How AI & the Cloud will Affect the Future of Accounting with Jeff Wilson (Part 2)
In this two part episode, Phil continues his conversation with Jeff Wilson, CPA and owner of the W2 Group, about the future of accounting. Jeff shares how his firm uses artificial intelligence with some of his clients and how he thinks technology will continue to evolve the industry. He also describes his specialization and what he loves about the profession.
Narrator [00:00:00] This is the second part of the conversation between Phil and Jeff on how I and the cloud will affect the future of accounting if you haven't listened to the first part of this episode. Check your podcast feed.
Narrator [00:00:12] Hello and thank you for tuning in to another episode of CPA Review and more. We are pleased to bring you the number one podcast for CPAs and CPA candidates. If you'd like to learn more about how Yaeger CPA Review can help you find us on our website at Yaeger CPA Review dot com. Now here's your host, Phil Yagur.
Phil [00:00:38] What gets you excited, which an accounting standpoint, OK, all right, what gets you excited about the profession?
Jeff [00:00:48] What gets me excited about the profession? Two things. One, extremely giddy about where artificial intelligence is going to take us.
Jeff [00:01:00] Right. Like, I would love a robot right now. Right. And I'm also giddy about the things that we as CPAs accounting can do.
Jeff [00:01:12] I think that we other industries need us more than we know. And we I don't think we've scratched the surface yet.
Phil [00:01:20] Do you have any clients who have some form of artificial intelligence?
Jeff [00:01:25] Well, we use some artificial intelligence or some of our clients, like we use VIC A.I., which is like an accounts payable artificial intelligence. And what you're trying to do from an accounting standpoint with that software is be able to read the bills and automatically put them into the system. So you got less review time, if any, at a period of time. So it gets like start seeing the bill all the time and then now it automatically matches and puts it into the system. It doesn't need your review to go say, hey, what account it goes to and all that.
Jeff [00:01:57] And so, that's a very cool thing. But what I'm excited about is that I think that if you're an accountant, you running a firm, I think they're you going to have a robot that you can almost program how you would do the bookkeeping and that robot, you're going to hook them up to the computer, and he's going to do it for you.
Phil [00:02:17] Yeah, they can do the bank reconciliations?
Jeff [00:02:19] Yeah. They can do the bank recs. I think posting too. I think all of that.
Phil [00:02:23] Yes, yes.
Jeff [00:02:24] Yeah. I think all of that is going to happen. I wish I could afford one now, but I think that's the real cool thing about it, is like how we're going to be able to scale what we do and what we can do for our clients. Like a lot of small firms like, hey, I can't afford the talent. Right. But what I think I can afford extra employees or you can't even fathom because we've got a pipeline short. I think the robots and artificial intelligence is going to play a huge point in solving that problem.
Jeff [00:02:51] Like if you're a really good accountant, when you'd be great, if you could duplicate yourself. Well, we all say, I wish I could duplicate myself. What I'm excited about in the accounting field is that's going to happen. That's going you're going to be able to somehow, someway, this robot is going to know how you want to do things from an economic standpoint and do it and post that way.
Phil [00:03:13] They won't have to take the CPA exam, will they?
Jeff [00:03:16] I hope so. He may not. That's that's going to be interesting, but he may not.
Phil [00:03:22] Well, the one year of experience under a CPA could be a problem.
Jeff [00:03:25] Yeah. Yeah. I'm keeping my robot. I'm calling Rover. I figured out his name. Yeah I already figured out his name.
Phil [00:03:33] Rover the Robot. That's a good name I use. I use the name Robby the Robot. Yeah. Hey, right now Google is actually a very good speaker on artificial intelligence is and I think she spoke at the Maryland Association CPAs: Jody Padar. You ever heard of her?
Jeff [00:03:53] Yeah, the radical CPA. Yeah.
Phil [00:03:53] The radical CPA. Alright. I know Jody. We've actually she was going she was giving a talk one day at--oh god--in Baltimore someplace.
Jeff [00:04:06] Yeah.
Phil [00:04:07] I met her at the Sheraton Hotel I think for lunch. All right. And she is...She's funny. She's a piece of work, you know, really. I mean, from a positive viewpoint. All right. But I would say starting over to speak, is that correct?
Jeff [00:04:22] I've heard a few things that I read some of her content. I know she's that she's at an AI place now. I know she's there.
Phil [00:04:32] Bots. They sell bots.
Jeff [00:04:32] Bots. Yeah, yeah. So I read some of her content every now and then and kind of see some things. Yeah. Yeah.
Phil [00:04:42] She, I think they offered her a full time job and put her on the board of directors. All right. I believe that's the case and I think she might have actually got out of--sold the firm. I'm not sure.
