US accounting firms with integrated systems feel AI ready

Firm360 has published research on AI readiness among US accounting firms, finding that those using a single integrated practice management platform were far more likely to say they were ready for AI.

The findings are based on a survey of 209 leaders at small to mid-sized accounting, tax and CPA firms in the United States, conducted by market research platform Centiment on behalf of Firm360.

The clearest divide in the data was in how firms manage their systems. Among respondents using one integrated practice management platform, 82% said they felt ready for AI, compared with 21% of firms using several systems with manual data transfer.

AI and automation disruption ranked as the leading threat to growth over the next three years, with 34% of leaders placing it among their top two risks. That was ahead of cybersecurity at 32% and increased competition at 30%.

Yet concern about AI did not always translate into confidence. Firms that identified AI as a top threat were less likely to say they were AI-ready than those that did not, at 53% versus 61%. Overall, only 22% of firms said they were extremely prepared to compete in an AI-driven environment.

The research also found differences within firm leadership. Founders and owners were less confident than managing partners, with 49% saying they felt mostly or extremely prepared for AI, compared with 70% of managing partners.

Software changes

The report also suggested a broad appetite for operational software change, even among firms that said business conditions were relatively healthy. Some 71% of respondents said their firms had grown revenue in the past year, while 76% were confident in their prospects over the next three years.

Even so, 81% said they were at least somewhat likely to replace or upgrade their operational software within 12 months. More than half, 52%, said they were very or extremely likely to do so.

That intention was strongest among firms with 100 to 249 employees, where 68% said they were very or extremely likely to replace or upgrade software.

Time lost

The study also examined the effect of disconnected systems on day-to-day work. Overall, 38% of firms said they lose four or more hours per person each week to re-keying data, chasing approvals and reconciling systems.

The burden rose sharply with scale. Among firms with 250 or more employees, 40% said they lose seven or more hours per person each week, compared with 4% of firms with fewer than ten employees.

When asked where technology and AI should have the greatest impact, respondents put internal operations ahead of revenue growth. Operational efficiency was cited by 35% of leaders and staff productivity by 33%, while business development ranked last at 17%.

That suggests firms are looking first to reduce administrative pressure and manual workloads before using AI to pursue new business. It also aligns with the survey's broader finding that connected systems are closely linked to how prepared leaders feel for wider AI adoption.

Advice on technology decisions still came mainly from people rather than software. Peer firms were named by 46% of respondents as a source of guidance, followed by consultants at 43%.

Even so, AI tools were becoming a more common source of input. A quarter of leaders (25%) said they turn to AI tools for guidance, ahead of conferences, vendor content, and trade media. Among AI users, ChatGPT was the most widely used tool at 61%.

Patrick O'Neill, Chief Executive Officer of Firm360, said the findings highlighted the importance of data structure in AI adoption.

"For accounting firms, AI isn't a threat. It's an advantage," O'Neill said. "But AI is only as good as the data you give it. To take full advantage of it, the first step is making sure all your critical data lives in one place. That's why we're so passionate about building the best practice management platform for accountants: we take care of the heavy lifting so firms can focus on their people and their clients."