Hello, my name is Gillian Bowen and this is Small Firm, Big Impact.
If we take that down to what we do as chartered accountants and the way that we help organisations, I think the biggest impact that we need to be thinking about is all around productivity. Humans with AI will replace humans without it. Now, that's not going to happen tomorrow. Um, but I think that's probably the next horizon that we're looking at. And so I think it's extremely important to get across this.
It's the podcast giving Chartered Accountants the up to date information they need to do their jobs. Each episode, I share resources, tools and expert advice provided by Chartered Accountants Australia and New Zealand and a range of people across our profession. So get following the pod in your favourite podcast app. Let's start a conversation. Today, we have Kayur Patel CA. The topic, Artificial intelligence, but specifically tailored to accounting; accounting right
now in 2024. But also what's just around the corner. Kayur welcome to Small Firm, Big Impact.
Thanks for having me Gill.
So regular listeners of the podcast will know I like to get my guests to take me through their expertise and why it's relevant here. Why you're on the podcast with us. Take it away.
Yeah. Thanks, Gill. Um, so I've been in this space for quite a while, and I've been very lucky with my career to have roles that have allowed me to explore the cutting edge of technology. Um, so for a day job, I spend my time, um, immersed in the AI space at PwC and helping ourselves and our clients get across AI and what it means for their business. Um, I also lecture in this space at at the University
of Auckland as well. Um, and that's really cool because I get to start thinking around how this is going to impact us as a society, our industry and in our future. Um, and also as, as I am relatively involved in the, in the CA space on some local governance committees. And so I get to have conversations with CAs around what in the AI space is really of interest, what the concerns are, why people are excited and how this could
impact them. So it's something I'm immersed in a lot of, and it's something I really enjoy doing.
Mmm, okay, this is great. I feel like we've got the right person for the job here, which is fantastic. Now, we have talked about AI on this podcast before. You're right, it's a topic that our members come to us regularly about, and it was an episode back in season three, and I just kind of sat down with a member in a smaller practice and asked how she was using generative AI. Right? So what she discovered it could do what she thought might be helpful to practices going forward. It was all
kind of new-ish at this stage and was evolving. And I mean, gosh, it's still evolving, isn't it? We're all just kind of testing the waters and it's moving so quickly. So I thought it was time to again discuss this topic. And it is something that is impacting accountants and we can't ignore. And it is complex and an important one, as you would know. So Kayur and I have decided that it would benefit our members and our listeners if
we did this in two parts. Right. So this episode is part one, and the episode straight after this will be part two. Part one we're going to focus on what I'm thinking is the what, the why, how, when, what if sort of discussion, the landscape in 2024 and then part two will focus on accounting specific use cases relevant to right now. So make sure you're ready for the episode that'll follow this, so part two as well. But let's get cracking. So, Kayur what does AI mean, essentially?
Why does it matter to New Zealand and Australia, to accountants?
Yeah. It's, um, it's a good way to start. Maybe we. Maybe we start with why it matters, and then we can go through what it is. So, I mean, it matters for a lot of reasons like this technology could really change the way that society, um, thinks about itself, the way it organizes itself. There's some really high level
existential things that this could have an impact on. But if we take that down to what we do as chartered accountants and the way that we help organizations, I think the biggest impact that we need to be thinking about is all around productivity. So, um, I live in New Zealand. New Zealand, we're not a very productive country at all. And and in fact, we're way down at the bottom of
the end of that spectrum. And I think Xero, which you'll be aware of in Australia as well, they came out with a report last year to say that if New Zealand was to match the same output as a country like Ireland, similar, similar factors going on in Ireland. Um, every New Zealander would have to work on average 11 hours a day more than what they already work. So on top of what they already work. Wow. Um and you guys in Australia are doing better than us, but still
not at the top end of the spectrum. You're still kind of in that middle bucket, you know. AI has the ability to change the game when it comes to productivity. And if we make the investment and take the initiative to harness the use cases in the ability for AI to make us far more productive, far more efficient, we can have both of our countries really skyrocketing up that curve.
