AI Implementation Tips

Executive Summary

• AI Implementation Tips – At a recent Digital CPA conference, CPA and AI expert Jason Staats recommended:
  • Clarifying for people at your firm what types of information they can and cannot share with AI,
  • Giving “people the tools they need to start experimenting, and start rewarding curiosity in a way that’s visible,” and
  • Using a “group text or a Slack channel or a Teams channel” to have your people share insights with each other when they discover AI-related insights that will save them an hour or more each month.
• Staffing and Talent Management Tips
  • Hire Early – Onboard new staff before you absolutely need the extra capacity
  • Skills Testing – Testing and assessments can help overcome the possibility of candidates not being truthful on their resume (e.g., technical tests, probing questions to identify gaps in expertise, etc.).
  • Tier Client Services – Offer your clients multiple tiers of service, which allows you to encourage them to choose a higher or lower level of service based on the pricing you set.  This gives you greater control over the amount of work your firm would need to produce, which you can customize based on your current bandwidth.
  • Client Scoring – Clearly identify your best clients (e.g., the most profitable, the ones your staff enjoy working with, the ones that are not overly demanding, etc.), and use this information to let some clients go as needed to address your firm’s bandwidth constraints.
  • Increase Staff Retention – CPA firms can increase their retention of talent by:
    • “Re-recruiting” staff, including engaging them more in their work and getting them to recommit to their work for your firm and
    • Providing a level of flexibility they would not be willing to lose by leaving your firm
• Client Reallocation Between Firms – CPA firms can mutually benefit from building networks with other firms to shift clients from one firm to another based on each firm’s specialization(s) and client size requirements.
• What Prospective College Hires Value – Based on a recent survey of Indiana college and university accounting students, the major drivers for them entering and staying in the profession are long-term earnings and job stability.
• Tax Trends – CPA firms are increasingly de-emphasizing their tax compliance work while expanding their tax advisory work (e.g., tax planning, tax strategies, etc.).
• Obligatory Overtime can Backfire – Mandatory overtime can result in:
  • Burnout and high turnover rates,
  • Your firm’s people working at a slower rate because they know they have to work a certain number of hours regardless of how productive they are during that time.
  • “Productivity theater” where staff pretend to be busy and working productively when they are not
• Best Practice Actionable Insights – The Modern Accounting YouTube channel recently shared the following insights:
  • Social Media Marketing – Identify someone at your firm who is familiar with and enjoys posting on social media, and have them start posting to LinkedIn regular updates or articles relevant to your clients.
  • Implement a Client Feedback System – Use a free online survey tool to send your clients surveys to request their feedback, and take action on these insights.
  • Delegate Non-Core Tasks – Identify tasks that do not require a CPA’s expertise, and delegate them to non-CPA support staff or outsource them to specialized service providers.

Accounting Today –  Accounting Students Influenced by Internships, Social Media 

Based on a survey of Indiana college and university accounting students:

• “When asked to describe their long-term ultimate career goal, CFO and partner in a public accounting firm were the most common responses among the students polled.”
• Long-term earnings was the “top driver for going into accounting and staying in the profession.”
• “Job stability and/or having a job that’s always in demand came in a close second.”

Accounting Today –  Voices: Find the Right Clients Through Interfirm Collaboration 

• CPA firms are currently overwhelmed with clients but struggle to find the right fit for their firm’s expertise and resources. 
• The solution may lie in building referral networks with other accounting firms, especially those with different specializations or client size requirements. 
• Accounting firms can mutually benefit by referring clients that don’t align with their services but may be a perfect fit for another firm’s niche.

Accounting Today –  Going Beyond Tax prep 

• “There is a growing trend of firms of all sizes shifting their focus from primarily tax compliance toward tax planning and strategies.”

Accounting Today –  IRS Plans to Start Tax Season on Jan. 29 

• The IRS will start the 2024 tax filing season on January 29, accepting and processing returns with over 128.7mn individual tax returns expected by April 15.
• Taxpayers and professionals can submit returns before January 29, as tax software companies will hold the submissions until processing begins.

