Weekly Update

Weekly Update – May 26, 2024

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Accounting Today –  AI Specialists Draw 18% More Pay 

  • Accounting firms are typically willing to pay 18% more for roles that require AI skills relative to comparable positions.

Accounting Today –  EY, KPMG Upgrade AI Capacities for Auditors 

  • KPMG and EY announced upgrades to their AI tools used by auditors including:
    • Recording and analyzing discussions,
    • Creating process maps,
    • Reviewing audit documentation,
    • Extracting contract terms, and
    • Assessing financial statement disclosures.

Accounting Today –  AT Think The Wisdom of Being a Lazy CPA 

  • Delegate Routine Tasks – Identify and delegate routine, redundant tasks to free up time for higher-value work.
  • Document Processes Step-by-Step – Capture and document each step involved in a task to ensure consistent replication by your team.
  • Start with Tedious Processes – Begin automating routine tasks like bank reconciliations, data entry, and client engagement letters.
  • Overcome Staff’s Fear of Automation – Help staff understand that automation is an opportunity for growth, not a job threat.
  • Reward Staff with Automation Savings – Fix clients’ fees and reward staff by sharing the time savings from automation.
  • Use Checklist-Based Workflow Software – Choose workflow software that combines documentation and checklist functionality for easy process management.
  • Integrate With Automation Platforms – Ensure your workflow software integrates with automation platforms like Zapier for seamless task completion.
  • Standardize Processes Across Clients – Create substantially identical processes for client intake, billing, bookkeeping, and payroll to scale your firm.
  • Invest Freed-up Time in Growth – As client service hours drop, invest more time in growing your firm and developing staff.
  • Change Mentality to From Hours to Results – Shift your firm’s mentality from billing hours to being productive with the time you work.

Boomer Consulting – Technology + Process = Rocket Fuel for Your Firm 

  • Integrating technology with streamlined processes is essential for accounting firms to enhance operational efficiency and gain a competitive advantage.
  • Before automating any process, it’s important to pinpoint the goals and objectives.
  • Automation is most valuable for processes that are:
    • Manual,
    • High-volume, and
    • standardized.
  • Common roadblocks to automation include:
    • Technology limitations,
    • Lack of expertise, and
    • Inconsistent processes.
  • “Employees are more likely to buy in when they realize the goal is to automate tasks, NOT roles.”
  • “Evaluate your existing tools for integration and automation capabilities and ensure you’re fully leveraging your existing tech stack before investing in new solutions.”

CFO Dive – Getting Employees Ahead of the AI Learning Curve: Tipalti CFO

  • Leaders need to provide opportunities for employees to experiment with AI.
  • When recruiting, it’s important to seek individuals with curiosity and willingness to experiment with new technologies.
  • Implementing AI requires a holistic shift throughout the organization, not just one expert.

CFO Dive – Want to Fix the Accounting Talent Shortage? Raise Starting Salaries, Students Say.

  • “Over the six years from 2017 to 2022 when the Consumer Price Index rose 19.8%, accounting salaries rose just 16%.”
  • “Addressing the lack of competitive starting salaries ranked as the most supported solution among students and stakeholders alike.”

CFO.com – How CFOs Can Keep Restless Accountants on Staff

  • Retaining good employees is less expensive than hiring new ones.
  • Some ways to retain staff include the following:
    • Compete Beyond the Industry – Make your firm’s value proposition appealing compared to the broader labor market, not just other accounting firms.
    • Prioritize Work-Life Balance – Implement strategies to manage staff’s workload effectively, such as capping working hours, to improve recruitment and retention.
    • Offer Flexible Work Options – Provide flexibility in hours and location to increase employees’ desire to stay with the firm.
    • Review Financial Incentives – Ensure salaries are competitive, as accounting tends to lag behind other financial professions in compensation.
    • No Single Solution – Recognize that improving talent retention requires multiple changes rather than a single fix, such as increasing compensation.

