The generational shift in accounting

The intergenerational transfer of wealth is happening and there will be a significant number of SMBs looking to exit in the near future as a result. With this, there will be opportunities for CPAs to connect to the next generation of entrepreneurs and wealth holders. These opportunities come with a generational caveat — there are fewer CPA graduates, meaning more work with less time.

Understanding how to speak to clients in a modern, digital, and data-driven way that serves the needs of the newest generation of accountants will be the pivotal difference in firms who prosper.

A new generation of accountants

The key challenges of this generational shift inside firms is access to labor and the dwindling rate of entry into the profession. A lack of willingness to adopt or acknowledge technology to fill these gaps in human capital has been the catalyst for some firms falling short of future-proofing effectively.

According to the Intuit Quickbooks 2023 Accountant Technology Survey, 94% of accountants pinpoint fewer graduates coming into the profession as one of the biggest obstacles to hiring and retention. When hiring for the skills and attributes that accountants need to stay competitive and relevant, firms are missing a big part of the picture — time. Not having enough time to stay on top of compliance while finding growth opportunities has only been made worse by the lack of access to labor. This paradigm shift in the industry is a perfect storm when paired with the new generation of younger accountants. It's no longer about fear of technology taking over your job, or young kids not wanting to work. The new generation of accountants are equipped with the innovation and drive for automation and technological advancements to create something magical — Accounting firms that are technology forward, and accountants who save time with tech and use that time to grow or take on new clients. These innovative industry leaders will be prepared to serve the pool of SMB clients ripe for retention with a firm that helps them grow or sell.

So, whose responsibility is it to ensure that the accounting profession is future-ready? Everyone's. The responsibility lies within every aspect of the industry. The future of accounting will be influenced and only successful if it is a collective effort between accountants, the governing bodies or professional designation groups, and technology companies. The collaboration between everyone involved will be critical in creating a future-proofed profession.

With automated data discovery, technology like interVal is making waves with firms looking for sustainability amidst the rapid economical changes. Providing real-time insights on SMB client data, this platform attaches to your already existing processes to pull out advisory opportunities linked to excess working capital, serviceable debt, loan opportunities, and valuation; essentially clearing the clutter of accounting data to highlight quantified growth opportunities for accountants, firms, and their SMB client base.

What can accountants do?

Accounting no longer fits the out-dated stereotype of being a monotonous desk-job surrounded by piles of paper. Being a proactive accountant keen on building trusting client relationships is the new way of work for the industry. In the hands of the future generation, Client Advisory Services (CAS) is about to boom. Some firms operate this way now in concept, but others are creating defined practice areas on par with audit, tax, and others. As CPAs spark growth and revenue opportunities at the helm of being an active participant in their client's future, CAS practices bring a much needed infusion of creative and forward thinking to the accounting profession. Using data to grow the share of wallet is the secret to turning accountants into sales people.

What can firms do?

How the accounting profession is perceived by the new generation of young accountants is critical. 91% of decision makers surveyed in the 2023 Riverbed Global Digital Employee Experience Survey say that they will need to provide more advanced digital experiences to meet the needs of millennials and Gen Z employees, which together account for roughly half of the workforce.

Talent attraction and retention has become a marketing issue. Accounting as a profession needs a complete rebrand, both in how they are perceived by potential clients (adding CAS practices to establish themselves as growth experts, not just compliance management) and by potential employees (building internal structures that implement technology and time-saving practices). Unfortunately, firms don't have influence in how many CPA graduates are coming into the workforce. Knowing this, it is important to stay ahead of the curve by positioning yourself as tech-enabled, showcasing your ability to keep up with the changing needs of the industry and those who work within it.

What can technology companies do?

Software vendors play a pivotal role in serving the accounting profession. This role is just as much about education and understanding as it is about the technical components.

"It is the technology-provider's job to deeply understand the current state of the profession, how it identifies its wants and needs, and provide meaningful solutions to solve pain or create opportunity," says Trevor Greenway, Co-Founder and CEO at interVal, "This requires empathy, understanding, education, and innovation."

Often overlooked in the accounting technology space, collaboration between vendors and firms can create incredible technology advancements. Whether it be a time-saving tool or something that helps you hone in on specifics, accounting technology is becoming niche and needed.

There's no better time than now

The shift to holistic advisory-focused accounting is adding value to accountants, firms, and technology companies alike. There is no silver bullet or single change that will create the systemic change in both perception of the industry and practice itself, instead it is a confluence of factors; a change in how we practice, a re-branding of the industry and what it does for SMBs, and an adoption of effective tech stacks to aid in labor constraints and discovery of revenue opportunities. Breaking free from the silos of the accounting profession's past, as these areas of focus undertake their own industry impact, each one helps solve the other. This collaboration gives accountants and firms the opportunity to capitalize on all of the change the world is seeing, including the sizable transfer of wealth and rapid advancement of AI, instead of folding beneath the weight of it.

You can't manage what you don't measure: when connected to interVal, SMB clients see an average of 29% YoY growth. interVal allows you to proactively advise your clients by seamlessly identifying the largest revenue opportunities from your existing SMB clients across lending, cash management, investments, specialty products, and wealth & insurance — paving the way for a steadier stream of higher-margin services.

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