Accounting Today –  Voices: Mastering Cross-Selling: How to Expand Services to Existing Clients 

• CPA firms can significantly increase their revenue by cross-selling, which involves selling additional services to existing clients.
• “Cross-selling is a ‘win’ for your accounting firm because it generates more revenue and a ‘win’ for your clients, who receive a more well-rounded service from you.”

Accounting Today –  Voices: The Negative Impact of Busy Season Saturdays 

• “A recent study reveals that compelling employees to work extra hours, such as mandating time in the office on Saturdays during tax season, backfires by reducing productivity during the week.”
• “Enforced overtime leads to worse work-life balance for staff, higher turnover rates, and otherwise avoidable productivity declines.”
• “Excessive overtime also normalizes a ‘productivity theater’ over actual work…where employees pretend to look busy to please managers and partners or pad hours on timesheets.”
• “Parkinson’s Law states that work will expand to fill the time available for completion. When staff are required to be in the office whether or not they’ve finished their assignments, they have little motivation to work faster. So, work they could have completed during the week gets done on Saturday instead. This is particularly frustrating for high performers who know they don’t need to be in the office. And do you really want to burn out your best and brightest?”

Accounting Today –  The Next Frontier in Tax 

• Tax planning is evolving away from an incidental compliance service and toward a proactive advisory service that offers greater value to clients.
• “We used to give advice away to our compliance clients; now we give compliance away to our advisory clients.”
• “Tax compliance can be likened to looking into your rearview mirror observing where you’ve been,” whereas “tax planning is more like looking out your front windshield at where you are headed.”

Accounting Today –  Voices: Secure the future by transforming your firm’s business model 

• “Ultimately, the goal of transforming a firm’s business model is to make a firm future-proof. This means securing the right talent, clients, technology and governance structure to ensure a firm’s success, both for the present and for future succession planning.”
• “Change is right in front of you — listen to what your clients, as well as new recruits, are asking for.”
• “Some challenges I see to tech transformation within firms are typical across the board: budget constraints, lack of buy-in from leadership, and the need to prep staff with technical knowledge and training. But incremental changes are key here — everything doesn’t need to be done at once.”
• A helpful question to answer when you transform your firm is, “Do your clients see you as a trusted adviser or a necessary evil?”

AICPA & CIMA – A&A Focus Series

• The AICPA & CIMA are offering “a monthly newscast series on the latest in accounting, auditing and assurance” called the A&A Focus Series.
• Attendees will receive one CPE credit per event.
• It is free for AICPA members, and the cost is $39 for each monthly session for non-AICPA members.

Cogneesol – Add Value to Your CPA Firm? Accounting Outsourcing Can Help!

• CPA firms spend much of their time on low-margin compliance tasks, but outsourcing can save time and create opportunities for business growth.
• Outsourcing can benefit CPA firms in the following ways:
  • Reduce workload to help avoid burnout
  • Reduce costs by up to 50%
  • Handle time-intensive tasks like bookkeeping and compliance
  • More time to specizlize in services as skilled experts and advisers to clients
  • Greater ability to scale staffing up and down without incurring high costs
• “CPA firms typically spend 70% of their time on low-margin, data-intensive compliance tasks.”

Collemi Consulting – Training Time – Collemi Consulting

Collemi Consulting believes it “is a big concern” that “many small- and mid-sized public accounting firms simply don’t properly train their professional staff to develop their research skills,” and it suggests the following solutions:

• “Develop an in-house training program”
• “Pair more-seasoned CPAs with an in-house mentor”
• “Outsource training to a trusted provider”

CPA Practice Advisor – 3 Strategies to Help CPA Firms Retain In-Demand Talent

• “If employee retention isn’t already a priority focus for your CPA firm, you may want to make it one — and soon. Research from Robert Half found that 27% of finance and accounting professionals in the United States are either looking for a job right now or planning to do so in the next six months.”
• “That may not sound like a significant percentage. But could you afford to lose more than one-quarter of the best players on your team, especially during tax season?”
• “Re-recruiting is a way to engage and persuade current employees to recommit to their roles, projects or the overall mission of your business.”
• “More than half (51%) of the professionals in accounting and finance recently surveyed by Robert Half said the main reason they aren’t planning to look for a new job is because their current position offers a level of flexibility they are not willing to lose.”

