The accounting profession is going to have to move beyond the financial statement and the P&L to become holistic advisors, says Joe Woodard, a consultant and coach to accountants, founder of the Woodard Group, and the impresario behind Scaling New Heights.
Transcription:
Dan Hood (00:03):
Welcome to another edition of On the Air with Accounting Today. I'm editor-in-chief Dan Hood. It's a special live edition coming to you from the Firm Growth Forum in San Diego. We're very excited about this — I've got with me our closing keynote who wrapped us up here — Joe Woodard, he's the CEO of Woodard Events. He's the impresario behind Scaling New Heights. He's the man behind all the Woodard reports, the Woodard Reports podcast, all those millions of resources, he has coached 1,001 accountants. That's a low number. I know it's a lot more than that. More like a hundred, 150,000.
Joe Woodard (00:30):
So on the training side, not the coaching side.
Dan Hood (00:32):
Yes, there you go. But basically worked with a million accountants and a great source of information for everybody. Joe, thanks for joining us.
Joe Woodard (00:38):
It's always great. Always great to be here. Dan,
Dan Hood (00:40):
You talked a lot about CAAS today. That was sort of the focus of your practice in the future of what it's going to look like. And you describe the cast opportunity as unprecedented, which is a word that's gotten a lot of use in the last couple of years. But I wonder if you a sense of what that means, the potential for this?
Joe Woodard (00:55):
Yeah. Well, it's unprecedented because of the displacement. That's more likely in some of the other areas of the practice. So it's sort of a negative, unprecedented in some ways. Okay. Because tax preparation is ripe for disruption by automation as is record keeping, which is why we're not using the word bookkeeping or record keeping. We're saying cas. Okay. Where that A, to clarify? Yep. Or as I said in my presentation of the double A has advisory in it, so single A, you need to make an advisory or double A, you need to include advisory because other than that's just another displaced area of the profession that we've been talking about since the early 21st century, but has now become imminent. Right? Right. Imminent, I cannot stress that enough. I used to say, Nan, that I'm not chicken little, the sky isn't falling, but there are things falling from the sky.
(01:51)
That was always my line. Right. That's a good line. And now I'm kind of pivoting. Right. The sky's falling not to alarm people, but to let people know there's going to be a massive acceleration of artificial intelligence and tax returns. Record keeping are the very first dominoes to fall. And then, as I said in my presentation, some of the even lighter touches of outsource controllership, next domino to fall. And we're not talking in the distant future on that. So what will remain is this holistic coaching or mentorship of business clients and on the individual side, the wealth management that factors in the whole of the human is going to endure. Whereas just the rudimentary stock analysis or retirement portfolio analysis will be displaced by the machines. Gotcha.
Dan Hood (02:44):
All right. I think I'm gathering from all what you've just described the answer to my next question already, but I want you to say it cause I don't want to say it. Cause it's scary. How much of a must have is this, I mean is this pretty much as these dominoes fall this, that all practices are going to be cast practices or ca practices? Sorry, there's two as in there. You can't hear it necessary, but it's cas. Yeah. Is everybody going to be a CAAS
Joe Woodard (03:03):
Practice? Not everybody's going to be a CAAS practice. Some people are going to be in different professions, but everybody who endures within the profession that doesn't retire just in dime or doesn't decide they want a different profession. Yes. Everybody is going to be involved in the advisory A. Now, I want to make sure I'm clear. There is a tax advisory side, which isn't just calculated tax planning as I demonstrated in my keynote. Even the very child version of chat, G P T 3.5 can create a projection of tax liability for say, an extension. And I did that right in front of everybody in about 30 seconds, literally 30 seconds. For the folks listening in who aren't there is disturbing, but tax analysis, tax analysis is much more complex. It, it's going to become more fused with wealth management and strategy that's forward looking about what you're going to do, not just next tax season, but over the next five to 10. And it's going to incorporate in the management of their business, like corporate 4 0 1 [inaudible] plans with their individual tax strategy. Now that'll stay ahead of the bots a lot longer. So tax analysis and financial analysis, but mostly holistic business coaching. We've got to venture beyond the balance sheet and the profit and loss, and we have to start doing more of the operational advisory leadership skills protecting, I like to phrase it this way that the accountant of today is the journey protector of tomorrow.