Jeff [00:04:57] Yeah. Yeah. I think they acquired the firm which was probably a good thing to test subjects and things of that nature and knowing how to practice.
Jeff [00:05:03] And that's the cool thing. Like just think about that. Like, yeah, I think that's the that like if you ask me what gets me excited about the accounting profession is things like that, like you can have a practice and then next thing you know, you working for artificial intelligence company in the same breath, doing the same things, I think we're going to see that more and more. Personally, I think the traditional accounting firms want to change. I don't think it's I think it's over. But...
Phil [00:05:28] Yeah, because if you don't change, you're not going to be able to compete with the larger firms.
Jeff [00:05:33] Yeah, exactly. So those smaller firms, the smaller firms like. Me and myself, we're all going to do some very different things, and that's what's going to make us the older the larger big four firms will continue to do commodities, traditional work, and they'll kind of come down free every so once in a while.
Jeff [00:05:52] But being able to do different things in different areas is what we're that's what the mid-sized and small firms are gonna want to do.
Phil [00:06:01] A lot of people say it's a good idea to be in some type of niche, you know, a specialization. What is your practice mainly specialized in as far as types of clients?
Jeff [00:06:12] So types of clients. We focus on government contractors and associations. And I totally agree that a niche is the best of the best way to go.
Phil [00:06:23] Is that most of you practice government contractors.
Jeff [00:06:26] That's 98.9% of our practice. It's even association or government contractors, one of them.
Phil [00:06:33] And you probably--what did you learn that at a Bon BB? They were...
Jeff [00:06:38] Yeah, they were big on associations. No--I don't--you know--I don't know how we actually ended up in association. I mean, I do. It was kind of a weird year. I definitely think of a friend and it makes me my first association client to this firm. Actually bought the accounting firm owner so they can no longer do the work anymore. And they recommended me to do the accounting and that was back in 14.
Jeff [00:07:05] And I don't know, it was like. Every quarter after that, it was a no association, kind of like, hey, we heard of you take us on. And then I was there something that I would never say we planned associations. We didn't plan associations. Associations kind of happened. Government contracting was strategic and planned out.
Phil [00:07:26] Did you learn what government contractors do before you started getting them as clients or did you take them as clients first and then learn the ins and outs of government contracting?
Jeff [00:07:38] No, I think my experience actually, you know, I spent some time actually working for the federal government, so that gave me some understanding of what was going on and how the accounting had to be.
Jeff [00:07:50] And so I just kind of just kept learning. And I just even even when I was a government employee, I mean, I had my own contractors that reported to me. So I just understood more and more and know what their regulations were and what you have.
Jeff [00:08:06] It's a very good opportunity with them because a lot of times are government contractors. They don't know all their compliance requirements. So I learned their compliance requirements because I was the compliance person for once. So I knew what they needed to do and how the government worked. Most government, small government contractors, they don't really know what a compliance requirements.
Jeff [00:08:27] And so that gives us some expertize to kind of help them with that. And they most government contractors know how to sail, so they don't know the other half of it. And I mean, I didn't know everything. And I even when we started becoming our clients. But, you know, you got to the one thing that you learned about being a CPA is you've got to continuously learn all the time.
Jeff [00:08:46] And so I just continue to just learn more and more. And it wasn't really from the client. It was just regulations, because that's all there really is from a government contractor. They always changing the rules. And so...yeah.
Phil [00:08:59] How many employees do you have?
Jeff [00:09:02] We have five.
Phil [00:09:03] You have five. And that doesn't include you, right?
Jeff [00:09:06] No, no, no. That includes me. I got a performance evaluation just like everybody else.
Phil [00:09:12] Who evaluates you. My firm administrator. She's critical too. She's critical. So, yeah.
Phil [00:09:19] You haven't been asked to leave, have you?
Jeff [00:09:21] I have. [Laughs] I have. When I when I book too many meetings. Yeah. I've been I've been told to leave like, you know what, get out of here.
Phil [00:09:33] That's good. She sounds tough.
Jeff [00:09:36] Yeah. She's she is tough. Yeah. Yeah she's lovable but she's tough.
Phil [00:09:40] She's lovable but she's tough.Okay. Let me ask you, do you love accounting as much as you did when you got in? Well, maybe you didn't love it when you got in. Did you like accounting when you got into it, you sort of disappointed with it?
Jeff [00:09:56] No, I liked accounting when I got into it. I really did like add I love debits and credits. I think over a period of time though, I think just like anything.
Jeff [00:10:05] And I'm just being truly honest because I have to ask myself this all the time and my mentor tells me, you know, if you're not having fun, you want to make sure you're having fun and what you're doing. And they are early stages on. I was having fun. It was a fun thing. You go through those moments where it isn't as much fun. I can tell you I've been in an audit room at 2:00 in the morning. I don't care what account you're doing, that ain't fun. And it was Saturday night!
