Artificial Intelligence – what CPAs need to know

As we move past another busy season, we are seeing a change in the public accounting landscape like never before.

The challenges we are faced with seem to be growing by the day. In the past, it was just staffing shortages and succession issues, which were enough to stress even the most level-headed individual.

Now those issues have not gone away, but more issues have been added with the coming of artificial intelligence (AI), which is expected to dramatically impact our profession. Given this, one of the latest challenges we have been faced with as firms are how do we transition from compliance-based accountants into proactive advisors and entrepreneurial CPAs.

The question is not: Are these changes coming? But, instead, how can we prepare for them?

It is critical not to overlook the silver linings and opportunities generated by AI, and how practitioners and organizations can benefit from the adoption of AI moving forward. Below is a quick primer on what CPAs need to know about artificial intelligence.

So what exactly is artificial intelligence (AI)?

AI is one of those concepts that has received a large amount of attention lately but still seems like an intimidating topic that is hard to get a handle on. Drilling down, however, AI simply represents a computer program or suite of programs that allow computers to replicate human behavior or insights. The implementation of AI across the industry and geographic lines will have profound impacts on accounting, data management processes, and other businesses moving forward. Automating and streamlining the flow of information from the organization to external stakeholders will help CPAs and other accounting professionals interpret, analyze, and report data, while also allowing accountants to provide higher level advice versus traditional number crunching.

Simply put, AI has the potential to have a powerful impact on the accounting profession as lower-level services and tasks continue to be automated and almost outsourced, to technology and other tools available to market participants. It is one thing to understand these trends; however, it is an entirely different task to implement AI into the business environment. Let’s take a look at a few of the impacts and ramifications that AI will, and already is, having on the accounting profession and the clients served by accountants.

What is the impact for CPAs?

AI and machine learning are already changing our lives every day, even if we don’t realize it, and this technology trend is coming to the accounting profession. Let’s take a look at the way this technology will impact how and what we do.

• Virtual assistant and customer support – AI today is being programmed to function as both an administrative role and customer support aspect. From answering your phone calls to booking appointments to responding to customer requests by reading and understanding emails, voicemail, and text messages, AI is already presented in the business environment. These changes are here and ready for mass market adoption.
• Auditing – This is another area where we already see the impact of AI and it is more than just speeding up the confirmation process. AI and data analysis allows CPAs to streamline the audit process by validating and analyzing data in a nearly real-time and continuous manner. In the past, it could take 10 hours to complete analytical testing on an audit section, whereas AI can do the same testing within minutes and come to a better conclusion than a traditional staff accountant. The question is not when can AI save significant amounts of time on audit engagements but when do you plan to deploy this software in your practice.
• Tax compliance – In the past, the question for practitioners was: Do I deploy a scan and auto-flow new products in when doing my practices tax return as a way to reduce costs and increase capacity? Now the question is: Why are you not leveraging these technologies? The future will bring even more automation into the individual tax practice in the form of bots who will automatically complete your clients’ tax returns for you.

How can CPAs prepare for artificial intelligence?

After analyzing and reading about AI in the context of accounting professionals and business overall, it may seem like a difficult topic to get started with, but the good news is that it is not impossible. Like any other technology tool, AI platforms and technology can be learned and implemented over a period of time and should not be something that is avoided or feared.

We can’t say when AI will make a significant impact on our industry, but we do have complete control when to implement it. We do know what the change will look like and how it will impact what we do – enabling practitioners to score a win in the certainty column. This allows us to think about what actions we need to take to get ready.

1. Step one: Take action today and every day. This isn’t something you can sit around and wait on until you are forced into implementing it. If you wait, you will negatively impact your firm’s performance moving forward.
2. Step two: Stop being afraid to fail. Do something drastically different than ever before; fully commit to adopting one piece of AI in 2018. Even if it is just a small team within your firm or a niche, commit to the change and put a plan in place to succeed.
3. Step three: Accept that things are going to change, stop relying on the same tools as last year and think about which technologies will your business implement and commit to moving forward and adopting change sooner.
4. Step four: Focus on the non-technical skills, as they are critical in the changing business landscape, as our role as accountants shifts from practitioners to advisors and forward-looking partners. This means the soft or perhaps better now labeled as business skills we’ve put off for too long are now in the forefront. Embrace them and build on them.
5. Step five: Celebrate your success and adapt to any setbacks. But first, celebrate your victory in taking a step forward and implementing AI at your firm. Learn from your success and push forward toward your next goal.

In today’s ever-changing environment, CPAs can no longer afford to sit back and wait to adopt innovative technology. The future of the entrepreneurial CPA and start-up accounting firm depends on your ability to change and evolve with the times to move you and your practice forward at a constant rate to avoid getting left behind.

Where is the silver lining?

The silver lining in AI, this transformational technology which will impact our profession to the core is that by embracing AI and the automation that comes with it, it will allow us the capacity, new skills, and knowledge to begin our transition into becoming proactive advisors for our clients.

CPAs have been saying for years that they want to transition from bean counters to strategic advisors, and AI is providing practitioners with a tool and platform to accomplish just that. It’s time to adapt and embrace the entrepreneurial CPA mindset so you can help your firm move from an accountant to an advisory.

Want to learn more about how to take advantage of the silver lining from the Entrepreneurial CPAs, keep the learning going and check out their YouTube Channel.