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Accountants Using Tech to Mitigate Inflation, Talent Shortage

Posted by Matt Raebel on Jun 27, 2024 3:00:00 PM

Accounting professionals have been relying heavily on tech solutions to weather windfalls caused by inflation, high interest rates, and talent shortages, according to a new report by Intuit. The study also found that respondents cited “falling behind the tech curve” as the “number one threat to the profession.”

Key findings of the report

Intuit published the findings of its annual Accountant Tech Survey on June 25, 2024, revealing several insights about the use and attitude of tech by accounting professionals. The survey, conducted in March 2024, included 707 accounting professionals (all adults aged 18 or older) sourced from firms throughout the United States.

The report highlighted several takeaways from respondents’ feedback that revealed insights about hiring challenges, attitudes and adoption rates of artificial intelligence (AI), and more.

1. Leveraging AI and other tech

The vast majority of respondents were extremely bullish on leveraging tech solutions for the industry. According to the report, 95% of accountants say that tech skills “are just as important as traditional accounting skills—to support their own business growth as well as their clients’.”

Over half of respondents also said their businesses identified as “early adopters of digital tools.” In the past year, firms have invested an average of $16,000 in accounting technology and plan to match this investment in the coming year. More than half of respondents reported that their firms plan on investing in AI (57%), automation (54%), and machine learning tools (46%).

Tech was also cited as a potential solution for the accounting industry’s talent gap. Almost all respondents (94%) said that technology “is the key to success” if the accounting workforce continues to shrink, with 44% saying they “strongly agree" with the statement and 55% saying they “somewhat agree.”

98% of respondents also said they had “used AI to help clients” in the past 12 months. The most common use for AI reported was “data entry and processing” (69%) and fraud detection and prevention (51%).

When it comes to concerns about AI, “data privacy and security” were far and away the most commonly-reported top concern (31%), beating out the next-highest concerns—“accuracy and reliability” of information generated by AI, and “cost of implementing and maintaining” the technology—both at 21%. Almost all respondents responded that they have implemented formal ethical guidelines for AI use, including transparency documents given to clients describing how they use AI, the establishment of codes of ethics for AI use, created committees or panels overseeing its ethical use, and informational training for employees using AI as part of their jobs.

2. Enhancing client services

Despite reports of increased reliance on technology, the results of the survey also demonstrate the enduring need for a human touch in accounting.

Respondents almost unanimously emphasized the importance of maintaining a balance between technological proficiency and human interaction. 95% said that “prioritizing human touch and connection with clients and staff is just as much of a competitive advantage as technological capabilities.”

Respondents to the survey also reported that clients are seeking more strategic advisory services, which require an average of 47% of their time each work week.

3. Addressing economic challenges

The survey highlights that economic challenges, such as inflation and rising interest rates, significantly impact accounting firms and their clients. Almost all respondents (99%) reported that their clients have been affected by increased economic pressure. “Reduced profitability due to increased costs of doing business” was also the most reported (63%) top challenge accounting businesses face due to increased interest rates and record-high inflation.

Respondents were confident that leveraging tech was a sure path to increasing their businesses' survivability in the face of such challenges. 93% of respondents said they agree that “accounting firms making more use of technology are more likely to survive periods of high inflation and interest rates.”

4. Outsourcing and talent management

Besides leaning on tech solutions, outsourcing consistently emerged as a primary strategy accounting firms are using to manage workloads and improve efficiency. More than nine out of ten respondents reported that they “have struggled to hire good quality people into graduate/entry-level roles” in the past twelve months. 99% of firms also said their businesses plan to leverage “the latest technologies to attract and/or retain top talent.”

Nearly all respondents (98%) reported having outsourced at least part of their work in the last 12 months, with general ledger and transaction management, accounts payable and receivable processing, and financial statement preparation and reporting being the most commonly outsourced services. 94% of respondents said outsourcing “can help drive profit growth by allowing firms to spend more time on advisory services.”

What does this mean for my firm?

The results of the Intuit report indicate that accounting firms are increasingly turning to tech solutions and outsourcing to cope with economic pressures, skills gaps, and changing client demands.

By investing in advanced technological solutions, adopting strategic outsourcing, and balancing human interaction with tech proficiency, accounting firms can navigate economic challenges, enhance client services, and drive future growth.

 

Topics: Finger on the Pulse, Technology Advisory


 

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