5 practical uses of AI for tax pros

The tax profession is constantly in motion, driven by new regulations, increasingly complex client needs, and the never-ending demand for efficiency. We already know a powerful tool has emerged as a game-changer: artificial intelligence or AI. However, how can you use this tool more efficiently and improve your workflow?

AI offers practical, accessible solutions that can significantly enhance your firm. For many, the idea of integrating AI into their daily routines may seem daunting, perhaps requiring expensive software or a team of data scientists. The truth is this: Readily available AI tools can be seamlessly incorporated into your workflow to help you move faster, work better with clients, and automate tedious tasks.

No matter who the audience is, there are always beginners … and this article is designed specifically for professionals who are new to the world of AI. We’ll explore five ways you can leverage AI in your day-to-day work. The goal is to demystify AI and show you how it can become a valuable asset in your firm, allowing you to provide expert advice and build strong client relationships.

Forget complex algorithms and hefty price tags. Let’s dive into the world of practical AI and discover how it can revolutionize your tax practice, starting today.

1. AI-powered research assistant

Imagine a client asks about the latest changes to the Qualified Business Income (QBI) deduction. Instead of spending hours sifting through IRS publications and legal websites, you can turn to an AI-powered search engine. These tools use natural language processing (NLP) to understand your query, and provide a concise, relevant answer, often summarizing information from multiple sources.

For example, you can ask a specific question such as “What are the recent updates to the QBI deduction for self-employed individuals?” AI will quickly provide a summarized answer, citing relevant sources. This significantly reduces the time you spend on research, helps ensure you’re accessing the most current information. It also makes it easier to keep abreast of constantly changing tax laws and accounting standards.

A word of caution: While these tools are powerful, always cross-reference the information with official sources such as the Intuit® Tax Pro Center, the IRS website, and authoritative accounting publications. Never rely solely on AI-generated summaries for critical advice.

2. AI for summarizing documents

Let’s say you receive a complex, 50-page client bank statement or a lengthy IRS notice. Instead of meticulously reading every line, you can upload the document to an AI summarization tool. Within seconds, you’ll have a condensed version highlighting the most important transactions, balances, or key points of the notice. These tools use NLP to analyze lengthy documents, identify the core topics and key arguments, and generate concise summaries. By dramatically reducing the time spent reviewing lengthy documents, you can quickly grasp the essential information and focus your attention on critical details. This improves your focus and helps you gain a quicker understanding of complex documents.

A word of caution: AI summaries might sometimes miss nuanced details or specific clauses. Always review the summary and refer back to the original document for a comprehensive understanding, especially for critical legal or financial documents.

3. AI for grammar and style improvement

Before sending an important email to a client, proposal, or financial report, run it through an AI-powered grammar and style checker. These tools that are readily available as browser extensions or online tools analyze your text, identifying grammatical errors, spelling mistakes, punctuation issues, and even suggesting improvements to your writing style, tone, and clarity. AI will highlight any errors and offer suggestions, ensuring your communication is professional, clear, and error-free. This helps build trust and confidence with your clients.

A word of caution: While excellent for catching common errors, these tools might not always understand the specific nuances of accounting or tax terminology. Use your professional judgment to review the AI’s suggestions and ensure they align with your intended meaning.

4. Overcome writer’s block with AI for generating initial drafts

Need to draft a standard engagement letter for a new client? Instead of starting from a blank page, you can use an AI writing assistant. By providing a brief prompt outlining the purpose and key information such as the client’s name, the services you’ll provide, and the fee structure, AI can generate an initial draft for your communication. You can then review, customize, and finalize this draft, saving you significant time and effort in the initial writing process. This helps ensure a consistent tone and structure in your standard communications.

A word of caution: AI-generated drafts are just a starting point. They often lack the personal touch and specific details required for individual client situations. Always thoroughly review and personalize the drafts to ensure they accurately reflect your firm’s policies and the client’s specific needs.

5. AI for basic data extraction and organization from documents

Imagine a client provides you with a shoebox full of paper receipts for expense tracking. Instead of manually entering each transaction into a spreadsheet, you can use an AI-powered OCR (Optical Character Recognition) tool. These tools can analyze scanned documents or images, and extract key information such as the dates, amounts, and vendor names, organizing them into a structured format such as a spreadsheet. AI will attempt to identify and extract the relevant data, and while it might require some manual review and correction, the results can significantly reduce the time spent on tedious data entry and help improve accuracy.

A word of caution: The accuracy of data extraction can vary depending on the quality of the scanned document or image. Handwritten receipts or documents with poor image quality might not be processed accurately. Always review the extracted data and make necessary corrections.

Unlock the potential

Integrating AI into your tax firm doesn’t require a massive overhaul or hefty investment. By leveraging readily available AI-powered tools, you can significantly enhance your efficiency, improve client communication, and automate repetitive tasks. You can free up your time to focus on providing high-value services and building stronger client relationships.

Are you ready to unlock the untapped potential of AI for your firm’s success? Get started today!