How Automation & AI are Changing Accounting

In this episode of The Faces of Business, David Hartley, Partner-in-Charge, Advisory, Anders CPAs + Advisors, shares his insights on how automation and AI combine to change the accounting world.

In this episode of The Faces of Business, David Hartley, Partner-in-Charge, Advisory, Anders CPAs + Advisors, shares his insights on how automation and AI combine to change the accounting world.

David delves into the interplay of Automation and AI in the accounting sector. His insights are invaluable for those eager to understand and leverage the latest trends in technology to enhance their business operations. His work leading the Anders Technology team exemplifies his commitment to integrating managed technology, cloud services, and data analytics into the accounting world.

David Hartley brings over 30 years of experience driving innovation and leadership in business and technology. David’s transformative approach at Anders is revolutionizing the accounting field, blending technological advancements with traditional CPA expertise.

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David’s extensive background includes roles as a Chief Information Officer, Big 4 consulting, and impactful leadership at Arch Coal. His innovative technology strategy, cybersecurity, and business intelligence strategies have earned him the Missouri Society of CPAs “Impact Award: Outstanding Innovator.” He also hosts the ‘But Who’s Counting’ podcast, offering more pearls of wisdom.

Damon excitedly begins the show, mentioning a recent post by David, also known as Dave. The post details a study indicating that the accounting or CPA world is poised to undergo AI-powered transformation.

In response, David shares his perspective. He cites a UK Department of Education study highlighting the top three areas most prone to AI disruption: management consulting, financial management, and CPAs.

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At Damon’s request, David shares his journey of combining technology and accounting expertise. Starting with a role at IBM in the 90s, he later transitioned into becoming a CPA, spent a decade in a Big Four firm as an auditor, and then pivoted to lead technology for a public company. Returning to the CPA job, Dave now utilizes his unique perspective as a business advisor.

With five years at Anders CPAs, a top 100 CPA firm, David is passionate about innovative approaches that align well with the firm’s progressive initiatives.

Damon inquires David about the challenges and growing pains Anders CPAs experienced during its expansion from 200 to over 400 employees.

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David enumerates some challenges and complexities of scaling. In his view, talent constraints and the need for evolving skill sets pose considerable challenges. He points out business owners’ hurdles, notably lacking financial expertise and making poor strategic financial decisions.

To tackle these issues, David introduces Anders CPAs’ virtual CFO practice, tailored for fast-growing organizations in the three to 15 million annual revenue range. This service addresses the specific needs of founders who, while excelling in areas like engineering or sales, lack financial acumen. The 70-person virtual CFO practice aims to assist these clients in making informed financial decisions, ultimately providing significant value and impacting profitability positively.

Damon asks David to compare and contrast the transformative impact of technology, particularly OpenAI’s ChatGPT in 2023.

David reflects on the period from 2015 to 2022. He discusses the transition where companies moved past hesitations and started recognizing the importance of technology investments. In 2015, as he exited his public company CIO role and entered the middle market, Dave encountered clients still contemplating technology investments. However, by 2022, new practices emerged, with businesses realizing the impact of technology, investing, and having the right strategies and personnel.

Similarly, David points out that the COVID-19 Pandemic further accelerated technology investments from 2020 to 2021, but the shift had already begun in the preceding years. He observes that companies have crossed a tipping point, understanding the influence of technology on their operations.

Moreover, David talks about the data-related work environment in 2015, adding that silos and on-premises systems hindered seamless communication. He contrasts this with the present-day cloud adoption, enhanced SaaS solutions, and the widespread use of APIs. These advancements, coupled with a growing emphasis on data, have created a multiplying effect where improvements in one area accelerate advances in others.

David describes the current period as witnessing a significant acceleration, where data correlation, dashboarding, and increased data visibility happen simultaneously. Adding ChatGPT to the mix creates unprecedented types of possibilities.

Damon applauds the flexibility recent technological advancements provide. Now, organizations no longer need to seek a one-size-fits-all solution.

Dave responds with small businesses’ improved options, particularly with QuickBooks Online (QBO) and its ecosystem tailored for this segment. He anticipates a boost in productivity when AI, like ChatGPT, is seamlessly incorporated into everyday applications, creating observations, linkages, and suggestions within the workflow.

Damon reflects on the transformative role of such integration to reclaim valuable time as AI takes over repetitive, routine tasks.

David shares an experience from the Digital CPA conference where AI showcased its capabilities in assisting with Excel-type queries. The AI not only performed the requested task but also proactively provided suggestions for preventing future issues and offered a self-check mechanism.

Likewise, David talks about the transformative power shift within the CPA profession. Traditionally, mentorship and knowledge transfer occurred from experienced CPAs to new entrants. However, with the influx of highly talented individuals from campuses, there’s a shift in dynamics. With three decades of experience, David acknowledges that these new hires think differently and possess expertise with modern tools, bringing valuable insights he might not have considered.

The guest discusses some more changing dynamics in the CPA profession. Traditionally, junior professionals would spend their initial years doing foundational work, such as processing tax returns or audits, before moving up the ranks. However, with AI, a realization has emerged that employees can learn much of this entry-level work quickly and resort to automation.

David further explores the implications of this shift, suggesting that professionals may rise through the ranks faster, but it also introduces challenges and risks. He notes the ongoing talent pipeline issue in the CPA profession and underscores the need to balance attracting new talent with the impact of evolving technology.

Damon reads a question from an attendee named Jordan about the percentage of CPAs logged into ChatGPT.

