From the shift to paperless workflows, to cloud-based bookkeeping, we’re now entering the age of AI-driven accounting. In this episode of Building the Premier Accounting Firm, host Roger Knecht sits down with long-time tech innovator Randy Johnston to explore how embedded artificial intelligence is transforming every layer of your practice—from simple prompt hacks to full-blown add-ons that automate reporting and forecasting.
Meet Our Guest: Randy Johnston, Accounting Tech Pioneer
Randy Johnston is an Accounting Hall of Fame inductee, a 14-time “Most Influential” honoree in Accounting Today, host of the CPA Practice Advisor podcast, and founder of firms like K2 Enterprises and Network Management Group. With more than 50 years in technology and a track record of early AI experimentation (“I wrote my first AI in LISP in 1975,” he recalls), Randy brings unparalleled perspective on what works—and what doesn’t—in modern accounting.
The Three Levels of AI Productivity in Accounting
Randy breaks AI adoption into three distinct tiers:
-
General-Purpose Prompt Engineering
Teaching teams to write effective prompts for models like ChatGPT, Copilot 365, Claude or Llama—“the prompt engineering actually turns out to be similar” across platforms. -
Vendor-Embedded AI
When product developers bake AI into their core offerings—tools like Impact Data or makershub.ai that generate drillable, transaction-level dashboards with one click. -
Specialist AI with Guaranteed Accuracy
Niche solutions from Wolters Kluwer or Thomson Reuters promising audited AI output. As Randy warns, “general models… hallucinate—they make stuff up out of whole cloth—and we have to have accuracy” in financial reporting.
Top AI Tools & Add-Ons to Supercharge Your Tech Stack
- Impact Data: Automatically hooks into QuickBooks Online to produce Power BI dashboards based on built-in DuPont and other business models .
- makershub.ai: Delivers true line-item extraction—splitting transactions across jobs or cost centers—that legacy tools can’t match.
- digits: AI-driven financial reporting and forecasting, though it highlights the need for specialist accuracy solutions.
Accuracy Pitfalls & Specialist AI
Randy cautions that while embedded AI can speed up routine tasks, it can also introduce critical errors:
“When these products are hallucinating…the problem in the accounting world is we have to have accuracy—well nuts, because that means we can’t really count on these AIs to always produce accurate results.” ?
By contrast, specialist offerings from Wolters Kluwer or Thomson Reuters come with guarantees and built-in safeguards, making them essential for any firm serving regulated industries.
Unlocking Speed with Neural Processing Units (NPUs)
A major leap in local AI performance comes from hardware acceleration:
“We are adamant now about all new laptops and desktops being bought with neural processing units in them… these AI models will run… on your phones or computers”.
Practically, that means trial balances generated in seconds via tools like Tally or ProSystem Tax—no cloud latency, no data privacy concerns.
Building Your Core Accounting Tech Stack
Selecting a primary platform—QuickBooks Online, Xero, Sage Intacct or Accounting Power—sets the foundation. From there:
- Add payroll modules, client portals and reporting engines.
- Layer in AI-powered apps only when they solve a real pain point (see “shiny-object syndrome,” below).
This modular approach lets firms scale without overcomplicating their environment.
Streamlining Workflow & Document Management
To keep client accounting services (CAS) running smoothly, consider:
- Keeper, Jetack, Carbon, Arrow for workflow orchestration, task assignment and client reminders ?
- SmartVault, Dex Prepare, Hubdoc, makershub.ai for automated document gathering and extraction—eliminating manual uploads and reducing errors .
Defining & Pricing Your Service Model
Randy advocates clear service tiers—bookkeeping/transactional controllership, advisory/CFO services and tax planning—and aligning tools to each:
“If I’m really doing advisory, first my preferred tools are those in the advisory area… if I’m doing CAS, I mention my CAS products first.”
Pair this with the “CAST” philosophy (Client Accounting & Advisory Services, Tax) to boost client retention and recurring revenue.
Best Practices for Technology Adoption
Avoid “shiny-object syndrome” by asking two key questions before any purchase:
- Is this solving a problem we already experience?
- Will it impact clients directly, or improve internal efficiency?
As Randy puts it, “go deep on what you’re already paying for…and commit to client-facing tools for four to five years” .
Emerging Trends & Future Outlook
- Quantum Computing: Once the domain of IBM labs, quantum-enabled AI may soon be accessible to mid-market firms within five years.
- Basis (Beta): An AI workflow tool that delivers 5× faster reconciliations on QuickBooks and 10× on Sage Intacct—“a clear game-changer in firm management” .
Conclusion
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