Hitendra Patil is the President of Global M&A Services, Datamatics Business Solutions, Inc. | Exclusive services for accounting firms.
TL;DR: Why Accountants Need to Understand AI First Really East.
Hey, accountants! Have you heard of ChatGPT?
Sorry, wrong question. What do you think of ChatGPT after trying it?
This article isn’t about any specific tool you may have heard of in the field of artificial intelligence (AI). It’s about how the fundamentals of AI can apply specifically to your business and its business model.
AI will impact your practice.
Either way, AI will impact your business.
Whether this will have a positive or negative impact on your business is a question of evaluating your company’s business model. How much It’s a question of evaluation.
You might think, Wait, AI has made inroads into the software we use every day. So why is it now necessary to specifically assess the impact of AI on my business? What has changed?
Good questions!
There are no simple answers. But let’s try to build them for you.
What changed?
The CEO of a large accounting software company had predicted This AI would have old-school accountants struggling in five years. Those five years are now over!
So where are we today in the AI-driven accounting profession?
Today, as an accountant, would you accept receiving a shoebox full of receipts from a client and manually entering them into the accounting software? Probably not. Why? Most software can create accurate data from scans of those receipts and place the data in the right places by categorizing it with a very high level of accuracy (although there are some exceptions). And the clients themselves know that the software can do it. So why would they want to pay you to do what the software can do?
This is possible thanks to technological advancements, especially those made by artificial intelligence, which have made giant strides. ChatGPT is just a glimpse of these advancements.
It will take several articles to explain how AI works and how it will evolve in accounting software (payroll, tax, and audit). But for this article, let’s focus on the fundamentals of AI.
How does AI relate to your company’s business model?
In a nutshell, if AI can do the work you do (manually or even semi-automated), AI will likely replace your need to do that work.
In your company’s business model:
• If a large portion of the total work done by your business involves converting source data (paper or electronic) into structured data (entered or uploaded into software), your business model is more exposed to the challenges posed by AI. This is because AI can do this work extremely quickly and accurately.
• If a good part of your work is about transforming data into information and generating insights, your business model will still be exposed to the challenges posed by AI. Indeed, generative AI (like ChatGPT) is already demonstrating what it is capable of. And such generative AI is considered “narrow” AI! In other words, AI will make discovering insights based on data cheaper, easier, and faster.
• If a reasonable percentage of your job involves connecting the dots between your clients’ goals, situations, fears, concerns, plans, and thoughts with the information in their accounting data to help clients make better, more timely decisions, AI will become the best tool you’ve ever used.
The business model categories mentioned above were meant to get you thinking about how the impact of AI relates to your company’s specific business model and processes.
But how exactly can AI impact my company’s business model?
If you are asking yourself this question right now, congratulations! You are on the right track.
To understand exactly how AI can impact your company’s business model, the very first step is to try to learn:
• How AI is created.
• How he learns (on his own).
• How it works (constantly changing how it works as you learn).
I have been researching and studying AI from an accountant’s perspective for almost five years now. Before that, I had been reading (with amusement) about AI for many years.
From my understanding of AI, I can confidently say that you don’t need to be a programmer to understand AI.
AI is not some kind of magic. It’s not a mystery. It’s a science. There’s a method.
And there are no better professionals than accountants to understand things systematically. After all, you can almost predict what your software will do in a given situation, right? Because you can understand the logic of the software.
However, AI poses a huge problem.
AI is not traditional software. It can learn by itself and therefore adapt periodically, even daily (without programmers needing to write new code). Unfortunately, this means that we don’t have enough capacity to “understand” exactly how AI does what it does.
Yet once you understand how AI is created, learns (and relearns), and works, you’ll be able to see the bigger picture when coexisting with (much more) AI.
Accountants must understand many aspects of AI’s limitations and biases, both for professional ethics and to protect clients. Yet there are several opportunities to integrate the power of AI into your practice to transform your business like never before. Your people will need this fundamental understanding of AI to take advantage of it.
How can you integrate AI into your company’s business model?
AI is here to stay. It won’t replace you, but someone who leverages AI will. It will redefine what you call “work” (what customers pay you to do).
To integrate AI to improve your company’s business model, start by aim.
Think, using AI:
• What new tangible benefits can you bring to your customers?
• How will you use AI to deliver more meaningful work to your workforce?
• What should you stop doing because AI can do it better?
AI actually makes “accounting intelligence (AI)” more powerful!
The information provided here does not constitute investment, tax or financial advice. You should consult a licensed professional for advice regarding your particular situation.
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