10 Opportunities for Accounting

With so many changes coming at the profession so quickly, it can be easy to get overwhelmed -- but many of those changes, properly approached, represent tremendous opportunities for firms. This session will identify some of the most important trends and developments that accountants should harness to ensure success in the future, from ESG and remote work, to private equity and artificial intelligence.

Transcription:

Dan Hood (00:10):

The suspense is building, you can feel it. This would be the point at which I would introduce our keynote speaker, but we're holding him off for a little bit to about an hour because I want to talk to you a little bit about some broad opportunities that are happening in the accounting profession. And one of the reasons I want to talk to you about them is because they'll give you a sense of why we chose a lot of the topics we chose, why we set up a lot of the sessions that we set up, why our picking the speakers we picked, and the sorts of things that we hope you will come away from this conference with the sort of opportunities we want you to be able to take advantage of with the information, the best practices, the tactics, the strategies, the advice that we're going to gather here. We want you to be able to take advantage of all the opportunities that we're going to be talking about over the next hour.

(00:58)

The reason we're calling it 10 Opportunities in Accounting is because it is very easy to talk about the challenges that face the accounting profession. There are a lot of challenges. There's no question there's a lot of challenges facing every profession, every industry. But for accounts, there's a tremendous amount of change going on and it is very easy to talk and to focus on all the challenges that firms face. I know I'm guilty of it. We at accounting today routinely run articles, 10 things that are keeping accountants up at night or five challenges you need to overcome to become a great firm, or three things that are a big problem for you and you really should be nervous about them and why aren't you nervous about them? We do that a lot and I apologize, but there are a lot of challenges. There's no question. The interesting thing is that the flip side of a lot of those challenges is a tremendous opportunity.

(01:40)

When you actually step back and stop focusing on the challenge, you start to realize it is a fantastic time to be an accountant. It is a fantastic time to run an accounting firm. The opportunities are enormous and while we're as guilty as anybody else focusing on on the challenges, what we want to do here over the course of the next day and two days or two and a half days, three days, however you want to count it, is highlight a lot of those opportunities and give you the tools that will allow you to, I don't want to say exploit, that's not the right word, but to leverage and to make the most of them to grow your firm and not just to grow it purely and sort of top line, bottom line, Conde sense, but to grow it in the way you want to grow it.

(02:13)

And that'll be a big focus of a lot of things we're talking about is identifying the kind of firm that you want to run, that you want to work in, that you want to pass on to your partners that you want to eventually retire from or whatever it is. You want to be able to identify it, describe it, and then enact it. And we're hoping to give you a lot of the tools that allow you to do that kind of growth to grow the firm you want as opposed to just focusing on the bottom line and top line. Not that they're not great and important, but the rest of it is important too. Alright, so with that, I'm going to start running through this list of opportunities. Many of them you will say, well, okay, these are obvious, a little bit obvious, but I want to talk about the background of them and how you can turn them into again, that thing that allows you to build the practice that you want.

(02:55)

So let's dive into the first one, which is, there you go. One of the big things that's going on in account is there's a lot less grunt work, but the interesting thing is over the last 30 years or so we've seen technology has automated and changed a lot of the grunt work that we do, taking it away, and yet not everybody is benefiting from that. Doesn't seem like we're doing less work. It doesn't seem like we're less busy. It doesn't seem like we have less going on. Okay, we're doing a little less tedious payroll work, a little less tedious, bank reconciliation, a little less. Some of the, we're not reentering data constantly, but there's still plenty of work we haven't saved, don't seem to have saved the right kind of time from all this grunt work going away. What seems to having is that we're just doing more of the same work, only faster one.

(03:42)

What we should be doing is saving that time and saying, okay, I don't have to do that grunt work anymore. What am I going to do with the time I've saved? And that's really what we want to talk about throughout this session is say, okay, I don't have to do that. Basic lifting, the heavy lifting of the accounting profession, what are you going to do with that time instead, are you going to just take on more of the same kind of work? That's possible. Some firms do it, they went from 510 forties to a thousand and they can get them out in the same period of time. That's great, but there's other things you can do and other things that we think you should maybe be looking at to make a more satisfying, a more profitable firm. So that grunt work, having gone away presents the opportunity to do something else and we're going to talk about a lot of what that something else might look like or over the rest of the opportunities.