David responds that during his presentations, he has observed a growing percentage of attendees who have logged into ChatGPT, surpassing the 50% mark. However, the adoption rate is still less than 30% in the general population. He mentions the progressive firms at the Digital CPA Conference actively exploring and piloting AI tools, with existing tool providers offering AI-enhanced versions.

Damon, impressed, appreciates the opportunity for accelerated learning with AI. He gives an example of a firm leveraging AI for tax returns, showcasing the potential for increased efficiency, accuracy, and faster customer service, positioning them ahead of competitors. Moreover, he mentions Jordan’s second question about quelling the fear of AI eliminating positions.

David advocates addressing the fear of AI eliminating positions through proactive communication and education. He believes the objective is not to reduce employees but to provide them with the best tools available. Employees can engage in more value-added activities by repurposing time spent on mundane tasks.

Towards the show’s conclusion, David expresses his excitement about the innovations and developments planned for 2024 at Anders. As the advisory practice leader, he aims to identify opportunities by incorporating boutique firms or individuals with expertise that complements their existing services.

David advises smaller boutique firms to join Anders, which can handle administrative tasks and provide a platform, freeing them up to focus on their unique capabilities.

Lastly, Damon requests Dave to talk about the potential consequences for firms that do not adequately embrace technology.

David believes that firms that do not embrace technology risk losing competitiveness over time. In contrast, clients may be loyal as more success stories emerge about businesses benefiting from proactive and technologically advanced CPA firms. He suggests firms invest in technology to retain their best employees and ensure positive prospects for young CPAs.

The conversation ends with Damon thanking David for his time.

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Dave Hartley, Damon Pistulka

Damon Pistulka 00:02
All right, everyone, welcome once again to the faces of business. I’m your host, Damon Pistulka. And I am very excited for our guests today, because we have Dave Hartley here. Today, we are going to be talking about how automation and AI are changing accounting. And Dave is a partner in charge in the advisory part of Andr CPAs, out of St. Louis, Missouri. Dave, thanks for being here today.

Dave Hartley 00:30
Thanks, Damon. Appreciate it. Yeah. Now, it’s a very exciting time in my world in the CPA world. So I’m excited to share some of the insights, some of the things that I’m seeing from my perspective.

Damon Pistulka 00:39
I know, I know, as we were getting on to get ready, you had just shared a post earlier today, that said something to the effect that a study you had read about, you know, the accounting or CPA world was one of the things that was going to be rocked the most by AI. So I think this is timely. Yeah,

Dave Hartley 01:00
I think, you know, my perspective is, I think it’s going to have a significant impact. And I’m a technology guy, I’m a CPA, but I’m also a technology guy. And from my perspective, some of the things that I’ve seen and see coming, are going to be significant. And one of the things I posted about today, yeah, it was the UK Department of Education study. And I always look for these data points to try to put some things together and figure out, Is this real? Is this as big as the internet? Because I think it is. And so the the top three, the top one was management, consulting, and business analysts that will be the most disrupted. Second was financial managers, and directors. And then the third was accountants. And so when I look at that list, pretty much when you think about professional services, accounting CPAs, the top three basically hits very close to home in our world. And and I agree with that, I think some of the things that we’re seeing, and just in general, it’s going to be a fascinating time over the next couple of years to watch this evolve. Yes,

Damon Pistulka 01:59
it really is. It really is. So before we get going down the road too far, Dave, let’s talk a little about your a little bit about your background, tell us how you you got here to Anders, because you you’ve been a CPA at a big firm, then you went into technology and some other things back into CPAs. Let’s just listen to it. So we can kind of put this history together in one package. Yeah,

Dave Hartley 02:20
I’ve always been interested in technology. And actually in college, I worked for IBM as their campus sales rep. Back in the 90s, when the 386 SX, if you if you’re that old to remember that. But when that came out, but I had a very smart, very smart mentor friend of mine who said, Dave, study accounting, you don’t have to be an accountant, but you need to understand accounting. And I was like, Okay, that sounds good. So I went and studied accounting, sort of naturally was good at it, liked it. So came out of school, took the CPA exam became an auditor, and Big Four spent a decade, the Big Four firm. And then I pivoted to technology. And I had the opportunity to lead technology for a public company after kind of moving up through the ranks. And I did that for six years. And that was a pretty amazing opportunity. And then after that, then I came back to the CPA world. And I think as a business advisor, I think that perspective of having been in the CPA profession left and went to the technology world. And now bringing some of those insights back to the CPA world, I think has made me really effective in advising clients in my new role. And then also so I’ve been with Anders for about five years, the firm specifically, is doing some innovative and progressive things. And so that mashed up very well with some of the things and I’m really passionate about. And so that being the case, that’s how I ended up at Andrews CPAs. And advisors were a top 100 CPA firm north of 400 employees, with now employees and clients really spread all across the

Damon Pistulka 03:49
country. Nice. Nice. So when you started, you said you had about 200 employees. Now you got 400 Plus, you’ve added service lines. What are some of the growing pains? You know, I mean, because we talk about things a lot we end it just seems like so many companies exploded in the last five years.

