Welcome to the Escaping the Accountants Trap podcast. It's a podcast to help accountants, CPAs and bookkeepers escape what we call the accountant trap. It's where accountants are not getting paid for their value and are forced to work long hours with high, demanding clients with little pay. Well, how do you escape the trap? One way is the topic of today's episode, and that's by leveraging AI to handle the low level task so that you could focus on the more interesting work.

To help me with the discussion, I've invited Shane Westra. He's the chief product officer at Canopy Tax, which is a software to help accountants organize their practice. Shane, welcome to the show. Thank you so much, Adam. Great to be here. Yeah. So I'm excited to dive into this topic of AI. Because for a couple reasons. One, I think AI is this term that a lot of people are throwing a about around, but not really understand what it means.

And then the second reason I want to talk about this is how can we, as accountants, leverage AI to grow our practice? So let's kick off the discussion. Could you tell us exactly what you mean by AI when it comes to leveraging AI, AI to handle the sort of a low level task that accountants and bookkeepers are doing now?

Yeah, a great question. And I think for a lot of people, you know, it's been a very common buzzword and it's mentioned a lot in the media. And I think a lot of people just to have a lot of confusion or misunderstanding about what is it or what will it be? I think a lot of us are kind of caught in between the spectrum of and realizing that, like Alexa and Siri today have a lot of it and competence and can even answer a lot of the things we do today.

But yet in the media, there's a lot of talk about AI replacing lots of jobs, and especially in the accounting industry, that's been a very, very common topic of, you know, to what degree will it be threatening to careers or aiding. And so I think for us, at least with canopy, we've looked into AI a lot to really see, you know, how can this be used to facilitate jobs and really reduce a lot of just the mundane tasks that accountants do today?

There's so much regarding just simple communication, document analysis, a lot of different things that really don't require too much, you know, through intellect. And so really our perspective is that I will be a tool. It will enable accountants to do more than they've ever done before. They'll do that by taking care of a lot of these very simple tasks.

Take that off their plate so they can focus on the higher level functions, whether that's client advisory services or getting to other areas of the business. You know, going upmarket, dealing with clients that are where they can provide a little bit more of this white glove service to them. And that's kind of our approach is, you know, just letting I do the stuff that really no one wants to do anyway.

Yeah. Okay. So I which stands for artificial Intelligence, is this idea from what I'm gathering from you is that it's this idea that you can take technology to replace a lot of the menial tasks or low level tasks, so that you could focus on higher value tasks. I mean, it it sounds like this scary, especially when the media talks about it.

It sounds like this scary sort of doom and gloom, especially for accountants. Oh, it's going to replace everything that we do. But if you think about it, AI is almost just sort of another iteration on another level of technology. It's almost like when the the 1800s, everybody rode horses everywhere. And then in the early 1900s, cars came out.

It's the same ideas to help you get somewhere, but one is just faster and better. So this is just another technology concept. Like the car that can help people or or computers especially, you know, accountants a long time ago obviously use like green bar paper and literally kept the books using physical books, which is where the term came from.

And then computers helped them do that job much faster. So this is I would you agree that this is just another step in that evolution, that accountants shouldn't view this as a negative thing, but as something that can aid them and helping them grow their practice? Yeah, exactly. I think those are great analogies where there's the computer in general and spreadsheets, email, you know, all of these things are tools.

They help do the job more efficiently and better. So I strongly believe that I want to place accounting. But accountants that use AI may very well replace accountants that don't use AI, similar to as accountants today, if you're not using even the modern technology that is around currently, then you're at a disadvantage. So I do think it's important for the accountants to lean into this and realize how powerful it can be to them, to make sure that they can have a better practice than ever before.

Got it. Okay, so I know that you're the. You're the chief product officer of Canopy Tax, which is a software for that accountants can use to organize their practice. And I'm assuming that you guys are embracing AI and building that into your to your software. What are some examples of these low level tasks that can be accomplished or taken off the plate of an accountant or bookkeeper that that I can help with?

Yeah. Great question. There's a few that we've built already and there's a lot more on the roadmap, but just some examples, for example. One is with communication, you know, working with clients back and forth and writing emails and in messages and chat, there's so much that, I can really help with. So a lot of accountants, you know, writing, you know, professional emails, maybe it's not their strong suit or just something that just takes more time than they want to provide.