(04:24)

One other thing I will talk about that the less grunt work presents an opportunity for is making your younger staff happy. Now, I don't want to get too deeply into the war for talent. We're going to talk about that a lot. It's going to be mentioned probably once in every session, sometimes 10 or 12 times. It's a big issue, we all know that. But the lack of grunt work or the decline in grunt work allows you to be more attractive to younger staff, right? No one wants to join a firm and do 10,000, 10 forties. Some people will say, well, how will you train them and say, you don't need to do 10,000, 10 forties to learn how to do a 10 40. You probably need to do 10 under the right supervision and now with the grunt work, you don't have to give them the other 9,990.

(05:03)

You can train them and then free them up to do other more exciting things. I will say one exciting thing about this current period is that while the grunt work has gone away, you can still bring some of it back. So if you don't really want to spend time with your younger staff, you can probably give them 10,000, 10 forties in 5, 3, 5 years. Artificial intelligence, robotic process automation, a lot of those things will actually take away that grunt work entirely. It'll go into sort of a black box. You won't see it. You may review the results of it at the end, but you won't be able to actually take that grunt work and give it to people. Whereas right now you can so can free up your younger staff to do more exciting, more interesting things, which they'll appreciate. Or if you need to punish them or you just can't listen to them anymore for this afternoon, you can give them, still give them some grunt work.

(05:43)

So a nice balancing point with that. Alright, so that's a major opportunity to do something with that time that's freed up, need to press hard on your thought. More tools. Now in some cases this seems like a challenge, right? There's more technology going on in the profession than ever before. There's more, you go outside, you will talk to 20 or 25 different people who all have great tools and services that can enable your practice. Now that puts a challenge to you of figuring out what are the right things to invest in, what are the right tools to bring on board, how to train your staff, how to integrate them into your practice. So there is challenges involved with these tools, but the trick is that they then enable you to do much, much more. Now I've said over the past 30 years we've seen a lot of the grunt work of accounting get automated or turned digitized.

(06:29)

One of the things that's happened is it's been primarily a question of taking what accountants do on paper and translating it to a digital format. What we're seeing over the past five years though is a switch from that from saying, okay, this is what accountants used to do on paper. We'll do it now in a digital format. It'll be faster, it's more efficient, there's no question, but we're seeing a switch from tools that mainly do that to new tools that come along and allow you to do new things. I'll give you a couple of examples. There's a million outside to talk to, but good example is data analysis tools that allow you to dive deep into what your clients are doing to do things like find out if they're paying the wrong vendor twice, find out if there's fraud to determine how they compare to other businesses in their industry to dive deep into them, to give them advice about how to be better at what they do and how to make more money.

(07:16)

And that in the end is one of the big opportunities that we're seeing, we're going to talk about it in more detail later, is the opportunity to be not just a sort of the standard advisor for a lot of the standard advice a lot of accounting firms bring to their business clients and that their business clients look for is about saving money on taxes. What we're seeing, a lot of these tools come around and they're flipping around to not just saving people money but making them more money, helping them make their businesses much more successful. So that's really what these tools are about. They are not about automating what you already do. They are not about taking away grunt work. They are about enabling you to do more new things. We're seeing more and more firms, it's starting at the larger end, but we're also, it's trickling down to more proactive firms.

(07:56)

They're building their own tools for their specific practices. They're building tools that fit specifically with a nonprofit healthcare nonprofit niche that they work in or a dental, a niche that they work in or whatever niches they happen to be. If they're taco truck, they're the greatest accountants for taco trucks there are. They're building tools that enable them to do more for them than just save them some money on taxes. Not that isn't fantastic, but these tools enable you to do much more. Now they do bring along the thing of you have to assess them, you have to look at them, you have to be ready to embrace the ones that work and the ones that make sense. And if you try one that doesn't work, you need to be ready to move on very quickly. That's the challenge. The opportunity is doing much more valuable work much more quickly.

(08:38)

All right, I'm going to go on to our next three opportunities to be more virtual and we all learned over the past three or four years that you can do a tremendous amount of work from home or from the road. We're all forced to change over the course of the pandemic. This opportunity is enormous and it can't be ignored because what means is that you now have the opportunity to get work and clients from everywhere across the country and in fact across the world. I talked about taco trucks, I saw a lot of taco trucks coming in from the airport, so I've got a lot. I've got taco trucks on the brain, but the point is, if you live in rural Pennsylvania, there's probably not that many taco trucks around, but if you're willing to do your work virtually, you can be the taco truck accountant for every taco truck in the country.

