Why Industry-Specific AI is the Key to Scaling Accounting Services

In my conversations with accounting firms, I consistently hear a common theme: as firms look to scale their practices, they focus heavily on expanding high-value advisory services like CFO and controller work.

However, there's a fundamental challenge holding many firms back: bookkeeping.

Bookkeeping remains a growth challenge for firms

Everyone recognizes that handling bookkeeping would provide both a clean financial foundation for additional services and a tight recurring relationship with clients. But getting it right is a persistent challenge. If clients handle it themselves, errors are inevitable—turning intended advisory engagements into constant clean-up work.

If firms take it on, it's often too difficult to scale or too low-margin to justify. It's a classic catch-22. AI has promised to solve this problem for years, but generic horizontal AI solutions have repeatedly fallen short.

The reason these generic solutions fall short is simple: bookkeeping isn't one-size-fits-all. Each industry has unique workflows, compliance requirements, and reporting structures that shape how transactions need to be processed and validated. Just as accounting firms specialize by industry to deliver better results, AI solutions need to do the same.

As the founder and CEO of an accounting automation platform built specifically for construction, I have a unique perspective on this challenge—and yes, an obvious bias. But top investors are reaching the same conclusion. For example, Andreessen Horowitz recently covered why AI built for specific industries can outperform generic solutions in accounting,  

In this article, I'll explain why industry-specific AI is the key to finally solving the bookkeeping bottleneck, and why this creates a massive opportunity for accounting firms right now. 

Why industry specialization matters

People often overlook that accounting isn't a single vertical—it's a universal business function that varies significantly across industries. Each sector has its own complex workflows and requirements, which is precisely why Client Accounting Services (CAS) teams typically organize themselves by industry. While a generalist CAS team could handle multiple industries, we see that industry-specialized teams consistently deliver better, faster results, leading to higher-margin engagements and more satisfied clients.

The same principle holds true for AI—but with even greater implications. While generic AI solutions might offer incremental improvements to accounting processes, the real breakthrough potential lies in deep vertical specialization. Consider the distinctive challenges across industries—from construction job costing to healthcare reimbursement models to manufacturing inventory accounting. Just as specialized CAS teams outperform their generalist counterparts today, those who adopt industry-specific AI solutions will gain a significant competitive edge in the future.

The problem with generic AI in accounting

Take construction as an example. When a supplier bill arrives from ABC Materials, generic AI might recognize the vendor and suggest "Building Materials" as a category. But that's not enough—each transaction needs to be allocated to specific projects and cost codes, checked against POs, validated against work completion, and more. These aren't simple categorization problems—they're complex workflows that require deep industry understanding.

Why vertical AI is the solution

Industry-specific AI eliminates these roadblocks by embedding domain expertise directly into automation. Let's go back to our ABC Materials example to see how.

When that ABC Materials invoice hits your inbox, a construction-specific AI solution immediately:

• Pulls in relevant project budgets and POs from your project management system
• Checks daily logs to validate that materials were actually delivered
• Verifies whether the quantities match approved POs
• Flags if this purchase would push any cost codes over budget
• Confirms lien release status before suggesting payment

This kind of intelligent processing simply isn't possible with generic AI that lacks construction-specific context.

Beyond just processing invoices, vertical AI can:

• Auto-generate POs when it sees new quotes in your email
• Draft payment applications based on % complete derived from field reports
• Proactively alert you when jobs are becoming underbilled
• Automatically flag cost overruns before they hit your books

The key difference is that vertical AI isn't just categorizing transactions after they happen—it's actively helping manage your construction workflow in real-time.

This is why generic solutions fall short. They're trained on broad datasets that miss the nuanced relationships between documents, project progress, and financial transactions that make construction accounting unique. Only AI built specifically for the vertical can deliver this level of automated intelligence.

The bigger picture: The strategic opportunity for accounting firms

This is a major "why-now" moment for accounting firms. Bookkeeping has always been a gateway service—firms that handle it are in the best position to upsell higher-value services like tax, forecasting, and advisory. When done efficiently, bookkeeping keeps firms closer to their clients and deeply embedded in their business operations.

Until now, scaling bookkeeping was a massive operational challenge. Firms had to hire large teams for manual data entry, then add a layer of managers to review and correct errors, creating a ceiling on growth.

AI is finally breaking that ceiling. With automation handling the vast majority of day-to-day bookkeeping tasks, firms can now scale without adding headcount. What was once an operational burden is becoming a strategic growth lever.

The time to act is now

The promise of AI is real, but the key to unlocking its full potential lies in industry-specific solutions. Horizontal AI will never fully meet the needs of complex industries, just like generic accounting advice will never fully meet the needs of complex industries. Accountants who embrace an industry-specific approach will thrive, offering deeper insights, enhanced service, and the ability to scale without the need for large teams.

In an increasingly competitive market, industry specialization was already becoming the norm. With AI, that trend is about to accelerate. And those who get ahead of it stand to gain massively.