The Accounting Market Has (Finally) Moved

Hey. Hey, this is Jody Paid our here the radical cpa. And I'm just talking today about has the market moved? So I believe the market has finally shifted. Now I'm sure there are people who disagree with me, but there's enough that I've seen that I do believe that the market has shifted. When I say the market, meaning the accounting market of like mostly old school firms moving to new advanced practices. Now, what are new advanced practices? Well, a, I think it depends on the firm, but I think it means that you're starting to think about different pricing models. You're starting to think about how you're automating things. You're starting to think about your culture differently. You're starting to realize that the partnership model probably isn't the most efficient way to run a firm and that there's got to be new alternative business models out there. And you're really starting to think about putting customers first and, and really changing the firm. So what I would have called a radical firm years ago, I believe it's kind of shifted now. Right. So how do I know that? Well, first of all, when I was started on my journey, many people said, oh well, it takes 12 years to move a market. I was like, oh no, it's not going to take 12 years. Well, if you consider like kind of the Inklings or the movement as coined by Mark Koziel and Tom hood in like 2010, that means it is now 12 years. Right? 2010, 2022. We've now had 12 years to actually move the market. And it's so funny because when someone told me it took 12 years to move market, I would have never believed them. And now I'm like, oh my God, like it's 12 years and I finally believe the market has moved. So, so how do I know this or what have, what have I seen recently to really believe that the market has shifted? So first of all, I've been out and about this past fall. I've been to a few events, most recently being QB Connect. And at QB Connect, I really saw differences, differences of what the event was like versus what it was like multiple years ago versus what it was. And again, when we say QB Connect, QB Connect is a subset of the accounting market as a whole. Right? I get it. I get that there's a lot of times smaller firms there, though. There are, there were quite a few larger firms in attendance. There are bookkeepers there, there's accounting professionals. They're not all CPAs. Right. And they're not all. And, and some of Them dabble in tax, but they may not be, they may not be completely taxed. So yeah, okay, so let's take out the fact that QB Connect is a subset of the accounting market to begin with, but that market was energized and that market was young. And again, me being around for as long as I have now, when I say that I saw there everybody was younger than me or like my age and younger, and there were a handful of people who were older. But when you're talking about what the market used to be, where it was all old, middle aged men and beyond, they were all boomers and older. Now most of the market, I would say, is millennial and younger. The diversity of the crowd is significant. It felt like a regular event, not like an accounting conference. And that's different because even few years ago it still skewed predominantly female and predominantly older. And now it was really young diverse. The culture as a whole, it just, it had a different vibe to it. So, but, so that was just a physical presence. Right. And I was at another tax conference and again, most of the people at that conference were 50 and under. And maybe it's because they want to learn and they want to grow and they want to change their firms, they want to evolve them. But I would say that prior to this past year, everybody was always skewing Older than 50. Right. And predominantly male. And now it's not like that. It truly is becoming a diverse and new age. But okay, forget just the events and who showed up at them. What are the major market shifts that I see happening? Well, first of all, the next gen is opening firms. They are leaving old school firms and they are saying, I'm going to do it better. And, and I am. And they're looking at communities to help them. They're going first to digital marketing to build these firms. And they are thinking about how their firm is going to be different than the traditional firm that they left. There's always been new firm owners, but never in the amount in years past. I mean, seriously, probably every fourth or fifth person that I talk to was opening a new firm or is opening a new firm or they're taking over a firm. Right. That the shift is actually happening with leadership, which is huge and that makes a big impact. The next thing is large firms are engaging with parts of their firms to actually shift. So maybe it's not the whole firm. Now we know large firms are big ships and it's going to take a while to move them, but managing partners are on board and, and there are Pockets of innovation within these large firms. That was never the case, I would say in 2020 I started to see it happen, but now you hear about it everywhere, that the larger firms are looking to do things differently and in new ways. So that means that they'll start to change inside the firm a little bit at a time and they will shift outside. So the third thing is, is outside entrants are looking at the accounting industry as a whole. Right. So other people are looking at us and you know, we've been talking about it. At least I've been talking about it. You know, Pilot got money and you know, there's alternatives to a