How do different accounting firms use AI?

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In today’s fast-paced business world, ignoring technology is not an option, and the field of accounting is no exception. 

Artificial Intelligence (AI) has become a game-changer, helping accounting firms streamline processes, improve accuracy, and deliver more value to their clients. However, firms are still cautious about adopting GenAI technology into their workflows. The 2024 Generative AI in Professional Services Report from the Thomson Reuters Institute found that 30% of tax and accounting firms are in the consideration phase of whether to use GenAI tools, while 49% have no current plans to use.  

How are industry leading firms implementing GenAI technology? This article explores how different accounting firms use AI in their operations to drive efficiency and excellence in their services.

How many accounting firms use AI?

According to survey respondents, 8% of tax firms identified as using GenAI technology, with 13% of firms planning to use the tech soon.

The adoption of AI in the accounting industry in recent years has been on the rise. Accounting firms of all sizes from global giants to local boutiques are increasingly turning to AI solutions to enhance their services. This shift is driven by the realization that AI can automate mundane tasks, reduce errors, and free up accountants to focus on higher-value advisory work. 

Interestingly, accountants seem to be implementing GenAI tech through personal, open-source tools for their work over industry-specific tools. 27% of tax firm survey respondents who already use a GenAI tool are using open-source technology (i.e. ChatGPT) over 8% using an industry-specific tool.

This trend could soon shift as more industry-specific technology providers introduce their own GenAI solutions within the coming years. 

How do the Big 4 use artificial intelligence?

The “Big 4” accounting firms—Deloitte, Ernst & Young (EY), PwC, and KPMG—have led the way with AI adoption. They have heavily invested in AI-powered tools and solutions to provide clients with more advanced and insightful services. Here’s a glimpse of how they use AI: 

• Document review: Deloitte has internally developed an automated document review platform. The tool uses cognitive technologies and fits into their practitioners’ existing workflows, allowing them to evaluate an entire population of contracts to find key information. 
• Auditing: EY is embedding AI technology into their audit process. They are using AI to analyze and extract data from unstructured data, such as contracts, and analyze large data sets to help respond to the risks of material misstatement due to fraud. 
• IT: In-house teams at PwC have developed customized software applications for employees that synthesize data, complete and review code, generate documentation, and more. They have seen 20% to 50% productivity gains in their development processes because of GenAI. Additionally, PwC professionals have access to an enterprise version of ChatGPT-4o for themselves and their clients.
• Client solutions: KPMG’s Trusted AI framework helps their member firms’ clients design, build, deploy, and use AI tech solutions in a responsible and ethical manner, building loyalty and partnerships. 

How do smaller accounting firms use AI?

Smaller accounting firms might not have the same resources as the Big 4, but they are also embracing AI to stay competitive and offer better services. According to the GenAI report, the top five use cases for tax firms using or planning to use GenAI were: 

1. Accounting/bookkeeping automation: Firms are using AI-powered software to automatically categorize expenses, reconcile accounts, and generate financial reports. This saves time and reduces the risk of manual errors for firms.
2. Tax research: Firms use AI-powered algorithms in tax research tools to return data from human-edited, tax-specific content. This provides authoritative answers from trusted sources quickly and accurately.
3. Tax return preparation: Firms are using AI to automate the extraction and analysis of data from various financial documents, significantly reducing the time and effort required to prepare accurate tax returns. GenAI also assists in identifying applicable deductions and credits tailored to individual or corporate financial scenarios, ensuring compliance and optimization of tax liabilities.
4. Tax advisory: Firms are using AI tools to generate predictive insights, helping clients plan for future tax implications based on their financial decisions. This provides a more strategic role to tax professionals, allowing them to offer value-added services.
5. Document review: Firms use AI to summarize key points from contracts, invoices, and receipts and can quickly identify anomalies that require further investigation. This capability not only speeds up the review process but also enhances the accuracy and reliability of financial audits and compliance checks.

Among the firms actively using or planning to use GenAI, 42% said they use the technology daily, if not multiple times a day. An additional 31% said they are using it weekly.

Approaching AI with curiosity

In the accounting world, AI is not a threat but an opportunity. It can empower firms of all sizes to offer better services, improve efficiency, and thrive in an ever-changing industry. As AI continues to advance, those who approach it with curiosity and a willingness to embrace new technology will likely stay ahead of this trend.

If you’re looking to explore the world of AI in accounting, join the AI @ Thomson Reuters community. Here, you can connect with experts, learn about the latest AI trends, and unlock the full potential of AI in your accounting practice. To read and download the full 2024 GenAI in Professional Services Report, visit www.thomsonreuters.com/en/reports/2024-generative-ai-in-professional-services.html.

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