The Transformative Impact of AI on Accounting
As artificial intelligence gains prominence, its transformative capabilities are poised to reshape accounting, creating a more efficient, data-driven, and future-ready landscape.
By John McGowan | Digital Exclusive – 2023
With the rise of artificial intelligence (AI), the accounting industry is experiencing a seismic shift in the way it manages tax compliance and financial reporting, among other things. As tax and accounting firms continue to witness the transformative power of AI on business—increased accuracy, efficiency, and scalability—and try to meet surging client demand for its integration, they’re making significant investments in technology to maintain a competitive edge and streamline their operations.
This growing trend is expected to trigger transformative changes across various sectors within the accounting industry, paving the way for an era of advanced automation and data-driven decision-making. And what’s more, AI can free accountants from repetitive tasks to concentrate on their core strengths of delivering insightful, strategic analysis and exceptional client support.
The True Value of AI
According to a recent Thomson Reuters survey, 68% of participating tax and accounting firms believe that generative AI tools, like ChatGPT, could be used to improve tax work. Therefore, it’s not surprising to learn that today’s accounting and tax firms are harnessing the power of generative AI to transform the taxpayer experience. By leveraging these tools, tax advisors can generate summaries of documents, read relevant information, and break down complex tax returns with greater efficiency and accuracy.
Of course, the true value of AI lies in its scalable integration, empowering tax professionals to maximize their skills and expertise while delivering enhanced services to their clients. Simply having AI for the sake of having it may result in frivolous applications, but when utilized as a tool, AI can drive meaningful outcomes and transform the tax industry.
Surging Client Demand
The tax and accounting industry has experienced a surge in client demand for innovation. According to a Mordor Intelligence statistics report, AI adoption in the accounting sector is projected to grow at an impressive rate of 30% annually from 2023 to 2028. This rapid growth highlights the industry’s recognition of AI’s transformative potential in streamlining processes and enhancing decision-making.
In response to this heightened demand, businesses are making significant investments in AI integration, with some companies dedicating as much as $1 billion to stay ahead in the competitive landscape and cater to customer expectations. The substantial investments underscore the strategic importance of AI in enabling accounting firms to deliver efficient and data-driven solutions, ensuring they can meet the evolving needs of their clients and remain at the forefront of industry innovation.
With skyrocketing AI investments in the accounting industry, the benefits of adopting this technology have become increasingly evident. These advantages include, but are not limited to:
- Invisible accounting: automating routine tasks for accountants to focus on strategic decision-making.
- Continuous auditing: ensuring uninterrupted and precise audits.
- Active insight: offering real-time financial visibility for informed and proactive decision-making.
Maximizing AI’s Benefits With a Manageable Budget
While larger firms in the finance industry are making massive investments of millions (or even billions) of dollars in AI, smaller players are keenly aware of the significant benefits it can offer. Recognizing the need for a more measured approach, emerging players can strategically position themselves to tap into the potential of AI without the need for substantial financial investments. By taking deliberate steps, smaller players can effectively embrace and leverage AI’s transformative power to stay competitive in the rapidly evolving finance industry.
Overall, integrating AI into tax and accounting holds immense potential to transform the industry, bringing about streamlined processes, heightened accuracy, and the ability to make proactive decisions. As innovation progresses and responsible implementation continues, AI is poised to reshape the tax and accounting landscape, empowering businesses to thrive in the digital era.
John McGowan is the founder and CEO of HubSync, a SaaS company with a next-generation tax and accounting automation platform created with the goal of changing how tax professionals work and how clients interact with CPA firms. Previously, John has more than 25 years of experience driving technology innovation and investment at Deloitte and KPMG.