8 Key Challenges Firms Face While Adopting AI Technologies-and How to Overcome Them

AI is no longer a futuristic concept in accounting—it’s a present-day disruptor. From automating routine bookkeeping tasks to enabling predictive financial analysis, artificial intelligence is reshaping the accounting landscape.

The 2025 Karbon report, “The State of AI in Accounting,” reveals that 85% of accounting professionals are either excited or intrigued by AI’s potential. Yet, enthusiasm alone doesn’t ensure success.

As firms rush to adopt AI, they face a number of growing pains. Whether due to a lack of training, data security concerns, or internal resistance, these barriers must be tackled head-on.

In this blog, we’ll explore the top challenges firms encounter when adopting AI technologies—and the practical solutions leaders can implement to overcome them.

1. Lack of AI Training and Education

The report revealed that 57% of companies do not provide any formal training in artificial intelligence (AI). This lack of investment is not just a missed opportunity; it poses a direct risk. Untrained teams may either copy and paste AI outputs without proper validation or entirely avoid using these tools, leading to errors, deliverability inconsistencies, and compliance issues.

Additionally, staff members who lack training may feel skeptical, overwhelmed, or unprepared to effectively utilize AI tools.

The Impact:

• Staff with no training save significantly less time using AI than advanced users (46 mins saved per day, respondents who use AI at a beginner level vs. 79 mins saved per day, respondents who use AI at an advanced level).
• Firms with no AI training programs face more internal resistance and lower overall productivity.

The Solution:

• Develop structured AI training programs that are role-specific. A bookkeeper’s use of AI will differ from a partner’s.
• Start with low-code/no-code tools and gradually scale complexity.
• Encourage experimentation through sandbox environments to safely explore AI applications without operational risk.

2. Data Security & Privacy Concerns

When client files contain sensitive information such as birth dates, bank details, and tax IDs, even a single data leak can lead to regulatory fines, malpractice claims, and a significant loss of trust.

70% of accounting professionals are concerned about the data security associated with AI mishandling or exposing sensitive data. This anxiety is particularly pronounced among operations, technology, and administration teams—those who are directly involved in selecting, configuring, and maintaining AI systems.

The Impact:

• 23% of firms report AI has negatively affected their data security (leaked data, misconfigured settings, or unexpected API exposures).
• Security concerns stall AI adoption, especially in mid-sized and larger firms that rely heavily on document management workflows.

The Solution:

• Implement a firm-wide AI and cybersecurity policy to establish safe usage standards.
• Use secure, vetted AI platforms with SOC 2, HIPAA, and GDPR compliance.
• Train employees on data security best practices and use AI tools integrated with your practice management system.

3. Fear of Job Displacement

The concern that AI will replace accountants is a widespread issue, particularly among professionals such as accountants, bookkeepers, and enrolled agents.

According to the Karbon report, 28% of these individuals fear that automation and AI-driven processes could lead to job loss. This anxiety is particularly pronounced in bookkeeping, where 57% of respondents believe their role is most vulnerable to disruption by AI technologies.

The Impact:

• Staff may resist AI adoption or disengage from transformation efforts.
• Misalignment between leadership’s vision and team sentiment can lead to cultural fractures.

The Solution:

• Shift the narrative from replacement to augmentation: AI handles mundane tasks so accountants can focus on advisory and strategy.
• Leaders should hold open forums or Q&A sessions about AI, addressing real concerns and showcasing success stories.
• Highlight the new career paths AI enables, such as AI-supported financial advisors, data interpreters, or process engineers.

4. Fragmented or Inadequate Infrastructure

Many mid-sized firms (51–200 employees) face fragmented tech stacks that weren’t built for AI integration. This patchwork of legacy systems causes compatibility issues, forcing staff to use time-consuming manual workarounds. The result is wasted effort, increased errors, and employee frustration, all limiting the firm’s ability to scale AI effectively and stay competitive.