CPA Practice Advisor – The Resume Is Dead, Long Live Skills Testing

• CPA Practice Advisor notes that skills testing is one way CPA firms can overcome the risk job applicants are exaggerating or lying about their background.
• “Extra assessments create an objective ‘safety net’ so you depend less on questionable resume claims,” which may include:
  • “Technical tests”
  • Probing interviews “to investigate any gaps in expected expertise”
  • “Personality evaluations”
  • “Personality tests”
  • “Cognitive and IQ tests”
• The company Accountests “developed industry-specific accounting assessments to tackle ‘resume roulette’ in our profession.”

CPA Practice Advisor – Tips to Avoid Common AI Adoption Issues in Accounting Firms

• Although the integration of AI and Machine Learning into accounting firms presents opportunities, it is important for firms to address related challenges, such as protecting sensitive client data.
• To mitigate these risks, firms can implement strict data sharing protocols, enforce access controls, encrypt data transfers, security audits, and ensure third-party contracts address confidentiality.
• “The efficiency gains from AI are significant, but they can be accompanied by risks like unauthorized access, data breaches, or data corruption if proper precautions are not taken.”
• “Protecting client information is of utmost importance in this evolving landscape.”

CPEThink – Top 3 CPA Staffing Challenges 2023 | CPETHINK.COM

The top three staffing challenges for CPA firms include:

• “Finding and Retaining Staff” – The struggle to both attract and keep qualified staff, which calls for building an environment that offers more than traditional compliance-based roles, with an emphasis on varied, impactful work and personal development opportunities.
• “Adapting to a Changing Business Model” – This calls for reinventing the CPA firm business model to stay relevant, which involves embracing new operating methods, technology, and flexible work arrangements to create an engaging and motivating workplace.
• “Capacity Challenges” – Staffing shortages exacerbate burnout, and solutions include further leveraging technology and automation, outsourcing, and client expectation management.

Forbes – How Auditor Deloitte Missed a Nigerian Company’s Massive Fraud

• According to Forbes, Deloitte failed to detect a massive fraud at one of its audit clients, the the Nigerian company Tingo Group.
• “The accountants certified that Tingo Group had $462mn in the bank.  The SEC says it was just $50.”

Future Firm – Accounting Work Life Balance: 10 Tactics for Success

• Accountants often start their own firms seeking a better work-life balance but frequently fall into the trap of working longer hours. 
• This article from Future Firm guide provides ten tactics to help accounting firm owners improve their work-life balance including:
  • “Hire early” before you absolutely need the extra capacity
  • “Use 3-tiered” gold/silver/bronze pricing so “you can push customers on to the plan that makes the most sense for your firm at the moment” based on your bandwidth
  • “Only work with clients you love working with” because “no amount of money is worth dealing with an unreasonable client that keeps you awake at night.”

Future Firm – The Top 23 Questions to Ask in an Accounting Interview

• It is important to ask the right questions to assess a prospective candidate’s fit for your firm.
• Some of these questions could include:
  • Asking “What do you know about us?” to determine how eager the candidate is based on how much research they performed about your firm
  • Asking “Could you tell me about a time when you made a major mistake that you made at work?” to determine if the candidate takes “responsibility for their actions rather than pointing the blame elsewhere.”

