Cetrom has been documenting the advantages enjoyed by CPA firms that deploy cloud computing with artificial intelligence (AI) security features for some time. (A recent blog, “How Artificial Intelligence is Reshaping Cyber Security” is worth revisiting for a refresher after you finish this blog.)
We’ve championed that adopting cloud technology with AI offers CPA firms unprecedented efficiency, governance capabilities, collaborative opportunity and data security. And it is well chronicled in various reputable publications that the cloud has become the norm across the CPA industry and AI will soon follow suit among CPA firms with foresight.
Now, it’s time to take a step back from security and examine how AI will likely impact CPA firm business models in 2020 and the years ahead.
The “Big Four” CPA firms are already investing and implementing AI, robotic processing automation (RPA) and natural language processing (NLP) to automate and streamline the way they do business. These technologies are beginning to fundamentally transform the CPA firm business models, moving them away from labor and human capital-intensive processes and toward faster and more accurate AI-driven processes.
The “Big Four” investing strongly in AI and other smart automation tools is the precursor to wider industry adoption, much the same way that larger CPA firms presaged cloud computing adoption becoming the norm for CPA firms of all sizes.
So, what does your CPA firm need to be on the lookout for as the new decade begins to unfold?
Stronger Data Security Measures Using Artificial Intelligence (AI)
In order for CPA firms to keep their valuable client and company data secure, automation and AI are a must to mitigate risk. New technology is now available that will enable CPA firms to automate security measures and integrate a more behavioral, always-on approach to keeping data secure. Partnering with a cloud service provider with deep data security expertise and current experience leveraging AI, machine learning and automation can literally be a company-saving decision.
AI is a valuable tool for thwarting cyberattacks, be they malware, ransomware or a solo hacker. It’s an established fact that human monitoring of any given IT network is doomed to failure. AI can be a great weapon against cybersecurity attacks.
- Earlier Breach Detection. AI’s always-on, always-scanning nature not only can reduce vulnerabilities, it also can increase attack response times by allowing your IT team to focus on response rather than everything all at once, including detection. In that way, AI enhances your cybersecurity program both in detection and response.
- Email Scanning. Having automated, AI-led email monitoring is really the only effective approach to mitigating the biggest cybersecurity risk of all: your staff.
- AI Is Better Than Antivirus Software. Antivirus tools are always lagging behind the pace of existing malware threats. AI can detect anomalies and unusual program behaviors as they happen, so there is no gap for malware or hackers to exploit between signature detection and distribution.
The Automation of Manual, Rote Tasks
The automation of manual, labor-intensive tasks will transform the CPA industry this decade. Where processes like audits required heavy investment in human capital, time and treasure, AI will enable CPA firms to process huge amounts of data quickly and efficiently, allowing audit teams the space and time to focus more on analysis rather than aggregation.
According to AccountingWeb, the auditing process is fundamentally transformed by AI: “Artificial intelligence automates many tasks that were previously done manually, such as ingesting data, and it analyzes 100% of the dataset without requiring a human to create tests, write scripts, or remember all the rules. AI also reduces the amount of work on both the firm side and client side. By having complete ledgers ingested and analyzed, with little manual effort, the need to go back and forth asking questions of the client is minimized. Auditors are free to explore and dive into details as they wish, providing a richer financial picture than ever before.”
What’s more, internal back-office tasks at CPA firms can also be automated via AI. Audit process and back-office automation will significantly reduce the human capital and labor-intensive process burdens holding CPA firms back from innovating and providing clients better service and stronger, more accurate strategic advice.
More Time for Innovation and Client Interaction
With AI and automation handling time-consuming tasks, CPA teams will have more time to think strategically, be innovative and perhaps most important of all, spend more time in front of clients and responding to their needs.
According to the Maryland Association of Certified Public Accountants (MACPA), “It is ironic, but in an industry that involves service along with financial and regulatory expertise, artificial intelligence and automation increase the human interaction with clients while reducing human error. It represents a shift that includes a mutually beneficial relationship between software and the services of an accountant.”
The nature of what an accounting firm does and what skills are required to do it well is changing and will continue to evolve right alongside the use of AI in the CPA industry. The days of the accountant as number cruncher are short; the future of the accountant as a customer experience agent and strategic advisor is just beginning.
A New Kind of CPA
According to the CPA Journal, “One national firm leader reported that more than 25% of its new entry-level hires are science, technology, engineering, and math (STEM) majors.” (Allan Koltin, opening remarks at Advisory Board’s Winning is Everything Conference, Dec. 13, 2017, http://bit.ly/2wrh091.)
The age of accounting AI will require a rethinking of CPA skill sets and the talent required to compete. Veteran accountants will likely need to pivot to develop new skills and update old ones; new hires will need to have the technology and IT skills necessary to manage the advanced cloud and AI ecosystem that all CPA firms will need to develop and maintain to thrive.
The cloud and tools like AI, RPA, NLP and the concepts of machine learning cannot be seen as a threat by CPA firms and their accountants. It is, rather, a unique opportunity for firms and CPA teams to gain a competitive advantage in the marketplace and within their individual careers.
According to Forbes, “As accounting firms and departments begin to rely more heavily on machines to do the heavy lifting of calculating, reconciliations and responding to inquiries from other team members and clients about balances and verifying info, accountants and bookkeepers will be able to deliver more value to their clients and handle more clients than ever before.”
Cetrom can help you and your CPA firm implement AI and reap the rewards of automation as your company navigates the new decade. With deep cloud and AI integration experience, 24/7 support from tier-3 technicians and geographically dispersed servers, we can help keep your firm up and running and safe while you can focus more on serving your clients.
Reach out to us today — we’d love to learn more about your challenges and goals for the 2020 tax season.