Accounting
Generative AI accelerating product development, increasing competitive pressure says solutions providers
The generative AI revolution, now several years old, has materially accelerated the software development cycle, allowing solutions providers to design, build and release new products faster than before. But this extra efficiency has not served to reduce stress but rather increase it among leaders as the widespread use of these tools has turbocharged already intense competitive pressures.
Coding
Beyond text generation, coding support has been touted as one of the primary use cases for generative AI, with several
However, there was also remarkable uniformity in saying that code generation capabilities were not the primary factor in why generative AI has sped things up. Indeed, there was a general recognition that generative AI, left to its own devices, does not produce quality code. Chris Szymansky, chief technology officer of accounting and auditing platform Fieldguide, spoke for many when discussing the quality of AI coding.
“Certain activities are not as useful yet. Like writing high quality code itself, like the code a senior engineer would write, those tools are not helping with that yet,” said Szymansky.
Rather than writing the code itself, generative AI has instead been an invaluable tool for helping engineers review, analyze and optimize their own code, identifying root causes of bugs and errors, testing and evaluating their work, and making suggestions when they’re stuck, all of which are as important as the coding itself.
“I think this drives speed into the development process, but also more importantly for us, it drives long term quality improvements into our products as well in terms of how they perform at scale,” said Joel Hron, chief technology officer for Thomson Reuters.
This, ultimately, has facilitated the prototyping process. Coming up with new products and quickly making a prototype has become much easier, as has making iterative improvements on it, according to Dan Miller, executive vice president of Sage’s ERP division.
“The greatest benefit of generative AI accelerating our product development is the rapid prototyping of new feature sets to ultimately drive the value for our users. Sage customers have always recognized the tremendous value our platforms have been able to deliver relative to cost, and this product acceleration only supports our ability to deliver the best value. By saving development times, we can gain more and more efficiencies to help our customers grow their business by delivering greater value,” he said.
Non-Coding
However, product development is more than just code. A project is built on not just the technical aspects but myriad other factors like design, user experience, market research and overall business strategy. Generative AI has had a huge impact in these areas, serving to accelerate the overall product development cycle. Leaders cited uses like summarizing progress meetings, drafting reports, and tracking key metrics and milestones. Enrico Palmerino, CEO of accounting automation solutions provider Botkeeper, spoke for many in saying it has also been valuable for analysis and research in seconds that normally would take days. These insights are then employed to improve product design.
“If we have a question and we can’t understand what is going on with our users [it can help]. I just did this in an executive meeting recently: [I asked] what is the biggest problem people are experiencing? And before, it used to be we needed someone who would look at all the tickets coming in. Now you can just ask the AI and it will be like ‘16% is this, 35% is that,'” said Palmerino.
Sage’s Miller, also mentioned analytics as an aid to development, adding that this has greatly facilitated not just prototyping for current products but ideas for future releases as well.
“From a non-code perspective, we can pipeline product development more efficiently using data from user metrics, such as product features that our users are leveraging more than anticipated and what new features they might benefit from in future releases. In other words, generative AI is facilitating market research for us in the most efficient way possible and uncovering user patterns at a rapid pace,” said Miller.
Another major non-code aspect is content development. Brian Diffin, chief technology officer for Wolters Kluwer, noted that their own products have a lot of content which needs to be drafted, edited and curated. Generative AI has significantly sped up this process, allowing them to draft materials much faster.
“Some of our products—let’s say Research for example, where we have editorial people who are finding new legislative content and then curating that content and summarizing it into more digestible language and concepts for our research products—the editors are using generative AI to help them do that and it is saving a lot of time,” said Diffin.
Jayme Fishman, chief strategy and product officer for Avalara, made a similar point, saying that content generation has been vital not only for documenting use cases “because for everything you build you need to document it,” but for content generation as well.
“We don’t have a product that does not rely on content, because we are a compliance solution and everything we do is governed by some law somewhere that needs to be translated to business logic, and using it to help in that definitely helps accelerate our ability to do more with less,” he said.
Time and money
While a project may require fewer labor hours than it did before, this has not necessarily translated into lower development costs. Diffin, from Wolters Kluwer, noted that while projects require fewer labor hours than before, there are still technology costs to consider. For one, generative AI is very compute-intensive, which can lead to higher data fees from cloud providers. It is a challenge, he said, to balance functionality with cost.
