Firm Growth Forum 2023 Keynote Address: The future of CAAS

During this forward-looking presentation, Joe Woodard, Client Accounting and Advisory (CAAS) coach and expert, will prepare your practice to navigate the rapidly changing world of CAAS. This engaging keynote presentation addresses the unprecedented opportunity around CAAS, the challenges firms face with CAAS (e.g., staffing crisis and standardization), and a categorical overview of accounting automation solutions, with a focus on foundational applications, technology trends, and technology futures.

What you'll learn:
  • Explore the unprecedented CAAS opportunity as driven by significant changes in market demand, supported by cutting-edge automation technologies.
  • Survey the technology landscape and make informed and prioritized technology choices for your CAAS department.
  • Address challenges to building a successful CAAS department including navigating the changing technology landscape, building systems that scale, and managing the current staffing crisis.
Transcription:

Chris (00:11):

Joe Woodard, founder of Woodard Events. He's also well known for the Scaling New Heights conference, and yet here he is speaking at our conference. I'm pretty proud everyone. Please give it up Joe.

Joe Woodard (00:23):

Thank you so much Chris. Alright, we're here to talk about the future of CAAS. First lesson in CAAS is that double A is not a typo. Alright, so this is the trending acronym two A's Accounting and advisory services. But you may see it as CAAS, meaning client accounting services, client advisory services. But I'm telling you, my first projection for the future is this is going to be the ultimate landing spot for the acronym. So let's get used to the double As because of the fusion as we're going to talk about at the end of today's presentation. My last point between accounting and advisory, now I've got a little disclaimer here. No one can actually see the future and you won't remember what I said in 10 years anyway, so it doesn't matter. All right? But if you do happen to remember it, you can reach out to me if I'm not retired at that time and say, nah, nah, you were wrong.

(01:22)

All right. But I don't think I am. There's a lot of research that's gone in my presentation in my career. I've trained 150,000 accountants of bookkeepers largely in the arena of CAAS and keeping, and I am quite the student of shareholder reports from publicly trade companies and I have my eye on the crystal ball, but anybody can be wrong. Alright, so the future of CAAS will be a series of fusions. I was trying to think about how to create a framework of this so I don't just spit out a bunch of information and then make you have to put the puzzle together because it'd be really difficult to retain that. So I'm, I'm going to categorize the future into six different fusions. Fusion number one is the fusion of general ledger and workflow solutions. And I'm going to drill down and explain on each one of these. Client communications and workflow are going to become fused together. Humans and bots are going to be fused, credentialed and non-credentialed accounting professionals are going to be fused in the future of CAAS real and virtual worlds. There's a fusion coming there for CAAS and accounting and advisory for real this time. We're not kidding this time. Okay, so, alright, so let's talk about the fusion of general ledger and workflow solutions first. Now, if you think you know what I'm talking about here, prepare to have your mind blown because unless you've used one of these solutions, this is not what you think it is. What we're talking about is taking multiple client general, general ledger data files from multiple accounting platforms, most major platforms being supported by most of these aggregators, whether it's Zero or Intacct or QuickBooks online. So multiple clients across multiple platforms being ingested by the workflow solution. Now don't confuse that with a practice management solution like Mango or Canopy Out in the foyer there we're talking about just strictly workflow solutions and auto review and mass entry change solutions. So this is strictly a CAAS tool, but after it ingests all of this client data, you can use the tools within the system to both read and write what is coming in from the general ledger tools. Now I want to make sure we're clear. It does not aggregate the data across client A, B and C. There are reporting tools like Draft and Qvinci and Claim Guru that will do this sort of client base level aggregated data analysis. If you wanted to get some benchmarks across your 40 clients in a particular industry, there are other tools for that. It keeps everything in the client silos. Never can you risk the information or journal entries from client A going into client B'S file, but it aggregates the interface.

(04:30)

