Track 3: Technology and CAS

Assembling the technology is a critical part of building a client advisory services practices, and pioneering firms are rapidly putting together a set of best practices for everything from selecting the right GL packages and the apps to go with them, to automating your processes, and getting your staff and clients onboard.

Transcription:

Chris (00:11):

All right. So it is 3:30 right now and it is time for our next session all about technology and CAS, and I have some great panelists with you today. I have Hey, Hitendra Patil, why don't you maybe briefly kind of talk, hang on, wait a minute.

(00:28)

What? It's 12. That's right, because my laptop is on New York time. I am is clearly my brain is across the country. But regardless, we still do have this panel about CAS and Technology. And so I guess, you know what the first thing we actually want to do is we want to take a quick straw poll so we know who our audience is, right? So first of all, who's got a CAS practice? Raise your hand. All right, so keep those hands up. And have you had this CAS practice for at least one year? Alright, who has had it for at least five years? Who has had it for at least 10 years? Alright, Now hands up again, just everyone. Are you large firm or company?

Chris (01:19):

It's I guess not medium or small.

Audience Member 1 (01:24):

Account.

Chris (01:26):

Okay. Would you consider yourself a large firm from your own subjective perspective?

Ashley Doyen (01:32):

Do you have over 21 accountants? Do we have over 21 AI CPA members? Do you have 10? Okay.

Chris (01:46):

All righty. Alright, so that is our audience right now. So allow me now to introduce our speakers. We have Ashley Doyen is the Manager of the CAS Firm Strategy at CPA.com and we have Hitendra Patil, he's the Founder of Account and the Author of multiple books, including this one right here, the Definitive Success Guide to Client Accounting Services. Alrighty then. And so maybe we can just kind of get started over here. And the first thing that I'm wondering about is what are the biggest technology challenges that CAS practices face? Why don't you start her off?

Ashley Doyen (02:21):

Good. Is our mic, do we have mics?

Chris (02:22):

I don't think mic's.

Chris (02:27):

Okay. Do we have microphone?

Ashley Doyen (02:31):

Hello.

Chris (02:31):

There we go.

Ashley Doyen (02:32):

Yes. Hello. We are working. You're live.

(02:35)

So I believe the question was biggest challenges around technology and CAS. I was just having this conversation earlier with a firm and evaluating technology can be a full-time job in itself. So while we all know that's a challenge, I would say taking that a step further, keeping up to date on the technology that's out there and knowing what to prioritize can be a leading reason why firms that I'm working with are starting to look at either implementing an innovation role or an innovation committee. But then the question becomes after you've found these individuals that are focusing on keeping up to date on the technology, what's available today, what's coming, what's on the horizon? Do we have the individuals that are able to implement that technology and standardize it across all of your clients? So oftentimes I'll work with firms and they'll say, well, I've had, I have in individuals on my team that implement QuickBooks all the time, they can implement any system.

(03:41)

Well, as they go to continue to evolve their tech stack, they find that those same individuals are not always the same individuals that can implement a mid-market ERP solution as an example. And so taking a deep look at what type of individuals do you need that understand the technology and are able to think through deploying, procure to pay cycles for a particular industry, what that looks like, how we aggregate data from multiple systems and how we do that across our clients, maintain it and update it so that all of our clients are utilizing the same technology in the same way can be a challenge, but also can be something that can be solved when we look at utilizing or hiring the right people or maybe even using a managed service provider to address that challenge.

Chris (04:35):

So Hitendra, what do you think about when you think about the biggest challenge that CAS practices face right now in terms of tech?

Hitendra Patil (04:41):

Yeah, so when it comes to using whatever the clients use as technology, that's a sure shot recipe. For a CAS disaster. You don't want the clients to define what technology you should use. So that's was first thing. Then you're talking of what should be my CAS tech stack budget. Depending upon your firm size, your revenue, where your niche industry is going towards, that can be a very tough ask. How do you define your CAS tech budget? So that's one of the challenges. Then when you come to selecting the tools and components within your entire tech stack, that's another problem. If you are serving a lot of different industries, practically serving anybody and everybody who comes in your door, you're going to be in trouble. So that's where the niche practices have a little better advantage. So you don't want to really look at far too many software's and with the changes that are happening in the technology space practically overnight every day. So you're looking at that learning curve of new technology, every new solution. It's not the cost of the solution really, it's the cost of implementation. How is your staff going to learn it? How are your clients going to collaborate over that software? So that means they need to learn. So that's a massive ask. So these are common challenges that most firms face. Yeah.

