Why CPAs Shouldn't Fret About AI Right Now
by Div Bhansali, AccountantsWorld –
June 11, 2018
CPAs have varying thoughts on artificial intelligence (AI), ranging from concern to confusion to unabashed excitement. AI isn’t something to fret about — at least for now. There’s no doubt that AI is changing the way some CPAs operate, particularly corporate accountants. However, that’s been less the case for small and mid-sized public accounting firms. This is largely due to one major factor: their small business clients. Rather than looking to advanced technologies to help clients, CPAs in public practice don’t need to look any further than their own data to grow both their firm and their clients’ businesses.
The Current Landscape
AI requires massive amounts of data. Small business owners already struggle with basic tasks like managing their books or prepping their taxes. In fact, many end up making mistakes. This becomes a major problem for AI. In order to learn how to populate data, AI needs a role model, which is typically the user. If the user makes mistakes, they become compounded as AI would unknowingly replicate those errors.
As a result, CPAs spend tremendous amounts of time fixing those mistakes. This causes them to miss opportunities to provide real-time counsel and advice, such as flagging any potential issues to their clients — an aspect that many business owners look for in their financial partners.
Small Data Now, Big Data Later
AI can help corporate accountants understand the broader industry and benchmark where their company stands against global competitors. Small business owners, however, do not need that macro-level comparison.
As such, CPAs can help their clients thrive most by focusing on small data. CPAs can monitor cash flow, look for unusual receivables activity and discover new revenue opportunities for their clients. This is the real value that deepens their relationship with small business owners.
The good news is that AI isn’t needed to gather and analyze small data. Today, cloud-based professional accounting software is already capable of automatically aggregating that data and delivering real-time insights, making it easier for CPAs to help clients manage their finances.
Because of the real-time integrated capabilities of the cloud, CPAs can better prepare for any issues small business owners may encounter. Dashboards and alerts can pinpoint changes in payables or receivables levels, or dips in cash flow. This means CPAs can analyze the complete picture of a client’s finances to offer real-time strategic advice and provide significantly deeper value beyond preparing simple financials and doing taxes.
What to Really Expect From AI
Once small business clients are more ready for AI, there will be a growing number of opportunities for both business owners and CPAs to use those tools to advance their business goals. For example, CPAs with predictive intelligence will be able to use algorithms to better profile the needs of each individual client.
Additionally, with these tech advancements, the skill sets required for success in accounting will also change. Interpersonal communication and leadership skills will become as (or more) essential than the traditional quantitative focus of most CPAs.
Accounting staff will need to become proficient at operating these AI tools and interpreting their output. This may also mean that fewer data-entry roles will be required in the future given that most entry and reporting will be automated. But not to worry, the strategic and advisory value of CPAs will actually grow as a result.
That said, change can be distressing. Accounting partners may encounter pushback from colleagues and even clients. It’s up to them to emphasize, teach and highlight the benefits of using new technologies.
Big data and AI will eventually open many doors for the accounting industry. However, if CPAs look too far ahead, they run the risk of missing more immediate opportunities to help their clients. By working with small business owners to extract the full value of their own data, CPAs can improve client relationships and advance their practices.
Div Bhansali is vice president of marketing for AccountantsWorld, the pioneer in innovative cloud computing solutions for accountants.
This article appeared in the May/June 2018 issue of New Jersey CPA magazine. Read the full issue.