Practice Success Podcast

Must-Know Accounting Tech Trends with John Higgins

• Canopy • Season 3 • Episode 7

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John Higgins, a CPA with a focus on technology discusses his extensive experience in helping CPAs understand and apply emerging technologies. He emphasizes the importance of strategic investment in continuing professional education, especially with the rapid advancements in AI. 

KC Brothers:

Welcome to another episode of Canopy Practice Success. Oh, my goodness. That is my second time stumbling over that. I don't know if you can hear I'm recovering from a small cold. So hopefully I'm not terrible to listen to today with my conversation with John Higgins. John, will you introduce yourself?

John Higgins:

Yes. Uh, so hello Casey and hello everyone who's watching us today. Uh, thanks for joining us. So, uh, a little bit about my background, I am a CPA with the CITP credential, which stands for Certified Information Technology Professional, and that's an AI CPA specialty credential that lets me communicate to the marketplace that, yes, I'm a CPA, but I really focus on technology. Uh, I've been in the profession a long time, and, uh, for all that time, I've really focused on helping CPAs to understand emerging technologies. and how to apply them. And during the course of my career, I started with a local CPA firm here in the Detroit, Michigan area. That's where I'm from. And then from there, I had two startup client advisory practices along the lines of client and technology advisory for CPAs. Uh, sold both of those. The first one I sold into BDO, and I was a partner in BDO's, uh, national practice here in Detroit for a few years. Uh, and then most recently, CPA Crossings, which started as a technology advisory company in the early 2000s, and kind of morphed into a, uh, uh, pretty good sized continuing professional education platform. for CPAs. We, uh, at CPA Crosses, we, we basically got together a group of, uh, professionals who could speak on a lot of different tap topics for CPAs, uh, and we distributed those as webinars. It was all webinars, uh, through state CPA associations. And, uh, so that company was purchased by the Pennsylvania Institute of CPAs. In 2020, uh, so they could use it to kind of expand their offerings to their members and get more involved in online learning. Uh, but, you know, I've seen the whole landscape of emerging technologies for CPAs. I like to joke that, you know, I started in the profession before we had electronic spreadsheets. With somebody as young as Casey doesn't even know what I'm talking about. How can we have a world without spreadsheets, right? Uh, so I've seen all that and I've seen the whole evolution of, uh, transitioning to the cloud computing. And then, of course, now everything's all about AI, which is really exciting. I really enjoy it because I like, you know, new technologies, learning about them and trying to figure out how we can put them to work. And there's going to be no shortage of ways to put AI to work. That's for sure.

KC Brothers:

Oh, I couldn't agree more with that last statement. And maybe we touch on that a bit, um, as well in our conversation. But with all of your many years, um, in consulting and providing education, do you have any thoughts or strategies on how CPAs should be approaching, uh, this CPE requirement. I love that it's a thing in the industry. I love that, um, you know, I don't have a little nudge, a little fire under you to, like, keep you updated and, and learning constantly. Um, but what, what recommendations do you have to make sure that people are getting the most of that?

John Higgins:

Yeah, I think as a CPA, you know, and I know because I've seen it for over my whole career, a lot of CPAs are just focused on, I gotta get my 40 hours of education each year and I don't care where I get it. Sometimes they go for the cheapest option. Uh, and I understand all that, but in this day and age, I think it is so important as a professional to make sure you're investing in the right kind of education. Uh, this whole area of technology is just. You know, we're at the very early stages of, I think, a very major transformation in the way we deliver services to clients as CPAs, whether you're working in an accounting practice or maybe you're a CFO working in a corporate environment. But the way we deliver services is definitely about to go a major transformation. So as CPAs, I think you have to be strategic about how you invest your time for education. And there's lots of good opportunities. You know, all the education I get, uh, Casey, frankly, is. I mean, the CP is like secondary. I could almost care less if I get CP. I just want to learn and I'll get my 40 hours of CP. I'll get that one way or another. But, uh, you know, so right now for me, I'm spending all my learning time primarily on AI because it's moving so fast and has so much potential. There's a lot of hype around it for sure, but it's not all hype. It's real and it's going to have a major impact. So, so if I was a, you know, advising a CPI, I'd say, you know, Invest a little bit of time at the beginning of each year thinking about what do you really want to learn, what should you be learning, and then figure out what are the avenues of resources. Uh, to get the kind of learning that, that you're looking for.

KC Brothers:

Yeah. I, you said beginning of the year, and I kind of want to dig into that a little bit more. Do you really mean January?