If we don't, we're going to fall further and further behind, because you can bet that the other countries at the top end are going to be doing that as well. And so when I think about what accountants do, we help the backbone of business in Australia and New Zealand, small medium sized business. And I think as advisors it's our job to help our clients, these businesses get across this new technology and understand how to implement in their business in a safe, reliable way to really get up
the productivity curve. That'll help them. It'll help us, and then it will help our economies in New Zealand and Australia as well.
So there's two parts there to that for me. So it's not only you understanding it as a member, as an accountant to how it can help your individual business, but then also being able to understand it enough to do that advisor role to show your clients as to how it can help them.
Yeah, I really think we're quite lucky and privileged in our types of roles we get to do it from both perspectives. And even if I think about the journey that we're going on in our own firm, you know, we are very much of the opinion that we got to do this to ourselves. And we've we've got to go through this journey ourselves. And then we have the ability and the experience to help our clients do that as well.
So I think for the listeners of this podcast getting on to some of these AI tools, and we could talk about some examples, but and then we'll, we'll do some specific ones in the next, um, in the next episode, that's going to really help your listeners get across some of these productivity gains for themselves. But I think there's also another piece around here. You know, we've talked about accountants moving from just focusing on compliance to also being
those well rounded business advisors. I think this is another arm of that well-rounded business advisor that we should be looking at.
I might tie that into the next question I want to ask about what exactly generative AI is. And I love the way now it's known as Gen AI. So spelling that out in case people haven't heard it or realised it's already being abbreviated. Um, it. If we discuss what it is, it'll show that it's more than just a fad, that it is a real thing.
Yeah, absolutely. Um, and I think the easiest way to explain it to people that haven't come across it, um, before is, is that it kind of operates in the same way as our brains do. And in fact, the underlying technology that generative AI has been around for a long time, and it's the study of neural networks, and
it's basically trying to mimic the way our brains work. Um, what's happened relatively recent though, and, and ChatGPT kind of made this popular, but there's a lot of others in the same space um, was the ability to also include what we call natural language processing, and that's to get this technology to think like a human, because you can understand the English language or Spanish or Hindi or whatever might be but the way we actually use it is
very we don't we don't speak in the most efficient way. We've got colloquialisms, all those types of things. And so what happened recently was this ability to get this awesome technology, which has been improving at a rapid rate, to also understand natural language. And that's been the real game changer. Um, so something like ChatGPT. And again, I know that's just one of them, but it's probably the most well known. Um,
it GPT stands for generative pre-trained transformer. And so what it means is that they took these neural networks, these these this piece of technology, and they basically got it to ingest a whole bunch of data and information from the internet. And it just let it loose. And this technology was then able to, as it ingested, start finding patterns and learn how to predict things. And that's really all Gen AI is.
It's just a tool that's good at predicting what the next piece of text might be, or what you actually mean when you ask it to do something so that if it reads, for example, an article on Daniel Carter, um, it might predict that the next words are going to be All Black, and it'll then be able to test itself to figure out whether it gets it right or wrong. And it will know or store that in the memory bank,
not the actual information, but its ability to predict. Um, and so every time it reads something new, it's predicting every single word and then figuring out whether it gets it right or wrong. And that's how it's able to really improve at such a rapid rate.
So you touched on it briefly, then, um, in the sense of why accountants should be interested in that. Um, that, that, that is helpful in the sense of understanding. ChatGPT. But why does that apply to the profession? What other bits and bobs should we know about to show why we should be interested in this space?
Yeah. So if I think about what we we would do as a chartered accountant advising businesses, um, you could probably and there's way more nuance in this, but at a high level you could probably separate it, separate out what we do into a couple of different fields. Um, we do some stuff where we build relationships with clients, and we understand their business and we understand them as a person, and we understand the market that they're in, their customers, all of those types of things. And that's
really built on human relationships. And then off the back of that understanding, we will then help those businesses with certain tasks. Now it might be accounting and tax preparation. It could be things with applications for research and development grants, whatever that might be. The relationship building and all of those things at the moment requires us to have that
human to human connection. But the task of doing the stuff off the back of that, that is all about generating text, generating data, understanding data to then generate more data or text. And the use of AI to do that will allow us, and it was already allowing us to be far more efficient at how we generate the data or the text, or understand what the data might mean to then be able to go back to our client and provide meaningful insights or, or just do what
we've always done, but make it more efficient. And that's where the tool, these tools are playing in that space.
