Accounting Tomorrow: Preparing for Transformative Changes

Rob Brown: 00:00:00

Hi, I'm Rob brown and welcome you.

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Accounting finance professionals,

tech enthusiasts to the

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accounting answers podcast.

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We've embarked on a captivating

exploration of the future of accounting

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and its profound connection to the

ever-changing technology ecosystem.

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I think for a moment, how access to the

minds of a range of accounting experts,

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influencers, vendors, and leaders would

keep you super informed about what's

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going on in this wonderful profession.

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You'd stay relevant and future focused.

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You'd make better strategic

and career decisions.

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If you know what forces are in play

and what factors are driving change.

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To unravel the complexities

unenviable future of accounting.

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I've personally interviewed 111

leading accounting professionals, tech

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leaders, and industry influencers,

each bring in their unique.

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Expertise and insights to the

table and together we'll delve into

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the five critical questions that

will shape the accounting world.

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Through the eyes and minds of people

living their accounts in life.

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I'll talk into accountants every day.

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We'll talk about five critical topics

that ignite in passionate debates

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and stimulate minds across the globe.

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We're mapping the transformative

trajectory of the accounting profession

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and its symbiotic relationship

with the technological revolution.

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We'll be asking about the next

gen accountants, how far down

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the advisory line firms are.

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What's going to change

the accounting world.

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What their software vendors

and tech providers could do

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better to serve accountants.

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And what's coming up in the future.

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Let's get straight into the

answers for today's topic.

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Oh this week, we're asking the question.

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What, if anything will significantly

change accounting in the next few years?

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What changes are on the horizon?

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A few doubt that weren't to go

in seismic shifts propelled by

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technological and basements, the

rise of innovative business models.

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And the ever evolving regulatory

landscape and this dynamic environment

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presents many questions, challenges, and

opportunities that demand our attention.

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It's good to stay informed.

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So let's dive into here,

what our experts have to say.

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I'm thrilled to introduce Jeff gremlin.

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CPA head of accounting at Valdez

and a 40 year industry veteran.

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Who's dedicated his career to enhancing

the reliability and efficiency of

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financial reporting and analysis.

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Jeff Gramlich: Ongoing regulation.

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That'll change it.

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and so maybe, an ongoing, government

and legislative demands whenever

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there's more money moving, whether

it's through a business, or through

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a service, you have to think through

who all wants a piece of that action.

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And so that complexity, the Is going to

require new things, for the accountant.

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I was just talking last week with

some folks about lease accounting.

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And if you haven't done lease accounting

before the rules used to be pretty

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straightforward, they're not so much

anymore and they're very involved.

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And if you haven't done a lot of.

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lease accounting yourself as

a CPA, you haven't done it.

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And so there's constant things like that.

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And that's for two reasons.

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One, for the investing public that

really relies on us to, to issue an

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opinion and be independent of management

and be independent of the company.

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In fact, in appearance, it's important

that we, make sure that what the

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company is revealing to the public

financially is true and accurate

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to the best of our abilities.

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Right?

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so I think with increased regulation.

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Typically, Rob has always come

increased complexity and some of

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these rules just have to be looked

through at a granular level.

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And the client doesn't

have time to do that.

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And a great example of that was, here

in the States when COVID hit and we

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had the, uh, the payroll protection

plan, PPP, as it was called here, There

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was a process for applying for the

money, which some of the accounting

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firms helped their clients do.

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There was a process for usage of

the money and tracking, what the

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accounting firms also helped them do.

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Track where the money actually got used.

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And then when we started forgiving

paybacks of the money, There was

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yet a third process for getting

forgiveness of that, of which the

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accounting firms helped them do.

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So that's just one recent kind of

a broader public type example where

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the CPA got very involved to help

their client do that, and in some

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cases, keep their business open.

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we knew what the word

pandemic meant prior to: 2020

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I'm not sure most of us ever said it

much, or even thought about it much

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because it was something that happened.

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A long time ago, and we just

didn't, it never came up.

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but, Bloyd came up in, in 2020 from

March onward, and we still talk about it.

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And I know it's in the rearview mirror

for the vast majority of it, but

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we still think about those things,

and people are already planning,

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okay, what if this happens again?

