Pia Malaney, Senior Economist at the Institute of New Economic Thinking, recently explained that we’re entering a “Golden Age of AI complementarity” – where a human being making prompts can ask the Large Language Models questions, and the two of them in dialogue can create something new.

In this Golden Age, the accounting profession will be confronted with an urgent question: How do you protect yourself and your firm? Even more importantly, how can you make sense of all the positive use cases for Generative AI and take control of this seemingly “Wild West” technology?

This is where the accounting profession can gravitate towards intrapreneurship as a fundamental leading principle. But first, it’s important to know how Generative AI will impact the profession, both now and in the near future.

What Is Generative AI?

Generative AI (GenAI) refers to a type of artificial intelligence that can generate new content, such as text, images, music, or other data, based on patterns and information it has learned from its training data. This is achieved using machine learning models, particularly deep learning neural networks.

Although there are big players in this GenAI space like OpenAI, Google, Microsoft, and IBM, it’s important to realize that Generative AI is in an infancy stage, and there are still major risks with data and compliance. In fact, 80% of accounting firms don’t have an AI usage policy; Jason Staats, CPA breaks down how to build a policy here.

GenAI also has limitations. Persistent bias and “hallucination” effects continue to surface in machine learning models – and when you combine those issues with limited context windows and a lack of human reasoning, it’s clear why Generative AI needs strict oversight. For the time being, at least.

Benefits and Business Cases for Generative AI

On a recent podcast episode titled “All Hell Is About to Break Loose,” physicist and mathematician Eric Weinstein breaks down how AI changes the game for all businesses. Rather than being chased into ever-higher levels of strategic work, human beings are now being chased out of repetitive work.

That means Generative AI can bring a ton of benefits specifically for the accounting profession. Generative AI Toolkits, such as the CPA.com Generative AI Toolkit, are great frameworks to start building “guard rails” for this technology at your firm.

Below are some potential and practical use cases that many accounting firms and vendors are already developing to reduce the busy work. (Keep in mind: GenAI is not great at math, but very useful in other ways.)

• Automated Data Entry and Processing: Generative AI can automate routine tasks such as data entry, invoice processing, and reconciliation. This reduces manual effort, minimizes errors, and frees accountants to focus on more complex and strategic tasks.
• Advanced Financial Analysis: AI can generate insights and forecasts by analyzing large volumes of financial data. It can identify trends, anomalies, and patterns that might not be immediately apparent to humans, aiding in more informed decision-making.
• Enhanced Audit and Compliance: Generative AI can simulate various financial scenarios to test compliance with regulations and standards. It can also be used to automate parts of the audit process, making it more efficient and thorough.
• Fraud Detection: By analyzing transaction data, Generative AI can identify potentially fraudulent activities more quickly and accurately than traditional methods. It can learn to recognize the subtle signs of fraud that might elude human detection.
• Customized Financial Reporting: AI can generate comprehensive and tailored financial reports based on specific criteria and formats required by different stakeholders, like management, investors, or regulatory bodies.
• Tax Preparation and Planning: Generative AI can assist in automating tax calculations and identifying optimal tax strategies. It can keep up with changing tax laws and regulations, ensuring compliance and maximizing tax efficiency.
• Enhancing Client Services: Accountants can use AI to provide more personalized and proactive advice to clients. For example, it can help in forecasting cash flow, budgeting, and financial planning, offering insights that are specifically tailored to each client's unique situation.
• Training and Development: AI can be used to create customized training programs for accountants, helping them stay updated with the latest accounting standards, technologies, and best practices.

Applying the 5 Phases of Intrapreneurship to GenAI Adoption

As Meredith Somers at MIT writes: “Intrapreneurship is as necessary for your company’s future as swimming is for a shark — if you don’t do it, you’ll die.”

Intrapreneurship is the key to a successful GenAI adoption, and it requires acting like an entrepreneur within your established company. It’s creating a new business or venture within an organization. Sometimes, that business becomes a new section, or department, or even a subsidiary spinoff.

