Artificial intelligence (AI) is transforming the way accounting professionals work. Generative AI, specifically, offers compelling opportunities for auditors, accountants, and tax professionals, especially when it comes to operational efficiency.
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By automating routine tasks, tax professionals can use AI to redirect efforts toward more client-focused work that’s typically more fulfilling and profitable. Couple that with the ability to conduct tax research quickly, generative AI is a potential game-changer.
However, most tax and accounting professionals are unsure of how to effectively harness the power of AI, or even where to start. A crucial step is choosing the right AI-powered technology and partnering with the right provider.
What is GenAI and how can tax professionals use it?
AI refers to the simulation of human intelligence in machines programmed to think and learn like humans. The goal of AI is to create systems that can perform tasks that would normally require human intelligence. It is important to note that AI is not a single technology. Rather, it is multiple technologies applied in different functions through various applications.
GenAI refers to a specific type of artificial intelligence system that is capable of generating new content or data that is similar to, but not an exact copy of, existing data. This type of AI is often used in creative tasks, such as generating images, music, text, or other forms of content.
One important area where tax and accounting industry professionals can use generative AI is data entry automation. Generative AI systems can automate data entry tasks by extracting information from various documents, which can reduce manual effort and minimize errors. Document generation and summarization is another area where Generative AI models have the potential to help. They can automatically generate financial reports, invoices, or other accounting documents, as well as assist in summarizing lengthy financial statements or reports for quick insights.
AI can also help tax and accounting professionals with fraud detection (identifying patterns and anomalies), forecasting and predictive analytics, natural language processing (NLP) for client communication, and tax research and compliance, among other important functions.
Here are three key considerations for tax and accounting professionals to keep in mind as they seek to make the most of this transformative technology.
#1: Let client needs lead the way
AI has the power to transform processes. It can nurture greater collaboration between clients and accounting firms. But, it is important to remember that client needs must drive the adoption of many AI applications.
Clients usually have the data they need to effectively build out good AI solutions. And, they surely have ideas about the optimal outcomes. AI technologies, of course, produce the best results when they are not developed in a vacuum.
This presents an opportunity for tax professionals, their clients, and their organizations to integrate operations for mutual benefit. Like any technology, the greatest benefits are realized when AI addresses client needs and unleashes human expertise.
#2: Find a trusted AI technology provider as a partner
While many tax and accounting professionals recognize and welcome the arrival of generative AI, many are also skeptical of the technology at its current stage of development. Many question whether or not the technology is dependable enough to handle anything more than the most basic tax-related questions.
Therefore, most firms are cautious about embracing the technology too soon. They’re standing on the sidelines, waiting for it to mature to the point where it can be rigorously tested on more complex tax matters.
Data privacy and security are enormous risk concerns as well. That’s because tax professionals, not surprisingly, deal with extremely sensitive personal information that cannot — and should not — be publicly shared.
That’s why it is so important to find an experienced technology provider who can leverage decades of rich domain expertise in public tax data that drives many AI applications. It is also paramount to find a partner that is committed to safety, security, and privacy in the design, development, and deployment of AI products and services.
The ideal partner should not only have a strong technological foundation but also a deep understanding of the tax and accounting industry’s needs and challenges.
Some key attributes to consider include:
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- Industry expertise
- Technological prowess
- Data security and privacy
- Customization and integration
- Support and training
- Commitment to innovation
- Ethical AI practices
- Collaborative approaches
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#3: Focus on building trust
Implementing new AI-powered tech solutions involves two layers of building trust:
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- The confidence that the technology stack employed adheres to industry standards
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- Firms must ensure that the AI solutions they adopt are built upon a technology stack that complies with the highest industry standards.
- This includes standards for data integrity, accuracy, and reliability, as well as compliance with the latest regulations. Firms should also seek out AI partners who not only understand these requirements but who actively design their systems to meet or exceed these standards. This approach helps to ensure that the AI solutions are robust and can withstand scrutiny from both clients and regulatory bodies.
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- The confidence that the technology stack employed adheres to industry standards
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- The confidence that clients and system users can trust the new work processes
- The second layer of trust is equally critical. Clients and system users need to feel confident that the new AI-enhanced work processes are secure, transparent, and effective.
- This involves clear communication about how AI is being used, what data is being processed, and how decisions are made. It is essential to demonstrate to clients that AI is augmenting the expertise of tax professionals, not replacing it and that human oversight is a key component of any AI-driven process.
- The confidence that clients and system users can trust the new work processes
Clarify the complex with AI-powered technology solutions
AI has the power to transform the way tax and accounting professionals work. However, the technology partner a firm chooses can make a huge difference—good or bad. In fact, going with a trusted technology and AI provider can be one of the most consequential decisions a tax and accounting firm can make.
To learn more about key considerations and insights for picking a provider, read our white paper, Demystifying generative AI: An opportunity for the accounting industry.
White paperDemystifying generative AI for tax and accounting firms
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