So instead of the CAAS worker of the future popping in and out of different data files to do their work, the CAAS worker of the future operates within a single workflow and affects the general ledger directly from within the workflow. If it's time to put in an accrual basis entry to accrue payroll at the end of the month, they can do it directly within the interface without ever going into zero into QBO or into any of these solutions that these tools integrate with. This is a powerful revolutionary change. Now, to give you an example, there are others out there, but Zenit who does not pay me to say this, they have no idea. I'm even speaking today, they auto detect errors imported with bi-directional general ledger sink and it would come up in an interface similar to this. Now I know you in the back room might not be able to read the details there, but what it's doing is just detailing out how many uncategorized entries there are. Meaning they might be written to a suspense account or even an account called Uncategorized if you're in QBO entries that are posted to parent GL's because in certain accounting solutions, you're supposed to only work within the sub structures like zero and QBO entries without a department, entries, without a location, entries without a name, so that you don't have gaps in your job costing entries without a project. Again, back to job costing and any possible duplicate entries. Now I know it begs the question, can I customize this because what if my client A uses an account called suspense and client B uses an account called something else? And the answer is absolutely yes. You can create rules within these tools that will read and analyze data at either the portfolio level or at the individual client level. And those rules are pervasive. You can also create mass changes like you can say these 50 transactions are on the wrong department, let's grab them all and let's change them over to the correct department and then it pushes it right back into the gl. So as you're looking at the future of CAAS, just understand CAAS workers are going to work less and less inside the GL and more and more inside their workflow, not just to know what to do next, but to actually do the next thing. It got kind of quiet in here. That's just number one a six. It's an exciting future, right? Let's talk about the fusion of client communications and workflow, mobile first interactions. I was talking with somebody from Sage out, Steven from Sage out on the balcony as we were freezing to death over breakfast and it wasn't him actually somebody else said, and I won't out them in CAAS they don't want to be outed on this. And I said, they said, I hate email. If you want to go out yourself, you can. I hate email and I don't know if anybody else feels the same sentiment if you also hate email, but we have a zero inbox culture at Woodard, which means I over manage the process at Woodard of everybody clearing their inbox by the end of the day and we achieve this, but at great effort and great managerial attention and hold and it takes a tremendous amount of accountability and discipline in or and process in order to maintain zero inbox at the end of every day. But in preparation for this session, I did look in at Microsoft Exchange to see exactly how many inbound emails I receive each and every day and it's north of 500. And then I did an analysis on how many of those I actually replied to and it was about 15 per day. Anybody else relate, right? Exactly. So if we're going to interact with the clients of the future and we're going to do so effectively, we're going to do so with this little device here if you've ever heard of it, because the phone, which we never use as a phone when it rings, I'm like, what's happening? I don't know what's going on here, but we obviously use it anytime that we want to interact with our social networks or our family and that this interaction comes in the form of notifications and notifications. Unlike email, get our attention. If you've ever seen the social dilemma on Netflix, you understand that the human race has been conditioned to respond to mobile notifications If you've not seen the social dilemma, and especially if you are the parent of somebody who's still in your home 18 or under, and then I paused because some of you have 24 year olds in your home, but if you're still raising a child, you really need to see the social dilemma on Netflix because you need to know how your child is being manipulated, but it also helps you to understand how you are being manipulated. And look, we can't change that.

(09:54)

These are extremely powerful corporations, Facebook, Google, Microsoft that have conditioned the human race to think that the value of a relationship is equal to the timeliness of the response. And we'll say that again because that was their whole goal, that they have conditioned the human race to think that the value of a relationship is equal to the timeliness of the response. Just ask my 15 year old daughter, because she could be in the middle of lung surgery and if she gets a notification, she thinks she must respond this very second. And she's been taught to do that by Facebook, by Google, by Microsoft, and by the other forces of technology in our world. Now if we can't change that, and if you're the parent of a teenager, you sure wish you could, but you can't if you can't change that, let's play along with it. Let's leverage it. Let's be the advisor in our client's pocket instead of the advisor buried in their inbox. I like to repeat things that are super important. Let's be the advisor in their pocket, not the advisor buried in their inbox. And watch how much faster you're going to get the information you need. Watch how much faster you're going to get the documents that you need. Because if you're using the right tools when your client takes a picture of the document, you don't get this shadowy image at a weird angle that you can barely read or you can read the top but not the bottom. That's not the way that these optical cameras and systems work now. They capture it, they frame it, they rotate it, digitize it, and make it the same quality as one of the leading scanners like Canon or Fujitsu, all from the camera, all from the snap of a picture. But it's not just enough that we're mobile, we have to be integrated because I could ask the client by text, can you text me back a picture of that basis statement or whatever?