You can break down 5 phases of the Intrapreneurship code for GenAI adoption in the following ways. (This also serves as a guideline for how you can approach any project at your firm.)

Phase 1: Take Stock

You should start by taking stock of your current business and all aspects of that business. Key areas include the standardization of processes, your technology stacks, and most importantly, the individuals involved in your organization.

You should also review the processes in place from a mindset of “scarcity.” This means that you first tackle your issues as if you do not have the option to bring in new technology and must solve the process gaps using only what you have.

Some suggestions to help you get started:

• Review your overall business strategy in the near-term and long-term.
• Review all processes that are of the highest value.
• Complex multi-step processes should be evaluated, and steps should be reduced. (If a process takes 15 steps, how can you reduce that to 5 steps?)
• Research your current tech stack capabilities and roadmap. (There may be functionality already available that you can use.)
• Review the people that are managing or “in the weeds” within process improvements.
• Ask yourself: Are these people detractors or champions of the business? Are they bought into the business strategy?

Phase 2: Choose the Path of Highest Impact

You should then attempt to tackle the lowest hanging fruit with the least amount of risk towards your client base, as an initial rule of thumb for implementing GenAI. One good question to guide this process: Which tasks consume more than 15 minutes a day?

Examples of common low-hanging fruit for accounting firms:

• External Client Communications
• Marketing Content Drafts
• Policies and Procedures
• Payment Reminder Letters
• Internal Communications
• Document Analysis
• IRS Tax Assistance

Phase 3: Make “Big-Small” Bets

This phase is a direct result of the efforts you put into Phase 2. By reducing the repetitive work in each department, you will get insight into exactly where your processes have value upstream and downstream in the business. This is where you will find the “Big-Small” bets – meaning small, strategic bets that have a high upside and a low downside. For example: If you properly evaluate your tech stack and how you got there, then you’ll understand how to simplify your existing processes and technology with a mindset of scarcity.

One specific example comes to mind from my work as a consultant. We were building an automation to print out picking tickets based off specific logic for orders coming into a distribution center. When I sat down and spoke to them, the pickers said this small task was taking them a very long time to do – and by automating, it would save them hours every week. Executives didn’t even realize this was an issue.

In short, taking the time to learn from every level of your firm will lead you to the smartest bets for the future.

Phase 4: Iterate to Innovate

Over time, you can achieve significant improvements through iteration. The main point about iteration is that you aren't intentionally inventing something new. You're finding something that already exists and choosing to make it better.

Phase 5: Build your Innovation Habit

In “The 5 Requirements of a Truly Innovative Company,” Gary Hamel (Professor at London Business School) and Nancy Tennant (Vice President for Innovation and Margin Realization at Whirlpool Corporation) write that: “Innovators have an inclination and a capacity to examine what others often leave unexamined.” Time and again, I’ve seen that prove true and seen how a mindset of intellectual curiosity will always breed a habit of innovation.

A few pointers on cultivating that innovative mindset:

• Make time for exploratory thinking. For example: Provide one hour a week for individuals to look at new technologies or process improvements.
• Tap into shared knowledge. Create an “innovation committee” that is not only leading the charge on innovation, but the iteration and management of your existing technologies.
• Create a culture of collaboration. Everyone should feel safe to voice their ideas but also understand that failing forward is a positive thing.
• Hold people accountable for change. Positive reinforcement and accountability are always vital pieces to this puzzle.

In Conclusion

Technology (and especially Generative AI) is a tidal wave that has hit our profession and lives in many different respects. If nothing else, you should remove Fear, Uncertainty, and Doubt (FUD) and approach this wave as a massive opportunity to learn and adopt. Approach GenAI with a mindset of scarcity and openness.

It’s also a great opportunity for leadership to really understand every aspect of their overall business strategy, the processes, and the people involved in making a difference. Remember that as an accountant, your soft skills and relationship-building will be more valuable than ever before. GenAI is a tool – not a crutch – and should be seen as an enhancement rather than a replacement.

Above all? Continue to be resilient, passionate, and curious.