AI in accounting: Profitability analysis tools deliver better client value and higher margins

For firms looking to improve their operations and gain a competitive advantage, AI in accounting is no longer a nicety — it’s a necessity.

Clients expect more fluidity from their accounting service providers. They want firms to move beyond flat-fee and hourly billing models, and to provide transparency and predictability around pricing and budget management. To improve your pricing protocols, your accounting firm will need to adopt AI pricing software.

AI pricing software improves client value and profitable delivery by providing data-driven pricing capabilities and enhanced budget monitoring. The software provides predictive intelligence, so your teams can correctly scope, price, budget, resource, and monitor engagements. This ensures profitable engagement management while meeting client expectations.

With the right pricing technology, your firm can unify data across disparate sources, surface key insights, manage unforeseen risks, and increase efficiency across a range of core functions.

Pricing engagements for profitability and happy clients

Best-in-class AI profitability analysis tools help accounting firms increase profit margins. Using AI, your firm can leverage past data and outcomes to improve the accuracy and efficiency of pricing function. Free up your professionals’ time by eliminating the guesswork associated with unsurfaced data and manual processes.

As data accrues within the solution over time, the AI pricing software becomes increasingly intelligent. Each time data is refreshed, the AI incorporates new data points to continuously improve accuracy and reliability.

Harnessing the power of AI-fueled profitability analysis tools

To develop new budgets, firms must first gather source materials and conduct analysis. But firms that lack AI pricing software are stuck relying on spreadsheets and time-consuming manual processes to do so. The limitations of manual processes — including subjective estimation and unreliable data — open the door for significant scoping and pricing errors. This ultimately leads to unpredictable budget overruns and frustrated clients.

On the other hand, AI-based technology can automatically sift, sort, and categorize your firm’s previous engagements by shared characteristics. Your teams can then dynamically model pricing and profitability scenarios, and optimize scoping, resourcing, pricing, and planning strategies.

AI-powered analysis tools provide key insights, such as the number of accountants performing the work. You can also view the leverage or the ratio of senior and junior team members. Firm leaders can use these insights to inform staffing strategies.

Your firm can also use AI to analyze past engagements with respect to profit margins associated with leverage ratios. This helps the firm balance profitability with client value.

Monitoring budgets to actuals

Clients are challenging the status quo with their accounting providers. They’re looking for better value, transparency, and predictability throughout the lifecycle of the engagement.

Subsequently, once an engagement gets underway, clients expect their firms to proactively manage budgets to actuals. Clients don’t want to be surprised by overages midway through an engagement.

The right AI pricing software provides monitoring tools and automates reporting, so your firm can course-correct while keeping clients in the loop every step of the way. When firms have visibility into budget alignment, tasks, and milestones — as well as automated event-based alerts — they can keep engagements on track and clients happy.

Boosting engagement profitability

Faulty pricing eventually results in budget overruns and inefficient resourcing. Without the right AI pricing software and profitability analysis tools, firms struggle to model pricing and resourcing scenarios that ensure strong margins. And without ongoing oversight, firms are vulnerable to overbilling, which in turn leads to write-downs and reduced realization.

Using AI pricing software, your firm can explore pricing, resourcing, and profit margins in concert. Use dynamic modeling capabilities that become increasingly intelligent over time with the continuous influx of new data.

Supporting clients throughout the pandemic

With client-requested pandemic rate reductions on the rise, firms must be able to confidently respond to these requests in a timely fashion. With AI, accounting firms can figure out how to cut a budget by modeling rate reductions and other factors. When firms are able to respond quickly and reasonably, they stand out among competitors with respect to client-value delivery.

Improving time capture to increase realization and profitability

AI pricing software and profitability analysis tools can help firms improve realization and profitability. But achieving these goals ultimately depends on actually collecting fees.

Accounting staff generally struggle with contemporaneous time capture, which translates into underreported time that erodes revenue. When fee earners are tasked with reconstructing their time allocation, they prolong time-to-bill and time-to-collect cycles. Inefficiencies and deficiencies around billing and time capture significantly impact time-to-collect cycles and lost revenue.

Intapp Time streamlines the timekeeping process by automatically capturing hours as well as details around those hours. The solution also offers passive time-capture features, predictive timekeeping prompts, and full mobile access to make the timekeeping process even easier and more efficient for your accountants. With more accurate data around time sheets and work effort, your firm leaders can make better-informed decisions around resourcing and pricing.

Intapp Operations & Finance also ensure compliance with client billing terms at the point of time entry. Your accountants can facilitate compliant, rapid, and accurate time entries that reduce leakage and significantly shrink the interval time between time worked and payment received.

Informing better pricing strategies

To meet client expectations on value while ensuring profitable engagements, your firm will need automate its pricing function. More importantly, it will need to implement AI pricing software to surface and analyze key data, so your teams can create budgets for new engagements quickly and confidently.

By monitoring budgets throughout the client lifecycle, your firm ensures that there are no unhappy surprises for clients or staff. Improve client value, profitability, and competitive advantage with AI pricing software.

Learn more about AI in accounting. Discover how your firm can strengthen client relationships and enhance profitability with Intapp Operations & Finance, and check out our accounting-specific software.