I've heard from 4 different founders in the accounting tech space now: Investors are nervous putting money into our space due to general concerns around whether AI will automate accounting/tax work in the near-term 🤦
David Cristello
1mo
Been hearing this for 10 years :/ and to be fair… sometimes investors say this as a way of saying “no” without rejecting the team or product. Investors dislike flat out saying no (and use this, or TAM) as a way of saying no without offending the founders)
It's an interesting and valid concern, but I believe AI will enhance, not replace, the work of accountants and tax professionals. While automation can streamline certain tasks, the personalized advice, strategic planning, and expertise we provide are hard to replicate. AI will certainly play a big role in improving efficiency, but human judgment and relationship-building are key aspects of our profession that AI can't replace.
Jamie Peebles
1mo
Just further confirmation that VC/investor types do not understand this market. It’s very competitive and complicated. This is an industry that runs on accuracy and scalability. AI is a lot of amazing things but it is neither of those right now. Running entirely off of revenue is a fun place to be. You can prioritize actual customer needs over the FOMO needs of the VCs backing you.
Jody Padar
1mo
They are nervous about the wrong thing… the GTM cost of selling to accountants is a bigger threat than the actual work accountants do.
Kathryn H Brown
1mo
It's a shame they are stuck in the "AI will replace accounting practices" mindset. We need to be looking towards how it can enhance our capabilities to serve clients even better instead.
There’s so much software out there already, it’s impossible to evaluate it all. Once we do evaluate it, we bring it in house and use 10% of it. Now we are going to be inundated with new or enhanced AI products to further exacerbate the issue. I guess what I’m saying is that the real issue is getting an objective comparison of software in a particular lane, then applying it to your practice then taking the proper time to onboard it. Accountants are notoriously cheap to do this all completely and thoroughly (I’m guilty as well.), but now’s the time we have to raise profitability so we can do these things right. Thanks Jason for reviewing practice management software. We had gotten pretty far down that road but it was nice to see some validation. We’ll be making a final selection and implementing a new system after tax season.
Yonathan Grigiac
1mo
Interesting! I believe AI will certainly help accountants automate more and more routine tasks, but thinking it will replace them is a lack of understanding of the small business - accountant relationship. Small businesses rely on accountants as trusted advisors, especially when managing finances feels stressful. They don’t want to screw up their taxes or cash flow and will trust their accountant more than an AI for these topics. A great example I see on the day to day is the growing number of small businesses outsourcing bill pay to their accountants despite the fact that there are a lot of great tools that can help them automate the process.
Interesting. Although we already have RPA doing the tax work that would have been normally be done by team members this year. Key is to bring the accountants along with the tech companies. You get that balance right and it becomes a win/win for everyone.
But what about the PE firms gobbling up accounting practices? Seems there’s an appetite for investment in the space - why invest in the service providers but not the tech? I’m interested to see how this plays out.
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1moMy professor at University told me that our work would be automated about 15 years ago… I am still waiting…. AI will not replace our industry as a whole but as we already know it will assist us to work smarter and more efficiently.