Jeff [00:10:28] So I've been there. So you're going to have those up the up and down seesaw moments. Right now I think I'm having a little bit of fun. Right now it's a little bit fun.
Jeff [00:10:37] I found out different ways or different things about accounting, just like anything. You find out what you don't like and then you kind of about accounting and you stay away from that and stay with the things that you do.
Jeff [00:10:48] Like I like strategic thinking firm building. I love that portion of it. And I'll, you know, like like right now, even though I kind of started my practice on tax, I don't like tax right now. I was I've had a two year period where. Really, paying income tax is not what I care about or not what I like. I don't say I care, but I don't--I'm not--it ain't what I love anymore, but I love the financial KPI accounting.
Phil [00:11:17] What is KPI? What is KPI?
Jeff [00:11:19] Key performance indicators.
Phil [00:11:20] Okay.
Jeff [00:11:21] Right. So...
Phil [00:11:22] What is that? What do you mean?
Jeff [00:11:23] So now and when you're doing the accounting, after you finished up the debits and credits, it's about the KPIs. The KPIs help--those are your financial ratios, your indicators that tell you how the business is operating. Is it healthy comparing it to other businesses? So I like that part right now. That's my thing now is the analysis of, OK, are we doing good or bad?
Jeff [00:11:49] What do we compare it to? And then are we being reasonable and what our expectations are? Right. Because, you know, somebody has set a goal: "we're going to do 20 million in revenue". Well is that really reasonable? Let's look at the what the business is telling us it normally does.
Jeff [00:12:04] Let's compare it to the other businesses and then say, hey, what's what what's the trajectory we need to be on in order to make that? And so I'm really into that side of the world now.
Phil [00:12:14] It sounds like you like advisory services say.
Jeff [00:12:18] Yeah, yeah, yeah, yeah. Which is where everybody is kind of, you know, kind of tilting to now, saying, hey, we want to go to advisory services.
Jeff [00:12:26] And so that's what I like now. I like that portion of it. I'm not elated by talking tax. I mean, I can do it, but it's not what makes me wake up in the morning. But, yeah, so the advisory side of it is really what I like. But, you know, you can use I think we use a lot of words like key. I think in our industry we use a lot of advisory services. We break it down, but in my mind, as a CPA, we always had to do it on the why we're giving it, a special name now that...
Phil [00:13:02] Well everything has a special name.
Jeff [00:13:04] I think--I equate it to sports. It's it's about being an all around good basketball player. Right.
Jeff [00:13:10] So you got you can shoot the free throw. You have a mid-range. That's good complete player. I think any CPA who can talk tax, talk debits and credits, financial reporting and compliance and KPIs performance. That's what we're supposed to do that you'll need if you just that's an all around complete CPA. And that's actually what the CPA exam--the new one--is trying to do is really look at it and trying to make a complete whole CPA.
Phil [00:13:42] If anybody came out of majoring in accounting and they said, should I go for the CPA or I could just be an accountant? All right. Do you advise everyone to become a CPA or there's reasons you don't advise them to be CPAs? All right. Do you ever get those questions?
Jeff [00:14:02] Oh, I do. And it's something you always have to think about. I'm partial to becoming a CPA, but I do tell people I tell everyone, hey, you should become a CPA. I do. But I understand that some people, if they're--I would say--I tell people this, there's I'm always trying to shoot for the top and I understand that. So if I may be an accountant, the top of accounting is a CPA. So why would you shoot for anything less than that?
Phil [00:14:33] You think it makes a difference, different change in people's lives with the CPA, where if they didn't have it, it wouldn't--a lot of people said, thanks to the CPA they've been able to take positions, jobs that I wouldn't be able to take if I didn't have the CPA. Alright. "It changed my life", a lot of people said that.
Jeff [00:14:53] Oh, it definitely changed my life. My like, oh, no. Oh, no, it changed my life for sure. I have a lot of opportunities to take. I've never had a job that I couldn't get. That's never there's no worry about that. Right. I don't think that, you know, just just think about it starting. I left my job in 2014 full-time government job and at that point 2014, I'm...I'm thirty to start my own business. Right.
Jeff [00:15:27] I didn't go to Harvard. That's only--the CPA is the only thing that allowed me to really do something like that--to go out on a limb. Right? Take this risk and say, hey I'm going to start a firm. You can't...I don't know it. Now? Maybe if you're a programmer, you can do that.
