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Archives for July 2026

Private Equity’s Big Bet on Accounting Firms Is Starting to Look Shaky

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CBIZ stock has lost half its value in the past year. Starbucks just killed its AI inventory counting tool after nine months of miscounts. And Microsoft, after investing $13 billion in OpenAI, had to cut off its own engineers from AI coding tools because costs went through the roof.

These stories from the latest episode of The Accounting Podcast paint a picture of where the accounting profession is heading, and it’s not what private equity investors or AI vendors promised.

CBIZ’s Stock Tells a Story About Private Equity’s Future

CBIZ is the only publicly traded accounting firm in the U.S., so its stock price is the closest thing we have to a market report card on the profession’s consolidation strategy. Right now, that report card shows failing grades.

“The stock price of CBIZ, Inc. today is $34.68. That is down 51% over the past year,” host Blake Oliver noted during the episode. When CBIZ bought Marcum at the end of 2024, the stock was at $78. It hit $90 in early 2025, then crashed to about $27 by March before recovering slightly.

What makes this even more interesting is that CBIZ isn’t alone. Co-host David Leary asked Blake to pull up Intuit’s chart for comparison. “Similar chart,” Blake confirmed. Intuit is down 53-54% over the same period. Meanwhile, the S&P 500 is up 28%.

The problem is what’s behind the stock price. CBIZ forecasts only 2% – 5% revenue growth for 2026. “That’s less than inflation. So basically, no growth,” Blake explained. “Why would investors be excited about buying stock in a company that’s not really growing much?”

Blake sees a more serious threat to large firms from smaller, more nimble competitors. “The larger the organization, the harder it is to change a business model or to integrate new technology,” he said. “I see smaller, more agile firms becoming a real threat to the large accounting firms. The smaller ones can integrate AI into their systems and switch their billing models.”

The math is simple but meaningful. AI lets a 10-person firm work like a 100-person firm. The traditional advantage of midsize firms (having an expert for everything) disappears when smaller firms can use AI to expand their capabilities.

Private equity firms typically look for efficiencies, not complete reinvention. “They figure out how to get marginally more efficient. They don’t completely reinvent the business model. That’s not what private equity is all about,” Blake explained.

When AI Meets Reality: Starbucks and Microsoft Learn the Hard Way

Starbucks spent nine months trying to make AI inventory counting work. The idea was that employees would walk past shelves, filming with an iPad, and AI from a company called NomadGo would automatically count everything. The company claimed 99% accuracy.

Reality hit hard. “Reuters reported the app often miscounted or mislabeled inventory, including confusing similar milk varieties or failing to recognize them,” Blake noted. Starbucks killed the project. Stores went back to counting by hand.

These failures hit the bottom line. “They were getting product shortages because they thought they had coffee, but didn’t have coffee to sell,” David explained.

Meanwhile, Microsoft discovered that AI coding tools come with a shocking price tag. Despite investing $13 billion in OpenAI and using AI to write 30% of its code, Microsoft had to cut off engineers from these tools because costs exploded. The same thing happened at Uber, where the CTO said they burned through a year’s worth of budgeted tokens in just four months.

The token problem is growing. Blake shared a striking statistic from Forbes: “Anthropic’s annualized net dollar retention exceeds 500%.” That means customers end up spending five times more than they initially expected.

“Nobody knows what they’re buying,” David said. “If I sign up for a monthly plan that gives me 20,000 tokens a month, it feels like enough. And then I’m six days into the month and I have to spend another 40 bucks for more tokens.”

“We’re going to hear a story like this in the next year,” David predicted. “Some firm will say, ‘Our five-person firm spent $300,000 on AI tokens, and we didn’t know it until it was too late.'” 

The Small Firm Revolution: XeroForce and AI Architects

While big firms struggle with their business models and AI costs spiral, something interesting is happening with smaller practices. Xero just launched XeroForce, a tool that could change the game.

“It’s a no-code AI agent builder that lets small businesses and accountants automate repetitive financial tasks using plain language, no technical skills required,” David explained. Unlike chatbots that give one-time answers, these are permanent automations that run on schedule.

