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An Accounting Firm Owner’s Guide to Strategic Technology Adoption

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Is your accounting firm’s technology stuck in the past? In a world where clients expect seamless digital experiences and remote work is the norm, relying on outdated, disconnected software can be a recipe for inefficiency, frustration, and even lost business. But with so many options on the market, how do you choose the right tools to propel your firm forward?

In a recent Earmark Podcast episode, Blake Oliver shared his framework for strategic technology adoption. He argued that firms that intentionally select software to streamline operations, enhance client experience, integrate smoothly, and enable standardization will be best positioned to thrive.

Blake walked through the key software categories firm leaders need to consider, from proposal management to artificial intelligence (AI). He emphasized the importance of choosing tools that are easy to use, align with the firm’s unique needs and processes, and facilitate client collaboration.

Proposal Software

Blake recommended proposal software options that allow firms to quickly generate professional, standardized proposals, collect e-signatures and payments, and kick off projects seamlessly. “You cannot standardize the service delivery to your clients if you don’t have standard terms in your engagement letters,” he noted.

For example, Practice Ignition and Anchor allow firms to create templated proposals with standardized terms, pricing, and payment schedules. Clients can quickly review and sign off on engagements digitally, reducing friction and ensuring consistency across the board.

Practice Management

For practice management, Blake stressed the importance of workflow tools that centralize client communications, automate tasks, and provide visibility across the firm. With remote work now the norm, he argued, “If you’re in a remote environment, how can you work remotely without having workflow software?”

Platforms like Karbon, Canopy, and Client Hub offer client portals, task management, team collaboration, and insights reporting features. By standardizing processes and centralizing information in one system, firms can boost efficiency, transparency, and accountability, even with distributed teams.

Blake shared a cautionary tale from his experience, where choosing the wrong practice management tool cost his firm weeks of lost productivity. The lesson? Prioritize ease of use and team buy-in when evaluating options to ensure successful adoption.

General Ledger & Payroll

In the realm of general ledger and payroll, Blake advised firms to curate a lean tech stack of best-fit solutions. Instead of accommodating every possible client need, he suggested choosing one or two options that cover the bases for core client types, focusing on scalability, integration, ease of use, and reporting capabilities.

For the general ledger, that might mean standardizing on QuickBooks Online for most clients, with Sage Intacct reserved for those with more complex needs. On the payroll front, Blake highlighted Gusto and OnPay as user-friendly options that automate compliance and integrate with popular GL systems.

Blake emphasized the goal of going deep on a few core platforms rather than spreading yourself thin across a dozen different tools. By strategically limiting your tech stack, you can streamline training, support, and processes while still meeting diverse client needs.

Accounts Payable & Banking

Turning to bill pay, Blake highlighted the spectrum of solutions available, from all-in-one platforms like BILL for larger clients with complex approval workflows to more streamlined options like Relay for smaller businesses. He emphasized the key is to match the tool to the client’s specific needs and design efficient processes around it.

For example, a large nonprofit with multiple departments and strict controls might benefit from BILL’s advanced approval routing and audit trails. A small business, on the other hand, may prefer Relay’s simplified workflow and flat-fee pricing. The right fit depends on factors like transaction volume, number of approvers, and accounting complexity.

Whichever tool you choose, Blake stressed the importance of clear client communication and well-defined processes. Establish expectations around bill submission, approvals, and payment timelines upfront, and consider designating a dedicated team member to manage the AP queue and troubleshoot any issues.

Artificial Intelligence

Finally, Blake touched on the exciting frontier of AI, noting that ChatGPT’s new offering for teams, coupled with Microsoft’s significant investment in OpenAI, has made the technology more viable for accounting firms than ever. He advised listeners to start exploring use cases like drafting routine documents.

For instance, firms could leverage ChatGPT to generate first drafts of engagement letters, email responses, or work papers based on predefined parameters. By automating the initial content creation, staff can focus on more strategic work like analysis and advisory.

However, Blake cautioned against an “AI-first” approach. Tools like ChatGPT should augment human expertise, not replace it. He recommended starting with narrow, well-defined pilots and keeping humans in the loop to review and refine AI-generated content.

The Path Forward

Across all these categories, Blake underscored the importance of approaching technology decisions with intention and a focus on client needs. Flashy features may generate buzz, but the true test of any tool is how well it supports your firm’s service delivery and client experience.

