7 eye-opening ideas for digital CPAs

December 7, 2022 2:30 PM

The pace of change in every aspect of the profession is such that it can be difficult to keep up, and the scope of those changes is so broad that it can be difficult to wrap your head around them. Paradigms are shifting so frequently that accountants need a whole new set of rubrics to guide their thinking and to help them make sense of what's happening.

With that in mind, here are a number of ideas to help guide accountants and firms as they move into an ever-changing future, drawn from the experts who spoke at CPA.com's annual Digital CPA Conference, held this week in Austin, Texas.

We've only seen 1% of the future

While the sheer volume of current technological change can be overwhelming, it's really only just beginning. A wide range of technologies — from artificial intelligence and robotic process automation to cryptoassets, blockchain and beyond — are essentially in their infancy, in terms of both how we will use them and the impact they will have on us, according to strategic future Nancy Giordano.

"If you speak to experts in any of these fields," she said during her keynote, "they will almost universally say we're only 1% of the way into the future ... There is so much change going on."

How to prepare for the 99% to come? "Start by taking a deep breath," she suggested.

Innovating means failing

If your firm isn't failing, you're not innovating, according to a panel of firm leaders who focus on innovation. "Only one in 10 projects will deliver a return on investment, but the return will be 10X," said Lindsay Stevenson, chief transformation at Top 100 Firm BPM, who talked about how her first major project — to standardize the firm's engagement letters — went so badly that "I definitely have PTSD." The trick, she realized, is that, unlike with previous generations of firm projects, which were all expected produce results, firms now need to recognize failing projects early, learn from them, and move forward.

"We fail all the time with innovations," echoed Jim Bourke, a partner at Top 100 Firm Withum. "You have to be ready to fail."

Innovation is a team sport

"Innovators" come in different flavors — from those who can define problems that are ripe for improvement or disruption, to those who can ideate potential solutions, to those who can implement those solutions, to those who can drive and encourage adoption and buy-in. No single one can successfully create change, which is why you need teams of innovators, according to BPM's Stevenson, so that they're not left on their own, unable to effect change.

"You can get 10% from each type, but they need direction and help, or they feel ineffective," she said.

Forget 'steady' — growth is a staircase

The old growth curve that showed a smoothly increasing line of profits is a thing of the past (if it was every really a thing at all). Instead, firms should expect a series of advancements interspersed with pauses for innovation and investment that led to further advancement.

"Your numbers are going to be a stairstep — you grow, and then you innovate and don't see the growth for a six-month period, and then you grow again," explained Amy Bridges, professional development manager at CPA.com. While she was speaking specifically of client advisory services practices, the advice will hold true for any practice area, new or old.

Value pricing isn't the last step

Accounting firms have been gradually moving away from the billable hour and toward value pricing — but it's not the final step, according to Ron Baker, founder of the VeraSage Institute. That's subscription pricing, which not everyone understands.

"There's a lot of confusion about the subscription business model," he explained. "Firms say, 'We do that in our CAS group,' but the subscription model isn't a payment cadence or a financial arrangement — it's a transformation of your business model and how your firm creates and delivers value."

He laid out the differences this way:

Hourly billing prices the inputs;
The fixed fee model prices the outputs;
Value pricing 1.0 prices the customer; and,
The subscription model prices the relationship and the portfolio of services available.

"It doesn't look at the math of the moment," he explained. "It looks at the lifetime value of the client. Firms with recurring revenue will trade at a higher value than those that just have 'reoccuring' revenue." In the end, he said, it involves helping guide your client through a series of transformations — in their personal, business and financial lives — rather than delivering services.

Questions great leaders ask

The thing that separates great leaders from the rest of the mere managers is a pair of questions, according to Marcus Buckingham, a researcher and author of "First, Break All the Rules." Those questions are:

"What was last week like for you?"
"What's coming up for you next week and how can I help?"

Those two, asked in the context of a weekly "light touch" between just the leader and the individual employee, are a key differentiator for great people leaders.

Love sets really effective people apart

A study of high-performing people found that one of their common characteristics was loving very specific elements of their jobs — not broad things like "I love working with people" or "I love a challenge," but narrow things, like "I love catching errors while reviewing a return" or "I love talking to clients about saving for their children's education."

"If you talk to really good people in any profession, eventually they'll talk about something they love," explained Buckingham. "The most effective people find the love in what they do: They don't find a job they love — they find the love in what they do."

Effectiveness peaks for those who love roughly 20% of what they do on regular basis; if they love more than that, their effectiveness doesn't improve, but if they love less than that, "There's a perfect linear decline in excellence," he said.

There are two key takeaways to this point, Buckingham suggested: First, that we should all pay attention to what, specifically, we love, and second, that firms should build teams that pay attention to what people love, and give them roles that allow them to do those things as much as possible.