The Evolution of an Industry in Real Time
In this episode of the Accountant’s Flight Plan Podcast, Brannon Poe is joined by Dan Hood, Editor-in-Chief at Accounting Today, to explore the shifting tides of the accounting industry. From his start as a receptionist to laying out physical newspapers and magazines to leading one of the profession’s most respected publications, Dan shares his unique vantage point on the industry’s past, present, and rapidly approaching future.
AI Is Here—But We’re Just Getting Started
Dan and Brannon dive into the transformative role artificial intelligence is beginning to play in accounting. While the AI boom is still in its infancy, the industry is already seeing an influx of capital and enthusiasm for automation, agentic AI systems, and data-driven insight. Dan emphasizes the importance of starting small—testing tools, cleaning data, and learning to interact with AI—to position CPA firms for long-term impact and return on investment.
The Scaling Trap: Why Growth Means Letting Go
As firms grow from $1 million to $10 million and beyond, the old ways of doing things no longer serve the new reality. Growth requires infrastructure, process, and a shift in mindset—thinking of yourself not as just a managing partner but as the CEO. The most scalable accounting firms aren’t just bigger—they’re better organized and strategically focused.
Industry Disruption and the Rise of New Models
Dan and Brannon unpack the structural shifts that are reshaping the profession. From the growing influence of private equity to the rise of non-CPA ownership and advisory-focused business models, the landscape is rapidly changing. Traditional partnership structures can stall progress, but nimble leadership can be a game-changer.
Accounting Isn’t Boring—And Here’s the Proof
In a funny anecdote, Dan shares a moment from a wedding where he hesitated to talk about accounting, only to end up realizing that he was speaking with an accountant. Dan believes that accountants are some of the most passionate professionals. They deeply care about their industry and profession and that is what makes covering their stories in a journalistic sense exciting.
Book Recommendation
Dan recommends the book Say Nothing, a gripping journalistic investigation into a mysterious murder during The Troubles in Northern Ireland.
Dan Hood is Editor-in-Chief at Accounting Today, where he’s spent decades covering the accounting profession’s biggest trends, challenges, and opportunities. You can connect with Dan via LinkedIn or visit AccountingToday.com to explore more of his work.
Connect with Dan
- LinkedIn: Dan Hood
- Website: AccountingToday.com
You can listen to the podcast on the player below or watch the latest episode here!
Timestamps
00:42 – Introduction of Dan Hood, Editor-in-Chief at Accounting Today
01:50 – Dan’s career journey from receptionist to editor
04:22 – AI’s growing impact on accounting and data usage
11:20 – Starting small with AI: how to learn and scale
16:05 – Scaling your firm: “What got you here won’t get you there”
21:50 – The shift in revenue per employee as firms grow
24:20 – Letting go to grow: moving toward zero billable hours
26:10 – Advisory services, PE firms, and new ownership models
29:30 – The challenges of the traditional partnership model
32:00 – Wedding story: accountants aren’t boring!
34:48 – Book rec: Say Nothing
39:03 – Closing thoughts and where to connect with Dan
The Following Is an Autogenerated Transcript of This Podcast Episode:
00:00:00:00 – 00:00:02:12
Unknown
I know, you know, whenever I tell people about it, they say that sounds really dull.
00:00:02:17 – 00:00:15:11
Unknown
So, you know, don’t worry about it. You know? Come on. Seriously, what what do you work for? And I say, well, it’s called accounting today. I know everyone thinks it’s great, but it’s boring and stumbles. It’s called accounting today. And he goes, oh, all right, well that’s that’s fine. And his face kind of changes in like, that’s weird.
00:00:15:11 – 00:00:26:21
Unknown
Why is his face going to change? And he said, what do you do? And he says, well, I’m Steve’s accountant, Steve, as I’ve mentioned, Steve’s the guy who was getting married. So at that point I was like, you know, and I’m, I need to figure out how I’m going to introduce myself to people from now on.
00:00:27:07 – 00:00:41:05
Unknown
I’m Brandon Poe, and this is the county’s Flight Plan podcast, where you can enjoy engaging conversations about mergers and acquisitions in accounting, practice management. Listen in on strategies to build a more fun and valuable accounting firm.
00:00:42:00 – 00:01:22:04
Unknown
Welcome to the Qantas Flight Plan podcast. I’m excited today. I’ve got some, a guest on today that many of you might be very familiar with or very familiar with his publication. Have Daniel Hood on. He’s editor in chief at accounting today. And if you have been under the Rock and aren’t familiar with accounting today, it’s, the leading information resource for public accountants reaching over 325,000 professionals across the full breadth of the profession, ranging from sole practitioners who prepare tax returns up to the big four firms that audit the largest multinational corporations.
00:01:22:06 – 00:01:43:10
Unknown
He’s been with accounting today for over two decades, previously serving as managing editor. He’s also served as a business editor for the New York Daily News Express and a production editor for the Wall Street Journal. Europe. Very. I didn’t know about the Wall Street Journal. That’s really exciting. It was cool. I bet it was so welcome.
00:01:43:12 – 00:02:09:20
Unknown
Thank you for coming. Thanks for having me. So, first question I always ask my guess is like, okay, how how did you get into your field? How did you, find yourself one day at accounting today as editor in chief? Entirely by accident. Entirely by accident. I got out of school, and I, somebody got me a job at a at a company as basically, I was a receptionist.
00:02:09:20 – 00:02:31:22
Unknown
And then they needed someone to help with, they produced magazines and newspapers. They needed help laying out the the magazines and newspapers. I started working on that and then went from there to sort of be a production and design person, you know, layout and that sort of thing. And then at some point in, in the 90s layout and design and edit came together to the magic of desktop publishing.