(12:13)

First text isn't going to rotate, text isn't going to optimize, text is not going to digitize. But even if I'm using something like Microsoft Lens that does all of those things, it's not going to be integrated with my workflow. I still have this disparate process of getting it from wherever my client sent it to me into my workflow. But if you've got products, and I'm just going to call out Canopy because there's some great products out there, but I happen to know Canopy does a amazing at this particular thing. If I'm inside of Canopy's workflow and I need something like that basis statement to complete a Schedule D. I can tell Canopy right in the workflow, I need this information from this client and it will create a task that says waiting on client for information. It will push a notification through the Canopy app straight to the client. The client can take a picture of it right on their mobile device. It rolls the document securely bypassing in email, which is both cumbersome, inefficient, and insecure. That's a three things, not a both and pushes it right into the workflow marks that task complete that we're waiting on the client and alerts me that I can continue processing that return. That is CAAS and tax in that case of the future. But it's not just documents, it's also client chats because if your folks in CAAS or anywhere they work in your firm are texting clients back and forth, that is a black hole. Unless you happen to have company managed phones, unless you happen to have a very sophisticated CRM solution that is scraping the SMS text on the company managed phones, you are not capturing these exchanges between your folks and your clients.

(14:06)

They're black holes, they're data prisons is the way I like to refer to them. So you've got to route all the chat right into a company managed system. And now folks I've tried, and I know firms that have tried and Slack is not the tool for this and Microsoft Teams is not the tool for this. If you've ever tried, you probably know what I'm talking about, right? Because trying to get a client who doesn't use Slack to use Slack or doesn't use teams to use teams too much of a lift. And even if they do use these tools, they're operating inside their business, which is what those are designed for. And then you come in from the outside wanting a piece of information and it's bifurcated, especially in teams, not so much in Slack, it's bifurcated and you end up getting more ignored than if you were just using email. So you need to have the chat infused into whatever you're using to manage your CAAS workflows, our tax workflows or audit workflows like I just mentioned in my example, and again, they're not the only one and I don't want to say that there aren't some other great solutions out there. Just you like Zenit, they happen to excel at this particular area of rolling chat straight into the practice management solution. Now, I want you to remember this that I said and I want you to tell me in 2031, if I'm wrong, just go ahead and give me a call in 2031, I'll pick up. You can tell me I'm wrong. I don't think I am. Email is the fax machine of this decade.

(15:46)

It will not survive to the year 2031. If it does, it will survive to the same degree that fax machines survive today because I actually had someone ask me to send them a fax. It happened once so far in the last 12 months. It was a medical practice. Can you just fax that over? And I'm like, am I faxing it to the 20th century? Where am I sending this thing? Right? But they love their fax machines in the medical industry because they deemed them secure. Just let Randy Johnson get ahold of that. Alright? But email facts, not only are they insecure, they're terribly inefficient and lemme tell you how you can, the leading indicators that something is about to die is the degree to which we're inundated by the information, the disparity that exists between the vehicle and where we live and work and how much spam is inside of those systems. And it's mostly the latter as your leading indicator because you remember back in the fax days how we would get about 20, 30, 40 or 50 faxes a day and one of them was real and it was so for some reason it was all the roofing companies. Where did they get the faxes numbers? I don't know. But everybody wanted to replace my roof.

(17:03)

It was you two, huh? Alright, what about the fusion of humans in bots, the fusion of human in bot. So Intuit is driving and reflecting the future of CAAS. Now what do I bring up Intuit specifically because in the United States of America, the two forces of change and the two mirrors that reflect the industry most are the AICPA by and by extension CPA.com and Intuit. Now, I'm not saying there aren't very important forces. If I were in India, Val, I would say watch Zoho. They reflect and change the entire landscape of the accounting industry. If I were in the UK, I would say watch Sage. They both reflect and change the entire scope of the accounting industry. But in the United States of America, you watch the AICPA and you watch into it whether you're users of QuickBooks or not because they own so much of the market share.

(18:00)

Can we all agree on that? Now Intuit, if you look at this from their shareholder report, January, 2023, watch the era that they are in. Watch the decade of how they define their decade, but it's not just their decade because remember, they're both driving and reflecting the future of the industry and if you watch what they've done with their historical eras, the era of windows, they're dead on the era of the web. They were dead on the era of mobile and cloud in the 2010s. They're dead on. Could they? Could they be right? They are right. The 2020 is the era of artificial intelligence all the way up and into the future. Hey, you want to have a little fun? I want you to pull out your phone right now because you're never more than an arms length from your phone. So therefore you're never an arms more than an arms length from your client.

