david bergstein says you’re wasting your time and your client’s money if you’re not focussing on the future.
with steven sacks
the new fundamentals: thriving in disruption
to be more competitive, cpas need to shift their focus from compliance service to process-oriented, value-added work, veteran cpa david bergstein tells 卡塔尔世界杯常规比赛时间. this means working with clients to understand their business operations, competition, and financial challenges, such as liquidity, solvency, and profitability.
more on value-add: how cas communications are different | how value billing eliminates guesswork | avoid last-minute deal making | how a great managing partner impacts firm growth | tax season client meetings: kill them now | do you give yourself too much credit? | the 17 rules for making partner at a cpa firm | family feud isn’t just a game show
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the key takeaways:
- accountants need to switch their focus to look to the future and real-time accounting, which means that the right way of doing things these days is to take advantage of all technology and automation.
- it’s a small and mid-size business that doesn’t have a bookkeeper, that doesn’t have an accountant, that doesn’t have a controller, that doesn’t have a cfo that looks to cpas to help them. cpas’ advantage is to use that technology to automate all those processes and then spend time selling value-added services.
- today, to be successful as an accountant, you must identify what platform or platforms you’re going to use to capture your clients’ data at the source to move it through the system.
- payroll tax processing services can be expanded by setting up the human resource tools that go with it. beyond processing payroll, cpas can find ways to get lower workman’s compensation; automate the onboarding of employees, and provide various benefit options.
- as part of the de-emphasis on process, younger staff members don’t want to do vouchering anymore, which will be supplanted anyway by automation. so, it’s great for firms to offer more training opportunities to their younger staff regarding analytical thinking, selling, and how to consult with clients to find out what their needs are.
transcript
david bergstein, interviewed by steven sacks
steven sacks
hello, i’m steven sacks, owner of solutions to results llc. today i’m here with david bergstein, chief innovation officer with bergstein cpa. david, who has been a major voice in the profession, is a leading proponent of the use of technology by cpa firms, and how firms need to position themselves in the future in this new work environment. welcome, david. and thank you for participating today.
david bergstein
thank you for inviting me, steve, it’s always my pleasure to chat with you on these technology topics. i am working my way to retirement by helping other cpas improve their technology as well as adjunct teaching accounting to youngsters, showing that the future of accounting is bright, as long as you do it the right way.
steven sacks
well, it’s interesting that you say, as long as you do it the right way, because you and i had in many prior conversations have talked about the limitations and value that the year-end audit and the tax return has. and if you’re not delivering value for your client, the client is going to go elsewhere. so, we get to that c-word: commodity. and we’ve heard that both services the audit and tax return preparation is, is becoming a commodity with the growing emergence of robotic process automation and artificial intelligence. so the audit’s value, the tax returns, is starting to become more apparent in its limitation. what do you think the profession can do to come up with a way that both of these can be truly value-added services?
david bergstein
great question. i think the profession has to change from looking at the past being historical, which is what the audit, the review, and the compilation with delivering. the tax return is also delivering past information to the prior year. but accountants have to do is now switch their focus to look to the future and real-time accounting, which means the right way of doing things these days, is to take advantage of all technology and automation ai that you can that will produce real-time answers so that you can be advising your clients on what they need to do to stay profitable liquid and solvent. because the future is all about helping your businesses grow. audits are going to always be there for the outside investors, the government entities, et cetera, et cetera. so they can go back and check to look at the accuracy. but what the business owner wants, how can you help me right now improve what i’m doing so i can increase my profitability daily. i don’t want to wait till the month after the year-end close or a month into the quarterly close. i want to know right now what i can change and automation and technology, use, and even the aicpa nasba are changing what they consider core competencies and changing the cpa exam. so people can be more of an adviser status, more analytical to help their clients. it’s not about putting on the green eyeshade and putting your head down anymore. it’s about getting actively involved with your client. and what you as a solo practitioner, and it’s 44,000 plus of us out there, smaller cpa firms, we’re always going to have a hand in compliance even though the consumer applications are automating it more. and even though the professional tools are automating it more. we’re always going to be in compliance because it’s a small mid-size business that doesn’t have a bookkeeper, that doesn’t have an accountant, that doesn’t have a controller, that doesn’t have a cfo that looks to us to help them. and the advantage we have now is we can use that technology to automate all those processes, and then spend time selling our services. why did someone go into a cpa profession? well, they might like numbers, they might like financial acumen, they might want to — i always want to help my clients, but they’re basically going to open up their sole proprietorship or small business or partnership to make money. so how does the cpa make money today? by helping their clients be more liquid, solvent, and profitable. it’s not about me saying come to me because i can do this. it’s about me sitting down with the potential clients and existing clients and showing how you bring them more value by asking them what keeps them up at night. what are their goals? what are their objectives? have they thought about their business? do they have a written business plan? do they have a business strategy plan? do they have goals? do they have budgets? and as you ask those questions, you’re opening up yourself to be able to help them and that’s truly the goal. and as a cpa, i may not know all the answers. i may not know all the niches. but as a cpa business person, i can hire other people around me to offer my services, not to do audit and tax, but to do consulting, advisory and accounting services to them. and that’s what cpa firms are becoming. they’re becoming professional service firms. but showing upfront that, hey, everybody needs help with accounting. let’s start there. and that’s why the focus is on client accounting services, because it lets you see what’s going on. whether you’re outsourcing it, you look at it more information, cause i sit with three computer screens in front of me. i can monitor my clients. and as you use business intelligence software, you can see green, red, yellow. i better call this client and tell them hey, let’s take a look at this, to see how to help you.