(09:18)

Similarly, you're able to hire staff from every part of the country. We know, again, staffing I mentioned we're going to be talking about it a lot. Staffing's an issue. You can hire staff from every part of the country. Now the challenge there is building a culture that allows you to onboard both clients and staff successfully, virtually and to manage them. It's a management and a culture issue. It can be overcome. There are plenty of firms that have already done it. We're about to release tomorrow our best firms for technology list. There's at least two firms on there that have never had an office. They have been virtual since their foundation and they're foundation is, they've been around for more than a decade, at least one of them is more than a decade. I think one of them is more like 20 years. It is possible to build a culture that works virtually.

(09:59)

It is possible to manage people virtually. It is a challenge. It requires a different approach to what you're doing, but it is absolutely possible and the opportunity, as I said, opens up your can, your client pool and your job candidate pool enormously. So I highly recommend that you take advantage of this virtual thing. It also allows you, again, to build the kind of practice you want that we're talking to accountants who talk about I take a month off in January and go to think wherever they go. Some go to the Caribbean, some go to Florida, some go, well, lots of other places and they can do all their work from the beach. That's great. That's the kind of practice, if that's the kind of practice you want, that's the opportunity that's available to you. All right, more interesting and more valuable work. Now, I'm not going to say that the current work accountants do isn't interesting.

(10:42)

Obviously people go into accounting like doing the kind of work they do. It's good stuff, it's valuable, the tax, the accounting, the auditing. This is all good stuff. Clients appreciate it, they value it, but the opportunity to do a lot more is out there. You think about things when you go into advisory services, the ability to dive more deeply into a niche, to dive more deeply into a specific industry, the ability to dive more deeply into a specific service offering. If you find a, I'll give you great example. My favorite one of these is there's a firm in Florida. Everybody in the firm loves to fly. They're all, they fly small planes, they love it and they realize that the tax work for owning a plane for a business that owns a plane is incredibly complicated. And there's a fair number of companies that own planes whose accountants have no idea how to handle that tax work.

(11:29)

There is a firm, and they're actually based in an airport in Florida, I think it's the Fort Lauderdale airport, where they said, all right, we know how to do this because we love how we all own planes and we all know how to figure out this stuff. We will one, build a service line entirely around this and we'll work with other accountants. When other accountants have clients who own planes, they come to us. They've also built software for it that handles all those calculations. Originally it was in house, they had to build it for their own needs and they said, oh, you know what? This is great if other accountant firms don't want to work with us, they can hire our software or buy our software. And similarly companies, if the companies don't want to have an outside accountant, they can buy this software. There's a tremendous opportunity to focus in on the things you really want to do to go beyond just basic accounting and bookkeeping for anybody who wants it and focus on what's the kind of accounting and bookkeeping tax that interests you. And then to go beyond that and say, what do I really want to do? How do I really want to advise clients? You can pick and choose. You can also pick and choose the niches you want to work with. We're going to talk about that in a second.

(12:26)

More interesting things to do, and again, it's not that the current work of accountants isn't interesting. The thing is there's more options than ever before. We'll talk about Cass. We are going to be talking about Cass a lot at the this event. We've got three or four sessions on it because it is by far the fastest growing service offering in accounting history. It's currently going double digits. We saw it exploded over the course of the pandemic. It is continuing to grow and is continuing to evolve from basically client accounting services. So what people call transactional cast where it's write up and bookkeeping done remotely to client advisory services where it's all that. But then on top of that, you build a set of advisory services where you're acting basically as a sort of outsourced CFO for the client and bringing them the advice they need to grow much more rapidly.

(13:11)

So that's obviously getting involved in the nitty gritty of a business. These are things the accounts really love to do, and you're able to do that now much more with much more depth, much more insight, much more easily. You have gone two mics on, maybe either that or I just suddenly started talking louder, but then there's other areas where you talk about cannabis has been growing for several years. Crypto is an exciting new area. How long it will be an exciting new area, I don't know, but that's part of the excitement. And then sort of the big one, I always mention this, there are lots of other, there's lots of smaller niches the firms are focusing on, which is great. There's lots of smaller service areas that I don't know, but they're out there lots. I said airplane tax accounting is a great example, but then the big one that I would mention is ESG.

(13:53)

We've got a session on ESG, Colleen Les from Los Adams this year to talk about that because it is an enormous, potentially enormous area for accountants, both in terms of a test work, which I think has been a big focus for the profession that say, oh, this is going to be a big opportunity for auditors and people doing the test work, but also for consulting work because all of those, the businesses that are going to be required to report on different ESG areas are going to have to have those reporting systems stood up and no one understands reporting systems better than accountants. So the opportunity right now really is a huge opportunity for consulting. Think of it as sort of like SOX reporting was in the first couple of years when sock for those who remember those crazy years when SOX first came around and businesses were trying to figure out their reporting only, it's every business because every business is going to get involved in this.