Dave Hartley 04:09
Yeah. And I think probably one of the biggest issues that I see in this, this is not news, certainly not to you, but it is so hard to scale. And and when you look at you know, even for a growing organization, that is a difficult process to go through that maturation process. You’ve got the talent constraints, you’ve got people that maybe were perfect when you were a $5 million company, but when you’re 25 or 30 or 35, maybe that’s not the right skill set. So that whole process and rapid growth can create a host of changes, and that the challenges of trying to grow and scale a business in today’s talent constrained. Environment is is just really challenging. So yeah, we see a lot of challenges. We see business owners who are not financial people who are trying to make finance She’ll decision. And that’s one of the things our virtual CFO practice does really well. So we work specifically with fast growing organizations between, say, three to 15 million in annual revenue. And basically what we do a lot of those, you know, the owners of those companies, a lot of them are founders who may be engineers, or they may be really good at sales, but they’re not financial people. And so they, nobody who can help them with financial forecasts and help them make better business decisions based on financial data. And that’s really we have a 70 person, virtual CFO practice, that that’s really one of the things that they do really, really well is for that particular niche of clients, and especially in a couple of selected verticals, the value that we can bring in that space is significant, because if we influence one to three better business decisions across the course of a year, that easily pays for, you know, our fee, and then, you know, significant profits. Lots

Damon Pistulka 05:54
of return. Yeah, that’s cool. Well, Jordan, let’s say hello, Jordan, you’re stopping by said he’s ready to learn. So Dave is not going to disappoint today. I’ll do it. Yeah, do it again. But I’m pretty sure that this is going to be a very interesting conversation. So you’ve you’ve been in the CPA world for a while. Now, coming up to the this is this to me 2023 is a breakout year in a lot of lot of areas because of this, just face it open AI chat, GBT, we have not been inundated with this kind of technology, really, since the internet. And and on demand internet, you know, constant on like we are we are now. So let’s talk about pre pre chat GPT. What were some of the things that really hit us, say 2022, to 2015 to 2022, kind of time rate timeframe? And then how do you think that’s going to be accelerated as we go forward? Because of automation and AI?

Dave Hartley 07:09
Yeah, I think a lot of things hit their stride in that 2015 to 2022 period. And it is crazy that Chechi PT hit just over a year ago. And, and so as we’re as we’re looking at timeframes and parameters, you know, I think there was a lot of I think businesses got religion around, sort of getting serious about technology, if I go back to 2015. So that’s when I exited my public company CIO role. And that’s the first time I started working in the middle market. And there were a lot of clients still in 2015 that I worked with, that were still like, the technology investments, we don’t know, you know, kind of, you know, thinking things through. And so I would come in as a virtual CIO, and I would help them with roadmaps and strategy and those types of things. And there were still a lot of middle market companies that I would say, we’re not there. And then when I look 2015 2021 2022, going through the pandemic, I think the pandemic dramatically accelerated investments in technology. But I think in that in the 2015 to 2020, period, I think a lot of companies sort of past that tipping point of, Oh, my goodness, this is really significant. We better invest, we better have the right people, we better get serious about this. And I think we also saw that in the in the software space of the solutions that are available to these companies. Yeah, because when I go back to that 2015 space, you know, it was mostly, you know, you’ve got to have SAP Oracle. And then there’s just this proliferation of SaaS based tools that really became perfect for small to midsize businesses to be competitive with the big guys. And so I think that all happened. And that was kind of the sort of the 2015 to 2022 area, people getting serious about automation and about leveraging technology to improve business outcomes.

Damon Pistulka 08:55
Yeah, you you hit one of the things there that I mean, you look at that last, like you said, the last few years before the pandemic through the pandemic, just the last three, four years, the options for companies now Software Solutions is so much greater than it was. You know, it seems like every year, there’s just a multiplication of the the options that we have. And the existing options get so much better. I mean, you wouldn’t think I mean, I’m, I’m talking with companies now that are smaller, I mean, sub 20 million that are putting in Oracle, NetSuite, and things like that, that you had that just wasn’t being done in those size companies. Four or five years ago, because they

Dave Hartley 09:43
Yeah, the tools have gotten so much better. Yeah,

Damon Pistulka 09:45
yeah. And I got to believe that that’s helping people like yourselves in the finance end of it to be able to get better information to really make better decisions. Yeah,

Dave Hartley 09:57
go back to 2015. lot of the data is still in silos, it doesn’t talk to other pieces of the organization, there may be on prem stuff that’s still there. Now, you look at today that with, you know, the advent of the cloud and the SAS solutions becoming much better, and then the prolific proliferation of API’s, and people getting serious about data, kind of all of those things have started to evolve. And as a result of that, kind of, and I can’t remember exactly what the term is, but it’s the effect of as one thing gets a little better, it accelerates something else, which accelerates something else. And I think that we’re just now in that period that it really picked up. Now it’s like, well, then I can do this with this data. And I can take this and I can correlate it with that. And then I’ve got dashboarding. And I can actually see and have visibility to the data. And like, all of these things are happening simultaneous, but the multiplier effect of the impact of that is, is more than just the discrete parts of one plus one plus one equals three. It’s not one plus one plus one equals seven. And it’s those types of things that we’re seeing, and then you start throwing Chet GPT and AI powered technologies on top of that, and then it’s like, Oh, my goodness, what what are we going to unleash?

