Agentic AI holds much promise for the accounting profession. AI agents, defined as "software that is capable of at least some degree of autonomy to make decisions and interact with tools outside itself in order to achieve some sort of goal—whether booking a flight, sending a bill, or buying a gift—without constant human guidance" (by Chris Gaetano
Generative AI is already ushering in this change, and AI agents will take it to another level, fundamentally reshaping how firms win. Here are three ways AI agents will force a business model reckoning in accounting.
1. Death of the billable hour accelerates
The billable hour has been under scrutiny for years, but agentic AI will accelerate its demise at an unprecedented rate. Why? Because AI agents can scale 100 times faster than humans at a fraction of the labor costs, resulting in parallelized work for greater speed and efficiency. In this agentic AI world, the traditional time-and-materials billing model becomes increasingly nonsensical.
Imagine an army of AI agents that can:
- Generate many tax returns with reasonable "judgment" for initial reviews in the background, reducing the need for manual first-pass preparation;
- Reconcile financial statements instantly, identifying anomalies and inconsistencies with greater accuracy than a human who is manually doing this work;
- Draft audit reports overnight, improving speed and consistency without requiring overtime or additional staffing.
I cannot stress this enough: the firms that successfully transition to value-based pricing will be the winners in this new agentic AI economy. I hear of firms instituting technology fees or passing on specific software costs as a response to time saved in achieving an outcome. This is not enough if we want our profession to thrive.
True transformation requires a shift in how we define, price, and deliver value; it's time to rip off the band-aid and do the hard work.
2. Current outsourcing models become obsolete
Outsourcing has been a great capacity expansion and cost-optimization solution for firms looking to grow and serve their clients well. Many times, outsourced roles focus on less complex and more deterministic work like reconciliations and tax prep and are managed by more senior accountants in the home office.
These are precisely the types of tasks AI agents will take over. As the agentic AI technology improves, firms will increasingly appreciate that AI agents don't get sick, work 24/7 without burnout, can be quickly "onboarded" upon a firm-wide trained repository of data, and don't leave for another job with higher pay. It is inevitable that agentic AI will eventually replace human-based outsourcing models as we know it, forcing firms to reallocate budgets and rethink staffing.
Outsourcing firms will not disappear overnight and there is still a great ROI to be gained from further investment today. However, over time, the nature of outsourcing will evolve dramatically. My many talented friends in the accounting outsourcing business are already aware of this shift and are actively working to redefine the value that outsourcing entities of the future can bring for firms.
3. Cost structures and workforce metrics transform
Nvidia CEO Jensen Huang said something clever at the CES show in January: "The IT department of every company is going to be the HR department of AI agents in the future." He is pointing out the inevitable shift of firms who will soon be "hiring" AI agents alongside human employees.
Today, we judge the efficacy of engagements based on KPIs such as realization, utilization and bill rates. But in a world where AI agents execute on increasing portions of work alongside humans, how we measure profitability, cost structures and engagement performance will change.
Key shifts include:
- Human staff impact will be quantified differently, explicitly including their ability to manage AI agents for compensation considerations.
- Performance metrics will evolve—how do we measure AI agent vs. human staff performance, productivity and their direct contributions to success?
- IT budgets will increase as firms invest in AI agents to increase their "labor capacity."
This transformation will require new benchmarking, financial models and internal engagement cost allocation between IT and HR.
How to prepare for the agentic AI world
The firms that win in this era of agentic AI will be those that take a proactive approach to business model evolution and rethink their approaches to value creation, talent management and financial modeling.
1. Transition to value-based pricing
The firms that wait too long to make this transition will struggle to justify their fees in an environment where AI agents dramatically reduce the time and cost required to deliver services. Key steps to take include:
- Identify high-value services that can be decoupled from time and materials billing.
- Educate clients on why they are paying for outcomes, not effort.
- Experiment with fixed-fee engagements where possible, ensuring pricing resilience in an AI-driven world.
- Incentivize teams based on client outcomes rather than hours logged.
2. Evolve your workforce strategy
The workforce of the future is hybrid—humans and AI agents working side by side. Firms that fail to adapt to this reality will overpay for human labor where AI could be leveraged or will fall behind competitors who optimize AI-human collaboration. Key steps to take include:
- Collaborate with outsourcing partners that are actively evolving their business models and technology capabilities alongside agentic AI developments.
- Create training programs in preparation for the agentic AI future.
3. Adjust cost structures and performance metrics
Firms that don't rethink their profitability, cost allocation and engagement performance tracking will be flying blind in an agentic AI world. Key steps to take include:
- Redefine staff performance impact—factor in how well human staff work with technology and AI in performance and compensation models.
- Treat AI investments as labor-expanding strategies, not just tech expenses.
- Update engagement profitability models to incorporate AI-driven workstreams alongside human contributions.
AI agents are no longer a far-off concept. While they are not quite ready for prime time for a mainstream CPA audience, they are here and slowly but surely changing the accounting profession. Firms that embrace these changes with strategic intent will thrive in the agentic AI economy.