(14:39)

Every business is going to have to have some kind of reporting. When you look at the SEC proposals, they end up looking like they're going to cascade down to businesses of almost every size. Some will escape very, very small ones, but a lot of businesses are going to have to have these reporting systems. More importantly, there are going to be a lot of reporting systems. There's some consolidation going on among standard setters right now, but there's still lots and lots of different ways to report on it. There's different elements of it. There's literal carbon emissions and there's pollution. Then how are you affecting groundwater? How are you affecting the local community? What's your diversity, equity and inclusion policies and are you enacting them properly? What's your board composition? Is it diverse? What's your governance look like? All of these are things that are going to be reported and many of them going to be reported on separately and under different frameworks.

(15:25)

So the opportunity to get involved with clients, to implement those kind of things is enormous, and every business is going to do it. Every new business is going to have to do it. This is the kind of thing, like I said, for, so it's going to go on forever and similarly. Then after a few years, attestation will kick in and that will also be an enormous opportunity for this. So we see an enormous amount of opportunity in ESG. And the thing is, many people, we've talked to, many people in the profession who are kind of like, they don't like ESG, they think it's a political agenda, whatever the case may be, it doesn't really matter. The fact is markets and regulators are going to require it of businesses and businesses are going to need help with it. And if you want to help your clients, this is going to be a great area to be in it because they're going to need to do it.

(16:07)

It's confusing. It's the kind of thing they're not going to be able to do on their own or not going to be able to do very well on their own. And the flip side of that is it is not necessarily going to be a mandate for accountants to do it. There will be opportunities for other people to come in and do it. So if you don't get in fast, other players will look at this and go, well, I can help implement a framework, implement a reporting framework, and that's going to be, it's the opportunity for some people to eat your lunch. But right now, this is an opportunity for accountants to take and to leverage if they want to, and I recommend, that's one of the reasons we have a session on it. I think Wednesday morning could be wrong about that. Check your agenda because we think it's such an enormous opportunity, and the session is specifically about the consulting aspect of it, helping people set up their systems as opposed to the attest.

(16:50)

Maybe next year we'll add in a test session, but for now, that's where we think a lot of the opportunity is in helping people stand up their reporting systems. So all of that adds up to you've got a huge arsenal of potential interesting areas for you to practice, but also huge areas for you to bring on new staff who might be interested in it, right? We know ESG is a big issue for a lot of younger people. They're excited about that, so that's a great thing. But the other areas is being deep in some interesting niche being cannabis. It doesn't have to be, I feel like I'm saying cannabis. Of course, they would like to get high. That's not really the issue. The issue is that it's a new and different business and people will be interested. They say, well, this isn't just old fashioned.

(17:29)

Accounting isn't just ticking and tying and armbands, and this is about where the economy is headed. This is about making sure that businesses succeed and there's tremendous opportunities across the board for you to offer lots of opportunities for people who want to come and join your firms. Six, there's fewer CPAs and there isn't actually fewer CPAs. Number of CPAs continues to increase, but there's far fewer CPAs than the demand. So what effectively ends up happening is the demand grows and the number of CPAs available stays doesn't grow at the same pace. Effectively, it creates the scarcity of CPAs. Now, why is that an opportunity? It isn't In some ways it's a scarcity, so it's a problem, but what is an opportunity for is to think differently about how you hire and who you hire and what you hire them for. It is an opportunity to look at every function in your firm and say, okay, is this need a single person to do these tasks?

(18:24)

We're looking to hire somebody. We need them to do X, Y, Z and A, B, and C. Does one person have to do all those things? How many of those things need to be done by an accountant? How many of those things need to be done by a CPA? As you start to look at job descriptions and break them down, you start to realize that there's lots of that work that can be distributed. It can be distributed in some cases, straight to a machine, straight to a, you could be automated and you say, all right, listen, nobody needs to do that. We'll just bring in some software that will handle that. In other cases, you may be able to outsource it. You may be able to send it to the Philippines or India to service providers there or in Mexico or in lots of other places or even within the United States.

(18:59)

There's an opportunity to outsource some of those tasks. There's obvious also opportunities to automate things, as is mentioned, to hand them over to outside workers. And then also there's ways to turn those things over to non-accountants. Plenty of work that accountants and CPAs do that don't require someone to have 150 hours and to have passed the CPA examiner have the work requirements. There's plenty of work that you have people in your firms doing that don't need to be done by someone at that level of expertise. So the opportunity here, because it's being forced by the pipeline problems and the staff shortages, there's an opportunity to reexamine every position at your firm and to rethink how you fill them and how you keep people in them. The opportunity really is, and I don't want to say that, it's to have less fewer staff. That's not really the issue.

