Accounting firms have used software for decades to improve workflows and cut down on manual tasks like bookkeeping, tax prep, and compliance. But even with the best tools, firms—large and small—still struggle to maintain healthy margins and keep up with changing client expectations.
That’s because the foundational work—gathering documents, reconciling data, managing deadlines—hasn’t changed much. Most software stops at streamlining workflows; it doesn’t eliminate the repetitive, behind-the-scenes tasks that keep firms running. These are the small steps: chasing documents, updating spreadsheets, managing timelines. On their own, they seem minor. But together, they add up.
These manual processes, patched together with a mix of tools not built for the job, quietly slow down service delivery. They take up unbillable time, which acts like a silent margin killer in the background of a firm doing everything it can to lower costs and grow without adding administrative headcount.
Given the talent shortages in accounting, a firm should hire for the future to invest in new sustainable talent, rather than spend budget on more admin staff, who often have a ceiling on the value they can bring.
The opportunity cost shows up in strategy too.
The more time spent staying on top of the basics, the less space there is to build deeper client relationships or think proactively about their business. And without that headroom, the chance to deliver strategic advice—or turn insight into new revenue—starts to shrink.
The unfortunate reality is that when teams are stretched and margins are thin, client service, which is often the firm’s biggest differentiator, becomes squeezed.
Fortunately though, AI is changing that.
If you’re reading this, you’re likely in the industry, so none of this is new.
What’s less clear is exactly how AI will reshape accounting in the next 1, 5, or 10 years and how to implement it into your firm.
Phrases like “evolve or die” may grab headlines, but they miss the nuance.
Traditional firms, those that rely heavily on manual processes and people power, can and will exist in the future. But they just won’t lead. They’ll survive, but won’t thrive.
We’ll likely see a rise in AI-first firms; not just startups, but also more established, larger firms that embrace the shift. But being efficient doesn’t always mean being effective. These firms may not be better at delivering expertise, but they’re better at delivering it efficiently. That efficiency will drive their pricing, and it will become harder for traditional firms to compete in a market where AI has pushed prices down.
Right now, AI is strongest in the parts of accounting that rely on structure, repetition, and pattern recognition. Tasks like reconciling transactions, organizing financial documents, extracting data from receipts or contracts, and summarizing reporting obligations are already being handled by AI in many firms.
These are areas where large language models (LLMs) and automation tools can offer immediate value—because they don’t require deep judgment, just accuracy and speed. Where AI still falls short is in more nuanced, judgment-heavy work: edge cases, context-specific advice, or interpreting vague client needs. But even those boundaries are starting to shift as tools become more specialized, better trained, and more deeply integrated into firm workflows.
This is important context for firms trying to figure out where to start.
Not every part of the job should—or can—be handed over to AI, and that’s okay. The goal isn’t to automate everything. It’s to reduce the time your team spends on work that doesn’t require human judgment or relationship-building. That’s where AI creates real leverage.
So where does that leave the modern accountant or fractional CFO?
It means getting clear on which tasks are high-value, and which are simply necessary. AI is already proving itself in the “necessary” category—handling admin tasks that don’t move the needle, but still need to get done. That includes:
- Pulling data from messy documents and structuring it cleanly
- Organizing files and ensuring compliance checklists are complete
- Tracking deadlines, sending reminders, and closing the loop
- Reconciling across systems to surface mismatches or missing entries
All of that work adds up. It’s valuable in the sense that it keeps things moving—but it’s not what clients are paying most for. What they want is clarity, insight, and speed. AI gives you back the time to deliver on that.
At the same time, it’s worth being realistic. AI isn’t here to replace the thinking side of accounting. Tools today still need oversight. They don’t understand the why behind your client’s decision-making, or the context that changes how revenue is recognized, or which tax interpretation is right for a specific scenario. They’re not making judgment calls. You are.
And that’s exactly the point: AI should take the noise off your desk so you can focus on the signal.
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