Use Artificial Intelligence and Machine Learning to Make Your Accounting Firm More Profitable in 2019 and Beyond

Artificial intelligence (AI) and machine learning (ML) are getting a lot of attention in numerous industries that are historically slow to adopt new technology.

Real estate is begrudgingly evolving, by leveraging the convenience of all-online loan paperwork processes, remote agents able to manage home sales from a distance, and self-guided home tours. The transportation industry also experienced a significant push forward, with the introduction of electronic logging device (ELD) mandate. This mandate requires truckers to use an electronic device to monitor engine hours and report drive times to their company. The first all-electric, self-driving semi also made front page news last year.

But what about the accounting industry? How is technology impacting daily operations?

The History of Technology in Accounting

Accountants face an immense amount of work on a day-to-day basis. While anyone can stay focused and productive for short periods, accountants are expected to remain in a state of deep analysis that requires intense concentration for extended periods of time, every day. Add in lots of repetitive tasks and it doesn't take long for diminished productivity, low motivation, and mental burnout to rear their ugly heads.

For years, tech innovators have been working to solve for this by providing software tools that help accountants get more done in less time. Today, the number of options available is higher than ever before, allowing your firm to thoughtfully invest in the perfect system to meet your needs. This post will explain what kind of impact adopting smart, AI-powered software into your firm can have on your business.

AI Benefits for Accounting Firms

AI successfully reduces or eliminates many tedious tasks, allowing accountants to tackle day-to-day to-dos with focused attention to detail. But that's not the only benefit. AI can also help your accounting firm:

• Reduce redundancies
  With smart software in place, accountants have the opportunity to eliminate unnecessary busy work, and in particular, tasks that require manual data entry. This provides time to focus on more complex work, like deep financial analysis, that requires extensive expertise. Not only does this benefit clients, because they get more bang for their buck, it also allows accountants to flex their financial knowledge muscles and improves job satisfaction.

• Decrease human error
  When you spend your entire day working through a lengthy data project in excel, your eyes start to cross, and you may even fat finger a number or two. For accountants, there's really no room for error, and mistakes can lead to intensive, time-consuming audits.
  
  Luckily, smart software is capable of serving as the first line of defense and a second set of eyes. With the right tools in place to double check your work, highlight anything that's out of the ordinary, and clarify anything that doesn't quite fit your typical patterns - your firm can easily reduce human error.

• Better whole-team visibility
  Intelligent office-level solutions give your office manager full control over data access throughout your firm. Your appointed software manager maintains control of who has access to what and can provide team access to key documents, performance stats, reports, and any other resources hosted on your platform. This can not only help reduce gatekeeping hiccups but can also help streamline inter-office communication.

• Enhanced ability to recruit top talent
  Recent grads and experienced CPAs looking to move to a new company are excited to see forward-thinking, modern firms adopting smart technology. By highlighting the tools your firm uses to save time and simplify processes, you'll have an easier time attracting up-and-coming talent or top talent who's seeking an innovative firm.

• Provide tech-driven value to potential clients
  Quickbooks is one to watch when it comes to keeping up with the importance and evolution of technology in the accounting industry. As a leading software giant, the company is dedicated to understanding the market. Their large marketing and product teams work together to regularly evaluate, reimagine, and evolve their tools and messaging to fit the needs of their core users.
  
  
  When industry-leaders start taking the leap to incorporate more tech into their offering, it's time to examine what your firm has to offer and to make sure you're blazing the trail, not struggling to catch up. Your firm may not need enterprise-level software tools, but it's worth considering what tech tools you can use to expand your service offering to your clients. Creative use of innovative tools will help you compete with firms that are not ready or willing to embrace the benefits technology has to offer.

Become an instant sales tax expert with LumaTax. Outsource sales tax management to our expert team and finally make it profitable for your firm.

Challenges Tech Changes Can Bring

It would be careless of us to conveniently avoid talking about a couple of significant challenges that tend to go hand-in-hand with adopting new software into your accounting firm. So we'll do that now.

• Onboarding can be time intensive
  Making significant changes to day-to-day processes is always tedious. Especially if, up until this point, your accountants have all been able to manage things however they see fit. The key to overcoming this challenge is to have open communication with your team.
  
  Set proper expectations when it comes to determining how much time your organization will have to fully learn and embrace new software tools. Divide and conquer when it comes to compiling and exporting the data needed to complete the setup process, and be sure to take advantage of office admins when possible. Setting up mandatory training sessions and providing access to software support platforms can also help keep things moving along.