00:02:31:24 – 00:02:54:02
Unknown
And so they were like, well, you know, how to lay layout, magazine pages and layout newspaper pages. And you know how to spell. So we’re going to make you an editor. So that’s how I that’s how I ended up. There’s a couple of steps I went to. I was working at the Wall Street Journal for a while, working on the news, but that’s how I ended up in accounting today as managing editor, because that was one of the managing editors job was to to to layout the magazine, and then make sure everything was spelled in, in English and that sort of thing.
00:02:54:04 – 00:03:13:07
Unknown
And then I was that for a long time. And then at some point, that, that period where layout design and editing were combined, and, and they sort of ended up getting split up again. And I sort of found myself on the editorial side after that because I learned a lot about accounting and, the pay was better.
00:03:13:07 – 00:03:36:14
Unknown
So I said, yeah, I’ll stick with the I’ll stick with the editorial staff. So when you started, I guess the technology in, in your industry was probably a lot different when you started. Were you kind of like doing layouts with like, I’ve talked to people who were in advertising many, many years ago and they’d actually, like, cut things and like physically cut things and paste it up with wax.
00:03:36:14 – 00:03:50:03
Unknown
You have all these guys with razor blades. I was the guy who took all their jobs away. I was, when I came on because they were like, well, you know, how do you. I mean, I was thinking, like, we need someone to do this layout. No one knows how to do it because the only people that know how to do it are, you know, all teams.
00:03:50:05 – 00:04:03:04
Unknown
Because it was all computer based and, you know, how to use a computer and make sure I could use a computer. I know how to use a mouse. That was basically my qualification. Yeah, well, like I said, all the guys I was putting out of business, were the old guys who were geniuses. I mean, they could do amazing things with.
00:04:03:04 – 00:04:21:01
Unknown
With razor blades and exacto knives and a little PC. They could put it the dot of an eye and remove it, replace it with, you know, replace it with some other character if you want to put a heart. They could do these amazing things. Yeah, but they were really expensive and the computers would do it much cheaper, particularly with yeah, idiots like me behind the by the by the wheel.
00:04:21:03 – 00:04:43:04
Unknown
Yeah. Well, this is a good segue into what we talked about kind of before we hit the record button today was I, and I just came from a workshop with, Entrepreneurs organization about I, you just came from a, a CPA, workshop. Yep. And, I’ll, I’ll start this and tee it up for you.
00:04:43:04 – 00:05:23:18
Unknown
So one thing that was shocking to me was sort of like big picture on things that are, happening in the industry for I not not in the accounting industry, but just in general, the amount of, data centers coming online, the amount of computing power that is, being kind of prepared, you know, that investment going into computing power, the investment going into energy, the people that are kind of controlling this industry right now, the AI industry are putting massive amounts of capital into it.
00:05:23:18 – 00:05:48:23
Unknown
And they their vision for this is very large. And, their predictions maybe there are the predictions that I heard are a little more, shall we say, optimistic than then could, could end up being, you know, I feel like when the internet came out, everyone was talking about how fast it was going to be and how easy it was going to be.
00:05:48:23 – 00:06:10:24
Unknown
And then 20 years later, that vision was realized. I personally think I will be a little faster than that. But, you know what? What I came away with was like a little bit of fear of the amount of disruption that’s going to happen in the next five years. But on the other side of that coin, on the other side of the fear coin, is excitement.
00:06:10:24 – 00:06:37:18
Unknown
Right? Because there’s tons of opportunity. There’s tons of, ways that this can help, so many different companies. But we’re still in the wild, wild west of AI. So, I know you had, like, some pretty interesting, maybe some more industry specific takeaways about AI, which I’d love to get into. Yeah. Well, I mean, first off, I’d say I mean, I think I’m glad to hear that the two things we went to are sort of matching up on some fronts.
00:06:37:21 – 00:06:51:10
Unknown
When you talk about preparing and investing and starting, and it’s the wild, wild West, that was the impression I really came away with is we are. This is so early days for AI, and you’re talking about takes 20 years to figure out what we’re going to do with with the internet. And it took 30 years to figure out what radio was going to be.
00:06:51:10 – 00:07:06:19
Unknown
You’re probably right. I think that, hey, I will move a little bit faster, but it’s still going to be very different from what we’re seeing now. You know, people talk about to how, you know, we’re moving from, from, you know, sort of ChatGPT style generative AI, to a genetic AI. That’s the next big step.
00:07:06:22 – 00:07:28:03
Unknown
But everybody at the symposium I was at, pretty much agreed that after energetic AI, they’ll be something else. And then there was something else, and then there was something or some other form of AI, some other iteration of AI. That’s going to look very different from generative AI and from a genetic AI. And as you sort of, as you say, we’re we’re we’re moving through all these stages to get to some final form of AI, but that’s, that’s a good ways away.
00:07:28:06 – 00:07:43:08
Unknown
And I don’t think anybody knows what it looks like, that, you know, it’s one of those things where it is, it may not be far away in time. I like. So I think your point there is probably right. They’ll move faster. But, they are far away in sort of structure and concept and what it means.
00:07:43:10 – 00:07:58:18
Unknown
And I think it’s going to be both exciting and terrifying to see what that structure is. And I think that’s the that’s the problem is at every level, right at the problem. And then taking it down to sort of at the accounting, the level of the profession, no one knows what this is going to look like for the world at large and for accounting in particular.
00:07:58:24 – 00:08:21:14
Unknown
There is tremendous opportunity, right, is pretty much a consensus that the place I was at, you know, you need necessarily lose out if you stay with if you, if you, try to keep up with AI. Right. If you work with AI, you have a much better chance of surviving it, than if you don’t. And that the the people who are going to win are not somebody who isn’t an accountant.