Damon Pistulka 11:06
Yes, yes. I mean, you hit on a couple of things there, that is really cool. What’s happened in the in the last few years is really, it, you don’t have to try to find one solution in one big package. There’s so many you talked about API’s and the advancement of API’s and other tools just to move data between systems to be able to really give your organization the solution that they want, not necessarily what comes out of the box, but really is good for them in their industry in their size in their goals. Yeah. Which is amazing for the end that I get to work in and and that’s where we’re doing business strategy and decision making, and and how we’re really scaling those companies. And then seeing the results of our efforts, it’s just being able to get that data at, you know, when we started in these kinds of things, you only saw things that when the financial statements were generated at the end of the month, really, a lot of times and now we’re being able to not only some of it minute by minute, by transaction by transaction, if you want, and which is gives us so much better opportunity and so much more opportunities to make better decisions. Yeah, especially

Dave Hartley 12:18
in that sub 20 million space. Where before, there weren’t a lot of good options. But now with what what QuickBooks has done with QBO, QuickBooks Online, and that whole ecosystem of things that are specifically designed to plug into that, just as you know that that’s brought a significant amount of value. Now one of the cool things that I’m watching now, that is really interesting. And like every day, every week, there’s more AI announcements in software products, and you’d sort of expect to see those but sort of what we’ve been through the last year, you know, chat GPT is great, it’s amazing. But where the real power hits, I think is when AI and tools like chat GPT start being plugged into our existing business applications. And when that happens, because there’s a lot of people’s like, oh, yeah, I need to remember to go to Chet GPT, and ask that question and that kind of stuff. So it’s like, it’s this thing over here, as opposed to when it gets baked into your applications, and you start seeing observations and linkages between things and suggestions, when that starts to happen. That I think is sort of when it turbocharges to that next level of productivity, because it’s not this separate, discrete thing, it starts to be, you know, into, and when I think about AI and automation, then it’s like, all this stuff starts to feed on each other. And you can do things quicker, more rapidly, the AI does, you know, can can take care of a lot of things that, you know, maybe you had to do manual work on before. And suddenly you’re spending your time on more value added things. And think as these productivity shifts start to happen, and people repurpose their time, from things that aren’t that value added, then I think that’s when things get really interesting.

Damon Pistulka 13:52
Well, yeah, you just you just hit something it’s like so if, if I’m, if my AI is connected into my business system as one, and daemon is doing something, and I’m doing it over and over and over the AI, the AI can say, hey, Damon, do you want me to just do that for you? And then do you want me to give you the output, so you can make sure to check that I’m doing it right. You know, I mean, you just think of these kinds of things that it just hit me. It’s like how, how wild would that be to be able to one day see that then tomorrow? It’s working, and I just freed up an hour of my day.

Dave Hartley 14:27
Yeah. And so actually, so last week, I was at the I was at the Digital CPA conference in Las Vegas. And I love that that’s my favorite event of the year for the CPA world. Because that’s when the most progressive, most innovative firms come together and their leaders and their professionals and you get to compare notes and kind of see some of the things that they’re working on. But in one of the presentations, there was an example of exactly that, where it was basically an Excel type question, help me understand how to do this and do it in this format and those types of things. And so the AI went out and did it, but then at the end it said exactly To your point, oh, and by the way, if you want to prevent this from happening in the future, do this. And if you want to check if I did it right, you should do this. And it’s like that. Those are the types of things that you start to see glimmers of and it starts to be mind blowing of, it’s now suggesting things I didn’t even ask it about. But it knows that I need to know that and it’s bringing it to me. And that’s when a lot of these concepts start to get extraordinarily interesting.

Damon Pistulka 15:26
Yes, yes. And that that is why I think, now we are in such an exciting time when you talk about automation and AI and accounting. And in business in general, because we, I mean, just think about this as simple thing that I use. And I use every once in a while. And I’m not by no means an expert. But if you don’t know what to do in Excel, if you know how to describe it into chat GPT does halfway, it will teach you new things that you would never learn. You can’t go on and searching Google and find, but it tells you exactly how to do it and says copy it into the the code into your Excel formula and just modify it. That is that’s a that’s just a little glimpse of the easy stuff. It does. Yeah,

Dave Hartley 16:12
yeah. And so So let’s, let’s talk about that for a second. Because that is a fundamental power shift within a lot of companies, but specifically also within the CPA profession. Because when you think about it, you come into the CPA profession, a lot of times you’re taught by other CPAs. And it’s kind of a mentoring type profession. And then when you get to the top, you’re the guru, you’re the person that has all the answers and all the experts, all the expertise. Now what’s happening is that we’ve got some incredibly talented new talent coming into the firm off of campuses. And when it’s interesting, because now, you know, here, I’m the guy, I’ve got three decades of experience, I should be the guy on top that knows everything. And actually, what I’m finding is a lot of the new hires coming in, they think so differently, they know these tools, and they’re bringing great insights to the table of something that I wouldn’t have even thought about. So the whole power being at the top, I think smart leaders are going to recognize that there are people and technologies that probably as a leader you don’t know anything about. And so you need to tap on those people who have the more recent experience, maybe have been at a different company and can bring you some insights on that. Or if they come off campus, you know, one of the things I worked very closely with, with my alma mater, to try to make sure that they are bringing those types of things into the classroom, so that when their students graduate, they’re exceptionally competitive when they come out. And that’s the types of things that we’re seeing as an employer, when we bring these these students in off campus, that they’re bringing us some great expertise and some great insights, that actually they have better ideas on how to get things done faster. Automation ideas, different ways to use some of these technologies, than somebody that’s been around for three decades is going to know how to do.

Damon Pistulka 17:54
Yeah, you’re, it’s like the difference between my son going to figure out how to fix something in me, his first thing is going to YouTube, because he knows is there. Yep. To me, I might search the internet or some other way or talk to somebody about it. But that is a great point. Because it also in the CPA profession, or a lot of other ones really allows someone coming in to start performing at a much higher level faster.

