YOUNGSTOWN, Ohio – Accountants may be busier at tax time but there is much for them to do in the off-season, especially as local accounting firms move toward an AI future.
Part of that, according to Tim Petrey, CEO of HD Growth Partners, is the shift in focus from compliance-only work to the advisory role companies like his have adopted.
“Compliance used to be 100% of our business,” Petrey says, adding that included tax returns and financial statement audits. “But now the core of our business is advisory work. So we spend a lot of time with our clients all year long – not just talking about taxes, although taxes are a big part of the things we’re working on throughout the year and planning for the future.”
In today’s world where it can take longer to make big decisions, such as buying new asset, Petrey says it is important to start looking at the next tax season even earlier.
In addition, Petrey notes the adviser helps the business owner focus on charging the right price, entering new markets; looking at marketing opportunities and the return on the marketing investment; deploying capital; even hiring strategies and company culture.
In a larger company a CEO or chief financial officer would address those questions internally. Petrey, however, sees many local small to mid-level businesses are family-owned and thus lack the financial resources for a trained CEO.
“We recognize a big gap in our community in terms of providing those levels of services,” Petrey says. “We still do plenty of compliance work. But really we’ve gotten to a point where our focus has changed.”
A small-business owner himself, Petrey knows the owner may be great at manufacturing or health care. What provides stress might be what the owner is not good at or lacks the time to learn.
“So, we’re very focused on the idea of you do what you do best and we’ll do what we do best and the end result is a much better thing,” Petrey says.
Debbie Liggett-Dixon of DGPerry, notes with quarterly tax estimates due and clients who need to file an extension; the busy season is no longer relegated to only a few months. And clients are always consulting them on acquiring new businesses, expansion, winding down operations or other unusual projects.
“Yes, we are quite busy — but with a little bit less stress,” Liggett-Dixon says, “which is sort of nice.” She adds that the best weather in northeastern Ohio matches well with the flow of the tax seasons.
Kayla Emanuelson of SSB said many accountants use the time after tax season to unwind and close their offices on Fridays in the summer. Team leaders encourage its staff to refresh. SSB also sends some of its members for leadership development and other continuing education.
Summer is also a good time to work on the more complex projects clients need. The SSB client accounting and advisory services team works with clients year round, maintaining their accounting systems, integrating new software, automating bill payment systems for them and regularly providing reports to help them make good decisions.
Marc Mazzella, geographic lead for the Youngstown office of Cohen & Co., agrees that being the trusted adviser comes with continuous tasks, including meeting with clients, advising them in operations, keeping them informed about tax law changes, as well as compliance work. “So you really can’t limit that to one part of the year,” Mazzella says, “You’ve got to be in touch with them throughout the year. It keeps us busy.”
AI IN ACCOUNTING
However, providing all the additional services is putting a strain on an already short-handed field.
According to last December’s The CPA Journal, significantly fewer students are selecting accounting as a major and the Association of International Certified Professional Accountants reports 33% fewer took the CPA exam in 2021 compared to 2016. The fewest numbers in 17 years took it in 2022. The number was reportedly up more than 30% in 2023.
“We’ve been facing a talent shortage and we continue to face a talent shortage right now,” Mazzella says, attributing it in part to the retiring baby boomer generation and fewer people entering the field.
As opposed to those who are concerned AI could replace people as accountants, the local CPAs say AI could be part of the answer. Mazzella points out keying in data are not the best use of a new accountant’s time. “If people are going to do this for the long haul there needs to be some relief,” Mazzella says. “And if AI can help with some of the tasks that don’t necessarily require a college degree, if you will, then it is not taking a job away from somebody. It’s really just helping them alleviate some of the pressure that people in the field have been feeling for years.”
So, how do firms use AI or project its use? Potentially, Mazzella says, AI has the capability to quickly analyze 100% of a company’s data, which can give it better information to make quicker decisions.
Already, AI programs are helping those in Petrey’s office to send automatic reminders about deadlines, which frees staff from writing repetitive emails. HD Growth Partners employees are encouraged to use AI to turn direct or abrasive emails into those with a friendlier tone.
Liggett-Dixon says it is used to automatically scan many routine tax documents and “populate” the tax returns once it is programmed to recognize where those numbers were placed.
“That’s a menial repetitive task and then we can free our people up to do higher-end things for our clients instead of being a key puncher,” Liggett-Dixon says.
In addition, newer tax preparers unfamiliar with a tax area or issue can begin to learn by asking ChatGPT, which can help them get up to speed or even know the language enough to write a memo. However, she also cautions that AI needs to be vetted and it can be a year or more behind on the latest tax laws.
“I do think the firms that are not keeping an eye on AI will get left behind,” Liggett-Dixon says. “They just can’t efficiently be competitive with pricing, with staffing, if they’re not keeping an eye on what’s out there.
Although local CPAs are not those developing the AI, Liggett-Dixon points to recent AI-related investments by one of the Big Four accounting firms, Price Waterhouse PwC, as a sign new accounting resources will be developed that smaller and mid-size firms can tap into. “We’re sitting back and we’re waiting for them to blaze the track,” Liggett-Dixon says.
Mazzella agrees that AI will continue to progress quickly and add new features.
Petrey encourages not only his firm, he says, but his clients’ firms to embrace AI. While businesses continue their struggles to hire, Petrey says if a business can find enough ways to automate little things, it can regain the hours in the day for the remaining employees.
“The internet was a game changer. AI will be too,” Petrey says. “So, get in early and learn.”