(19:45)

It's not about saving money on staff though can, if you push some work down to people who are not CPA level, you may be able to save some money on it. Really, it's an opportunity to find the perfect person to do the work and then that will free other people up. If your partners and your CPAs aren't doing administrative work, onboarding work, other kinds of things like that, if you turn that over to someone with a strong personality and a strong sense of organization, but not necessarily a CPA, then your CPAs can focus on the technical work and the advisory work and the relationship building that they need to make sure that they're moving their clients to the next level. So it's really the opportunity there. As I say, it's really, it's a challenge on one hand, but on the flip side, it's an opportunity to think very differently about hire, about how you hire and who you hire and what you hire them to do.

(20:31)

Next up, more money. No question. Accountant is pretty profitable profession, but the opportunity is there to significantly increase the amount of money you make, and that's great. I think everyone would agree more money is great, particularly if you're not having to work an enormous amount more to get it. They talk about things like subscription pricing and offering more value added services. These are one of the great things about them, right? Is they're regular recurring revenue. They require you to set boundaries. They require you to say, listen, this is what we're providing for this amount of money. This need to stick with your engagement letters, stick with how you're handling, how you're working with clients. But once you do that, once you get them on a subscription based thing, you get them understanding what you're providing and at what cadence and how frequently you're there to talk with them and how frequently you're there to do your deliverables.

(21:20)

Subscription pricing is fantastic in part because there are no write downs. No one's ever going to come back and say, if you deliver the things you said you would deliver in your engagement letter, they can't come back and say, did you really spend that much time? Because you're not selling the time, you're selling the work you're selling, the deliverables you're selling, the advice you're selling this, the planning meeting, the strategy meeting that you have once a month with them. That's the opportunity you're offering. It's not we'll take care of your problem in a certain amount of hours, take care of your problem. And that way when you send them a bill, they've already agreed to it. They're not saying, I need to question this because I don't think it could possibly take six hours to do that. Well, it does, but it's hard to prove that.

(21:59)

So you end up writing it off. No one wants to do that. That's the beauty of the subscription pricing is you switch that model. The other thing is as you move to more value added services, things where you're making clients more money, the opportunity to make more is there. You can't really say to someone, I'm going to save you a thousand dollars in your taxes, so I want 10% of that. I think it's illegal among other things. It's certainly unethical and it's not something we encourage. But on the other hand, if you turn them onto a business opportunity that makes them a million dollars, you can absolutely say, listen, I've got an opportunity or a platform or a program or a strategy that you can imply right now to your business that I guarantee you will make you a million dollars. I understand it's uncomfortable to guarantee anybody anything like that, but as you build these strategies, as you work with your clients, as you develop your advisory services, you will be able to come up with services that enable them to do that kind of thing.

(22:46)

And you can say, and I expect 10% of that, and people will say, if you make somebody a million dollars for 10% or 1% or whatever you determine is a reasonable fee for it, they'll be fine with that. It's not the same thing as saving the money on taxes. That's a different kind of making the money. They love it, don't get me wrong, and they look to you for it. But as you start delivering that kind of high-end proactive value, you're going to be able to charge a lot more. They're going to make more money and they're going to be more than happy to pay your sir pay the sorry prices you're asking for if they're the right clients. We're going to talk about picking the right clients in a little bit. Actually, we're going to talk about it right now. Sorry, I had my slides out or in my head, but as I said, we're going to talk about it in a little bit.

(23:30)

A little bit is now you have an opportunity. Now, the demand for accounting firm services is such that you have an opportunity to only work with the people you want to work with. Now, the challenge there is you have to determine who you want to work with. Now, for those of you who were in Gene Careager's Workshop this morning, I was delighted to see the number of people who said they had fired a client recently, and I think there was only one person who raised their hand to say they hadn't fired a client, and it was only because they'd only been in business for a month, as I assume that by the end of the week they will have fired somebody, which is great. But the basic premise is, so this is great. I think we know this is a crowd of people who understand this, who understand the value of saying, listen, who are my clients?

(24:13)

Who do I want to work with? And if I don't want to work with them, I want to get rid of them. I will say this, we talk a lot. There's a lot of focus on when we talk about, it's about culling clients, about firing clients, about getting rid of your C's and your D's, the real value here, while that's awesome and everyone in your firm will love it that they're firing the bad people, the real opportunity is to pick the A's, to figure out who you want to work with. That's the opportunity. Yes, it's great to get rid of the people who are, we were talking about emotional vampires who are sucking up all your time and causing you problems and delivering things late and then wondering why you're not delivering it on time. All those kinds of people, it's great to get rid of them.