So it's like they're an extra set of hands, but you would need to check their work.
Absolutely need to check their work. And your listeners have probably heard around things like hallucinations where you've got, I go on ChatGPT to tell me that a fringe benefit text didn't exist in New Zealand, which is obviously very incorrect. So there's this absolutely a need to check. Um, and it's not perfect, but, um, the rate at which these technologies are improving is very, very quick.
So what could this mean then for the accounting workforce? Um, and I'm thinking in particular we are talking to small and medium sized practice members here.
Yeah. So I think, um, small practices and medium sized practices that are getting across this right now, what they're finding is that they're able to do the stuff they already doing, but they're doing it a little bit more efficiently, right? So if you get a tool like this to help you draft an email to a client, maybe you have to draft a challenging email around a client wants to reduce fees and you don't want to reduce fees. You've got
to put some nuance in there. These tools can help you do that um, quite well and a lot quicker than you used to be able to do it. Maybe if you have to, if you've got Excel spreadsheets that you've got lots of data on and you want to manipulate that data to come out with some graphs or a report or whatever might be, you would do that anyway, but you can get it done faster. You can get
it done a bit more quickly. And at the moment, those are where those use cases are helping me generate text or generate visual data visualizations or understand data help me do that quicker than I used to be able to do. At this point in time it's not yet at the level where I would see it saying, okay, I used to need a person to do this, and now I'll take that person out and, and replace it
with this either single or multiple tools. It's more that we've got people in there just being more efficient at what they're already doing, and then being able to spend more time at the value add stuff, have those discussions with the clients, build those relationships, all the stuff we want to do we don't have the time to do because we're bogged down and in the data manipulation and the processing.
What happens if you don't get across this info? If you're just like, I don't have time to get trained and have time to read, it's not something that's ever going to impact me.
Yeah, well, see, my personal view is that, um, you know, the big next big paradigm shift with AI will be around the fact that humans with AI will replace humans without it. Now, that's not going to happen tomorrow. Um, but I think that's probably the next horizon that we're looking at. And so I think it's extremely important to get across this for two reasons. One, there's some real
value that you can get right now. And we're seeing businesses, both accounting firms and um, and, and their clients seeing some real value right now with specific use cases that are very useful. But the second piece is this technology is only getting better and better. And I think your last guest on this topic, um, mentioned the fact that, you know, she's really looking forward to the time when AI is built into the existing tools she's already using.
That's not that far from happening. It's happening right now, and it's going to continue to happen. And so if you're using these AI tools now, by the time they're integrated in the stuff you already use or the stuff you want to use, you'll already be across it. It's not going to be as steep a learning curve as it might be when you find that you have to interact with this stuff all the time, day in and day out,
you can't escape it because it's just built into everything. Um, and the reason for that, and I think this might be something that people often miss, Gen AI doesn't work unless you know how to use it well, and in fact, it actually is worse if you don't know how to use it well. Like if you just if you ask open ended questions, you don't iterate with it. You're not specific enough with your type of prompting. You don't give
it the right persona. It can provide you with a lot of material that is just irrelevant and will take you longer. And so understanding how to use it is important.
I got two questions out of that, the first one is when you said humans with AI will replace humans without AI. Do you mean that those businesses or, you know, sole practitioners who who aren't, those clients who aren't using it will just fizzle out because they can't keep up? Is that what you mean essentially?
Yeah, I think there will come a time where that is absolutely the case. Um, now, if you ask me to predict a timeline as to where that happened, I don't think there is. There's so many variables as to that.
No.
But I do think that, um, you know, in our industry particularly, there is a need right now to have advisors and chartered accountants spending more time on the relationship building and the value add. Every, every accounting firm, every accountant I see, they've been talking about that for years. Um, this is the opportunity for them to be able to do that. And I think the ones that are able to use AI to then do that processing, free them up on the value add, they're going to be the ones
that are successful. Um, and therefore they're going to be the ones that are, that are more valuable in the future.