And so we have generated emails and so you can provide just a quick summary and say, hey, ask for all the tax documents from this client. And I can just have a very professional email written just within seconds that you can then review changes needed and send along your way. And so, you know, that's one that we've released and it's got a lot of usage on a daily basis.

People love it. And to learn. So that's the thing to with, with AI is it learns based on behaviors. And so the more people use it, we can refine it. And it learns your tone and voice to become more like you would sound. And so, so, so that's one of the first things we did. Another one is regarding documents.

So of course there's a lot of documents that flow through an accounting firm. And so whether that's the initial, documents that a client uploads or any subsequent artifacts that they need to put into the system, we can now parse these, we can classify them. We can use that to put them in the right folders, the right structure.

And then looking forward to the roadmap a little bit, we will take that information to know if when a client uploads a document, does that resolve a task that we can, say that's been done and maybe that triggers the next task, whether that's for the client or for the practitioner to act upon. And so a lot of us dealing with workflow and just making a seamless, just helping them understand what's the very next thing that happened needs to happen based off of what's been uploaded.

And then another one is regarding reporting. And so we have a module that we call insights that shows reports and dashboards. It's really just all the information for your firm. Your fingertips. But reporting traditionally requires a lot of knowledge to set filters. And you need to know the database field names. And so we've taken that away. And we just use natural language search.

And so we can just say hey show me all the tasks do this month or show me the clients that are performing. The best or the clients are performing the least that we need to maybe increase our prices or maybe maybe fire them. And so just using natural language search is an easy way for just the average person that may not be an expert on report generation to deal with this data, to learn from it, and to act upon it.

Okay. Interesting. Can I be used to help come up with tax strategies or, suggestions on what the client could do to improve the state of their business? What are your thoughts on that? Yeah, definitely. And that one for us is something we're working on right now. So it hasn't been released quite yet, but we are looking at how can we marry up, you know, the tax laws, together with the proprietary data, that, you know, is, is still kept a very safe and secure and not shared within these engines to really marry these two concepts, to provide that advice on on what needs to happen.

One of the things that we're working on is this concept of a copilot, and it's essentially an assistant that, just knows everything about the tax law and the business and their clients, and that you can ask questions and get answers immediately to provide guidance. And, and this is still done in such a way that the accountants are the true experts.

And so they use this as a tool to do some of the heavy lifting. But then they can provide these answers to the clients, tweak them, change them a little bit. And so this copilot concept, if you imagine a chief of staff or maybe a very intelligent, administrative assistant that knows everything about your business, it has a photographic memory and that is available 24 over seven to bounce ideas off of and to ask questions.

So that is what we're building into this practice management software. Wow. It's the ability to just ask it anything, get a response and then you know how to, you know, more efficiently interact with your clients and provide better service than ever before. Wow. That's interesting. Okay. So on there along the same lines of of AI in the future, where do you see the accounting profession in ten years?

Yeah. Great question. I think I will really allow the industry to open up and be more valuable than ever before. Okay. Because artificial intelligence can take away a lot of this. The mundane tasks, the things that historically have taken so much time, that opens up people to become more experts and to focus more on the clientele that they prefer dealing with.

For example, whether that's client advisory services or maybe you want to go into more of a niche type of audit, type service that you want to provide. You know, those are now options. It is something that will allow, the practitioners to really just choose, you know, who they want to serve and who's best for them.

And with that is a lot more of that in-depth expertise on whether it's client advisor services. Or you could take it a step further. You know, for those practitioners that are acting as, for a fractional CFO, for example, know, before you had limits on how much you could really do in that environment because there's just so many companies that you can have in your brain at one time, but maintaining the data and being able to pass all that and kind of present this information in such a way that the accountants now focus more on decision making in guiding, as opposed to just dealing with spreadsheets and data import and some of those things

that would really be the bulk of time going forward. Now what, you know, twists that narrative and says, you know, the accountants in control and can really focus on those higher level tasks such as the advisory services. Yeah. What's interesting, my, my, co-founder Jeff, he started as an accountant, I believe, in the early 70s.