By aligning your tech stack with your strategic priorities, designing efficient processes, and investing in training and change management, you can harness the power of modern software to drive meaningful results. The key is to start small, iterate often, and never lose sight of the humans at the heart of your business’s heart – your team and your clients. Ready to dive deeper into Blake’s strategic technology playbook? Listen to the full episode and start charting your firm’s path to digital success.

Embracing the Remote Work Paradigm in Accounting

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In a world where the nature of work is rapidly evolving, the accounting industry finds itself at a crossroads. As remote work, alternative arrangements, and AI automation become increasingly prevalent, firms must adapt to stay competitive and attract top talent.

In episode 380 of The Accounting Podcast, hosts Blake Oliver and David Leary explore the shifting dynamics of work in the accounting industry and discuss how firms can navigate this uncharted territory to create a more flexible, balanced, and fulfilling work environment.

Navigating the Salary Landscape: Remote, Hybrid, and In-Office Work

A recent study by ZipRecruiter sheds light on the salary disparities between remote, hybrid, and in-office workers. 

David shares the findings: “Fully in-office workers average $82,000 on average. Hybrid workers average $60,000 on average. So basically, it’s almost $22,000 less than in office. Fully remote workers get about $75,000 on average. So, in the office, you’re making more; fully remote you’re making more. But if you’re kind of hybrid, not making as much.”

The study also suggests that high-performing staff prefer remote work and can command higher salaries. This trend underscores the need for the accounting industry to adapt to the changing preferences of top talent and remain competitive in attracting and retaining skilled professionals.

H&R Block’s Successful Transition to Permanent Remote Work

The shift towards remote work is not just a theoretical concept; it’s a reality many companies already embrace. 

H&R Block’s experience provides valuable insights into how a major player in the accounting industry successfully transitioned to permanent remote work. As the company continued to grow, they hired corporate employees who were fully remote. It quickly became apparent that high-performing staff preferred remote work.

Jeff Jones, H&R Block’s CEO, put it simply: “There isn’t a good reason why we would do that. There’s just no reason to have a required to come back to office policy.”

H&R Block’s experience demonstrates that even large, established companies can adopt remote work and benefit from focusing on outcomes rather than micromanaging employee time and location.

The Productivity Puzzle: Debunking Myths About Remote Work

One of the most common concerns about remote work is its impact on productivity. 

However, as Blake points out, “Studies on remote work productivity suggest that it is generally a net zero impact. While there may be some inefficiencies with remote work, these are offset by increased employee satisfaction and the elimination of commute times.”

It’s important to recognize that the true cost of requiring employees to work in the office extends beyond the walls of the workplace. Expenses like gas, car depreciation, and the additional cost of living close to the office can add up quickly for employees. 

By offering remote work options, firms can help their staff save money and reduce stress, leading to a happier, more productive workforce.

The Four-Day Workweek: Challenging Traditional Work Arrangements

In addition to remote work, alternative work arrangements like the four-day workweek are gaining traction. 

Blake notes, “In the UK, a pilot involving 61 organizations implementing a four-day workweek found that 89% continued with the model after a year, with many making it permanent. The study reported positive impacts on staff well-being, lower turnover, and easier recruitment.”

The success of four-day workweeks in other industries raises questions about the accounting industry’s traditional approach to work, particularly during busy seasons. Many firms still require staff to work weekends during peak periods despite evidence suggesting that alternative arrangements can lead to better employee and firm outcomes.

The future of work in accounting is not a distant concept; it’s already here. As the industry faces unprecedented change and disruption, it’s clear that the traditional ways of working are no longer sufficient. To thrive in this new era, accounting firms and professionals must embrace the opportunities of remote work and alternative work arrangements. For all the details, listen to episode 380 of The Accounting Podcast. 

How Auditors Can Bridge the Expectation Gap and Provide More Value

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The audit profession faces significant challenges, including evolving business models, high staff turnover, and a growing “expectation gap” between auditors and clients. The expectation gap refers to the difference between what clients believe auditors should be delivering versus the limited insights they often receive from traditional audit approaches.

In a recent episode of the Earmark Podcast, Alan Anderson, a renowned audit innovation leader, discussed the pressing need for a paradigm shift in the audit profession to address these issues.

Alan’s message is straightforward: In order to bridge the expectation gap and continue playing its crucial role, the audit profession needs to move away from its conventional compliance-focused approach. Instead, auditors should adopt a more proactive, insights-driven methodology that prioritizes comprehending clients’ businesses and offering timely, actionable recommendations.

