The Unstoppable Accountant - Grow your Accounting Firm

Transforming the Accounting Landscape with AI and Offshoring

• Arun Mehra

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Ever considered the potency of Artificial Intelligence and technology in reshaping the accountancy industry? Prepare to be astonished as I, Arun Mehra, share an insightful conversation about the global challenges and opportunities facing accountancy firms today. Drawing from my firsthand experience at an LEA global event, I'll shed light on how technology, especially AI, can revolutionize accounting decision-making and massively increase efficiency within firms. I'll also share insights on how offshoring, coupled with AI, can provide efficient solutions to staffing challenges.

Switching gears, we'll also dive into the realm of business management and exit strategies. Comparing various global accounting firms, we'll discuss the impact of private equity and the transformative potential of AI in shaping decisions. From managing staffing and resources to underlining the need for strong leadership and robust culture within firms, we'll navigate through it all. Whether you're an accountant, business owner, or interested observer of the industry, this episode is a treasure chest of knowledge and practical wisdom. Tune in and get ready to be enlightened!

Arun Mehra:

Now welcome back to the Unstoppable Business Podcast. This is Arun Mehra, and today I'm just going to be talking a little bit more about accountancy firms. Now I've just come back from an LEA global event in Washington DC, and this is an opportunity to meet with other accountancy firms on a global basis. So, interestingly, I met accountants from the US, canada, ireland, australia, vietnam, indonesia, you name it. They were pretty much there India all over the place and this is a great forum and a great way for accountants to learn about other ideas but also see the commonalities that are occurring in many, many firms across the world, and there are many commonalities. So what I want to talk today is about what are the commonalities and what are the issues facing not just UK firms but global accountancy firms, because there are some real kind of things to be taken away from this, to understand and then implement as well. So the overriding factor that we seem to be seeing everywhere and we've probably seen it in your posts on LinkedIn and elsewhere is AI.

Arun Mehra:

Now there is concern that AI will take over jobs, and AI seems to be moving at such a pace If we look at how it's developed since we were made aware of it, I suppose publicly earlier this year to now, where it can do so many more things. But remember, ai was actually introduced a few years back but it didn't really get its public notoriety until earlier this year. Now, for accountants, we do, and I think it was in a unison. Everyone was thinking that it's definitely going to take over many, many roles, many, many jobs, which presents an opportunity but also presents a challenge. Because, from a challenge point of view, we might have bookkeepers, we might have accountants, and if AI can do all the work by taking in the data and basically doing the books, preparing the accounts, preparing the tax return, you may think, well, what can the accountant do? And that's a very valid point. So you have to think, okay, what will the accountant in the future be doing? Well, it came clear in the process, in discussions One of the things that they can be doing is analyzing these numbers or interpreting these numbers and then helping businesses make better decisions and help them with their businesses. So, technology and AI I think, whilst it might be scary, I think it could actually add value to the accountant's role, as long as you're receptive to using AI and being using it to allow you to make better decisions for your clients to help them grow their businesses better.

Arun Mehra:

We're going to see this week, I think. Microsoft Co-Pilot will come out on the 1st of November, which is an exciting development as well, and this will be integrated into Office 365 and Outlook and everything like that, and I think I'm quite excited to see how we can start using that, because I think that could be a real game changer for accountancy firms. The firms that embraced that early on will hopefully see the benefits Again. But this isn't something that you can sit on your own. It's something that you're gonna have to be trained across your organization, across your teams, and if you've got teams overseas, again that will have to be trained to them as well. You wanna ultimately improve efficiency, and the way to improve efficiency is to embrace the technology that's there, and what we're seeing, I think, in the tech space as well, is a lot of applications things like the accounts, production software, the booking software, keeping software, are now gonna start integrating various elements of chat, the GPT or BARD into their actual programs again, which will then speed up the process. So it's an exciting development in the account that's in space scary a little bit, of course, it is, but very exciting too.

Arun Mehra:

So then, the next challenge that it was quite evident also that was discussed was resourcing. Us firms, canadian firms, irish firms, australian firms you name it include and, of course, uk firms. We're all facing the same challenge, including firms. I spoke to people from Germany and Belgium as well, and France, and they're facing the same challenge as well not enough account accounts, that's not enough staff to work in their home countries. Now, for the English speaking firms, it's actually a little bit easier, because you can find staff overseas through offshoring places like India and the Philippines, but for the German firms and for the French firms it's a little bit more difficult. So that's an opportunity for some firms out there offshoring firms if they can get the language skills up, but I think that's a little bit further down the road.