Dave Hartley 18:25
And that’s that’s another interesting point. And there was actually I saw a write up on this earlier this week, where some of the big four firms are kind of coming to that realization and making that point, which is traditionally in a lot of professions, the CPA profession being one of them, you come in and you spend your first two or three years doing stuff, that’s not a lot of fun. So if you’re coming in and you’re a tax professional, you’re just going to crank out hundreds of returns. If you’re an audit professional, you’re going to crank through audits, and you’re going to do sort of the grunt work to learn how it works. And then once you do that, then you get a little more senior, you start supervising engagement, start supervising people, and then you move up through the ranks. What’s when you think about okay, well, now a lot of that work, that the lower level professionals come in and learn on now can be done through AI. So then you start thinking about, well, maybe in the in, you know, if you go back, you know, even today or a few years ago, well maybe how much how many tax returns does somebody need to do to really get exposed to enough of the concepts? You know, maybe it’s 40, maybe it’s 400, but it’s probably not 4000? Yeah, and you start thinking about that. It’s like, okay, so suddenly, I can I can turbo charge these less experienced professionals, by supplementing their ability with these tools, and then starting to think about the implications of that. It’s like, well, now they can rise through the ranks faster. If how do we solve this challenge of the old way of learning was by doing a lot of stuff and doing the heavy lifting, and now when we start to relieve that a little bit, sort of that creates opportunities, but it also creates a risk. And that that I think is going to be one of the things that will be interesting because if you’ve been following the CPA profession, we have a talent pipeline issue. And I do a lot and I work with young professionals and I work on campus, and I try to educate people about the CPA profession is actually a really great place to be. And you can have some fun along the way. And so by by trying to get people into the profession to help solve the pipeline issue, but then on the other hand, we also have this technology that’s coming out. And as our tools are getting better, just like computers, and the internet, and Excel helped us get better and do things more efficiently. Now you start adding that on, and it’s like gonna go to a whole other level, where we can get these folks up and being more productive and doing the things that they want to do. As opposed to having to spend years doing things that maybe aren’t so fun, you can get there a lot faster.

Damon Pistulka 20:54
Let’s just, let’s soak that in for a minute. Because you said something there, Dave, that was was really, really poignant. And important. I just want to say hello to as vital. Thanks for being oz. Valdo. Thank you for being here today. Jordan asked a question. Let’s get to Jordan’s question real quick, what percent of CPAs? Do you think have logged into chat? GPT?

Dave Hartley 21:17
Okay, so we act and every time I do a presentation, I usually ask this question, I asked that exact question to find out just to get a pulse of kind of where people are at. Generally, I would say back in the summer, when I did this, I’d say I probably only got maybe 20 to 25% of hands going up. Now. Now when I asked the question, I definitely get over half of the room to say yes, we’ve logged into chat GPT. So I think we’re over that 50% Mark, I think in the general population, I think the latest stats that I’ve seen are, it’s still somewhere less than 30%. So when we talk about the impact that this can have, but still there’s this massive amount, and Daymond when I think about business owners and people out there who may feel exposed because they’re not using chat GPT. And they hear all this hype about AI. And they don’t know how to close that gap between there’s something there, but I’m so far over here. And and you know, how do I get started? How do we move things forward? But But I can tell you at that at the Digital CPA conference last week, that sort of the folks who are really in there playing with the tools, firms are doing their identifying use cases, they’re starting to pilot different tools, we have a lot of our existing tool providers that are coming to us with their AI, either plugins or their AI enhanced versions. Of course, they want us to pay for those. So you know, how much productivity can I get for it. But I think there’s a lot of things and the more progressive firms are really out there looking at this stuff, because I think all of the firm’s that, you know, sort of are in that peer group and the folks that we talk to, they all are thinking that this is going to be significant. And you know, none of the firms really want to get left behind.

Damon Pistulka 22:57
Yeah. Well, you talked about this, and this is, when we were just earlier just a second ago, you were talking about how this will allow young professionals to accelerate their knowledge base and be able to handle you know, more advanced, traditionally advanced work faster. I really think it’s the work they want to be doing. If you’re a progressive firm, you’re gonna get left behind because if I’m Damon and I’m graduating from school, and I go to Anders, and Andrew says, Yeah, we use AI extensively, we know you’re using it coming out of college, what this is going to do is you’re going to be at this track at year two, you’re going to be this year, three, five, whatever it is, and then you look at somebody else’s career track, it might take them five years to get what you’re getting into, because that AI is taking care of a lot of that the the mundane that is necessary now, to get to that point, which would be a huge recruiting tool. Yes.

