AI Will Kill the Billable Hour

Hey 👋 - Brandon here.

Happy Saturday to 1,809 growth-minded accountants.

Here’s one growth tip for you and your firm.

Today’s issue takes less than 5 minutes to read.

Today I’m going to give you my thoughts on how AI will change how you bill clients and what you can do about it.

The narrative on social media is AI agents will replace professional services providers. If an AI agent can do everything a human accountant can, why do we need the humans?

Personally, I doubt that will happen any time soon.

Think about your attorney. Will you stop using him/her in favor of an AI agent? Highly unlikely because you don’t know what you don’t know. That’s the value of an expert. But you will expect your attorney to leverage AI to provide you streamlined legal services.

It will be decades before people are comfortable fully entrusting AI for professional services.

We are here to stay - take a deep breath.

That said, take a hard look at how you bill for your services. In the not so distant future, many of the deliverables we sink time into will be created instantaneously. Think about pressing a button and 60 seconds later a complex tax return is 100% complete and ready for your final review.

That will happen.

And it’s going to kill the hourly billing model (or kill the firms that cling dearly on to an outdated billing methodology). If you can instantly create a tax return, and you bill hourly, the tax return is basically free! The hours you count on today to hit revenue goals will disappear.

Instead, our time will be spent managing the client relationship, collecting and structuring data, and telling stories about the deliverables we are handing to clients to help them understand.

So what can you do about it?

Start exploring how to price the relationship with the client. Whether fixed pricing or subscription services, your clients will still want access to a professional they trust.

But it’s going to look and feel different.

How much access will clients want and how do you price it?

How many clients can you handle if the time prepping deliverables decreases by 90%+?

How do you nurture client relationships and be their go-to tax/accounting/business advisor/wealth manager?

Are you and your team prepared to manage relationships all day every day (rather than work on projects)?

That's all for this Saturday. See you next week.

Cheers,
Brandon

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