Our CPA profession is undergoing the most significant transformation ever during the next 5+ years! This is an exciting time for all of us – at every level. It is also a time of concern for leaders as they make decisions about their firm’s future direction.
This article is a two-part article intended for partners and staff – to envision the future and to learn how we all have a role in helping take next steps in shaping our firm’s future.
What is creating the need to transform?
This transformation will result from the disruptive effect of artificial intelligence, machine learning and big data converging, to only name a few. Many current CPA compliance activities will be performed by artificial intelligence based programs.
In addition, as block chain technology continues to evolve and become commercialized, it will also have a significant impact on CPA firm attest services as we know them today.
How might it be in 2023?
A day in the life of a partner and staff
Fast forward to 2023 – 5 short years from now. What might your day look like as a partner or staff in a professional services firm? Imagine, you as a partner in your firm attend a virtual meeting with both the CFO and CEO of your favorite client together with two of your staff.
You are in your office at home, your tax staff (Sarah) at her kitchen table, your technology staff (Jason) in the office and your client at their office. You are all in a virtual meeting room.
Jason reports in to the CFO on suspicious transactions flagged by the fraud monitoring software robot Jason has implemented on your client’s cloud based ERP system. There are several transactions he believes deserve immediate attention. You and Jason wish to make sure the CFO has seen the detail in the dashboards Jason implemented on the CFO’s mobile device and that the CFO intends to investigate the transactions.
You also share some good news with your client about a partnership your firm just entered into to provide 24/7 penetration testing services to companies. Your client has interest to learn more and you book a future meeting to discover your client current situation and share more about what is ideal for your new solution.
During the meeting the CEO shares some exciting plans to launch new technology to disrupt the market they compete in. Sarah, Jason and you ask a few probing questions and identify a research and development tax credit opportunity for your client. Your client wishes for you to quantify a “soft ROI” for the potential opportunity.
Post meeting Sarah uses the equivalent of Alexa to pull the latest on R&D credits – federal, state and what is going on at the congressional level. She pulls down a template from the R&D Credit firm you have a strategic alliance with. She debriefs with you and you give her the green light to work with the CFO to create the soft ROI on the R&D credit opportunity. Sarah uses big data tools to extract relevant data from your client’s ERP system and interviews the client for some of the more subjective information she needs.
In the afternoon Jason and Sarah who are on flexible work schedules sharpen their critical thinking skills by spending 30+ minutes in a national online university for professionals watching video and applying their learning to a mini case study. They get immediate feedback on their performance compared with peers across the nation. Meanwhile you as partner, spend 30 minutes in the same online university sharpening your skills to have “crucial conversations” with clients and staff alike.
What else has changed by 2023?
The following are other things that have changed during the 5 years ending in 2023:
- You are more efficient. Hours for CPA compliance work (tax returns, attest work) have been reduced by 50% – replaced by AI and machine learning.
- You create more value in your client relationships, functioning as true business advisors.
- You move from answering “what did happen?” to “what is going to happen?”
- You share insights regarding how your client can change what is going to happen
- There is more opportunity for entrepreneurialism. With technology advancements there is greater opportunity for staff and partners to be more entrepreneurial within your firm. They have a greater impact on client’s businesses and at the same time more work flexibility.
- Revenue from non-traditional compliance actives has gone up.
- Your firm has chosen to be an expert in 1+ industries where you command a premium fee!
- You have more strategic relationships with others that help you solve problems and create opportunity for your clients.
- Non CPA competitors with access to the same technology and tools you have are becoming trusted advisors to clients in your marketplace – a threat.
- Overall relevance of financial statement attest work continues to decline. Perhaps a Google or other disruptor will create reliable metrics and data to benchmark company performance.
- The pace of change as we know it today has accelerated and will never be the same given the ongoing impact of AI and machine learning.
- The pyramid CPA firm staffing models as we know them today is diamond shaped.
- Training and development has become one of the top priorities at your firm. Beyond technical skills, the following are skills being developed in all staff and partners (from Amanda Garner at The Growth Partnership):
- Critical thinking and problem solving
- Anticipating and serving evolving needs
- Synthesizing intelligence to insight
- Integration and collaboration
- Fewer and fewer firms think of themselves as CPA firms. More and more will think of themselves as professional services firms or something similar.
- Much more – the above is not intended to capture all possible future scenarios.
In closing, is this a firm you’d like to work for?
Part 2 of this series will discuss each of our roles to help our firms make the pivots and transformations they will be facing.