John Higgins:

Well, so here's how it goes for CPAs. You know, the cycle is that, uh, you know, their, their, their best time for getting education is really November, December

KC Brothers:

and

John Higgins:

then, you know, May, June, July, August. Uh, because they're, they're really busy, of course, from the middle of January through the middle of March. Yeah. With tax work and busy season work and so on, um, and then they come out of there. So what happens if you plan now, if you plan early in the year, then when you come out of your busy season, you already kind of know where you want to go and you, you don't spend a lot of time thinking about, well, what education should I get? And you know, there's a lot of good conferences out there and those are on the, on the schedule. Usually pretty early, so it's not too early to figure about, figure out where you want to get your education from.

KC Brothers:

Have you ever seen firms, um, divvy out types of learning, or say like, or, or even just raise their hand and be like, hey, I'll, I want to elect to be the AI expert in our firm, or I want to be the client relationship management expert of our firm, or do you see them just kind of, I gotta get it, so I'll just, to your point, get the cheapest thing.

John Higgins:

Yeah, I'd say, I'd say, unfortunately, that a lot of firms, especially when you're dealing with the smaller firms, because they may or may not have an HR department, they may not have a dedicated, uh, person to actually help them, guide them through what they should be, you know, focusing their learning on. So a lot of them just take, you know, whatever they're interested in, which is, which is fine. Uh, but it's typically not, uh, strategic. But when I do, uh, technology advisory services, when I offer that to, to accounting firms, You know, I always talk about champions. So, whether it's, uh, you know, using a particular software tool, like Canopy, or using, uh, uh, ChatGPT for generative AI, whatever the tool is, that, uh, you know, you really should have a champion, or, depending on the size of your firm, maybe multiple champions. And those champions, one of their, uh, goals should be to really immerse themselves in education in that particular area of focus. And they can bring that to the rest of the firm and share their, what they learn, share their knowledge with the firm. You know, at the appropriate level, not everybody has to be an expert in everything. It's just not practical.

KC Brothers:

Yeah. Yeah. You can't. Yeah. Yeah. I'm just curious. I know like one of our goals, just even within our marketing team right now is, is really Centered on AI and what, what tools can we use to make our jobs smoother or better? And I bring this up, I don't usually talk about my function or, or even like our team here at Canopy on the podcast. Um, but I bring it up because. It signals a lot to our investors as well to the members of the board that we are investing in the technology and um, and leveling up our skills. And I'd say that same concept applies to your clients. Um, where you can when you make claims of like, or or even put your best foot forward and you're showing that you are, um, progressing as a firm, whatever that might look like, but an easy way that that does translate to clients being able to understand that you are improving is technology is the way they interact with you through, you know, whatever medium it is that you're utilizing. Um, and then, yeah. A. I. Um, just it all reflects to your clients on you improving your business. And I think in that way to helps retain them.

John Higgins:

Yeah. And I think, you know, every business has at least two primary goals. One is to be profitable and one is to build value. So at some point have an exit strategy, you know, for that for that business and In the case of an accounting practice, an important part of that extra exit strategy to your point, Casey, is really to show that you have been leveraging technology, you're keeping your firm, you know, modernized, going through the digital transformation, as we like to say, and that will be much more appealing to a potential suitor who might want to buy your practice. Uh, because if they walk into your practice to see a bunch of paper and a bunch of file folders, uh, that's going to just lower the value to them. In their eyes, this could say, this is a problem because we got to then help this firm go through a digital transformation. We'd rather acquire a firm that has already been through the digital transformation.

KC Brothers:

Yeah, like trying to sell your home with a hole in the roof.

John Higgins:

Yeah, exactly. You

KC Brothers:

know, it seems silly even when we put it that way, but how often are we seeing people getting to retirement or wanting to sell or or even exiting in some form or fashion, right? But particularly I'm thinking retirement age because they're tired or you know, just want to relax and call it a day. Um, thinking I'll just keep operating the way I want to operate. I know this, we're comfortable, and then when I'm ready to retire, I'll sell it. And, I mean, curious, how frequently are you seeing that actually happening?

John Higgins:

Uh, quite a lot. Majority of the

KC Brothers:

time?

