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AI evolves for CFOs and accountants

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While generative artificial intelligence is the hot conversation topic these days, we must not forget a long and successful history of using nongenerative AI, sometimes called legacy AI, especially for numerical and structured data. Uses such as forecasting of customer demand or revenues or the detection of patterns such as fraud or money laundering are important examples relevant to CFOs and accountants.

These tools and use cases improve in their capability every year and provide tangible business value.

Legacy AI uses

These nongenerative AI systems can also provide significant assistance in meeting compliance and regulatory requirements and preparing analytical reports for those purposes. Matching methods to detect which invoices and payments belong together, especially in cases of partial disparity, are in almost universal usage today and rely on AI.

Many of the more sophisticated management dashboards and systems underlying both accounting and enterprise resource planning software ultimately rely on such AI systems, for example inventory management and planning. Complex processes like just-in-time or just-in-sequence could not function without legacy AI backbones.

Limitations of generative AI

Turning to the oft-hyped topic of generative AI, we acknowledge that many claims are hype. Any tool, for instance, has an intended scope of use for which it is helpful and provides value. Beyond that scope, it is not helpful and may cause harm. Large language models are intended to manipulate language, not numbers, and so are generally not successful at dealing with numbers where we expect absolute accuracy.

A case in point is the analysis of a company’s annual report. If we do so using LLMs, we will get answers that are “enhanced” by information extraneous to the report, or we might get numbers that are not grounded in the report. Such uses are not appropriate and misleading. So what can we use them for?

Multimodal uses of generative AI

A step change forward of generative AI is its multimodal facility — the ability to work with text and images at once. Imagine taking a mobile phone snapshot of your latest restaurant bill and it’s automatically filed in the travel expense form of your company. What a time and hassle saver! This is quite accurate and thus also prevents human error. The same holds for invoices, receipts and other paper forms.

In case a legacy AI model discovers some sort of mistake — such as fraud or a partially paid invoice — it is generative AI that can convert this discovery into a human-readable message that explains what is going on and what to do about it. We have talked about explainable AI for many years, and it is LLMs that can produce an explanation even if the content of that explanation may need other systems to weigh in.

Natural language dashboards

We have all been in board meetings where one person asks an analytical question to which no one has the right numbers. Oh horror. An analyst will have to be kept busy for a few days, the charts sent, and the result is not actionable for a protracted time. Gone are the days! Generative AI can translate a question from English into the language of databases, SQL, and obtain the table of numbers that results. This table is then translated into the codified language of dashboards and displayed as a graphical image to the human user.

All of this occurs in the blink of an eye. Most importantly, the result is not hallucinated by the LLM but comes directly from the database — the answer can be trusted. This allows further questions to be asked live in the board meeting, eventually getting to an actionable result in a short time. I was present at such a meeting where a sequence of eight pointed questions was asked and answered in less than 10 minutes, leading to novel insights and a board decision. It was an eye-opener.

Support services

Fielding questions by employees, customers and suppliers is a major strain on any accounting division. Generative AI can help by triaging the most common questions and providing correct and sensible answers automatically. From providing help with the dreaded expense reports to filing invoices, AI can largely automate the everyday process of accounting, including matching it to the right expense account and getting approvals.

Security is important, especially when money is involved. Generative AI supplies a new level of sophistication for the detection of a variety of attacks such as phishing and hacking.

Some uses where AI, generative or not, can help in the realm of accounting have been listed here. Beyond the management of a company’s finances, the CFO also has to make many decisions for the rest of the company. AI can help analyze scenarios, help find reference data, and contextualize the situations and offerings of competitors or other vendors. It can help to objectify and compare the benefits of multiple options so that the CFO can better decide which to choose.

In conclusion, generative AI delivers genuine business value to the CFO organization after all the hype has been subtracted. The most impressive is the generation of dashboards on the basis of human-language questions. If you do nothing else, have a good look at that.

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Trump’s sharp turn for US policy faces slower road in Congress

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President Donald Trump is preparing to take his show on the road after a shock-and-awe flurry of executive actions that have flipped U.S. priorities on everything from climate policy to diversity and inclusion.

Yet while Trump’s long-planned fire and fury start to his second term is entirely something he’s controlled, the next steps for his plans to remake Washington will need the help of others. Republicans, who narrowly control the House and Senate, have yet to find agreement on how to move Trump’s ambitious plans through Congress.

Trump’s third day in office will be capped by an Oval Office interview with Fox News host Sean Hannity, set to air Wednesday night during Asia market hours. Trump is also expected to meet today with a group of centrist House Republicans, according to a Semafor report

Trump met Tuesday with House and Senate Republican leaders to chart a path forward on his priorities, but those talks ended without a deal on how to advance Trump’s signature tax plan, as well as on other key policy priorities like immigration and energy. 