traditional CPA firm or a traditional accounting firm that are offering cast services and money's coming in, but the fact that private equity is, is looking at us as a whole as a marketplace, that there's an opportunity here and it's actually starting to move. I, I, I think that's, that's the other piece of it also. There's outside money coming in and creating new technologies. When you look at what was on the floor at QB Connect, there were a ton of new startups trying to build new technologies for the accounting profession as a whole. When has that happened in the past? It hasn't happened. I mean, like maybe at every couple years we'd get someone new coming into the space. Now there were seriously seven or eight new technologies that were coming in that are saying, look, we're going to focus on the accounting market as a whole and we're going to build technology specifically for them. So again, money coming in, creating new technologies, money coming in and looking at how to optimize firms. When you think about how they're restructuring some of these firms, they're splitting them apart, they're other things are happening. Those are all signs of things of a market shift that didn't exist before. They really didn't. And then I think probably, and this is probably the most important thing that's happening that I see is there's multiple communities pushing and growing more innovators and helping those who want help. So social has enabled it. I believe that Covid has enabled it because people gravitated online to find communities. And when they found communities, they found different communities than what they were used to. They weren't necessarily only with their state CPA society, though there are, or with an older type of community. They went online and all these new communities really emerged. I don't want to say overnight, but in the last three years, right, they have, they've really evolved. And so that's huge. And so what's going to happen is, is those communities spread, right? And, and that's, that's the spark that, that's that that actually makes a movement happen, that makes things evolve, that makes things, you know, just move faster. And finally what made it happen? Well, we all know Covid pushed it, right? Covid pushed it because people had adapt, they had to change. And now they're going back and they're starting to think about how they changed in the past and what they really want to evolve to, how they want their cultures to come through. I think they're starting to wake up from that tax fog of being in the tax season for three years and some folks just die. I mean, honestly, their firms just went away and that's okay. And some firms have said, oh, like these changes are too much and they're reverting backwards. But I think those firms are fewer and far between. I think there are more firms who have kind of pushed over and said, okay, how do I keep going? How do I keep building the momentum that I have with what I've learned to do over Covid and beyond? And now how do I make my firm, how do I get those tools to make my firm optimized for those kinds of things? And I think that's huge. I think it's, I truly, I got back from QB Connect thinking, okay, the market has finally moved. I've been waiting 12 years for this, Right. And I would be curious as to what some of the other thought leaders think, if the market's actually moved or if it's just me with rose colored glasses thinking that it has. But I truly believe it has and I'm excited for it and I'm excited about it. And what does that mean? I honestly, it means that we're going to be ready for the next market shift that's happening. Oh, you know me, I'm always pushing the boundaries, but as I think about artificial intelligence and what's coming next, then we needed our market to catch up to where, like kind of where it needed to be so we could push it forward. And that's what I see happening is the ability to keep pushing and pushing forward. But I think the good thing is, is I'll say the majority of the accounting profession has kind of caught up a little bit as they were really far behind and now they're starting to get there. And some other just tidbits. When I hear large firms and I hear them actually making the shift to qbo, like they're taking all these people off a desktop. Huge. Huge. Because it all starts at the cloud. You can't do things with data if it's not in the cloud. Desktop doesn't help you manipulate data. And on desktop can't get you to the next level. So. And when I hear about large firms having large numbers of QBO clients now, I see that, okay, actually, things are moving and it seems like many of them can't migrate their clients fast enough now. Which again, an amazing thing to hear, an amazing thing that we as a profession should be excited about and just really excited to hear that the market shift is like, I, I think I'm going to nail it and say it finally has shifted. I don't know. You hear it from me first. Those of you who disagree with me, feel free to tell me, but I really believe the market has shifted. And this to that person who told me it takes 12 years to move a market and it was an M. And a guy who was working for Wolters Kluwer at the time, I can't remember his name. He. And he was the one who said it takes 12 years to move a market. And now that market's moved, it's 12 years later, so it's time to move the next market. Right. Awesome. Jody paid our here the radical cpa and I can't wait to hear your thoughts on if you believe the accounting market has finally shifted or not. Thanks. Bye. Bye. It.