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Accounting Tomorrow: Preparing for Transformative Changes
Episode 1118th March 2024 • Accounting Answers Podcast • Rob Brown
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Ep: 11 Top experts answer: "What, if anything, will significantly change accounting in the next few years?"

The Accounting Answers Podcast, hosted by Rob Brown, asks critical questions of the experts, leaders and influencers who shape the decision-making of accountants, CPAs and finance professionals. Today we ask:

What, if anything, will significantly change accounting in the next few years?

You'll hear insightful and passionate answers from these 5 experts and influencers:

Jeff Gramlich | CPA, Head of Accounting at Validis and 40-year industry veteran

Jeff Phillips | CEO of Padgett, Founder of Accountingfly and accounting talent expert

Jeff Seibert | Angel Investor and Co-founder and CEO of Digits, accounting reimagined

Jennifer Warawa | President of QuickFee North America, accounting thought leader, fintech executive

Jeremy Clopton | Upstream Academy's Managing Director, leading transformational change in firm leaders

Tune into more on this daily show for short, sharp episodes that keep you informed of what's happening in the accounting world and the whole ecosystem of consultants, organizations, vendors and advisors who serve them.

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Transcripts

Rob Brown:

Hi, I'm Rob brown and welcome you.

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Accounting finance professionals,

tech enthusiasts to the

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accounting answers podcast.

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We've embarked on a captivating

exploration of the future of accounting

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and its profound connection to the

ever-changing technology ecosystem.

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I think for a moment, how access to the

minds of a range of accounting experts,

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influencers, vendors, and leaders would

keep you super informed about what's

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going on in this wonderful profession.

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You'd stay relevant and future focused.

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You'd make better strategic

and career decisions.

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If you know what forces are in play

and what factors are driving change.

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To unravel the complexities

unenviable future of accounting.

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I've personally interviewed 111

leading accounting professionals, tech

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leaders, and industry influencers,

each bring in their unique.

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Expertise and insights to the

table and together we'll delve into

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the five critical questions that

will shape the accounting world.

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Through the eyes and minds of people

living their accounts in life.

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I'll talk into accountants every day.

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We'll talk about five critical topics

that ignite in passionate debates

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and stimulate minds across the globe.

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We're mapping the transformative

trajectory of the accounting profession

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and its symbiotic relationship

with the technological revolution.

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We'll be asking about the next

gen accountants, how far down

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the advisory line firms are.

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What's going to change

the accounting world.

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What their software vendors

and tech providers could do

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better to serve accountants.

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And what's coming up in the future.

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Let's get straight into the

answers for today's topic.

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Oh this week, we're asking the question.

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What, if anything will significantly

change accounting in the next few years?

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What changes are on the horizon?

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A few doubt that weren't to go

in seismic shifts propelled by

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technological and basements, the

rise of innovative business models.

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And the ever evolving regulatory

landscape and this dynamic environment

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presents many questions, challenges, and

opportunities that demand our attention.

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It's good to stay informed.

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So let's dive into here,

what our experts have to say.

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I'm thrilled to introduce Jeff gremlin.

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CPA head of accounting at Valdez

and a 40 year industry veteran.

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Who's dedicated his career to enhancing

the reliability and efficiency of

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financial reporting and analysis.

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Jeff Gramlich: Ongoing regulation.

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That'll change it.

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and so maybe, an ongoing, government

and legislative demands whenever

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there's more money moving, whether

it's through a business, or through

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a service, you have to think through

who all wants a piece of that action.

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And so that complexity, the Is going to

require new things, for the accountant.

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I was just talking last week with

some folks about lease accounting.

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And if you haven't done lease accounting

before the rules used to be pretty

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straightforward, they're not so much

anymore and they're very involved.

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And if you haven't done a lot of.

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lease accounting yourself as

a CPA, you haven't done it.

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And so there's constant things like that.

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And that's for two reasons.

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One, for the investing public that

really relies on us to, to issue an

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opinion and be independent of management

and be independent of the company.

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In fact, in appearance, it's important

that we, make sure that what the

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company is revealing to the public

financially is true and accurate

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to the best of our abilities.

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Right?

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so I think with increased regulation.

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Typically, Rob has always come

increased complexity and some of

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these rules just have to be looked

through at a granular level.

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And the client doesn't

have time to do that.

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And a great example of that was, here

in the States when COVID hit and we

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had the, uh, the payroll protection

plan, PPP, as it was called here, There

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was a process for applying for the

money, which some of the accounting

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firms helped their clients do.

