This is part one of a two-part series on Leveraging AI for Tax Resolution & Client Success. Part two will focus on tips for using Gen AI for tax resolution.

Our profession is at an exciting crossroads, and it's not just about the numbers anymore. Imagine having a tireless assistant who can analyze data, spot trends, and offer actionable insights faster than ever. That’s the power of generative AI for CPAs and accountants. We're not talking calculators—sophisticated tools like ChatGPT, Claude, Gemini, BingAI, powered by large language models (LLMs) are revolutionizing the way we work with accounting and financial data.

AI as an Enhancement, Not a Replacement

AI isn’t here to replace us. Instead, it’s an efficiency booster, automating repetitive tasks while still relying on our expertise. Think of it as having a highly capable intern who can handle the heavy lifting, freeing us to focus on strategic insights that only a seasoned professional can provide. Much like an intern, generative AI's work needs to be closely monitored and guided.

The Competitive Edge

The benefits are substantial. Potentially enhanced accuracy in financial analysis, real-time insights for faster decision-making, and the ability to detect patterns that even the most experienced accountants might miss. Imagine breezing through tax season or impressing clients with predictive analytics that seem almost clairvoyant—this is the competitive edge AI offers.

That said, with great power comes great responsibility. Generative AI is a tool, and like any tool, it must be used wisely. Data security is paramount, and we must implement robust safeguards to protect sensitive information. Additionally, considerations around data privacy, bias, accuracy, and ethics should always be at the forefront.

The Adoption Gap and Its Implications

A recent report from Google Cloud's Data and AI Trends Report 2024 underscores a critical gap in AI adoption within the accounting profession. Only 37% of finance and accounting professionals are leveraging generative AI, compared to 62% in marketing and advertising. This gap presents a significant risk of falling behind in a rapidly evolving, tech-driven landscape. Failing to embrace AI could mean missing opportunities for efficiency gains and client satisfaction—ultimately putting CPAs at a competitive disadvantage. While we know GenAI could never become a trusted advisor as it lacks the human element in the work we do, some clients who are able to use the tools effectively could lean more heavily on leveraging ChatGPT for accounting and finance advice and might even consider firing their CPAs.

Closing The Gap

To bridge this gap, CPAs must adopt these tools and learn how to engage with them effectively. Creating a persona and defining its role as part of the prompting process in GenAI tools is a powerful technique.  For instance, a CPA might describe themselves as “a certified public accountant with 7 years of experience in tax compliance and financial reporting for small businesses” when asking AI for help. This clarity ensures more relevant and tailored responses. Specific prompts like “Provide step-by-step recommendations, in simple language, on managing tax obligations for a growing small business” can yield actionable insights.

AI in Action

The potential of GenAI feels limitless, so where do you start? Let’s explore how to harness these tools to further enhance success for our clients and our firms. You can experiment with free or paid versions of AI tools, keeping in mind that free versions typically use your data to improve the model (although opting out is possible). Depending on the platform, you can either attach files or copy and paste data for analysis.

Before you dive in, remember to create a persona to define the experience and expertise the GenAI platform should use when responding to your prompt. Because of the fact that GenAI platforms frequently integrate user-provided information into their training and development for the platforms, be sure to use only publicly available financials when practicing and getting acquainted with GenAI.

Here are some examples using Anthropic’s AI offering, Claude and Google’s Gemini.

From Claude

Prompt deeper and ask detailed questions: e.g., go deeper on your recommendations to turn the company around.

You can perform analysis for any period.

Here is the quarterly performance. Any additional insights?

Don’t just accept the first results. Probe it for more analysis.

What other turnaround recommendations do you have?

CHATGPT. 4.0

I am a new CPA, and I am about to perform my first engagement preparing financial statements. Please provide me with an authoritative checklist to ensure that I meet all professional requirements. Then, export the checklist into a spreadsheet and a word processing document.

Notice that it provided instructions on how to export the checklist/result.

Client scenario – analysis

Can you do the financial ratio analysis for the company? It is a bakery shop. Also, do a comparison of the metrics to the industry average for bakery shops.

Remember to check the responses, as it will get things wrong. Prompt it to make corrections once you identify errors.

I did not give you the inventory or the balance sheet, so how were you able to calculate some of your metrics?

Client Scenario

You are a 10-year veteran and expert CPA. Can you answer these questions?

●       How do we optimize our savings/assets as we withdraw during retirement through minimizing tax burdens?

●       What are strategies available to employ in a sequence that meets our financial goals? Etc.

Don’t hesitate to ask for examples with numbers.

Here is a retirement first-year test drive tax return scenario.

Again, always ask your AI to be specific.

Client Scenario

Got a long, complicated issue with a prospective client, and you need to analyze the scope of work and create a proposal?

You are a not-for-profit accountant specialist. I will provide you with a scenario, and I want you to give me responses to resolve the current situation. Feel free to respond in the Socratic method if need be.

Ask more questions. Once satisfied with the proposal, ask for a draft letter.

Can you compose a letter to the NFP - SAMY - stating the proposed services, fees and timeline for completion?

I hope you learn some new tips and tricks with implementing Gen AI into your practice. Don’t hesitate to share your feedback and reach out to me with any questions.

Gen AI Power Tools:

OpenAI - ChatGPT - A powerful tool to automate tasks, analyze financial data, and enhance communication, ultimately boosting efficiency and improving client service.

Bing Al -Copilot - Empowers accountants to streamline their workflows, automate repetitive tasks, and gain deeper insights from financial data within Microsoft 365 apps.

Google - Gemini - Automates complex tasks, provides in-depth financial analysis, and facilitates more natural and intuitive interactions with data and systems.

Claude - Claude is a next generation AI assistant built for work and trained to be safe, accurate, and secure.”

Cody - Customized AI for your business. UseCody as an assistant to support your team, answer questions, help with creative work, troubleshoot issues, and brainstorm ideas

Poe - Brings together some of the most popular AI-powered bots across the web all on one platform, you can create personalized bots.

Solomon AI - Company (solomonlegal.ai) - A state-of-the-art platform for Tax Research AI.

Remember, while AI tools are powerful, they're not infallible. Always double-check results, challenge assumptions, and apply your professional judgment. Use AI to enhance your capabilities, not replace your expertise.

By mastering these AI interaction techniques, you can position yourself at the forefront of innovation in accounting, enhancing your value to clients and securing your role in the future of finance.

Orumé Hays, CPA, CGMA, MST, is the founder and CEO of HAYS CPA LLC, specializing in outsourced CFO services. Named one of the 25 Most Powerful Women in Accounting for 2022 and 2023, she's also recognized by Ignition as a Top 50 Woman in Accounting for 2023. Orumé is actively involved in professional organizations, including the NYSCPA, where she serves as a statewide Director at Large and is the chair of the Relations with the IRS Committee, and chair of the AICPA's Private Companies Practice Section (PCPS) Executive Committee. Additionally, she holds an adjunct lecturer position at the College of Staten Island, and a graduate advisor position at Hunter College, CUNY, where she mentors and inspires accounting students to excel in their careers. With a Bachelor of Science in Accounting and Finance from the College of Staten Island and a Master of Science in Taxation from Northeastern University, Orumé is a licensed CPA in New York and Virginia, with over 15 years of leadership and diverse experience in the field. As a frequent instructor, speaker and writer on topics ranging from Accounting to Entrepreneurship, Orumé shares her expertise and insights to inspire others in the field.