John Higgins:

Yeah, I would say with the smaller the firms like the small practitioners that you know, maybe five to ten person firms It's like they just like they're what they're doing. Yeah, they complain about working a lot of hours, but they'd actually like it There's no question in my mind about that. I've seen it for many years and So they don't really Spend a lot of time thinking about how to have an exit strategy until they get to the point where say, you know, like you said, I mean, I'm tired now. I think, yeah, maybe it's time to get out. And I would also make the point, Casey, that it's not just about getting your business or your practice in shape for an acquisition. It's about being able to hire people because, you know, you want young people to come into your firm. They expect you to be digital. They want digital. They want to be in digital today means embracing AI. And, uh, in fact, it's a, you know, I hear a lot from smaller firms about how it's tough for us to compete for talent against the large firms that can pay the largest, you know, higher salaries. But I would say, you know, I could come in and tell you exactly how to recruit a young person into a small firm because you can give them so much more. Uh, latitude and responsibility. You get into a larger firm, you start to get pigeonholed. Just the nature of the beast, you know? But, uh, in a small firm, boy, you can offer the world. And you get somebody that says, Hey, uh, I need you to come into my practice as a young person, understanding, uh, AI technology. Help me figure out in my practice how to put this to work. And you're going to have, I think, very good success recruiting somebody. And to even the smallest of firms.

KC Brothers:

Oh, couldn't agree more. And again, I like never do this on the podcast, but you're talking about things that are just so applicable to me personally too, like I could go, we've got a big Adobe, everybody knows Adobe, I feel like, even if you don't use them, it's a big name. Sure. We've got a big Adobe campus, just 15 minutes from our canopy office. I could easily get a job there and make more money and get killer benefits. They're a huge company. They can offer lots of fun things. I choose to be a canopy because of what working at a smaller technology company than a behemoth like Adobe can do for me. Um, but the thing is like. It's not just working for Canopy and the size of the company. It's working for my specific manager, our CEO, all of the leaders as well, and their vision and how that impacts my day to day. So to your point about like attracting talent, um, same thing. It's the same thing in an accounting firm that yeah, you just can't sleep on how much, um, that impacts your attractiveness. When, when you're interviewing candidates, it's not like the employee has a, a, what's the phrase I'm looking for, has the advantage, I guess, over the one seeking employment. It goes both ways. Like each, each party has power and the ability to interview each other and say, no, you're not the right fit because I'm seeing X, Y, Z about your firm that shows me what my life would be like, what I'd be battling or, or, or the success rate I might have the satisfaction I might get out of my day to day.

John Higgins:

Yeah. And you know, we all want purpose in what we do is our careers. You know, so I think in a lot of cases, you can have, feel, have more purpose in a smaller firm because you can have a bigger impact just by the nature of it.

KC Brothers:

Yeah. And even if, and some people might be able to come in and see, um, a lack of modern technology as an opportunity, as long as the leader is showing that like the maybe humility of like, Hey, I need help evaluating this.

John Higgins:

Yeah. Come

KC Brothers:

in and help me change this. Like that is so attractive to some people, to me in particular. Like I love that, the excitement of transforming something. So it's not just like to your point, um, just because you haven't updated, it's not totally going to hurt your ability to attract talent, but you need to meet the talent you're interviewing with this. opportunity and maybe find a way to really sell it to them because it can be a huge resume builder.

John Higgins:

Absolutely. And that's the kind of people you want in your firm, right? That somebody wants to take on the challenge and has a thirst for, you know, trying things out, you know, and being innovative.

KC Brothers:

Yeah. So, with firms like this, because you say it does happen the majority of the time where, you know, we're still, um, participating in this digital transformation, what are some things that these individuals should wrap their brain around? Expectations of how long it might take, where to start, what questions to ask, things like that.

John Higgins:

In regards to the digital transformation, is that what you're asking?

KC Brothers:

Yes.

John Higgins:

Yeah, well, so ideally you start with, you know, developing some strategy. Uh, and again, that's not typically the case in the, when you get into the smaller firms, it's, it's oftentimes more reactive, uh, reactive to, you know, we're just not happy with our tax software anymore. Let's go find something new, or I was at this conference and I learned about this new software. Looks really cool. Uh, you know, so the partner goes out and he or she sees us at the conference, they say, okay, we're going to put this in. They just bring it back to the firm. And now the people that work in the firm have to figure out how to make it all, all work. So, so having a strategy is, is definitely beneficial because, you know, with, when it comes to technology, Casey, there's, there's so many ways in a firm to spend money and it's so easy to spend it in the wrong things, you know, lower priority, uh, things or things that can just take it on a rabbit hole. Yeah. And, uh, and it's also, it's, it's not just deciding what to acquire, but also when, you know, and AI is a great examples like, you know, when do I jump on the AI bandwagon? Well, I think as individual CPA professionals, we have to get on it now just to learn how to, how to crawl before we walk, before we run. Um, but you know, when you're talking about big investments in a firm, you got to really figure out when, you know, when's the right time to make that big investment. Um, in the firm. So, so starting with a strategy and that could be, you know, a simple strategy, you know, maybe a few meetings with a small representative group of people in the firm say, you know, where are we having the most inefficiencies, where are we spending a lot of labor effort to get things done and therefore, let's figure out, let's tackle those, those areas first and, uh, gosh, there's often so much in the way of a low, what I call low hanging fruit. You know, like I'll just give you a simple example, password management. I've been doing webinars on password managers for 15 years now. And when I'm speaking to CPA groups, like maybe 5 percent of them are using the password manager. So I'm thinking, well, what are you using? Are you still using Excel spreadsheets? Are you writing it down on paper? Or are you using the same password for everything? It's like, I mean, a password manager is a low cost item that has cybersecurity benefits for the practice, but also has efficiency benefits for the user. So it's, it's a classic low hanging fruit. Let's just go do this. And there's a lot of those opportunities. Yeah.