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What do we need to do differently?

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And so that kind of forward

thinking is very important.

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And, we've got some, and,

Some global conflicts that we

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didn't have a few years ago.

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I'm not trying to get

political here, but we do.

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We've got some wars going on

different parts of the world and

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things have to be thought about

differently from going concerned

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from, from the ESG perspective, right?

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And that's where the CPA frequently can

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Rob Brown: welcome to Jeff Phillips

CEO of Padgett, founder of accounting

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flight and accounting talent expert.

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Who's revolutionizing the way

accounting firms attract and retain

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top talent in a competitive market.

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Jeff Phillips: What's going to change

accounting in the next few years?

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And I'm coming from the perspective

from Paget, where we work with firms in

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Canada and the United States that are

smaller and serving small businesses.

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But I think across the global

profession, remote hiring.

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Is going to be a major change that

we're going to see in accounting.

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I believe that in the coming

years, 50 percent of hires.

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Will be from, staff that work in your

country, but they can work in a different

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city than where your main office is.

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And when owners and partners begin

to embrace this work from anywhere

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concept, they'll realize that

they can find somebody in a matter

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of weeks, not months or years.

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Another change is offshoring and that's

a little bit more embraced, but there is.

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Much more room to grow, and I think

we're going to see a greater adoption

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of offshoring tax accounting and payroll

work to other countries where you

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might take advantage of labor costs.

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Obviously, you're going to

see more automation and AI.

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I think there's plenty of people that are

going to talk about that topic, but what I

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get excited about is where can businesses.

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Automate routine tasks

over and over again.

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There are so many software

products globally that give

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accountants the freedom to do that.

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So you're finding another resource

you can delegate work to and these

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changes are going to ultimately lead

the accountants to be proactive, to be

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advisors, to have desktop alerts that

will notify them when issues might come

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up for a client that they can get in

front of the client and let them know.

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These are three changes I see happening

rapidly over the next few years.

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Rob Brown: Let's explore the ideas of

Jeff cybered angel investor and co-founder

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and CEO of digits, where accounting is

re-imagined through technology, offering

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innovative solutions that transform

financial management of businesses.

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Jeff Seibert: This is a fun

one because the cliche answer,

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of course, is AI is going to

completely change accounting, right?

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But let me go way deeper

than that as an engineer.

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so a lot of what you've seen so far has

been driven by the sort of generative

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hype train that started with ChatGPT.

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And so now there's tools to

automatically draft client

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engagement letters, summarize data.

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write SEO content to attract new clients.

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And those are nice.

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I'm not saying those are bad and

they might help save some time, but I

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don't think those are going to really

significantly change the industry.

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if you look at it, most accounting and

bookkeeping work is not generative.

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It is what we would call predictive.

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And so transactions happen,

they need to be booked, right?

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Statements and balances

need to be reconciled.

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Invoices and purchase orders

need to be parsed and matched.

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Ledger entries need to be reviewed

for mistakes or for fraud.

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These are all predictive types of work.

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And so there are new MI, ML, and AI

techniques that are starting to make

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huge inroads into these core workflows.

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And we have teams applying new

techniques like vector similarity search.

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Leg out aware, large language

models, self critical agents,

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which is the cutting edge.

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and they're very effective at some

of these core accounting workflows.

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And so I would say over the next few

years, what's really going to happen

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is AI is going to start to open up

massive efficiency gains, allowing

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accountants to spend a lot less time on

the tedium, allowing them to serve far

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more clients with more time and more

attention and care to those clients.

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And as the tedium falls away.

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The client relationships are going

to become ever more important.

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Rob Brown: now I'm thrilled to

welcome accounting royalty, Jennifer

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Warwa president of quick fee, north

America and accounting thought

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leader and a FinTech executive

who's driving evolution of payment

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solutions for the accounting industry.

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Jennifer Warawa: I would love to say

that a lot will change in the next few

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years, but I said that 10 years ago,

and I think I said that 20 years ago.

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And then when you go to keynotes at

large accounting conferences, or you

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go and listen to podcasts, you're

like, wow, we were talking about

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that 10 years ago or 15 years ago.