So part two will go into some specific use cases. But before we get stuck into that, and obviously that episode's next, there will be people listening along going, okay, this is great. I do want to get some information. Where do you start? Where do you find that training that's relevant to you?
Yeah, it's a good question. Um, and it probably depends on where you are on the, on the spectrum of what your, your ability to immerse yourself in this stuff. Um, I think to start with, it's really important to have a base level general understanding of what the what this is, the different options available to you and just how to use it just for text. Um, there's lots of different
podcasts out there. There's lots of different YouTube videos out there. Um, and, and maybe we can provide some, um, some links or something like that.
It's a good idea that. Yeah, we'll have a look at it. Yes. We'll have a look at some useful things to put in. And normally as well, people who listen to the podcast will know I love a plug. I love putting a link in the show notes. So we'll find some some relevant stuff that you can you can listen to. We've we've answered our own question. We will do that. I should have thought of that ahead of time, but continue as you were.
Yeah. I just think that's a really good way. And there's some that I, that I'm quite partial to. And I think it's a really good way to just get up to speed. I think the best thing you can do is just understand how to use a ChatGPT or
a Google Bard or a Microsoft Copilot. It doesn't matter which one, but just learn how to understand, how to interact with them in a way that is useful, as opposed to just treating these systems like Google, where you're asking it questions and expecting it to come out with a good email that sounds like you, it's not going to do that unless you know how to use it. So those general
things I think are really, really important. And then after that, and what we'll cover in the next episode are some specific, um, some specific use cases. And then of course, it's specific ways that you can get up to speed on those specific use cases. So I think it's probably worth delving into the, the realm of, of data analytics and data visualization. Lots of accountants are helping to prepare board reports or management reports and and all of that data manipulation is
quite a good use case. Um, things like drafting, you know, automated client reminders. There are a lot of us that are sending prov-tax reminders or whatever else it might be. Um, you know, there's some there's some real use cases in that space as well. So but for those there's specific places you can go for specific use cases.
Hmm, now you and I are definitely excited about this. We sound excited about this. Uh, two questions in before we wrap up and then everyone make sure you're listening to part two. Are accountants excited enough about this. Are enough of us thinking about this. And if they're not, how do we get them excited about it?
Yeah, it's a real range. Um, you know, when I go in and speak at conferences, there's there's definitely a group that are super excited, but there's also some that are apprehensive and fair enough. Like, um, I can totally understand how how a change in technology of this magnitude could be something that makes you apprehensive. I think on the whole in our industry, though, this technology is only
going to be a good thing. And I know I've seen this probably four times now in this podcast, but like every accountant I have, I have talked to, they really want to spend time doing the fun stuff, the valuable stuff, um, the value add stuff with clients. And this is the best piece of technology that I've ever seen that can help us to spend time out of the weeds and into into that type of work that we really want to do. And it's just about understanding how
to use it. And as the technology improves, we're improving our understanding of how to use it. And together we'll get to that level where we can we can really have and we already have a massive impact on on small and medium size business. I really think we do and we can. That's only going to improve. And that makes me really proud of the industry we're in. I think there's very few industries that can have such a
direct impact on small, medium sized business. Um, and as you know, that's the backbone of our economy.
And it's also the backbone and point of this podcast. Small, Firm, Big Impact, I love it. What a way to round out this episode part one of this AI special. I'm excited about this discussion. I'm excited for part two of this AI special so make sure you're following the pod so that you are ready for it to drop as well. The next episode will look at what Gen AI is good at, what it's not good at, how leading accounting functions are responding, and some specific use cases that we've alluded to in
this episode. And we'll reveal some practical steps you can do ASAP. That is all we have time for. Have you checked out the podcast page on the CA ANZ website? There's plenty of other great content experts, interviews and resources tailored to you, so I'll put a link to it in the show notes so it's easy to find. And of course, you'll see a link to the podcast in the newsletters you receive from CA ANZ. If you want to get in touch with the podcast, email podcast@ CharteredAccountantsANZ.com
and follow the pod in your favourite podcast app. Let's start a conversation. Thank you Kayur Patel, for being my guest on Small Firm, Big Impact and for coming back for part two.
No worries. See you next time.
Bye bye.