KC Brothers:

Okay. So starting with the strategy, I like your point too of like getting key people in a room and really hitting on pain points. I've done similar things like that and I call them a pre mortem because we talk about post mortems. But like, let's imagine that like the firm's not in business in six months because We can't process anymore because our systems break. Our internet's gone out for two weeks and who knows?

John Higgins:

Yeah.

KC Brothers:

Um, but what's, what's the worst case and, and how can we extrapolate on that and then take those problems and solve for them and then to your point, prioritize? Um. That, and, and what that does is gets people bought in to what needs to be prioritized, which is huge. So that you don't run into the issue of what you said of like, Oh, I saw this flashy new thing at a show and I got it. So let's, sorry, let's figure it out. Um, okay. So what's next after that? Let's, we, we've got a strategy. Are there top tools that you recommend? I mean, you said a password management, that one's so easy, but yeah, to your point. As a lot of security.

John Higgins:

Yeah. Well, along the same lines, too, as you're looking at kind of developing a plan, a technology plan is look at the tools you currently have and make sure you're getting the most out of them. So often I see where gosh. Only a fraction of the capabilities are being used. I use Microsoft 365 as an example. There's so much capability across that ecosystem, but typically, very little of it is really being taken advantage of. So that's another point where it's not about just going out always and getting new technology or spending more on technology tools. But just really focusing on what you can get more, get more out of what you already have. Um, and then, you know, whatever the initiative is, let's say you decide, you know, we need a better file storage system. We need a better practice management solution. Well, then you got to go out, somebody's got to go out and get educated on what's out there in the marketplace. And that's where conferences can be very helpful. You know, you go to some of the CPA conferences. I know Canopy is at a lot of those conferences, right? And so that's a great opportunity as a practitioner to go and talk to the people, uh, that are with those software publishers and, you know, ask them the questions and just learn more about what, what is out there. Because frankly, in our profession, there's been, uh, obviously some very large players that have really dominated the market. Uh, but I would also say they tend to be really slow at being innovative. Has been my experience. Sometimes I look at products that I used back in, I had to admit it, back in the 80s. And sometimes I look at them today and say, Gosh, it still doesn't look like it's changed a whole lot. Uh, they try to be cloud enabled. But, uh, you know, I always say when you want to go to the cloud, if you have the ability finding a software solution that was built natively for the cloud, it's going to be a whole lot better because it's going to take advantage of the, of the technology, uh, as opposed to trying to be kind of retrofitted to be a cloud application when originally back in the day, it was a, you know, on premise solution. Um, but, you know, so you have to go out and find out what's available in the market. And, uh, And, you know, do some research and, uh, always I think it's important to talk to other practitioners. It's such a basic thing, but it's very rarely done. It's like, okay, if I'm going to go down this, uh, path of looking at this particular solution, I want to talk to some other firms that are using it. And, uh, you know, when you talk CPA to CPA about something like that, my experience has been that CPAs really like to be candid when they're talking with a fellow practitioner. They, you know, they're not going to, uh, sugarcoat it. Of course, the software publisher is going to give you references of people that have been successful with the tool. That's what you'd want, right? Uh, because I want to know that you can be successful with the tool. Now just tell me how to be successful with the tool and what should I watch out for, you know? Maybe it takes more to implement it than I, than I was led to believe, or maybe I need to make sure I invest in training because that's such a common, um, uh, mistake that firms make is they just buy the tool and they subscribe to the tool, but don't really invest in planning the deployment and training the people on how to. How to use it. And the training is not just how to use it, not just how to click the mouse clicks and so forth. It's how do we, how are we going to do our workflow now with this new tool? So if we're getting a new billing system, how are we going to do billing going forward?

KC Brothers:

I love that you said that. Um, and I have a few other things I want to add quickly as well. But to double down on that, um, English is not Spanish. Spanish is not English. They translate well to each other, um, more or less. Um, English is harder to translate into Arabic and vice versa, right? We need to think the same way about our systems, um, and that you cannot just take what you've been doing, buy a new system, and do it the exact same way. If that were the case, then just stick with your old system.

