Generative AI tools are transforming how tax professionals work, reducing task completion time by up to 56%. However, recent research indicates many practitioners aren't optimizing this newfound efficiency. Here's what tax practice leaders should know.
Tax professionals using tools like ChatGPT and Copilot are completing routine tax documentation, research, and client communication 40% faster than traditional methods, according to recent MIT research. Technical tax functions show even greater gains, with AI tools cutting tax research and compliance documentation time by 56%.
These efficiency gains raise critical questions for tax practice management: How should tax professionals allocate this time dividend? While some firms redirect hours toward deeper tax planning, client advisory services, or specialized learning, a University of Lausanne study of 302 AI users and 57 managers reveals concerning trends about time utilization.
The study found managers saved approximately 2 hours and 50 minutes weekly using generative AI. While 82% reported improved efficiency, 36% admitted wasting more than half of their recovered time. Similarly, 83% of general AI users who saved time acknowledged squandering at least a quarter of it. Rather than investing in client relationships, skill development, or work-life balance, over half of managers simply performed more of their routine tax work.
"Reallocating time savings requires tax practitioners to track when they're saving time," explains Isabelle Engeler, associate professor at the University of Lausanne and lead author of the study. "Only once they quantify these gains can they strategically reallocate hours to higher-value tax services." Unfortunately, 37% of managers failed to recognize their time savings.
Four Steps for Tax Practice Leaders to Optimize AI Efficiency
To maximize AI-generated time savings, tax practice leaders should:
- Implement Strategic Tracking: Focus on measuring time reductions for key tax processes with the greatest potential benefits. Begin with small pilot programs within specific tax service lines before expanding.
- Establish Time Logging Procedures: Have tax professionals record minutes saved daily. Options include self-reporting through reflective entries comparing pre-AI and AI-assisted completion times for specific tax tasks. Alternatively, productivity software like Harvest or ActivTrak can provide more objective measurements of time efficiency in tax workflows.
- Develop a Tax Practice Reallocation Blueprint: Create a structured plan for repurposing saved hours toward high-value activities like specialized tax advisory services, complex planning, or client relationship development. Survey staff about which tax services would benefit most from additional time investment, while providing clear direction on priorities.
- Monitor Resource Redeployment: Maintain regular oversight of how time savings are being utilized across tax service lines. Without ongoing guidance, practitioners may default to less productive uses of their newfound capacity.
"Generative AI can enhance both tax practice productivity and practitioner work-life balance, but realizing these benefits requires deliberate, intentional management," notes Engeler. "By helping tax professionals recognize and strategically reallocate their time savings, firms can ensure AI-driven efficiency translates to meaningful improvements in service quality and professional satisfaction."
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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