steven sacks
so in other words, what we’re talking about is a shift away from compliance and more of strategy settings, strategic advice for the client. talk a little bit about that.
david bergstein
ok, well, you have this organization, the aicpa that has a marketing arm called cpa.com. and they’re out there to help cpas change what they do. and they’re constantly talking about client accounting advisory services, being the future of accounting. you have many cpas out there, evangelizing such as i do, that we want to help you as a cpa change what you do. you have to focus on real-time accounting, you have to focus on helping your clients. and the tools that are out there are very diverse today. you can choose many different platforms, there’s no one solution that will help an accountant be more productive in automating their clients’ processes. but, today, to be successful as an accountant, you have to be able to identify what platform or platforms you’re going to use to capture your clients’ data at source to move it through the system. again, accounting is a process of recording, sorting, summarizing economic data. that’s all it can be automated. but the end part of that is accounting is a process and doing xyz to help your clients make informed decisions. everyone talks about being an adviser, but you want to be more than an adviser. and what’s better than being the trusted adviser, or really, i’ll call it the control center for your client. when they doing anything that relates to business, personal and it has financial involvement in it, and everything has financial involvement, to some extent. even health care costs. you might be advising your clients on different health care solutions. you may not know it, but you may be hiring somebody else as a consultant to work for your firm. so the client knows that there is one stop shop to help them.
steven sacks
so it’s sort of like the cpas following the route that cfos have been going through in terms of going from financial concerns to operations, management, human resources and technology. so you think that the cpas are going to parallel that transformation? yes?
david bergstein
i totally agree that cpas are going to parallel that and actually the cpa firm of now or the future, should be changing what they’re offering. and then they should be offering different levels of service to the clients. and what i mean by that is they can be offering transactional help, which gives me advisory services on setting up the client to automate their tools. or controllership services, depending what they need, or cfo, which is more strategic. and virtual meetings. you know, as a cpa firm i was talking to one practitioner, that’s building the whole cpa practice. they went from five people to over 60, i believe, where he brings on virtual controllers and cfos to work with the clients. they’ve created the automated process to capture data. and you really want to have meetings with your clients, but they could be virtual. and you could have in person meetings when the time presents itself. but more and more, this pandemic is forced people to realize they can be in contact virtually with anyone that’s helping them with their business. so, why hire a bookkeeper to your office when you can hire maybe a bookkeeper consultant or an accountant consultant, or a cpa consultant to help you do everything. and that person is automating the processes and looking at that dashboard to see what they can do to help you and schedule meetings. you know, the concerns about growing and what products to offer. again, a businessman says hey, i’m going to be a baker. you know, sort of like the e myth and i’m going to open up a bakery. you know, they sit down with the client and say, hey, you’re doing great, but i know you’re great at what you’re doing. but let’s help you work on the business instead of the business. you know, have you tested the area? do you know what kinds of breads or cakes they like? are you keeping records of what’s selling and what’s not selling? focus them on looking at profit lines for each of the things that they sell. that’s a value-added service. i give you a tax return. i’ll give you payroll tax. i’ll give you the sales tax. but we’re here to help you. it’s not about these commodity services. let’s help you plan your future.