Chris (05:59):

So one thing that I was actually kind of thinking about too is we have different technologies for different tasks, different services. How do the tech needs of CAS practice defer from those of other kinds of service lines? What are the CAS specific needs that you would be able to talk to?

Ashley Doyen (06:15):

So when I think of a, is this working? When I think of a CAS practice, I think CAS equals cloud. If we are not utilizing cloud technology, I would deeply be questioning myself if I really have a CAS practice. You heard Amy better talk about it this morning, and the challenges that she encountered when she had a firm where she was having to try to again aggregate data from multiple systems when there was no open API. So again, that should be a fundamental piece of establishing your CAS practices, defining that in regards to, again, the requirements that a CAS practice really needs around technology. Again, I'll go back to what I said earlier of we need the expertise as the technology continues to evolve, we should be looking at hiring individuals that are tech savvy and are interested in having appetite in understanding the technology.

(07:13)

We can train individuals around the, OR around the technical knowledge. We know what's so unique about CAS and what I love about CAS is the fact that we know that we are in have a staff staffing shortage and that's not going anywhere. That's not going to change. So how do we look at bringing on different types of talent? Well again, train the technical knowledge, look at for individuals that understand the technology and that can be a significant way to address that. The third being AI. So you look, anybody, you could pull up LinkedIn right now and you'll see, oh, AI is the future. Well, I would argue that AI is now, I work with hundreds of firms, and I'll give you an example, a common solution many of the firms I work with is Sage Intacct and Sage Intact has GL outlier detection. So you can see if there's anomalies in your journal entries. So don't overthink it. You don't have to have all the answers for a, now you don't have to have all the use CASes, but they're small use CASes that you can start to deploy that is going, that are going to allow you to provide unparalleled services in comparison to other firms. Because as we look to move into advisory, before we do that, we have to optimize that BPO level work. And we can't do that without the cloud, without AI and without automation.

Chris (08:41):

And so then based upon what you've observed, yeah, what have you seen about CAS specific tech needs then.

Hitendra Patil (08:47):

CAS specific?

Chris (08:48):

Yes. Okay.

Hitendra Patil (08:49):

So I think traditional accounting practice, if you call it an output driven practice, meaning your tax returns or your financial statements, that's where things ended. CAS goes a little further than that. You're talking of outcomes that you're going to change for your clients, which means it's not input equal to output, but how did the output come to be? What decisions clients made or did not make that resulted in those numbers. So you're applying your expertise, your education on all of that, which means you've got to have technology that will allow you to analyze so that you can create that little piece of advice which is customized to each individual client that you're dealing with. And typically you put yourself in client's shoes and the client's saying, okay, what are you doing different that I should pay you twice the amount of money for your CAS?

(09:42)

So how are you going to talk about that? So which means you got to differentiate that value and that most of that differentiation will come from your technology stack and that needs to be a little different. And I worked with a lot of traditional firms years and years ago and things were like, okay, just get the data in, put it in, make sure everything is accurate, deliver to the client and charge, here is my output, give me my fees. That doesn't work in CAS at all because the expectations are different. The types of clients are going to be different. It's those mom and pop shops, they're not going to be your typical CAS clients, growing businesses, larger businesses, hundreds of transactions every single day. So how are you going to make sure that the client is actually on their business track? That's your job as an expert.

(10:29)

And technology will enable that. And AI, again, as Ashley mentioned, is all over the place. But chat GPT for example, and everybody's by it. And what happens when you put data in chat GPT, where does that data go? How does it replace your accounting software? It does it right, but all accounting software, payroll software's, audit software's will have built in AI's. And you need to understand that where my work is going to be optimized because of this built-in AI, which means you're going to be able to apply your mind even more because you'll have that time. So you got to be very conscious in identifying those opportunities through your technology stacks.

Chris (11:13):

Alright, so I mean here I go again with pretty broad questions on this, but overall, when approaching the idea of building a tech stack over at A CAS firm, how should firms be approaching this? How should firms be designing their CAS tech stacks? Either one, I guess. Go ahead.