John Higgins:

Right, right.

KC Brothers:

The, the, part of the process of getting a new software system is also evaluating how can we be better and how, where does this software, Excel and, and thinking more, not about features, but maybe philosophies and executions. What is it that we're trying to accomplish? And then, yeah, of course, do we have to change the way we do it? Um, but the other thing I wanted to say just as you were talking about, you know, evaluating vendors, my personal preference and recommendation is to evaluate no less than three. If you're looking at one and you're like about to sign the contract, hard stop, like, evaluate that there's a reason why there are multiple tools. Um, we have built a. Rubric for people to use. Um, it is a Google sheet, um, that is, has a whole list of functionality that should at least get you started. But evaluate, look at different ones and weigh what does what better, whatever is most important to you. Um, and then yeah, to your point, talk to the community. I don't know if you have other recommended spots other than shows, but I see a lot of chatter in Reddit, um, and a decent amount in LinkedIn. But there are online communities as well as in person communities. I know there are lots of local communities. Um, lots of opportunity to talk to each other and talk shop.

John Higgins:

Yeah, no question about it. Anytime you can get together with other CPA practitioners, they're using something. Uh, you know, I really like your idea about looking at three solutions because you might look at the third solution and say, Gosh, that feature never even came up in the first two

KC Brothers:

solutions

John Higgins:

I looked at. Then it makes you think, go back to the other two and say, Do they have that capability? Or why don't they have that capability? So that, that's a really good idea. The part of the challenge is because, uh, most CPAs are pretty busy. Right? They don't have a lot of downtime. So, it's like easy to, to avoid looking at three. You might say, I'll look at two and that's good enough. But, um, you know, if they can invest that extra time, any time invested up front in evaluation and planning will pay big dividends on the back end during implementation. And gosh, I've had enough experience seeing implementations go wrong.

KC Brothers:

Yeah, and I've heard enough chatter, too, of, um, people purchasing something and being like, well, I just did this last year, but it's not suiting my needs, but I don't want to do it again this year. Especially when, if there's ever a client portal attached to Any Decision 2, because they don't want to do it to their clients. It's like, well, then make sure you evaluate it properly the first time.

John Higgins:

Yeah, for sure. And, and the portal is a great example, because sometimes, uh, We make decisions for our clients about what we think they want or don't want, uh, like a portal. And you got to make sure you communicate to them what the portal can do for them. And, uh, you know, more and more, we're all transitioning. We're all going through this digital transformation. Some people are, you know, almost completely down the path. Others are still at the beginning. Uh, but you have a lot of clients typically who are going to be eagerly wanting to adopt new technology because everybody's, you know, we're all watching news and, you know, YouTubes and things like that. And we see that, gosh, this is, this is changing, things are changing and we need to get on board. Uh, so yeah, I think that, uh, it's good to, uh, spend the time to do your research and invest what's out there and investigate what's out there.

KC Brothers:

Yeah. And I'd even make a plug here too. I mean, we use. seasonal talent during tax season to help with the accounting work. Don't shy away from hiring seasonal talent to help with evaluating software or, or not seasonal talent. Let's even scratch that. Hiring someone like yourself. Um, there, there are lots of opportunities like that where you can look to an expert, um, to help you evaluate your, your tech stack and your, Efficiencies or lack thereof. Yeah. And, and then work with them on a solution to get something in place and adopted well,

John Higgins:

yeah. And if you get a, you know, truly independent advisor, he or she's gonna be able to be objective about. You know, what are your needs or maybe, maybe it's not the software that's the problem. Maybe it's the way you are organized as a firm or your approach towards technology. So, it's, it's, the tool is just one part of it, right? You got the tools, you got the people, and you got the processes. They all three need to be looked at and evaluated, um, as you go about any digital transformation initiative.

KC Brothers:

I love that. I'm gonna double down on that. The tools, the people, and the processes. Yeah. I love that. I, I think that's

John Higgins:

a

KC Brothers:

A good way to end. In fact, I wish I mean, we probably could have even talked more about that because there's so much to unpack with how you approach each to make sure that you're successful as a firm. Um, but thank you again, John. This was great. It goes to show like you really can't sleep on technology. It moves every day, especially with AI, and it's gonna be really exciting to see how this impacts accounting.

John Higgins:

Oh, yeah, we're in for some interesting times. No question about it. And, uh, We'll see how it goes in the next couple of years, but it's going to move fast. So thanks for having me, Casey. I appreciate it.

KC Brothers:

Yeah. You're welcome.