change processes to pivot from people problems.
by jody padar
the radical cpa
if you’ve posted a job for an accountant in the past few years, you know people are hard to come by. the number of responses you received was likely down if you were lucky enough to find any at all.
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according to a recent aicpa trends report, the number of people graduating with a bachelor’s degree in accounting is down, and we’ve seen a steady decline since 2015. all this while half of u.s. cpa firms have increased the number of new graduates they want to hire. a lot of us are looking for staff that simply does not exist.
it doesn’t get any better when you examine the number of cpa candidates. the number is at its lowest since 2006, the furthest back the data went in the report. experienced hires are even more challenging to come by than new grads.
accounting just isn’t sexy enough! the accounting profession attracts a lot of people with analytical data skills. if someone is interested in numbers, they can study accounting or data analytics. these fields of study are competing for the same people in colleges. plus, the cpa profession then has the 150-hour rule, so when choosing a major, a student can choose data analytics without having to go to school for another year. and then there’s not having to take the cpa exam. and data analytics majors come out of school making more money, too. it’s hard to get the next generation to be excited about accounting.
the aicpa is working on a pipeline acceleration plan, but that will take time before we see results. so, that leaves us in a sticky situation where capacity is a big handicap. we’re constricted by the number of workable hours in a day, making this a limiting factor impacting a firm’s ability to grow revenue.
a typical accountant has, on average, 2,000 productive hours per year available, including time needed for administrative tasks, training, marketing and business development. therefore, in order to grow revenue, a firm has to hire additional staff to expand the number of clients they can support. a shortage of available talent makes hiring a poor option for revenue growth.
and you thought artificial intelligence was going to eliminate jobs. that’s not the case!
so, what are we to do? the answer rests in two main factors – keep a tight grip on the people you do have and use technology to take over the day-to-day grunt work.
the good thing is that these two areas are related. yes, you need to pay your people well, don’t work them to the bone and provide a culture where they can flourish. but you can also keep your people happy by removing the repetitive work from their workload.
that’s where ai, more specifically machine learning (ml) in the form of a bot, comes into play. when tasks are automated, accountants can get back up to 70 percent of their time, depending on what you do. this newfound time can be used on higher-level work. that’s the work that motivates your people, and with the proper training, they will excel in their new responsibilities. and because that new work is higher in value, clients will pay you more for it.
automation lets firms scale up without adding more staff or hours. what does it take for a midsize firm to sustain 2 percent quarterly growth? if a firm operates “as is,” it cannot achieve that growth without hiring an additional staff person. however, a firm that gets substantial assistance from technology can gain thousands of hours a year to reinvest in training, technology, advisory and growth.
as a firm increases reliance on ml-supported technology, it also needs to rethink billing processes. the billable hour really doesn’t apply when you have a bot doing your work. how can you bill for a bot’s time? you can’t. when it took a staff member 40 hours to do something the bot does in four minutes, time is irrelevant.
many firms get caught up in the fact that their costs when utilizing bots are significantly lower than before, which is why cost-plus pricing no longer works as a blueprint.
new technology requires standardizing processes, something accountants have historically struggled with. and it eliminates manual data entry, which also improves the accuracy and reliability of data. when the data entry is done for you, you can become more creative, analytical and strategic. the result of technology innovation is data that’s humanized. it is relevant. actionable. and you know who can interpret that data? you.
if there is an available tech option that automates an antiquated or repetitive process, run toward it with open arms. use your newfound time to provide more value to clients.