A few weeks ago, we brought together leaders from accounting firms, technology companies, investment firms, and academia for the first Accrual Exchange.
One question ran through the conversation: what happens when AI creates meaningful capacity inside a firm? The answers touched on which services become viable, how young accountants develop judgment, and what leaders need to learn firsthand. Together, those choices could expand what a firm is capable of and who it can serve.
“Everyone keeps wanting to move up market.”
He described businesses and households whose need for advice was being overlooked while firms competed for wealthier clients. His point was that technology could make it economical to serve more of those clients.
That is a useful starting point for a firm’s AI strategy: valuable work clients already need, which the firm knows how to do but cannot currently deliver at an acceptable cost. Making that work viable could expand the market for accounting.
Ritik Malhotra, founder of Savvy Wealth, described advisors spending six hours analyzing a prospect’s statements and preparing a proposal. With AI assisting that work, they could sometimes send a proposal by the end of the prospect meeting. Reducing the cost of showing someone how an advisor could help opened up room for more prospective clients.
For an accounting firm, the equivalent might be helping a business client decide whether to hire. An AI-assisted workflow could organize current books and cash commitments, flag missing information, and prepare scenarios linked to source records. The CPA could challenge the sales assumptions, examine when sales become cash, and explain what would change the recommendation. Work that was difficult to fit around an annual return could become a service the firm offers throughout the year.
How the next generation learns the craft
Delivering that advice depends on judgment that takes time to develop. A young accountant prepares a return, misses something, gets review notes, and works through the correction. Six months later, a different client presents a similar problem. Eventually, the accountant begins to recognize the pattern before anyone points it out. As AI takes on more preparation, firms need to be deliberate about where that learning will happen.
“The preparation wasn’t the teacher,” Armanino CEO Matt Armanino said. He described learning through trial, error, and mistakes, and proposed simulations that could recreate those experiences without a client on the other end. Unusual fact patterns that might take years to encounter could become part of a junior accountant’s training.
One exercise could ask an associate to form a view from source documents before examining an AI draft, then explain the differences to a senior CPA. Pair that practice with supervised client conversations: hear how a client describes a problem, prepare the questions, and discuss afterward what changed the recommendation. A new accountant could take on meaningful responsibility earlier, with experienced colleagues helping them build the judgment it requires.
That development needs time and funding. Armanino described the traditional apprenticeship as client-funded development: junior accountants learned through billable preparation. Firms will need to budget for more deliberate practice and coaching, and reward experienced people for teaching. The opportunity for someone entering the profession should be visible in the work they get to do and the support they receive.
Leaders have to learn the tools, too
“You can’t do workforce transformation via PowerPoint.”
Firm leaders need firsthand experience of what the tools can do and where they break down. Working through an engagement alongside the preparer and reviewer can reveal what an adoption dashboard misses: an assumption the system overlooked, a calculation someone had to rebuild, or a client question the draft failed to address. Those details should inform decisions about staffing, training, pricing, and where human review belongs. The professional and the firm remain accountable for the result.
A firm can empty its preparation queue while every engagement still waits for the same reviewer. Leaders need to understand whose time the technology releases and whose time a new service requires. Involve the people doing the work, and measure it through completion, including corrections and client follow-up. That is how a firm can tell whether it has created capacity it can use.
Saved time needs a purpose
“Creating capacity doesn’t magically create advisory.”
Turning that capacity into a service still requires a clear scope, someone responsible for delivery, and a fee clients will pay. Lower delivery costs might bring advice within reach of more clients or improve the margin on fixed-fee work. Under hourly billing, fewer hours can mean less revenue. Saved time needs a purpose, whether that is serving clients, developing people, or avoiding costs the firm would otherwise incur.
Chris Kauffman of General Catalyst pointed out that successful AI adoption could cause utilization to fall. He urged investors to give firms room to turn that capacity into growth. Owners need to see what the time is producing: paid advisory work, stronger client relationships, or accountants becoming ready for greater responsibility. They also need to distinguish those investments from a gap in the schedule.
The bargain with employees needs to be equally clear. A firm cannot ask accountants to reduce hours and then mark them down for doing it. Pay and progression should recognize the CPA who catches a bad assumption, the colleague who develops a junior accountant, and the practitioner who builds a client relationship. People need to see how better work helps them grow within the firm.
Start with a client need your firm would like to meet. Have leaders work through the service with the team, give newer accountants a supported role in delivering it, and test whether clients value it. The result should be a client who gets useful advice and an accountant better prepared to give it.