Some new workplace trends and recommended actions related to these trends include the following:

  • BYOAI (Bringing Your Own Artificial Intelligence)
    • Definition: Employees are increasingly using their own personal AI tools at work.
    • Recommended Action: Establish guidelines and processes for using AI tools at work to protect the firm’s private information, including confidential client data.
  • Office Peacocking
    • Definition: Excessive office decor and perks with over-the-top workspaces.
    • Recommended Action: Firms should steer clear of excessive office decor and perks, as younger workers are not drawn to these spaces.
  • Quiet Vacationing
    • Definition: Employees secretly taking unannounced vacation time during work hours without informing their managers.
    • Recommended Action: Monitor employees’ remote work productivity.
  • Dry Promotions
    • Definition: Firms are adding responsibilities to roles without a corresponding raise.
    • Recommended Action: Avoid assigning additional responsibilities without appropriate salary increases to increase staff retention and productivity.
  • Reverse Mentoring
    • Definition: Lower-level employees guiding and mentoring higher-level employees.
    • Recommended Action: Embrace learning from lower-level staff which can improve rapport and provide valuable insights.
  • Newskilling
    • Definition: Employees acquiring new, unrelated skills unrelated to their current expertise.
    • Recommended Action: Provide learning opportunities for staff to learn new skills outside their current expertise (e.g., training junior staff on business development skills).
  • Microlearning
    • Definition: Providing bite-sized learning to staff.
    • Recommended Action: Engage staff by offering concise, focused learning content.
  • Shadow Policies
    • Definition: Allowing exceptions or special arrangements for individual employees outside of typical firm rules.
    • Recommended Action: Maintain fairness and transparency in applying firm policies.

CPA Practice Advisor – 4 Steps to Post-Tax Season Success

Here are some steps to consider taking to increase your firm’s revenue and its efficiency:

  • Add new services including:
    • Advisory
    • Fractional CFO Services
    • Financial Planning and Analysis
  • Upgrading your firm’s technology to increase productivity and the client experience.
    • Consider using Canopy or Karbon so your team will always know the status of deliverables
    • Consider Clockwork AI to assist with financial planning and analysis
    • Consider FloQast to increase the speed of closing the books
  • Upgrade your client roster including:
    • Turning “B” clients into “A” clients by cross-selling them new services
    • Making “B” clients less high-maintenance
    • Creating a clear picture of your ideal client (e.g., their niche, pain points, services needed) and taking steps to attract these clients
  • Network and Upskill Yourself
    • Attend networking events
    • Stay up-to-date on industry trends and learn new skills, which can help you identify and overcome challenges

CPA Practice Advisor – The Future of AI: How Finance Leaders Will Guide its Adoption

Some ways you can guide your firm’s adoption of AI include the following:

  • Assess AI Risks – Evaluate your firm’s security requirements and business-specific risks to navigate the challenges of AI integration (e.g., security of client data, AI hallucination, etc.).
  • Educate Your Staff on AI Basics – Train your staff on the fundamentals of AI models to help them learn how to use it, what AI’s limitations are, and reduce the risk your staff would use AI improperly.
  • Adopt a Human-First AI approach – Emphasize to your staff that your firm intends to use AI as a tool to help your staff complete the firm’s work rather than as a replacement for some of your firm’s staff.
  • Regularly Discuss AI Use Cases – Have frequent conversations with your staff to identify AI use cases that can enhance their productivity.

Future Firm – Making Cybersecurity a Priority in 2024

Some recommendations to enhance your firm’s cybersecurity include the following:

  • Prioritize Cybersecurity – Make cybersecurity a top priority for your accounting firm this year given the increasing threats.
  • Realize AI-Based Scams are Becoming Convincing – Be aware that AI-powered scams, including text, voice, and video, are becoming more sophisticated and harder to detect.
  • Protect Your Firm’s Valuable Assets – Safeguard your firm’s clients, revenue, and team by implementing robust cybersecurity measures to minimize business disruption.
  • Basic Security Measures Aren’t Enough – While VPNs, password managers, two-factor authentication, and backups are essential, they may not provide sufficient protection in the current threat landscape.
  • Confirm Unusual Requests via WhatsApp – Instruct your team to verify any unusual requests, especially those involving money, through secondary channels like WhatsApp.
  • Engage Cybersecurity Experts – Consider hiring a cybersecurity firm to conduct a comprehensive assessment of your firm’s security posture, including its technology, people, and processes.
  • Implement Ongoing Training and Processes – Based on the cybersecurity firm’s recommendations, put in place regular training for your team and establish processes to maintain a strong security stance.
  • Stay Informed About Cybersecurity Developments – Keep yourself updated on the latest cybersecurity trends and best practices, as the field is rapidly evolving.