Blake immediately saw the potential. “Every week, look at all transactions over $75 in any expense account, and then search my email for receipts and attach those receipts to the transactions. That’s a whole category of apps right there.”

“Accountants have engineer brains. You just don’t know how to write code. And if this can let you create ‘permanent’ code that runs routinely for a client inside Xero, it’ll help you scale,” David said, putting it in terms every accountant can relate to.

But tools alone aren’t enough. Firms need someone to manage this transformation. Donnie Shimamoto, CPA and founder and managing director at Intraprise Techknowlogies, calls this role an “AI architect.”

“Every CPA firm that’s big enough should create an AI architect role,” Blake said, comparing it to the cloud transition. “All the leading firms created these technology roles that were not IT. They were basically operations roles.”

An AI architect would handle security reviews, evaluate different tools, monitor token spending, and train the team. Without this role, firms risk security issues or shocking year-end bills.

For young accountants, Blake had direct advice. “If you’re a student or a young accountant and you want a job, learn this AI stuff. Every firm is going to be hiring an AI architect.”

What History Tells Us About What’s Coming

Blake drew a parallel to when electronic spreadsheets arrived. “The number of bookkeepers employed at accounting firms dropped by about half. We lost like a million bookkeepers over a generation,” he said. “What happened? We had more accountants and, in particular, we had a whole new category of job: financial analysts.”

His prediction for AI follows the same pattern. The number of traditional accountants will decline, but new roles will emerge. “Small businesses will be able to afford controllers and CFOs. They’ve always wanted them but could never afford to hire one.”

Both hosts emphasized the importance of experimenting now. David spent Memorial Day building a production assistant that saves him four hours a week. Blake spent two months creating a tool that automatically reconciles bank accounts.

“Don’t try to build anything groundbreaking,” David advised. “Just solve a simple problem that you have to deal with week after week.”

The Bottom Line

The accounting profession is changing fast, but not in the ways many expected. Large firms with private equity backing face serious challenges if they can’t reinvent their business models. AI implementation is proving harder and more expensive than promised. But smaller, agile firms that experiment with new tools and create AI architect roles could gain a huge competitive advantage.

“If you’re a firm with a few dozen people, you can now compete with firms that have hundreds of staff,” Blake said. That’s an opportunity for firms ready to embrace it.

Want to hear the full discussion, including how the hosts are building their own AI tools? Listen to the complete episode of The Accounting Podcast.

One-Third of B2B Payments Still Arrive by Check. Here’s the Hidden Cost

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A $20 million windows business was doing what countless companies do every day: attaching their bank account information to invoices they emailed out. A bad actor intercepted one of those emails, swapped the bank details for an offshore account, hacked into the company’s system, and accessed their entire customer base. Then they blasted fake invoices to every client on the list. In just one month, they stole nearly $100,000.

What makes this story unsettling isn’t that it was sophisticated — it wasn’t. It was a predictable result of manual accounts receivable (AR) processes that millions of businesses still use today.

That story came from a recent webinar presented by Baxter Lanius, CEO and founder of Alternative Payments — a company focused on accounts receivable automation that has processed over $1 billion in payments and works with more than 1,000 customers, including around 100 accountants, bookkeepers, and controllers.

The session, hosted in partnership with Earmark, exposed something most of us know but rarely measure: the manual AR processes most businesses still rely on drain thousands of dollars from your clients’ bottom lines. Check processing, email-based invoice chasing, and hand-done reconciliation all add up. And with interest rates rising and margins getting squeezed, fixing these hidden payment costs through AR automation might be one of the best services you can offer clients right now.

The true cost of manual AR

Before you can fix a problem, you need to see it clearly. Most firms haven’t done the math on what manual payment processes actually cost their clients.

Let’s start with checks. Thirty-three percent of all B2B payments are still check-based. And each check costs between $10 and $15 to process when you factor in the time and manual labor needed to handle it. Think about a client processing a few hundred checks monthly. That’s thousands of dollars in hidden costs that never show up on the P&L, but they’re eating profits all the same.