• You may not get 100% buy-in
  Some employees may be resistant to the changes brought on by new software. While some workers may just be set in their ways, others may be uncomfortable with trusting software tools to handle elements of their job efficiently. To help appease these employees, and to ensure your software is, in fact, handling the job, it may be wise to have extra checks and balances in place for the first few months to avoid any major hiccups.
  
  Also, be sure to ask your team for input on any concerns before you get started. By proactively addressing concerns, you'll build confidence among team members and will help them feel more comfortable and secure during the transition.

• There will be a learning curve
  Any time you adopt new technology into your business, processes are going to change, and team members are going to need time to learn how to use the new system. And it can go on for a while, as people uncover new tasks they haven't had to do in the system yet. While this can be tricky to navigate, it's not impossible, and it shouldn't stop you from moving to a time-saving platform if it will ultimately make your team more efficient.
  
  To mitigate the hassle that comes from facing a learning curve, try to set up your new software at a time of year that's typically less busy for your firm (hint: not tax time) and be sure to ask software providers what type of onboarding process, training tutorials, and resources they offer to new clients. Also be sure to make firm leaders available to answer questions and provide support, as needed.

Biggest Benefits to Your Clients

There are numerous ways that smart software can help your firm provide better service to your clients, resulting in higher client satisfaction.

• CPAs have more consult time
  By eliminating time previously spent on redundant, repetitive tasks, your accountants will have the opportunity to provide more value to their clients by acting ass well-researched financial advisors. Having more time means CPAs can get in the weeds and thoroughly evaluate books and analyze their client's numbers. Having the time to do so allows CPAs to offer clients more thorough guidance on how to save, improve, and grow - as well as how to avoid common business pitfalls.

• Firms offer more services
  For most firms, having the ability to provide certain services is out of reach. This is true simply because teams don't always have the time or know-how to manage certain tasks efficiently (read: without it costing clients a fortune). But with today's widely varied software solutions, accountants can lean on tools that provide the expertise, guidance, and management needed to enhance a firm's service offerings. This can include things like payroll management, sales tax compliance, and due diligence management.

• AI automation speeds up tedious processes
  Many of today's popular accounting software solutions leverage the power of AI to automate, simplify, and streamline invoice processing and approval workflows. When automation begins, the system runs everything by your CPAs for approval, and machine learning makes the technology smarter over time. Once you have a well-oiled system in place, CPAs just have to verify anything out of the ordinary and can skip manual input processes altogether. Which again, makes your firm more valuable to clients because you can maximize billable hours.

• Detailed reporting improves performance
  Stop guessing where and how you can increase efficiency, boost productivity, or maximize profitability. With accounting software that has built-in reporting, your firm will be able to leverage more in-depth insights into various key performance indicators to make smart business decisions. And as an added bonus, no more tedious report building!

Don't sell your firm short by sitting idly by and missing the chance to evolve in lock-step with accounting technology changes. Embrace the power of AI and boost your firm's ability to grow, expand your services, and most importantly, better serve your clients.

How to Find and Implement the Right Software Tools for Your Team

• Do your research
  All software is not created equal, so it's vital that you prioritize key wants and needs and research to find the system that will provide the best fit for you and your team. Start broad and come to the table with a list of dealbreakers, then start narrowing. Also, be sure to categorize your needs.
  
  Perhaps you want one software that enables you to manage your office, customer relationships, and billing, but need another to manage financials, both for your business and for your clients. If a multi-system solution is a must for you, look for tools that play nice together (or better yet, fully integrate) to eliminate duplications and redundancies.

• Focus on areas of weakness
  Solving for known problems and implementing tools that reduce or eliminate time-consuming processes is a great way to approach software shopping. Maybe your team is really expedient with federal tax filing; let's say you have a good process in place and have a streamlined system that works for you. But when it comes to state sales tax compliance, your team seriously struggles to keep it all straight. Focus on finding a solution that will help you streamline state sales tax management to reduce time burdens and make that portion of your business profitable.

• Seek tools that add value
  This one goes hand-in-hand with the point above. Always consider the cost-to-return ratio to make sure you're making sound financial decisions for the future of your firm. By researching first, understanding the possible upside of various service add-ons, and incorporating tools that make previously not-so-profitable services more lucrative, you'll find tools that pay for themselves.

The bottom line is, technology is here to stay. In today's competitive landscape, with today's powerful AI tools, you have the opportunity to leverage these tools to attract top talent, increase profitability, improve efficiency, and get a leg-up on competitors.