The IFAC Global Knowledge Gateway team recently attended the American Institute of CPAs (AICPA)’s Practitioners and Tech+ (PracTech) Symposium in Las Vegas, NV to capture the key discussions and overall mood of the accountancy profession in 2016 as it is on the brink of what seems to be some revolutionary changes. We talked to thought leaders and experimented with new technologies, and we spoke with the accountants on the ground guiding businesses every day.
There is no better way to gauge the future of the accounting profession than to see these different groups interact in a dynamic venue. While attending the learning sessions, it was clear to see an overall promise of reinvention—a promise that is available for all accounting firms today if they are willing to embrace transformative technologies, new leadership approaches, economic opportunities, and changing corporate culture. Vendor displays also revealed new possibilities: new software for workflow automation, improved client engagement, and real-time monitoring of business performance. However, having a strategy for how you can bridge the gap between the potential of the future and the practicality of the present is critical for any attendee.
Choosing from Tomorrow’s Transformative Technologies
The most important concept that all firms must grasp today is the cloud. The experts we spoke with emphasized that many firms still have ill-conceived notions about cloud technologies with respect to certain risks. This begins with having to embrace the intangible over the tangible. “One of the main things that small firms have an issue with is change,” says Jose Antunes, an accountant at WithumSmith+Brown. “They are all used to going into their file cabinets and having that physical piece of paper on their desk.”
According Jim Boomer, Chief Executive Officer, Boomer Consulting, Inc., a major concern in terms of the cloud is security. “We hear over and over that if we put our data in the cloud it’s at risk,” says Boomer. “A big part of this is from the media. You see security breaches and cybersecurity issues from big companies in the press all the time. But if you step back and look at the resources that the cloud providers are putting into security, its way more than an accounting firm could ever put into that function.”
Cloud-based applications also empower software for resource management, especially in improving staff productivity. On the cloud, businesses are using these smart tools to coordinate skill sets, tasks, and timing to maximize efficiency in the workplace. “One of the biggest issues that faces accounting firms of all sizes today is staffing—recruitment and training of staff,” says Cathy Foley, Director of Technical Sales at XCM Solutions, LLC. “The resource tools we are starting to see [that use the cloud] help to align them with the work they do.”
Perhaps the most powerful aspect of the cloud is its ability to integrate many different software functions that support all operations of an accounting firm or business—including finance, human resources, and client management. “The cloud is a concept for improving workflow, internal processes, and the way you are managing your data,” says Jules Carman, Senior Director, Global Accounting and Consulting Segment, Intapp.
Discovering Your Leadership Style
Technology alone is not the only driver of the future. As new accountants enter the workforce, there are calls for new leadership styles. “As a profession, we are starting to separate into differences of the generations,” says Mark Koziel, Vice President, Firm Services and Global Alliances, AICPA. Many of the experts we spoke with noted that millennials in the workforce seek change: greater flexibility in work/life balance, a more innovative office culture, and clear paths for professional growth and leadership.
“Today’s emerging leader is going to gain acceptance, inspiration, and the following of their people,” says Jennifer Wilson, Co-Founder and Partner, ConvergenceCoaching, LLC. “It’s a different kind of leadership. They have to be able to give feedback and be willing to receive it.” Wilson also advises that the concept of change—and the ability to address it effectively—is one of the defining traits of new leaders in accountancy firms.
There is something intrinsic and self-driven about what the changing workforce expects from leaders in this rapidly changing environment. “Traditionally, people have tended to look for others to tell them who do I need to be as a leader,” says Sarah Elloitt, Co-Founder of Intend2Lead, LLC. “But true leadership is an inside out job and we need to start within and lead ourselves before we can lead other people.”
Creating an Innovative Corporate Culture
PracTech also raised interest in the concept of a new kind of corporate culture in accounting firms: one that is based on individuality and innovation. Some say businesses that encourage individuals to leverage their unique skills and talents are more likely to recognize opportunities more quickly than those that follow rigid, traditional thinking.
Corporate culture also impacts the ability to deliver services and build client relationships. Edi Osborne, Professional Trainer and Coach, Mentor Plus, stresses that firms need to develop soft skills as part of their corporate culture in order to more effectively engage with clients in many of the new advisory services that accounting firms offer. “Culturally, these firms look at their people as being far more important than firms that are more technically focused. In firms that are advisory focused it’s all about developing people,” says Osborne.
One of the highlights of PracTech was a keynote by Bill Reeb, CEO of Succession Institute, LLC and co-author of several books on succession planning. Reeb emphasized that firm leaders and managers must do much more to motivate their staff to achieve their highest potential. This highly personalized mentoring approach might be ideal for millennial accountants and business professionals as it taps into more than just traditional business performance goals. Reeb, who is also a martial arts expert, employed inspiring mind-over-matter analogies to demonstrate the relationship between overcoming physically difficult personal challenges with professional ones. “We’re going to create a culture that is supportive and that helps people learn, try, fail so they become better and better,” says Reeb.
Capitalizing on New Economic Opportunities
One thing was made very clear at PracTech: accounting firms must pay close attention to the development of new advisory services if they want to remain relevant in the future. Firms need to look at the digital economy and the changing marketplace to develop services for their clients.
“Customers and prospects don’t care about compliance; they care about reliance: their wants and not their needs,” says Daniel Morris, Senior Partner and Managing Director, Morris + D'Angelo. “Compliance firms only deal with tax returns and financial statements—regulatory matters. Legacy kind of matters. Lagging indicators. New firms focus on ways to benefit people in the future.”
Experts at PracTech also agreed that advisory services will comprise a big opportunity for firms seeking to grow. “Where we see most firms spending their time is actually in the consulting area and building up these non-compliance based services,” says Sarah Johnson Dobek, Founder and President, Inovautus Consulting. “The consulting (e.g., non-compliance) services that CPA firms are offering are going to be the biggest growth opportunity for these firms. They are going to have the highest profit margins compared to tax and [audit and attest] services.”
But perhaps the biggest asset the accountancy profession has moving forward is the longstanding trust of society. Barry Melancon, President and CEO AICPA, said it best in his keynote when he summarized the key forces driving change for our profession today and in the future: “People see the profession with trust in a world where there is a void in trust.”
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