steven sacks
so, you know, you just spoke briefly about payroll taxes. so some of the applications right now will enable the cpa to analyze the benefits, compensation benefits plans, and they have human resource applications that cpas can use on top of the payroll tax processing service they provide. talk a little bit about that.
david bergstein
yeah, because it used to be accountants didn’t want to do payroll claims would come in with call and after-the-fact payroll or light payroll. it was a pain in the butt. it had to be real. you know, especially if it’s like payroll making go out every week. well, there’s automation tools, there now where when you set up the application, all the client does is put in the hours and the payroll is generated automatically. but, it’s not just about the payroll. it’s about the human resource tools that go with it. so payroll programs no longer just say, we’re doing your payroll. we’re going to help you find ways to get lower workman’s compensation. we’re going to help you find a way to automate the onboarding of your clients — i mean, of your employees if we’re doing the payroll across the board. we’re going to give your employees choices through an hr payroll. not just payroll. it’s given me greater depth, because i’m partnering with some hr applications, that allows me to talk to my client about ways of keeping his client, his employees and offering them more benefits.
steven sacks
you know what i find quite interesting is that the cpas these days are now turning to turbotax to help their clients with or to prepare their clients’ tax return. so, tax return, you know, if you analyze it properly, it tells some stories that you can provide advice to your client. talk a little bit about how a practitioner can be head and shoulders above the competition when it comes to tax preparation.
david bergstein
a good example is i’ve had a client for the last 20 years. a vp of sales at a company, who has retired last year. actually, two years ago retirement. doing his tax return. and at this point, his sources of income, his sources of investments, his diversification, what he was doing with his money to plan for retirement. it is really coming together that he’s now really basically doing rmds and pulling from certain investments. and i said, i think this is the year that i would like you to try to do your own return. but i’m here to help. but we still have to do our advisory services. because the advisory service that i’m doing with his money is: should he pay off. his questions a couple of weeks ago: should i pay off my mortgage? or should i continue to have the mortgage? and we talked about the different thoughts of the tax implication, what tax brackets he’s in, if he takes a large chunk of money out from his retirement plan, or what he could do with the money and reinvest it. it’s all about advisory services and financial literacy. you know, do you want to set up some funds for your children? how are you putting money aside for your estate planning? it’s all changing, but it’s not about doing the tax return now. it’s about financial literacy and how to transfer the wealth to the next generation.
steven sacks
so one final question. when it comes to not being myopic, but being you know, broad thinking, and looking ahead at the curve, how you can help your client. what are cpa firms now doing to cultivate this type of entrepreneurial mind mindset with their younger staff?
david bergstein
well, they are looking to give their staff more knowledge and actually younger staff doesn’t want to do busywork. they don’t want to do bookkeeping. they don’t want to do recording, sorting summarizing. they don’t want to do vouchering, because they’ve grown up with they know there are tools out here, whether they’re on the computer or on their tablet. they know how to move information around. so they want to be able to do more advisory service. so, it’s great for firms to offer more training opportunities to their employees about analytical thinking, selling, how to sell the client, which is not selling the client, but consulting with the client to find out what their needs are. how to identify. the more services you render to your client, the more touch points, not just a delivery of a tax return and payroll taxes, sales tax, a tax return, financial statement. the more you talk to them about helping them be more liquid solvent and profitable, the more stickiness and the more value you bring to your clients as a professional.
steven sacks
so to put a ribbon on this it’s essentially knowledge, not simply process.
david bergstein
it’s all about the knowledge, but you have to use the processes to be able to accumulate the information so you can spread the knowledge. and actually, it’s easy to obtain more knowledge with some of these business intelligent tools, and even cash flow is the biggest thing that small businesses need to know. they’re cash flow tools out there that’ll take the data that’s been put in there and help you as an accountant, give them advice, how to budget, what to do, and how to improve their cash flow and changes they should make.
steven sacks
makes a lot of sense. well, david, i appreciate you taking the time today to share your knowledge where this is concerned and it’s knowledge, knowledge sharing, value-added service, strategy. those are the keywords i think you would like our audience to be as take-aways.
david bergstein
i agree with you 100%. mr. sacks, it’s been a pleasure.
steven sacks
it has been more than a pleasure. thank you, mr. bergstein.