With accounting talent so hard to find, Wiss managing partner and CEO Paul Peterson shares how his firm has cultivated non-accountants and non-CPAs to fill the gap.
Transcription:
Dan Hood (00:03):
Welcome to On the Air with Accounting Today. I'm editor-in-chief Dan Hood. When you look at how the average accountant spends their day, one of the things that jumps out at you is how much work they do that doesn't actually require accounting knowledge, and that discrepancy only gets worse when you look specifically at CPAs. And even worse, when you look at the partners of CPA firms who spend a lot of time doing administrative work or things that aren't specifically were never on the CPA exam, that would all be fine if firms had plenty of CPAs and accountants floating around to do all that non accounting related work. But in this day and age, they often don't. So what are the alternatives? Well, what if you found other people to do that? Non accounting work here to talk about that and similar topics is Paul Peterson. He's the CEO and managing partner of Top 100 firm Wiss, and they've been doing exactly that for something like five years now. Paul, thanks for joining us.
Paul Peterson (00:48):
Thank you, Dan. I'm happy to be here. I appreciate the opportunity to convert us about this today. It's been something that a lot of firms have been struggling with is just the shortage of CPAs and how do you start to provide the foundation that the firm needs to continue to service the clients in the way that they're used to, but at the same time add additional services that many clients are expecting an accounting firm to deliver today.
Dan Hood (01:16):
Hiring non-ELL is an idea. This floated around for a bit, but there aren't many firms that have been doing it, so that's why we were particularly excited to talk to you all because you've been trying it out for a good long time and having some success with it. I think maybe let's start at the first. How do you identify work that non-accountants can do? Do you end up having to split up roles and saying all we're going to take this little piece and this little piece over here and this little piece over here?
Paul Peterson (01:39):
Yeah, I mean, it's a good question. I think to bring it back to where we really started looking into say there's a confluence I think of factors was one is just the shortage and there was a demand for additional services that an accounting firm can provide, especially when we were able to do accounting through the cloud. That breakthrough in essence where you could do a lot of accounting work on behalf of a company remotely, and you could start to look at the economics of, Hey, does this delivery of that service, is it something comparable to if a company had to hire that person on site? So with that though, it really started, it was the demand for that type of service from the opportunity that the internet really provided through the cloud, and we had to economically do it. So we did have to start thinking about, okay, what are ways that we can get a lower hour?
(02:47):
I would say hourly rate because we're still up against what a company would pay to have this person on staff versus what they would pay us. Okay. So there's no way that if we just hired accountants at what the salaries they would be doing and doing that type of work, that would work. So I think that economic push started to get us to look alternatively, and what we looked at were what fields had similar type quantitative looks like if somebody was in math, let's say, or we've taken a physics major and we've converted them. But in the beginning it was more about, hey, somebody is interested in trying to get into a bookkeeping career. And so that they were totally fine with educating themselves along the way. So it almost like we had to find the person that was willing to make the investment in themselves at the same time. That's how it started. That's how we got into it.
Dan Hood (03:58):
Yeah. Very cool. Well, it brings up an interesting point, which is there's kind of two ways of working or two kinds of non-accountants you could work with who have expertise in something. So for instance, we know a lot of firms have hired people from industries that they serve. So you're like, wow, this person ran a car dealership for 20 years. They're an expert in car dealerships, they'll be great. Our car dealership practice, even though they're not an account. So there's those people who bring outside expertise, but then there's just people who are reasonably intelligent and willing to work. I mean, you start talking about a physics majors, a perfect example of someone who would've a similar set of mindset and skills and analytical abilities that you would expect an accountant but not have had spent a great deal of time getting through the CBA exam. So how do you divide that up? Are there some people, you're not accountants, you're hiring or experts, some people who are just smart and willing to work, or is it a mix you?
Paul Peterson (04:53):
It's definitely a mix. So I would say that there's a three different, I would say paths maybe to kind of generalize it. One is just like we talked about, it's somebody that is looking to establish a career change or that maybe they had a quantitative background, not happy what they're doing, and hey, you know what I'm interested to learn and at the same time educate myself more. So if that's even at the level, like, Hey, I'll go get QuickBooks certified and they'll be at that level, or I'm going to go to school at night. And so there were those that and that we supplement, we will help pay for their education and stuff like that. So there was a desire, I think, of the individual that they saw themselves as wanting to invest the time and effort. The second piece was more from where the clients are starting to look at us as to offering additional services because of the overall shortage.
