As many practitioners in the tax & accounting field try to figure out the benefits of Gen AI, those early adopters of the new technology may hold a significant advantage
ChatGPT, a generative artificial intelligence (Gen AI) tool released by OpenAI in November 2022, has already reached approximately 100 million weekly users in just under a year of its release. This new record for “fastest-growing consumer application in history, according to a UBS study” was set when the application hit 100 million monthly users within just 2 months of its release.
Not surprisingly, there has been a lot of interest in how different segments of professional service firms — law firms, tax & accounting firms, etc. — would adapt to the new technology. About six months after ChatGPT’s launch, the Thomson Reuters Institute conducted a survey to gauge how tax & accounting professionals were responding to this new AI product.
As of this past summer, 50% of tax & accounting firms surveyed for the Institute’s ChatGPT and Generative AI within Accounting Firms and Corporate Tax Departments report, said that they were already using AI on a “wide-scale basis” (11%) or plan to use it “within the next 6 months” (39%). Although there is still much skepticism over the reliability and security of using Gen AI, specifically open-source platforms like ChatGPT, many professionals are capitalizing on the early benefits.
Among tax professionals, the top three use cases cited as being of most interest are tax research (79%), back-office functions (70%), and accounting/bookkeeping (70%), according to survey respondents. In a Gen AI toolkit developed by CPA.com, a subsidiary of the American Institute of CPAs, identified some of the following use cases for tax & accounting firms:
- Structured data extraction — Tax & accounting practitioners can submit a PDF or statement, such as a bank statement, into ChatGPT and convert the data into a comma-separated file (CVS file) that is easier to read and work with.
- Key performance indicator (KPI) analysis — The Gen AI tool can analyze large amounts of data and identify patterns, trends, and insights that help firm leaders better understand an organization’s performance.
- Talent recruiting — Gen AI tools can use certain criteria to look for candidates for open positions at a firm, eliminating much of the cost and time usually involved.
These are just a few of the additional use cases being explored and used by early adopters of various Gen AI tools. To really ideate all the possible use cases, tax & accounting practitioners need to recognize ChatGPT and similar Gen AI tools are not a search engine replacement. Gen AI is capable of generating comparisons, analysis, and new material based on the prompts it is given, rather than simply offering up a list of search results.
New, paid-subscriber versions of ChatGPT are capable of describing, interpreting, making recommendations, evaluating images, and much more. Jason Staats, a CPA and speaker at the Digital CPA Conference, pointed out this type of functionality does not just supplement the work of the lowest level team members but has the ability to perform tasks for staff at all levels within the firm.
For some, this raises concerns that tax & accounting professionals could be replaced by this technology, but it would not be the first time this fear surfaced amid the emergence of advanced technology. Gen AI tools are exactly that, tools — really no different than others like spreadsheet programs, tax & accounting software, etc. Each of these tools can now perform tasks that practitioners used to perform manually, and Gen AI will greatly add to that ability, automating many tasks that tax & accounting practitioners now are expected to perform manually.
In fact, Gen AI and AI in general are just more tools that have come into existence in order to make the profession more efficient, productive, and able to offer value to their clients. Cassie Kozyrkov, former Google chief decision scientist, noted at the Digital CPA Conference that if the tool doesn’t make us better, we don’t use it. Reflecting on the extraordinary adoption rate of ChatGPT indicates that many practitioners apparently feel that Gen AI is making us better at our jobs.
Not surprisingly, all of the tax & accounting practitioners surveyed in by the Thomson Reuters Institute said that they had saved time by using ChatGPT, and 58% said it freed them up “to focus on higher value work.” In fact, attendees of the Digital CPA Conference spent time ideating on ways that ChatGPT, specifically, could aid them in their practices. There were numerous ideas developed from marketing and billing, to creating client deliverables that they may be unable to generate in accounting-based software programs. Clearly, the surface is just being scratched on the potential of Gen AI.
As for the concerns on the quality of the output generated by Gen AI tools, it is contingent on the quality of the input. The more vague and non-descript the question posed to Gen AI, the less likely it will generate the expected results. Conversely, the more specific the prompt, the more likely a usable result will be generated. More training options are becoming available to enable users to get higher quality results out of Gen AI tools, but experimenting will also allow users to get better as well.
Practitioners limiting their use to free, public-facing versions of ChatGPT should remember that the data to which the tool has access is only as recent as September 2021. The paid-subscriber version, ChatGPT 4, has access to information as recent as April 2023. Obviously, by using only the free version, users need to understand that the most recent information may be missing from generated responses.
This is why tax & accounting team leaders should have discussion on Gen AI expectations with their practitioners and their staff. Instead of avoiding Gen AI tools because of these fear factors, it would be better to educate the team and discuss appropriate use cases. Practitioners should consult their insurance provider on risk guidance as well.
Tax & accounting professionals already are experimenting and gaining efficiencies with ChatGPT and other Gen AI tools, firm leaders shouldn’t be left behind by ignoring the potential and benefits already being experienced.