(24:50)

The real value though is to identify the people you want to work with, the clients you want to work with, and go out and get them. Stop bringing on people you don't want to work with because you've now identified who you do want to work with and who you don't want to work with. Stop bringing those people on. It's less important really to get rid of the bad people, though it's great than it is to make sure you're bringing on the good people that you're bringing on the people you want to work with. And that requires identifying who they are, what industry do they work in, how old are they? What kind of trajectory are they honor, they had a growth trajectory, what are they like as people in theory, as you do more of these advisory services, as you move closer and closer into their orbit and embed yourself more in their lives and their businesses, you're going to be spending a lot of time with them and you're going to be responsible for their growth and their success.

(25:34)

You want to be sure that they're the kind of people you want to help with that. If you don't like them, you don't need to work with them. So it's a personal connection. Is it in the right industry that you're excited about? Is do they need services from you that you're excited about providing? So you really, the opportunity there is less about firing the other clients, though that's part of the process than it is about identifying who you really want to work with, who you want to serve, what kind of service services you want to deliver to them, and then being able to say, okay, everybody who doesn't fit this, we want to move away from. But it does require that hard work of identifying who you're working with. I'm just checking my time. I think I'm okay. Alright, so that's identifying your A clients instead.

(26:12)

It was very excited about the number of people who are more than happy to fire a client. Spectacular. There's more ways to retire. This will seem weird. We know that there are succession crisis going on at firms in a lot of places. We know that m and a, the m and a market is booming. We know that it's harder and harder to find partners to move up, but at the same time as you look at the number of ways you have to retire or to leave your practice or to realize the value of your practice and move on to another stage in your life, there's actually more opportunities than there've ever been previously. What were your models? Your models were get a bunch of rising partners to buy you out and pay your retirement or merge. Those were pretty much your options for a long time, but over the past several years, we've seen the emergence of a number of other options.

(26:56)

Now, many of them fall in the area of mergers, but it's still that they're different options because they take different forms. For instance, we all know private equity. We've got a couple of sessions on private equity. We're going to be talking about that and it's impact. Alan Colton, who's going to be talking here in a few minutes, he's going to dive into that because he's deeply involved in that area. And so that's one of the reasons we're psyched to have only one of the reasons, but definitely a big one because it's a big issue. It's going on. People are wondering, what does that look like? And there's a couple of different ways that's going to play out. It's going to play out as large firms getting backing from PE firms and then going out and acquiring numbers of the firms. So what they call a platform firm, and then it's going to go out and acquire other firms, smaller firms.

(27:30)

There's lot of other versions where they're creating sort of networks of firms. This is like the Ascend network of Fountain. It's heard of that. That works with Dawson, just a few thousand miles up the coast. So that's another option where they create a sort of national network of firms where the firms are still independent, more operate independently. They're not independent in terms of ownership, but they operate independently in the PE firm supports them. So that's a different model. Then when you look at all the other possible people who can acquire accounting firms, it's not just other accounting firms, and it's not just private equity firms. Family offices are already looking to acquire accounting firms for a couple of different reasons. One for a steady revenue source, right? Accounting firms, as we've noted particularly over the pandemic, when lots of the rest of the economy, was it a slowdown or stopped accounting firms were still making money.

(28:16)

It is. They're not recession proof entirely, but they're do very well even in tough times. And just over in 2021 and 2022, we saw in our top 100 firms, tremendous growth, really strong growth, particularly among firms below a billion dollars. So the opportunity there for a steady revenue stream, a regular source of income is a pretty attractive option maybe for a family office. The other thing that's attractive for them is the services that accounting firms can bring to their families if it's a multifamily office or single family office. Either way, the tax and accounting expertise, the business expertise that accountants bring is of tremendous value to family offices. Similarly, wealth management practices are looking to acquire accounting firms because they're saying, again, tax and accounting services that they bring are valuable to our clients. It's a similar reason why accounting firms started up wealth management practices is that, well, we already deliver all their tax and accounting work.

(29:08)

We know their financial situation better than anyone else. Let's do the wealth plan. Wealth management, wealth managers are taking a page from that book and saying, well, listen, if we can bring on the tax and accounting services, we can compete better with accounting firms. So they're interested in buying accounting firms. You're also seeing, I expect, we'll see, we haven't yet seen it, but I think we'll see particularly as the first round of PE investors get involved and start turning over, we may well see them selling to things like pension funds that again, are looking for a steady stream of revenue, a reliable source of revenue as opposed to some of their growth. Strong growth prospects. Accounting firms deliver cashflow on a regular basis. So there's opportunities like that. There are other opportunities, things like employee stock ownership plans or employee owned accounting firms. We're seeing some of those.

