Machine learning is being quietly and consistently built into the technology that humans use to send and receive information – and the future of artificial intelligence (AI) and automation as an industry is built on the presumption that "smart" machines will continue to reduce the need for human labor. The mathematical and repetitive task demands on accountants place them at a disproportionately high risk of replacement by AI and automation. According to data from NPR, accountants and auditors, in particular, have a 93.5 percent chance of being automated.
In order for accountants to grow their firms and protect their practices, they must change their service offerings from just offering tax, compliance, and auditing (which will become more and more automated over the next 10 years) to offering financial analysis and consulting to clients. By shifting strategy toward strategic financial consulting, accountants can diversify what they offer to clients – such as advice on decision-making based on accurate financial analysis – while continuing to improve their bookkeeping accuracy and accessibility using the new technology.
At my company, Palo Alto Software, our team saw an opportunity to provide accountants with new tools, that enable the diversification of their services through the smart technology solutions. These new features, which have been incorporated into our existing business planning software, have helped to reduce workloads for accountants delivering strategic advising. Moreover, users of our tools were able to introduce more guidance and financial forecasting without adding further workload.
More accounting solution providers are embracing automation and machine learning to give their customers the upper hand. Intuit QuickBooks Self-Employed version, for example, recently incorporated a Decisions feature that's based on AI and automation. This feature makes financial predictions for contractors and freelancers based on data gathered from their bank accounts. Automation, if nothing else, is about saving time. Efficiency translates to margins, and margins determine profit.
Instead of manually exporting and organizing financial data into Excel, accountants bring their clients QuickBooks Online or Xero data seamlessly into LivePlan, a software platform that generates financial reports. Using the automated forecasting feature, accountants can help position their clients for growth by developing strategic financial forecasts based on revenue, direct costs, and expenses, as well as cash flow assumptions. LivePlan produces a full set of forecasted financials: projected profit and loss statement, projected cash flow and projected balance sheet. Additionally, client data from previous years can be used as a basis for the financial forecast with greater accuracy, which can be edited to project growth year-over-year. Once a strategic forecast is implemented in LivePlan that platform can be used to create up to 10 “what if” scenarios and a dashboard helps accountants give ongoing financial analysis in real time to their clients.
With the time and information given back to accountants through this technology, there is a distinct opportunity to provide new and valuable services to their clients.
By supporting smart accountants with smart technology—and using the extra margin of time to diversify your services—you can fortify confidence in your client’s financial horizon and also gain insights into the sustainable growth of your own business.