Arun Mehra:

So what does that mean? Well, the opportunity is for, again, combined with AI, but also using offshore kind of resource. If those offshore resource are trained with AI, then you've got a lower cost team, a receptive team and a team that's scalable, and I think that's a really important aspect is that you need to have a scalable team. If you're gonna grow. You need to be able to say well, I've got a new client, I need to have a team member to I can add to the team to actually support that client. There's no point in being able to grow if you can't actually scale the team, and that's a massive challenge that UK firms and the US firms are having. They cannot find the staff. They can get the business and we can all get the business, but actually then be able to deliver on the business is proving a challenge and the only option really available now is a combination of think of offshoring, well, outsourcing with AI. That makes it an exciting place to be and I know my firm I've positioned myself very much clearly in that space to say, well, we've got the back office all sorted or developing. It's never always sorted. There's always things that have to get better and improve. But then that falls in me the luxury to be able to scale up as we add more clients to our list, whether they're our own accountancy clients or whether we're supporting other accountancy firms. It's an exciting time indeed.

Arun Mehra:

In addition, the whole resourcing thing has really stemmed from the demographics of the team, and what we're seeing also is we've got in our firm, for instance, people in their late 60s all the way down to people in the early 20s and we're having to adapt our kind of and, in addition, some are in the UK, some are overseas and they're all over the place, and so we're having to adapt the understanding of how the different team members from different age ranges work together. Now, 60 plus year olds might be very good and have a lot of experience in their subject domain, but they're not so technically proficient on using the latest on IT, contrast that with a 20-something year old who's very quick, very fast, and you can get understand chat, GPT and other tools like that very, very quickly. So it's trying to bridge those gaps and it's training and it's taking the best of each age range. Taking the best of the baby boomers, but also taking the best of the Gen X or millennials, and I firmly sit somewhere at Gen no, I sit at Gen X, actually, I'm taking the Gen Zs as well. So I think it's about embracing each person at a different age level and taking the best out of that era. So, again, an interesting phenomenon occurring not just in the UK but across the world.

Arun Mehra:

And I think the last point I want to kind of touch on today in this brief, short podcast is again what we see, and I've seen it so many times and many times in a long time again is a lack of leadership and a poor culture in firms across the UK Again, not only in the UK, but also across the world as well. And that's the thing that I think differentiates the firms that do not just good but do really good to the firms who just kind of plod along. And that's the thing that I think I know. Certainly, in my team, I'm trying to focus on being the best leader that I can be, improving the culture in the team and making sure that everyone works together as a team. So I think you should be asking yourself how could you be a better leader in your team? What can you do in your team to empower your team, to build a culture where the team feel excited, feel excited, wanna get involved, wanna develop, wanna have new ideas, make suggestions, make recommendations. That's the kind of culture you want, the attitude of people who can do and who want to do stuff for your firm. So, as I said, three main areas here just talked on briefly today tech, resourcing, using offshoring and the demographics of the team. Then, thirdly, the lack of, or the development of, leadership in your team. That's really, really important too. Then, finally, one thing that, accountants, you might advise many clients all the time but quite often or not, we forget to do it ourselves or we just glaze over.

Arun Mehra:

The fact is, what are our exit strategies? What are our exit opportunities? At some point you're building up a business. Is it something you're going to hand on to the next generation? Do you have some partners in your organization who's going to buy in, or are you going to sell it on to a private equity?

Arun Mehra:

Now, what we've seen I think in the UK we've seen private equity in accounting and the accountancy market grow over the last few years. We've seen certain groups acquire well, who are well-funded and acquiring accountancy firms of all shapes and sizes all across the country. I think that slowed down a little bit now because of interest rates, but I can't see that going really why? Because accountancy firms have a regular recurring income. The valuations of accountancy firms tend to be lower than, say, tech companies and it just generates cash flow coming back in and in again every year.

Arun Mehra:

So you need to think about how are you going to be managing your business going forward and in terms of the exit, is it through private equity, is it through or are you going to be a platform for private equity? Are you going to work with a private equity firm to acquire other firms, or are you going to fund it yourself? So many many things to think about in terms of the actual space of accounting in the current world, and the issues we have in the UK are pretty much similar to what other issues the other accountancy firms have in other parts of the world, such as the US, canada, australia, etc. I hope that gives you a good insight of what's going on in the world at the moment. We're not alone. You're not alone, and if you need any help, you know where we are. We'd be delighted to assist. Thanks very much. Bye, bye.