Technology is an increasingly important part of what we do as accountants. Whether that's through accounting software, cloudbased solutions or AI-bots, no practice can expect to keep pace with client demands without adopting and rolling out up-to-date technology. And artificial intelligence will inevitably be powering much of the next wave of solutions and tools. Just as cloud-based applications shook up the enterprise software space ten years ago, the next decade will see AI increasingly embedded into everyday applications across the tech stack.
Intelligence squared
At PB Ltd, we've already begun this journey. Using AI tools has helped us create a responsive and agile practice, allowing us to not only to track and analyse data, but to capture insight and begin to deliver predictive capabilities. But one of the key challenges that practices face is how to seamlessly integrate all of these tools. And a lot of that is about data integration and consolidating data from different sources.
We use a practice management software package that helps us track client activity across our remote operations. The idea is to funnel everything we do – client interactions, document management, emails and so on – through the AI tool. By doing that it captures everything the practice is doing at any one time, so the platform almost acts as a 'central nervous system' for the business, sensing, recording and reacting to everything that's happening both inside and outside.
Our experience with it demonstrates that AI-led tools are especially good at summarising things: gathering – or aggregating – data together, making sense of it and filtering out extraneous detail to deliver a high-level overview of a client relationship, for instance, or a contract.
Sign on the dotted line
The most important function of AI is finding the right data at the right time, and then making sense of that data. In practice, that might involve scouring a contract and delivering the key clauses, messages and features to an accounting professional.
We are already seeing how AI will have an impact on how contracts are created and managed. Certainly, the process of creating contracts has been speeded up as AI improves functionality to assure that terms are properly vetted. This allows accounting professionals (as well as lawyers) and their counterparts to spend less time on manual, monotonous review, and more time on higher-value work.
It's also true that AI tools reduce the chances of mistakes being made during the entire contracting process. After all, there are simply too many important dates, deadlines, and terms and conditions to catch with the human eye. Because it's fair to say that when tasked with authoring agreements, sitting through multiple rounds of changes, or searching historical contracts for agreeable terms, contracting professionals may find the work flat and monotonous, or lose focus on it altogether. Now, AI tools are now better at helping to insert restrictive covenants into contracts that might otherwise be left out.
But AI means they no longer need to look through a 27-page services agreement; instead, they will be presented with the three elements that are important for this contract; it can then compare and contrast that with other suppliers and contracts.
Know your customer
In addition to the impact on contracts, AI will also change the way we undertake due diligence on customers and counterparties. Perhaps the most impactful area of that will be in antimoney laundering (AML), a central part of our operational relationships with clients.
One of the key elements of AML work is the requirement to carry out due diligence on their clients to make sure no illegal activities are taking place. Then, if the accountants' suspicions are raised, they must report it to the relevant oversight bodies.
For accountants in particular, the risk is even more significant: every practice in the UK must implement internal controls, maintain proper records, and train their staff on AML procedures to remain compliant with AML regulations in the UK.
The days of putting this off are over. Regulators (and there are several) are taking a more proactive approach to enforcement. In 2022-23, HMRC carried out 907 onsite visits and 834 desk-based reviews across the 35,000 businesses it supervises. That accounts for around 5% of the total. The levels of non-compliance among the reviewed firms was stark: 493 firms were named as non-compliant – 28%.
So the timing of AI's emergence as a key tool in this is fortunate, because there's no doubt of the direction of travel: towards greater enforcement of AML compliance. Recent figures showed that the total value of fines dished out by the ICAEW in 2021/22 for breaches of money laundering regulations was £267,002 from 53 fines, compared to £178,947 in the prior year from 59 fines.
Counting the cost
This isn't just an issue for larger international firms. Smaller accountancy practices and professionals are also at the sharp end. Ignoring the importance of AI would be a mistake – not just for clients but for the practices themselves.
So, AI may represent a game changer for accountants, and for our clients. We have found that mapping out our processes to find ways to increase efficiency through automation has been extremely useful.
Our operations are now generally smoother and more integrated, in large part thanks to tools that integrate seamlessly and save us time on monotonous transactional tasks. AI is already impacting how accountants are finding, onboarding and retaining clients, not just through efficient tools but also helping us become more intuitive and responsive to client needs. It also allows us to cross-sell more effectively, as our practice management package captures and summarises our relationship with each client, highlighting areas where we could offer other services.
And for our clients, the emergence of these new technologies represents an opportunity to get much more value from their professional service advisers. If we can do things quicker, cheaper and safer, then that will inevitably have a beneficial impact on the levels of service we can deliver.
Because while technology continues to develop and evolve, one thing remains the same: successful business is built on relationships.
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