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There was a process for usage of

the money and tracking, what the

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accounting firms also helped them do.

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Track where the money actually got used.

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And then when we started forgiving

paybacks of the money, There was

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yet a third process for getting

forgiveness of that, of which the

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accounting firms helped them do.

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So that's just one recent kind of

a broader public type example where

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the CPA got very involved to help

their client do that, and in some

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cases, keep their business open.

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we knew what the word

pandemic meant prior to:

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I'm not sure most of us ever said it

much, or even thought about it much

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because it was something that happened.

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A long time ago, and we just

didn't, it never came up.

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but, Bloyd came up in, in 2020 from

March onward, and we still talk about it.

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And I know it's in the rearview mirror

for the vast majority of it, but

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we still think about those things,

and people are already planning,

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okay, what if this happens again?

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What do we need to do differently?

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And so that kind of forward

thinking is very important.

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And, we've got some, and,

Some global conflicts that we

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didn't have a few years ago.

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I'm not trying to get

political here, but we do.

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We've got some wars going on

different parts of the world and

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things have to be thought about

differently from going concerned

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from, from the ESG perspective, right?

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And that's where the CPA frequently can

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Rob Brown: welcome to Jeff Phillips

CEO of Padgett, founder of accounting

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flight and accounting talent expert.

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Who's revolutionizing the way

accounting firms attract and retain

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top talent in a competitive market.

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Jeff Phillips: What's going to change

accounting in the next few years?

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And I'm coming from the perspective

from Paget, where we work with firms in

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Canada and the United States that are

smaller and serving small businesses.

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But I think across the global

profession, remote hiring.

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Is going to be a major change that

we're going to see in accounting.

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I believe that in the coming

years, 50 percent of hires.

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Will be from, staff that work in your

country, but they can work in a different

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city than where your main office is.

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And when owners and partners begin

to embrace this work from anywhere

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concept, they'll realize that

they can find somebody in a matter

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of weeks, not months or years.

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Another change is offshoring and that's

a little bit more embraced, but there is.

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Much more room to grow, and I think

we're going to see a greater adoption

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of offshoring tax accounting and payroll

work to other countries where you

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might take advantage of labor costs.

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Obviously, you're going to

see more automation and AI.

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I think there's plenty of people that are

going to talk about that topic, but what I

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get excited about is where can businesses.

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Automate routine tasks

over and over again.

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There are so many software

products globally that give

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accountants the freedom to do that.

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So you're finding another resource

you can delegate work to and these

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changes are going to ultimately lead

the accountants to be proactive, to be

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advisors, to have desktop alerts that

will notify them when issues might come

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up for a client that they can get in

front of the client and let them know.

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These are three changes I see happening

rapidly over the next few years.

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Rob Brown: Let's explore the ideas of

Jeff cybered angel investor and co-founder

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and CEO of digits, where accounting is

re-imagined through technology, offering

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innovative solutions that transform

financial management of businesses.

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Jeff Seibert: This is a fun

one because the cliche answer,

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of course, is AI is going to

completely change accounting, right?

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But let me go way deeper

than that as an engineer.

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so a lot of what you've seen so far has

been driven by the sort of generative

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hype train that started with ChatGPT.

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And so now there's tools to

automatically draft client

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engagement letters, summarize data.

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write SEO content to attract new clients.

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And those are nice.

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I'm not saying those are bad and

they might help save some time, but I

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don't think those are going to really

significantly change the industry.

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if you look at it, most accounting and

bookkeeping work is not generative.

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It is what we would call predictive.

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And so transactions happen,

they need to be booked, right?

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Statements and balances

need to be reconciled.

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Invoices and purchase orders

need to be parsed and matched.

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Ledger entries need to be reviewed

for mistakes or for fraud.

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These are all predictive types of work.

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And so there are new MI, ML, and AI

techniques that are starting to make

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huge inroads into these core workflows.

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And we have teams applying new

techniques like vector similarity search.

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Leg out aware, large language

models, self critical agents,

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which is the cutting edge.

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and they're very effective at some

of these core accounting workflows.

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And so I would say over the next few

years, what's really going to happen

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is AI is going to start to open up

massive efficiency gains, allowing

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accountants to spend a lot less time on

the tedium, allowing them to serve far

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more clients with more time and more

attention and care to those clients.

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And as the tedium falls away.

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The client relationships are going

to become ever more important.

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Rob Brown: now I'm thrilled to

welcome accounting royalty, Jennifer

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Warwa president of quick fee, north

America and accounting thought

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leader and a FinTech executive

who's driving evolution of payment

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solutions for the accounting industry.

