AI and accounting: preparing for the future
Today, we explore the exciting opportunities and challenges AI brings to the accounting profession. We’ll also highlight the logical next steps accountants can take to thrive in this evolving landscape and build deeper, more meaningful connections with their clients.
Artificial Intelligence (AI) is shaking up the whole world, and it’s only natural for accountants to feel a little uneasy about it. Tasks that used to take hours, like sorting through invoices or reconciling accounts, are now being handled in minutes, or even seconds, by AI-powered tools.
While this can be a huge time-saver, it raises many questions: Will AI take our jobs? Will accountants still be needed? What does this mean for the future of my practice? This isn't the first, nor will it be the last, time that technology has had a significant impact on accounting. We've seen similar concerns arise when automation entered the landscape decades ago, with fears about the role of accountants. However, the firms that adapted to automation not only survived but thrived.
The truth is, while AI is changing how we work, it’s also opening up new opportunities that allow accountants to focus on more meaningful and impactful areas. Instead of worrying about data entry, you can now focus on offering strategic advice to clients, helping them grow their businesses and plan for the future.
In this article, we’ll dive into how AI impacts accounting and how you can adapt to these changes. We’ll explore AI’s challenges, share practical ways to overcome them, and show you how leveraging AI can enhance your practice. Finally, we’ll explain why now is the perfect time to take the leap into advisory services!
The challenges of AI in accounting
As artificial intelligence (AI) continues to evolve, it’s transforming the industry in ways we never imagined. We want to address the challenges accountants face with AI before offering actionable solutions to keep your firm’s value clear to clients.
A double-edged sword
AI’s automation of routine processes allows accounting teams to complete tasks like preparing financial reports or processing expense reports more efficiently. While this is a huge benefit, it also sparks concerns about the evolving role of accountants. The challenge isn’t to compete with the speed of AI but to adapt and shift focus from repetitive tasks to areas that require critical thinking and strategy.
Upskilling in business acumen and advisory services can make your firm indispensable to clients. Combining AI-powered tools while offering expert advice will allow you to deliver more strategic value than ever before.
Job displacement fears
A significant concern among accountants is that AI systems will replace jobs, particularly for those who spend a lot of time on data entry or bookkeeping. While AI automates many manual tasks, it also creates space for new services.
Focus on providing services where AI cannot replicate human expertise, such as analyzing complex business challenges and offering customized financial guidance.
Evolving skill sets
Accountants are increasingly expected to interpret AI-driven insights and use them to guide clients’ business strategies. Developing your skills in communication, strategic thinking, and mastering AI technology will be vital to staying relevant in the industry.
Many accountants are already investing in learning opportunities by joining partner programs or taking online courses focusing on advisory skills to offer increasingly valuable services to their clients.
The opportunities to use AI in accounting
Now that we’ve explored AI’s challenges, it’s time to look at how you can use AI in your practice. Here are several ways AI can enhance your accounting work with real tools, prompts, and creative ideas to help you maximize the value you can provide to clients.
Automating routine tasks with software
AI excels at handling repetitive tasks like bookkeeping, payroll, and invoicing. Using software to automate these processes can significantly reduce time spent on administrative work.
Use tools like Xero or QuickBooks to automate the categorization of transactions, bank reconciliations, and generate expense reports. These platforms offer machine learning features that get smarter over time, reducing manual work.
JAX (Xero’s new AI assistant) takes it a step further by allowing users to interact conversationally with the platform. Instead of manually processing an invoice or reconciling accounts, you can “Just Ask Xero” to complete these tasks. JAX is also designed to anticipate follow-up actions, such as generating a reminder email for overdue invoices, further saving time.
Automating tedious tasks with generative AI
AI tools like ChatGPT can significantly reduce the time spent on manual data entry and other repetitive accounting tasks, freeing up time for more strategic work. Here are practical ways to use ChatGPT to handle these tasks more efficiently.
Disclaimer: Please be careful when entering sensitive or personal data into ChatGPT or other AI software. For enhanced privacy and security, consider investing in a private AI tool to ensure that data remains confidential and not shared with third parties. For more information on responsible AI usage, you can refer to resources such as this article from Microsoft.
Structuring data
Tools like ChatGPT can help you format and structure large volumes of data. Instead of manually entering data into spreadsheets or accounting software, you can feed data into ChatGPT to help standardize entries or check for inconsistencies.
Prompt example: “I have a list of transactions. Format them into columns for date, transaction type, and amount for easy input into my accounting system.”
Validating data
When working with large datasets, ChatGPT can also help validate the data, flagging potential errors or inconsistencies. This way, your eyes can be drawn to the mistakes more quickly than if you manually validated the data.
Prompt example: “Here’s a set of sales data. Can you check for any duplicate entries or misformatted dates?”
Summarizing your reviews
When preparing financial reports, instead of writing everything from scratch, you can jot down key insights or important points you’d like to discuss with your client. Then, use ChatGPT to transform those rough notes into clear, concise bullet points. This saves you time on the actual writing process, allowing you to focus more on analyzing the data and making informed decisions.
Prompt example: “Summarize the key findings from this financial report and organize them into simple bullet points that are easy for my client to understand.”
Writing automated reminders
AI can also help draft routine communications, such as follow-up emails for overdue payments or reminders for upcoming invoices. You can then tailor the message to fit your needs.
Prompt example: “Write a polite email reminder to a client about an overdue invoice, including the amount owed, the due date, and a friendly request for payment”
The logical next step: advisory services
The shift from traditional accounting roles toward becoming a trusted business advisor is an exciting and valuable opportunity for accountants, especially in the professional services sector. Businesses depend heavily on strategic financial insights to drive growth, manage resources, and optimize profitability in this space. The global professional services market is projected to reach $6.5 trillion in 2024 - so the opportunity is HUGE.
Why Professional Services?
Professional services firms, such as management consulting, architecture, software, and engineering firms, rely on financial advisors to manage their books and offer tailored insights that align with their business goals. However, the industry doesn’t have enough advisors to meet the demand of the growing number of firms. This makes it an ideal space for accountants who want to pivot from transactional work (e.g., bookkeeping expense reports) to offering more strategic guidance. Professional services firms can specifically benefit from advisory services in areas like:
Resource management: Helping firms understand how they can allocate staff and project resources efficiently to maximize profitability.
Revenue forecasting: Advising on strategies to ensure consistent cash flow, is particularly important for project-based work in professional services.
Revenue recognition: Assisting firms in managing complex billing structures and identifying opportunities for revenue growth.
Not sure if you have professional services clients? Read our comprehensive list of professional service professions here (there’s more than you’d think!).
In summary
AI is automating more and more of the traditional accountant’s responsibilities. While on the one hand, having less work to do is a good thing, on the other hand, AI poses a threat to the need for accounting services. The solution is to expand your firm's services so you can continue providing value to your clients in different ways. Transitioning from traditional accountant to strategic advisor is the perfect way to start preparing your practice for a future with AI.
Want to learn more about becoming a specialized advisor to professional services and consulting companies? Check out the Projectworks Partner Program. It provides resources to help you become a professional services expert and support clients more effectively.
