Joseph Damiano tracks the growing demands that accounting firms face to keep up with technology like an accountant: He looks over profit and loss statements.
The CEO and managing partner of Sax LLP said technology is a line item just below labor costs on the firm’s annual expense report.
“This has never happened before. We may have been in the top 10, but we weren’t anywhere near number two,” he said. “Budgets are constantly increasing as we make the necessary investments to keep up with technology. This is affecting all businesses.”
Damiano said technology spending in accounting has only increased, and it remains to be seen how much more it will increase in the future as artificial intelligence and language processing tools such as ChatGPT have an even bigger impact on the field.
That has led companies like Sax to hire outside consultants who work with their information technology staff to create “digital roadmaps” to figure out what technologies are in use now, what technologies will be in use in the future, and, of course, how much it will all cost.
The bottom line for accounting firm clients is that their financial professionals are becoming more aggressive in using the latest tools. Accounting firms have been talking about doing so for years, but, as Alan Sobel, managing principal in Clifton Larson Allen’s New Jersey office, suggests, they’re now putting their money where their mouth is.
Sobel’s company has invested hundreds of millions of dollars to enhance its technology with AI, and it recently acquired a U.K.-based company that was developing its own AI platform, not just to use the platform internally but also to offer it to clients, he said.
One of the most notable recent industry headlines was when Big Four accounting firm PwC announced last month that it would roll out OpenAI’s business-friendly ChatGPT Enterprise to its employees, and also to its clients for a fee.
“I think with this announcement and everything else we’ve seen in this industry, we’re starting to see companies take action and not just talk,” Sobel said.
Sobel expects to see more of this trend. In fact, he expects the adoption of AI in the sector to mirror the industry shift that occurred early in his career when the first personal computers were introduced into offices.
The American Institute of Certified Public Accountants (AICPA) and local industry groups have issued guidelines for the use of AI in the accounting industry, and the AICPA is also hosting an AI-focused startup accelerator this year.
Witham CEO and managing partner Patrick Walsh said there is undeniable excitement within the industry around the potential of AI and language processing tools, which he added explains the initial hesitation from financial professionals about data security on ChatGPT and other platforms.
“So we’re definitely leaning into this as our employees and customers educate themselves on this,” he said.
At the same time, Walsh said his accounting firm wants to balance that excitement with caution — that is, not rushing to overinvest in these tools before the ROI is clear.
And to be clear, the technology capabilities already exist to automate some of the profession’s more mundane data-entry tasks, and Walsh noted that investment in that area is booming.
“This form of AI has the benefit of shaving hours off work that’s already been done,” he says, “and that work can get forgotten in favor of new shiny objects and a focus on how these language models will impact us in the years to come.”