“We’re doing a lot of experiments with this, there’s so many approaches on how you implement a generative AI based piece of functionality in the software—we’re evaluating not just the large language models but what their capacities would provide and what is going to be the cost of that feature when we go into production. … We’re seeing some companies right now develop small language models to lower the cost of compute, so we’re doing a lot of experimentation now on what is the best way to release this from a feature perspective and how we can optimize cost,” said Diffin.
Hron, from Thomson Reuters, though, felt that costs, whether in terms of labor hours or technology infrastructure, is beside the point. The benefits of increased efficiency and capacity outweigh these kinds of considerations, and vendors are usually more focused on the product’s quality than the speed at which it is brought to market.
“These things are making it easier than they were before to provide more flexibility on how we deploy our resources across teams, and how we bring people to bear on new problems. I’d emphasize quality in terms of applications—not just shipping things faster but better. I think for us that is as important or even more important than speed,” said Hron.
And at any rate, even if a project does take fewer labor hours, no one is using the extra time to take a vacation. Everyone, instead, puts that saved time into more work, whether that’s adding features and refining the quality of the existing project or starting up a new one entirely.
“We’re a startup company so anything we can do to move faster and be laser focused on our customers, that is where we put our power into. If we can do that X percent times more, that is huge. So that is where we’re putting the time: more R&D, more product, shipping more product, faster dev cycles, happier customers,” said Fieldguide’s Szymansky.
So even if AI is saving people labor, it seems people are working more than ever. Botkeeper’s Palmerino noted that while AI has saved tons of hours in the product development cycle, people—including himself—have even less free time than before.
“What you will see is people going beyond, because they are trying to benchmark the new output expectations. Inherently, we tend to do more. … I’m not seeing work hours come down. They all said AI would mean we work shorter days, but you actually work longer days,” said Palmerino.
Competitive pressures
A large factor in this situation is that generative AI has greatly improved efficiency at many companies, including the competition. Consequently, competitive pressures have increased significantly since the introduction of generative AI, as everyone with these tools is developing products at an accelerated rate to the point where this pace is more or less the new baseline. Hron, from Thomson Reuters, said that as much as he’d like to be sitting on a beach sipping mai tais, the current market environment just doesn’t allow that.
“The interesting dynamic is the degree to which this technology has moved everyone forward in terms of pace, not just Thomson Reuters. The entire market can move faster, and our customers can move faster, and their appetite for more has grown as well. … If anything, I would say it is pushing us to do more, even if we can do each bit a little faster than we were before,” said Hron.
Avalara’s Fishman noted that this space has always had an “innovate or die” dynamic so the types of competitive pressures they’re facing are nothing new, but what is new is their sheer scope and scale. At this point, pretty much everyone is using AI tools, so adopting the technology can seem less about seeking advantage and more about avoiding disadvantage.
“AI really has the promise of making your solutions better, strong, faster. But that is the worst kept secret in the world. You can’t turn on the news or read an article in Accounting Today without reading about AI. Everyone’s awareness creates a dynamic where a choice as to whether or not to use AI is an illusion: there is no choice. You have to, or you will become obsolete,” he said.
Diffin, from Wolters Kluwer, pointed out that beyond incumbent competitors becoming more efficient, AI has also made it easier to launch a startup. With this technology lowering the barrier for entry in this market, there has been an explosion of niche products released at “almost a hypersonic speed because things are now easy to develop.”
“Someone, just a few programmers, can go to Azure, orchestrate a bunch of services, including OpenAI services, with just a bit of business logic and make a solution they can sell into the market,” Diffin said. Though, this may not be all bad. “We’re seeing evidence of that happening quite a bit. And of course we look at those startups as potential acquisition candidates.”
What’s a product anyway?
Botkeeper’s Palmerino noted, though, that as AI becomes increasingly intertwined with software development, the concept of a product release might start to lose its meaning. Right now, AI is still highly focused on specific applications, even if one interacts with these AI using natural language. In the future, he envisioned, AI might become advanced enough that it won’t necessarily need a discrete feature to do what users ask, it will just do it. In such a world respect, talking about a development cycle might not be as relevant to the experience of solutions providers as it is now.
Today, for example, someone might ask an AI built for insights how they can make their company more efficient, and the AI will say it found 12 financial institutions across four clients, all of which are capable of connection. Later, it might not only find those 12 financial institutions, it will prompt the user if they want the AI to connect to them now, and if so will just do it, all without a specific feature or functionality built in. It will just know how to operate the software.