(19:01)

Getting back to the last one, I want you to type it intuit.com/strategy. Type in intuit.com/strategy and tell me what you see. Those of you that are already there isn't that fun? And intuit.com/strategy, and for those of you who don't have good internet, there it is right there. Marquee single slug once removed from intuit.com. As a matter of fact, they've made five big betts and every one of those big betts sits underneath the umbrella of this page right here. So if you keep scrolling down on the page, you'll see there are five big betts. None of them are possible without artificial intelligence, which means you've got a company with a three figure billion, over a hundred billion market capitalization, unless I missed a memo someplace, they're still up in there telling us that the entire future of their company, not just QuickBooks but Credit Karma, MailChimp, TurboTax is an AI future. So we should stop, we should pay attention, but not just Intuit. Why don't we pay attention to the automation that is being infused by this artificial intelligence or rather is it is infused within it because every single one of the categories that you see here on this slide is something where you can get to zero or near zero entry. I know because we consult with CAAS departments and non-credentialed bookkeeping departments and we've achieved zero or near zero entry in every one of these categories once they fully deployed the right slate of technologies and the technologies keep getting more and more and more sophisticated.

(21:05)

We'll let you just kind of absorb these because you might think, is there anything left? Not much, but there are a couple that are still high friction areas, which is why I say your target on automation foreCAASt should be about 80% displacement of manual entry because some of the friction areas are in more of the outsource controllership or full back office processing like state returns, local property tax returns, things like that are very difficult to automate. They're too disparate. There are too many different counties involved in the country, too many different variables, but one of the areas of the highest friction are these darn paper checks. I mean, I've got one sitting in my bag right now because I'm a virtual office. We have people in 15 states, but I'm the only person that checks the mailbox, which is a UPS store box around the corner from my house because we're virtual and I don't want to give out my house, my house address, my home address. So it's either me or my wife who also works for the company that's going to check in the UPSs store box and inevitably every week paper checks and I have to scan them in so they become digitized so they become part of our document system. I have to then sign the back of it again, it's the 20th century and sometimes I have to dig around inside my desk to even find a pen because who uses a pen? And then I have to use the banking mobile app and I have to take the picture of the front, take the picture of the back, verify the amount, and I'm trying to run a multimillion dollar company and these jokers won't stop sending me checks for $400.

(22:54)

You feel it? Feel the pain. That's one of the ones you're not going to see coming up here on the board anytime soon because the banks, yeah, there's plaid, but plaid's a reader, plaid's not a writer. The banks for their to protect their customers are going to be very hesitant to ever let people write back in with things like paper checks. I'm not saying the systems don't exist, I'm saying they don't exist in an affordable way at the small to medium sized business market at scale, but this is still a lot of boxes. You need to be leveraging every one of these boxes in order to maximize CAAS productivities for your clients. Now, where can you go to explore these techs? Well, right out the door, a lot of them are represented out there, but where the trade shows are within the industry, AICPA engage in a couple of weeks. I'll be there if I'll see you there. If you're going to be in Vegas scaling new heights, like Chris mentioned, largest accounting technology showcase in the country now we're very proud of that. You need to go and explore these where you can talk face-to-face with people and you need to figure out how you can create your own stack of technologies with a caution. There's a difference between a Frankenstein creature and a Frankenstein monster, right? If in Mary Shelley's, Frankenstein, Frankenstein had had a normal brain, it would've just been a science fiction novel, but instead it was a horror novel. So you want to make sure that whatever is the engine running this, it's organized, it's systematic, it's part of a practice plan and that you don't overstack the technologies.

(24:42)

Oh, I'm sorry, I put the wrong one. So the child that's destined to become king here is chat GPT. Now I know we've all heard about it. As a matter of fact, you'd have to live under a rock. You're probably sick of hearing about chat GPT, but for those of you that haven't yet played around with it, understand a couple of things. It is the direction setting for the future. It points to where we will ultimately land. But it is just like this one not ready to rule yet, okay? It is a child, but I don't want you to dismiss the entire of the category, the kingdom that this sort of technology's going to create just because it's a child. So let me show you a little bit of what the child can do. And I want the caveat, it's a child, so I don't want you folks sitting on the front row to go, oh yeah, but that that's calculated slightly wrong. Of course it is. It's a child, alright? But what I'm trying to do is I'm trying to show you what the child's capable of doing by nature. So as the child grows up into adolescence and into adulthood and becomes more and more mature, which won't take as long as the prints there, it'll take about two or three years instead of two or three decades for this thing to be ready to rule, you need to be able to see what's coming around the corner. So I'm going to ask it the first question, and so you don't have to watch me type, got my questions all prepared, alright? I'm delivering a keynote presentation to an audience of accounting professionals and I'm showing them chat g p t, please greet the audience. And this is not something where I've programmed in if then statements, it's having to think about what I've written and it's having to actually come up with an answer and it is typing. I just have to scroll down. So hello and welcome accounting professionals. It's great to be here today and have the opportunity to share with you the incredible capabilities of chat g p t as a language model powered by the cutting edge G P T 3.5 architecture. I'm here to assist you with any questions or challenges you might have. Let's get started. Alright, so let's do, let's get started. Let's see, the audience looks a little bored.