Dave Hartley 23:58
So we think the high performers are going to see that and recognize that as a significant differentiator. Yeah. And so they they recognize that not only so we will be competitive on salaries and everything, but I think but I think that environment of, hey, I want to be over there, because that’s going to give me the opportunity to work with the greatest tools in this progressive environment with people who understand that, you know, the CPA profession is changing. We are definitely doing that embracing that. And we do think that’s going to be a differentiator. One of the things actually we’re doing tomorrow, we’re doing the first ever Anders Innovation Summit, where we have three World Class speakers that basically work with startup companies, and they’re all extremely experienced, they work with companies they’ve grown, they built companies founded companies exited companies, and they’re going to come talk to us because they work with with basically from an incubator standpoint, and they’re bringing all these technologies as part of this incubator process and what they’re doing now and what we’re partnering with them on is they’re now bringing this type of in information to firms and companies to help jumpstart innovation within, you know, not not just in the startup world. And so we’re doing that tomorrow, we’re doing a half day event. And so we’re excited about that. And we’re in, we’re seeing more and more of our people who are interested and excited about this, and are starting to play with the technology, starting to learn about it. Because there’s something to be said just from, you know, Korea, if you haven’t done one, if you haven’t done it, create a chat GPT account, it’s free. And then you can start playing with it and open if you keep a browser window open keeping it as one of your tabs. And then you have to start two or three times a day thinking about what can I do today that I would do differently? Or maybe I’ve got a question. Rather than me going, like you said, rather than going to the internet or going on Google and doing a search, let me just put this into chat GPT and see what it what it can do. And I think what you’ll find over time, and there’s lots of other tools, there’s Bard, there’s different things out there, but find something that you’re comfortable with and just start playing with it. Because I think you’ll have those those revelations that will start to happen, like we discussed earlier, where you’ll do something and then we’ll make some suggestion that you hadn’t even thought of that, you’ll start to get a glimpse to some of the things that are coming, and the more familiarity that you can get with that. And that’s one of the things we’re encouraging our people to do is to experiment with this. Because the more custom you get to it, the better you’re going to have the insights about where the technology is going, like for example, now, when I’m in my LinkedIn feed, I can easily pick out this was obviously written with the help of Chet GPT. And I and I’m not knocking using a tool. But the thing that it doesn’t create, it’ll do the blocking and tackling, but that it actually posted just about it, which by the way, connect with me on LinkedIn, and I post about a lot of this stuff. So Dave Hartley on LinkedIn. But when you go and you look at some of these things that are happening, that familiarity and really sort of being around it, you start to recognize trends and patterns, and you start to see what’s what’s coming. And you can start to see what’s next. And in this era, the ability to sort of know around the corner be able to see around the corner is going to be huge in terms of as these things start to start to evolve. Because personally, I think one of the big differentiators, the company or the firm that designs and builds their their teams to embrace these technologies, and actually build them into processes and workflow and have people being open to change and learning these new tools. The companies and the firms that do that are going to be the winners. And I think when you in 10 years, when we do those surveys about what are the characteristics of firms and pn companies that have really thrived in the last decade, I think that will be one of them. So anything you can do today, to prep your workforce set this expectation that we want you to explore, we want you to discover, we want you to be creative, and we want you to try things, and they’re not all going to work. But at the end of the day that experimentation is going to be key to fueling the innovation that is really going to drive your company forward.

Damon Pistulka 28:05
No doubt, no doubt. And you talked to us a minute ago to about the people that are mentoring in this in these young people coming in. And I don’t want to I want to come back to fueling AI. But I think also it’s exciting for people that are experienced that are mentoring young people now in the CPA field and many other fields too, because there’s a chance for them to learn faster than they have maybe in decades. And their experience will help their teams and those other people that they’re mentoring, learn that much faster with less mistakes that they had to go through. I mean, I think this is just so cool in so many facets, it’s for the experienced person is for the new people, it’s for the clients on the other end are going to get the benefits of this. But Wow, such a time and like you said designing your team and processes to embrace AI is is going to be significant mean significant advantages for the companies that do it because just take your example of the the entry level CPA person coming in and having to do 4000 tax returns or the other firm that’s going to to have ai do those tax returns and somebody may be doing the right checks whatever they do, but look at the efficiency gains that are going to happen in that that firm is going to be better plus, not just an efficiency in the firm’s gonna make more if they’re more efficient on them, but accuracy taken out human error and speed to the customer because if this stuff can work 24/7 And we’re we’re taking our time to do the the validation piece of it only. We can process things so much faster. You’re back to the customer that might my competitor down the door down the road, no matter how big they are, they can’t keep up. Yep.

Dave Hartley 30:06
Yeah, this is gonna be so much fun. Yeah. And Damon, I agree. I agree with all of those. The other one that I think is huge, is happier employees. And so when I think about when all those things happen at the end of the day, if my people are doing the things that they’re good at, that they want to do, that they’re passionate about, and they can see that they’re making a difference and having an impact, that’s going to fuel satisfaction, which is going to fuel so many other things. And I think that’s a big part of it, as well. But but to your earlier point, yeah, I mean, I learned from my kids all the time. So my kids, I now have four kids in college at the same time, oh, my wish was not the planned. Thankfully, I put money away in the 529 tuition plan, but seven year span of my four kids, but right now they’re all in school at the same time. But it is fascinating to see how they solve problems. And they’ll be doing something and they’ll be talking about something and I’m like, What do you show me? What are you doing? How are you doing that. And some of the tools that they’re using, that they’re being exposed to some of the ways that they solve problems are things that I never would have even thought of? Because I think one of the things about AI and we talked about this. So I’m active in the Missouri Society of CPAs. And we’re talking about, you know, right now why and somebody asked the question, how many CPAs are using chat GPT. And I think part of what we’re trying to figure out the messaging around, but it’s like aI solves problems, you don’t even know that you have, because we have become so accustomed to solving the problems, the way that we solve them. And we’ve gotten really good at it. And that’s what’s helped us progress over the last couple of decades. But now, there’s a completely different way to solve that problem, that likely we wouldn’t have come up with. But by observing embracing these people with different and it’s not just age, there are technology and oriented people that are being, you know, very innovative, that are not right out of school. So it’s not necessarily an age thing. It’s really that openness, and that willingness to experiment and try new things. And I think you know, so I see that with my kids all the time, they’re not stuck in the way that they’ve always solved that problem. It’s like, that’s just what I do that you know, what not with my kids with a lot of CPAs have been doing things a long time. It’s like, well, that’s just how we do it. And it’s like, well, that’s fine. And you can do that in four hours. But did you know that there’s a way to do it in 30 minutes. And as we look at this talent pipeline issue, I think that’s going to create all sorts of opportunities for how we become more productive with the limited time everyone has in their

Damon Pistulka 32:34
in their day. Yeah, yeah, you make a great point there when the talent pipeline is short, these efficiency gains are huge for these companies. Jordan asked another question here. He said, How do you quell a fear of AI eliminating their position?