(05:50):
I think sometimes that gets lost here is that you have, we're spending a lot of times talking about the shortage of accountants in accounting firms, right? Well, it has a massive problem. There's a massive problem in industry. I think the demographics of a lot of clients I think has because of the baby booming population and just them exiting out and what happened after Covid also affected industry. And so what we started looking at were the demand for us to provide not just the county, but more of financial planning type services like projections, budgeting, stuff that was more in the finance slot. So the second slice I would say for us in terms of our growth and looking at non-accountants and bringing those skill sets to the client were people that had a major in say, finance. We've converted some people that had a quantitative marketing type background where they were doing research and stuff like that where we can bring them in.
(07:05):
And then of course data. So anybody that had now a data background or math majors, math majors are very good at learning the data aspects and getting them into the statistical ways of evaluating, Hey, this customer is interested in this predictive type of analysis based on these trends, can you help? And they get in there and it's like they crave magic. So I think that you add a lot of value with these different disciplines. And I think overall, the way I look at it's like your accountant stack is not just accountants anymore. It's like you were talking about you can, and we have a real estate industry expert that we've brought in too, as an example. Somebody that may not have had the best background in terms of accounting but offers that industry. And then just the third slice I would say, which is really happening now is around technology and not just technology to offer as a external service and helping companies, but more on the inside is to, we now have a fully operating group that's dedicated to not only tech but transformation process. Really trying to look at what the underpinning of an accounting firm will look like going forward, and how can you leverage your operation in this AI to be world. So that is a whole host of different disciplines that we're now bringing into the accounting firm.
Dan Hood (08:42):
You made the fantastic point that the shortage is not just for accounting firms. Every business in the world is short of accounting staff and accounting help, and they all need it and all these alternatives are awesome. And you've talked between the three different pathways we mentioned. We've been talking about different kinds of majors from college, but you also mentioned people shifting careers. Is this a group of people? Is it all over the map in terms of age and career position
Paul Peterson (09:14):
At Dan? That's an awesome question. I'm happy to ask that. I was just thinking to myself, what we've had success with too is people returning to the workforce after say raising kids. And they are awesome workers, by the way. Oh my God, they're They're amazing.
Dan Hood (09:29):
Need to get away from the kids.
Paul Peterson (09:30):
Yeah, they're just amazing. They're so focused and they're so resourceful. I mean, I think a lot of times we undervalue how much in the way of just time management and organizational skills that they built on with all the kids' activities, especially nowadays. I mean, but yeah, that's been a real, and what's interesting about that, it's become its own recruiting way. Once you start becoming, say, open to that idea, you get a lot of referrals from people that say, oh, I have a friend that's looking to this or they share this. So it's been interesting that a lot of the growth, let's say, of bringing in, let's say people like that has happened very organically because there was, at one point we were loving that this was happening and we were trying to figure out how do you get to this population? Because it's not the easiest way to go out there and just start screaming from the mountaintops like, Hey, anyway. But yeah, because it's a lot easier to find college graduates or anybody. That's because you'd go to the career fairs and all this kind of stuff, but that's been really a very important development for us in terms of just the evolution of the workplace, which is again, helps you with just the shortage of accountants that are coming out of college. There's more demand of course than there are seats like people that could fill these. So what are you going to do?
Dan Hood (11:15):
Just to clarify, the people we're talking about coming back after having children. It's not that they were accountants before and left to have children. It's people who might have done, done. It's a combination of
Paul Peterson (11:23):
Both. It's a combination of both. We have had some that just pause the career and have come back, but it's also people that have, it's interesting. Some we're doing books on the side because one of their family members just asked them to keep a set of books. But for the most part, I would say that the thread there is that it was someone that wanted to come back and have some career in either bookkeeping or an accounting related type job. Yeah,
Dan Hood (11:58):
Gotcha. You've mentioned the cloud a couple of times and there's a lot of obvious reasons why that's been a big game changer here, but I want to ask about one specific angle of it. Have you been looking beyond your normal geographic traffic range for this? I mean, one of the things that you talked about different price points for the hours you're judging if you're hiring someone from way out in Idaho. I'm assuming Idaho is a cheaper
Paul Peterson (12:21):
Workforce. I would say that in terms of there's been so many inflection points I think over the past several years, just in terms of what's really transformed the accounting industry. I think it goes to the cloud was one thing, and then Covid was another. Covid opened the door up for possibilities that even though they pretty much existed before covid, you could do work, just I think it changed the rules of the game, whereas you can do that now and not be frowned upon if people want to do that opened up. We have people, even our workforce, honestly, we have people working all over the place now. We have one person who works for us who's literally traveling Europe.
