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Blog: AI Discovery - Practical steps for CPAs before tax season

December 10, 2024

By Rick Meyer, CPA, MBA, MST
CPA Director, alliantgroup

If I read one more AI article, I’m going to pull what’s left of my hair out!

Seriously, I’m tired of the theoretical jargon, the phrases like "AI pilot" and "digital transformation." I’m exhausted reading abstract articles about the potential of AI to revolutionize my business, followed by no practical steps of what to do now.

Stop all this gobbledygook!  I am just a practical, old-time, semi-retired, non-tech-savvy CPA who struggles to even use a TV remote control. Don’t waste my time with theory. Just give me answers to a few basic questions:

  1. What specific practical tasks can AI do today to make a CPA’s life easier?
  2. What specific practical steps can a CPA take today to prepare AI for the 2025 tax season?
  3. How much money will this save me?

Last year, with my frustration and passive-aggressive nature in hand, I marched into the office of Chris Stephenson’s, our Director of Intelligent Automation, and aired my AI grievances. He explained was the process for answering all of those three questions above. Its called AI Discovery, and he’s done it for businesses in every industry, including hundreds of CPA firms in a single sitting. Here’s the story.

AI Discovery

Last year, Chris put together a think-tank session with 200 top CPA firms nationwide. The goal was to gather feedback about how AI might help their practice. The No. 1 comment he heard from the audience? “I don’t know where to start.”

CPAs understand that there is incredible potential with AI but they don’t know what to do with it, what does it do best, how to scale it across a practice, and how to get it to do what you need.

Chris proceeded to walk the room through an “AI Discovery” session. This is a process where organizations can identify where AI actually makes the most sense for them and how they can get started. This is the practical first step every firm can start to take right now. Here is what the process roughly looks like.

  1. Ideation Session: This part is a workshop with partners and staff that gives everyone an opportunity to present their problems and ideas for possible AI solutions. Everyone on your team probably has AI ideas; the trick is getting them all out in the open and figuring out which will have the most value to your firm.
  2. Scoring: So, you've got a bunch of ideas. Now what? This is where scoring is critical. Discovery often hinges on scoring each idea based on objective measures to determine their priority. Every firm is different, but you want to score on several dimensions, like which can get solved the fastest, which will have the biggest impact, or which can scale for every department. This way you can rank what has the highest value and which you should start on.
  3. Technology Infrastructure Assessment: OK, you know which AI projects are going to have an impact on your business, but is your firm’s system even ready for AI? You’ll need to have your tech infrastructure evaluated to determine its AI readiness and to find out if there are any shortcomings preventing you from getting started.
  4. Roadmap: Finally, you need a clear roadmap to lay out how you’re going to deploy each solution. Do you need to buy a solution? Build one? How about training employees? How do you measure if your solution is having an impact? A proper roadmap should lay out all of that for you.

During Chris’ think tank, after he had run through the Ideation Session, where almost 500 ideas were generated, his team ran their scoring algorithm and identified five problems that AI could help nearly every firm with:

  1. Collecting payments from clients
  2. Requesting and processing documents from clients
  3. Moving trial balances to workpapers
  4. Responding to IRS letters
  5. Operating a Chatbox to handle internal queries, like HR questions

Note that, although these were the most identified issues from this group, every firm is different. Not every firm needs one of these five solutions. CPA firms may have their own unique problems that they’d love to fix with an AI solution. That's why you shouldn't jump to buy a package of AI add-ons from a local vendor to solve issues that may not even exist in your firm. Instead, do your own AI Discovery to identify your firm’s biggest pain points and develop a plan to attack with AI.

How Much Could CPAs Save

At this time in Chris’s story, the $$$ signs started flashing in my head.

I thought about CPAs increasing bottom-line profits. I thought about all the time I used to spend staring at an excel spreadsheet to analyze my time, project by project, to justify hours and bills, and put that into a client letter. I thought about all those routine IRS Notice letters I had to write to explain why my client’s 1099-DIV did not match the tax return Schedule B. I thought about some other mundane tasks I used to do in public practice that bored me.

You may now be asking yourself how much CPAs could save if AI were to do some specific tasks.

Some early statistics are showing that firms that adopt AI are earning 40% more per professional. Another statistic shows that companies who are AI leaders are outperforming competitors who are not using AI by six times. Firms that employ the document request tool and the trial balance to workpaper tool are seeing up to a 25% reduction in time preparing returns.

Would life have been better as a CPA 45 years ago, when I started in public practice, if AI existed back then? Should I even consider a return to public accounting from my semi-retirement with AI in the picture?

The answer to the first question is an obvious “Yes.” The answer to the second question is an even more obvious “No.” But for those still in the game, let’s face it: It’s time to jump on the AI bandwagon to be more profitable, reduce stress, increase free time and have more fun.

Rick Meyer, CPA, MBA, MST is a long-time member of the Illinois CPA Society and has served on various tax committees over the past 45 years. He is a Director for alliantgroup, a national firm that works with businesses and their CPAs to identify powerful government-sponsored tax credits and incentives, talent solutions, and emerging technologies like Generative AI. He can be contacted at rick.meyer@alliantgroup.com.