(29:52)

There have always been one or two out there in the profession, so I don't want to say that it's an entirely new thing, but it hasn't been very widespread. We are seeing more of that. We are seeing more firms say, listen, how can I get spread ownership out beyond just a partnership group? How can I get more people involved in this? Because it's hard to find a long-term partnership group people that will stick with your firm long enough to take care of your retirement. But if you spread it to the entire firm, every employee and everyone who becomes an employee or meets a certain qualification for, I haven't been there long enough, if they all become onerous, that diffuses that responsibility and makes it the whole firm's responsibility, not a small group of partners. So anyways, the point is, as you listen to all those different options, there's a lot of different ways to realize the value of your firm and to retire out of it or to and ensure that it can keep going.

(30:37)

And that's unusual, right? There hasn't been that way. As I said, for a long time it was pretty much merger or the standard model of handing an onto a group of partners who pay you out. This is exciting. Yes, it requires you think through. Yes, it requires that you go through a number of different options and figure out what's going on with them, which makes the most sense for you, and what work do you need to do to make sure they happen. I will tell you, all of these options require you to make sure that your firm is attractive. No firm can escape things like making sure you're up to date on technology, making sure that your client base isn't just basic 10 40 s, making sure that you have potentially strong niches if you can, making sure that you have strong specialty expertise. Make sure that you have a strong bench of talent.

(31:18)

You can't neglect your firm in the last five to 10 to 15 years of your tenure and hope and expect to be able to sell it to any of the people I've just described. I'm pointing like it's on the screen, but it's all in my head, but you heard me. If you want to sell it to all, to any of those groups or hand your firm on even to a group of partners, it needs to have value that they can see. And so you can't afford to neglect. That is the challenge there is to make sure that your firm will be attractive to whoever you're hoping to interest in it. But assuming you've done that, you'll be able to interest to interest a larger group, a much larger group of people in what you've got to sell. All right, and then the last one, and again this is, I'm just sort of hinting at this throughout, is that you have an opportunity to build a more ideal practice.

(32:01)

You have an opportunity to build a practice that works for you. The standard model accounting practice has been the same pretty much since the 1930s. There is no reason it has to stay the same. There is no reason it has to look the way it does. It can look any way you want it to look like. It can look like you on a beach in The Bahamas a month out of the year or 11 months out of the year. It can look like you having a staff that you've never met before, except virtually it can look like you having a staff in your office. It can look whatever you want it to be. It can be whatever set of services you want. If you don't want to do tax work anymore, you don't have to do tax work. There are plenty of ways to operate a firm that does exactly the work you want to do with exactly people you want to do and still make a ton of money and live the life you want.

(32:44)

You don't have to take the model that's always been around, and that's never been more true than over the last 10 to 15 years in accounting. As more and more technology gets brought to bear as more and more of the challenges that I've mentioned as we've gone along face the profession and create the opportunities to do things differently, there's just enormous potential. The trick is, again, it requires you to think about what you want your practice to look like. You can't just say, oh, I want it to look like an accounting practice. I mean, you can, and it could look like that, and that's fine, but you have an opportunity to opportunity to build something much better, much more personalized that fits you better and that do that answers the questions you have and the desires you have for your kind of practice. Alright? And that's the message really that I would say we talk.

(33:27)

It's the firm growth forum. So one of the things obviously we want you to come away with is lots of ways to grow, but we want you to grow in the way that makes the most sense for you and to be ready to grow individually in the way that fits your and your partner groups needs and hopes from your firm. So I would say that's really what we're hoping for you to come out of. There is the way to build the best possible practice that you can imagine, and that really is, it requires you to imagine. Alright, I think I am a little early. We've got Alan Colton coming on in a few minutes, but I'm going to take some questions if everybody has any, because like I said, I talked a little more quickly than I probably was supposed to. So if anybody has any questions, I do, I cannot stretch enough.

(34:08)

Again, the importance of the imagination you need to bring to your practice so that you can bring to your practice, and that's based premise is anything you can imagine you can do. The all bets are off and no one has to build a firm that is just the way firms were built for 30, 40, 50, 60 years since the 1930s, let's put it that way. So if there are any questions, I would encourage you, otherwise wait, we got a mic if anybody has any, I do. I should mention, as I said, we'll be taking questions for the experts panel all through the day. You can put them in umbrella app to me, Dan Hood, just look it up and you can chat me to chat them to me. Or you can put them in on the index cards from the registration. I think we got a question down, down in the middle there.