(27:26)

Tell them a joke. All right, so let's see what it says. Sure. Here's a joke for you all. Why did the accountant cross the road to get to the other ledger? Hope they gave you a little chuckle. All right, no. All right, so here we go. Okay, that they didn't think that was funny. Tell another one. Okay, so I could have left the typo just to show you navigates that too, but that's okay. Alright, so let's go. I'm sorry. You hear the last joke didn't quite hit the mark. Let's try another one. You all, why did the auditor cross the road to get to the other side of the balance sheet? Okay, still, you know what would be funny? You going to be funny? Why did the auditor cross the road? Because that's what the work paper said they did last year. Now that's funny And that shows you that human intelligence is still superior. And a boo boo. Stick your head. All right? Yes, thank you. Alright, so let's go to the next question because I'm going to ask it something a little bit more concrete. All right, this question says, I'm an accounting professional and my client has a new loan for $125,000 with simple interest of 8% and a term of 12 months. The first payment is due on June 1st, 2023. Create an amortization schedule for this loan. Okay, so we'll let it crunch that. It actually doesn't just create the schedule, it actually tells me how it's creating the schedule, how it's creating the calculation. And then after it's told me how it thought through it and how it did it because showing its math, then it begins to actually create the table itself and we won't wait for it to do all 12 lines. But you see the point, watch this though. If I were to say, I have decided I want to create this schedule in Excel instead, how do I do that? Okay, let's let it get through this last little bit. Well, we'll interrupt it, which you can do.

(30:03)

Now notice I didn't give it the information again, I just said this loan, right? Because I'm having a conversation with it, it remembers what happened earlier in the conversation. So it's giving me the step-by-step instructions not to just create amortization schedule in Excel, but the amortization schedule for this loan in Excel, which I won't wait for it to completely finish. I've got something even more fun and exciting to show you. How about this? I'm an accounting professional. My client has estimated $400,000 in gross income for the 2022 tax year. He will file his return. There's a typo in that as married filing jointly, and by the end of the year he's paid $85,000 in income tax to withholding quarterly payments. He has $25,000 in charitable donations. Both my client and his spouse are under the age of 65. Neither of them is blind. If you're a tax preparer, why that's important? They have no dependents. How much tax does my client owe in 2022? It tells me how I need to do it, which you guys already know, and then it will do it. Now, what's that mean for the future, the future of cs, the future of tax? It means that the artificial intelligence may be really bad at telling jokes, but anything that involves a concrete set of information, however complex that concrete set may be like the US tax code does a pretty darn good job. And remember, this is a child, so if you don't like some of what it's concluding here, remember who you're talking to, it's child.

(32:04)

But what will this do to your tax planning? It will streamline it greatly. The bigger question to ask is what is this going to do to your client's tax planning without engaging you right now? It could really hurt them because it's a child and it can give wrong answers. But when it becomes a grownup and its success rate on answering complex questions around finite sets of data, like the tax code becomes 99.9% accurate or greater, we have to figure out what we're going to do with our lives. And I don't mean to depress you because I have an answer to that at the very end of today's presentation, and I've just got one more because this is so important for the future, and this takes a little bit of a different approach. So I'm going to start by just doing this. The name of my company is Woodard Accounting and Advisory. I'm a tax preparer located at, I need an engagement letter for a client named Joe Smith who's also located in Atlanta, Georgia. I'm going to prepare his individual income tax returns for the year 2022 with a fee of 5050% up front, 50% when I deliver the return. Please create an engagement letter for Joe Smith. How many people dread creating engagement letters? How many people spend hours trying to pour over the specific and the unique qualities of an engagement letter? But you might say, Joe, this is nice, but it's a little more complicated than that. We have standards when we're creating our engagement letter chat GPT doesn't know those standards, so it's doing a pretty good job, but it's leaving out some things that I know that AICPA tells me I need to include in my engagement letters.

