But who can replace a CPA?

As part of an engagement involving a construction company, the advisory, tax and accounting firm Grassi had to analyze labor, materials and other components of the client’s work-in-progress.

Traditionally, that’s a tedious job with a numerous inputs that can gobble up a lot of time and a lot of staff. But Grassi streamlined the process with robotic process automation, or RPA, which uses computers and artificial intelligence to automate many labor-intensive business processes.

“We use a combination of internally developed and off-the-shelf RPAs,” said Stephen Mannhaupt, a Grassi partner and Assurance & Attest Services leader who also spearheads accounting technology initiatives for the firm and its clients. “We have a full-time employee who identifies tasks and automates them with RPAs.”

High-tech advances like blockchain [a shared, secure ledger that facilitates the process of recording transactions and tracking tangible and intangible assets], RPAs and others offer businesses safer, faster ways get things done. But these electronic brainiacs won’t put CPAs out of business, according to Mannhaupt and others.

“Technology won’t replace CPAs and auditors, but it is changing the way we perform our work,” he noted. “AI, RPAs and other advances allow us to become more efficient by taking over non-value-added tasks and giving professionals more time to engage in critical thinking and solve problems.”

Repetitive tasks

The firm is targeting tasks that are repetitive, and “that we have to do on a consistent basis, like certain spreadsheets,” according to Mannhaupt. “We’ve got bots that can sift between programs to get information, and also pull data in from sources like the internet.”

A mixed approach for personal finance

Backed by artificial intelligence, “robo advisors” — services that use computer algorithms to build and manage a client’s investment portfolio, often with low or no commissions — have made big inroads in the personal finance space. Invest-ment giant Vanguard offers a robo advisor called “Vanguard Digital Advisor,” while app-based companies like Robinhood and Acorns specialize in a robo-first approach.

Will this crowd out some CPA firms that, over the years, added personal financial services to their roster of offerings? The original thinking behind expanding to personal finance was that accountants — who already had an insider’s look at their clients’ situations — could leverage that knowledge in the financial planning space, too.

CPAs like Marc Scudillo — managing officer of EisnerAmper Wealth Management and Corporate Benefits LLC — don’t feel threatened. “Robo advisors can be great for individuals who don’t have complex financial needs,” he said. “Robos can easily deal with rebalancing a portfolio and developing suitable asset allocations.”

But when it comes to deciding on taxable- and non-taxable-investment mixes, spending strategies and other heavy-duty issues, “Robo tools can’t effectively do the job,” he said. And for high-end services like behavioral coaching — basically helping clients to understand why they make the choices and have certain risk and other preferences — nothing beats the personal professional touch, he added.

“Some individuals want investments that outperform markets but are they comfortable with the increased risk,” he asked. “Others want protection and stability, while some others are driven by tax efficiencies, or by incurring the minimum amount of investment-related costs. Through behavioral coaching, we can help clients understand the interplay between their preferences and the way the markets work.”

Human professionals can also make sense of the complexities that come into play when people try to balance their family owned business with their charitable-, estate- and other planning needs, Scudillo added. “You can’t automate these kinds of human elements. A robo advisor by itself misses the empathy of understanding a client’s personal needs and drivers.”

That doesn’t mean there’s no place for robo advisors in Scudillo’s world. “We do incorporate robo services for certain clients and classes of assets, depending on the particular situation,” he said. “So we see robo-advisory services as a complement to human professionals, not as a replacement.”

One “high touch” task would be analyzing the investments of a corporate benefit plan to determine the fair value of its components. “In the past, we would manually go to an independent website and get the information about the stocks and other securities, search for their values at different points in time, and then bring that information back to a spreadsheet for comparison and analysis,” he said. “The company plan could involve thousands of securities, which meant a lot of labor-intensive hunt-and-peck searching. Bots can cut a lot of time from that.”

Grassi is also using RPAs to assist in sending out confirmation letters — a time-consuming process, often associated with an audit — where CPAs verify bank and other balances by requesting the information, usually as of a specific date, directly from the client’s bank or other institution. “Instead of manually typing a letter, sending it to the institution, and then entering the response into a spreadsheet and comparing it to the general ledger, we’ve been able to automate that process,” Mannhaupt noted. “We used to assign these kinds of tasks to first- or-second-year staff and they’d get frustrated. Now I can free them up for critical-thought assignments — they’re happier and this can help them advance to a higher position faster. At the same time clients appreciate the fact that we’re engaging in more value-added advisory services and less number-crunching.”

CPAs like Ed Guttenplan also aren’t worried about high-tech advances. In fact, he said these and other developments represent opportunities. “Our firm has an innovation council, which includes the head of IT, that considers trends three to five years ahead and how they’ll impact our practice,” noted Guttenplan, who co-founded the CPA and advisory firm WilkinGuttenplan and serves as managing shareholder. “We already utilize RPA for some audit processes; we’ve got some people that can do advanced, amazing things with Excel, and we can also get some apps to ‘talk’ to each other in ways they normally don’t do. All of this, of course, helps us to gain a better understanding of client processes, so we can deliver an even higher level of service to them.”

Another tech-related advance — the ability to work remotely — has yielded mixed benefits, he added. “WilkinGuttenplan has had the flexibility to work remotely for a long time, so when COVID-19 hit, we were able to seamlessly transition to a remote environment — to the point where our receptionist can handle calls from home,” he noted. “Working from home and sharing data with clients securely and quickly can save travel time, which is good, but there are times when you wish you could be together.”

Guttenplan also has a potential concern about increased adoption of high-tech. “As more transactions move online, I just hope that clients don’t start to select their accountants by simply clicking on an app,” he cautioned. “In the long run, there’s no substitute for establishing new connections and reinforcing existing ones through face-to-face meetings and speaking with others who have dealt with the firm.”