Going Concern – Stat of the Day: 42% of Firms Are Turning Down Work Because There’s No One to Do It

• Preliminary results from the CPA Trendlines Outlook 2024 survey indicate that “42% of accountants turn away work over staff shortages.”
• “Some consideration [should be] given to scoring good clients” to allow your firm to allocate resources toward effectively serving its best clients when capacity is constrained.

Going Concern – What You Should Know About Changing the 150-Hour Rule Before You Debate For or Against It

• Although this is from almost a year ago, Byron Patrick and Going Concern made and shared some great points about the low likelihood of the 150-hour requirement being reduced to 120 across the country in the near-term.
• On X (formerly Twitter), Byron Patrick noted the following:
  • “To change the requirements to get licensed as a CPA [e.g., to reduce the 150 hr. Requirement to 120], each state government must pass a law to make the change.  This is not 1 person department’s decision.”
  • “State legislators won’t bother to show up to vote unless their constituents are advocating for or against the matter.”
  • “There will be arguments w/in the state against making the change.  Specifically, higher education will be negatively impacted by the lost revenue.”
  • Then even if the state’s governor signs the bill, this same process would need to be repeated in all the other states for the 120-hour requirement to be effective across the U.S.
• He then offered the following solutions to attacking and retaining talent while the 150-hour rule is in effect:
  • “Creative approaches to achieving the ed reqs”
  • “Financial support to help people achieve their ed reqs”
  • “Advocating for firms to compete for talent w/ compensation & benefits”
  • “Elevating firms and their practices that create environments that people want to be a part of”

Ignition – Accounting in 2024: The year of change management

• 2024 is “the year of change management: more change and adoption of technology that aids firms to drive more revenue and profitability.”
• “In a recent survey of accounting professionals, Ignition found the top three challenges for firms today are:
  • Staff shortages (51%),
  • Inefficient and manual processes (43%), and
  • Too much client work (35%).”
• Three ways CPA firms can overcome these challenges include:
  • Both managing and monetizing scope creep
  • Using non-traditional ways to find and retain talent
  • Evolving into “technologists” (e.g., automating recurring processes, using AI where appropriate, etc.)
• “Technology doesn’t impede or jeopardize an accountant’s role, it supercharges it and enables accountants and tax professionals to work faster, smarter and at a higher value than ever before. What’s more, work-life balance is restored and profits are improved. Win-win.”

Illinois CPA Society – Righting Retention: A Look Into the Accounting Profession’s Greatest Management Challenge

Key takeaways of a recent report on retaining talent at CPA firms include the following:

• Challenges
  • High Turnover is Not a Myth – 42% of public accounting firms are “seeing increased turnover rates.”
  • Few Departing Accountants Leave the Profession – “Accountants quit their employers, not necessarily the profession” – Less than 1% of accountants who changed jobs left the profession.
  • “Compensation Counts” – Salary was the most frequently-cited reason for accountants switching jobs.
  • Burnout is Real – After compensation, “too many hours/burnout” and “lack of work-life balance” were the next most frequently-cited reasons for talent leaving a firm.
  • Increased Burnout Work When People Leave – Approximately two thirds of survey respondents indicated they experienced an increased workload resulting from people leaving their firm, “further compounding the issue of burnout.”
  • Focus on the Future – Although less than half of firms meet these needs, employees highly value “career advancement paths and opportunities,” as well as “mentors/mentorship program.”
  • Leverage Exit Interview Feedback – Leverage feedback your firm receives from exit interviews
• Solutions
  • Identify & Meet Needs – Ask employees what they value most, and take action on their responses
  • Listen and Respond – Listen to and consider the perspectives of your firm’s people, and then make an appropriate response as appropriate
  • Sweeten Your Firm’s Offerings – Consider increasing employee compensation, implementing flexible hours, and making available remote work options

IRS – IRS, Security Summit Partners Warn of Surge in “New Client” Scams Aimed at Tax Pros as 2024 Filing Season Approaches

• “The Internal Revenue Service and the Security Summit partners today alerted tax professionals to watch out for a new round of filing season-related email schemes where cybercriminals pose as potential clients.”
• “The Summit partners warn that the new client email scam’s objective is to steal sensitive personal information that will allow fraudsters to prepare authentic looking tax returns to collect a refund – or use it to commit other types of fraud.”
• “We urge tax professionals and their employees to be extra cautious when receiving unexpected email solicitations and avoid clicking on links or opening attachments.”

