Integrate artificial intelligence to handle the grunt work, inform decision making, and liberate time for other tasks.
How to supercharge a practice with a trio of AI benefits
Despite challenges of high inflation, supply chain issues and labour shortages, ABS data shows a 7 per cent increase in the number of small businesses in 2021–22. Advisory practices are no exception, and so while facing a tough market and rising competition, it’s critical that practice owners are acutely aware of any opportunities that offer an advantage.
The popularity of ChatGPT has reignited a global conversation about the rise of the artificial intelligence-powered autonomous enterprise. As with the technology revolutions that came before it, organisations that don’t lean into AI and machine learning (ML) risk being left behind, with Australian spending on AI expected to reach $3.6 billion in 2025.
AI and ML aren’t just for large enterprises. There are a lot of opportunities for advisers to embrace the technology to help them manage their everyday admin processes and support scalable growth. That isn’t limited to just financial processes, but operational processes too which can be difficult to manage without a lot of knowledge and resources.
Integrating AI and ML into core functions like payroll, expense management and revenue forecasting are typically the starting point for advisers looking to experiment with the technology. And while practices continually move toward tech-led environments, so too do SMEs. Investing in AI-powered financial tools is fast becoming the norm, and so the need to adapt will become increasingly critical for keeping up with the rapid pace of change not just for operational excellence, but to attract clients.
While there are a range of benefits, here are three key ways that advisers can use AI and ML to manage their practice and supercharge growth.
- Make informed decisions for your clients with real-time data
Managing cash flow is one of the single biggest challenges small businesses face in 2023. Research from Small Business Loans Australia shows that more than three-quarters (76 per cent) of SMEs expect to hit a cash flow crisis by July 2023 as inflation continues to bite.
Advisers aren’t immune to seeing clients driven by a cash crunch. We know that businesses are often tempted to make some difficult decisions, like delaying payroll or loan payments, which end up hurting their long-term potential. So how can AI help to relieve some of the pressure and help advisers make informed decisions?
AI and ML tools can analyse historical data and predict daily cash flow figures months in advance. This data gives advisers an opportunity to assess what’s on the horizon and get ahead of potential challenges, allowing them to create realistic budgets and strategically allocate resources for their clients with real-time, up-to-date data.
By providing real-time data, AI allows you to have more meaningful conversations with your clients, providing real-time alerts, such as warnings about potential late payments or cash flow shortages, allowing small businesses to respond quickly to potential financial issues. All good accounting software should include this functionality.
- Automate admin for valuable time back
Managing administrative financial work takes up a lot of valuable time that practice owners would prefer to put back into running their businesses. AI and ML can reduce this burden by using data to automate things like categorising high volumes of transactions, generating invoices and reconciling bank accounts.
ML could be used, for example, to streamline payment processes with automatic invoice generation and payment tracking. It can also proactively look for anomalies in things like energy bills or expense accounts, allowing businesses to identify and resolve operational issues much faster.
While small business owners will still have to exercise oversight, AI and ML can dramatically reduce the time spent on this low-value and often laborious work.
- Strengthen client relationships
AI-powered tools are great for helping practice owners manage critical day-to-day administrative work and provide great insights to safeguard future performance. Although that doesn’t diminish the vital relationship between accountants, bookkeepers, and their clients, as advisory support is likely to become even more important.
AI and ML help relieve the administrative burden that was typically managed manually, giving advisers more time to spend on strategic tasks. Improved access to data and insights also gives accountants a better understanding of business performance, allowing them to make more informed decisions and identify opportunities for optimisation. Not only do advisers get valuable time back, but they can also make better informed decisions for their clients, and spend time advising clients and growing their own practice.
With the combination of automated grunt work, better cash flow management and a tighter, more strategic accountant relationship, AI and ML have the potential to drive incredible value in managing your practice, and providing better counsel for your clients.
While streamlining operations is integral to growing your practice, having more time and data on hand is a great way to provide added value to your clients and retain them for longer. These tools represent one of the most significant business opportunities of the next decade, making investment a critical consideration for 2023.
Damien Greathead is accountant and adviser group lead at Intuit QuickBooks Australia.