00:08:21:14 – 00:08:36:24
Unknown
And it’s not AI. It’s going to be the accountant who uses AI that’s going to be the winner. Yeah. So that’s, you know, and whether that’s true or not, because I can kind of look at it and say, I know how you feel about it, but every once in a while in the dark, you know, at the dark moments, you know, in the middle of the night, I say, you know what?
00:08:37:03 – 00:08:54:08
Unknown
I could totally replace us. And not just accountants could replace reporters and editors and writers. You can replace all kinds of theoretically, when you look at its potential, it could just replace all of us. Yeah. And we’d all be. We’d all be without jobs. I don’t like to think that way. You know, when the sun comes up and I go, that’s probably not that is that.
00:08:54:10 – 00:09:20:24
Unknown
But it’s definitely we are all going to have to engage with it. And then you talk about, you know, investments that, that the highest levels of the sort of industry wide levels over the Amazon, some of the Microsoft, some of the open AI and so on. We’re definitely seeing accounting firms and accounting software vendors and developers putting lots of money into it as well, and obviously not on the scale that that is being spent somewhere in the broader economy, but still putting in lots of money, particularly at the larger firms.
00:09:21:01 – 00:09:37:22
Unknown
They’re investing a lot here that, you know, billion dollar investments by the big four. I don’t think we’re seeing that in any of the other size firms, but still lots of money people going into it, particularly around, preparing for the data analysis and the data support, and the data management stuff, that all has to go into it.
00:09:37:22 – 00:09:56:02
Unknown
That was one thing that continues to to surprise me as sort of a minor takeaway, but but really important is how important your data is and how important the the cleanliness and quality of your data is. They’ll all brag about how our ChatGPT or our our generative AI can look at all kinds of unstructured data. And that’s true.
00:09:56:04 – 00:10:18:17
Unknown
But you get much, much better results if your data is somewhat clean and somewhat structured. And has been, looked at there’s a firm there, showman was, there a talent firm out of Florida, does a lot of hard work and is has a lot of AI, built into what they’re doing. And they like to have a full time person whose job it is to sort of check their check their data and keep it clean and keep it structured.
00:10:18:19 – 00:10:39:06
Unknown
And that goes again to the sort of how beginning, how early stages we are. Right. Did that. We’re not even ready to actually use a lot of our data in, in, in an AI capacity because it’s a mess and we need to clean it up and it’s, yeah, all that stuff needs to be worked on before we can really even begin to get a clear outline of what this can do.
00:10:39:06 – 00:11:06:16
Unknown
And what are we. Yeah. And my takeaway to coming out of this workshop was, hey, there’s two things you can do right now. And that is, getting your data clean. Getting it, getting that. Found it. That’s the foundation of getting AI to work in your company, right? Is your own data. And starting to, you know, capture more data, you know, because you can use this stuff to train your team.
00:11:06:16 – 00:11:33:07
Unknown
You can use this stuff to, onboard new people. There’s all sorts of different uses for it. But you got to have that data. And the other thing that I came away with was, if you can just start small looking at different applications, just get started with something. Hopefully it’s got a quick ROI, like, okay, if what, what how could this really help me?
00:11:33:07 – 00:11:54:19
Unknown
And just learning that and looking at different applications. So, it’s exciting. I’m sure it’s going to affect the industry in time, but like you said, I don’t I don’t think we know what it’s going to do, like what the impact is going to be and how fast it’s going to be weird. Tony. So and someone I’d just to reinforce what you’re saying some of that that literally said, why would you start with something big?
00:11:54:19 – 00:12:10:06
Unknown
People are like, oh, I’m going to have a bring AI and having to take all my tax work. So why would you start with something like that? If it goes wrong, your businesses destroy, you know, start with something small and and a lot of it was around learning. Right. And that’s one of the biggest things you can do right now is get your data in order, as you say, but also start to learn.
00:12:10:09 – 00:12:23:06
Unknown
What do you AI means, how it works, how it does, what to do. You don’t need to be able to. You know, I also think you don’t need to build the watch. You just need to know know how to tell time. But right now, none of us really know how to tell time. And that’s, you know, start looking at that, start thinking about what’s a prompt?
00:12:23:06 – 00:12:39:02
Unknown
What’s prompt? Engineering. What does that look like? How do I interact with AI? Thinking about data. We’ve been talking a lot about data. I start, I think, what is data, right. Our idea of data, I think for, for most of us, is, is numbers, numbers and spreadsheets. Right. But there’s all kinds of other data out there, right?
00:12:39:02 – 00:12:58:15
Unknown
And particularly unstructured data. And people are already starting to use AI for that. You know, they’ll throw in a bunch of leases, right, for lease accounting and say, digest this and look and you’ll find I need to, you know, look for these kinds of, of phrases and leases that I’ll know you know, might help me learn how to qualify, or you know, where to put them on the books and that sort of thing.
00:12:58:17 – 00:13:12:12
Unknown
There’s, you know, the definition of data is going to expand, and change and how we think about it. And just to be start wrapping your head around the concepts that are going with it and what it can and can’t do and might do in the future. It’s probably a a great way to start as well. Yeah.
00:13:12:13 – 00:13:38:20
Unknown
Yeah. Well, it’s an exciting topic. I’m sure. I’m sure it’s going to change rapidly. I think the things that are, you’re going to look at this year and again, another reason not to do something big because the effort required to do something if you don’t have a pretty quick return on whatever, AI tools you’re going to try to adopt, if you, you know, if you just wait a few another year, those tools will be easier to use.
