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The Botkeeper Blog

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The State of the Accounting Profession

Oct 15, 2019 3:34:29 PM

Accounting today is not the same as it was ten years ago. And while many accountants have been in the industry long enough to be aware of the changes, not as many have stepped in to help inform other professionals. That’s not the case for Mark Koziel, who runs the AICPA Engage conference every year.

During that conference, Radical CPA Jody Padar talked to Koziel about the transformation of the accounting industry. Koziel spoke about different firms’ feelings on change in the industry and said leaders seem to be more willing to try out new technologies than they were in the past. Early on, there were just a few small early adopters when it came to new technology, but now bigger firms seem to be getting on board. They’re more open to a “buy, then try” mentality.

He said the conversation surrounding change is different too. It’s no longer about the cloud; we’ve moved on to discussing Artificial Intelligence and other, newer technologies. 

Listen to the full interview by clicking below, or scroll down to read an edited transcript.

Jody Padar: I'm Jody Padar, the Radical CPA, and you're listening to Let's Get Radical live at the AICPA Engage event at the MGM Grand in Las Vegas. There are almost 4,000 people here today. Our next interview is with Mark Koziel, and this is his event. So, Mark, introduce yourself and tell us a little bit about the origination of this event.

Mark Koziel: Mark Koziel, executive vice president of firm services at the AICPA. This has been a culmination over the last 10 years that I've been involved at the AICPA. It started with the Practitioners Symposium, which was practice management. But, those folks wanted a little more tech.

So there was tech plus and tech practitioners, and we brought the two together, but then some people were looking for tax or financial planning, all these things that we had in various venues. So we said, "You know what, if we brought them together, it would probably be a much better experience for each member." Think about the fact that if we have a tax practice doing traditional tax—wouldn’t it be cool to hear a little bit more about what's happening in the PFP (personal financial planning) space to see if that is something of interest?

You come to this great exhibit hall, and there are different vendors that are actually supporting it and the different possibilities for each type of practice. And that's really how this all came about.

Padar: And it's three years now?

Koziel: Three years, yeah.

Padar: And every year it's gotten better and better.




Koziel: It has—it’s continued to grow. Feedback from members is that they're getting what they need. They're learning more. They're progressing their practices. Small, medium, large—it doesn't matter. Audit, tax, client accounting, advisory—all of those things are fairly well covered. And to be here is to experience what the future can hold for your practice.

Padar: I know we've had great reviews from everyone we've talked to so far, and I do think it's gotten better and better every year. So, Mark, tell us a little bit about what you do at the AICPA.

Koziel: I say that half of my job is to handle any conflict that Barry Melancon (president and CEO of AICPA) has, and that's like a full-time job by itself. But beyond that, it is about firm services, managing the various firm groups.

We have several people on our team. We have a VP of small firm services. We have firm groups in the major firm group category. For us, it's taking all that we hear in the profession and analyzing that and figuring out what we need to do to help our members be better in whatever it is that they do. 

The private companies practice section (PCPS) of the AICPA has been around since the ’70s and has really kind of migrated into this, bettering your practice type of section, a firm membership section, which has done a lot to help firms, whether it's human capital, succession planning, practice growth, whatever it may be—just focusing on those areas.

And then attached to that, we started the Center for Plain English Accounting, where we provide written answers to written technical questions to those who sign up as members. We've watched that grow; we have 450 member firms now, and it's just a really great value-add. We take all of these things we hear and try to respond to what's happening in the market.

Padar: How do you think the profession as a whole has changed over the last five years? 

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Koziel: You know, it's interesting. Ten years ago—as you know—it may have been radical as we talked about it. If I got up here and talked about what your services should look like, I'd be saying “cloud.” And we're not having that conversation anymore.

It’s not like it used to be. We've watched so many firms be so incredibly successful. It's not about cloud. We're not having that conversation anymore. But it is about transforming into the super niche, getting super deep into what you want to do to be able to provide KPIs and dashboarding and get a better understanding—become the ultimate expert.

