With the accounting industry often slow to adopt new technologies, artificial intelligence promises to be a major disruptor, local experts predict.
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With the accounting industry often slow to adopt new technologies, artificial intelligence promises to be a major disruptor, local experts predict.
“It’s a bit of a split,” said Eric Saumure, co-founder of Ottawa’s Zenbooks. “I’m seeing people in the accounting industry who are either resisting AI or they’re doubling down on AI and sometimes putting even too much trust into AI.”
According to Saumure, not all firms are well-positioned to use the technology. While Zenbooks has been fully cloud-based since 2015, he said other companies don’t have the digital records and connected systems needed to utilize AI.
“I think the truth is that the business owner with a box of receipts isn’t really going to get anything from AI,” he said. “Their books have to be up to date and, once a business is over that line, the benefits can compound. Below that, AI has nothing to work with. Everything has to be digitized and a lot of the time that’s the work that accountants and bookkeepers are actually doing.”
As a result, Saumure said meaningful AI adoption is likely to be slow, with most innovation coming from smaller firms.
“I think with the traditional accounting firms, especially the larger ones, it’s really hard to create operational change,” he said. “Which, at the end of the day, was kind of my story. I was at a large accounting firm, then it was easier for us to start a new firm with a new way of doing things. At the time it was cloud-based software.”
While Zenbooks is experimenting with AI, including introducing a 24/7 phone agent called AI Bob, Saumure said the company is being cautious.
“It’s not a free-for-all for us to put client data into any AI model,” he said. “We pre-approve them and we let our team know. And then we have an internal Slack where our team can post all the AI wins and losses. It’s kind of fun to see when it gets it wrong, which I think is the important part, to see how much we can actually trust it or not.”
David DiNardo, an Ottawa accountant and former owner of accounting firm Envolta Inc., recently launched an AI-based accounting platform called Taxifi, which is designed to serve small businesses.
According to him, accounting companies tend to stick to the status quo. When he launched Envolta as cloud-based technologies emerged in 2012, he said other accountants were being slow to adopt the technology. Even now, he said only some firms are cloud-based.
“I was one of the first companies in Canada to be on QuickBooks Online, to be virtual,” he said. “Then what happened with the pandemic was everyone went online and that was your only choice. Our business model just went through the roof because we were the only ones really online and we were ready. The industry, it’s a laggard, at the end of the day.”
As a result, DiNardo believes AI is going to be a major disruptor for the accounting industry.
“What AI does well is transactional work and that’s exactly what accounting and bookkeeping is,” he said. “I say that with the caveat that you still need humans. But (with AI) the delivery of the service gets way better for the small business owner. Now they get real-time bookkeeping. They don’t have to wait months to get their stuff in. Real-time, they can make the right decisions, they can cut expenses. They have full visibility of where they’re going in the future. Now accountants start becoming their advisers versus just a compliance head.”
DiNardo said the idea for Taxifi came in 2022, when AI started becoming mainstream.
“In the last three years, AI came up and I started following the AI trend and I started getting addicted to the ChatGPTs and the possibilities of what AI can actually do,” he said. “So we built an accounting ledger and are delivering directly to the small business owners in Canada. They come to us as an accounting platform, as well as a platform that has the back-end and engine to actually do it. It’s an all-in-one solution for the small business owner.”
The platform offers AI-supported bookkeeping, corporate taxes, payroll and business advisory services, said DiNardo, adding that while AI does most of the work, the human element is key.
“It’s human plus AI,” he said. “The model I’m going after is 10 per cent human at the front to have those conversations with the small business owners. Then 80 per cent of AI doing the actual work and 10 per cent at the back end of the process is humans verifying their books, verifying their sales taxes. So I take full responsibility for the submissions to the CRA. Humans are still involved. AI is just doing the heavy lifting.”
He added that he didn’t do the work alone.
“I hired very senior developers because I knew I lacked the technical ability,” he said. “So I surrounded myself with very experienced people to take that on. And fast forwarding now, with AI it’s becoming easier and easier for non-technical founders to develop these apps.”
DiNardo added that the technology made taking on the venture a safer bet than if he had tried without it.
“I don't think I would have taken the risk without AI because I think the risk would have been too big,” he said. “I think with AI, you're de-risking yourself significantly because it's so much easier to develop.”