Ashley Doyen (11:31):

It's a really good question. Again, evaluating technology, implementing technology can be a full-time job. I like to say take the crawl, walk, run approach. You don't have to do it all at once, but you do need to create a plan and that's where you get started. And to create that plan, the first step we need to take is identify our industry. I always say that our entire business planning, we at CPA.com, we do a lot of business planning around CAS's from staffing to pricing to the technology. But it starts with defining that ideal client and that's going to determine what does the tech stack look like? What do our scope of services look like? So again, define your ideal client, but from there then you can say what GL solution best supports that ideal client from an industry standpoint and also from a size standpoint. So if you're a firm that has two different industry groups within your CAS practice and you have a manufacturing or construction client, you may say, you know what, we have a Acumatica tech stack and this is all the pegs that tag into that Acumatica solution are, and we have a non-profit and we're using sage and tech for our non-profit group and these are the solutions that we're going to tie into there.

(12:51)

But again, you may not implement that all at once. So from there I say define your accounting, accounting and post accounting solutions and keep that goal of that accounting solution you want to get to in mind. But your first step may be simply by automating AP because that's where we can make the biggest impact on our clients in the fastest manner. So going in deploying a solution like Bill or whatever AP solution it may be, and then okay, maybe it's a CRM solution, maybe it's a point of sale solution. Again, depending on the industry that you're serving, get that in place and then say, okay, now we need to look at GL. Now we need to look at the post account. Is there an FP and a solution we should be using for our clients? What dashboards and analytics solutions are we using? But again, taking that crawl, walk, run and not feeling like you have to do it all at once. Because I always find that when trying to jump in all at once, it's usually the quickest way to failure and almost paralyzing yourself and not doing anything at all.

Chris (13:57):

It's rather than asking the exact same question, I'd actually like to reverse it. Based upon what you've observed, how should firms not be designing their tech stack? How should they question should not be approaching this? What are some of the pitfalls that you've seen? You look at them and you're like, oh man, oh man. What have you seen there that inspires that feeling?

Hitendra Patil (14:16):

Yeah, I think the reverse question is great. One, you're not going to start with technology when you're thinking of technology. So essentially you're looking at outside in approach, which means today that the line between technology, accounting technology and business technology is already blurred too much. Most businesses use accounting software as if it's a business software entering bills, paying bills, invoicing and things like that. Which means when you go into CAS, you're going to be collaboratively working on the same piece of software with your client much more than you do today, which means the clients need to be able to use that software properly, otherwise they're going to make a mess of everything and you'll just be cleaning up the mess, digital janitor job as they say, right? You don't want to get into that situation. So you always go for, and that's where the niche specific focus can help.

(15:08)

For example, restaurant industry, if you work for your menu pricing, your POS systems, as long as they're connecting to your GL pretty good, then you don't have to really use the same data to be entered again and again. And that actually leads me to a concept called straight through processing, which is pretty much pretty prevalent in capital markets and financial markets is data once created is only enriched at every single stage. You're not recreating the data. So when you go and look at things, okay, I'm going to pick up a few software's. So first thing that you want to do is look at am I going to enter the same three fields in three different software's? So for example, if your simplest example is your customer data, your name, address and all that stuff, if that goes in CRM, that also goes in your accounting software that also goes in payroll, you should be creating that only once.

(16:00)

So you look at that, if you are going to recreate every single data piece across your different software's, you're already in trouble. And then when you are looking at CAS, you're looking at making sure that you are passing on the piece of your mind to your clients as a rule. And for that to happen, you need to have some kind of analytics software that's going to create that advice that you can deliver to your client. It's not a report that you're going to print. Hey, read this 10 page report. You're going to be giving your commentary on that. And for that, if you're to export data in Excel, run macros, analyze, and then talk. It's an expensive proposition. So you're talking of all these integrations that should happen so that it works like a giant system applied. On top of that is your IPR intellectual property and that's how you go around designing. Otherwise you start with simple, okay, I see this same technologies, five tools in every single event that I attend, so these must be popular and hence I should use them. That's not the way you're going to go.

Ashley Doyen (17:08):

No, I love what you just said about, I see all these tools, I should probably deploy them. You know, might expect us to say, oh, you should always be staying on top of technology and always changing technology, but don't change technology just for the sake of saying that you're a technology firm because all you're going to do is end up with a bunch of solutions that bring absolutely no additional value to your clients. The question should become what services and what value are we trying to provide to our clients? What services and value do I anticipate? So going back to that anticipatory advisor that are, they're going to need in the future and what technology solutions are going to address that and that's when you make the change. Again, not just for the sake of saying we are a technology firm.

Chris (18:03):

So when you had talked before about how you can crawl before we can run, this made me think about how a stack implies multiple items. What do you think a firm's priority should be when it comes to the order in which they would pursue different solutions? What's kind of job one and then two, three and stuff like that.