The Expectation Gap: A Chasm Between Auditors and Clients

The current audit approach often fails to meet clients’ expectations. Auditors tend to focus on validating ending balances rather than understanding the entire transaction flow. For example, Alan described a client where 100% of transactions were based on container barcodes, but the auditors didn’t test the barcode system. They just traced numbers between reports without understanding the business.

Alan points out, “The expectation problem is that audits start at the end after the year-end has closed, and they start with those ending numbers, those aggregated amounts on the balance sheet or income statement. And then they test some of those items. The real gap is auditors don’t understand how the transaction even got into the general ledger.”

The expectation problem is that audits start at the end after the year-end has closed, and they start with those ending numbers, those aggregated amounts on the balance sheet or income statement. And then they test some of those items. The real gap is auditors don’t understand how the transaction even got into the general ledger.

Alan Anderson

To narrow the expectation gap, auditors must shift their focus to understanding transaction flows from inception through the system, providing more timely insights and value to clients. Addressing this gap is crucial for the audit profession to maintain its relevance.

Turning the Audit Upside Down: The Bottom-Up Approach

Auditors must adopt a bottom-up approach to understanding transaction flows to provide more value and timely insights. Alan emphasizes, “We need to think about turning our audit upside down. Rather than starting at the top, at the balance, and working down into the items, we need to start from the bottom up. When we start from the bottom up, we can be much more timely. We can be much more understanding of what’s happening to business.”

We need to think about turning our audit upside down. Rather than starting at the top, at the balance, and working down into the items, we need to start from the bottom up. When we start from the bottom up, we can be much more timely. We can be much more understanding of what’s happening to business.

Alan Anderson

This contrasts with the traditional “top-down” approach of starting with account balances and working backward. The bottom-up approach involves:

This bottom-up approach involves:

  • Starting with understanding transaction flows from the beginning
  • Working up to the financial statements
  • Providing real-time insights and understanding of the business
  • Offering greater value to clients

By adopting this approach, auditors can level out their workload, reduce the intensity of busy season, and deliver more meaningful insights to their clients.

The Power of Industry Specialization

Audit firms must specialize in specific industry segments to avoid commoditization and provide unique value to clients. As Alan notes, “When you try to be the pure generalist, doing any type of client of any type of industry, you’re just going to be a commodity provider. But I do believe that we can provide relevance in what we do if we set our mind to it, and our clients will see value.” 

When you try to be the pure generalist, doing any type of client of any type of industry, you’re just going to be a commodity provider. But I do believe that we can provide relevance in what we do if we set our mind to it, and our clients will see value.

Alan Anderson

Firms that specialize in specific industry segments and perform data-driven audits are more likely to:

  • Survive in a competitive market
  • Provide valuable insights to clients
  • Understand their clients’ businesses better
  • Offer more relevant advice

Generalist firms risk becoming commodity providers, unable to differentiate themselves or deliver unique value. Industry specialization is key to the paradigm shift needed in the audit profession.

Leveraging Technology and AI

Emerging technologies such as AI and blockchain have immense potential to enable the transformative, bottom-up audit approach Alan advocates. These tools can automate routine tasks, flag unusual transactions for auditor review, and continuously monitor systems.

For example, Alan describes putting an “audit bot” on a client’s system to analyze transaction flows and remove outliers. The auditor then interprets if flagged items are errors or fraud. This frees auditors to focus on understanding the business and providing valuable insights.

However, firms must approach technology purposefully. As Alan cautions, many firms have thrown technology at audits without rethinking their underlying processes. Technology should enable a fundamentally transformed audit methodology, not just a way to digitize existing checklists.

Potential Challenges and the Path Forward

Shifting to a bottom-up, data-driven audit approach is not without challenges. It requires significant investments in training, technology, and developing industry specializations. Staff may initially resist moving beyond familiar checklists. Firms will need to overhaul long-standing practices and fee structures.

However, the benefits are clear. Auditors will provide more value, gain deeper business understanding, and enjoy more engaging work. Clients will receive timely insights to improve their operations. The profession can reverse high turnover by making audits exciting again. 

 Alan shares, “I worked with a firm experiencing turnover at levels equal to that of every firm in the country. They worked with us for a year, and their turnover went to zero. Three people left and wanted to come back. Those staff were having fun. They were enjoying what they were doing. And guess what? Their quality went up.”

I worked with a firm experiencing turnover at levels equal to that of every firm in the country. They worked with us for a year, and their turnover went to zero. Three people left and wanted to come back. Those staff were having fun. They were enjoying what they were doing. And guess what? Their quality went up.

