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Artificial Intelligence

Unlocking productivity: How AI is transforming tax and accounting firms

Thomson Reuters Tax & Accounting  

· 6 minute read

Thomson Reuters Tax & Accounting  

· 6 minute read

For professionals across nearly every industry, the transformative impact of AI is reshaping work, driving productivity, and fostering innovation. This is especially true for the tax and accounting profession.

In recent years, small and midsized tax and accounting firms have increasingly adopted automation as a key strategy for streamlining their operations.

Initially, automation efforts targeted routine manual tasks, tax preparation, and back-office functions. But with the dawn of AI, these advantages are supercharged. Let’s explore how tax and accounting professionals can prepare for the challenges of tomorrow and stay ahead of the curve.

 



 

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The transformative impact of AI on accounting productivity

Gauging sentiment on the power of AI

Strategic trends for tax professionals

AI usage for productivity in the tax and accounting profession

The importance of responsible AI use

The role of AI-driven productivity in a collaborative future

The future of AI for accounting firms

The transformative impact of AI on accounting productivity

One of the primary benefits of integrating AI into your firm’s daily workflow is that AI-enabled tax software can analyze vast volumes of financial data in a fraction of the time it would take a human accountant — identifying patterns, anomalies and trends with precision.

In addition, AI-powered tax research can help staff find targeted search results in less time. By providing professionally summarized answers, complete with citation links to relevant editorial content and source materials, even junior staff can quickly answer complex client questions with confidence.

Gauging sentiment on the power of AI

According to Thomson Reuters’ 2024 Future of Professionals report, 77% of professionals see AI as having a high or transformational impact on careers, up from 67% the previous year. This excitement surrounding AI is palpable given the tremendous value and time savings that AI-powered technology can bring to day-to-day work. Survey respondents predict that within the year, AI could free up as much as four hours per week.

In addition, the majority of survey respondents across all industries believe AI can be a force for good — even 82% of tax and accounting professionals. However, some hesitance remains in terms of ensuring AI is used ethically and without compromising sensitive data, which are specific areas of concern for accountants.


Bar chart titled "Based on your current knowledge, do you believe AI to be a force for good in your profession?" with data from Thomson Reuters Future of Professionals Report. Overall, 78% say yes and 22% no. By region: Latin America 94% yes, 6% no; Asia, Middle East & Africa 80% yes, 20% no; Europe & UK 79% yes, 21% no; North America 74% yes, 26% no. By profession: Risk, Fraud & Compliance 89% yes, 11% no; Tax, Accounting & Global Trade 84% yes, 16% no; Legal 72% yes, 28% no. By organization: Business/Corporation 84% yes, 16% no; Tax firm 82% yes, 18% no; Law firm 74% yes, 26% no; Government 64% yes, 36% no.


For accountants, AI’s unique ability to analyze data can be a transformative force. Advanced analytics like predictive modeling and forecasting can help anticipate future trends and outcomes based on historical data. This enables tax and accounting professionals to identify potential risks, opportunities, and market trends for clients.

With these advanced abilities comes a shift in mindset. By harnessing the power of AI, your firm can broaden its focus from traditional tax compliance to providing clients with meaningful insights and personalized advisory services. In an increasingly competitive landscape, this is an invaluable strategic advantage that lends itself to a more profitable and sustainable value-pricing model.


Harnessing AI and automation: How to elevate your tech stack

AI usage for productivity in the tax and accounting profession

In terms of current adoption and usage of AI, 50% of those surveyed said new AI-powered technologies typically provide a basic starting point, but that they still need to do the majority of the work themselves. Another 28% said it was a strong starting point and that they just need to edit.


A bar chart titled "Personal usage of AI-powered technologies as a starting point for work" from Thomson Reuters Future of Professionals Report. It shows responses to whether individuals have used AI for work tasks. Responses are: 29% "Yes, once or twice," 22% "Yes, several times," 12% "Yes, and I now use regularly," and 37% "No." For those who have used AI, the strength of output is rated as: 7% "Poor," 50% "A basic starting point," 28% "A strong starting point," 9% "A very strong output," 4% "An output stronger than I could have produced myself," and 3% "I have had very mixed experience." For those who haven't used AI, reasons include: 43% "Concern about accuracy of outputs," 37% "Concern about data security," 35% "Unsure what type of work the technologies can be used for," 28% "Unsure how to access," and 27% "Concern about ethics of use."


When it comes to tax research, AI offers significant benefits. Professional tax research typically involves multiple searches, meticulous review of relevant materials, and the creation of a cited summary that is straightforward and understandable. This can often take hours, especially for junior staff who need to vet answers through senior colleagues.

But with an AI-powered tax research solution, accountants can save time and transform tax research challenges with easy-to-digest answers synthesized from trusted resources and vetted sources, along with citations for fast verification.

The importance of responsible AI use

Even amidst all its benefits, the enormous potential of AI is tempered by concerns about data security and ethical use. Addressing these realities requires clear principles and guardrails for responsible AI usage.

Building trust in AI requires transparency, benchmarking, and standards. Educating your staff on ethical AI usage and employing only industry-specific AI-powered tax solutions can help bridge this gap while also ensuring accuracy, security, and professional safeguards necessary for tax and accounting firms.

The role of AI-driven productivity in a collaborative future

When survey respondents were asked what percentage of work currently produced by their team will be completed with AI-powered technologies, the results pointed to rapid AI adoption in the workplace with technology providers as the main influencers.

On average, professionals predict that over half of their work will utilize new AI-powered technologies to at least some extent within the next five years. From Thomson Reuters’ standpoint, it is likely that all professionals will have a generative AI assistant within the next five years to assist them in their daily work.


The image is a chart from Thomson Reuters Future of Professionals Report, depicting predictions on the use of AI-powered technology in professional work over one, three, and five years. It is divided into two sections: "Cautious outlook" and "Ambitious outlook." Cautious Outlook (13% of professionals): Baseline: 100% of work not using AI. In one year: 96% not used, 4% assist. In three years: 92% not used, 8% assist. In five years: 88% not used, 12% assist. A red line shows the increase in AI usage for assist, draft, or complete over time. Ambitious Outlook (19% of professionals): Baseline: 100% of work not using AI. In one year: 43% not used, 6% assist, 18% draft, 33% complete. In three years: 42% not used, 10% assist, 29% draft, 19% complete. In five years: 38% not used, 17% assist, 29% draft, 17% complete. A green line shows the increase in AI usage for assist, draft, or complete over time. Predicted Pace of Change: A graph shows the average proportion of work predicted to use AI-powered tech over time: Ambitious outlook reaches 93% in five years. Average outlook reaches 56% in five years. Cautious outlook reaches 12% in five years. A note states that in five years, 56% of professionals' work is predicted to utilize new AI-powered tech.


The future of AI for accounting firms

By integrating AI-powered tax technology, accounting firms can not only enhance their operational efficiency but also better serve clients with meaningful data-driven insights that improve financial well-being and strengthen relationships.

As AI continues to shape the future of work, accounting firms that invest in AI early can gain a competitive edge by getting ahead of the learning curve and realizing a faster return on investment.

At the end of the day, the integration of AI represents a transformative opportunity to enhance productivity, unlock new insights, and elevate the client experience. By embracing AI-driven technologies, your firm has an opportunity to be at the forefront of driving value creation and meaningful growth for both your clients and your firm.

For deeper insights and strategies to stay ahead, explore the 2024 Future of Professionals report, below.

 

Future of Professionals 2024

 

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