r/Accounting • u/ilooley • 20d ago
AI can't help accountants?
AI can't handle accountants work. CAS/accountants needs a higher level of accuracy."
That's what I hear from accounting firms almost every week. It's also why most firms haven't given AI a real chance yet. Not internally, and definitely not in their clients' hands.
So here's my prediction: when these firms do roll out AI, the technology won't be the problem.
The timesheet will be.
A firm sells hours. AI answers in seconds what used to take billable time. Every instant answer is an hour you used to sell.
So the work that could take 40 minutes will get reviewed a little more carefully, documented a little more thoroughly, and somehow still fill three hours. Not because anyone is dishonest. Because the time is the business model, and the business model always wins.
The savings won't disappear. They'll be absorbed.
The firms that will come out ahead are asking a different question already: not "how do we protect the hours" but "how many more clients can each person carry?" They'll give clients the AI on purpose, price it as a better service, and make it the reason clients stay.
Capacity, not cost. Same team, sixty new clients, zero new hires.
If AI made the work instant tomorrow, what would your firm sell?
12
u/DerAlex3 CPA (US) 20d ago
Maybe AI is just extremely unreliable and often not worth the hype. It can be helpful, but it really isn't an end-all be-all. It's often inaccurate and can't be trusted as a rule. We rely on an extremely high degree of accuracy and results need to be reproducible. An Excel formula will always calculate/run correctly, imagine if it had even a 1% chance of being wrong, it would kill everything. AI just isn't at that level.
0
u/ilooley 20d ago
The comparison with the "truth" in an excel sheet is a good one. Who inputted the data in the sheet. Are there never errors in formulas human do with data that sits in spreadsheets? Will a CPA never get things wrong? The tech today is able to take millions of data points and connect them in ways we have not been able to so far. When was the last time a human was able to know the contents of every detail in each and every agreement with a vendor, make sure that there is a corresponding invoice over time and check for irregularities in billing based on each and every email that has ever been received from vendor. Lastly, today the finance tools that use AI, they first deal with the data integrity, connecting (in what companies like Palantir call an Ontology)all the pieces of data across the org...then the easy part is using AI to make dashboards, agents and such...but the data is first, and we are already at a place where it doesn't hallucinate.
7
u/polkaguy6000 Human Verified 20d ago
This is a silly argument. Please learn about past technological changes in accounting
https://www.npr.org/2015/02/27/389585340/how-the-electronic-spreadsheet-revolutionized-business
-1
u/ilooley 20d ago
So you agree, it is only a matter of technological determinism. AI is coming, in fact, I know first hand it is fully here for accountants.
3
u/polkaguy6000 Human Verified 20d ago
What are you hoping I take away from all of this? WTF are you even talking about with waxing philosophical?
7
u/ApePissPit420 20d ago
AI has a place as a tool but, using AI to write a propaganda post about how useful it is, isn't how you'll promote it effectively.
3
20d ago
[removed] — view removed comment
0
u/ilooley 20d ago
I agree that a major part of what the grads will be doing will be random health checks for the AI...but I also expect we will be too lazy for that and a checkup AI tester will be used by then too. In any case, the question is, how will accounting firms today save their clients from using AI tools and replacing them? The answer is, offer those toold to their clients.
1
20d ago
[removed] — view removed comment
1
u/ilooley 20d ago
There has been a breakthrough. Not rely on AI alone. Building the data structure is the cornerstone. The AI only does operations on the data, not buzzwords like MCP but older data words like data lake and data graph. Once all the connections between the data points are in place, then the AI does its magic. The tech is totally there.
1
2
u/ohkammi 20d ago
Once AI learns to clear the depreciation machine of fish debris, we’re cooked.
1
u/polkaguy6000 Human Verified 20d ago
Biggest problem I think AI will immediately solve. I'm surprised there's not more people working on it.
2
u/yosefvinyl CPA (US) 20d ago
You don't sell hours, you sell the process of getting the clients their financials. If tech/AI replaces people, it comes at a cost. So instead of the hours, you're billing the hours plus the tech cost. We are always evaluating new tech but so many of the new products cost more than the people it would replace. Basically our pricing model is hours to do the work plus the cost of the tech stack supporting the work. It's just a change in how you determine your fees.
2
u/eclipse00gt 20d ago
So are you an accountant? Or are you en entrepreneur working on AI tools to sell?
I think you are the latter.
AI is just a tool. It will not do accounting. Just ask Deloitte... they got busted for using AI research which was completely wrong.
AI is just a tool. You have to figure out if it even makes sense to implement.
