From Compliance to Capacity: Building an AI-Enabled Accounting Firm

In Episode 180 of The Woodard Report Podcast, Joe Woodard talks with Jan Haugo of SmartAccountant.AI about what AI adoption really looks like inside accounting practices. Their conversation covers AI workflows, security concerns, advisory capacity, team training and the operational changes practice owners need to make if they want AI to become more than a personal productivity tool.

AI adoption is becoming operational

Jan Haugo has moved beyond talking about AI as a future possibility. She helps accounting professionals learn how to use AI inside workflows, including through the SMART Method Bootcamp and direct implementation support. Joe noted that Jan recently presented on AI at Scaling New Heights and received a standing ovation, a sign that accounting professionals are hungry for practical guidance they can actually use.

The conversation started with one of Jan’s own operating metrics: her human-to-bot ratio. She shared that 70% of production in her practice is now handled by AI bots, with 30% handled through human effort. Joe also asked about the impact on gross profit, and Jan estimated a 35% to 40% increase.

 Watch Episode 180 here 

The profession is starting from different places

Joe asked where the accounting profession stands with AI adoption as of July 2026. Jan’s answer was direct and reassuring. She tells practice owners they are exactly where they need to be today, but she also made it clear that the window for waiting is closing.

Many accounting professionals are only now emerging from tax season with enough space to seriously look at AI. Other industries adopted AI earlier, but accounting faces added pressure around compliance, data security, and professional responsibility.

That is why Jan said firms should not measure progress by who is using the newest platform or showing off the most advanced tool. “It’s not about shiny tools. It’s about workflows,” she said. The real opportunity is finding the places where AI can solve practical problems inside the practice.

Security is still the biggest barrier

Jan identified security as the first major concern holding practices back. The concern is valid, and recent IRS guidance has added another reason for tax professionals to approach AI carefully.

The next barrier is knowing where to begin. Jan recommends starting with one problem and using her pain, problem, prompt method: identify the pain, define the problem and build a prompt that helps move toward a solution.

Documentation is another challenge. Many practices still rely on informal processes, manual workarounds and knowledge that lives in someone’s head. Jan explained that SOPs are no longer just for people. They are also becoming instructions for bots, agents, and AI tools.

AI requires a different way of thinking

Joe asked Jan what she meant by learning to think with an AI brain. Jan explained that AI requires a more inquisitive and creative approach. Accountants are trained to be accurate, structured and risk aware, but AI rewards users who can describe a problem, ask better questions and imagine a different way to work.

Instead of asking what a tool can do, Jan encouraged professionals to tell AI what problem they are trying to solve. Joe reinforced that point by describing how a user could ask Claude to build a fixed asset application and then let the tool ask follow up questions about depreciation methods, asset types and other details.

Capacity should not only mean more clients

AI can create capacity, but Jan cautioned against filling every saved hour with more client work. She said many practices still respond to efficiency with the old mindset of making room and then taking on more.

Jan encouraged practice owners to use that space differently. “Don’t take on more. Allow yourself that breathing room to be creative and to think outside that box and become strategic.”

Advisory requires more than capacity

Joe and Jan also discussed the shift from compliance to advisory. AI can automate or accelerate many compliance tasks, but Jan said becoming strategic is not as simple as flipping a switch.

“So advisory isn’t just about the numbers. It’s about a holistic view of how your firm is serving that client, what your client is doing in their world, and how those two pieces come together,” Jan said. AI can help organize the information, but the professional still needs to bring judgment, empathy and the right questions into the conversation.

Team adoption needs more than individual training

Joe asked whether training alone is enough to move an entire team into AI enabled work. Jan said training matters, but one-off usage is not enough to drive real change. The firms moving fastest are often not the most technically advanced. They are the firms where the owner has decided that AI is a priority for the whole team.

Joe added that guardrails need to come before broad rollout. He recommended writing an AI governance document, training the team on it, and reinforcing it with platform permissions. He also described Woodard’s own approach with Claude, including restrictions around browser interaction, shared memory, and writing to third-party software.

Jan agreed and added that many firms should start with the enterprise tools already in their environment. Google Workspace and Microsoft 365 include AI capabilities with business grade security boundaries. She also pointed to AI features inside trusted accounting applications as practical training grounds.

The bigger lesson

This conversation showed how AI adoption is beginning to shape the day-to-day work of accounting practices. It now affects security, workflows, training, team expectations and how practices approach client service.

The next step for practice owners is to look for places where AI can solve real problems within the work they already do. The production side may continue changing quickly, but the most useful results will still come from asking better questions, making stronger decisions, and having more thoughtful client conversations.

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Thank you to our show sponsor, RightWorks!

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This article was written with the assistance of AI and edited by a human.