The Impact:

• These firms showed a 6% YoY increase in skepticism and fear about AI.
• Integration bottlenecks lead to underutilization and wasted investments.

The Solution:

• Conduct a tech stack audit to identify gaps and ensure AI tools can be embedded smoothly.
• Invest in cloud-based practice management systems with AI-native features.
• Prioritize tools that offer open APIs, data encryption, and robust integration support.
• Opt for cloud-hosted tax software or accounting applications like QuickBooks on Cloud that support integration with AI tools.

5. Ethical and Trust Concerns

A major challenge in AI adoption is the risk of bias in algorithms, as AI reflects the data it’s trained on. Nearly 46% of accounting professionals worry about ethical issues, and only 49% fully trust AI tools.

This trust gap slows adoption as firms fear biased or unreliable outputs. To overcome this, firms need clear governance, human oversight, and transparency in AI decision-making to build confidence and ensure ethical use.

The Impact:

• Hesitation to rely on AI-generated outputs for client-facing tasks.
• Risk of reinforcing inequalities or errors in judgment-based roles.

The Solution:

• Establish an AI ethics framework to govern responsible use.
• Involve multiple stakeholders (not just IT) in evaluating new AI tools.
• Train staff to critically evaluate AI outputs rather than blindly accepting results.

6. Perceived Loss of Human Touch

Despite automation’s efficiency, 47% of accounting professionals worry it may erode the “human touch” crucial to client relationships. In an industry built on trust and personalized service, this concern is significant. Firms must balance AI-driven efficiency with maintaining genuine, empathetic connections to preserve client loyalty and satisfaction.

The Impact:

• Reduced client satisfaction if AI is overused without empathy.
• Misalignment between automated outputs and personal service expectations.

The Solution:

• Use AI to augment, not replace, client interactions, such as prepping insights before calls or summarizing meetings post-call.
• Reinforce the value of personal advisory services, enhanced by AI-driven data.
• Leverage AI tools that support relationship-building (e.g., automated follow-ups, meeting summaries with action items).

7. Misunderstood or Undervalued Use Cases

Many firms use AI for basic tasks like communication and automation, but more advanced applications, such as AI-driven financial analysis (13%) or tax prep (8%), are rarely adopted. This is mainly because firms lack awareness of these possibilities or don’t have internal champions to drive adoption, leaving valuable benefits untapped.

The Impact:

• Firms fail to fully realize the value of AI.
• Opportunity costs increase as competitors optimize processes faster.

The Solution:

• Identify quick-win use cases and build momentum. For example, start with AI-powered email writing or meeting summaries.
• Assign AI champions within the firm to test, iterate, and teach.
• Share success stories internally, such as time saved or new services enabled.

8. Leadership Disconnect & Poor Communication

Although firm leaders are highly optimistic about AI, many underestimate the fear or confusion among their teams. The report reveals that only 19% believe their peers share their excitement, exposing a clear communication gap. This disconnect can fuel resistance and slow AI adoption.

The Impact:

• Misalignment between top-down strategy and ground-level execution.
• Poor morale and missed opportunities for bottom-up innovation.

The Solution:

• Encourage open dialogue across all levels of the firm about AI.
• Use internal surveys to track AI sentiment and address concerns proactively.
• Position leadership as AI advocates by demonstrating hands-on involvement.

Final Thoughts: From Hesitation to Innovation

The future of accounting is being written now, and AI is at the center of the story. While challenges exist, so do immense opportunities. Firms that address fears, build trust, and invest in training will not only survive the AI revolution—they’ll lead it.

Whether you’re in a 3-person boutique firm or a 200-person enterprise, AI adoption must be intentional, inclusive, and secure. Remember: it’s not about jumping on every latest tool available in the market—it’s about solving the right problems with the right technology.

Note: The data referenced in this blog is sourced from The State of AI in Accounting Report 2025 by Karbon.