Ashley Doyen (18:20):

So are you asking in regards to the specific technology solutions I should be deploying first order.

Chris (18:24):

We can take it that way, or we could also take it as far as just process or things like that, whichever one you feel is more germane.

Ashley Doyen (18:31):

So we always talk people, processes and technology, and again, going back to don't deploy technology just for the sake of deploying technology. Don't deploy technology without first figuring out your people and your processes. I've worked with a lot of firms where, I'll give you a specific example actually. I've been working with a firm for the past year that purchased a FP and a solution and they made a pretty significant investment in this solution. And when we pulled the team together and we started really taking a deep look at re-envisioning their CAS practice, we found that every single individual that had their hands on that FP and a solution was utilizing it differently. And so I'm not even using it at all and they had no idea what clients were even using they had on it. So there was absolutely nothing documented. So first, again, we have to define our roles and our responsibilities within our CAS practices, who's doing with what technology? We have to define our standard operating procedures, we need to define our templates within our systems and again, how we are utilizing those systems and what is the baseline if we're going to set a client up within a FP and a solution, what is at the very core, the minimum way that we are setting up this client? And then again, how are we continuing to evolve from there at various levels?

Chris (19:53):

Would you be able to speak to that as well also both in terms of people and also if there's things regarding specific technologies too you might be able to share.

Hitendra Patil (20:01):

Yeah, I think if you take a foundational approach to this, so any business client that you're serving as an accounting firm, so every single business transaction has an accounting leg to it. Either it has to go in GL, it has to go in payroll, it has to go in taxes, no, all that. So all of that, when you combine together, what are the services that you need to offer to your client? You may not be doing all those 17 services, but let's say you do eight of them. So obviously you've got to have that core software in place so that you can actually process and bill your clients and then you will have some good to have services. Some clients will think, oh, that's not good to have. It's an absolute must for me. For example, large number of bill payments every day. So you got to look at that component.

(20:44)

So depending upon how you structure CS, competence and segments, you got to then think, oh, this is going to be my core technology, I must have this right? And then you look at, okay, I can do this because my client is paying to three different vendors or three different service providers, different fees because I'm not doing something. So that's an opportunity. You're leaving money on the table. So for that you need a technology. So that's where you're going to look at and when you take that approach, you're actually building up. So from let's say offering six services, you might go to offer 10 services. In fact, one of my CAS research non CAS firms versus CAS firms, and there's a pretty interesting observation there. Non CAS firms offered about six different services to their clients. CAS firms offered 12 different services double the number of services. That didn't mean their technology was twice the cost or they had double the number of people, no, it was just around 1.2, 1.3, which means you have 70% more margin when you offer more services to the same clients. So you got to look at are you leaving money on the table for any of your clients? And if you s, what is the technology piece that I must bring in so that I can capture that revenue?

Ashley Doyen (21:57):

I think building on that, if it's a function that you feel like a robot doing, it's probably something that a robot can do. And so that's where we should be looking at again at technology. It's crazy to me that I've been working with CAS practices for 12 years and it's like you would think that we would be past this point of people being so scared of RPA and AI, but we're not. And there's still this big fear of it replacing jobs, but it's reminding our staff that if a robot can do it, what's it going to enable you to do? It's going to enable you to make a bigger impact on your clients and help them career map and help show them what their future will look like through with at the firm and the services that they can start to provide that previously they simply didn't have the bandwidth to do.

Chris (22:52):

Hitendra were you about to add something?

Hitendra Patil (22:54):

Yeah, I think the word robot, you got to replace with cobot. So you're going to be always existing with bots. So you're the core. So you need to do that cobot thinking all the time. And it is essential because if a computer can do something, why should you be doing that? You have better mind God has given you. I always ask this question, did God make people for operating computers? Were the hands made for it, were the mind made for it? No. That's how we are coming to the stage where AI is really taking the world by storm. So leverage that and you will find opportunities there. Lot of technology companies that are doing accounting and payroll and all those software's, everything will get infused with AI. So you got to be prepared for that eventuality, which means you got to think, okay, I'm going to utilizing entire wisdom that I have in this profession for the benefit of my clients, so how can I devote more time to that? So it's easy to figure out, okay, I'm not doing this manual work anymore, I'm going to cut down on my manual work 20% next year or this year. So if you have those targets, you'll find solutions.

