7 Ways AI Improves Accounting: From Lease Accounting to Compliance
Artificial Intelligence is reshaping the accounting industry, offering groundbreaking solutions for various financial operations. This article explores the transformative effects of AI on accounting practices, from lease management to compliance procedures. Drawing on insights from industry experts, we examine how these innovative technologies are streamlining processes and enhancing decision-making in the financial sector.
AI Enhances Lease Accounting and Financial Operations
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.
— Lesley Hargraves, Audit Partner, Maxwell Locke & Ritter
Intelligent Automation Revolutionizes Accounting Processes
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.
AI Streamlines Compliance and Boosts Efficiency
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.
— Gary Jain, CEO, Ledger Labs
Automated Lease Analysis Empowers Smarter Property Management
From my vantage point, AI is revolutionizing how accounting teams tackle lease accounting under ASC 842 and streamline their workflows. Tools like Black Owl Systems leverage AI to automatically parse lease agreements, identifying key terms such as commencement dates and discount rates, which ensures precise calculations for right-of-use assets and liabilities as mandated by ASC 842. This is a lifesaver for our property clients who juggle dozens of leases, as it eliminates the risk of misclassifying a finance lease as an operating one. For month-end close, platforms like Highradius automate journal entry generation and task approvals, slashing close cycles by nearly a third for some of our clients.
Compliance risk is also mitigated through AI-driven features, such as automated audit trails and notifications for lease reassessments, keeping teams aligned with ASC 842 and GASB 87 requirements. By integrating these solutions, our clients spend less time on manual processes and more on optimizing their property investments. It's not just about compliance; it's about empowering teams to work smarter.
— Austin Rulfs, Founder / Property & Finance Specialist, Zanda Wealth
AI Solutions Transform Month-End Close and Reporting
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 errors, 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 quickly on AI integration position their companies for stronger financial management and sustained growth.
— Brandon Thor, CEO, Thor Metals Group
Advanced Systems Elevate Lease Data Management
The adoption of AI in lease accounting is transforming how accounting teams manage compliance, streamline month-end processes, and reduce operational risk under ASC 842 and similar standards. Advanced AI systems automatically scan, interpret, and populate lease data from contracts, removing the need for manual data entry and dramatically lowering the chance of mistakes. These platforms can identify specific lease provisions—such as variable payment schedules or termination clauses—and apply them accurately in financial reporting, ensuring adherence to regulatory frameworks.
Automation extends to month-end close activities, where AI continuously updates lease calculations and reconciles data, enabling faster, more reliable financial closes. With the burden of routine tasks shifted to AI, accounting professionals can devote more time to oversight, analysis, and strategic initiatives, elevating their role within the organization.
— Richard Dalder, Business Development Manager, Tradervue
Real-Time Analysis Drives Informed Leasing Decisions
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.
— Patrick McDermott, Executive Vice President, Max Cash
How Spacebase Supports AI-Driven Lease Accounting
AI is clearly changing the landscape of lease accounting, but success depends on having software that supports structured workflows, reliable data, and seamless ERP integrations.
Spacebase was built to streamline lease accounting under ASC 842 by providing:
- Clean, export-ready reports and custom journal entries
- Secure role-based access and audit trails
- Automated critical date tracking and alerts
- Compatibility with major ERP systems like Oracle, NetSuite, and SAP Our commitment to accurate data is what drives everything we do. While AI has made significant progress and continues to evolve, we are waiting for the right moment to integrate it into the Spacebase platform.
For now, lease abstraction at Spacebase is still handled traditionally: by experienced humans. As AI-generated data becomes more reliable, we plan to offer it as an option for teams that want it. We also recognize that not every company is ready to adopt AI tools, which is why we’re building flexibility into our platform, allowing teams to toggle AI-powered features on or off based on their internal policies.
but we make it easy to act on the data you already have.
Book a demo to see how Spacebase can support your accounting workflows.
Brooke Colglazier
Marketing Manager