Dan Hood (04:43):
Gotcha.
Joe Woodard (04:44):
All right. And that's the profession that we'll endure. Gotcha.
Dan Hood (04:46):
The Sherpa of the 21st century.
Joe Woodard (04:47):
The Sherpa of the 21st century. Exactly. We'll become Sherpa.
Dan Hood (04:50):
Excellent. I Or we'll leave the perfection
Joe Woodard (04:53):
Or we'll leave the profession or fall off the mountain.
Dan Hood (05:01):
This is why we're not usually in person with Joe because it evolves into me laughing. So let's talk about, assuming this is where we're going, everyone's going to be a cast practice again with two A's. What are the big challenges to launching a cast practice? All
Joe Woodard (05:13):
Right. So whether you're launching one or whether you are embracing a better model for the one you have, those are really the two realities. Staffing absolute challenge a right. We're in the middle of a staffing crisis. It takes currently until the bots do become preeminent within the next months, not years, there's a staffing lift. Now you could just sort of wait it out and you could hire technicians and AI curators. I would recommend that because it's that imminent, but you're still going to have to have some kind of body count in there in order to do the 20% the machines can't do. And in order to double check the artificial intelligence as it matures, because as a child now, and it's going to be an adult imminently. Gotcha. Imminent being more like a maturation process of a couple of years. So those that people count though, Dan, the way to address the challenge is by not requiring a lot of credentials. Hire for aptitude and hire for people that are as high on aptitude for technology as they are for accountancy. And then train them through an apprenticeship just like any trade industry would do. And if we can go outside the college grads, we can go outside the existing industry where we're just kind of poaching each other, trying to figure out how to solve our staffing crisis and reach into the non-engaged masses of millennials and Gen Xers or Gen Zers, then that will be the way to address that biggest challenge.
Dan Hood (06:54):
Fantastic. Are you talking about aptitude for technology? I want to dive into that a little more deeply, but we're going to take a quick break. All right. And we're back with Joe Woodard, who kicked off the final day of the firm growth Farm today. He was talking about Kaz, we've been talking about the challenges cas, why it's imminent, the word of the day is imminent and why it's happening. You talked to us a lot about technology and the changes in technology and some of which are terrifying, some of which are amazing, but it's absolutely central to this opportunity, it seems like. How, what's the role there?
Joe Woodard (07:25):
Yes. So everybody of course is focused right now on chat GPT and artificial intelligence. But a couple of things that may not be as noticeable to you. One is the technologies, many of which are on your show floor here, Dan, right? That are incorporating the artificial intelligence. I'm going to get back to my child comparison to chat g pt. Sure. When I was preparing today's demonstrations, I had to rephrase the questions. It looked really impressive up there because I copied and pasted the perfected questions. But just like a child, if you've ever asked a child a question and they give you an answer that's like a very literal, because you used a metaphor or something, that's the way that chat G B T was. And I kept having to rephrase and be more specific with my sentence structure until finally it went. Now I understand precisely what you mean. It's like talking to a robot, right?