Chris (24:06):

Okay, so obviously we don't want a firm's identity to be based entirely around their tech stack, but I was wondering, could you talk a little bit about how a tech stack still can be a differentiator among firms or a competitive advantage still?

Hitendra Patil (24:20):

Yeah, I think a tech stack being a differentiator is an illusion. It's a misnomer altogether. Today you're looking at let's say a hundred different software's. Most of them are in your face, you're getting emails, you're the sales people chasing you. If everybody has the same tech stack out there, how are you going to differentiate? So technology is just a baseline. What you do with that technology, using your own expertise and experience based on your own client's needs and focus areas to combine that together is your differentiator. So technology is just an enabler as of now. Previously when people went into let's say desktop technologies only and cloud wasn't being really adopted very quickly, so people who adopted early adopters of cloud went ahead and raced ahead and integrated and started offering better priced and quicker services, that became their differentiator. But now the market is level, everybody has the same technology really.

(25:19)

So try and figure out how are you going to leverage that from your client's point of view and your clients better than anybody else. Technology companies don't really know if you think, okay, your data is with a technology company, they're not looking at every single transaction, but why the transaction was made by the client. And in that case, you've got to make sure that your client feels that different value from your technology. Again, sending reports by emails is not going to differentiate sending a commentary on those reports might. So that is what I think I would say. Yeah,

Chris (25:59):

Ashley. And then what comes to mind when you think about that? What is the degree to which a tech stack can act as a differentiator or a competitive advantage?

Ashley Doyen (26:06):

So there's a lot of firms today that have tech technology, arms of their firm and value added reseller arms of their firm. And so yes, for those practice areas it can be a differentiator. That being said in regards to CAS, we're not selling the technology, we're selling our services. Again, this technology, like Hitendra said, it's just the vehicle that gets us there. But I love sharing stories and so again, thinking back to some of the conversations that I've had, it's not this mythical thing that we're going to start to lose clients to competition that's better equipped to provide services through technology. Because I'm already hearing the stories firsthand. I spoke with a firm just a few weeks ago that had a multi-entity client come to their doorstep looking for a new firm and the reality is they couldn't even support this client because they didn't have the bandwidth to support the size client based on the consolidations that needed to take place and based on the need for a rolling 12 month for CAS because the technology wasn't in place.

(27:16)

And so they're striving to move up market to larger clients, but they don't even have the technology to do that. So we had to have this conversation of before you even start to target the right clients, you need the architecture in place or you're going to continue to find yourself in these situations where you're losing out on business, not because you don't have the talent, but because you've limited it yourself based on the lack of the technology. So again, we are very, it's again, not this mythical thing. I think of people, we had talked a lot about pilot and all these Amazon pilot and all these competitors coming to market and then trying to scoop up the business and it it's happening.

Hitendra Patil (28:00):

I had one client down in Boston very focused on one industry only restaurant accounting. And what he did was he figured out some inventory items that most restaurants would keep buying consistently throughout the year. And those inventory items, he related that to nature. So depending upon the weather patterns, the cost of those goods would go up and down. For example, pork skin, if it's too hot or too cold, pork skin becomes either very expensive or less expensive. So he would track the weather patterns, go back to the inventory and it given advice to restaurant owners, Hey, go and stock poor skin for the next three months. It'll save you let's say $12,000. That was his average saving that he offered per year to a restaurant and most restaurants were paying him less than a thousand dollars. So basically he was working for free by giving that advice. And what did he do? He just used Excel sheets and tried the internet to find out the weather patterns and he said he was accurate 93% of the times in his predictions he didn't use any sophisticated technology. So how you use your technology for the benefit and you can be very creative on that.

Chris (29:18):

So I know the answer to the next question is probably going to be, it depends, I've talked to enough accountants to know that, but how often should a firm be revisiting their tech stack? And if it does depend on what does it depend? Ashley, would you like to start off?

Ashley Doyen (29:35):

I don't think it depends. Okay. I think annually, I think we always need to be a year in. So I think we had this conversation earlier about you can't pick a technology solution and deploy it the next week. Again, we have to document our processes. What does change management look like? So with that being said, start If you think you need to make a change in 2024, start looking now. And so again, every year, and I would say yeah, every year make a plan for any changes that need to be made. But you should constantly be reading articles, going to conferences, and just understanding again what's out there, what's on the horizon, but also back to the comment I made earlier, only actually making those changes when it is applicable to what you are trying to build for your clients.

Chris (30:31):

Does it depend Hitendra?

