Like any industry investigating new software tools for better, faster results, CPA professionals are immersed in testing and embracing advancements for their very data-intensive applications, with artificial intelligence (AI) and blockchain technologies leading the more progressive solutions. Standardizing the data generated from hundreds of different accounting software packages so that innovative solutions can flow are among the challenges this profession is tackling.
Plenty of today’s software has some type of embedded AI: Automatic machine learning from patterns or features in the data, programs software by combining large amounts of data with fast processing and intelligent algorithms. For example, data scanned into newer tax applications is read, recognized and auto-filled into fields such as 1099s or interest on income. Results aren’t always 100 percent accurate, but it’s getting there.
Blockchain, the technology behind Bitcoin, is a continuously growing ledger that links, secures and uniquely stamps blocks of non-modifiable transaction records such as medical, identity, voting and financial data. It’s what can unlock AI to its full potential. Some say blockchain is to digital value as the internet is to digital information.
For CPAs, AI and blockchain first requires the industry to “generate consistent information so that everyone uses the same technology and data model, not disparate systems producing disparate data,” states Brad Caruso, a partner with Withum Smith & Brown. “The data must be standardized in a format that compiles, aggregates and benchmarks it – only then can we best leverage AI and blockchain applications that add value for accounting clients.” He adds that without standardization, blockchain as a mainstream accounting tool likely is years away.
Predictions are the Added Value
Withum started to “play” with AI last year by acquiring a data analytics firm that is analyzing and centralizing the functions and requirements needed to build the right systems to address the company’s future needs. “The biggest value-add of those systems will be benchmarking clients with predictive insights that show how they compare to others in their segment,” Caruso reports. For example, without AI, when services are provided to hundreds of clients in one subset, those clients can only see themselves. But once data is standardized and mined, homogenous groups, each of dozens or more clients, emerge so that Withum can see, predict and advise regarding comparable positive and negative trends.
PKF O’Connor Davies, LLP, has been using several forms of AI, such as chatbots – programs designed to simulate human conversations such answering simple questions instantly – but has not yet implemented blockchain, explains Don Logan, the firm’s CIO. “It would be great to have blockchain baked into many of the software applications we use because that would equate to efficiencies and profitability along with the other positive aspects of blockchain technology. At this point, it’s up to the software vendors in the accounting industry to make use of blockchain to complement their software.”
AI and blockchain machine learning “are clearly the future, so it’s critical for firms to be researching and speaking with peers about them if they don’t want to fall behind,” Logan says. “While I’m not recommending that CPA firms become early adopters or even developers, it’s important for them to learn about these tools, and understand where and how they can help with specific pain points or inefficiencies. The strategy of ‘embrace and replace’ should be considered sooner than later before your competition figures it out before you,” he states.
Collaboration and Communication
While Logan’s firm looks to these two trend-setting initiatives, it has fully implemented many other valuable software tools, such as its recently adopted Content Management System. This program creates new levels of collaboration, communication and efficiency that allow the firm to work more effectively internally and with its clients.
Specifically, the CMS indexes all content across the firm in a secure and easily searchable format. It also contains a document management system with optimized workflows that create new levels of operational efficiency. This program integrates with every system employed within the firm, and because it is web-browser based, it can be accessed from anywhere.
The Cloud Means How, Not Where and When
“We also implemented a new cloud-based app that has enhanced communication and management for our firm,” Logan notes. “Among its benefits, the app gives us the ability to eliminate many internal emails with an instant messaging functionality to vastly improve team and interoffice communications. The app can incorporate calendars, task lists and files to create additional efficiencies.”
Cloud-based software adopted by Sobel & Co. allows its staff to work anywhere, any time, on the firm’s tax and engagement software for auditing, compilations for financial statement preparation and other workflows.
In addition to untethering the staff from in-house terminals and network systems, Sobel’s cloud-based processes transfer the responsibility of continuous upgrades to the software vendor, which keeps all users on most current versions without disrupting daily work routines.
Glenn Taylor, a Sobel partner and director of its core services group, notes that while CPAs are moving towards the cloud and software automation, those initiatives “will never replace the higher-level accounting professionals who interpret the data. The software gathers and enters the detail, “but we still need the human touch of working with clients to understand and interpret what the data is indicating.”
Taylor adds that though placing information in the public arena makes more data available more easily, and faster to cross-check, firms must pay close attention to strict safety measures, as does Sobel & Co., that protect client data against possible security breaches. “Unfortunately, crooks today are getting much smarter: To steal money, they no longer have to enter a bank and pull a gun – that’s the scary part.”
This Client Will Never Shake My Hand
At Alloy Silverstein – which specializes in accounting, bookkeeping, payroll and tax services for clients big to small, local or international – Managing Shareholder Ren Cicalese is a strong advocate for paperless, cloud-based systems and business processes. He notes that programs in the cloud are easily used in combination – to sync accounting packages to bank statements, for example – for quicker, more thorough results, and with fewer accounting positions needed at client companies.
Alloy Silverstein often combines Bill.com with Xero, “a good software package with about 600 add-on apps that allows us to sign on with clients to see where they currently stand on any given day,” Cicalese reports. “The world wants instant gratification and we can provide that through customized dashboards that drill down to each client’s current activities.”
Cicalese also notes that when CPA firms, like his, are cloud based, clients around the US or worldwide who ordinarily would “never shake my hand” can still do business with the firm.
New Need for a Mixed Skill Set
As cloud-based software, AI, blockchain and other technical advancements descend on CPAs, the skill sets required to move firms forward will require a mix of strong accounting abilities as well as computer science expertise, a trend that’s now expanding. “Paper auditing and blockchain are two discrete specializations,” Caruso states. “Anyone can audit on paper, but a blockchain ledger requires the technical skills to understand the codes. Data analyses in auditing will become more critical for firms that want to stay ahead of the curve or their technologies will have outdated them.”