Perspectives from the Profession: BDO’s Tax Practice Leverages AI To Boost Efficiency, Quality

By Matthew Becker, BDO’s national managing principal of tax, and David Toth, Chief Growth Officer and principal at Winding River Consulting

In 2024, discussions about artificial intelligence are inevitable in accounting and advisory firms. Clients increasingly inquire about its impact on their service experience. Professionals, cautious about data security, are observing industry leaders like BDO and other top 25 firms, along with vendors, to see how they will drive innovation. This innovation is anticipated to enhance accuracy and efficiency across operations, growth, client experiences, tax compliance and audits. This year, practical applications are emerging from theoretical concepts, signaling a transformative shift in the profession.

The focus has primarily been on generative AI technologies, such as ChatGPT. However, for firms integrated into the Microsoft ecosystem, tools like Copilot are expanding their functionalities. Adopting such technologies necessitates comprehensive strategies, including firm-wide policies and rigorous data governance. For instance, using Copilot 365 alongside the Office 365 suite could revolutionize access to information, enabling users to search and generate content from emails, documents and PowerPoints to secure files and reports.

AI is set to play a critical role in the growth and operational strategies of firms. Consequently, we took an opportunity to explore BDO USA’s current AI initiatives and glean insights that could guide other firms in their integration of these technologies. The journey of integrating AI is no longer merely a possibility – it’s an imminent reality that firms need to prepare for.

 Assessing AI to Improve Client Service

 In the case of BDO, tax practice leadership began assessing AI with BDO’s core purpose of helping people thrive every day as the foundation. It was quickly determined that equipping professionals with the latest technologies and integrating them into client service workstreams and methodologies would give them the tools they need to do their jobs better and more efficiently. It would also free them to focus on delivering a higher level of client service.

When determining whether to adopt a new AI tool, there are several initial questions to ask. For example: Does the tool help our people do their jobs? Are we able to use the tool responsibly and effectively? Are we able to appropriately resource the tool? Does the tool easily integrate with other systems in place as well as with our current data architecture?

As part of its ongoing digital transformation and innovation strategy, BDO’s tax practice has taken an intentional approach to embracing new AI technologies – one that simultaneously recognizes the value of these tools, but also acknowledges the inherent governance, data security and other potential risks of the technology.

Pairing Emerging Technologies with Client Expectations

BDO tax leaders are continuously keeping their finger on the pulse of emerging technologies with clients. Clients want to know how AI and other technologies will be used to provide the services associated with a given project. For BDO, these technologies are expected to increase the firm’s capacity and enhance the value the firm brings to clients. Clients of Winding River Consulting are also focused on operational efficiencies, leveraging AI-driven technologies to remain competitive in attracting talent, delivering services and addressing capacity challenges. It’s a new dynamic that’s prompted countless interesting conversations – and opportunities.

Some of those conversations have centered on concerns about AI’s impact on jobs and staffing, similar to discussions about other emerging technology. For instance, when Microsoft Excel launched, it was predicted that the technology would render accountants obsolete. But if anything, the opposite was true; it dramatically increased the industry’s capabilities to provide clients with tailored, detail-driven solutions. AI technologies have similar promise – they’ll change the complexion of the industry, but ultimately, many believe they’ll lead to significant productivity gains.

At BDO, new applications are considered from a governance and a business case perspective by a multidisciplinary internal group dedicated to assessing AI and other emerging technologies. Applications are then tested by a diverse cross-section of BDO’s thousands of tax professionals. Every potential application is assessed through the lens of whether it will unlock incremental value for BDO’s clients.

BDO and Microsoft: A Growing Relationship

BDO’s strategic alliance with Microsoft is central to how the firm is integrating AI capabilities. Many of the internal AI applications BDO’s tax practice uses run on the native features of Microsoft Copilot, and the team’s AI steering group (as referenced above) is consistently looking for new, smart opportunities to leverage these technologies. BDO is exploring Copilot in BDO Tax UserVerse, a project management platform developed with Microsoft using a combination of Microsoft technologies and other digital tools.

From using Copilot to highlight action items from a Microsoft Teams meeting to drafting follow-up emails, BDO’s tax practice is already applying AI technologies to streamline many routine processes. Today, the firm is testing Copilot licenses throughout the tax department and is strategically studying greater application.

The standard of the output has surprised many. Team members have reported that even a highly skilled notetaker would struggle to summarize meetings with the same speed and accuracy as Copilot, and these efficiencies are directly translating into benefits for clients and professionals alike.

Teams save time on routine, manual tasks, allowing them up to focus on the activities that are most valuable for clients – and more energizing to work on. For clients, that translates to more efficient services and improved accuracy, and for BDO, it results in improved risk control and revenue maximization.

Building a Standardized Approach

The value of any AI technology is dependent on its inputs. Establishing and maintaining a high quality of data demands strong internal processes and a standardized approach to projects and services.

Without these, it’s difficult to justify the big investments in technology and AI that are required to change the way firms operate. At BDO, taking a uniform approach to importing, analyzing, retaining and publishing data has been key to unlocking the full potential of Copilot and other AI tools. A close partnership between IT and the tax department has been central to BDO’s initial success.

Another key focus area has been driving standardization in processes and workflows. It’s a precursor to adopting AI tools, and it creates a flywheel effect, strengthening AI models and improving outcomes.

While standardization is a foundational building block for firms looking to extract the value of their data and AI, it is no easy task. This is often overlooked and almost always underestimated in time and effort. No matter where you are on your digital transformation journey, ensuring an appropriate focus on standardization is essential for success.

Innovating New Use Cases

BDO’s tax practice is maintaining an open mind to the potential applications of emerging AI technologies. Under the guidance of the steering committee, the firm is currently exploring several use cases. One example is the internal deployment of Chat BDO, a language model built for internal use that’s similar in nature to OpenAI’s ChatGPT model.

The accounting industry continues to face a shortage of qualified talent, but there’s optimism that by embracing the opportunities AI technologies afford, the firm will realize significant efficiencies while remaining people-focused. BDO’s approach to AI, for ourselves and for our clients, centers on people: engaging them, empowering them and inspiring their imaginations. When humans and technology come together in new ways, we can tackle new problems and reach new heights.

Building for a Better Future

There’s no question AI technologies are poised to have a powerful impact on the industry. At BDO, the firm’s tax practice is taking a client-centric approach focused on streamlining processes, improving work products and allocating resources toward high-impact tasks.


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