(33:59)

Oh, well, we can take care of that because now I'm going to do the same question only when I paste it in. I'm going to include all the text from this article from the Journal of Accountancy about exactly what you should do with your engagement letters for income tax engagements. I'm just going to grab the whole thing and I'm going to say at the end of my question, I'm going to tell chat GPT, please create an engagement letter for Joe Smith and use, I know you can't read it in the background background. This article as a guide when creating the engagement letter, which is exactly what you would do, correct? You would go to an article like this and use it as a guide. So now I'm going to grab the whole thing and paste in everything, including the text of the article into a single chat. Now, I want you to notice how long I'm scrolling here, and I want you to notice how fast chat GPT reads the article, analyzes it and incorporates it into its new engagement letter and breaks it down by every single section that the Journal of Accountancy article says. It's supposed to have mentioned bi section in the engagement letter, including jurisdiction, limitation of liability, non-disclosure, termination, and this is a child, Okay?

(35:47)

The fusion of credentialed and non-credentialed professionals. That was the fusion of bots and machines, the bots and humans, the fusion of credentialed and non-credentialed professionals. In the future of CASS, you're going to see fewer and fewer and fewer CPAs. Right now, there aren't a ton. I mean, if you go to any firm and you hunt for the CPAs, you're going to find them really heavily in the audit department. You're can find them pretty thick concentration in the tax department and the lightest concentration is already currently CAAS. Are we right? Okay, but in the future of CAAS, you might find one CPA for every 1000 or 2000 clients. That's the difference. I had a sports injury recently. Okay? Yeah, I know that's what they settled the paperwork. I was like, I don't know if I would actually call what I was doing a sport because let's just show of hands, how many people think paint ball's a sport?

(36:55)

Oh yeah, that's not a lot already, guys. And I'm not done yet because I was playing it in the Metaverse on an Oculus. Okay, alright. Nobody raised their hand, but there's still a physicality to it. And there was this paint gun just sitting right there on the virtual ground and I thought, oh my gosh, like two paintball guns, I'll be unstoppable. And I reached down to grab it, which you must do in the physical world too. And I reached and I didn't lift my leg like this. That would've been smart. I went straight down, the adrenaline was going and I had to shoot somebody fast and my back went, bam, just locked up. And when I laid down on the ground or fell down on the ground, my avatar fell down too. So all of the other paintball people stopped playing paintball and they floated over to me and they said, are you okay?

(37:48)

Are you okay? And of course I lied and I said, yeah, I'm fine. I just tripped and then I quit the game. So I just disappeared in the metaverse. But in the real world, I was in a lot of pain. So I had to go to the hospital. I'd never had a back pain this bad, and I had to spend three days in the hospital out of three days in the hospital. I saw somebody with MD after their name, a total of 15 minutes. Now the accounting industry can learn something from this. If we ran our CAAS departments or even our tax departments or for that matter, even our audit departments, a little bit more like a hospital with the medical industry then where everybody walking around in the hallways as a doctor, we might just take care of this staffing crisis a little bit and we all know we're in one.

(38:36)

So I thought I would kind of break down and research the causes. Some of these you may be familiar with, some of these you may not be familiar with, but more specialized requirements are required. Now they have to know technology as well as the industry. There's a decrease in college grads heavy recruitment by top 100 firms, which is for, if you're not one of those, you don't have their kind of recruiting power heavy recruitment by scaled players. So companies like H and R Block now have employed 7,000 gig bookkeepers or CAAS workers, which kind of gets me into my next square. I just dropped a big bombshell on some of you. You didn't know. 7,000 gig bookkeepers, h and r Block, because they're going after the QuickBooks Live market, which already has hundreds of gig workers in the, CAAS category, and that trend's just going to continue with these scaled complain.

(39:28)

And then you got pilot bench belay, finance pals, I could go on and on. Alright, sole practitioner appeal because now it's so easy to hang your shingle because it's respectable to work out of your home. You don't have to go have an office to be respectable. Thank you. Covid Retirement Bubble and a family migration. Now if you see all of the asterisks here, all of those were accelerated by covid, which made the staffing crisis even worse. The answer to the staffing crisis. Watch the firm Adams Brown. There are a top 100 firm. I can't disclose the number of CAAS clients they have, but it's a four figure number. And they've solved much of this staffing crisis by hiring people who don't know a debit from a credit they hire based off aptitude. Then they run internships and apprenticeships and they teach people how to do the trade of record keeping.