Audience Member 1 (34:51):

Yes, Dan, I was wondering, who am I? Who should I talk to about ESG reporting?

Dan Hood (34:57):

Who should you talk to about ESG, the session.

Audience Member 1 (34:59):

ESG, you said there's a session Wednesday?

Dan Hood (35:02):

Yes, it's, I'm not sure, I said Wednesday. It might actually be Tuesday morning, but it's Colleen Les from Moss Adams. She heads up their consulting, their ESG consulting operation, profiled her and talked to her extensively about it. She'll be here. It's a morning session, and again, I'm sorry, I can't remember if it's Tuesday or Wednesday. I'm just hoping to get through today, frankly. But it is not today. It's definitely either tomorrow or Wednesday, that session's going to be great because they have done, they've stood up a really strong business in that area. And as I say, it's in the consulting area. And one of the reasons that we brought her in, one because she's an expert in this area, but because we think that's the immediate opportunity is the consulting, the standing up, the reporting systems that firms are going to need. And one of the fascinating things that she told us and that we heard from other experts as we were exploring sort of what ESG consulting looks like is that while there are a lot of different reporting frameworks been an accounting firm that gets in and understands one framework, they generally find it relatively easy to set up another framework.

(36:02)

Think of it as a set of agreed upon procedures. If a client needs you to do set up reporting for their carbon footprint, and then next year they may you to set something, another framework up. And it's relatively easy for accounting firms that know how to do one of them to then figure out how to stand up another one. So it's a opportunity, and as we say, I think this is going to be a huge opportunity where we see a lot of reporting in this, a lot of businesses a looking for help in it. So it was Colleen Les from Moss Adams, and as I said, I'm sorry, I don't remember exactly when the session is, but I know it's early in the morning, either tomorrow or Wednesday. Anything else? Like I said, I spoke way too quickly, so I've got a little bit of extra time.

Audience Member 2 (36:45):

Hi, Dan. Hey. Hey. Right here.

Dan Hood (36:50):

Oh, there you go. Sorry, I got a bright light.

Audience Member 2 (36:51):

So you talked about a lot, lot of the opportunities, and I feel like we talked about CAS forever for 10 years, different names, but it's really exciting. I am so excited about this. What do you think for the next three days that everybody's going to be here? For people who are interested in CAS, what should they, what's the one tip that you would give them that makes a difference? So it's no longer just talking, no longer just in the head, but then they can really put traction to it, really make a difference this time around?

Dan Hood (37:22):

Sorry, give me the last part of that again.

Audience Member 2 (37:23):

Instead of just, what's the one tip you'll give the people who are interested in doing CAS, right, so they can really put it to practice. So it goes away from just ideas to implementation.

Dan Hood (37:35):

Well, let me actually, before we do that, can we just, because now we got the lights up, I can see everybody. I'm going to hold my hand up like that so I can really see everybody who's got a practice in their firm. All right, good. So a good number, but not everybody. So I would say as one of the things to bear in mind for CAS practices is you're thinking about it. I would say one, if you're interested in, we've got three different sessions on it. Michael's on one of them, which is going to be great. One, there's one on technology in CAS. There's one on how to launch a practice, and then there's one about the broad future of CAS with Joe Woodard on, that's Wednesday morning. I would encourage everybody to attend all those sessions regardless of whether you have a cash practice or not, because there's got a great experts, as we said, Michael's going to be one of them.

(38:15)

Lots of great advice on how to build a new practice or improve one you've already established. I would say one of the things to bear in mind is that there's a little degree to which CAS is kind of an evolution. A lot of firms start as, like I said, sort of transactional CAS and that it will change over time. As you add more advisory services, you become more comfortable. You get deeper into your clients, you understand them better, and you're able then to sort of say, okay, I've got the delivery of the transactional CAS stuff down. I've got all my procedures in place. I've got my clients trained, and that's a big part of it. It's getting them trained on the systems, but then you will evolve that practice over time, or you can evolve that practice. Technically you don't have to, but what we're finding is a lot of firms are saying, okay, we got that down. Now we're going to involve evolve more of our advisory services. We understand the reports we're giving from a transactional perspective. Now we're going to figure out how we can turn those reports into something more proactive, more forward looking. That gives people sense of how to build their business, not just what's going on in it, but how to take that, the data from the transactional cast and turn it into advisory.