(13:07):
The establishes a place for a few months and then goes to the next place. Yeah, it's pretty interesting. We have 'em all over the states now, which is kind of given our controller fits at times, you have to file different payroll taxes in different states that you're not aware of. But clients too, it's opened up the door to many. One of our largest clients is in Las Vegas now, and so I think it's just been wonderful from that perspective, and I think that's going to be just something that we continue to go after, especially with ai.
Dan Hood (13:47):
Yep, yep. Excellent. You've talked a little bit about one, particularly for people returning to work, there's a lot of referrals, a lot of word of mouth helping bring people in. You talked about college fairs. Obviously a lot of firms are familiar with the college search for account accounting. Is it hard to get into the job fairs for other majors at colleges, or is it pretty much a straightforward
Paul Peterson (14:13):
Yeah, I think in a way I feel bad sometimes because accounting is so easy in terms of there's such a defined route for someone, and it's gotten earlier. I mean, nowadays it used to be junior year. A lot of times people are getting scooped up sophomore year. So it's very defined, I think. So it makes it a lot easier for accounting majors to understand what does that roadmap look like into a career. I think what's hard is the other business majors that are not, let's say, have a specific discipline or let's say you were in finance and you didn't get hired into an investment bank and that's who you're interested in. A lot of times it's like, well, where do you go? What do you do? Or if you were at business management, and some of them have the quantitative skills, it's not like, because all had to take accounting classes, so there's some introductory class that occurred at some point in time.
(15:18):
So we're not really starting from scratch. So we're willing to take a chance if somebody's willing to commit to say, Hey, I will learn. I'll take classes at night. And we offer a lot of, for us, honestly, because we've really embraced this, we do a lot of training. So we do have, but again, we've been blessed that the firm has grown that allows you to do these things. We have a whole people operations team now. We couldn't do that 10 years ago. We could do that now because we were able to grow, but we also try to also have outside programs. We have a partnership with Fairleigh Dickinson. It's right across the street from us in Madison, New Jersey here. So they help, we supplement programs for them, the additional learning and there's on the job. So I think that's really become so important is to have the culture that's going to support these people and have patience, understand that they're not going to have the same level of skills as you. So if you're going to evaluate them based on that expectation, it's not going to work. People won't stay.
Dan Hood (16:33):
You talking about the paying and so on, I think I have some sense of the answer already, but we're not looking to make these people accountants. You're not trying to train them up to be accountants, to take the CPA a exam and become full fledged
Paul Peterson (16:47):
CPAs. What's interesting about that, Dan, again, we've been blessed that the firm has grown and we've become so diverse in service offerings that there's a path for so many different people if they chose that because we've had that. We've had somebody that's come in and they've started even a tax, you don't need necessarily to be wonder at accounting in double entry accounting to do great attacks. So we've also been able to get people into tax that did not have an accounting background. But what's interesting is that we try to give them exposure to different aspects of the business. And if they come in and they're in, say, finance, and we've had this, and they say, you know what? I really want to learn more about accounting and I actually think I want to become a CPA. We've had that.
Dan Hood (17:41):
And you're certainly not going to say, no,
Paul Peterson (17:43):
Hundred percent. Oh my God, we're all for it. We we'll pay for it. Go. So yeah, I think we try to, but at the same time, we can add a lot of value with people that don't want to. I guess what I'm saying too is we're not baiting and switching either. We're not saying like, Hey, come in here and then we're going to force you to be an accountant. But I do think the opportunity though, is there for someone if they choose to, even if it's exploratory, they may say, Hey, I want to try this. And we've been blessed to be able to do that.
Dan Hood (18:12):
You're going to teach 'em enough accounting to do the job that they're there for, and if they want to learn more, you'll help 'em. But that's not the main thing.