Hitendra Patil (30:33):

Yeah, so I had some clients who had technology experimentation budget every year, 1% of their top line and they had a technology champion who would go in the market and figure out actually either buy or use a trial version and keep experimenting. And today, I don't know how you do your own accounting for your software, do you expense it or do depreciate that as an asset? So if you expense it, okay, look at the change immediately because it's already no value there. But any given software, given that it takes time, core software especially to implement let's say three to six months minimum, you're looking at maybe two years down the line, I might have to change unless the software really evolves quite a lot and you will see that many times they keep adding features and all that. You may not need to change it, but two years at the most.

(31:28)

You don't go beyond that, don't think I'm going to use this software 10 years now that's not going to be possible because things are going to change very, very quickly. So between one to two years for sure. And more importantly now, the reason is technology's really changing way too fast. AI, whether we realize it or not, can really transform your current solutions literally overnight. Every single software vendor what the solve that I know is already working behind the scenes on AI infusion in their technology. So things are going to change. You got to be aware of that and hence you got to be one step ahead of it. Chat GPT with all the frenzy, it's like a separate tool. You don't do chat GPT for your accounting. What QuickBooks does, for example, chat GPT is not going to do it. And more importantly, if you put your client's data on chat GPT, you don't know where that data is landing, how secure that is. A lot of these connotations come into a picture as to how you decide, but don't go beyond thinking more than two years now.

Ashley Doyen (32:32):

I love the comment you make about technology is continuing to change and I think as a profession we've always been loyal to many of our solutions. We've formed these loyal relationships, we all know the marriage. Many people have to QuickBooks and Intuit and I think we have to be having the conversation with any vendor that we partner up with on what is your product roadmap because the solution doesn't need to be perfect today. Very few I would say, if not any solution has every single thing that it truly needs to have. But there is a significant advantage in being an early adopter and having an impact on the roadmap. So again, sometimes getting in early but then still understanding what is the vision of this vendor's solution and again, what does that product roadmap look like to determine are they working towards AI even if it is not there today. And if they don't execute, then that's where again you're not married to them. Jump ship and find something else. I know. Easier said than done, but.

Chris (33:41):

Alright, well so pretty random question here, but in your opinion, how many GL packages can a firm handle at once?

Ashley Doyen (33:49):

Yes. So we've done a lot of surveying at CPA.com around this topic. If you're not familiar, we released in 2018 our first CAS benchmark survey. We have a few left on our table out there and if not you can get it off our website, it's free for you to access. And the numbers that came out of that survey where that 75% of the top performing CAS practices used three GL solutions or less, and 16% of the top performing CAS practices used one GL solution. I think when I first started in this space, there was this big push from vendors of course, and even a lot of thought leaders out there on only utilizing one solution. But as we develop or we narrow in on niches, but having separate teams that are created around those niches, we are finding again that you may have to use a couple different solutions.

(34:52)

Like I mentioned earlier, Acumatica or Sage Intacct or QuickBooks and Sage in whatever it may be. So that is okay to have more than one, but I would, from the experiences I've had, I would discourage against using more than two because at that point training of staff becomes a challenge. You're constantly having to make sure people understand what's the technology of the day. Second standardization, you can't standardize when you're looking at utilizing different solutions, different chart of account structures in each of those solutions. How are we creating our naming conventions? I meant all you simply cannot. So again, I personally would recommend limiting it to two

Hitendra Patil (35:40):

Your thoughts. Yeah, I think very similar. The only change that I would talk about is if you are serving certain niches, so within that niche don't allow far too many software's to be used. You might look at, okay, restrict to two restaurants, construction. Don't go beyond that. Not every single accounting software can cater to every single industry. And then you're talking of your staff operating X number of software's. Microsoft did a study long time ago, very scientific study. They looked at the effect of switching in the minds when a programmer is doing something, it's pulled into a meeting, goes back and starts restarts his programming effort, they saw 35% drop in productivity. So same thing happens here in accounting firms. So if you're, your staff is switching from one software to another while they're working from one client to another, that's a cost to you. So essentially if you are in a niche or niches, if you can afford keep that staff on that niche alone, don't ask them to go into seven different niches. So their productivity will be much higher, your cost will be much lower. So all these adds up and let's say you have 500 clients or 200 clients, it can be a significant amount of money. So two or three. Yes, go ahead.

Audience Member 2 (37:03):

I was just wondering, seems to be more.

