By Dr. Sangeeta Chhabra
With the coming of artificial intelligence, we are, in no uncertain terms, witnessing a technological evolution. Once a fantastic figment of our imaginations, and a staple of science fiction, AI has become a cornerstone of innovation across industries and all walks of life.
To be clear, finance and accounting will not be excluded, and the sooner firm owners can see this as a way to modernize their practices and essential services, the better prepared they will be for growth.
AI is already disrupting the realm and proven to be more than just a buzzword. With these technological advancements, expectations and requirements are also evolving, and traditional accounting practices are becoming increasingly obsolete.
Such shifts mark a pivotal moment for every firm, especially those focused on client accounting services (CAS). AI is the next level of automation and can significantly improve service speed, delivery, and accuracy. But adopting AI is not the only solution. It raises several complex questions that must be addressed before incorporating it into your business operations.
The changing landscape of client accounting services
CAS include bookkeeping, financial reporting, payroll management, accounts payable, accounts receivable, and virtual CFO services. Traditionally, this service was labor-intensive and time-consuming. While technology has gradually changed some of that over the years, things have changed at a trailblazing pace in recent times.
Clients’ requirements are not limited to accurate and up-to-date accounts; they also want meaningful insights and forecasts derived from their financial data. They want to be on top of their performance in real time and want preemptive and quick course corrections based on the insights drawn.
Additionally, other concerns, such as growing oversight in the form of an ever-changing regulatory environment and increasing cybersecurity threats, make the job of accounting services firms humanly impossible. They would probably need an army of accountants to manage and stay on top of all this, yet still be unable to deliver on time and with the expected accuracy. The answer lies in aiding human capital with AI and automation.
Why AI is a game-changer for CAS
1. Automation of repetitive tasks
AI can automate time-consuming and monotonous processes such as invoice processing, data entry, expense management, and bank reconciliation. AI tools can scan through invoices, emails, receipts, and vouchers, efficiently retrieving data with accuracy without human intervention. It can even flag or rectify any inaccuracies in invoices, emails, vouchers, and receipts, thereby improving the efficiency of this whole process and speeding it up.
Such automation has the potential to eliminate human errors and help an accounting services firm transition into an accounting advisory firm.
2. Real-time financial insights
If adopted and used effectively, AI tools can continuously analyze data, maintain live dashboards, and generate real-time reports and alerts. These tools can even help pre-empt issues that may affect the financial health of the client organization, such as cash flow, credit risks, cost escalations, and project delays.
When an accounting services firm can perform all this for a client, it positions itself as indispensable and evolves into a trusted advisor instead of just an accountant.
3. Enhanced client experience
Clients are no longer looking for monthly reports—they want a bespoke solution to their finance and accounting problems. They want their accounting services partner to be on top every time they need something remotely related to accounting services. Clients need accounting services firms to pre-empt every problem or glitch that is likely to come their way and have fixes ready even before they arrive.
The good news is that this is possible with the help of AI-powered client portals and chatbots. These tools can help accounting services firms offer instant responses to queries and customized dashboards that deliver self-service access to real-time financial data. AI can also help firms deliver tailored services aligned with a client organization’s size, category, industry, and stage of growth.
4. Compliance and risk management
Compliance with regulatory requirements and laws of the land is another challenge that is becoming increasingly complex. AI can provide support and ensure accuracy and completeness in all dealings with regulatory agencies, leading to full compliance. It can also help maintain audit trials for regulatory scrutiny.
Additionally, AI can monitor potential fraud and irregularities in transactions, minimizing financial and reputational risk. As a result, employees spend less time on routine and repetitive tasks and more on handling real issues.
5. Scalability and efficiency
Modern AI-based accounting services platforms are built to scale up effortlessly. A client can breathe easily without worrying about the accounting services part of scaling up. These platforms help ensure consistency in service levels, irrespective of the number of clients. Scalability is one of the primary issues that firms look for to grow their business and client base.
Why now? The timing couldn’t be better
The benefits of adopting AI are clear as crystal. But is now the ideal time to modernize accounting services and invest in AI tools?
1. Client expectations have changed
As more millennials assume leadership positions across businesses and geographies, technology adoption is on the rise. Millennials are digital natives and are used to real-time applications and dashboards. They want on-demand services and expect nothing less from their accounting services firms. Any firm failing to meet these expectations is likely to lose clients.
2. Technology Has matured
AI has matured at an astonishing pace over the last couple of years. Tailor-made AI solutions are available for every industry, and the accounting services industry is no exception. Early adopters will reap the benefits of AI, and laggards will lose out. The decision of whether to do it now or later will be the differentiating factor between industry leaders and the minnows.
3. Remote work is here to stay
COVID ensured that every business around the world embraces remote work and digital transformation. Although the COVID pandemic is gone, remote work is here to stay. Technology has made it possible to work together effortlessly regardless of the location. AI has made life easier by allowing tasks to run in the background 24/7.
4. Competition is heating up
The competition levels are rising in the accounting services sector. Increasingly, firms are leveraging AI to deliver smarter, faster, and more effective solutions to clients, all at a lower cost. The rest of the firms must follow suit if they want to stay relevant and in the race.
5. Value-added services drive growth
Although bookkeeping and compliance remain the bread and butter of accounting services firms, by adopting AI, these firms can offer add-on services such as advisory and financial planning. These add-on services have higher fees and better margins, which can significantly contribute to the bottom line.
Embrace the AI era: Transform your CAS for tomorrow
A significant disruption is staring the accounting services industry in the face. AI is already revolutionizing the value of delivery of accounting services firms, and its role is only going to get bigger in the entire accounting services industry.
Although AI is still evolving and far from replacing humans, it is empowering accountants, who, in turn, are much better equipped to offer better value to their clients. AI can also help firms achieve better operational efficiency and become more competitive.
The tools are ready, the market is demanding, and the opportunities are vast. The question is no longer if you should adopt AI, but when—and the answer is NOW.
ABOUT THE AUTHOR:
Dr. Sangeeta Chhabra, co-founder and executive director of Ace Cloud Hosting, is a leader and innovative entrepreneur with more than 20 years of experience in the IT sector. She has positioned the company as a leading global provider of IT and managed cloud services, celebrated for its QuickBooks hosting tailored for the accounting sector, managed security services, Desktop as a Service, and public cloud offerings for SMBs and enterprises. Under her leadership, Ace Cloud Hosting was honored as the Best Outsourced Technology Provider at the CPA Practice Advisor Readers’ Choice Awards 2023, among other accolades. Beyond her professional successes, Dr. Chhabra is a passionate advocate for women’s empowerment and is committed to fostering an inclusive environment at Ace Cloud Hosting.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