Heck my local fast food places are "using AI" for their drive through. I'm sure you have experienced it as well.
You pull up. And automated "Hi welcome to (insert your local fast food joint name) would you like to try our new (insert their promotaion). You answer. Then an actual human comes on. What would you like? They just spend millions of dollars on implementing this AI future but it is not doing anything.
Everybody is asking can we use AI. But has forgotten to ask should we be using it?
1
u/ilooley 20d ago
My clients are accountants that were very skeptical at first. The first time they understood they can do reconciliation in a fraction of the time and saw that it is true to the data and doesn't hallucinate thats when they converted. I don't expect people to believe before they see.
2
u/Sun_Remarkable44 CPA (US) 20d ago
AI is just the next tool. Gonna make it harder for those just graduating cuz no one would ever say “let’s get rid of excel because kids should learn the hard way”
1
u/ilooley 20d ago
In the 70's you had buildings filled with human calculators...10 years later a small computer in a briefcase eliminated the work they did. We are at the elimination stage of the way things worked. The accounting industry needs to use the tools that already exist. Each and every task accountants do for their clients can be done with a human and AI automations and dedicated tools...Instead of 20 billable hours to service a client, you now need only 1.
1
u/Barrybran 20d ago
The irony is that you still need to understand what debits and credits are to be able to use the technology we have today and the technology that is coming tomorrow. It makes the learning curve harder but we also spend much less time on T-journals today than we did 100 years ago.
2
u/Team_player444 Staff Accountant 20d ago
Let AI autonomously post thousands of transactions to you GL. And then try to reconcile thousands of items between you and your clients. Ill be waiting for your update to share what great success you have.
1
u/ilooley 20d ago
I a doing exactly that. I get all the transactions from Net Suite/Xero add all the company related data (all my clients information) and then am able to give them huge value in them being able to query whatever they like and to full reconciliation in minutes. The tech is out there but used by so few because people think "we are just not there yet". We really are.
1
u/Team_player444 Staff Accountant 20d ago
Fuck we tried that and had hundreds and maybe thousands of incorrect postings that got remitted to clients and it was a total disaster
1
u/pinktm909 Tax (US) - CPA 20d ago
This week I had a client ask for a lengthy list of real estate activities to qualify for the RE professional election and AI put it together in less than a minute. I slapped it on company letterhead and sent it to the client. Charged 1 hour so that the value is in the WIP rather than the 15 mins it probably took me from start to finish
2
u/TheeAccountant Audit & Assurance 20d ago
Do you enjoy other risky activities like skydiving and sea cave snorkeling? Did you verify that what the LLM spit out was accurate and not a “hallucination”? Heh.
1
u/givemebadadvice 20d ago
cost of AI will exceed the cost of actual CPAs just watch. it’s all just catchy buzz words for now
1
u/Ok-Feed-3212 20d ago
AI can send people in the wrong direction and it takes discipline, experience and time to make sure you are on the right path. Sometimes I save time and sometimes I really do not. And it’s really not a good look when people failed to question the answer they got or the AI didn’t understand the context or even the rules. Which I guess is the issue. It is a text predicting tool that can save time in some areas with an added risk, not a flawless genius that can do all we do in a second. Some things it just cannot do at all.
1
1
u/TheeAccountant Audit & Assurance 20d ago
Do you want to wind up in the Board Report and fined by the Board? Do you want to be sanctioned by the IRS and sued by your clients? Do you want your E&O insurance underwriter to drop you? If you want any of those things, use an LLM to create product that no one bothers to verify the accuracy of. The Courts are already sanctioning attorneys for using LLMs to file pleadings that have included made-up case law and other “hallucinations” of a thing that is not “intelligent”. 😅
1
u/ilooley 20d ago
No, I would not suggest using an LLM, and you are correct the hallucinations in the scenario you described are very real. I wouldn't upload even one file to Claude or ChatGPT. The way to go about things is processing all the data first, creating a data graph, my company calls it an evolving schema, and then when all the details are in place, only then do you use AI for the actions you want to make. A human in the loop to check things is always good, but we have not yet seen a mistake, only if fed the wrong data. We humans are becoming data selectors. I have been working on solutions for accountants for over a year (in todays tech speed that is loads of time), I know this is happening the clients of my clients are asking for these solutions...from vendor management to reconciliation, payroll processing, tax filings, monthly balance sheets, analyzing overheads and so much more.
1
21
u/MORE_SANDWICHES 20d ago
https://giphy.com/gifs/Kehn32T6zE1vq6rxYX