Forbes says AI can help with the CPA shortage, TaxDome is here to show you how

The modern tech revolution is filled with innovations swearing to save users time and money. In the accounting industry, this means completing more projects with fewer accountants — something firms around the world need to do, thanks to a shortage of accountants.

The CPA shortage isn’t new. We reported on it earlier this year and again when the Wall Street Journal reported that 300,000 accountants left the profession. Now, Forbes is reporting that AI and automation can help.

Why accounting firms are turning to AI and automated solutions

The accounting industry is navigating a period of significant transformation. As firms face an ever-growing client base and a shrinking pool of professionals, the need to maintain high standards of personalized service while managing increasing complexity becomes more pressing.

As CEO of consulting firm RGP, Kate Duchene notes in the Forbes article, “According to Andreessen Horowitz, the functional areas where AI and automation can be most useful to accounting professionals include data collection and ingestion, automation of report generation and filing, and deeper analysis of client service insights.”

Her insights become all the more apparent when you consider the following:

• 74% of automation users say it’s made them more productive
• 90% in the same survey said automation has also made them more satisfied with collaboration across departments
• 79% of corporate strategy leaders say AI, automation, and analytics will be vital to their success in the coming years

The functional areas where AI and automation can be most useful to accounting professionals include data collection and ingestion, automation of report generation and filing, and deeper analysis of client service insights.

Challenges and complexities presented by AI

While AI and automation present exciting opportunities for accounting firms, they also come with challenges. Acknowledging this sets a realistic expectation for AI usage and positions firms to use it more effectively.

Accounting relies not only on data but also on nuanced judgment, ethical decision-making, and client relationships — all areas where AI cannot fully replace human input. AI should enhance, not replace, the personal service that accounting firms provide. Automating every process might seem appealing, but over-relying on AI can potentially strip away the personal touch that clients value.

Additionally, the use of AI in document management and data analysis often raises concerns about security and privacy. With firms handling sensitive information and financial data, clients are often worried that the use of AI in accounting firm processes can expose them to potential data breaches, unauthorized access, and misuse of their personal information. This concern is valid, especially as cyber threats continue to evolve.

To address these worries, firms must implement robust security measures, such as encryption, multi-factor authentication, and strict access controls. Choosing AI solutions with a strong focus on privacy can help reassure clients that their information is safe and protected.

The industry is definitely changing and we need to be able to use technology. – Kesha Dawnson-Harris, Director of the National Association of Enrolled Agents (NAEA)

How TaxDome is using AI and automation to help accounting firms

TaxDome AI

TaxDome AI is designed to tackle some of the most persistent challenges faced by modern accounting professionals — disorganized client workpapers, inefficiencies caused by non-descriptive file names, and the time-consuming process of manual document management.

Currently in beta, TaxDome AI aims to replace repetitive workflows entirely and allow firm members to concentrate on higher-level tasks that focus on serving clients, using time more effectively, and increasing firm revenue for growth.

CPA Practice Advisor recently recognized TaxDome AI as an “industry-first to transform client document management.” And, that’s not all. As TaxDome AI continues development, it will address additional use cases, including bank statements, driver’s licenses, and more.

When it comes to security, TaxDome is a SOC-2 certified platform. We do not use data to train AI models and incorporate a zero retention policy, ensuring that all firm and client data remains private and protected.

We also employ the following additional security measures to ensure your firm and your client’s private data and information are kept secure:

• GLBA-compliant chats: safeguards the privacy of consumer financial data during all communications in accordance with the Gramm-Leach-Bliley Act.
• Two-factor authentication (2FA), face ID, and touch ID: provides enhanced security for the client mobile app, guaranteeing that only authorized individuals can access confidential information.
• Data backup with Amazon AWS: stores client information daily on Amazon AWS, a trusted cloud storage provider, ensuring data protection even if unexpected events affect a firm’s local storage.
• PCI DSS for payment security: secures every payment transaction, protecting clients’ financial details and adhering to the Payment Card Industry Data Security Standard.

AI-powered reporting

Earlier this year, we introduced AI-powered reporting. Designed to help accounting firms unlock the full potential of their data, this tool provides real-time visibility into firm operations, allowing firm leaders to discover opportunities for revenue growth, improved client experience, and increased efficiency.