Paul Peterson (18:19):
A hundred percent. I think we haven't touched on it yet, but the other thing that is going to happen, which is really going to be interesting to how it changes the nature of accounting, is the intelligence that's coming with it, the AI and making you can make, we're already starting to see the effects, but you could take an average accountant and make 'em good with ai,
Dan Hood (18:42):
Which is three or four other podcasts entirely. We'll have another day
(18:48):
For sure. Talk about that. I want to dive into that. I want to particularly dive into a little bit about the culture of it and how has it affected your culture, if at all, and how did the non-accountants and the accountants get along? But we're going to take a quick break first.
Alright, and we're back. We're talking with Paul Peterson of Cop 100 firm Wiss. They've been hiring non-accountants, a range of different kinds of non-accountants for roles and a range of different roles at the firm for five years or so now have a lot of experience with it, and he's been sharing with us some of the details and some of the opportunities and they're pretty exciting. I mean, the way you describe it, it sounds kind of like no-brainer, right? It's a great way to approach the staff shortage. But I do want to start to talk a little bit about the interactions.
(19:41):
Put it this way, between the non-accountants and the accountants and the firm. There is, you said something, you mentioned earlier that people get on an accounting track and a public accounting track very early these days, and it comes with a certain set of expectations and a certain set of understandings about what it means to work in an accounting firm and what that's like and how you are as an accountant and you, your career paths and so on. If you're coming at it, even from a business degree, you may not have some of those same understandings and expectations. How do the non-accountants and the accountants get along? Do you have to separate them at lunchtime? Do they sit at different tables? Do they not play with each other at recess?
Paul Peterson (20:18):
That's
Dan Hood (20:18):
Great. Is that an issue at all or
Paul Peterson (20:21):
No? I think it's a great question. I think it definitely took some time. It was something that I think you have to be very intentional about fostering the ways in which they collaborate and that you're not segregating, if you will, just like you say, because it wasn't easy at first because there's a hierarchy in terms of mindset, and that's been in firms for many years. Even one of the challenges I'd go even back prior to this was always the professional versus the support person in an accounting firm. And it was always more of a tendency that the professionals, anybody that was on the accountant track was so much more important than anybody that provided the support, which is kind of crazy when you think it's like we're so codependent and our support people are incredible in what they're able to do for us. But yet there was a hierarchy.
(21:24):
And so that was something that's always been a challenge and how do you overcome that? And then the next layer was when we did start doing the non-accountants and how are they viewed, especially again, there's a track that people that have been here for years and years and years, their expectation was they look like this. This is what the quality of work should be. This is the expectation. So it took time. And I think you have to almost start in a way that you take one service area, I would say, and you work within that service there. I wouldn't recommend doing it whole. I would do it intentional, especially again, where somebody is with their own accounting firm in terms of if this is kind of new to you, then pick an area where you can get it to go and make it work. Because once you do that and it starts to really work, and people start to see like, wow, this is great.
(22:26):
This person is really helping me on the delivery to the client, and I don't have to do this anymore, whatever it may be. Like the work that they're solving for, especially as you can emerge into other advisory type services, especially if you become the relationship person that's been the most, I would say anybody that's listening here, that's in that relationship seat, man, is it cool to be able to deliver value to the client that someone with a different skillset is bringing these insights that you're never capable of before? And you could see how much more value you're providing in terms of the service.
Dan Hood (23:10):
But I think that's a great point to say, start with one area.
Paul Peterson (23:14):
You have to, I think,
Dan Hood (23:15):
And particularly an area that's open to it, and then you can demonstrate success there. And that's going to make it a lot easier to, because that mindset, there's no question. I mean, it's the old division between doctors and nurses, and if anybody's ever been in a hospital, knows that the nurses are way more important than the doctors. They do all the work. No, treats it that way, don't treats it that way. But yeah, and that's the traditional format. So there's some hurdles there to overcome. Let me ask you, and we talked a little bit about this earlier, have you found that they're bringing any kind of value beyond just the easing of the burden on your accountants and CPAs? Are they bringing extra value of extra perspectives?