Alan Anderson

Transforming Audit: An Imperative for the Profession’s Future

The audit profession stands at a crossroads. Maintaining the status quo is not an option in a rapidly changing business world. Forward-thinking firms will abandon a narrow compliance focus and transform their approach to deliver valuable insights and thrive in the future.

Auditors have a clear choice: cling to an outdated model and slowly becoming irrelevant, or seize this opportunity to reimagine their role and secure their position as indispensable business advisors. The future of audit is exciting – for those bold enough to create it.

To learn more about the need for a paradigm shift in the audit profession and how auditors can adapt to provide more value to their clients, listen to the full episode of the Earmark Podcast featuring Alan Anderson. 

To learn more about transforming your audit practice, read Alan Anderson’s book Transforming Audit for the Future from CPA Trendlines.

Accounting’s Wild Ride: Private Equity, Burnout, and AI

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The accounting industry is in the middle of a wild ride! Private equity money, work-life balance drama, AI taking over – it’s enough to make your head spin. Blake Oliver and I dug into all these topics in our latest episode of The Accounting Podcast.

Through all the craziness, one thing’s clear: accountants have got to stay on their toes to make it in this business. Embrace the new, take care of yourself, and sharpen those skills – that’s the trick.

Will Private Equity End the Partnership Business Model?

You know it’s serious when a heavyweight like Grant Thornton gets gobbled up by private equity. New Mountain Capital swooping in shakes up the partnership model that’s been the foundation of accounting for decades.

In partnerships, profits end up lining partners’ pockets instead of getting pumped back into the firm. Private equity cash could be just what’s needed to drag firms into the future. Blake nailed it on the show: “The argument in favor of this sort of investment is that private equity can invest in modernizing technology, modernizing the firm in a way a partnership doesn’t.” 

But here’s the catch – private equity folks want their dough, which could mean partners’ paydays take a hit down the road. Accounting firms have to thread the needle – get that sweet private equity money but keep the partner track golden so that staff want to work hard and stick around to get there.

To Attract Talent, Firms Must Improve Work-Life Balance

Speaking of incentives, our discussion on working hours and job satisfaction in accounting was eye-opening. According to a report by Big 4 Transparency, a crowdsourced compensation website, the big cheeses – equity partners – are grinding 50+ hours a week on average.

“Could this be part of the problem with convincing people to stay in accounting?” Blake pondered. “You would think that the longer you stick around, the better off you’d be. You make more money. But you also work more hours, so it doesn’t add up.” 

Could this be part of the problem with convincing people to stay in accounting? You would think that the longer you stick around, the better off you’d be. You make more money. But you also work more hours, so it doesn’t add up.

Blake Oliver, CPA

And get this: No accounting firm had an average workweek of 40 hours or less.

Accounting firms have to tackle work-life balance head-on to keep top talent from running for the hills. Flexible work schedules, using tech to work smarter, not harder – firms need to get creative. Young people want a life outside work, and if we don’t get with the program, we’re going to lose out on the best of the best.

Artificial Intelligence Could Help

AI is about to shake things up big time in traditional accounting. ChatGPT and tools like it paint a wild picture – AI-powered insights transforming how we crunch numbers and dazzle clients.

Blake shared a great example: “When I met with clients as a manager, going over their financials, clients would have a question. And in the meeting, I couldn’t answer their question right then and there because I would have to go and do some research. But if I could use a chatbot to ask the question, I could review the answer real quick and then maybe give them the answer right then and there, rather than saying, I’ll do some research and get back to you. That saves a lot of time.”

The trick is using AI to make us accounting pros look good, not put us out of a job. With AI doing the heavy lifting on numbers and insights, we can focus on the high-value stuff clients need. But to make AI work for us, accountants must carve out time to level up their tech skills.

Navigating the Future

Accounting is at a fork in the road, juggling private equity plot twists, work-life balance meltdowns, and AI’s world takeover. It’s a wild ride! But every stomach-churning dip is a chance to throw our hands up and holler. Stay loose, take care of your crew, and always be first in line for the latest tech – that’s how we’ll come out of this ride, grinning.

To stay updated on the latest in the accounting profession, listen to me and Blake Oliver ride the accounting roller coaster every week on The Accounting Podcast.

QuickBooks Online Advanced Unleashes AI-Powered Financial Forecasting

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Imagine having a crystal ball that could predict your clients’ financial future with unparalleled accuracy. With the introduction of AI-driven financial forecasting in QuickBooks Online Advanced, that dream is closer to reality than ever before.