And he said that accountants traditionally before the the age of compliance and transactional work, that's what that was. Their job was to advise. That's why you hired an accountant. But with all the tax regulations, everything that came in that in the next few decades, accountants transitioned from being an advisor to being the compliance person and transactional person, which sort of, you know, in my opinion, I think a lot of a lot of people's opinion is is almost a waste of time of the accountant themselves, the accountant, especially from their client standpoint, their client wants them to provide that higher level advice.

What do I do? Should I higher this person? Should I raise my prices? Can I buy this piece of equipment? Should I expand to an a second location? These are questions that most business owners want their kind of accountant to answer. But most accountants are buried in transactional compliance work, which they don't even like. Anyways, most accountants and I've talked to don't don't look forward necessarily to tax season other than that's really the time when they're going to get paid.

But you know, what are your thoughts on that. Yeah, I completely agree. It's a way for them to truly be the financial advisors at the highest level, for their clients. And I think it does provide a lot of optionality as well. You know, if you do want to be a full service, accounting practice and if you're still want to do the 1040 work, it also will facilitate that to be a lot easier to do than ever before.

And especially combined with a modern tools such as the client portal that's easy to use and interface with, to have self-service opportunities for kind of the the lower end, more recurring tasks such as 1040 work that, you know, if you still want to handle that, then that at least makes it easier to do. Yeah. To really essentially automate most of that and allow you to focus elsewhere and at least have these options to do, financial advisory type of business and to become an expert.

It's been interesting to, to see, a lot of practices really want to become very specialized in certain areas that this is opening up a lot of opportunity for them to not only become experts in their clients, but certain genres. You know, we've heard of some that, you know, their specialties are with optometrists or maybe with, you know, capital equipment for, for FAS.

And they can then use artificial intelligence to become experts, not only on the financials, but to even broaden that into just the business in general. And knowing that those industries are coming up to speed very quickly to be able to have that additional knowledge to guide those financial, advice and decisions that they recommend. Okay. So going back to canopy, tell us what canopy is and why somebody should choose it over.

You know, an alternate alternative software for canopy. It's really a firm operating system, right? It's like everything you need to to manage your practice. And so for us that's CRM and your client management. And so it's where you store all the information regarding your clients and especially where you have a lot of clients that you might have. They might be business owners, but then also do personal taxes.

And so those relationships are very well defined. It's also where all the documents come into, it's the client portals. So it's the experience that your clients have to, have those initial proposals, engagements and to understand what services are being agreed upon, you know, pricing, communication and all of that, and then getting all the information from your clients, you know, what do you need, what you're looking for, a place for them to upload their documents, much more securely than an email or any other method.

And again, like I mentioned, we're using AI to then classify those documents, put them where they need to be automatically to look at those documents, and then learn from it. You know, what did they upload last year? What do they need to upload this year? You know, maybe they upload or something last year, a form that they didn't have this year that we can remind them, hey, what about this or this?

It's also the the way to, just really manage your workflow, your projects, your tasks. You know, what needs to be done next, how do you then allocate your resources? That's been one of the biggest challenges, you know, just too much work and not enough staff. So how do you how do you really know that? How do you see that graphically and visually to see, who's doing what?

And if you need more staff or if you just need to organize it better, or maybe there's certain work that you can slice and dice and understand that, what work is profitable and what work is not. And so it's really everything that you need to do to manage your practice. We don't get into, you know, tax prep or bookkeeping or HR services.

But beyond those three, we aim to be the one stop shop for everything you need. Interesting. Okay. So if somebody listening wants to check out, check it out. Where do they go. So canopy tax.com okay. Is that you also check that out. And and also I think there's a lot of firms that have use just more just legacy products that are on prem that don't have those modern capabilities, such as a really refined mobile app for the client, the client portal, payments.

And so, you know, along with AI and just the whole concept of, you know, modern technology that can be applied generally to your business, to taking this to the next level, whether it's canopy or others. But I think it's very worthwhile to look at, what's out there, you know, these tools that can help you become even better.

And, you know, AI is is going to be a big part of everything we do going forward as well. Interesting. Okay. So we'll we'll definitely put that in the show notes canopy tax.com. Well Shane we're almost out of time at time. I really appreciate you joining us today. Yeah likewise. Thank you so much. Appreciate the opportunity. Excellent. Well and to everyone listening or watching, thank you so much for spending the last few minutes with us.

As we discussed how to escape the county's trap. Bye for now.