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and so I think that.

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we're still finding ourselves or

firms are still finding themselves

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constrained with, on prem technology.

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We have a lot of firms.

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I'd love to get off of what I'm

using, but I'm so deep in it,

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whether it's, practice management

solution or an accounting solution.

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And, and so they're constrained

by those challenges.

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And then you have a group of firm

partners who is getting set to

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retire in the next few years.

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And they're like, I hope that I can retire

before all of this has to get implemented

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or any major change needs to happen.

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So I think the change will

probably well summarized by

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saying survival of the fittest.

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The gap will continue to widen

between the innovative accountants

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and accounting firms who embrace

change and adopt leading technology.

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And those who cling to the status

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quo.

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At a recent BDO event, the big topic

was, this was an area meeting, but

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the big topic was The challenges

attracting and retaining talent and,

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it feels like a very today problem.

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And Michael Horowitz from BDO said,

I just want to let you know that

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if you came to the same meeting

10 years ago, this was the topic.

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If you came to the same meeting

15 years ago, this was the topic.

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So it's not, it feels new, but

it's still the same as before.

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Rob Brown: Let's get ready to hear

now from Jeremy Clopton upstream,

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Academy's managing director leading

transformational change in accounting

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from leaders, inspiring a culture

of innovation and forward thinking

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in the accounting profession.

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Jeremy Clopton: Technology's

going to change, in the States,

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especially right now, the entry

of private equity is changing.

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A lot of the conversation, there's

a lot of the obvious stuff.

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I really believe that one of the big

things that is changing the profession

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over the next few years is how we work.

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All right.

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Firms finally moving away from

this idea that we sell hours.

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We sell our time hours or our

inventory more hours is more success.

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That mindset shift, that approach to

management, that fundamental change

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to the business model that says we

don't generate value based on time.

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But instead we generate value based

on the outcomes that we provide.

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the successes that we help clients

achieve, the risk we help them mitigate.

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That is going to be one of the

biggest changes in the next few years.

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And there are some firms that

have already made that change.

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I don't know anybody's

fully made that change.

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There's still always pockets, right?

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They latch onto the old model, but that

is going to be a significant change.

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Because it's that mindset shift, that

business model shift that is truly

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going to allow, in my mind, firms to

take advantage of all the other changes

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that are out there, the technology, the

outsourcing, the, the different, talent

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pipelines of different majors and the

different way to staff and structure.

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But it's all contingent on the fact

that we stopped thinking that our

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hours are what we're getting paid for.

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And we recognize it's the difference

we're making for our clients.

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That's what we're, that's

what we're getting paid for.

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That's the value that we're

generating in the market.

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And it has to.

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if you think about all the other changes,

implementing AI, implementing analytics,

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automation, process improvements,

getting folks that are, more specialized

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and we reign in the processes and

we get more, lean Six Sigma, all the

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things, all of those things are great,

but if we still buy into the fact

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that we're getting paid for hours.

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That's going to make us less successful

and that's a very bad place to be.

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So, tech and all the other, those

are the easy changes, but we got to

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figure out, we got to move upstream

and figure out, okay, what's the

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underlying problem that has to change

so we can actually get the benefit of

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Rob Brown: that.

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So they have five great

answers to the question.

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What, if anything will significantly

change accounting in the next few

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years, every working day of the week,

Monday through Friday, we give you

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the insights of five top influencers

in the accounting world on this

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critical area of what is coming up.

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Change wise for accountants

that's 25 valuable perspectives.

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Viewpoints and best thinking every

week and with a fresh week comes the

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first question and more thoughts from

the best influencers and leaders we

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can find in the accounting world.

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Thanks for listening to the accounting

answers podcast and sharing this brand

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new show with your friends and colleagues.

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If you want to join the conversation.

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You can plug into our community of

influencers@accountinginfluences.com.

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And check out our virtual

speed networking events.

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These happen every few months

for the north American region

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and the UK Europe region.

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These are great opportunities

to raise your profile, build

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valuable connections and share your

thoughts with influential peers.

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Until next time, this is your host,

Rob brown, saying stay informed,

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stay relevant and stay connected.