Dave Hartley 32:50
So I think on that one, I think it’s it’s got to be education. And it’s got to be from leaders, like when we put out and I would encourage CEOs, founders, people in their companies, when we put out messaging as it relates to innovation in AI. It’s not about and we’re very clear about it, they may think sort of the hidden agenda is to reduce employees. But what we try to go out with is, we want you to have the best tools available. And we want you to learn how to use these tools. And it’s so it’s about how can you get better as a professional and do the things that you want to do, as opposed to having to do things that you don’t want to do that you don’t feel add a lot of value. And so by being proactive with that communication, and letting people know, our objective is not to do that our objective is to take the two or three hours of your work day where you do stuff that you don’t want to do, if you could repurpose those two or three hours to things that were more value added. Because you leverage the tool that helps you get the mundane things done faster, then that’s a win for everybody. Because as a firm, we can start to do more things as a company, you can start to address things that maybe we all have things that are on our to do list that we can never get to. And that’s the kind of thing that if you are able to get through that done and you have that extra time, what would you do, and I think that’s where the people who are creative, the people who are in that, and I write about I talk about this on LinkedIn as well, which is AI will do a lot of very average work and get a lot of things done. But what it will not replace are those true human elements of creativity, the ability to influence the ability to communicate the ability to you know, there’s so many things that the AI will get really, really good at, but that human to human relationship and the CPA business is really it’s a relationship business. It’s a people business, both our employees and our clients. It’s all about helping our employees be able to accomplish what they want to accomplish, and helping our clients achieve success, whatever that means for them. And so you know, all of those factors I think are happening where you know, as long as you keep your your eye focused on that outcome, you’re going to have more options than Ever for how you figure out how to get there, and how to help your clients get there as well? Yeah,

Damon Pistulka 35:05
yeah. Yeah, very cool stuff, you’ve got to be really excited about 2024 for the opportunities and CPA. So let’s talk about a few things that you’re really excited for, for 2024. Well,

Dave Hartley 35:19
so one of the things specifically we’re doing at Anders is, so I joined the firm less than five years ago, and my job at Andrews is to lead the advisory practice, which is really so we have the traditional audit and tax practices in the firm, but my world is really all the other, you know, different advisory consulting, Future Focus type services. So, you know, a big part of that is our virtual CFO business, which we talked about earlier, our technology practice. And then we’ve got other things that we do. So my job is to specifically identify and work with our clients on things that our clients need that today, we can’t deliver, and we can’t help them with. So we’re out looking for opportunities to fold in boutique firms who have an expertise that we don’t have, or to find an individual that has an area of expertise that can help us build a practice. So those are all things that we’ve got outlined. And we’ve made progress and 23. We’ve got more exciting things planned in 24, as well as we’re innovating within all of our existing service lines. Because we because we have that client interaction, we get feedback all the time on what we do, how we’re doing it, is it meeting their needs, and we encourage our professionals to be very, to listen, and to understand really what’s happening and where we’re going. We’ve got a great internal technology team. So they’re working on a bunch of things right now, sort of behind the scenes, that we’re going to start unveiling to our employees in 2024. So that’s going to be exciting. And we just continue to automate, we’re looking at our practice areas and figuring out how can we build them to scale? How can we automate as many things as we can, how can we, how can we make sure that our humans are scarce resource, our great talent, are doing the things that are most impactful and are the highest and best views. And so 2024, we’re going to be putting a lot of emphasis on those types of things, both to get into these new businesses, but to also take what we’re doing and get a lot better at it and prepare those businesses to scale as we further automate.

Damon Pistulka 37:14
Yeah, that’s exciting that it’s got to be just a lot of fun and challenging at the same time, but a lot of fun. So we, when you’re, when you’re looking at so the the m&a I think is a really interesting spot. Now we’ve seen that, you know, the interest rates have quelled some of the m&a work just because it did some things with you know, it costs more to buy costs more to to run, you know, and and that’s something that a lot of people selling businesses weren’t prepared for. But you guys are really in an interesting position, because you have this base resource. And you can absorb a lot of these maybe regional firms, maybe smaller firms. And really, the two of you together can do a lot more than either one could separately. So there’s got to be some good synergy you’re seeing in that?

Dave Hartley 38:06
Yeah, absolutely. And so we’ve got so a lot of a lot of smaller boutique firms that we talked to, they’re like, man, if you can take marketing off my plate, if you can get some of the HR people stuff, if you can, it’s like, Yep, we’ve got all of that we’ve got the platform, we just need the specific unique capabilities that our clients need. And we can take all of that. So all the admin stuff that you’re having to deal with all the headaches, basically, we can make that go away, we can help you, you know, basically improve and become more effective. Plus, by joining Anders, you get access to our 1000s of clients that probably already needs your service that you’re trying to reach anyway. But when you’re part of Anders basically opens up a lot of doors.

