AI is going to change accounting, but not in the ways that you think.
By now, AI is being utilized in almost every industry. While in some sectors automation could lead to a reduction in the number of jobs, for CPAs, its impact is beneficial. If you’re a practicing CPA, rest easy; technology isn’t coming here to take your job, it’s here to make your job better.
Like the previous adoption of calculators or online bookkeeping services, the industry, and those who serve in it, are safe. People still provide what technology and algorithms can’t, particularly trust and client interactions. But technology and algorithms can replace much of the work that no one enjoys doing, while simultaneously freeing up CPAs to become better partners to the organizations they work with.
Eliminating the mundane
Whether you’re a CPA just starting out or higher up the ladder, you know that many of the tasks for a new CPA are repetitive and boring. But they need to be done. Items like data entry, reconciliation, adjusting entries and categorizing expenses have long been the responsibilities and bane of the newly-employed accountant. Few, if any, enjoy this work.
AI in accounting is significantly reducing — and in some cases eliminating — these tasks. That doesn’t mean less experienced accountants are now replaceable. A person is still needed to verify there are no unintended errors in the data. Someone still needs to make sense of and explain all the data. It means less copy and paste during your workday, not a reduction in hours.
Increased accuracy and efficiency
Many repetitive tasks are prone to human error. When you’re plugging in data all day, it’s understandable: Sometimes a keystroke is missed or an item gets duplicated or put on the wrong line in a spreadsheet. Automating these tasks actually increases the accuracy of reports, while drastically reducing the amount of time necessary to compile them.
Imagine spending an hour each day to verify the numbers, rather than four hours just plugging numbers in. Month-end closing reports can take a couple of hours to analyze rather than 20 to compile. When this type of work is automated, it allows accountants to focus on other types of work, often more creative and strategic.
More, happier clients
Increased efficiency and accuracy have trickle-down effects that boost your bottom line. Accounting practices are limited in the number of clients they can take on based on the amount of time required to input data and create reports. Accountants know there’s no shortage of people looking for their skill sets. With the mundane and time-consuming tasks out of the way, you can actually increase your client base.
It also means you can give more time to each client. Rather than emails piling up and having clients beating down the door to get information and reports, you’ll be able to respond and provide them with what they need quickly. This also allows you to talk to them about more strategic concerns like spend and income rates, trends across periods, and suggestions for future actions. Combine this level of service with more accurate reports and you’ve drastically improved client relationships at the same time you’re taking on additional business.
Less stress at tax time
April and the months leading up to it can seem like an endless pile of receipts, forms, spreadsheets and transactions to categorize to prepare taxes. AI can help with all of that. We’ve already talked about the ability of AI to eliminate data entry and perform reconciliation, but it can do even more than that at tax time.
Automation can ensure that not only are all of the numbers compiled accurately, but the information is optimized for tax purposes. In the future, it will also be able to scan for any available tax credits and integrate with the IRS submission portal.
CPAs will still be needed at tax time, because a human will still need to verify the numbers make sense and double-check that the technology did its job correctly. They’ll just be able to take on more clients, achieve a bit more balance, and get a better night’s rest during crunch time.
Trust still comes from humans
Automation isn’t here to replace accountants. In fact, AI in accounting is designed to benefit from humans, rather than being standalone. It will shift the nature of your daily tasks, with junior CPAs performing more strategic, creative work and senior CPAs having more client interaction. In the end, the financial professionals that we work with are more than happy with these changes.
Financial professionals are increasingly relying on technology to help run their practices and perform their duties. The breadth of continuing professional education courses that teach tech solutions are evidence of this. AI is at the forefront of new technology for the industry, and adopting it early will give you an advantage as the industry and client expectations shift.