00:13:38:20 – 00:14:03:18
Unknown
They’ll be better. The quality is going to improve quickly. So that was the other thing is like if you don’t see an immediate ROI or a use for it, then probably shouldn’t do it because yeah, yeah, there’s the effort. Yeah. Well I think is right. Is do you think about these things. It’s it’s at the early stage, you know, when you think about the early days of computing when people had to build their own computers, right?
00:14:03:22 – 00:14:17:01
Unknown
Mac started with, you know, they would sell a motherboard. You had to figure out what to do with it. But but it was still that was how you got a computer. That’s, I think, a tool for a lot of people. That’s where we are with AI. You don’t need to do it. Someone’s going to build those tools into tools you can buy off the shelf.
00:14:17:02 – 00:14:31:21
Unknown
That’ll be pretty much more easy to use in. AI itself is now. So unless you’ve got a compelling case, you just say, if you’re looking at going, I don’t really know what this is going to do for me, don’t worry about it. Don’t worry about not. I shouldn’t ignore what you said. You’ll learn about it. Figure it. Help, wrap your head around it.
00:14:31:21 – 00:14:50:01
Unknown
But do you necessarily need to apply it into your firm right now? Pay know, because there’s a lot of accounting. You know, accounting solutions vendors out there figuring out how to build it into their tools and figure out how to make it easier for you to use. Right. So you don’t have to be an AI genius. You can just wait a year and you’re you’re software will do it for you.
00:14:50:05 – 00:15:02:06
Unknown
Now, you may have that have to learn how your software you know, how best to get good results out of your software and so on. But, it’ll become easier for everybody if you wait a little bit and approach it from a more educated sort of standpoint.
00:15:02:06 – 00:15:27:21
Unknown
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Unknown
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00:15:50:00 – 00:16:05:06
Unknown
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00:16:05:06 – 00:16:11:00
Unknown
Well, let’s, let’s, talk a little bit about scaling.
00:16:11:02 – 00:16:41:04
Unknown
A lot of our audiences, you know, interested in how to grow an accounting firm and, a lot of our listeners might have smaller firms like 1 to $10 million in annual revenue. And, you know, again, before we hit the record button today, we kind of chatted a little bit, about growth and how what got you here won’t get you there, I guess is, how you would paraphrase that.
00:16:41:06 – 00:16:44:19
Unknown
Absolutely. So I would love to get your thoughts on like,
00:16:44:19 – 00:17:06:15
Unknown
what are the challenges of scaling a small firm and, you know, what what what a firm owners need to be thinking about if they want to grow a bigger business. Right. It’s. Yeah, it’s it’s amazing. There’s I don’t think it’s a there comes a time in young firm’s life, you know, there’s a, there’s very much this that period somewhere between 1 and 10 million going anywhere up to.
00:17:06:15 – 00:17:21:20
Unknown
And it depends who you talk to and what, what how what the firm is like. But anywhere from that 1 to 10 million all the way up to, you know, even to 30 or 40 million when people are, you know, figuring out how to negotiate. That’s a weird period of time for accounting firms because you’re going from you have been pretty much one, maybe two people.
00:17:21:23 – 00:17:39:06
Unknown
Maybe you have a couple employees, but it’s really just 1 or 2 partners. You kind of, you know, and everything is very loosey goosey and you can grow your firm to, to the bottom threshold of that without really much in the way of being business. Right? Being a sort of formal business. You can handle things in an ad hoc kind of way.
00:17:39:06 – 00:17:57:06
Unknown
You can handle your technology on the weekend, and your hiring is pretty simple and maybe even get, you know, you get somebody to help you with it. Maybe you have a part time bookkeeper, part time invoice person. But really, it’s a pretty straightforward, simple, stripped down operation because there’s not that much, in the way of corporate requirements for you.
00:17:57:06 – 00:18:11:07
Unknown
And I don’t mean requirements in a sort of compliant sense, but just you need somebody to handle this as you get bigger, though. And this is you talking about that, you know what got you here? We’ll do won’t get you. It won’t get you to the next stage. Scaling from that from that point is not just, hey, doing more of what I’m doing now.
00:18:11:07 – 00:18:28:11
Unknown
Right? If I’m doing 100 returns now and I got 100 clients, all I need to do is get a thousand clients and a thousand tax returns. And I’ll make, you know, ten times as much money. And it just doesn’t work that way at all, right? Because you get to that thousand clients, you, you add on all sorts of structural requirements.
00:18:28:11 – 00:18:44:06
Unknown
You just have to have in place to be able to, to, to handle it. And it’s things like, you know, what kind of HR function you have doesn’t mean you have to have a full time HR person, but it means you got to have somebody looking after that because you cannot handle at that scale you personally or you and your your partner or your couple of partners.
00:18:44:06 – 00:18:59:22
Unknown
You can’t handle it. There’s just too much going on there and it’s too important to not have it be handled in some kind of professional way. The same thing goes for your technology. The bigger you get, the more, clients are bringing on, the more data you have, the more back and forth that you’re having. And the different kinds of back and forth that you’re having.
00:18:59:22 – 00:19:13:13
Unknown
That’s a terrible way of putting it back and forth. But, you know, I mean, data and data exchange, different kinds of data coming in from a lot of different places, how you’re making sure that you’re keeping track of it, how you’re making sure that it’s backed up and it’s safe, and so on. Those become not just bigger but different, very, very different.
00:19:13:15 – 00:19:32:24
Unknown
So you need someone with some serious, tech expertise. Your marketing goes from just being, hey, I talked to somebody or some of our clients, referred some stuff to me to a business development function. Right. And you need to have some support there. Again, it doesn’t always mean that you have to go out and hire someone. And there’s no threshold where you say, okay, you’re making you’re making, you know, 2 million.