Journal of Accountancy – CPAs at a Crossroads: Real Approaches to Artificial Intelligence

At a recent Digital CPA Conference, CPA and AI expert Jason Staats presented with a session named “Empowering Teams with ChatGPT,” which included the following insights:

• “If this truly is this civilization-shifting thing, that’s going to be a pretty darn big blind spot when it comes to how we work with our clients if we’re not plugged into it.”
• Give “people the tools they need to start experimenting, and rewarding curiosity in a way that’s visible.”
• Spin up “a group text or a Slack channel or a a Teams channel” to have your people share insights with each other when they discover AI-related insights that will save them an hour or more each month.
• Clarify for people at your firm what types of information they can and cannot share with AI.

Medium – Addressing Productivity Issues in the CPA firms

• Accounting CRM software can integrate with existing accounting software to make CPA firms more productive by:
  • Automating tasks and reducing manual data entry,
  • Improving communication and collaboration with centralized client databases,
  • Providing efficient project management tools, and
  • Managing processes with projecte management features, customizable reports, and real-time dashboards.
• “CRMs can automate compliance tasks like sending reminders for deadlines, tracking documentation, and ensuring adherence to regulations.”

Modern Accounting YouTube Channel – Get Comfortable with Change: Interview with Dan Hood

The Modern Accounting YouTube channel recently shared the following actionable insights:

• Emphasize Mental and Physical Well-being – Start with small, firm-wide initiatives like mandatory breaks, wellness programs, or mental health days. Where possible, encourage a culture where overtime is not the norm but an exception.
• Adopt User-Friendly Technology for Efficiency – Identify repetitive tasks (e.g., data entry) and invest in user-friendly software solutions.
• Utilize Social Media for Marketing – If you don’t already have one, create a LinkedIn profile for your firm and start posting regular updates or articles relevant to your clientele. Assign this task to someone at your firm who is familiar with and enjoys posting on social media. This step can significantly enhance your firm’s visibility with minimal effort.
• Implement a Simple Client Feedback System – Use a free online survey tool to create a short client satisfaction survey. Send this out after you complete your services. Analyzing these responses can provide quick insights into areas for improvement.
• Delegate Non-Core Tasks – Identify tasks that do not require a CPA’s expertise, such as administrative work or basic bookkeeping. Then delegate them to support staff or outsource them to specialized service providers. This step frees up valuable time for the CPAs at your firm to perform more complex value-added activities (e.g., to automate processes at your firm, to participate in revenue-generating activities, etc.).
• Regular Short Team Meetings for Alignment – Schedule 15-20 minute-long weekly team meetings to align on priorities and to address any bottlenecks. These meetings should be concise and focused on setting clear objectives for the week and ensuring everyone is on the same page.

Public Accountant (Australia) – 6 young accountants share the changes they want to see in 2024

Describing changes she would like to see in 2024 a “young accountant” stated,

• “As accountants, we need to embrace and adapt with AI and all the new emerging accounting technology, and harness these tools to enhance data-driven insights and analysis.”
• “With these resources, accountants can better assist businesses and key stakeholders in making well-informed decisions that align with both operational and financial objectives while ensuring regulatory compliance.”

Reddit – The Small CPA Firm of the Future : r/Accounting

• In a recent Reddit post, a commenter stated that some CPA firms have leadership that is unwilling to materially improve processes, and “the way they bust through these inefficiencies is by forcing overtime on their minions.”
• Therefore, if you are open to materially improving your firm’s processes while your competitors are not, you have a significant advantage in being able to outcompete them for talent and with your firm’s overall productivity.