Adapt or stagnate as AI changes the accountancy profession

Apr 9, 2024 | Business Strategy

When we go to see our local GP we expect them to fulfil 3 primary roles. We need them to diagnose our problems, to prescribe solutions and to care for us.

There is a direct parallel with the role of accountants. And, as this decade continues to generate new tools and resources, so there is the prospect of patients/clients adopting AI solutions to address 2 of those 3 roles.

The key question is how will accountants respond to the changes that are rapidly becoming reality?

The Growing Trend of Self-Diagnosis
It has long been common for patients to self diagnose their issues before attending the GP’s surgery.

Much assistance is available from (Doctor) Google. And, going forwards, Artificial Intelligence (AI) services will be available to diagnose our ills. Probably with a higher degree of accuracy than can a human doctor.

Why would AI (reliant on Large Language Models, like ChatGPT) be able to diagnose with more accuracy than human doctors?

Well, like accountants, the medical profession do not have to secure full marks to secure their qualifications. And their memories are not perfect – as they are only human.

In the same way therefore we can be sure that doctors, like accountants, don’t know everything. They get some things wrong.

At the moment so do the large language AI models. But that won’t always be the case.

IBM’s Doctor Watson is learning fast and is already able to diagnose far more accurately than can human doctors.

If AI robot doctors can diagnose what’s wrong they can also prescribe solutions (be that medication, surgery, rest or something else).

All that will be left for HUMAN doctors to do is something the robots cannot do. To fulfil that 3rd role I referenced earlier. To care for us. To apply their knowledge, skills and experience to help us with our medication, our surgery, our therapy and our recovery.

How does this relate to accountants?
Clients only engage accountants when they have a problem. When they need your help.

Even as things stand accountants need to be skilled at asking enough of the right questions to help diagnose clients’ real problems, and the underlying issues, before ‘prescribing’ solutions for their clients.

The primary driver for many clients to engage an accountant is a perceived need for help to satisfy their legal obligations to prepare and file accounts and tax returns.

In turn this has led to huge tendency to assume this is all that every new client requires. And, to be fair, this is currently true for many clients.

However, many others also want broader help, support and advice. And these are the clients you will almost certainly want to focus on attracting and serving in the future.

The DIY tax surge
There is already a growing trend for ‘simpler’ clients to try to prepare and file tax returns themselves.

They buy into the hype that they can use Xero, Freeagent or QBO without an accountant. And it’s getting easier and easier for them to take their data (however wrong it may be) and to use it to file their tax returns.

This trend will only continue as more and more people tell their friends that this is what they are doing. I have seen this happening on forums for professional speakers, for coaches/consultants and for magicians. They can’t be the only ones!

Increasingly clients can already self-diagnose and prescribe/choose a bookkeeping package that reduces their need to engage an accountant.

Head in the sand?
Of course we like to hope that some clients will never be able to do everything without the support of an accountant.

I believe this view is often based on assumptions and on limited awareness of how fast AI and machine learning developments are changing things.

It may take another few years but the days of clients NEEDING to pay accountants for much of the compliance work you currently do, are coming to an end.

I understand the temptation to challenge, deny or ignore this view.

Until 2017 when i visited Intuit’s HQ in san Jose for a a QB conference, I did exactly that. Since then I have been more open to the coming changes as only being a matter of time. Now I would say we have reached the ‘tipping point’ and that it is only a few years from becoming your reality.

I have seen the technology that already exists; the AI included in online bookkeeping packages, the way that H&R Block in the US is using IBMs Watson to advice basic tax return clients (by reference to 77,000 pages of tax codes and 60 million data points of experience) and the speed with which AI is being developed in related fields.

This is not a doom and gloom scenario. You still have time to adapt and to evolve your practice (and your clients). And for many accountants this means focusing more attention on the forward focused business advisory side of things than ever before.

Compliance work will continue to become more and more automated and this will push down the fees you can charge (and retain clients) for doing this work.

AI will never be this bad again
It was always a mistake to assume that home based AI (eg: Alexa, Google and Siri) was as good as it could get get. No. They were just the start. They are still in their infancy so the speed with which they are learning and improving is only getting faster.

It’s the same with the Large Language AI models which have developed over the last 18 months. In the future they will never again be as ‘basic’ as they are now. It won’t be long before we can rely on their output. Even now they are already saving us a huge amount of time. But all of this is still simply step one.

Artificial Human Intelligence (AHI) – which is what we are now playing with – simply mimics what we do, and does it faster and more accurately. But AI has the potential to be much more than this.

Artificial Super Intelligence (ASI) is what will follow when technology is able to surpass what we could possibly do as humans. Whilst this may be scary, it’s still some years away in most fields.

However advanced the software and AI develops, what it will never be able to do is replace your ability to show you care. To engage with clients and learn about their dreams and plans. And then to offer empathetic constructive and relevant advice to assist them in achieving their objectives.

The sooner accountants start focusing on how to grow the advisory side of their practice, the less worried they need be about the rise of AI in the accounting world.

And for those who want to continue focusing on simply dealing with compliance work, you probably still have a few years to adapt. Nothing is changing overnight, but the pace of change has speeded up. You have time to plan and adapt.

I think that in time you’ll struggle if you stand still and allow everyone else to zoom past you. And they will.

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