Then there’s the security risk. As Baxter put it, “When you hand somebody a check, you hand them your bank account number and routing number.” It’s printed right there on the bottom of every check, and it’s a security hole hiding in plain sight. The $20 million windows company is an extreme case, but the risk exists every time a check changes hands. Add in lost packages and stolen mail, and checks become what Baxter called “a very inconsistent way to get paid.”

Another problem that compounds over time is days’ sales outstanding (DSO). When clients don’t pay for 30, 40, or 60 days, working capital gets locked up. And if your client pays their vendors quickly but waits forever to get paid themselves, they can wind up in a cash flow crunch.

“If clients aren’t paying you after 30 days or 40 days, don’t you think there’s a higher probability of bad debt expense or potential write-offs?” Baxter asked. When does a $50,000 receivable become a write-off? Day 60? Day 90? Every day increases the risk.

Manual reconciliation deserves its own spotlight. Baxter shared an example from a real Alternative Payments customer during the webinar. Before automation, the company had three people whose job was basically opening the bank account and refresh, refresh, refresh. If a customer paid, they’d try to match a $1,500 or $2,500 deposit to the right invoice. Then tie that to cash in the bank. All done by hand.

Then there’s the risk of human error. He admitted to fat-fingering bill payments himself and spent time chasing down overpayments. Some businesses still record credit card numbers on paper or store them in Excel files. That’s a PCI compliance violation waiting to happen.

Here’s what manual AR really costs your clients:

  • $10–$15 per check in processing labor
  • Locked-up working capital from long DSO
  • Fraud and compliance risks from exposed bank information
  • Hours of manual reconciliation every week
  • Higher bad debt risk on old receivables

The industry-wide context makes this worse. Only about 30% of B2B invoices get paid online today. Even among Alternative Payments’ established customers who’ve been on the platform for six months, only 70% of revenue flows online. The other 30% still moves offline, mostly through checks. The gap between where businesses are and where they could be is huge.

The macro environment makes this problem urgent now

These inefficiencies have been around forever. But today’s economic environment makes every one of them more expensive and more dangerous.

Start with the cost of capital. Everyone expected interest rates to fall, but that hasn’t happened. At the time of the webinar, Baxter estimated there was over a 50% chance rates would rise another 25 to 50 basis points in the year ahead. That changes everything about dollars sitting idle in your client’s AR pipeline. Money locked in unpaid receivables is expensive. Companies can’t reinvest it, use it to reduce debt, or earn returns elsewhere. What was a minor issue two years ago is now a real drag on profits.

Meanwhile, margins are getting squeezed everywhere. Minimum wages are climbing across the country. Hard goods costs are up. Revenue that can’t keep up with rising expenses magnifies every inefficiency. A manual AR process that was just annoying when margins were fat becomes truly threatening when they’re thin.

Small businesses are also failing faster. They’ve always been risky, but AI and automation, he noted, accelerate how fast weak businesses fail. Companies that don’t adopt efficient processes fall behind competitors who do. For accountants, this matters in two ways. First, your clients need help staying competitive. Second, if clients go under, you lose revenue. Helping them automate AR protects your own business.

Tying it all together, financial processes are, as he put it, “one of the last remaining components of our businesses that remain really manual.” We’ve automated marketing, sales, and big chunks of tax prep and bookkeeping. But actually moving and matching money still runs on manual effort in most firms.

AI is advancing rapidly as a tool for closing books and running operations. But Baxter made the point that it’s not about AI for AI’s sake. It’s about results. Whether automation comes from AI, workflow rules, or both, the goal is eliminating manual steps that waste time, create errors, and lock up capital. When all those costs are rising, there’s a clear return on automation.

The bottom line is, if your clients have capital tied up in inefficient AR, they’re paying more for that inefficiency than they were two years ago. If you’re not helping them fix it, someone else will.

Automation features that deliver measurable results

So the problem is real, and timing is urgent. What actually works, and by how much?

