How might it be in 2023 and how to get there

By Jim Stelten, CPA, partner, BerganKDV

Our CPA profession will undergo the most significant disruption and transformation ever during the next five-plus years! Take a moment to think about that statement. This is an exciting time for all of us -- at every level. It is also a time of concern for leaders as they make decisions about their firm's future direction.

The following is part one of a two-part series intended for partners and staff to envision the future and to learn how we all have a role in helping take next steps in our firm's transformation.

What is creating the disruption?

This disruption is the effect of artificial intelligence (AI), machine learning and big data converging. Many current CPA compliance activities will be performed by artificial intelligence-based programs.

Additionally, firms of all sizes will pivot and become even more relevant by providing enhanced risk assessment, risk monitoring and data analytic solutions.

Lastly, if blockchain technology continues to evolve and become accepted, it will be yet another disruptor that will have a significant impact on CPA firm attest services as we know them today.

How might it be in 2023?

A day in the life of a partner and staff

Fast forward to 2023, just five short years from now. What might your day look like as a partner or employee in a professional services firm? Imagine you, as a partner in your firm, attend a virtual meeting with both the CFO and CEO of your favorite client together with two of your staff.

You are in your office at home, your tax staff, Sarah, at her kitchen table, your technology staff, Jason, in the office and your client at their office. You are all in a virtual meeting room.

Jason reports to the CFO on suspicious transactions flagged by the fraud monitoring software Jason has implemented on your client's cloud-based ERP system. There are several transactions he believes deserve immediate attention. You and Jason wish to make sure the CFO has seen the detail in the dashboards Jason implemented on the CFO's mobile device, and that the CFO intends to investigate the transactions.  

You also share some good news with your client about a partnership your firm just entered to provide 24/7 penetration testing services to companies. Your client has interest to learn more and you book a future meeting to discover your client current situation and share more about what is ideal for your new solution.

During the meeting, the CEO shares some exciting plans to launch new technology to disrupt the market they compete in. Sarah and you ask a few probing questions and identify a research and development tax credit opportunity for your client. Your client wishes for you to quantify a "soft ROI" for the potential opportunity.  

Post-meeting, Sarah uses the equivalent of Alexa to pull the latest on R&D credits -- federal, state and what is going on at the congressional level. She pulls down a template from the R&D credit firm with which you have a strategic alliance. She debriefs with you and you give her the green light to work with the CFO to create the soft ROI on the R&D credit opportunity. Sarah uses big data tools to extract relevant data from your client's ERP system and interviews the client for some of the more subjective information she needs.

In the afternoon, Jason and Sarah, who are on flexible work schedules, sharpen their critical-thinking skills by spending 30-plus minutes in a national online university for professionals watching videos and applying their learning to a mini-case study. They get immediate feedback on their performance compared with peers across the nation. Meanwhile you, as partner, spend 30 minutes in the same online university sharpening your skills to have "crucial conversations" with clients and staff alike.

What else has changed by 2023?

The following are other changes you can expect in the next five years.

  • You are more efficient. Hours for CPA compliance work (tax returns, attest work) have been reduced by 50 percent and replaced with AI and machine learning.
  • You create more value in your relationships, functioning as true business advisers to clients.
    • You move from answering, "What did happen?" to "What is going to happen?"
    • You share insights regarding how your client can change what is going to happen.
       
  • There is more opportunity for entrepreneurialism. With the advent of technology advancements and tools, there will be more opportunity for staff and partners to be more entrepreneurial within your firm. They will have a greater impact on client's businesses and, at the same time. more work flexibility. Entrepreneurialism is something that ties into many millennials' lists of top priorities.
  • Revenue from nontraditional compliance activities has gone up.
  • Your firm has chosen to be an expert in two-plus industries where you command a premium fee!
  • You have more strategic relationships with others who can help you solve problems and create opportunity for your clients.
  • Non-CPA competitors with access to the same technology and tools you have are becoming trusted advisers to clients in your marketplace, which is a threat.
  • Overall relevance of financial statement attest work continues to decline. Perhaps, a Google or other disruptor will create reliable metrics and data to benchmark company performance.
  • The pace of change will continue to accelerate thanks to the ongoing impact of AI and machine learning.
  • The pyramid CPA firm staffing models will become diamond shaped.
  • Training and development has become one of the top priorities at your firm. Beyond technical skills, the following are skills being developed in all staff and partners (list from Amanda Garner at The Growth Partnership):
    • Communication                                                                
    • Leadership
    • Critical thinking and problem-solving
    • Anticipating and serving evolving needs
    • Synthesizing intelligence to insight
    • Integration and collaboration
       
  • Fewer and fewer firms will think of themselves as CPA firms. More and more will think of themselves as professional services firms or something similar.
  • Much more. The aforementioned is not intended to capture all possible future scenarios. Feel free to send me your thoughts on other items to supplement this list at jim.stelten@bergankdv.com

Is this a firm you'd like to work for?  

Part two of this series will discuss each of our roles in helping our firms make the pivots and transformations they will be facing.

Jim Stelten, CPA, is an innovation, growth and customer experience partner with BerganKDV. You may reach him at jim.stelten@bergankdv.com.