(08:21)
But when the software products begin to incorporate it as a back engine, they've already, they know exactly which words to use, which phrases to use to, it's like coding, but more like low-code where you're writing blocks of if then, and you see, well, it didn't respond to my if then statement because I wasn't specific or logical or rigid enough. That's kind of the way that this version of chat G P T is. But the software developers have figured that out so you don't have to figure it out. So you might phrase the typical kind of, might phrase something 20 ways, but they take the 20 different ways and they phrase it in a way that the bot will understand and push back out. I'm staring here at Canopy and Canopy's a good example of that. If a client emails you, they'll now fashion up what the suggested reply is. But again, they built algorithms over the top of the ai. So you're talking to something a little bit more sophisticated than a quote child,
Dan Hood (09:17):
Right? Well then as you say, they're child, there's going to get better. They're going to learn amongst themselves. A lot of those models are teach themselves, but also they're going to be trained up by the engineers who are looking at saying, oh, we got to solve these problems or bringing these sorts of things. So it is all going to get, get better. And your point about hiring people with a aptitude for technology is going to become more and more important. Cause you say you'd probably teach 'em the accounting or the bookkeeping or a lot of the other things, but the being comfortable and good with technology is going to be sort of the key skill of the future, it
Joe Woodard (09:45):
Seems. Well, yeah, absolutely. And so to kind of give you an example, I was hired as a non-credentialed accountant who didn't know a W two from a W four. I was hired in this same way by the managing partner of a CPA firm out of a temp agency because he saw aptitude. Right? Now, I've since had gone to graduate studies at U N O on accounting. So I'm mean I'm credible to stand up here, but at the time that they hired me, I didn't know how to a tax return for that. I couldn't tell you the difference between a 10 40 and 1120 s, but they plopped me down in front of ERT for Doss. I was technology savvy and I understood the logic of grabbing this, the work papers and placing them into proper fields. And it would place out a tax return where I had a really good track record passing review cycle. But if you asked me to go to the actual forms and fill 'em out, I couldn't have done it. Right. And this is the bookkeeper of tomorrow, just like the barista at Starbucks, who makes a cup of coffee greater than what that high school kid deserves to make. Right? But Starbucks has democratized its knowledge through systems and process and machinery, and that's what CAS is going to be. A lot of people making cups of coffee better than they deserve to make. And the bots are going to facilitate that. All
Dan Hood (10:59):
Right. I hope to someday have aptitude in something, but it's not technology. So the future is bleak for me, but it's pretty bright for you guys. Last question. You talked little, we talked a lot about Cass and some of it, the inevitability of cass, but you also mentioned about the opportunities in terms of tax advisory services, wealth management. Are there other areas of opportunity you see for accountants?
Joe Woodard (11:18):
Well, I'm going to come back to none that I haven't covered at a high level, but it gives me an opportunity to drill down on the one that is most important and most pervasive. And that is the one that stretches beyond the balance sheet and the profit and loss and the statement of cash flows. What clients ultimately want is not interpretation of their financial position and performance.
(11:41)
They don't even know how to make that interpretation actionable. They have a dream, they have a vision, or as I like to put it, they have a journey. And back to the journey protector, in order to be the journey protectors of the future, which is the future of the profession, we must be holistic. So my encouragement to your podcast listeners on the way out as we're wrapping up here, is go beyond your field and don't worry about imposter syndrome. Because if you read one book by Patrick Lindsay, you understand more about leadership than your client does. And mentorship is not about being superior, and mentorship is not about being perf perfect. Right? And it is not about being credentialed. Mentorship is about knowing something the other person doesn't know. If I wanted to learn Instagram, my daughter would be my mentor. Sure. And she would be a Yoda at it. Right?
Dan Hood (12:37):
But does that mean her English language skills aren't that strong? Is that what you're trying
Joe Woodard (12:40):
To suggest? All of her pep preposition phrases are backwards, right? But no, she, because she just knows something. I don't know. So it's not about superiority, it's not about seniority, it's not about anything other than I have the knowledge you don't have. And if we will, we'll understand that we'll more confidently exercise probably what we already know anyway, as business owners, right to holistically coach our clients.
Dan Hood (13:06):
Excellent. A fantastic opportunity. Want people ought to pursue. Joe, thank you so much for joining us.
Joe Woodard (13:11):
It's always great to be here, Dan.
Dan Hood (13:13):
Great stuff, and thank you all for listening. Cheers Cheers. This podcast was produced by Accounting Today with audio production by Kellie Malone. Rate us and review us on your favorite podcast platform and see the rest of our content on accounting today.com. Thanks again to our guests, Joe Woodard. Thank you all for listening.