Paul Peterson (23:54):
Oh, a hundred percent. I think especially, again, anyone in the data realm that has those types of skill sets, and it's even the way they use Power BI or other say technology, and then those that are trained more to provide insights into the financial planning and analysis type stuff so that they can really dig into, what often happens is we'll team up somebody that's really good in our fp and a world with a data person, and then we'll get a specific project for a client and the insights and the way that they're able to communicate. So the other thing which is interesting is the tools that they use to communicate is much more illustrative. Sometimes in accountants. Accountants, we love Excel and doing our insights through Excel, and a lot of times other alternatives come through it at a whole different way. They communicate it much more, I would say visually through charts or these ways of establishing, here's where your starting point was and let me walk you through graphically how you got to where you are.
(25:05):
So that's another really cool thing that's kind of evolved. But I would say that what's really going to help us in the entire, I would say, realm of accounting and taking a lot of the stress off of what it's like to be an accountant has been that we've been bringing in these transformational process people that we've hired out of, I would say more corporate environments where process means so much to standardizations and efficiencies, and we have such hope. We feel like we're in this transitory period of time and what accounting looks like today and how it gets done versus what it may be in two to three years. And having these process people start to put in, I mean, the way they think is incredible, like A to Z, but what they're going to do is by really trying to help us get our jobs done better. Even just the collection of information is so painful. 10 40, it's not the 10 40. That's difficult. You can't get the information to get the 10 40 done. So these people, I think are going to have such a great impact on us over the next couple of years and just really non accountant related.
Dan Hood (26:26):
But that's something that, I mean, when you talk about process and processes, just getting it done, but when you talk about standardization, the value of standardization, the value of thinking differently about the process, which accountants generally say, well, this is the process we've had for 60 years percent. Why would we change? Why you change it? Change it because works. Yeah. No, it doesn't. There's 17 different bottlenecks that meet people to stay here four hours, an extra four hours every week, and a project management or a process management person can see that. It's interesting you talk about communication skills because that's for the last 15 years or so, everyone who's been talking about the quality of accountants, communication skills, let's just put it that way, or the lack thereof. And it's fascinating to find, rather than expect accountants to be good at it, let's find people who are great at it. And percent,
Paul Peterson (27:13):
Yeah. And it's helping us learn how to convey our thoughts better because look, I was always an Excel guy. You want me to communicate some, I put it in Excel, I'd make a table out of it and I send it out. So just the rethinking of what communication will look like in terms of providing insights has really been cool.
Dan Hood (27:37):
Yeah, very cool. Excellent. This is a big, we could talk a lot more about this, I can tell, but unfortunately we're running up against time. But any final thoughts for firms or first steps or final advice for firms that are thinking about working with non-accountants?
Paul Peterson (27:53):
Yeah, no, I appreciate that question. I think that for me, it size should be irrelevant even on a lot of the thinking. I think a lot of times you think you got to get to a certain size before you go this way, or, Hey, we're not doing a lot of that service yet, so we're not going to, you could just do it. I just feel like, and even on say this, bringing in people that are the non-accountants to help with the operation of the firm and thinking differently about sets. I just think it's something to be very open-minded about, but not feel like you got to get to, well, we got to get to $50 million before we do that, or $10 million or $25, whatever the benchmark is. My recommendation would be just start and pick an area that you feel like you could benefit most. Where do you feel like you said before, which is really interesting, is where are you having the most bottlenecks? And maybe that's where you start and think a little bit differently. And the best part about accounting is we're such a collaborative world that anybody wants to contact me, I'll be happy to help. That's what we do. So yeah,
Dan Hood (29:01):
It is. I always say that about accountants. I'm just stunned at the things accountants will share with other accountants. Yeah, there's other industry. Yeah, it would be that in any other industry, you'd be a trade circuit. They're like, I can't tell 'em about this. And accountants, they're like, no, let me walk you through it and give you my spreadsheet and my each. Yeah, it's great for the profession. Awesome. Well, very cool. Paul, thank you so much. This has been a great conversation. I hope it inspires a lot of people to look at non-accountants as a potential resource. It sounds like it's working very well for you.
Paul Peterson (29:30):
I appreciate Dan and having me here. And again, we got to galvanize together because the industry is too important for us to lose that trust that we've been so blessed to have for so many years. So we've just got to continue to be able to service in a way that keeps us in that high regard. So I appreciate the opportunity. Thank you.
Dan Hood (29:50):
Absolutely. Well, thank you for joining us, and thank you all for listening. This episode of On the Air was produced by Accounting Today with audio production by Adnan Khan. Review us on your favorite podcast platform and see the rest of our content on accounting today.com. Thanks again to our guest, and thank you for listening.