performance obligations with impressive speed and accuracy. This allows companies to automatically carve out lease-related expenses and income and book them directly to the appropriate general ledger accounts. Not only does this reduce the risk of misclassification and non-compliance, but it also frees up accounting teams to focus on higher-value work like analysis and strategic guidance. As accounting standards evolve and reporting requirements become more complex, AI is emerging as a critical enabler of scale, accuracy, and operational agility.
Accounting teams are increasingly leveraging AI to streamline and strengthen their processes under standards like ASC 842. For lease accounting, AI tools are helping automate the extraction of key data points from lease contracts, classify leases correctly, and maintain compliance with disclosure requirements — saving significant time compared to manual reviews. In the month-end close, AI is being used to reconcile accounts faster, flag anomalies, and generate draft journal entries, allowing accounting teams to close the books more quickly and accurately. To reduce compliance risk, especially under complex standards like ASC 842, AI systems are enabling continuous monitoring of lease modifications, remeasurements, and impairments in real time, which helps companies stay audit-ready and minimize the risk of non-compliance penalties. Overall, AI is moving accounting teams from reactive to proactive, boosting both efficiency and accuracy.
AI is transforming accounting departments' handling of lease accounting, month-end close, and compliance with ASC 842. Finance executives today leverage AI solutions such as LeaseAccelerator to pull lease information directly from contracts. These systems eliminate manual input, reduce emissions, and ensure critical dates and terms are captured without delays. Teams gain time to focus on analysis and strategic reporting. Month-end close processes have tightened with automation platforms like BlackLine. These tools match transactions, flag anomalies, and recommend corrections automatically. Accounting teams that once needed weeks to close books now complete the process in days. Companies improve reporting speed and accuracy without expanding headcount. Compliance under ASC 842 has become more reliable through AI-driven systems that track lease changes in real-time. Platforms adjust calculations and journal entries automatically when contract terms shift. Real-time dashboards alert teams to audit risks early, strengthening internal controls and reducing exposure to financial misstatements. AI is no longer optional for modern accounting operations. It delivers measurable gains in speed, accuracy, and compliance that manual processes cannot match. Accounting teams that move fast on AI integration position their companies for stronger financial management and sustained growth.
One of the major benefits of AI in this area is the ability to automate month-end close procedures. With AI-powered software, accounting teams can now complete tasks such as reconciliations and journal entries in a fraction of the time it would take manually. AI technology also offers the potential for real-time analysis and decision making in lease accounting. With lease accounting software powered by AI, companies can quickly access important financial information and make informed decisions about their leases. This can include identifying potential cost savings or opportunities to renegotiate leases based on market trends, as well as analyzing the impact of new leases on financial statements.
At FuseBase, we've streamlined our month-end close process using AI automation that validates lease payment entries and reconciles them against our master lease database, cutting our closing time from 5 days to just 2. The system also maintains an audit trail of all AI-assisted decisions, which has been incredibly helpful for demonstrating our compliance controls to auditors and reducing our risk exposure.
With my experience deploying AI analytics at Unity, I've seen how machine learning can transform lease accounting workflows by automatically extracting and classifying key terms from contracts, saving our accounting team countless hours. We implemented an AI solution that flags potential compliance issues in real-time, reducing our ASC 842 audit preparation time by 40% while catching subtle regulatory mismatches that human reviewers often missed.
As a finance expert, incorporating AI into accounting processes is no longer a choice but a necessity for guaranteeing efficiency and regulatory compliance. Especially when dealing with ASC 842 lease accounting, AI simplifies the management of bulk lease information, accurately classifying, reporting, and lease term real-time updating. By automating these tasks, finance departments can reduce the likelihood of human error and keep records up to date without manually entering or tracking each detail of a lease. AI plays a critical role in accelerating month-end close too. Traditionally, this is a labor-intensive process of manual reconciliation and reporting at scale. Today computer programs with artificial intelligence can perform these tasks automatically, rapidly extracting data from different sources and creating correct reports without any human intervention. Not only does this accelerate the close but also guarantees consistency and accuracy of financial reporting, enabling teams to devote more time to valuable analysis and strategic decision-making. In addition, AI is always monitoring compliance to reduce the risk under ASC 842 and other financial reporting frameworks. AI technology can follow changes in amendments, terms, and other significant lease information and raise red flags for potential concerns in real-time. This method keeps companies ahead of compliance while saving them fines. For finance professionals, incorporating AI in such spaces is an important move to streamline accounting operations, mitigate risks, and secure compliance on an all-around level.
A key advantage of leveraging AI in lease accounting is its capability to efficiently process and analyze vast amounts of data with speed and precision. With traditional manual processes, accountants would spend hours or even days reviewing leases, extracting relevant information, and inputting it into spreadsheets or accounting systems. However, with AI technology, this process can be done much faster and with greater accuracy. This not only saves time and resources for the accounting team but also reduces human error in data entry. In terms of automating lease accounting tasks, AI can also assist with lease classification and measurement. By learning from previous leases and applying complex algorithms, AI can accurately classify new leases according to the appropriate accounting standards. This not only speeds up the process but also reduces the risk of misclassification, which can have significant financial consequences for a company.