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The dawn of artificial intelligence (AI) has sparked concerns across various industries about the potential replacement of human workers with machines. With the recent release of tools like ChatGPT, apprehensions about job security are growing among many professionals, including those in the tax and accounting space.
By definition, AI refers to the ability of machines to perform tasks that normally require human intelligence, such as reasoning, learning, decision-making, and problem-solving. When it comes to the tax and accounting space, AI can essentially do the work of a human professional in preparing an individual’s tax returns or auditing a business of virtually any size.
Scary, right? But, if we think back to several years ago, tax software solutions that streamlined an accountant’s workflow begged the same question: will technology replace my job? The answer has been just the opposite. Tax preparation software has shifted the work of today’s tax and accounting professionals—from mundane data entry to more meaningful and strategic work.
Now, with the power of AI, today’s tax professionals can take these advantages to the next level.
Job security: AI is an enhancement, not a replacement
Contrary to the fears of job displacement, AI in the tax world does not necessarily mean the replacement of human tax professionals. Rather, it means the transformation of work—for the better.
Let’s take a look at some of the many ways AI can enhance the work of tax professionals.
- Automation of repetitive tasks. AI can handle repetitive, time-consuming tasks like data entry, data validation, and basic calculations, freeing up tax professionals to focus on higher-value activities such as strategic tax planning and client interaction.
- Improved accuracy. AI can significantly reduce the risk of human error by performing calculations and cross-referencing data with precision, leading to more accurate tax returns.
- Enhanced compliance. AI can continuously monitor and analyze changes in tax laws and regulations, helping tax professionals stay updated and ensuring their clients’ compliance with the latest rules.
- Data analysis and insights. AI can analyze vast amounts of financial data to identify patterns, trends, and potential deductions that may go unnoticed by manual practices. This can lead to better tax-saving opportunities for clients.
- Skill enhancement. AI can be a valuable tool for tax professionals to enhance their skills and knowledge. It can assist in research and analysis, allowing professionals to provide more informed advice to their clients.
- A client-centric approach. Instead of replacing client relationships, AI can complement them. AI-driven analytics provide clients with personalized tax strategies tailored to their unique financial situations and long-term financial goals.
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Making AI work for you: Best practices for tax professionals
When introducing new AI technologies into your daily tax workflow, it’s often smart to start with small-scale implementations and gradually build them into your tech stack. Like any workplace change, integrating AI typically works best when it is phased in at a manageable pace.
Think about your existing workflow. Is there a specific problem or challenge you’d like to address? Or maybe a step you’d like to enhance? While AI isn’t an all-knowing solution, it is an enabler for problem-solving. So, start by identifying a need and explore AI-driven solutions that will help you tackle it.
Here’s an example. Like most professional services, tax preparation comes with tedious data entry work that, while often mundane, must be done quickly and accurately. This is a great opportunity to showcase the value of AI. By automating manual data entry tasks, you can shift your focus to high-value advisory services that boost client relationships and growth.
A major benefit of AI also lies in its ability to process massive data sets quickly. The breadth of these data sets can range from financial statements and reports to emails and even social media content. That means tax professionals now have the ability to quickly consume these data sets using techniques like predictive analytics and anomaly detection. The result is insight into patterns, trends, and potential deductions that can lead to tax-saving opportunities for your clients.
In addition, AI can also help improve how tax and accounting professionals communicate with clients. Natural language reports and summaries can be generated from a client’s numerical data sets, opening up new opportunities for client engagement and relationship-building. Plus, AI’s natural language generation can provide effective chatbot user interfaces derived directly from its data sources.
In short, AI is a transformative tool for tax professionals, enabling a pathway toward a leaner, more productive, and, ultimately, more profitable business.
A collaborative future with AI
There is no doubt that the tax and accounting profession is in the midst of profound change. However, AI presents an enormous opportunity for tax professionals to harness its power and enhance the quality of client service—from automating manual tasks to delivering real-time tax insights to providing tailored financial guidance.
So what are you waiting for? By adopting AI and incorporating best practices, the possibilities for tax professionals are boundless.
To learn more about how AI is impacting the tax and accounting profession, download our report, “ChatGPT in tax.”