Do you know the trends that will define the future of accounting and help you stay ahead of the competition?
Here at Gusto, we work to prepare you with the tools you need to excel. That’s why Gusto, along with our partners at CPA Academy, presented a webinar that provides invaluable information about the ways you can prepare your firm for the future.
Our webinar “2020 Changed the Rules: Client Services in the Changing Work Environment” addressed the importance of client value and how technological advancements change the relationship between business owners and their CPAs.
Our expert guest was Jody Padar, also known as “The Radical CPA.” She is the vice president of strategy at Botkeeper, a software company that compiles clients’ financial data from multiple resources and organizes them into one convenient location. Jody is also a prevalent writer, named on Accounting Today’s “Top 100 Firms” list, and prides herself in having a significant social presence.
In this article, we will address the best ways to foster innovation and how you can become a better advisor for your clients. You’ll also learn about new opportunities you can consider offering your clients.
Looking into the future of accounting
In 2020, the COVID-19 pandemic brought widespread economic devastation within the small business community. The prolonged shutdown of many communities left business owners wondering how they would keep their businesses afloat. Many small business owners relied on their CPAs for assistance with loan applications. Although this economic setback was challenging, Jody believes it gave accountants the ability to be innovative:
“Let’s think of it as a renaissance now. As businesses start to open and we continue to evolve, how is that going to change and how are we going to think about keeping innovation in our DNA?”– Jody Padar
Changes in tax laws have pushed clients to be more communicative with their CPAs. During 2020, many businesses struggled to sort out the details of COVID-19 EIDL and PPP loans, which drove accountants to stay updated on ways to serve their clients with timely, important information. The economic difficulty of 2020 left us with the pressing question, “How do we innovate during uncertain times?”
Redefining the future
As the world around us evolves, the processes we use to address clients’ concerns need to adapt to this change. The old checklists used to make sure we are best serving our clients have become irrelevant as new laws surrounding our money have developed. Jody believes the best way to confront this change is by writing new checklists for ever-changing social and professional norms:
“I think it comes into play when we think about PPP loans and how every day it seems like something new is changing. We’re used to having a checklist, and we’re having to think on our feet now.”– Jody Padar
The constant changes in laws and regulations may seem like a burden, but we can also view it as a blessing. PPP and other SBA loans force clients to constantly reach out to their CPAs, which keeps accountants relevant and essential. Accountants need to perform detailed research to properly advise their clients, which has reduced the amount of time they have for everyday tasks, such as basic data entry and payroll processing. Although this research creates stress, technology-based support lifts some of that weight.
Jody stressed the importance of automating menial tasks, and you can begin automating services through Gusto. Gusto creates opportunities for accountants to step away from the day-to-day responsibilities within payroll and data entry and so that they can become people-focused advisors. These services automate menial tasks so that you can focus on the details of ever-changing tax laws and serve your clients better.
“It’s time to look at automation to help [your clients] move forward. As we know, the world is not going to change back to the way it was [before the pandemic]. It’s going to continue to move forward, and we’re going to have to adapt to that in the future.”– Jody Padar
Utilizing automation also gives accountants instant access to detailed historical data records, which are necessary for SBA loan applications. Without automated services, the time spent compiling this data would be overwhelming:
“By utilizing technology, you have an opportunity to make cash flow projections, so the SBA loan application isn’t so hard. You already have the data, and now it becomes a [simpler] loan application, as opposed to catching up with your client’s books first.”– Jody Padar
While these tools aid in relieving daily stress, an inherent discomfort still exists within the ever-changing world of accounting rules. Jody used a specific example of dealing with the uncomfortable economic climate while helping her first client file for an SBA loan. She filled out the paperwork and began the strenuous process of submitting it online. After struggling for a week, Jody finally submitted the loan successfully. Though her task was complete, a new problem arose because there were no specifics regarding the submission:
“It didn’t give us an email confirmation. It didn’t give us a file number. It basically was like we uploaded all this paperwork into Neverland. There was no [confirmation].”– Jody Padar
The application’s unknown status gave Jody a sense of uneasiness because she was unsure if she had adequately completed her task. However, she realized the situation presented an opportunity to rely on her experience. Jody learned from the experience that accountants develop self-reliance when encountering unstable futures.
“As CPAs, we understand the rules better because we know how to read the law. We understand how to do the applications, and we have to take those strengths with us as we move forward.”– Jody Padar
The unique skill sets of CPAs give them the ability to create a sense of security for their clients. Small business owners know that their accountants do their best to aid them through changes. By relying on their knowledge, CPAs can confidently remove the burden of uncertainty from their clients. This relationship between clients and CPAs redefines accounting because it shifts accountants away from bookkeeping and toward people-focused advisory roles.
What is the future of accounting?
The future of accounting relies on the way firms redefine the role of CPAs. Jody suggested thinking about your firm as a startup. By looking at your firm as a brand new business, you can take a new approach to the changes presented and adopt a new way of holistically thinking about accounting:
“As we move into the future, remember that the future is going to be different than the past. We can’t force it to fit our old ways of doing business. We’re going to have to do things differently and think through those things.”– Jody Padar
You can redefine how your firm works by automating bookkeeping tasks, which will open up your accountants to transition into becoming people-focused advisors. According to Jody, advising is the future of accounting. To be successful, you need to answer three questions to take an advisory accounting approach:
“What do you know for sure? What don’t you know? And what won’t you absolutely do? If you know those three things, you can help your client[s] make decisions.”– Jody Padar
Setting yourself up in an advisory position for your clients shifts the focus from data to people. A people-focused approach allows you to partner with your client on their financial journey rather than telling them what to do.
“We don’t want to try to solve their problem. What we want to do is give them advice. We want to help them distill information and help them walk along that decision as they make it themselves.”– Jody Padar
The future of accounting relies heavily on a pragmatic approach to understanding tax rules. This application puts you in an advisory role that will help your clients translate information, so they feel informed and financially stable.
Learn more about automated tools and advisory based accounting
Fundamental changes are developing within the accounting community. Relying on automated tools has become less of a suggestion and more of a requirement in the field. Using these tools allows accounting firms to step out of the past roles of bookkeepers and data entry operators and into the future of advisory-based accounting.
If you want to learn more about the future of accounting, make sure to check out the full webinar “2020 Changed the Rules: Client Services in the Changing Work Environment” here. Also, be sure to check out Part Two of this webinar article series.
Here at Gusto, we provide simplified, streamlined payroll services for small businesses, and we partner with accounting firms to help them step into a people-based advisory strategy. With the responsibility of payroll removed from your shoulders, you will be able to focus on what matters most: your clients. Visit our Gusto for Accountants page for more information on people-based accounting and check out our payroll options to streamline your firm’s workflow.