00:19:33:00 – 00:19:41:09
Unknown
Now you’re making 2.1 million. I mean, you’ve got to have these four people hired onto your staff, but it means you need to start thinking about those functions in a much more corporate kind of way
00:19:41:09 – 00:19:52:10
Unknown
than you would when you were when you were smaller. And again, it’s a process. You’re going to go through a thing where maybe you’re hiring some part time help for this, and then maybe you’re having a full time and they won’t always every firm will look different as it it grows and expands.
00:19:52:10 – 00:20:08:04
Unknown
Different needs will pop up depending on the nature of your business and the nature of your clients and the size of your staff. But you need to be aware that you’re going to have to stop doing that and start having a professional backbone, to your firm, a sort of professional back office that handles a lot of these things.
00:20:08:06 – 00:20:31:22
Unknown
We just completed our, our top 100 firms survey and one of the sort of, data points on the rise. That’s right. That’s much bigger than we’re talking about. But it says there’s a data point in there that I only discovered, two years ago that continues to fascinate me. And it’s the number of employees per partner at the billion dollar firms is twice as high as the number of employees per partner at all.
00:20:31:22 – 00:20:52:20
Unknown
The firms that are smaller. And it’s something like the average big for actually being down from, I should say, there’s about $17 billion firms at this point. The average number of employees per partners is about 15 or 16 at those firms, and it’s 7 to 8 at smaller firms. And these are still we’re talking, you know, 800, $900 million firms, but they’re still that’s a big leverage point.
00:20:52:20 – 00:21:17:14
Unknown
And the reason that those firms are able to leverage that is because they have that, that corporate infrastructure, one of these is a couple of others. But but that’s a big one, right? They have a huge HR department. They have a huge legal and education department, learning education department. They have a huge business development staff. They have all kinds of support stuff that allow, this larger staff to function effectively as a, as a, as a, as a company, as a corporate thing.
00:21:17:18 – 00:21:40:20
Unknown
I don’t mean to, you know, to differentiate it from firm in a negative way. It’s just that’s a corporate way of acting and behaving that allows you to do a lot more. And not that what it means to to have the infrastructure that a big four firm has. But you need to start thinking about that kind of stuff as you start to move up from that one, two, 3 million size and start thinking about how much bigger do I want to get?
00:21:40:20 – 00:21:59:17
Unknown
And as I become bigger, I’m going to need to start thinking about a lot of these things I have and rambling on for a long time. No, no, you. It’s good you got me thinking about, I saw a speaker, just talking about big business. Bigger business in general. It wasn’t accounting specific, but, the revenue per person.
00:21:59:19 – 00:22:22:09
Unknown
And as firms grow, as businesses grow it, it’s actually a lot higher. So you would think with all those people and sort of a bureaucracy, if you will, that your revenue per person might not be as strong, but it’s actually it actually gets the revenue per person goes up as the size of the company goes up as well, even with all of that structure.
00:22:22:11 – 00:22:36:20
Unknown
Yeah, it’s weird, right? You know, it’s totally counterintuitive. You would expect. Well, we had all these all these people are, you know, they’re sucking revenue out of my pockets. And then for a lot and this is a big thing for a lot, particularly for, you know, smaller firms, very small firms, 1 to 3 partners. It’s going to feel that way.
00:22:36:20 – 00:22:52:11
Unknown
I mean there’s no question ideas coming out of your pocket. But what it’s going to do is free you up to make so much more money. As you go on, you think I think a small things like, grant writer, you know, proposal writers write the big for for, sure have departments full of proposal writers, right.
00:22:52:11 – 00:23:10:19
Unknown
When when clients come out that allows them to go after much, much, much bigger clients. Again, I don’t I’m not suggesting small firms need to be like big firms, but it gives it points out how that works. Right. Having having that kind of back office, structure to it, whatever it is opens you up to much bigger opportunities, much bigger clients.
00:23:10:19 – 00:23:27:19
Unknown
You know, much greater scale and capacity, right? If you’ve got, if you’ve got a team, a small team dedicated to handling your outsourcing, you can outsource a lot more work, which means you can take on a lot more work. It’s your small firm. You’re managing that outsourcing relationship, and it’s a relationship. There’s no question. It’s a thing you’ve got to keep on top of.
00:23:27:24 – 00:23:42:09
Unknown
You can get a lot of value out of it, but it takes time and effort and it takes time and effort away from the work. I think particularly that a lot of, you know, it’s smaller firms. Why do you do this work? You do it because you like it. You do it because you like working with clients and you like doing tax returns, and you like the books and you like the the being inside the business.
00:23:42:09 – 00:23:59:19
Unknown
And that’s, that’s fun and rewarding and brings good value to clients. But if you want to get bigger, that’s the problem is you have to start doing a lot of the work. Yeah, nobody really wants to do, which is managing and structuring and holding people accountable and thinking more broadly and not doing the stuff that got you into accounting in the first place.
00:23:59:19 – 00:24:16:06
Unknown
Right? The things that made sense and the power of the books all spoke to you and came together. You’re going to do a lot less of that. Which sounds terrible, I realize, but it also means you’re serving more clients better. I mean, you’re providing more opportunities to your staff, and making sure you’re offering more value out into the world.
00:24:16:08 – 00:24:50:20
Unknown
But it does require that big, big change. Yeah. I, interviewed, a CPA named Rob Siegfried. I don’t know if you know Rob. But he, grew a firm from scratch to over $100 million. And, we wrote a paper on this. And, you know, he described growing as a series of letting go. You know, I think so many people think growing is, like more and more and more like like in your example, hey, if I do ten x, the kind of work, but, as, as a leader of a firm like that, it’s actually about doing less and less and less.