“That is where AI is heading: to do full stack task completion for you, which will make it hard to understand releases. We do true releases where there is an update to the version or a very segmented or defined functionality change, but with the open-endedness of AI and the ability to do full completion of tasks, pieces will mostly be behind the scenes, I don’t think you’ll see or hear about them and, in many cases,” he said.
Tens of millions of lower-income retirement savers could soon get up to $1,000 in matching contributions toward their nest eggs each year — but they’ll need financial advisors’ help.
That’s the key takeaway from
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Financial advisors often focus on high net worth clients whose wealth stretches far beyond that eligibility. However, they also frequently work with clients whose businesses sponsor
“The impact is intuitively the biggest when people are changing their behavior, taking full advantage,” said Spencer Look, an associate director of retirement studies with
Advisors, employers and other parts of the 401(k) and retirement-savings ecosystem require some time to “not only to get the infrastructure, the plumbing in place,” but try to “target the potentially eligible participants in their plans and make sure they understand this is free money to them,” said Jack VanDerhei, the director of retirement studies with
“It’s a given that, if
What the study found
The current saver’s credit has reached fewer than 6% of filers due to design shortcomings like the requirement that they have an income-tax liability and a lack of knowledge among eligible savers, Morningstar’s report said. The researchers found “reasons to believe that the saver’s match will be more effective than the saver’s credit,” including the facts that savers will no longer be obligated to have federal income tax liability, that the money “will be directly deposited into their retirement accounts — a more tangible benefit that could encourage greater participation,” and that the law instructs agencies such as the Treasury Department to promote it, they wrote.
“That said, the success of the saver’s match will largely depend on how effectively it is implemented,” Look and VanDerhei wrote. “To maximize impact, the government and retirement industry should reduce barriers and minimize savings friction wherever possible, within limits. Clear and accessible communication and education — including an awareness campaign — are also critical to ensure qualified individuals understand and use the program effectively.”
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The maximum match of $1,000 on top of the first $2,000 in retirement savings each year will go to taxpayers with modified adjusted gross income of $20,500 or less as individuals, $30,750 or lower for heads of households and as much as $41,000 among couples. For those with higher modified adjusted gross income, the matching contributions phase out at respective levels of $35,500, $53,250 and $71,000. Among millennials and Gen Z savers, roughly 49% of Hispanic households, 44% of Black Americans, 29% of white taxpayers and 26% of other racial and ethnic groups will qualify for some level of matching contributions.
Using census data on those generations in terms of gender, marriage status and race and a simulation model called the “Morningstar Model of U.S. Retirement Outcomes,” Look and VanDerhei predicted that single women’s wealth at retirement could jump 13%, that of Black savers could grow 15% and Hispanic households could surge by 12%. Those figures assume that they get the highest matching contribution in 2027 and retire when they’re 65 years old, and that the program spurs more people to open retirement accounts and save more in order to take advantage. But even without behavioral changes, the saver’s match could boost the generations’ retirement nest eggs by 8%.
“When looking at the results from different demographic perspectives, we found that single women, non-Hispanic Black Americans and Hispanic Americans see greater benefits compared with other groups,” Look and VanDerhei wrote. “Moreover, our results show that workers in industries with a higher risk of running short of money in retirement are projected to experience a more significant increase in their retirement wealth under the new program.”
Help needed
The match necessitates “buy-in from everyone” across employees, employers, advisors, recordkeepers and governments, plus ample financial wellness education, according to Pam Hess, the
“Peoiple need help meeting their short-term financial struggles,” Hess said. “Employers are coming up with other solutions to help their workforce. You put those together with the saver’s match, and it could be really meaningful.”
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Until the policy starts in 2027, advisors could get a head start by trying to increase the number of households using the existing credit, according to Catherine Collinson,
“Most people don’t wake up in the morning thinking about taxes everyday, unless it’s April 14 — the day before everything is due,” Collinson said, noting that many people also push back on the idea that they are among the “low-to-moderate income retirement savers” eligible for the credit. “The general public does not relate to that messaging, so this is where it’s so critical for financial advisors who can help to get the word out.”