Ignition – A Clear-Cut Way to Price and Package Your Services

Some ways to price and package your services include the following:

  • Use a Three-Tiered Pricing Model – Offer clients bronze, silver, and gold package options, which can improve client satisfaction and increase firm profitability.
  • Provide Detailed Service Breakdowns – Breaking down services into individual components clarifies the value you provide for each package and prevents client confusion.
  • Pre-Engagement Client Consultation is Crucial – Thoroughly consulting with new clients before starting work prevents mismatched expectations and scope creep.
  • Integrate Advisory and Compliance Services – Offer client accounting services (CAS) and compliance services within tiered packages to meet evolving client needs.

Illinois CPA Society – Re-Decoding the Decline [in the Pipeline of New Accountants]

  • “The perceptions of the CPA credential are largely positive, even among those who don’t want it.”
  • According to survey respondents, the top challenge to obtaining a CPA license is finding the time to study for the exam.
  • Contrary to popular belief, the time and cost to meet the 150-credit hour requirement were not viewed as a “top challenge” by respondents.
  • The strongest drivers to encourage people to pursue the CPA credential include:
    • “Earning potential,”
    • “Job security,” and
    • “Work-life balance.”
  • Some ways to facilitate new accountants obtaining a CPA license include:
    • Providing time off to study for and take the exam,
    • Reducing workloads, and
    • Providing “other time management assistance.”

Public Accountant (Australia) – Selling a business: Insights on a Successful Accounting Firm Sale

Some things to consider when selling your interest in your firm include the following:

  • Strong Systems Enable a Successful Sale – Having strong internal systems and processes in place is key to preparing a business for a successful sale.
  • Consider a Partial Sale – A partial business sale allows firm owners to retain some ownership and continue working in the business with reduced administrative burdens.
  • Buyers Value Good Staff – Buyers are interested in the capabilities of your firm’s staff, as well as the likelihood they will remain at the firm after the sale.
  • Agree on a Valuation Methodology Early – Agreeing on a valuation methodology, such as dollar-for-dollar based on revenue, simplifies the negotiation process.
  • Inform Key Staff and Clients – Carefully inform key staff members and clients about the sale, reassuring them of continuity and introducing them to the new owner.

Rosenberg & Associates – Takeaways from Busy Season 2024

Some takeaways from the 2024 busy season include the following:

  • Two Efficiency-Boosting Tools – Introducing SafeSend and SurePrep helped manage out-of-town clients and improved processing efficiency.
  • Impressive Results Outsourcing 1040s – Outsourcing 1040s through Xpitax yielded impressive results, surpassing expectations in quality and turnaround time.
  • Firm-Wide Meetings and Mini-Courses – Adding 15-minute firm-wide meetings and processing/tech tips mini-courses helped keep everyone on the same page.
  • Team Lunches – Instituting team lunches for the office on Fridays helped work out kinks in new systems.
  • Paperless Approach – Embracing a paperless approach reduced reliance on physical documents.
  • Delegating Clients to Managers – Delegating clients to managers helped distribute work more effectively.
  • Early Associate Onboarding – Bringing in new associates in June allowed them to gain experience before busy season, resulting in the best group of new associates in a long time.
  • Staff-Related Issues – Staff-related issues were the top challenge faced by firms including:
    • Work compression leading up to compliance deadlines,
    • Finding the right people, and
    • Maintaining a balanced workload.
  • Training and Hiring Processes – Investing in training, refining hiring processes, and administering knowledge testing pre-hire could help address staff-related issues.
  • Non-Accounting Recruits and Remote Work – Looking at non-accounting degree students as recruits and expanding remote work options could help with staffing challenges.
  • Outsourcing and Continuous Improvement – Exploring outsourcing for certain work and fostering a culture of continuous improvement and adaptability could help firms navigate challenges.

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