Navigating the Future of Accounting

The recurring theme during many accountant-focused sessions at AICPA Engage, and the profession itself, is that change is not “coming” it is here.

During their live session “Navigating the Future: Disruption Map Exercise to Future-Proof Your Firm,” Kacee Johnson, Senior Director of Strategy & Innovation at CPA.com, and Lisa Simpson, the Vice President of Firm Services at the AICPA, offered accounting and finance professionals the tools to ensure they’re ready for the future. Here are just some of their suggestions, as well as considerations to keep in mind for your firm. Some may even sound familiar:

Move Away From Hourly Billing

You don’t pay for Netflix per TV show you watch, and we no longer pay our phone companies per text message. To be more specific:

“As a society, we like subscription models,” Kacee says. This is true for the clients of accounting firms as well. When you ask them to pay by the hour, this might actually limit the amount of services they choose to purchase from you because they’re worried about the time as it relates to the cost.

Although many accountants still offering hourly billing are concerned they’ll lose clients when they switch to a subscription model, research shows the opposite is actually true. They have higher client retention rates. Even the participants at the session agreed they had found this to be true in practice.

Rethink Using Time Sheets

Time sheets have long been used to record how many hours employees are working, and because they’re seemingly so innocuous, they’re often overlooked when it comes to future-proofing an accounting firm. But did you know, say Kacee and Lisa, that businesses that do away with time sheets actually have higher staff morale?

Also, consider this: Time sheets provide a measurable KPI; i.e. they show how efficient your firm is with time. However, this actually may be stifling innovation and narrowing your vision. Kacee and Lisa encourage you to consider what other metrics you could be looking at should you do away with time sheets. What other areas could you become more efficient in? This consideration may help you expand your service offerings and become more profitable.

Take a Critical Look at Your Employees and Their Skill Sets

Simply put, hourly billing stifles innovation. Generally, this is because it affects billable hours, and firm leaders whose profits are directly affected by how much work gets done per hour don’t want anybody spending time doing anything else.

Firms that want to thrive in the future, however, should encourage innovation. Review the skill sets of your employees and find out what they can bring to the table. Understanding the strengths your team has will help you figure how out they can contribute if you’re considering expanding the services you currently offer to your clients.

This will also show you where additional training is needed. If you’re changing your service offerings, Lisa says, you’ll need to ensure you have the appropriate staff and figure out where there are training gaps.

Consider Your Space

Whether you’re currently working in an office with your staff members and taking in-person client meetings or considering staying mostly remote, you need to think about your space. Does your current office space have the capacity to support more employees if you’re hiring (or more clients, if you’re expanding your client base)?

Alternately, if you’re downsizing, could you be saving money by getting a smaller office or doing away with it altogether? For those who are considering hiring more employees to work remotely, location is key.

Kacee and Lisa recommend deciding if you’d like to look for a location that has highly skilled taken or if you’d prefer to hire remote employees who are near large client pools before you take any steps forward. Firms that are prepared for the future are flexible and willing to ask themselves these questions.

If you find yourself going in circles or vacillating between pros and cons, Kacee and Lisa both recommend making a disruption map. Start by writing down what needs to change and what it could possibly lead to, both good and bad. This will help you visualize your thoughts and see the future more clearly.