Jeff [00:15:44] But I don't know many other professions where you can just be like, hey, I'm going to quit today and build a business that's going to be built to last. I think the CPA gives you the opportunity. Definitely changed my life and it gave me a lot of opportunity. My wife at the time, she was an accounting major. We met in class. She didn't take the CPA. She works at the same place that we were graduating. And I would probably equate some of that to if she had the CPA, she probably would have moved differently. Human nature had more opportunity. You know, you can take more risk and more chances, but you can't if you don't have it. So there you go.
Phil [00:16:22] You said you didn't go to Harvard. Now, I think you and I, if we think a lot we can say, having a Harvard MBA, does that mean a lot for everyone? I don't think so. And we won't mention names, by the way, all right. Because we don't want to be sued. So anyway, Jeff, anything else you want to say?
Jeff [00:16:45] No, no, I'd like but like I said, I would say this about the CPA. It's evolving and it's the exam is evolving because the world we operate in is evolving. And we have to keep up with that. And it's evolving in an awesome way.
Jeff [00:17:01] Technology is really driving what we're going to do. And we're trying--we need to make more complete CPAs to be able to compete and also to service. Right? Because we're really public servants. In order to... We're the oil to help some of this economic engine go. We've got to continue to push through. And that's what I'm always trying to do. And I think feel what you do and what we try to do to make the profession better is awesome. And hopefully we get to where we're trying to get to eventually.
Phil [00:17:32] Well, thank you. I appreciate that. And I appreciate you being in the business. All right. Yeah. You're a you're someone that people are going to look at and say, hey, this guy made it, you know, and he's done very well with the CPA. All right. Because I urge people you should go on for the CPA. All right. It is the union card. Someone once told me that: "it's the union card". Once you have it, you can get into any union anywhere.
Jeff [00:18:01] You get in anywhere!
Phil [00:18:02] Anywhere, anywhere.
Jeff [00:18:04] I'll tell you, you know. Once you got that...
Phil [00:18:06] Tell your wife it's never too late.
Jeff [00:18:08] Yeah, yeah, yeah.
Phil [00:18:10] I'm sure you'll love hearing that.
Jeff [00:18:11] [Laughs].
Phil [00:18:11] Yeah, but anyway, Jeff, I want to thank you very much for being on the podcast. And please say hello to our mutual friend, Joe Lanciano. All right.
Jeff [00:18:24] I will.
Phil [00:18:25] And by the way, I was at his wedding.
Jeff [00:18:30] [Laughs] Nice! I'm going to definitely talk to him and I appreciate that.
Phil [00:18:33] Ask him what happened to my car. Okay. All right.
Jeff [00:18:40] I will.
Phil [00:18:43] And he lived in a place called Colt Mont. Do you ever mention that place?
Jeff [00:18:46] You say where?
Phil [00:18:46] He lived in Colt Mont, Pennsylvania.
Jeff [00:18:51] No.
Phil [00:18:51] All right. There were--most of the town was four churches. That was the thing. And he had a Catholic wedding and it went--Italian also--morning till night. Okay?
Jeff [00:19:04] [Laughs].
Phil [00:19:04] I mean, it was a wedding. So anyway, please send Joe my best.
Jeff [00:19:08] I will. I will.
Phil [00:19:09] And please tell him also, to his wife and Nicole, his daughter.
Jeff [00:19:14] Yeah. Yeah, she just got married. She just got married. They had a Covid wedding. He was just telling me about it.
Phil [00:19:19] Really. Oh, God. I remember when she was like this. You can't see it, but anyway. Oh God, it's unbelievable. Anyway, thank you very much and thank you everyone for listening to CPA Review and More. We have our broadcast podcast every Tuesday, a new subject, a new guest. And if there is a subject you want us to speak about, we will get someone for that.
Phil [00:19:51] We've got people doing Bitcoin cryptocurrency, OK? And by the way, I know this is a lot of commercials now on CNBC saying buy cryptocurrency. Alright? You don't have to worry about them printing too much of it. Okay? I don't know what they're talking about, but I notice they're really pushing that on CNBC. Alright. Don't go out and buy cryptocurrency. Check it out before you do it.
Jeff [00:20:22] It's only the technology behind it that matters.
Phil [00:20:24] Right. And also, it's not a real good idea for retirement. OK, all right. So anyway, Jeff, I called you James. Jeff, thank you very much. Take care. Stay well and be safe. And hopefully one day I'll get out to see you. Okay?
Jeff [00:20:44] I appreciate it, Phil. It was a great time.
Phil [00:20:45] Take care.
Jeff [00:20:46] Yeah.
Phil [00:20:46] All right, take care one. Thank you again. And we'll see you soon.
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Narrator [00:21:19] Again, thank you so much for listening. And we look forward to you tuning in next time.