00:24:50:22 – 00:25:12:24
Unknown
And, yeah, he, he got to zero billable hours pretty early in that, in that, and that was his goal. And managing partners of much larger firms thought he was a little crazy for wanting to get the zero billable hours, but that’s what he did. And that allowed him to grow. So it’s, it’s good stuff. Yeah.
00:25:12:24 – 00:25:30:19
Unknown
Nobody. It’s. But it’s hard. Hard letting that stuff go. Yeah. In part because a lot of your partners will be looking at you going, you have zero billable hours. What? Do you do it. Yeah, yeah, because I realized right then that. And it’s worth it. It’s one of those things where it’s, the language doesn’t help it, right?
00:25:30:19 – 00:25:44:00
Unknown
Because it’s all. You’re the managing partner. And I think that’s why you see it. A lot of firms are switching that name. There’s which is column CEO, your CEO. I’m sorry. My phone keeps pinging at me. I’m going to turn it off. I’m sorry. I thought I had time to do that. But apparently I had,
00:25:44:02 – 00:26:02:00
Unknown
But, yeah, you need to think of him as a CEO. Right. Too much as a managing partner. Where that’s. Oh, you’re just a partner who also happens to do a little managing on the side to keep things smooth. It’s. You really have to think about yourself as the head of a business. And that means, as you say, letting go of a lot of the stuff that really, you started out for doing.
00:26:02:00 – 00:26:20:08
Unknown
That was the value you brought. Was that you you did this work really well. But if you want to take it to the next level, you have to do a different kind of work. Very well. Yeah. You mentioned the top 100 firms survey. Any other, big, big AHA’s. From that survey, you want to share? Cass keeps growing.
00:26:20:10 – 00:26:50:09
Unknown
Keeps, you know, being a big deal for everybody. We added, we always ask sort of a, breakdown of, see, split by, you know, it’s usually audit and tax and advisory work and then other. We added Cass as a separate, category this year. It is still pretty small, but it’s going to be, we’re expecting it to grow a lot of the firms in their sort of their, ad lib responses, where we’re focusing very seriously on Cass also focusing very seriously on advisory work.
00:26:50:11 – 00:27:13:22
Unknown
I think that’s a that’s going to be crucial. Their clients are asking for it. And I think, you know, the, the, the impact of private equity, in a bunch of different ways in terms of competition. Right? I think we’re we’re seeing lots of firms, that haven’t taken on money talking about how it’s changing their competitive landscape, and changing it fairly frequently, like changing this month and then changing it again next month and then changing again some months after that.
00:27:14:03 – 00:27:40:04
Unknown
As firms are cycling through, owners and, firms are reaching out, across big, big profits and multiple geographies. They’re seeing a lot of competition there, but also seeing, more and more different models for accounting firms. So I think that’s something, you know, this year is just a continuing portion of a trend that’s been going on for 3 or 4 years of finding all kinds of different ways you can be an accounting firm.
00:27:40:04 – 00:27:59:02
Unknown
It doesn’t have to just be a straightforward partnership. That was pretty much the model for 80 odd years. But just in the past 4 or 5 years, we’ve seen all these firms taking on yet another esops and now they’re, PE firms. Now they’re, they’re they’re owned by a PR firm or they’re on a PE firm platform and they’re still operating kind of independently, but they’re definitely owned by their central PR firm.
00:27:59:08 – 00:28:18:10
Unknown
And I think we’re going to see, you know, a handful more of different models of that coming out the next couple of years, just from the people we talked to, who are interested in coming into the accounting profession, what that’s going to mean for you, it’s going to be two things. One, obviously, like I said, just structurally, it’s going to be a lot of different ways to be a be an accounting firm.
00:28:18:12 – 00:28:37:24
Unknown
You may be you won’t be a CPA firm. You’ll be, an alternative practice structure with a CPA firm and, and advisory firm, or you may be something else entirely. The other thing is that, there’s, you know, what is PE mean in and of itself? What is non CPA ownership mean? Even if it’s just all the people, you know, some Esop where it’s employee ownership.
00:28:38:04 – 00:28:57:14
Unknown
What does that mean. How will that change what accounting firms do and how they think of themselves their role with the public. For instance, you know, how does that change? How does their what is their, right now? I think it’s safe to say that accounting firms are really they’re the most trusted advisor, tremendous professional integrity, tremendous professional responsibility to their clients.
00:28:57:16 – 00:29:15:10
Unknown
Is that at risk? Will that change? When firms come in? I had none of this, I should say. You know, we’re not seeing this. We’re not seeing, you know, firms, give up their their professional responsibility, something like that. But it raises a bunch of a bunch of serious questions along those lines. You what are the things that keep that professional responsibility and integrity intact?
00:29:15:12 – 00:29:40:08
Unknown
Is there something, anything special about the CPA firm partnership model? That does that? Because we’re going to see a lot of new different models come up, you know, beyond just the 2 or 2 we’ve already seen in the last two years. Yeah. I think the partnership model, the biggest thing I see is as a issue or as an obstacle with it is it’s very hard to change and grow with that partnership model because you’ve you’ve always got this 1 or 2 partners.
00:29:40:08 – 00:30:02:07
Unknown
That’s kind of your I call them the veto people. You know, they’re they don’t want to change and they want everything to kind of be the same. And we’re operating in an environment where not changing is pretty dangerous, I think. But there’s a great some, I want to say it’s uncommon, but, it may not be so said, you know, you got a group of partners and, no one can say yes, but everyone can say no.
