Artificial Intelligence has truly enabled evolution, especially for niche fields like accounting. As we continue to reinvent the way accounting businesses work, it becomes critical for CPA firms to draft policies around AI. While AI helps simplify complicated jobs and makes space for accountants to focus on tasks that truly matter, AI also poses a threat to ethical conduct, data privacy, and compliance. AI is altering jobs, so the way accountants work within an accounting firm is also changing. Today, clients expect better insights – in terms of turnaround time and quality. The need for an AI policy within the firm also comes from the changing landscape in the accounting business. To establish and maintain trust, firms must adopt AI policies that are also customer-friendly.
In this article, Finsmart Accounting – globally trusted for outsourced bookkeeping services in India – will share expert ways to draft a new AI policy for your accounting firm. Let’s start by learning the difference between generative AI and other advancements!
How is generative AI different from other advancements?
Many accounting firms and CPAs already have a technology policy in place. However, Generative AI is massively different from past tech advancements. It is important for accounting business leaders to understand that, unlike any other technology that has made its way into the industry, Gen AI processes vast amounts of data, identifies patterns, and helps generate insights faster than traditional tools. And the need for AI policy comes with the fact that it also levies several potential risks.
With Generative AI, accounting firms can reap different results with the same inputs. This is because, unlike humans, there is no guarantee that AI will follow the directions or prompts given.
Who needs to be a part of the team that drafts the AI policy?
Just like any other firm, your accounting firm is made up of different teams. And they have several roles to play when it comes to adopting AI policies. There are several challenges in AI adoption and involving all relevant teams right from the beginning will only help you be on the right track. The teams you need are:
– Human Resources: In any organization, including accounting firms, the Human Resource team is responsible for the execution of policies throughout. They are not only aware of what would benefit the employees and clients but can also give real-life insights. They also help ensure that everyone is clear on where the content policy applies and where they don’t.
– IT: For things like Artificial Intelligence, IT can help tell what tools are already in place and what new tools and technology firms need to adapt. You will need this team along the way to ensure that you are adopting AI policies that suit the needs of the firm and the clients.
– Marketing: This team is involved with creating and approving thought leadership content. Accounting firms also need to make sure that the marketing representatives are aware of the policies and implement them accordingly when using open platforms.
Once you have drafted the AI policies, it is important to roll out a firm-wide notification informing everyone about the changes. Make sure that every team member is given thorough training to ensure that everyone is on the same page, no matter their degree of contribution in terms of AI.
Recommended: Learn about accounting outsourcing services pricing in India
Accounitng AI Policy Recommendations:
When drafting policies catering to AI in accounting firms, there are certain aspects that you must keep in mind. Accounting, being a niche field, requires thorough observation, knowledge, and understanding of what kind of policies benefit the firm and customers, without putting data security and compliance at risk. Here are the top aspects that you must include in your AI policy after careful consideration:
– A Human Layer of Checks: While AI has the potential to make accountants’ lives easier, what they can’t do is use rationale. It is important to include an additional meaningful human involvement where someone from the team is responsible for fact-checking, manual review, and ensuring there is no duplicity. Quality is of paramount importance in the field of accounting and adding this layer helps strengthen the practice.
– Set Clear Boundaries: When setting accounting AI policies, it is important to note that you can not and should not be okay with the use of AI in any form. Create a statement of acceptable practices that allows your firm to benefit, including reasonable exceptions. This document should lay out what is out of scope for the team members when it comes to the use of AI in accounting.
– Accountability: With the increasing use of AI across the accounting industry and the threat that it poses, team members need to maintain transparency and accountability. A firm’s reputation depends massively on the accuracy and fairness they bring. When drafting AI policies for accounting firms, maintaining originality lies at the forefront. The AI-generated material that the firm showcases should speak highly of your integrity and have the ability to set you apart.
– Privacy and confidentiality: Accounting firms deal in critical data and that is why trust is the foundation of the profession. In your AI policy, you must lay all about the need of the employees to remain compliant with privacy laws, prevent them from entering and using anything open-source, and be careful of third parties. The policy should also make it mandatory for the employees to comply with data and information in confidentiality which is the right of the firm.
– Adaptability: Just like any other form of technology, generative AI is constantly evolving. There are changes, growth, and updates. In pursuit of adopting AI, accounting firms should make sure that the teams are equipped to adapt fast and well.
Read on to discover what AI policy should cover or check out this blog to discover how to start an accounting firm or CPA business in 2024
What Should the AI Policy Cover?
The new-age Artificial Intelligence is here to stay. Many accounting firms are still struggling to adapt to AI, and that is only pushing them a few years, even decades, behind. We have been using Artificial Intelligence for the longest time – software, search engines, and even platforms like HubSpot. While each firm needs to choose and responsibly make use of AI, here are a few questions that must be answered in the AI policy
- What tasks could the new AI policy take off your employees’ plates if you used a tool?
- What are the sources that the teams should use to educate about AI? Are there any tools that can help?
- How to choose, assess, and use new tools?
- What is the budget set for AI tools?
- How to maintain the privacy policy when using AI for daily accounting operations?
- How will the team know if a tool’s terms and conditions meet the firm’s policies?
- What is the information that the clients need to know when it comes to the use of AI?
These are just some of the basic questions that remain common for almost all the accounting firms and CPAs. However, as a firm leader, it is your responsibility to understand the opportunities and implications of AI that are specific to your firm. That will give clarity on all questions that should be a part of your AI policy.
How to draft a new AI policy for your accounting firm or CPA practice
Framing AI policy for your accounting firm – End Note
Every firm’s AI policy needs to change as there are new updates and modifications. These upgrades should happen as the organization grows or the needs of the firm change. The leader, along with the team, should make continuous efforts to learn about AI tool availability and capability. Just like the accounting industry, Artificial Intelligence is evolving at a rapid pace too and it has become extremely important for firm leaders to adapt to change. You do not need to be a technology expert to use the AI tools – train yourself and work on learning the best use of the tools.
If you are struggling with adopting AI and have an overwhelming workload, outsource your accounting tasks to the experts. Write to us at connect@finsmartaccounting.com.
Also, don’t forget to check out:
Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