TaxDome’s AI-powered reporting offers interactive dashboards that give accounting firms a clear view of essential metrics. It also includes ready-made reports on aged receivables, completed tasks, utilization rates, and revenue sources that help firm leaders make informed decisions in less time.

TaxDome’s AI-powered reporting is also customizable. Its drag-and-drop interface allows firms to create reports tailored to their specific KPIs without coding.

Natural language search makes data exploration easy by allowing users to ask direct questions and receive AI-generated insights instantly. You can gain immediate insights by simply making requests like these:

• What were our top revenue-generating services in Q3 last year?
• Identify the main bottlenecks in our workflow during Q1.
• Show me a pie chart of 2023 invoice amounts by service.

Built-in automation

From the beginning, TaxDome has continually developed innovative ways to automate repetitive accounting tasks that eat away at your firm’s time and prevent your team from realizing their full productive capacity.

In addition to the document management automations provided by TaxDome AI, our core automation features include:

• Automated workflows: TaxDome automates the movement of jobs through each stage of your firm’s processes, from sending engagement letters to collecting client information and sending invoices. We even provide workflow templates to get you started on utilizing our automation features.
• Task management: TaxDome lets you automate task assignments, so your team stays on top of deadlines and workload distribution is optimized. This helps maintain consistency and prevents bottlenecks in project management.
• Client communication: TaxDome automates client interactions such as sending reminders, follow-ups, and updates, ensuring consistent communication without adding to your team’s workload.

What have these automations achieved for firms around the world? In 2023, firms completed 1.2+ million jobs, securely sent 1+ million emails and chats automatically, got 300k+ proposals and engagement letters signed, and collected $1 billion using TaxDome.

It’s the best program in the world. I’m very, very happy. And it’s really, really inexpensive. – David Steiner, Owner, Zebulon Tax Advisory, Springfield, NJ

The future of AI in accounting

Looking ahead, we believe the future of accounting lies not in replacing accountants with machines but in empowering them with smarter, more intuitive tools. These tools are already helping make better decisions with informative data, look forward toward growth potential, and deliver superior client experiences.

As AI continues to evolve, several key trends are expected to shape the future of accounting:

1. Widespread adoption: the adoption of AI in accounting is accelerating, with a projected annual growth rate of more than 40% through 2029. Firms are increasingly recognizing the benefits of AI and as more adopt AI, it will become a standard tool in every accountant’s toolkit, helping practices stay competitive.
2. Integration with existing technologies: AI is not just a standalone solution; it’s becoming integrated into accounting software and practice management platforms — such as TaxDome AI. With tools incorporating AI into document management and reporting, firms will benefit from a unified platform that optimizes both traditional and AI-driven workflows.
3. Enhanced predictive analytics: AI-powered predictive analytics will continue to revolutionize accounting. Firms will be able to forecast revenue, expenses, and cash flow with greater accuracy, allowing them to take a more proactive approach to strategic planning and risk management.
4. AI-driven client interactions: AI will enhance the client experience through automation and personalization. Chatbots and natural language processing (NLP) tools can answer client questions, gather essential documents, and even provide timely alerts about upcoming deadlines. As these tools develop, clients will enjoy more responsive and personalized service without adding to the firm’s workload.
5. Evolving regulatory landscape: with the increasing use of AI in accounting, the regulatory environment will continue to evolve. New guidelines and best practices will emerge to ensure the ethical and secure use of AI, requiring firms to stay informed and compliant.

AI’s future in accounting is one of augmentation, not replacement. By embracing AI and integrating it thoughtfully into their processes, firms can work smarter, improve accuracy, and deliver exceptional client service, ensuring they remain competitive in a rapidly changing landscape.

Learn more in our blog: AI in accounting 2024: key trends, insights, and how to get started.

Build your future with TaxDome

As accounting firms worldwide look for ways to transition from the past and thrive in the future, it’s clear that embracing AI and automation offers a wealth of advantages that both accounting professionals and their clients want.

At TaxDome, we envision a future where AI, automation, and human expertise work together to create firms that are more agile, efficient, and client-focused. As client expectations continue to evolve and accounting firms have to embrace technology to stay competitive, we’re innovating to help keep your firm running with the competition.