(40:35)

Now, I don't want to insult anybody in the room here. If you're a bookkeeper, that's not a trade, not if you're have a bookkeeping practice, if you're a CAAS practice and you're certainly not a trade. And if you're a CPA firm in here, that's not a trade. Those are careers. Those are professions. Record keeping is a trade. Just getting the data into the general ledger is something you can teach somebody like how to repair an air conditioner. And the HVAC industry uses apprenticeship for that model, and that's what Adam Brown has figured out for their CAAS department, which means they're able to service thousands of CAAS clients and they're battling the staffing crisis just fine. In other words, if you get back to my hospital stay, we have MDs, RNs, LPNs, and Orderlies that all are part of the hospital equation and they all play their own particular role. This might be CPAs certified QuickBooks, ProAdvisor's interns, but if we can deploy this sort of an approach, we can hire from outside our industry, we can bring people in without the necessity of the college degrees, the fusion of real and virtual worlds. This one will blow your mind. Team, go ahead and run the video.

IVR Machine 1 (42:03):

Here we are, Jason and your avatar looks awesome. Something that I really like is how freely you can move around and have face-to-face conversations.

IVR Machine 2 (42:11):

That's exactly right. We've held more than a hundred team gatherings in these immersive spaces where people can connect, learn, and collaborate because they're truly in the same place together.

IVR Machine 1 (42:20):

The solution has been a game changer for onboarding about a hundred thousand people a year. And like many organizations, onboarding has been remote for the past 18 months. So bringing our new hires into this immersive environment fosters immediate and deeper connections. It transcends physical boundaries and helps individuals experience a culture in a very personal way. Our new hires meet many more people and grow their professional network much faster.

IVR Machine 2 (42:48):

In IT. We're thrilled how easily we could unlock Mesh capabilities through teams. In fact, we're currently rolling it out on all of our computers and recently deployed 60,000 VR headsets. The integration with Microsoft 365 makes everything feel familiar, but on top of that spatial audio makes everything sound just like it would in person. And I love seeing and hearing our colleagues collaborating and whiteboarding and using this space for productivity.

IVR Machine 1 (43:14):

This doesn't just feel real. It is real. It's been exciting to see an idea become a reality in such a short time enabling presence and connection that transcends location, keeps our culture vibrant wherever we're working and levels the playing field to create equal and inclusive experiences.

Joe Woodard (43:34):

And that's not future technology. That's a product called Microsoft Mesh and it is imminently available. Accenture was one of the pressure test, a 60,000 VR headset purchase. If you caught that number, could you imagine calling Facebook and going, yeah, I'd like 60,000 Oculus headsets. How fast can I get those? But that just shows you that Accenture understands the way you engage clients in the near future or they would not be making that kind of investment. Did you hear that they onboard a hundred thousand a year? I haven't been able to unpack if that's client onboarding, employee onboarding, but I'm sure they're not hiring a hundred thousand people a year. So I'm sure that's a lot of client onboarding probably by engagement level. But the point that I'm making is they didn't order 60,000 headsets just for their own team members. They ordered them for their clients because they want to engage their clients inside of Microsoft Mesh, which has both the immersive VR option that you just saw.

(44:40)

And I wanted to really feature here the auto translation, which is currently done through subtitles, which basically reverses the entire mythology of the Tower of Babel. Right now we're all one language, but very soon it's going to be real time translation of what I'm speaking into the language that the other person hears, which gets us into the realm of Star Trek. You ever worry about, wonder about how Kurt can go all these planets and they understand each other? Well, gene Roddenberry solved for that, but something called the universal translator, and they have them embedded into their ears. It was a plot device to solve for this. But now the plot device has become a reality because inside of Microsoft Mesh, I can speak with anybody in Asia, in Europe, Australia, because they're kind of a little different with their accents and they're fine. I can just understand everything that they're saying. So interactive haptics. I can have a client in South Korea, I can high five them and I'll feel it on my hand very soon. You can hug them and you'll feel the pressure on your chest. And this global rollout is imminent. I was just out. I watched this website, plus I'm on the alerts from Microsoft and they're talking about within the next six months, they're going to be globally rolling this out through Microsoft 365 to every Microsoft user on planet Earth. So if you think that Mark Zuckerberg is dumb for what he's doing, understand he sees this stuff and he may not be so dumb.

(46:21)

This is the imminent future. Do you see this holographic one? This is particularly interested. If you've watched your Star Wars, you notice how the little grainy thing comes in, right? Well, that's what this is. You're wearing your VR headset and the other person is portrayed in a ghost, ghost-like form, like a translucent form, but it's their actual face and it's their actual body structure. Now, how does it know what the actual person's face is? All the new VR headsets, like the new one, beyond MedQuest two, the by Oculus plus all the new ones coming out by hp, they have cameras that point inward, not just outward. If you smile, your avatar smiles, but in this CAAS, it's actually doing a live video of your face and portraying it in a translucent appearance inside the room. And this is not distant future. This is in the year 2023. And the last one I want to get to is the fusion of accounting and advisory for real this time. Now, what makes this different, everything that I've just talked about is what makes this different. I am just going to go to a childhood story because it's a great metaphor.