Senate Republicans would like to do a large bill on immigration and energy first to deliver a quick win for the president and then tackle tax reform in a second bill, whereas House Republicans would prefer to do one large bill that ties together all of Trump’s priorities to help ensure passage through Congress. 

Congressional Republicans have struggled with unity in recent years, especially in the House. It took 15 votes for Kevin McCarthy to become speaker in 2023, and he lasted just 10 months in the job before being ousted. GOP lawmakers eventually settled on Mike Johnson to take over, and he’s led an uneasy majority since then. Earlier this month, Johnson required Trump’s own last-minute intervention to flip a couple of votes in order to keep the top job.

Hannity, in a Tuesday evening program at the Capitol with House GOP leaders and lawmakers, repeatedly pressed them to get on board with Trump’s full agenda, urging unanimity while reminding repeatedly that no one member can get everything they want. 

Johnson told Hannity Tuesday that a bill to move Trump’s tax agenda, extending cuts from his first term and enacting promises made during his campaign, could be done by April and would be passed by the Memorial Day holiday near the end of May at the latest.

“We’ve had a lot of member briefings, but we’ve also been talking about this with President Trump,” House Majority Leader Steve Scalise told reporters after his meeting with the president on Tuesday.

“When you look at what gives us the best path to success, to secure the border, lower energy costs, save the tax policies, stave off the tax increase — all of those things we want to do, what builds the best path?” Scalise added.”The one area we’re not in disagreement on is what will be in an overall package. We’re all talking about the same things.”

Yet for all the optimistic talk on passing Trump’s legislative agenda, there’s no agreement yet on how to do it. 

Complicating matters further, Republicans in recent years needed to rely on Democratic votes for even the most basic legislative must-dos, like funding the government or lifting the debt ceiling. House Republicans can only afford to lose one vote and still be able to pass bills without needing to go to Democrats for help. In the Senate, they can afford just three defections.

“We’re gonna get the job done, at the end of the day,” Representative Tom Emmer, the Minnesota Republican whose job as majority whip is to corral House GOP votes for the bills that will enact Trump’s agenda, told Hannity. “Failure is not an option.”

Fire funding

Meanwhile, preparations are underway for a trip to North Carolina and Los Angeles, the latter of which will give Trump a chance to spar on Democratic turf with the biggest political foil of his first days back in office, California Governor Gavin Newsom. 

Trump is slated to visit North Carolina Friday to see the aftermath of Hurricane Helene and then California to view the devastation wrought by wildfires in Los Angeles. Trump and Newsom have sparred repeatedly over the handling of fires in California, including over water usage, preparation, and the state’s response. 

In his inaugural address, Trump said fires have burned in Los Angeles “without even a token of defense.” Newsom shot back that Trump’s rhetoric was both “nonsense” and “insulting,” in a statement late Tuesday that interspersed those words with photos of firefighters tackling the blazes.

“I look forward to President Trump’s visit to Los Angeles and his mobilization of the full weight of the federal government to help our fellow Americans recover and rebuild.”

Newsom has also sparred with conservatives in Congress over whether federal aid to California should come without conditions — his insistence — or with conditions including requiring changes to water policy and fire mitigation strategies in the state, as Republicans including Johnson have suggested.

“We’re going to take care of Los Angeles,” Trump said to reporters on Tuesday at the White House. “I’m going to North Carolina, which has been abandoned by the Democrats. And I’m going to North Carolina, very importantly, first, I’ll be there on Friday.”

Trump will also go to Nevada, a swing-state he won in the 2024 presidential election, to “thank them” for their support. 

The trip will cap off a busy week for Trump, who advisers and allies say returned to power with a strong sense of the way he wanted to approach a second term. Trump is trying to demonstrate his effectiveness as a leader and draw a contrast with the former President Joe Biden, who typically did one or two public events each day in office. Many of Trump’s aides would like his legacy to rival that of the late President Ronald Reagan.

The Trump team always intended to move at a dizzying pace during its first two years in office, while Republicans control the White House, Senate and House. They say they are emboldened and confident after winning all seven swing states in the 2024 election and expanding the Republican Party to include greater numbers of young men, Black men and Hispanics. 

To reporters, Trump has said he may impose tariffs on Mexico, Canada and China as soon as February 1. “We’re talking about a tariff of 10% on China, based on the fact that they’re sending fentanyl to Mexico and Canada,” Trump told reporters Tuesday afternoon. 