Damon Pistulka 38:46
Yeah, that’s, that’s great. Because it’s it. You know, that’s where you see that true Win Win going on? Right?

Dave Hartley 38:51
Yeah, we can add a ton of value and accelerate. And you know, it’s kind of like aI we can the stuff that you don’t want to do that you’re not passionate about. Basically, we have people that can handle that for you and help you get to your outcomes faster.

Damon Pistulka 39:03
Yeah, yeah. So when you look at the and we started out with this, we started out at the accounting is going to be one of the CPAs is going to be one of the most disrupted industries because we’re a third out of that study that was going to be most disrupted. What are you what are some of the things that you think are going to happen to the firms that aren’t embracing the technologies well enough? Is it just simply that they’re going to be not competitive? Or what are some of the things that?

Dave Hartley 39:41
Yeah, generally, I would say, generally, most people, and I’m thinking just traditional smaller companies that are working with smaller firms. Generally they are they’re very loyal, and they don’t shop around a whole lot. But I think what’s going to happen so I don’t know that it’s going to be like 2025 If everything’s going to be different, and all the smaller, but I think it will happen over time where people will start to hear about, man, I’ve got this person over here that I know they’re having such a better experience with their firm and their business is better because the CPA firm that they’re working with is being proactive, is helping make their business better is helping them with business decisions. It’s really impacting the future. I think that will happen. I think also, you know, it’s going to be interesting what happens with price points, in terms of how does the market shift in terms of once AI starts doing some things? Do price point, stay firm? Do they go up? Because we’re delivering more value? Do they come down? Because the costs have gone down? I think that’s going to be interesting to watch. So I think this will ripple its way through the CPA profession. And I think and then, you know, we talked about it earlier, the firms that don’t make these investments and try to just keep doing things the way that they do, they’ve been doing things. They’re at risk for losing their best employees, because those employees are going to say, Why am I doing this over here? And that’s actually one of the things. We talked about it earlier. But I just did a podcast where I was asked is today is today a good time to be a young CPA? And my answer was actually, yes, today is the best day ever to be a young CPA, and tomorrow will be even better. So when I when I went to sort of prepare for that podcast, I made a list and ended up with 14 items. And I’m like, you know, I should turn this into a David Letterman style top 10 list. And so I did a podcast episode, you can find it on my LinkedIn. But basically where I go through why today is the best day ever to be a young CPA. And we have a lot of fun with it. The two hosts of the young CPA success show, I told them, I was going to do this, but I didn’t give them my top 10. So when I when I’m telling them and I the here’s the number eight, here’s number seven, they don’t know what’s coming. So it’s fun to see their reaction, which ones they really get into which ones kind of surprised them. And we have some good back and forth as part of that. So so maybe we can drop that in the show notes. But yeah, I did on my LinkedIn, LinkedIn, Dave Hartley. So there’s some good things there that I think people can have some fun with. And hopefully, you know, we can get those, those younger people, or people coming off campuses, we can get them exposed to some of that stuff. Because if firms don’t recognize that and start to move on it, then they’re definitely going to be at risk for becoming non competitive, pretty darn quickly. And I don’t think happened in a period of months. But all period of years, I think, I think we’re gonna see some firms really start to differentiate and become, you know, much more competitive, much more visible in the market, because they’re just adding so much more value than other firms.

Damon Pistulka 42:36
Yeah, yeah. I mean, I think your your very your first point about being really loyal to their CPAs. I mean, it’s like switching to church for somebody, it’s going to be a it’s a big decision, right? And, but that experience that others are seeing, well, I get my taxes done all the time. And they are giving me great advice and blah, blah, blah, you know, just go through the thing you’re talking about, it’s thinking in my head, this is all going to start to add up over time. And then they’re not going to it’s going to even compound for the firm’s adopting it because those the best talent won’t come there anymore. They’ll come to the places where they can get exposed to this thing. So ah, great stuff, David. Man, the time wise, will you have lots of

Dave Hartley 43:19
fun, right? Well, like I said, it’s the best day ever to be a young CPA. But yeah, doing it right. It’s a pretty darn good time to be not necessarily young CPA, but any CPA, there’s so many exciting things happening. We’re adding so much more value than we’ve ever had. It’s a great profession. And I think, you know, it’s only going to get the opportunities are only going to become even better, because we’re already trusted. People trust CPAs. And we got to maintain that foundation. But now there’s so much more that we can do and use that as a springboard.

Damon Pistulka 43:46
Yes, yes. Well, Dave, thanks so much for being here on the faces of business. Again, we had Dave Hartley here from Andhra CPAs. He’s a partner in charge of their advisory division. We’re talking about how automation and AI are changing accounting. And wow, if you just got in here late, go back to the beginning and listen to Dave and connect with Dave on LinkedIn. It’s David Hartley is what you’re on on LinkedIn is just said CPA innovator podcast sold, building the future ready firm at Anders, connect with him on LinkedIn, because wow, he’s got some good content. And thanks so much for being here today. Dave.

Dave Hartley 44:27
You bet. David. I enjoyed the conversation. Yes, yes.

Damon Pistulka 44:30
Like we said, reach out to Dave at on LinkedIn or check out Andrews CPAs and see what they’re doing there. Lots of good stuff, everybody. Thanks for being here today, Jordan, and we had Jordan as Osvaldo was here today. Jordan says thank you. So great, thanks. Appreciate you being here. We’ll be back again later this week. Hang out Dave for a minute and we’ll finish up. Sounds good. Thanks, David.

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