The webinar laid out specific features with hard numbers. This is the kind of data you can use to convince clients who are still on the fence.

  • Autopay is the biggest game-changer. When clients set up autopay, where a saved card or bank account gets charged automatically when invoices come due, their time-to-payment drops by 80% to 90%. That’s transformational. It kills the entire waiting-and-hoping cycle that makes DSO unpredictable. And it removes manual work on both sides. Customers don’t have to remember to pay, and your client doesn’t have to chase them.
  • Automated reminders are the second-most powerful tool. Alternative Payments’ data shows clients who get automated invoice reminders pay 66% faster than those who don’t. It makes sense. When reminders keep invoices top of mind, they never become those forgotten 120-day outliers that drag up average DSO. Modern platforms let you customize tone based on how overdue invoices are. A friendly nudge at five days. Firmer at 30. More edge at 45. They’re even launching an AI agent that can automatically customize these sequences.
  • Credit card surcharging saves money. About 80% of Alternative Payments’ clients pass credit card fees on to their customers, and it’s becoming the norm everywhere. Baxter shared a personal example from his insurance company, Chubb. The company told all policyholders they’d start charging 2.99% for credit card payments. So Baxter switched to ACH autopay. Problem solved. When 20% of payments are by credit card, 3% on that volume adds up fast.
  • Automated reconciliation eliminates the worst work. The platform handles daily payouts with full invoice-to-cash matching built in. When payments come through, it automatically matches them to invoices in QBO, Xero, NetSuite, or whatever system your client uses. No more marking invoices paid by hand. No more refreshing bank accounts, trying to match deposits. For audit prep, this automated documentation saves serious time.

Baxter shared a case study that put real numbers behind these features. S1 Technology was getting paid 30 days after due dates. Only 15% of clients paid electronically, and the other 85% wrote checks. They stored credit card numbers in Excel. After implementation, they cut collection times by 70% and drove major online adoption.

Two other features deserve attention because they solve common problems:

  1. Multi-tenancy lets you manage AR for all clients from a single dashboard. You can click between client accounts, adjust automations, check what’s outstanding, and run reports, all without logging in and out of different systems. For accountants managing 10, 50, or 100 clients, this makes AR management scalable instead of a bottleneck.
  2. Simple onboarding removes adoption friction. Many platforms require clients to fill out applications or create accounts before paying, and that’s where adoption stalls. The better approach is automatic. Alternative Payments creates accounts from integration data, ports over invoice history, and migrates payment methods so they’re ready when clients pay. The portal is white-labeled with your client’s brand, URL, and email, so it feels like their business rather than a third-party tool.

What this means for your practice—and your clients

Let’s bring this back to the numbers, the opportunity, and your next move.

  • Manual AR imposes a hidden tax that never shows up on financial statements — paper check processing, trapped working capital, fraud exposure, lost reconciliation hours, and growing bad debt risk. Each one is more expensive in today’s environment than it was two years ago.

Against that backdrop, the automation results speak for themselves. Autopay cuts payment time by 80% to 90%. Automated reminders speed collections by 66%. Firms using these workflows reduce overall collection times by up to 70%. Credit card surcharging is now standard for 80% of businesses on the platform, recovering about 3% on every card transaction. And automated reconciliation eliminates the most mind-numbing task in accounting.

For accountants, AR automation is a legitimate service line that delivers measurable value to clients while freeing your team from work that AI and automation are making obsolete. As traditional accounting services become increasingly commoditized, the ability to identify hidden financial drains and address them distinguishes advisory practices from commodity bookkeeping.

Alternative Payments also offers a referral program for accountants, with 10% lifetime commissions on referred clients, paid quarterly and managed directly through the platform. It’s another way AR automation can become a revenue stream, not just a cost-saver.

The full webinar goes deeper, including platform demos, workflow examples, and details on how multi-tenancy and integration with QBO, Xero, NetSuite, and other systems work in practice. If you want to see exactly what manual AR costs your clients and understand how to fix it, it’s worth watching.