Hitendra Patil (37:11):

I don't think any GL package right now is very much infused with ai, although there has been some kind of AI going behind the scenes but not in the form that you see. It's mostly rules-based, you know, create rules and the next time things come in, you know, apply the rule and you still have classifications happening. So that's not really AI but that will change pretty soon. I know some of the largest GL package companies are working on training their AI models on these things, which is going to be very, very helpful. Yeah, go ahead.

Audience Member 2 (37:47):

So to his question's question, whose roadmap do you like two AI. If you're looking at the roadmaps of the DGL package.

Hitendra Patil (38:03):

See if I have to know name a few, I would avoid the names. But nobody's shared or disclosed their AI roadmap. All that we know is they're working on those AI and I can easily pick the largest three software companies because they have so much accounting data with them and AI is nothing but what it is trained on. So anything that is wrong in that database will get perpetrated in the AI. So any company that has the largest accounting, largest payroll, largest audit, largest tax databases with them and all cloud companies have that. Right? So serer has the largest, will have the biggest benefit in terms of producing more accurate AI. So you can pretty much take all top five software's in every single segment and be assured that they're going to be racing ahead. Right.

Chris (39:00):

Alright. And so when doing client accounting services, should firms require all clients to use the same software?

Ashley Doyen (39:10):

Yes. Well do you mean in regards to whether the client should dictate the technology? Is that the question more? Yeah, that's how, yes, my husband just had his spleen removed and I can only imagine the look on the surgeon's face if we had said we need to have a conversation about the scalpel that you're going to use prior to you performing surgery. This is the only profession that I know of where we try to let our clients or we not try, we let our clients dictate how we're going to deliver services to them. Our insurance providers, we pay doctors thousands and thousands of dollars because they are the ones that went to medical school to make the decisions on how they're going to remove that spleen. The same can be said for why your clients are going to you, you are the expert. That is why they are paying you.

(40:07)

So I would encourage that if a client is not willing to go on the technology that you are requiring that they go on, they are not a good client or you're going to charge them more, which may end up meaning they don't go with you anyways. Right? So because going to cost you more at that point and it's, you're not going to be able to effectively do your job and provide the value that you know can because you are not able to utilize the systems and solutions that you have determined as the expert is best for that service.

Hitendra Patil (40:42):

Yeah, I think I'll take that same analogy for you. Don't go to your doctor with a Tylenol and say, doctor, I have a headache. Treat me with this Tylenol doctor will say, okay, I'm going to do what I need to do and you don't tell me what I'm supposed to do. But at the same time, these clients will come because they've been using accounting software as a business software and that's why they come to you with that is ideally you should simply say, look, I mean I have my trusted mastered software that is going to give you more benefit. You don't have to worry, you can continue doing what you're doing. You want to issue bills, invoices, enter payments, you can still do that. But in my software, because what at the same time, I know firms that they say, okay, you continue whatever you want to use, you're going to integrate your accounting software with my accounting software, I will do all the programming and whatnot, but I will use only one GL software that's mine.

(41:36)

Once you say this is your monthly data, once it comes into my system, I'm going to base all my reports, statements, everything based on that. If you go and change something later on, it's your headache. I'm not going to be touching that. So there are approaches that you can do, of course you need a little bit of a technical capability, but to avoid that technological programming investment, you can minimize the number of software's that your clients should be telling you. Ideally you shouldn't allow your clients to really dictate what software you should be using. Right.

Chris (42:09):

Alright, so we actually have nine minutes left until we go onto the lunch session. So in those nine minutes, are there any questions from the audience? Anything that people would like to elaborate on to clarify or even something entirely new? Yes,

Audience Member 2 (42:24):

I think, I guess we want to be sure I understand something you said earlier about really essentially almost like changing software packages, software package for two years because I, there's constant change and the software changing, changing, but it's almost like you're putting yourself in, that might mean you're changing all of your clients. How does that play out? What am I understanding that correctly? How does that play out?

Hitendra Patil (42:58):

Yeah, I think if you look at the top most GL software's, large companies, they're always changing the software itself. So it's like a new software one year down the line. So you don't need to really throw out one software and bring in another software, but at the same time to know what can work better or are there better options, you might want to experiment maybe with 10 clients or five clients onto a different piece of software. So you're at least ready. So once you master that, you know can easily teach that to your clients. You don't overnight change something for a hundred clients, that's never going to work. It'll cause chaos. So you got to prepare for that. But at the same time, if some software is evolving, it's not necessary that you just throw that out. Right.

