AI Is Automating Accounting — But It's Not Replacing Accountants

Hey everybody. My name is Macgill. I'm the co-founder and CEO of Rize. I'm here with Logan Graf today. He is one of the experts on the cutting edge of accounting and professional services. Super excited to chat about AI and how it's changing accounting and the professional services space. Do you want to give a little introduction?

Hey everyone, my name is Logan Graf. I'm a CPA based out of Austin, Texas. I run a CPA firm — it's all virtual. I service business owners and individuals. I also create content for other accountants and host a community for accounting firm owners. Thanks for having me.

Really happy to chat with you. Logan, you've been a user of Rize for a long time and shared that. We're eternally grateful for that.

Maybe coming up on five years. I started using it to track my time with the buckets of firm work, client work, admin work, content. I've been able to use it as a reference over these years on how much I'm working and where I'm spending my time.

We actually just passed in February our five years since we first launched the product. I think you're probably one of the earliest users.

It was referred to me. Someone was like, 'Hey, you should check out Rize.' He never used it, but I tried it out and was like, 'Oh, this is sick.' Everything is automated basically. This is what I've always wanted with time tracking.

One of the big things on a lot of people's mind — agencies, professional service owners — is AI and agents and how it's changing the way we work. From your perspective, what is actually changing immediately inside of accounting firms?

It's able to handle a lot of low-value tasks where we don't want to spend a bunch of time. We can use AI to really accelerate how efficient we work. We're always working in spreadsheets, handling a lot of documents, and AI is able to accelerate that. There's still a lot of broken out, segregated components to what we do, so it's hard to fully use AI the most efficient way.

Tax research has gotten way better. There's also tax-specific AI now that I would recommend versus using a general GenAI. You want to use the best tool for your work. Why not spend just a little bit of money to have that confidence in it?

What are some of those tax-specific AI tools that you've been using?

I've had this thing called the Tax Book for five years. It used to be just a tax research website and they have a physical book they send out every year because tax changes every year. They initiated their own AI with their research. I'll also use BlueJ AI tax research, CoCounsel by Thomson Reuters, TaxGPT. There's all sorts of tax-specific AIs now.

Are there areas in the accounting world that are going to be really quickly replaced with AI and other areas that won't be?

We're seeing a lot of breakout AI companies with tax prep. This tax season you've seen a lot of people testing the waters with AI tax prep. It's probably going to be very common in the next couple years. Basic tax returns with simple data and simple tax forms will be pretty much automated. I'm perfectly cool with that — I've already used OCR automation software that does it for me, but it's only going to get better.

What will be the ripple effects for accounting firms with these changes?

A lot of people will realize they can use AI to do their tax return. We're probably going to see more churn due to AI. Most of my clients are more advanced — they desire a relationship. Those doing only basic tax returns may see more client loss. But there's also people hesitant to go that route. A lot of people don't use online free software by TurboTax or H&R Block even though their return is simple. They still pay someone. That element of 'I don't want to do it, I don't want to think about it' — that will always be there.

What would you recommend firms do to take advantage of the shifts that are happening?

You really have to lean into the human element. Build relationships with your clients. A lot of my clients just want someone to be there for them versus just a tax preparer. When marketing your services, have a more personal touch. Be more than a commodity — have that advisor-type relationship. You're more than a tax preparer, more than a bookkeeper. Help people understand what's going on and be a good relationship with them. Those that are just there for the tax return — AI is coming for them.

Do you think AI is going to change the way that accounting firms bill their clients?

I've been thinking about that a lot. If AI continues to speed up processes, do we need to charge as much for certain things? The value of our services is still there, but for example, clients with businesses that don't do their accounting at all — you can feed their bank statements into Claude and it'll come up with a pretty slick trial balance. It's not 100% though — we are verifying everything still. It still takes time to double check everything.

As that improves, it'll speed up that type of work. We would maybe charge $1,000 for a client to get their books up to speed. Now if AI can do that quickly, we probably don't need to charge as much. You run into the situation — do you boot it back to the client or say, 'Do you want us to do this for you with AI? We'll still have verification.' When we work for businesses, we do our due diligence. We don't just take the numbers for what they are.

People will put all this data into AI and be like, 'All right, I'm good, it's got to be right.' They put blind faith in it. But you have to have a person to verify it — someone who knows what they're doing.

Just like coding. You need to make sure it's actually going to work. It just accelerates the time to get to the outcome.

There's a perfect example yesterday. Daniel Basel — he's pretty big on Twitter — he had AI do his tax return and filed it. He had Claude and GPT verifying each other, but there's this huge glaring issue: he filed without a K-1, which is what he needs for his tax return because it's part of his businesses. That's the most obvious thing a professional would catch — we're not filing without that K-1. But AI just had him do it anyway. All the professionals are like, 'Don't you see this right here?'

It reminds me of code. You can use AI to generate code, but as a developer you still need to review it. There's always mistakes, always ways to improve. You still need the human in the loop.

Do you think there are areas in accounting where you won't need the human in the loop anymore?

That's hard to say. I don't see it right now. Maybe next year it'll be better. I don't know if I would ever let it run 100% on its own.

Do you see margins changing? How do you see the structure of accounting firms evolving with AI?

Who do you need on your team now with AI? Do you still need admins, or do you hire an admin to run the AI? There are so many different routes. I feel like you always need somebody making sure the AI is right. Maybe you just have a person that's over different agents managing all the work — more of a reviewer, manager-type level person. This is years down the road, I feel. Technology could surprise us.

It could reduce the amount of lower-level employees. They'd basically be interns, entry-level people. That's worrisome for the next generation — 'Where do I get in here? Do I even have a career anymore?' We're basically reshaping the whole workplace over the next 5 to 10 years. It's moving so fast. I don't think we've caught up to the realities of it all.

I think we have to slow down a little bit and make sure we're doing things right. We're not putting too much faith into it. What's the rush? We don't want Skynet here.

How have you been implementing AI in your day-to-day? Do you have any principles or processes that might be helpful?

I'm using an AI built by Thomson Reuters right now. They have the security on lock so I can use client information. My clients have signed off that AI is part of my work process. You've got to have permission from your client and make sure the AI is locked down — I'm not putting personal information into the cloud.

I use it to reference tax code. 'Hey, I have this document — where does this go on the tax return?' Sometimes the translation from the tax form to the actual return is a mystery. I reference it with other documents and ask, 'Is this actually right?' It's a lot of verification on my end — I can double check myself. And for bookkeeping, low-level bookkeeping work. That's only going to get better. Plus a ton of tax research, newsletters, writing, emails. Admin stuff — it helps you save your brain power.

Well, thank you so much for joining. It was really interesting chatting with you. Super excited to see where everything goes.

It's a great product, I love it. Thanks so much for having me and building an awesome product. I get questions about it weekly. I'm a big ambassador — I think I'm technically an ambassador.