Trump’s comments, made in White House events that turned into impromptu press conferences, scrambled currency markets. China’s onshore yuan dropped by the most in three weeks on his tariff threat reiteration. A day earlier, Trump’s 25% threat had sent the Canadian dollar to its weakest levels in nearly five years.

Even if Trump’s second-term is off to an impactful start, warning signs loom for his presidency. The nation’s stubborn inflation will be hard to tame, despite his recent order to federal agencies to study the issue of bringing down costs for consumers. 

Peace in the Middle East may prove fragile, despite the agreed-upon six week cease fire between Israel and Hamas in Gaza, while Russia continues to bombard Ukraine’s cities nightly, with little sign yet of public movement by Russia’s leadership toward the truce talks Trump says are essential.

Trump indicated he plans to speak soon with Russian President Vladimir Putin, and suggested Tuesday he could impose more sanctions on Russia if Putin doesn’t come to the table for talks on Ukraine. 

Putin told China’s leader Xi Jinping, during their 95-minute video call Tuesday, that he was ready for dialogue with the U.S. on Ukraine, Interfax reported, but that Trump’s representatives hadn’t yet contacted the Kremlin over possible talks. 

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Accounting

In the blogs: To be continued?

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TikTok and taxes; future of L.A. revenues; engagement limits; and other highlights from our favorite tax bloggers.

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Accounting

Carr, Riggs & Ingram merges in CapinCrouse

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Carr, Riggs & Ingram, a Top 25 Firm based in Enterprise, Alabama, has added CapinCrouse, a Regional Leader based in Indianapolis, effective Jan. 17, 2025.

The deal is CRI’s biggest merger in its history, and the first since it received outside investment last November from Centerbridge Partners and Bessemer Venture Partners. 

CapinCrouse focuses on exclusively serving nonprofits, such as faith-based  organizations and private colleges. The merger will add 40 partners, 185 professionals and 15 offices to CRI, which has 437 partners and 2,304 staff 

After the outside investment, CRI split its attest and non-attest practices, as is common when accounting firms receive private equity or venture capital funding. Carr, Riggs & Ingram, L.L.C., as an independent licensed CPA firm, is providing assurance, attest and audit services. CRI Advisors, LLC (including its subsidiary entities) operates as a separate legal entity, providing clients with tax and business consulting services.  

“This merger represents an exciting milestone in our firm’s history and a significant  advancement for both CRI and CapinCrouse,” said CRI Advisors LLC chairman Bill Carr in a statement Tuesday. “We have previously invested in firms that specialize in serving faith-based  organizations and private colleges. With the addition of CapinCrouse, CRI is now  positioned to become the leading national provider in these vital markets. By combining  our strengths, we will enhance the value we offer and greatly expand our national  geographical presence. We are proud to welcome CapinCrouse to the CRI family.” 

Financial terms of the deal were not disclosed. CRI ranked No. 24 on Accounting Today‘s 2024 list of the Top 100 Firms, with $455.36 million in annual revenue. CapinCrouse ranked No. 27 on Accounting Today‘s Regional Leaders list of the Top Firms in the Great Lakes region, with $35.51 million in annual revenue.

“We are very pleased to join CRI,” said Fran Brown, Managing Partner of CapinCrouse. “For  over 50 years, our focus has been on providing innovative service to nonprofit  organizations whose outcomes are measured in lives changed. CRI’s commitment to client service, respect, and integrity is an excellent fit with our mission and firm culture. We will  continue to operate under the CapinCrouse brand and are excited to now have access to  more offerings and resources to further drive exceptional client service.” 

Koltin Consulting Group CEO Allan Koltin advised both firms on the merger. “It is interesting to note that this is CRI’s biggest M&A deal in its history, and it comes on the heels of their private equity deal with Centerbridge Partners and Bessemer Venture Partners,” he said in a statement. “CapinCrouse, a top 125 firm nationally, is viewed by many as the preeminent firm in the country when it comes to the audit and related advisory  services of nonprofits and religious organizations. My intuition suggests that going forward, we will see CRI expanding its geographic reach nationally by combining with more top 200 firms.” 

Last August, CRI added ProSport CPA, a firm in New Kent County, Virginia, offering tax and accounting services within the sports and entertainment niche. In 2023, CRI expanded into Oklahoma by adding Stanfield + O’Dell PC, a firm in Tulsa. CRI expanded to South Carolina in 2022 by adding Lanning Group LLC, a firm based in Mount Pleasant in the Charleston suburbs, and expanded in Florida by adding Alonso & Garcia, a firm in Miami. It expanded that year in Florida by adding Travani & Richter in Jupiter, and in Texas by adding Pharr Bounds LLP in Austin.

In 2022, CapinCrouse acquired the Global Center for Nonprofit Excellence.

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