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Jennifer Warawa: I would love to say

that a lot will change in the next few

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years, but I said that 10 years ago,

and I think I said that 20 years ago.

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And then when you go to keynotes at

large accounting conferences, or you

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go and listen to podcasts, you're

like, wow, we were talking about

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that 10 years ago or 15 years ago.

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and so I think that.

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we're still finding ourselves or

firms are still finding themselves

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constrained with, on prem technology.

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We have a lot of firms.

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I'd love to get off of what I'm

using, but I'm so deep in it,

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whether it's, practice management

solution or an accounting solution.

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And, and so they're constrained

by those challenges.

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And then you have a group of firm

partners who is getting set to

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retire in the next few years.

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And they're like, I hope that I can retire

before all of this has to get implemented

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or any major change needs to happen.

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So I think the change will

probably well summarized by

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saying survival of the fittest.

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The gap will continue to widen

between the innovative accountants

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and accounting firms who embrace

change and adopt leading technology.

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And those who cling to the status

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quo.

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At a recent BDO event, the big topic

was, this was an area meeting, but

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the big topic was The challenges

attracting and retaining talent and,

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it feels like a very today problem.

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And Michael Horowitz from BDO said,

I just want to let you know that

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if you came to the same meeting

10 years ago, this was the topic.

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If you came to the same meeting

15 years ago, this was the topic.

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So it's not, it feels new, but

it's still the same as before.

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Rob Brown: Let's get ready to hear

now from Jeremy Clopton upstream,

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Academy's managing director leading

transformational change in accounting

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from leaders, inspiring a culture

of innovation and forward thinking

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in the accounting profession.

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Jeremy Clopton: Technology's

going to change, in the States,

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especially right now, the entry

of private equity is changing.

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A lot of the conversation, there's

a lot of the obvious stuff.

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I really believe that one of the big

things that is changing the profession

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over the next few years is how we work.

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All right.

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Firms finally moving away from

this idea that we sell hours.

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We sell our time hours or our

inventory more hours is more success.

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That mindset shift, that approach to

management, that fundamental change

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to the business model that says we

don't generate value based on time.

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But instead we generate value based

on the outcomes that we provide.

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the successes that we help clients

achieve, the risk we help them mitigate.

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That is going to be one of the

biggest changes in the next few years.

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And there are some firms that

have already made that change.

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I don't know anybody's

fully made that change.

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There's still always pockets, right?

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They latch onto the old model, but that

is going to be a significant change.

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Because it's that mindset shift, that

business model shift that is truly

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going to allow, in my mind, firms to

take advantage of all the other changes

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that are out there, the technology, the

outsourcing, the, the different, talent

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pipelines of different majors and the

different way to staff and structure.

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But it's all contingent on the fact

that we stopped thinking that our

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hours are what we're getting paid for.

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And we recognize it's the difference

we're making for our clients.

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That's what we're, that's

what we're getting paid for.

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That's the value that we're

generating in the market.

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And it has to.

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if you think about all the other changes,

implementing AI, implementing analytics,

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automation, process improvements,

getting folks that are, more specialized

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and we reign in the processes and

we get more, lean Six Sigma, all the

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things, all of those things are great,

but if we still buy into the fact

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that we're getting paid for hours.

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That's going to make us less successful

and that's a very bad place to be.

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So, tech and all the other, those

are the easy changes, but we got to

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figure out, we got to move upstream

and figure out, okay, what's the

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underlying problem that has to change

so we can actually get the benefit of

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Rob Brown: that.

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So they have five great

answers to the question.

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What, if anything will significantly

change accounting in the next few

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years, every working day of the week,

Monday through Friday, we give you

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the insights of five top influencers

in the accounting world on this

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critical area of what is coming up.

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Change wise for accountants

that's 25 valuable perspectives.

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Viewpoints and best thinking every

week and with a fresh week comes the

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first question and more thoughts from

the best influencers and leaders we

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can find in the accounting world.

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Thanks for listening to the accounting

answers podcast and sharing this brand

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new show with your friends and colleagues.

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If you want to join the conversation.

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You can plug into our community of

influencers@accountinginfluences.com.

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And check out our virtual

speed networking events.

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These happen every few months

for the north American region

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and the UK Europe region.

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These are great opportunities

to raise your profile, build

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valuable connections and share your

thoughts with influential peers.

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Until next time, this is your host,

Rob brown, saying stay informed,

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stay relevant and stay connected.

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