Using AI solely to reduce time and manpower can accidentally invite client pushback on your fees. Read Jeff’s breakdown on shifting from an "IT tool" mindset to a transformative business strategy that elevates your advisory role.
AI & The CPA Firm
AI & The CPA Firm
Jeff Kapelus
After years of speaking with leaders of accounting and advisory firms across the country about growth, M&A, and industry trends, one thing is clear: the conversation has shifted.
For the past few years, the dominant two-letter acronym in the accounting space was PE. Today, it is AI.
PE is still very much in the conversation - but AI has claimed the throne.
AI is already transforming the profession. Many firms are using it in some capacity, while others are deciding how much to invest and how deeply to embed it into their operating model.
From my conversations with CPA firm leaders, I see two broad approaches emerging.
Two approaches to AI:
Let’s classify firms into two broad buckets.
In bucket #1, firms treat AI as a tool in their IT toolbox, i.e. a line- item under IT expenses. AI is used as a means to create efficiencies, automate processes, and expedite deliverables with minimal manpower. These firms - typically smaller firms - have financial constraints, limited resources or just aren’t “all in."
In bucket #2, these firms- typically larger firms- invest substantial resources towards AI and are “all in."
These firms treat AI as a broader transformative business strategy.
That distinction matters.
When AI is used strategically, it can strengthen advisory services, enable forward-looking decision-making, and help firms create deeper, stickier client relationships. Bottom line, AI will create and add value, not just a tool of efficiency.
The pricing implication:
The approach a firm takes will likely impact how clients view fees and pricing.
For firms in bucket #1, since AI is positioned mainly as a tool to reduce time and manpower, clients might ask: “If you're using AI, using less manpower and taking less time to produce the same deliverable, why aren't you passing these savings along to us? Why are we paying the same fees for less work?”
However, for firms in bucket #2, for which AI enables better insights, stronger advisory work, and more strategic guidance, the conversation changes. Clients are more likely to accept - and potentially pay more for - services they perceive as creating or adding value.
Clients value the human touch and interpersonal relationships. Firms in bucket #2 don’t only use AI to do the same work faster. They use it to elevate the client experience, enabling team members to be more client-facing, and live up to the “trusted advisor” moniker.
Finally, clients expect their CPA firm to be AI-savvy. Whichever bucket a firm falls into or whichever approach to AI a firm takes, the one thing a firm cannot do is do nothing.