How accountants and technology can coexist and bring “humanity” back to the profession

When I was in college, I was bright-eyed and excited about the opportunity to join the workforce. I had big dreams and public accounting was my dream crusher.

Back then, I did not have the forewarning of goingconcern.com, @thebig4tweets on Instagram, or the accounting subreddit to warn me about the collective nihilism that can exist in the public accounting profession. These sites provide amusing content, but it saddens me that there are ton of frustrated people who acknowledge there is a problem, yet the industry continues to regress.

On the other side of the spectrum, there are the happy-go-lucky consulting companies and tech providers who mislead those at the top of pyramid with hyped-up strategies and technology that promise to bring hope to their firm.

Yet, despite the high consulting fees, and billions of dollars we spend on technology, there are more CPAs leaving the public accounting profession than ever.

My take on the accounting industry’s challenge? In our attempt to make a profit, we have used our greatest asset, our workforce, and turned them into machines.

My take on the solution? Let technology do what technology needs to do so we as humans can do what only humans can do.

Traditional public accounting firms: Profit focused, machine driven

As I moved up the ranks towards partner, I began to learn how our public accounting firm operated. The tactic was to take on low-cost staff and squeeze as much work out of them for as long as we could. We would promote only to reduce attrition.

My job as a manager was to keep the workforce busy. Every six minutes we kept “billable” so the partners could justify sending an invoice to the customer. We rewarded staff when they hit their billable hour goals. But if my staff were “too efficient” and had less billable hours than projected for that week, they became fearful of being reprimanded or called out for not being productive.

When employees are billable, we become like machines that crank out effort and bill accordingly to our billable hour rates. In turn, our billable hour rates increase when our value to our employers (not the customer) increases.

When my staff had excess non-billable time, they became anxious because they were conditioned to derive their self-worth from the internal profit formula of rate X time = profit. That formula should be used for cost accounting on machines, not humans.

Because the industry has focused solely on profits, we see the byproduct of CPAs leaving the industry in droves. But if we embrace technology and let machines do what machines were meant to do, and it will in turn create capacity to not only think about how we can be great accountants, but it might even allow us to work on being even better people.

When CPA firms are focused solely on profits, human resources are used for someone else’s end. When organizations are focused on human aspects of business, the people are the end, and profit ends up being the result.

The future of public accounting firms: Human focused, tech driven

If firms want to focus on what matters they need to stop focusing on measuring and treating staff like machines and start focusing on value to the customer, and value to the employees who help deliver it.

Your firm needs to be human focused and tech driven. But technology needs a strategy, and the name of the game is addition through subtraction.

Most firms incorrectly treat their tech stack like they do the newest version of an iPhone. The moment a tech provider adds a new feature, we feel like we need to purchase it. And when we purchase it, it adds another layer of training and procedures to be able to implement it.

But if our focus is shiny new features, we are missing out on a ton of questions we fail to ask ourselves.

What is value to the customer? What does it look like to serve our staff who provides the value? What bureaucratic policies and procedures or technology can we get rid of to provide more value? What technology is out there to help me drive results?

If you want your firm morale to improve, stop doing what machines are built to do, and let technology do the work for you.

Additionally, if technology is successful at what technology does, it will create margin for you to do what only humans can do, which is work on things only humans can work on, like empathy and self-improvement.

Our tech stack

We use Autoentry for our write up clients to automate invoices and bills to be seamlessly imported into accounting software. For our individual clients, we utilize Sureprep which automates the reading of standard tax forms and imports it into our tax software which takes the manual data entry away. Both of these platforms use OCR technologies that are aimed at automating processes so we can be effective with people.

But by far, the most revolutionary technology we have implemented is a “Transaction-Based Workflow” from BaCo Tech that gathers transactions and pulls these transactions and automates them into the CPAs workflow.

This is revolutionary technology because every other “trial balance” software is built around being efficient with the wrong thing, which is last year’s dead, static trial balance that is in essence a batch processing workflow.

In contrast to a batch processing model that works off of a historical trial balance, BaCo Tech transforms the old CPA workflow into a “continuous accounting” model and turns a once dead trial balance into a living one.

I am able to prepare 2021 tax returns while still in 2021 because I have the data being provided to me nightly that allows me to eliminate manual data entry through automation. It also allows me to have real time relationships, proactive alerts, notifications, preemptive problem solving, and propels me to deliver better results today (and we don’t have to wait until 2030 to be able to do it).

Change is coming regardless of we embrace it or run from it

General Eric Shinseki once said, “If you don’t like change, you will like irrelevance, less.”

Artificial intelligence and machine learning are helping accounting firms automate repetitive tasks and improve their business processes so we can focus on becoming better human beings. But if your focus is to follow whatever you did last year with technologies that focus on being efficient with the wrong things, your company will fall behind clinging onto the practices of the past.

However, if you see the value in embracing change through technology, you will create capacity and margin for the people around you to thrive.