00:30:02:09 – 00:30:16:01
Unknown
Yeah. And it’s, it’s, And even if they do want to say no, they can say, well, let’s think about it. And as you say, we’re not if you’re not moving fast. Right. That’s a dangerous thing to do. You may not need to change. Right. But you need to respond to whatever whatever it is. You may need to think very clearly.
00:30:16:03 – 00:30:31:15
Unknown
Yes, we need change or some changes. You may say no, but you need to do it quickly. And with some with some certainty. And that’s, you know, we’re talking about scaling, right? That’s another issue with with the bigger your partner group goes, you know, it feels like you’re getting big because you’ve got a lot of partners.
00:30:31:17 – 00:30:54:19
Unknown
But you’re going to be held back from that next level, because the next level is where some of those partners have to let go of the notion that they are that they control the firm. Right. You know, in the end, obviously, they get a vote, one of what matters over big things. But on a daily basis, one of the things that you have to change as you grow is some partners have to be have more control, over partners than others.
00:30:54:21 – 00:31:06:01
Unknown
You’ve got to have a leadership team, and the leadership team has to be able to say to some people, you got to be different. You got to do this differently. You got to work on this instead of that, or you got to deal with your clients differently than when you’ve been doing it. And that’s a big that’s a big issue.
00:31:06:01 – 00:31:25:22
Unknown
I think that we really talked about we talked about scaling, but it’s a, it’s a, it’s a big, big issue. Yeah. Because that veto power is is really strong. If people have veto power boy you can really stall out. And then sort of growing scaling becomes very very difficult if if you’ve got an anchor attached to you. Right.
00:31:25:24 – 00:31:43:00
Unknown
Yeah. Yeah. And it is that’s the thing. It really is. It’s an anchor. And I think for, you know, to give the veto people, they’re kind of a lot of times they’re not thinking of it that way. They’re not like, I want to stop everything. They’re just like, do we need to do this? They’re cautious. And then this is, you know, they’re cautious and small C conservative, right?
00:31:43:00 – 00:31:57:00
Unknown
They’re like, well, not let’s not do anything crazy. Let’s we’re an accounting firm. We’re supposed to be cautious and careful and think things through and take our time. The problem is, is that time is a precious commodity these days. And things move so quickly that you you can take your time, but you have to take your time very quickly.
00:31:57:03 – 00:32:16:07
Unknown
Yes. So time, I want to respect your time. And we’re going to wrap up. I got a couple of wrap up questions. One is stories. You have a funny career story that you could share. I always I tell this story, and whenever I tell two accounts, I’m not sure how they take it. So I had to very carefully lay the groundwork.
00:32:16:07 – 00:32:38:22
Unknown
When I very first started working for a company managing under, which obviously I’m going to be a managing editor for accounting today and people who heard accounts because most people weren’t accounts that point. Right? Oh, accounting. That sounds pretty dumb. Yeah. You know, so far it’s not bad. It’s fine. But I quickly learned that if I said I work at accounting today to people, they would go, oh, that’s pretty dull.
00:32:38:22 – 00:32:55:24
Unknown
Which was rude, isn’t it? What are you going to do? And early on was, we had an art, an artist who did our cover art. Over the course of a year, I got to know him very well. We became good friends on the phone. We never met because he lived outside the city. He got married, at the end of that first year and said, you know, why don’t you come a wedding?
00:32:55:24 – 00:33:11:12
Unknown
We can meet at the. At the wedding. I get there and he’s obviously he knows a ton of people, because there’s hundreds of people there and I don’t know anybody. So I’m just sort of, you know, moseying around, get on the receiving line. And, it’s a very long resume because he knows a lot of people. So when people end up chatting and I’m talking to the guy next to me, you say, so what do you do?
00:33:11:13 – 00:33:21:20
Unknown
And I said, why? I’m managing editor of a trade magazine. Eagles are really what? Trade magazine? I go, wow, yeah, it’s a it’s a small trade. No, you wouldn’t have heard of it. Most people would find it very dull. Oh, go ahead, just tell me what to. What trade is it, man?
00:33:21:20 – 00:33:24:07
Unknown
I know, you know, whenever I tell people about it, they say that sounds really dull.
00:33:24:12 – 00:33:37:06
Unknown
So, you know, don’t worry about it. You know? Come on. Seriously, what what do you work for? And I say, well, it’s called accounting today. I know everyone thinks it’s great, but it’s boring and stumbles. It’s called accounting today. And he goes, oh, all right, well that’s that’s fine. And his face kind of changes in like, that’s weird.
00:33:37:06 – 00:33:48:16
Unknown
Why is his face going to change? And he said, what do you do? And he says, well, I’m Steve’s accountant, Steve, as I’ve mentioned, Steve’s the guy who was getting married. So at that point I was like, you know, and I’m, I need to figure out how I’m going to introduce myself to people from now on.
00:33:48:16 – 00:34:01:20
Unknown
And I reached the by now I can tell that story because what I’ve discovered, right, is that is that, I work at a company that has a lot of different trade magazines, and of all of them, the one I would most want to work with is kind of easy, because accountants are super passionate about what
00:34:01:20 – 00:34:20:24
Unknown
they do. And that’s, you know, even if you even find the subject matter boring, I have. No, no, I had no knowledge of accounting, didn’t know anything about accounting. Still really don’t know a lot about, you know, actual technical accounting. But when people are passionate about what they do, that’s that’s fun to cover, right? It’s just their infection sort of comes across.
00:34:21:04 – 00:34:37:05
Unknown
Their infectious enthusiasm sort of comes across, we work for a lot of the other publications here. People talk about, you know, it’s like pulling teeth to get people to talk about their professions. But but for accountants, they’re they love it. They want to share. Yeah. You know, I never really thought about it because I’ve been in it for so long.