Ashley Doyen (43:42):

Yeah, I agree. It's not necessarily that that you're always changing like your GL solution or AP solution, but it may be what else can we deliver to our clients? So right now a hot topic is spend management advisory. And so when we look at solutions like Bill and their acquisition of Divvy, so we know that they were an AP solution, but now they're looking at how do we also start to control spend and have visibility into spend so that we can have conversations with our clients around their monthly bill bills to their vendors and where we can potentially negotiate fees as. And so it's again, how are the services evolving and what technology do we need to continue to keep an eye on so that we can continue to deliver the service. Again, not necessarily just changing GL just to change GL or whatever it may be. Does that answer your question?

Audience Member 2 (44:36):

Yeah, no, it's a little bit more what's there versus.

Ashley Doyen (44:43):

Yeah,

Chris (44:46):

Go ahead. Hand over there

Audience Member 3 (44:48):

On you see that there's more of a change going that direction than online adding Salesforce, adding manufacturing customer something. Yeah,

Ashley Doyen (45:08):

So it depends, again, go back to going back to the ideal client. I work with a lot of firms where they will still use QBO. QBO is great, but it's for a particular type of client and then they'll implement a mid-sized ERP solution like a Sage Intacct for a larger client or a client that has multiple entities where they can do the software, can do the consolidations and the eliminations for them, or looking at how can we do more with less. So Intacct has the, and a lot of those E R P solutions, their enter E R P stands for enterprise resource planning. So it's taking a look at front office and back office and how do we pull that all into one solution? How do we have the dashboards built into the solution so that we can start to still have a very strong tech stack, but it doesn't, we can maybe start to get condensed that more so point being, I suppose is still seeing a strong spot with QBO. I don't think that's ever going to change. I do think that there is a big shift though in understanding that we need a QBO and we also do need a mid-sized ERP solution to target the types of clients that we might within want within our CAS practice.

Hitendra Patil (46:25):

I think that is a simple trick to know. If you look at the advertisements by these vendors, for example, NetSuite might advertise, have we overgrown QBO? So they're talking of some level of client in terms of business volume that may be a better fit for that. And if you have those kinds of clients multiple, then it's worth looking at that, right? For one client, you're not going to be implementing a huge ERP like a software, you've got to have a niche in that. You've got to have a marketing plan for that. You want to build practice in that. Only then you look at that, right? Otherwise it's like you know what a train can do, you are using a military jet for that. You can't do that.

Chris (47:07):

Alright, I think I saw a hand in there.

 (47:09):

Yeah, Ashley, I love your comment on question. You know, build it or you build, I agree with you. I mean you first have the infrastructure and feed in. Yep. That seems to work.

Ashley Doyen (47:29):

Yeah, absolutely. So one of the, it's the same, so CAS topic but not technology specific but conceptually the same idea. One of the facilitators that we use for one of our workshops, Dixie McCurley from Cherry Becker, she always tackles a staffing conversation, the chicken and the egg. And people always say, well I don't need the clients before I can hire the staff. And she's like, the clients are going to come. So have you never want to find yourself in a position where you can't deliver a service to client or if you do it's a poor service because you're not staffed well, the same thing again goes for the technology is you're either going to lose a business or you're going to be writing off a ton of work because you simply cannot efficiently even service them as a client. So to me, I know it's one of those things easier said than done, but to me it's a no-brainer that the architecture needs to be in place.

Hitendra Patil (48:28):

I think your plan has to be in place that I'm going to make an egg omelet or a chicken curry only, then you go and buy the chicken and egg, right? Right. So it's important that you should be able to sell the service, that you have a plan to attract those kinds of customers. Then yeah, we'll go ahead and build that capacity knowing fully well that look, once I'm ready it's a no brainer. I'm going to get clients no matter what or else you're just creating an infrastructure and waiting that's going to be killing.

Chris (48:56):

Alright, I mean we've got about two minutes left. Theoretically I could just speak really, really slowly to fill up the time, but I got a feeling that you probably all want to go to lunch. So let me actually just kind of first we're going to go to lunch and lucky there are going to be two lunch sessions to choose from. One is going to be on tax workflow automation that is going to be in Harbor A. The other is on overcoming capacity challenges and that one is going to be in harbor B. So everyone really strikes your fancy, that's the one that I'm sure you could be able to head over to. And so thank you a lot to our speakers. It was fantastic. And also thanks a lot to you, our audience.

Hitendra Patil (49:32):

Thank you.