AI to drive shift to value-based billing, says NAB
The adoption of AI technology by accounting firms may see the traditional time-based billing model replaced, the major bank says.
The expansion of generative AI in the accounting space may accelerate the shift towards value-based pricing models by accounting firms, says NAB professional services banking executive Adam Holster.
Mr Holster said that with AI technology automating a wide range of tasks associated with traditional compliance work and opening up opportunities for accountants to offer higher-value, strategic advice services, it is likely many firms will also look to transform their billing method.
“If we think about AI being primarily responsible for activities such as originating a set of financial accounts, a BAS and helping support a compliance and lodgement program, and those services becoming largely digital and automated but overseen by a human, that raises some important questions for how you charge for those services,” said Holster.
“Do you say well on a time basis it actually took me 20 per cent of the time of what it used to so that’s how I’m going to bill it, or do you use a different approach?
“The other approach which we think will be the model that’s adopted more broadly is a value-based model where firms think about the value that the service provides to a client.”
Mr Holster said while the idea of data entry and other similar tasks may not be that appealing to the client, knowing that they’re compliant is highly valuable to the client.
If the firm is also able to offer the client other insights along the way about their business or their business relative to other industries that they wouldn’t have otherwise had, this will further enhance the value for clients, he said.
“It could just be around compliance benchmarking or insights that can be used as part of advisory services along the way,” said Mr Holster.
“It’s that advisory component that is going to be far more valuable to clients and I think when you’re in front of the client its much easier to be able to talk about the value the advice will provide them rather than what it costs the firm to be able to produce the advice and therefore what the bill is.
The automation of services is “reframing the conversation around the value created by the accounting firm” rather than the amount of time taken to provide those services, said Mr Holster.
A recent report by Microsoft and the Tech Council of Australia found that generative AI can automate 36 per cent of accountants’ tasks and assist a further 26 per cent of functions.
The report, Australia’s Generative AI Opportunity, found that generative AI could improve several industries and contribute between $45 billion and $115 billion a year to Australia’s economy by 2030.
The research identified the professional and financial services sector as one of the key industries within the economy poised to benefit from the technology advancement with generative AI to contribute between $5 billion and $13 billion annually to the sector by 2030.
About the author
