Why businesses should invest in technology

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For today's accounting firms, advanced technology is no longer an option — it's a necessity. To keep up in an increasingly competitive industry, forward-thinking accounting firms are investing in artificial intelligence (AI) solutions to automate tax workflows, unlock new revenue streams, and better serve their clients.

If your firm is considering investing in tax technology, now is the time. The most successful accounting firms are investing today to optimize future growth. But how can you claim the benefits of AI and make the most of this transformative opportunity? Let's take a look at how AI is changing the way accountants work and why it will help shape the future of the profession.

Current state of corporate technology investment

Historically, accounting firms have been passive when it comes to adopting technology. But as tax and accounting professionals begin to tout the benefits of AI-powered technology, more firms are approaching adoption with a proactive perspective. This change also requires a mindset shift to focus on strategic advisory services over traditional compliance work.

According to the latest Client Advisory Services (CAS) benchmark survey, advisory services work grew by 16%, with 72% of all respondents and 81% of top performers saying they believe there are continued expansion opportunities in the pipeline. The survey also showed that advisory practices continue to leverage technology to innovate and adopt new business models to maximise value for their staff and clients.

Additionally, a recent Thomson Reuters survey on generative AI (focused on content creation) revealed a mix of optimism and caution among legal and accounting professionals. 78% of respondents believe that generative AI tools such as ChatGPT can enhance their legal or accounting work, yet only 4% of respondents are currently using them in their practice, and an even smaller 5% plan to do so in the future. Interestingly, tax and accounting firms are more open to the idea, with 15% having implemented or planning to implement them.

From saving time to increasing productivity and boosting profitability, investment in AI-powered technology is on the horizon for many businesses. Let’s take a look at how AI can support a lucrative transition to advisory services and deliver transformative benefits to accounting firms of all sizes.

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How to maximize the benefits of technology, especially artificial intelligence

While most businesses use some form of tax technology to standardize tax entry and streamline workflow processes, the next level of optimization comes in the form of tax preparation automation along with real-time insights and personalized advice. For example, 1040 workflow automation can free up valuable time for strategic activities, provide insightful information, increase overall productivity, and improve customer service.

One of the most significant benefits of AI is its ability to identify patterns in large data sets. From an audit perspective, this allows accountants to analyze vast amounts of data and quickly identify anomalies and outliers. This will encourage a move away from sampling and instead create an opportunity to review all of a client's transactions in real time. AI will revolutionize audit work by better identifying risky transactions and delivering higher quality audits.

From a client advisory perspective, AI provides more accurate data for customized analysis and predictions, helping businesses stay ahead of ever-changing tax regulations and shifting market conditions. Powerful AI-assisted algorithms and predictive analytics give accountants meaningful insights into client behavior, allowing them to tailor strategies to each client's individual needs.

From a tax preparation perspective, AI can provide contextual answers, empowering even novice staff to handle complex returns and answer complex client questions quickly and confidently. AI-powered tax preparation tools can make this vision a reality by providing targeted search results based on sophisticated algorithms, editorial insights, and trusted sources (like IRS.gov). Overall, AI can position your firm as tax experts, regardless of the topic.

How to get the most out of your technology investments

While the benefits are clear, securing the funding and support to invest in AI-powered tax solutions is often difficult. To support your case, consider your company's strategic vision and identify your goals, risks, and obstacles.

From streamlining processes to unlocking revenue streams (such as value-based pricing), advanced technology can help your firm reach new heights in terms of profitability, customer retention, and staff satisfaction. Consider a side-by-side comparison of your current processes with the efficiencies you could gain with AI-powered technology. You can also work with your tax technology provider to understand and estimate the potential time and cost savings.

As with any business case, put together the overall cost of the technology and determine the ROI. Don't forget to incorporate quantifiable data with estimates where possible. Technology changes rapidly, so it's also important that your tax technology provider is future-proofing their service with ongoing updates and regular feature additions.

It's time to put AI to work

By automating tax workflows and freeing up time for more value-added activities, AI can help accounting firms stay ahead of the competition and ensure success in a rapidly changing environment.

With AI tools built for the profession, accountants can move away from tedious compliance work and towards more profitable strategic advisory services. With access to real-time data, investing in AI technology can help predict future trends and provide clients with insightful strategies aligned with current market conditions.

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