(47:46)

You build an arc, put a bunch of animals on it, nobody goes, who's going to walk into a boat with a bunch of smelly animals, right? Again, this is the childhood story. Nobody's going to step into a boat with a bunch of smelly animals until you, your survival depends upon it. So our survival will depend upon advisory. I've shown you a little glimpse of that today, have I not? Because I was sitting with somebody at the very beginning of the conference and they were talking about where are the limits of this ai? What is it? And I didn't want to show you this because it involved my own financials, but I play around with it all the time. And I copied my balance sheet and profit and loss from this past fiscal year, pasted it into chat GPT, and I said, what is my operating capital ratio? It told me how to compute it, which I didn't need to know, and it told me what it was. And then I said, well, based off of my solvency, liquidity, operating capital and quick ratio, how stable do you believe my company is? And it gave me an extremely well thought, conversational, detailed, fact-driven assessment of my financial position and performance for last fiscal year that I swear was about 90% of what I could have done for a client in a cursory look.

(49:27)

It's a child. So you might say, well, Joe, are we even safe with advisory? Then what's left? And I'm so glad you asked, Because in this progression we have this record keeping job, which is most susceptible to displacement. As a matter of fact, if you want me to make one of my forward-looking statements with my disclaimer, bookkeeping is going to be the first to be displaced and it's going to be eminently displaced by the bots. We've already talked about how you can manage 80% of the entry in an automated way right now that requires a very sophisticated technician curating the stack. Very soon it will require no curation. The small business owner can go straight to the bots and get that 80% lift done, then 90, then a hundred percent done. This is the first domino to fall. Outsource controllership has enduring power because if you're looking at payroll compliance, again, you get into all this jurisdictional level like the property taxes that the bots are just simply not going to get too fast enough. So you're going to want to use really good payroll companies like some of the ones out there. You're going to want to integrate it with the GL, and then you're going to want to provide this peace of mind level curation of that payroll solution. Salt practices, the child will have to be king for a decade before it can. In my opinion, do salt now and maybe rather year 2030, 2035, the bots will completely automated all salt compliance, but good luck because it's moving as fast as AI. It feels like, right? It's just the complexities are just this curve that's going to stay ahead for a long time. The value added services, like entry level financial measurements may be easily displaced, but predictive analytics on accounts receivable with bad debt, expense mitigation, not as easy to manage.

(51:28)

A lot of complexities in that and a lot of nuances in that because the bots can't possibly know who the customer is to introduce those subjective variables. Spend management has a lot of subjective variables. Fixed asset management doesn't. Budget curation, once it's created can be automated. And so you're going to get this mix of more of the bionic outsource controller. So if you want to use it in sort of sci-fi terms, the bookkeeping is going to become a robot. The controllership is going to be a cyborg or a bionic, a half human half bot. But the kind of advisory that I'm talking about, because advisory is a loaded word, that means a lot of things to a lot of people. Some of you might have said, well, this stuff sounds like advisory. Well, I'm delineating, I define advisory as holistic business coaching, and if you look at financial analytics, the bots may be able to do that.

(52:25)

If you look at the curation of all of the intellectual properties and knowledge of a business, capitalizing that into an operational manual with systems, training their team members and managing the adoption, no, you get into that kind of management and operational advisory and the bots can't touch you. Even technological assessments, if you're looking at the security and privacy and the security and privacy policies and employee compliance to security and privacy policies and vendor compliance to those policies, the bots can't do that. That's human stuff. Leadership. The bots cannot tell a company how to effectively reorganize an org chart. I don't care if it has ingested all the disc assessments and personality profiles of the people because the human equation is too complex for it to understand. It can evaluate processes, but it can't improve them and democratize them throughout an entire organization. And strategic planning is as much about the owner's vision as it is about the owner's data. If you live in this realm of advisory or what may look like this, the bots can't touch you. This is Noah's Ark, succession advisory management, advisory knowledge advisory, which I call the intellectual property Capitalization and Democratization Technology advisory, financial advisory and operational advisory. This is the world. This is the CAAS of the future because the record keeping will no longer just be a means to an end. The record keeping will be displaced as a professional service altogether, and this is all that will remain.

(54:21)

That's the future of CAAS. Thanks for attending.