Satisfied employees, happy clients and a broad service offering all help accounting firms find success in a competitive environment. All three of those are increasingly predicated on AI and machine learning.
While it is a boon to those who use it well, that technology also inherently brings with it two new and formidable forms of competition: tech-focused accounting firms that aggressively deploy AI and ERP systems with built-in AI.
The following is an excerpt from “The Future of Accounting Technology: Preparing for Artificial Intelligence (AI) and Machine Learning.”
Tech-Focused Accounting Firms
As the importance of technology in the accounting industry becomes obvious, many accounting firms will become almost entirely tech-based – or tech-based services will be created that look nothing like traditional accounting firms.
Those that arrive at that destination first will be able to sharply drive down the costs of delivering core services, with a much faster response time. Accounting firms that do not begin investing in accounting technology will struggle to attract new clients and retain existing ones.
Think of the thousands of mom-and-pop retailers and e-commerce websites driven out of business by Amazon’s lower prices and faster delivery. A similar extinction-level event is already happening in the accounting industry.
The other threat is even more pernicious: It does an end run around accounting firms altogether. Company’s ERP system providers will continue encroaching into the service areas offered by accounting firms. Businesses will slowly gain awareness that their accounting firm is no longer relevant:
Their cost structure is bloated by today’s standards.
Their technology stack is antiquated.
Their standards for speed belong to a bygone era.
Their leadership is too busy living in the past.
ERP systems can provide a golden ticket to solve all of these problems – and it is software that clients already pay for. When that happens, there is no longer a use for an accounting firm, and the needless expense will be eliminated.
Accounting firms will have to find a way to stop client attrition due to tech-based accounting firms and ERP automation.
Is your firm taking AI-driven countermeasures against threats to your business model? Share your thoughts in the section for comments below.
To learn more about the importance of technology in the accounting industry, download your copy of “The Future of Accounting Technology: Preparing for Artificial Intelligence (AI) and Machine Learning.”