And now we're watching those firms who have grown up—the sole practitioner community, the small firm community that have grown up in that base, purely in the tech space and cloud—the larger firms that have struggled with implementation are now buying up those small firms. And so you're seeing that the tools of the smallest of firm are the same tools for the largest of firm. And it's just truly amazing.

Padar: We have the opportunity to look back and ask what these little firms were like 10 years ago. And now seeing these big firms want to buy them or they're trying to partner with them. It's pretty cool to see how these top 100 firms are actually finally embracing the work that the smaller firms did so many years ago.

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Koziel: I tell this story: I had a top 15 firm CEO call me and say they needed help with client accounting, they had disparate systems and they needed to figure it out. And so I’d been invited to meet with them. I couldn't make it live, but I said I would video chat. And there's six people in the room. The two at the end, they tell their story. Turns out to be a husband and wife team. And he said, “I was reading the Journal of Accountancy and I read about client accounting.” He thought it was really cool, and he did all these things. Then before he knew it, he had a multimillion dollar practice.

I see the CEO a month or two later, and I asked who that guy was? He said, “That's our retired CFO who's sitting at home. He builds this practice, and here’s the kicker: we're buying this practice. We're bringing him back into the firm, and he's going to help us run our client accounting practice.” 

It's amazing to watch the transformation in the profession. One of the fastest growing industries is client accounting. And then right behind that now is SALT (State & Local Tax) advisory.

In general, I mean, firms now are having strategic discussions with their client about what state they should live in based on where the SALT deduction ended up. So, it's just amazing as you're watching these and the opportunities that are there.



 

Padar: And so I heard you on a podcast talking about that with MACPA (Maryland Association of Certified Public Accountants) maybe. You were talking about artificial intelligence and machine learning and how it's going to affect the profession. What's been the feedback from big firms and small firms as to how that's kind of coming together? 

Koziel: I think we have to break it down into the service lines. So artificial intelligence—if we were to think about it for audit and lot more capabilities—the big four have been doing it for some time. The problem is the standards haven't kept up. We're trying to change that. Between data analytics and artificial intelligence, what is it that we can automate inside of it?

Can we set up parameters so that rather than coming in at the end of the year doing samples and hoping to get it right, we could have this continuous system that the minute something happens within the system, that anomaly kicks it out and then we're able to get a human on it to be able to see it? And that's the automation on the exception.

Then the client accounting, of course, for the transactional to be virtually seamless. So it's so automated that you're not even seeing it. The big firms—they've figured out some of it. They're still playing around with it [AI]. There are more unknowns than knowns. And a lot of the firms today, they still haven't quite figured it out. But they're willing to test it. They're willing to check it out and see what the opportunities might be.

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Padar: I think that's what I've noticed mostly about the last year or two, is that the people who were so afraid of moving are now actually moving. Would you sense that as well, that people are willing to take a risk? 

Koziel: For sure. In some of the audit world with what they've been doing with AI and with data analytics, because most of our standards are wrapped around what the human needs to do, they have to actually write bridge memos to take it from what their capability is to what the standards say they need to do to be able to bridge that difference.

But there's a lot of firms that are out there kicking the tires of AI technology. You and I have talked about this because I know your firm was really popular with that, never afraid to take a new technology and just beat the heck out of it to try and figure out if it was right or not.

And in my session this morning, I referenced that, and I said that's how firms today will need to buy things. And there's a lot of larger firms that are not used to that. “No, we need proof of concept. We need to be talking to every sales person who’s going to tell us how every bell and whistle works. And that’s how we buy software and technology.” That’s not how it’s going to be in the future—you find that one talent. Then you say, “Go play with it.”



When you’re trying to find the right tech for your growing accounting firm (or business), it’s important to know you have ample support to help in those moments when things get a little sticky. That’s one reason why Botkeeper offers 24/7 expert support from senior accountants. In the event that you’re struggling to configure your dashboard, or maybe you don’t understand a recurring transaction, you can always reach out to your Botkeeper team!

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Aaron Sullivan
Written by Aaron Sullivan

Aaron is a content marketer with a background in writing and editing for social, email, and blogs. His experience is heavily focused on bookkeeping/finance, entertainment, and beer.

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