Is AI Overhyped? Is CAS a Necessity? These Questions and More w/ Daniel Hood

Podcast

Summary

On this episode of Growing Your Firm, host David Cristello interviews Daniel Hood, the editor-in-chief of Accounting Today. With over two decades of experience in the industry, Daniel shares insights into the evolving trends in accounting firms and the push for advisory services. Tune in to gain a deeper understanding of the future of accounting and the role of technology in shaping the industry.

What you’ll learn

The listener will learn about the evolution of accounting firms, advisory services, trends in the accounting profession, and the impact of AI on the industry.

Guest Bio

Daniel Hood is a distinguished figure in the accounting profession, known for his extensive experience and insightful contributions to the field. 

With a career spanning over two decades at Accounting Today, Daniel has established himself as a prominent voice in the industry. Starting as a managing editor and now serving as the editor-in-chief, Daniel has played a pivotal role in shaping the content and direction of the publication.

Throughout his tenure, Daniel has demonstrated a deep understanding of the trends and challenges facing the accounting profession. His work at Accounting Today has provided valuable insights into the latest regulations, tax laws, and industry standards, helping professionals stay informed and navigate the evolving landscape of accounting.

Daniel’s expertise extends beyond traditional accounting topics, as he delves into strategies for building successful firms, advancing careers in public accounting, and adapting to technological advancements. His broad perspective on the profession encompasses not only technical aspects but also the strategic and practical considerations that drive success in the industry.

One of Daniel’s key contributions has been his exploration of the evolving models of accounting firms. He has highlighted the shift towards advisory services and the potential impact of AI on the profession, offering valuable insights into the future direction of accounting practices. By engaging with experts and thought leaders, Daniel has facilitated discussions on the changing dynamics of the industry and the opportunities for firms to innovate and thrive.

Daniel’s philosophy centers around the importance of specialization, innovation, and client-centric service. He advocates for firms to embrace new models, adapt to technological advancements, and focus on delivering high-value advisory services to clients. By encouraging firms to think differently and explore niche areas of expertise, Daniel promotes a culture of continuous learning and growth within the profession.

Overall, Daniel’s career trajectory and contributions to the accounting profession reflect a commitment to excellence, innovation, and strategic thinking. His insights and perspectives have shaped the industry discourse and inspired professionals to embrace change, adapt to new challenges, and drive success in the ever-evolving world of accounting.

Detailed Synopsis

Firms in the accounting profession are undergoing a transformation towards more specialized models, akin to the creator economy, by focusing on super niching down and utilizing AI tools.

In a podcast episode, Daniel Hood delves into the evolving models of accounting firms, emphasizing a trend towards specialization and super niching down. He discusses how firms are honing in on specific services, such as payroll for a particular industry or tax returns for corporate jet ownership. This specialization enables firms to excel in a particular niche and deliver high-quality services tailored to the unique needs of their clients.

Drawing a parallel to the creator economy, accounting firms are shifting towards a model where individual practitioners or small teams can thrive by offering specialized services. Just as individual creators in the media industry have built million-dollar businesses, accounting firms are leveraging their expertise in specific areas to effectively cater to niche markets.

Furthermore, the integration of AI tools is revolutionizing the delivery of accounting services. AI technology allows firms to streamline processes, boost efficiency, and offer more accurate and insightful advice to clients. By incorporating AI into their operations, accounting firms can handle complex tasks with greater speed and precision, enabling them to focus on delivering value-added services to their clients.

The move towards specialized models in the accounting profession, combined with the adoption of AI tools, reflects a broader trend towards innovation and adaptation in response to changing client needs and technological advancements. This evolution mirrors the dynamics seen in the creator economy, where specialization and technology are key drivers of success and growth for individual practitioners and small firms.

The concept of an ecosystem model in accounting, where firms with specific skill sets form alliances to serve clients, is gaining traction. Daniel discusses how this model could transform the accounting profession by allowing firms to specialize in niche services and collaborate with other firms to provide comprehensive solutions to clients.

Hood cites the example of a firm in Florida specializing in reporting and tax calculations for corporate jet ownership. By forming alliances with various accounting firms with clients interested in owning planes, this specialized firm can offer its unique service to a broader client base, creating a network of expertise that benefits all parties involved.

This ecosystem model enables individual practitioners or small firms to focus on their core strengths and partner with other service providers offering complimentary services. By leveraging the strengths of each firm within the ecosystem, clients can access a wide range of specialized services tailored to their specific needs. This approach not only enhances the value proposition for clients but also opens up new opportunities for firms to differentiate themselves in the market.

Overall, the ecosystem model in accounting signifies a shift towards collaboration, specialization, and innovation within the profession. As firms continue to adapt to changing client demands and technological advancements, forming alliances with other specialized firms can be a strategic way to deliver high-quality services and remain competitive in a rapidly evolving industry.

The acquisition of firms by private equity and the subsequent roll-ups can disrupt the profession, prompting new perspectives on firm structures and models. Daniel shares how private equity ownership of accounting firms can impact the profession. He notes that private equity ownership can empower firms to think innovatively about their structure, freeing them from traditional constraints.

Moreover, Hood explains that private equity ownership can drive changes in the profession, encouraging firms to explore different models and approaches. 

For instance, the episode highlights the potential for specialization and super-niching down in accounting services, focusing on specific services or industries like payroll for a particular sector or expertise in complex areas such as corporate jet ownership. This level of specialization can create a diverse landscape of accounting services, offering clients a variety of specialized options.

Ultimately, the influence of private equity ownership on accounting firms can prompt a shift in thinking about firm structures and models, inspiring firms to innovate, specialize, and adapt to better serve clients. This shake-up in the profession can lead to a more dynamic and diverse accounting industry, with firms exploring unique and specialized service offerings to meet the evolving needs of clients.

Timestamps

[00:01:33] Evolution of advisory services.

[00:03:25] Advisory services in firms.

[00:07:26] The trend of selling clients.

[00:10:45] Pricing trends in tax returns.

[00:14:49] The future of accounting models.

[00:15:28] Podcasts and AI collaboration.

[00:19:10] Future of professions.

[00:21:34] Client relationship insights.

[00:25:52] Small business owners and finance.

[00:29:20] Financial data visualization and analysis.

[00:31:32] Super specialization in accounting firms.

[00:33:26] Ecosystem model of business alliances.

[00:37:25] Impact of private equity in professions.