In this Unofficial QuickBooks Accountants Podcast episode, hosts Hector Garcia and Alicia Katz Pollock dive into the exciting world of AI and advanced features in QuickBooks, focusing on the potential for improved financial forecasting and decision-making. While these innovations offer exciting opportunities, they challenge maintaining transparency and trust. 

The Promise of AI-Driven Financial Forecasting

QuickBooks Online Advanced is set to introduce enhanced cash flow forecasting for balance sheets powered by artificial intelligence. This AI-powered forecasting considers factors like seasonality, customer attrition, and location to provide more accurate predictions. As Alicia Katz Pollock notes in the podcast, “I think they listened to our episode about the QuickBooks, about the cash flow forecasting, because every single thing that we said that we wanted it to do is here: seasonality, customer attrition, which is what I was calling customer churn, and then also location, being able to look at your region versus other regions.”

These factors contribute to more accurate predictions in various ways:

  • Seasonality: By analyzing historical data and trends, AI can help businesses anticipate and prepare for seasonal fluctuations in cash flow.
  • Customer Attrition: AI can identify patterns in customer behavior that may indicate a churn risk, allowing businesses to take proactive measures to retain clients and maintain steady cash flow.
  • Location-Based Data: Comparing financial performance across different regions can help businesses identify areas of strength or weakness and make more informed decisions about resource allocation.

The advanced features have the potential to revolutionize how accounting professionals provide financial advice and make decisions for their clients.

The Importance of Transparency and Trust

While the promise of AI-driven financial forecasting is undeniably exciting, it raises important questions about transparency and trust. Hector Garcia says, “As an accountant, I want to know what logic you’re applying to it. This whole thing of ‘don’t worry, it’s AI’ is black magic. ‘We are suggesting this out of nowhere.’ That’s not going to fly with us. I want to know what your AI is doing and the justification for suggesting this thing or that thing into the forecast.”

To fully leverage the benefits of AI-driven forecasting, accounting professionals must balance embracing new technologies and maintaining the trust and confidence of their clients. This means:

  • Understanding the logic and methodology behind AI-generated predictions
  • Being able to explain these predictions to clients in clear, accessible terms
  • Ensuring that AI is used as a tool to enhance human expertise, not replace it
  • Maintaining a critical eye and verifying AI-driven insights against other data sources

Accounting professionals must collaborate with technology providers to ensure that AI tools meet the industry’s specific needs and prioritize transparency. By finding the right balance, professionals can harness the power of AI-driven forecasting while still providing the human touch essential to building strong client relationships.

Preparing for the Future of Accounting

As AI continues to shape the future of accounting, professionals must stay informed, adapt their skills, and find ways to leverage these new technologies while prioritizing transparency and trust. This means:

  • Staying up-to-date with the latest developments in AI and machine learning
  • Investing in education and training to develop skills in data analysis and interpretation
  • Advocating for transparency and explainability in AI-driven accounting software
  • Maintaining a critical eye and verifying AI-generated insights against other data sources

By taking a proactive approach to integrating AI in accounting, professionals can position themselves at the forefront of this exciting new frontier.

The Bottom Line

The introduction of AI-driven financial forecasting in QuickBooks Online Advanced marks an exciting milestone in the evolution of accounting software. By considering factors like seasonality, customer attrition, and location-based data, AI can help businesses make more accurate predictions and informed decisions.

However, the success of AI in accounting relies on maintaining transparency and trust. Accounting professionals must understand the logic behind AI-generated insights and be able to explain them to clients. They should also view AI as a tool to enhance their expertise rather than replace it.

To thrive in the age of AI, accounting professionals should prioritize continuous learning, advocate for transparent AI tools, and collaborate with technology providers. By doing so, they can harness the power of AI-driven forecasting while continuing to provide the human expertise and judgment that is essential to their work.

To learn more about the future of AI in QuickBooks and how you can prepare your practice for these exciting changes, listen to the full episode of the Unofficial QuickBooks Accountants Podcast. With hosts Hector Garcia and Alicia Katz Pollock as your guides, you’ll gain valuable insights and strategies for navigating the brave new world of AI-driven accounting.

Alicia Katz Pollock’s Royalwise OWLS (On-Demand Web-based Learning Solutions) is the industry’s premier portal for top-notch QuickBooks Online training with CPE for accounting firms, bookkeepers, and small business owners. Visit Royalwise OWLS, where learning QBO is a HOOT!