By Kevin Smith
Kevin Smith
Most accounting firms are asking the wrong question about AI.
The conversation often starts with tools: Which platform should we use? Which processes should we automate? How quickly can we roll out AI across the firm?
Those questions matter, but they’re not the most important ones.
Firm leaders should first ask what AI will change about their business model, client expectations, talent strategy and competitive position over the next three years.
That’s the difference between treating AI as a technology initiative and treating it as a strategic investment. The firms that benefit most from AI won’t necessarily be the first adopters. They’ll be the ones who align technology investments with long-term business goals.
Start with strategy, not tools
One of the most common mistakes firms make is jumping straight to implementation.
Leaders want to “do something” with AI, so they introduce it into tax, audit, client service or administrative functions and call it progress.
But if you ask five partners where AI investment should go, you’ll likely get five different answers. Some will prioritize efficiency. Others will focus on growth, client experience or advisory services.
All of those priorities are valid, but they are not a strategy. Without strategic-level thinking, people will naturally gravitate to solutions relevant to their specific, tactical areas.
AI forces a more fundamental question: What are you trying to change about the firm?
Are you trying to improve profitability? Address staffing shortages? Expand advisory capabilities? Enhance client experience?
Without clarity on the outcome, firms risk spreading investments across multiple initiatives without generating meaningful value from any of them.
Re-examine your competitive advantage
AI is also forcing firms to reconsider what makes them competitive.
For decades, accounting firms have built advantages around expertise, institutional knowledge, client relationships and the ability to scale services through people.
Those strengths still matter, but AI is changing how they are delivered.
Tasks that once required significant staff time — from research and documentation to analysis and drafting — can increasingly be completed faster and at lower cost. The question for firm leaders is whether their competitive advantage is built on activities AI can compress or on capabilities AI can enhance.
Rather than asking, “How do we use AI?” firms should ask, “If a competitor launched an AI-enabled version of our firm today, what would they do differently?”
That question often reveals opportunities and risks that are easy to miss when the focus remains on tools alone.
Don’t optimize a workflow that won’t exist
Many AI initiatives focus on improving existing processes.
Faster document preparation. More efficient research. Better reporting.
Those improvements are valuable, but they can also become a distraction.
The bigger opportunity may not be completing existing work faster. It may be redesigning how services are delivered altogether.
This is especially relevant in tax, audit and advisory services. Firms that focus only on incremental efficiency gains may find themselves improving workflows that competitors are actively replacing.
Efficiency matters. Transformation matters more.
Sequence matters more than speed
There is understandable pressure to move quickly with AI.
But speed without sequencing creates risk.
Should you deploy client-facing AI solutions before strengthening data governance? Should you commit to a platform before understanding where the greatest value exists?
As firms continue to navigate staffing challenges and increasing client demands, leaders must decide where AI can have the greatest impact first — whether that’s internal efficiency, knowledge management, client service or advisory growth.
Getting the order right is often more important than moving first.
Don’t overlook risk
AI doesn’t just change how work gets done. It changes risk.
Client information, proprietary data and firm knowledge are increasingly flowing through AI-enabled systems. At the same time, cyberthreats continue to evolve in sophistication and speed.
Cybersecurity and governance cannot be afterthoughts. They need to be part of the AI strategy from the beginning.
Firms should also remain cautious about locking themselves into long-term technology commitments while the market continues to evolve rapidly. Flexibility may prove just as valuable as functionality over the next several years.
Focus on the outcome, not the tool
Accounting firms are facing pressure from every direction: Talent shortages, rising client expectations, evolving technology and increasing competition.
AI has the potential to help address each of those challenges, but only when it is approached strategically.
Before making the next AI investment, firm leaders should spend less time asking which tool to buy and more time asking what kind of firm they want to become.
In today’s environment, that may be the most important investment decision of all.
About the Author
Kevin Smith is a partner and the national leader of Wipfli’s Technology and Innovation Industry. In this role, Kevin aligns Wipfli’s broad portfolio of consulting and financial services to accelerate growth for technology centric clients. With a successful history of driving growth in private equity held technology and professional service firms, Kevin is uniquely attuned to opportunities and optimizations that provide immediate impact for scaling technology companies.