More ways to get involved
On the other side of the equation, the sponsors and recordkeepers could use a nudge from the advisors to ensure they’re giving the employees the means to get the biggest match “systematically, in a way that is doable and viable,” Hess said. Right now, many employers simply don’t “have all the information they need to know who’s eligible and who’s not,” based on their modified adjusted gross income, she noted.
“We know that engaging employees is really hard — getting that connection is increasingly hard in a noisy world,” Hess said. “First you have to figure out who qualifies, and then you have to get the dollars from the government into that account, which is not a connection that’s in place today.”
Advisors’ expertise could overcome some further barriers to participation based on the continuing problems that “there’s still a major trust issue going on any time the government gets involved” and some people may not understand how to open an IRA, VanDerhei said. They’ll also be able to point out that the match would benefit “a lot of people” to a certain extent, so it’s not just for those of the lowest means, Look said.
“Pro bono work, volunteering to help educate and talk through with people in the community who may be eligible is very, very important,” he said.
The Governmental Accounting Standards Board today published a post-implementation review report on GASB Statement No. 72, Fair Value Measurement and Application.
The
The report concludes that Statement 72 resolved the underlying need for the statement, which involved valuation issues from a financial reporting perspective. It also concludes that the statement was operational and its application provides financial-report users with decision-useful information such as fair value measurements used in the analysis of governmental financial information and fair value-related disclosures.
Statement 72 is eligible to undergo more extensive PIR procedures, culminating in a final report.
CohnReznick, a Top 25 Firm based in New York, is the latest accounting firm to receive a private equity investment, in this case from funds advised by Apax Partners, a private equity investment advisory firm also based in New York.
This represents the first institutional investment in CohnReznick. The firm plans to use the extra funding to accelerate its growth strategy, deliver more client services and attract talent. Apax will support CohnReznick in expanding service lines, developing technology for client solutions, entering new markets, developing talent and advancing its existing tech platform to drive further innovation and efficiency. Apax also plans to support CohnReznick in pursuing a targeted acquisitions strategy to further grow its client base. CohnReznick was the result of a
CohnReznick has over 5,000 global employees and more than 350 partners in 29 offices across the U.S. It earned $1.12 billion in revenue in fiscal year 2025. It ranked No. 16 on Accounting Today‘s 2024 list of the Top 100 Firms. The firm has clients in a variety of industries, including real estate, financial services and financial sponsors, private client services, consumer, manufacturing, renewable energy and government advisory.
“Our partnership with Apax is a milestone moment in CohnReznick’s history,” said CohnReznick CEO David Kessler in a statement Wednesday. “We have consistently delivered strong growth and cemented our position in the mid-market, thanks to our best-in-class talent, industry expertise, and comprehensive service offerings. This strategic investment from the Apax Funds will help us continue on our growth trajectory, expanding our solutions and geographic presence to meet client needs while continuing to create exciting career growth for our people. We were impressed by the Apax team’s track record in the professional services sector and their experience in driving operational excellence in complex businesses like ours, while continuing to create a best-in-class experience for employees and clients.”
Once the transaction closes, CohnReznick will operate in an alternative practice structure, as has become common with private equity funding of accounting firms CohnReznick LLP, a licensed CPA firm, will be led by Kelly O’Callaghan as CEO and provide attest services. CohnReznick Advisory LLC (which will not be a licensed CPA firm) will provide tax, advisory and other non-attest services, and will be led by Kessler as CEO.
“Over the past two years, we have built a strong relationship with the CohnReznick team and have been deeply impressed by the company’s culture, vision, and the consistent growth they have achieved,” Ashish Karandikar, a partner at Apax Partners, said in a statement. “We are excited to partner with David and the firm’s leadership team to fuel the next phase of growth. Together, we aim to accelerate service line expansion, explore new geographic opportunities, and drive innovation. We look forward to what we are confident will be a highly successful and rewarding partnership.”
Apax was advised by Guggenheim Securities, LLC and CohnReznick was advised by William Blair & Company, LLC. Koltin Consulting Group served as an additional financial advisor to both Apax and CohnReznick.
“It was love at first sight,” Allan Koltin, CEO of Koltin Consulting Group, said in a statement. “I can’t recall two firms and their leaders culturally and strategically aligning as fast as they did. When one side talked, the other side finished the sentence. No question in my mind, this combination will produce one of the next $2 billion firms in the accounting profession, but more importantly produce a lot of successful people and clients along the way.”
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