00:34:37:05 – 00:34:59:15
Unknown
But you’re right. We are passionate about our profession. It’s it’s true. And, and, and interesting that. Yeah, that’s a really good point. Awesome. All right. One last question. But can you can you recommend a book for our audience? Sure. This is not a I read this, I actually read this a couple years ago, but I this is the book I recommended to everybody from for a long time.
00:34:59:17 – 00:35:19:18
Unknown
It is it’s nonfiction. It’s not about accounting. It’s called Say Nothing, and it’s, it’s about, sort of case study of a woman in the Troubles in Ireland in the early 1970s who was murdered. And if her murder was unusual in that it was, she was never found. Her body was never found, apparently, and this is the book sells you this.
00:35:19:19 – 00:35:35:06
Unknown
Apparently, most times when somebody was murdered, whether they were, you know, whichever side they were on, you think you, they let you know because they wanted you to know. They were mostly warnings, right? So you leave the body in the middle of the street so that all your enemies would know you were out for them.
00:35:35:08 – 00:35:52:04
Unknown
But she disappeared. No one ever knew where she went. And this journalist sort of goes looking, treating this story as sort of a microcosm of one part of the troubles. And so he brings in all these other details about that, which are pretty fascinating. But he’s also following this story about this woman. Where is she and what happened to her?
00:35:52:04 – 00:36:10:20
Unknown
Where’s your body and how did she die? Who killed her? And basically in the course of investigating this story, which he tells really, really well and it’s exciting, it moves pretty quickly and it’s like a murder mystery, only it’s true. He find he one gives you this picture of the Troubles in Ireland, which is fascinating. It’s a it’s a weird and fascinating period of time.
00:36:10:22 – 00:36:30:01
Unknown
But he also just in the process of reporting it, investigated. He may have solved it. And so at the end he sort of starts revealing these details that he’s learned that pretty much say, you know, I’m not bringing anybody to court. I’m not arresting anybody for anything. But some of the stuff I’ve put together pretty clearly means this person did it.
00:36:30:03 – 00:36:47:22
Unknown
And and you’re it’s all the, you know, the back jacket cover copy and the, the advertising around it said, oh, he may have solved it. And you’re like, yeah. Did he really solve it? And then when you get to his evidence, you’re like, oh, oh no. He did solve that. He totally solved it. It may not be, like I said, court ready evidence that you can you can, you know, have somebody arrested on.
00:36:47:24 – 00:37:01:19
Unknown
But he pretty much pretty clearly solve this mystery. And we now know how this woman died and why. And you’re like and it’s really very you get to this point thinking, oh, well he was just that was just a, you know, a hook to bring you in. And then you get to it, you’re like, oh, wait a minute.
00:37:01:24 – 00:37:18:09
Unknown
Yeah. Just the last. And they just it’s and all the rest of it, it’s good. It’s a good read. It moves at a good pace. It’s fascinating stuff. It’s all it’s murders and, you know, terrorism and and whichever side you’re on, he’s very, he’s very good about not being, you know, Protestant or Catholic or taking sides or anything like that.
00:37:18:09 – 00:37:36:10
Unknown
And he’s very careful to, to make that clear. So you don’t come through feeling like, well, you see what? He has a bone to pick. He does come to come. And they just he just figured it out and they I think they’ve actually made it a mini series now, on one of the streaming channels. But the book itself was fantastic.
00:37:36:12 – 00:37:55:06
Unknown
So was the case never solved officially? It was never solved, in part because knowing her body just disappeared. So first it was just a disappearance and when somebody disappeared back then, you were like, wow, their body will probably turn up. And it did. They did eventually find her body. Got a camera, right? I’m assuming they found there was she had been killed.
00:37:55:08 – 00:38:11:13
Unknown
Yeah, it was it was a murder. They knew it. But it was so. So it was past, and there was no real evidence to tie them. To tie anybody to it. And and no one had claimed it. And that was what was so weird. Like I said, it was a, that whenever somebody got murdered in Northern Ireland at that period of time, somebody claimed, somebody said, oh yeah, we did it.
00:38:11:14 – 00:38:26:22
Unknown
We did it because he was a bad guy, or we did it because he was a Catholic, or we need because he was pressed into it, you know, they were. But, you know, every murder got claimed. And this one just did. So it sort of slipped between the cracks. And it’s a weird thing, you know, she was a mother of, like, I want to say 11 kids came to 11 kids, but she had a lot of kids.
00:38:26:22 – 00:38:43:05
Unknown
And so all her kids are sort of, you know, fell into the system and stuff like that. It’s a it’s a a really good creepy story, but a good thing. It’s, it’s, I mean, you come away thinking, wow, this is this poor woman and her poor family. But also, you know, poor Ireland and poor everybody have to go through this.
00:38:43:11 – 00:39:03:22
Unknown
But then there’s also the end. Yeah. It’s great. Great. No, it’s a, it’s a, it’s a very good and yeah not Tim I also I, I didn’t know a lot about that period. And it does a good job of without taking sides or diving into it. Yeah. It’s not a history. Yeah. Yeah it sounds that sounds interesting.
00:39:03:24 – 00:39:20:20
Unknown
Well Dan this has been a very interesting conversation. Thank you for joining our podcast today. And, what’s the best way for people to connect with you or follow you online? I think even just counting today.com. My emails on there, if anybody wants to reach out to me, I always feel free to do that or I’m on LinkedIn.
00:39:20:22 – 00:39:28:06
Unknown
Just, all the contact information is on the website. Awesome. Well, thank you so much. Thank you. It’s a pleasure.
00:39:28:06 – 00:39:42:22
Unknown
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