How to Thrive in the New AI Order: Survival for Tax & Accounting Firms

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Welcome to the growth minded accountant podcast where our experts will share best practices on running your firm in the digital age. This podcast is brought to you by CountingWorks Pro. Let's get started. 

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Hi and welcome back to another episode of the growth minded accountant, I am your host, Lee reams, the second to the founder and CEO of countyworks and our sister company, tax buzz.com 

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and today we're diving into a topic that every tax and accounting pro needs to hear. It's how to thrive in the new AI order. And what we're going to talk about today is both from a communication kind of branding, 

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point of view of visibility, authority building and also understanding kind of the new expectations from a user experience and even a service experience that your your clients are going to expect in the AI. So a couple things I want to go over.

First, search has changed. It's no longer just about ranking on Google, it's about being recommended by AI so perplexity, chatgpt, obviously AI, Google search, right? And if your firm is not adapting to this shift, you risk becoming invisible. So user experiences and client expectations have changed. So today we're going to jump into a lot of issues. We're going to talk about macroeconomics, we're going to talk about trends. We're going to talk about how you can pivot your current firm and adapt to the AI New Order as usual. My co host, Rebecca Barton, our chief visibility officer, is here to talk about this topic and give a lot of insight on the AI visibility side. So Rebecca, if you can say hello.

Yes, hey everyone. I'm looking forward to this one, yeah. And we're going to go over why some firms are starting to struggle, and what you can do to make sure your firm doesn't just survive, but you thrive in this new era. So I'm going to start with some macro economic issues, you know. Is it, you know? And why is this perhaps creating some winners and some losers. Okay, so macroeconomic headwinds are hitting some hard. So if you're dealing with businesses that deal with tariffs or importing exporting, for example, you know you're obviously experiencing some sort of decline. There's a lot of different industries that are also kind of ebbing and flowing. So this is tied to a widespread, broader economic slowdown and uncertainty, right? No business likes certainty. Consumers don't like uncertainty. The good news so far is the consumer stays strong, right? But the question is, why are some of the big four cutting jobs? They're restructuring, adjusting operations in response to this. Could it be that AI is backfilling some of these more remedial tasks? I don't know, but there is definitely a change in sentiment. A was it a 2025 

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Avalara accountants Confidence Report 

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flipped the switch. It went from a hopeful 19% to a negative 39% between January and April, right? That's a big issue, you know, like, what is it that is making accountants do that? I would say that was the beginning of the Trump tariffs, and a lot of things have changed since then, right? So it's still uncertainty, but who knows? Right, over half of accounting professionals anticipate their firm's headcounts will shrink by at least 20% over the next five years, and 75% believe they'll still need the same or more staff to meet client demand.

So what does that mean? This points squarely at macro level, stressors affecting demand driven by inflation rate hikes, geopolitical friction, reduce client spending and structural pressures such as automation, and guess what? And AI, so what does that mean for our industry? We're going to see some winners and losers, and I'm starting to experience and Rebecca, I'll just ask you we're seeing. And you talk to our clients often, we go through kind of our vision of what the world needs to be for a tax and accounting firm and how to survive in the AI age, we started our big migration or change, or whatever you want to call it, about the authority, building the trust, building the visibility side on, and using AI tools to personalize this like never before and to scale content creation like never before. But you're getting pushback at times when, you know, accountants are set in their ways and like, I'm not going to use AI, I'm not going to do this, I'm not going to do that. But now, six months later, nine months later, 12 months later, after those discussions, they're like, oh, you know, my business is starting to suffer. So kind of, what is the sentiment you're hearing when you're talking to our clients? And I'm going to kind of go into what we're seeing and how you can adapt, yeah, so I think there is a reticence still among the tax and accounting world to kind of fully adopt AI, but that said, definitely in the past half a year, nine months. 

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We have seen more and more people getting excited about what we're doing, getting excited about how I AI can actually help them, how it can save them time, how it can assist them with their branding, how it can make everything more cohesive for them around the web, I think people are starting to realize that it's here to stay. I think, you know, even half a year ago, I was getting people who thought this was kind of a blip. They didn't think it was going to really last, particularly within the finance space, in any capacity. And here we are, and it's only getting bigger. It's only becoming more and more a part of people's day to day lives, both at work and at home. So there's definitely sort of an integration that's happening, a natural integration, where people are starting to recognize that they need to utilize AI tools in order to be competitive, and not only that, but in order to really grow in this day and age, you're not going to be able to achieve the goals you have for your business without utilizing AI in some capacity. And I think that's starting to become ingrained in people's minds, yeah, and what's happening right now is smaller and mid market accounting firms are starting to face competition from kind of new players. So it's not just the big accounting firms anymore. There's private equity roll ups that are happening that they're investing in all this AI technology, automation, better user experiences, better position packages and and pricing schemes for their clients, right? And that is a big deal, right? The good news is, on the flip side, mid size and boutique firms can and do compete by offering what we talk about all the time, specialized services, perhaps a niche being more agile. You have pricing advantages, right? You have lower overhead. There's a lot of ways to compete, and to be honest with you, you have availability the same powerful AI tools as these do.

So what I'm seeing right now, they're starting to become clear winners, typically, those are firms that are embracing tech AI workflows or niche specialties, and then I'm seeing what I call the strugglers, those in traditional, cost sensitive sectors or beyond, behind on this transformation, meaning I'm still charging hourly. I'm still just doing commodity tax returns. It's going to be more and more difficult to retain clients, to find new clients, and even push your pricing higher within those categories. So I consider these structural shifts beyond just what's happening in the economy, and they're you know, what's happening is automation and AR are increasingly displacing certain roles. Okay, 

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depends on who you want to listen to. I don't believe the Armageddon of the industry. Personally, I see more demand, all new opportunities, new startups, new businesses for the industry to support. But what you are going to see is a lot of automation of what I'm going to call the medial tasks and bookkeeping, collecting documents, scanning and being able to route documents very easily. So a lot of entry level work could vanish in, you know, and not just now, but like in the next five years. Okay, so there's that's issue one, and Issue two is, there's a huge talent shortage, right? We have fewer accountants coming in, fewer people going to sit for the CPA exam. We know there's a lot of different shifts on ownership of firms, perhaps the education requirements, so maybe there will be some movement there. But a lot of firms are responding by and I've heard this from even our own accounting firm. They're trimming clients or refusing new work to balance capacity, meaning they're actually at capacity. They're now pushing clients away. And it's kind of like we're only going to work with people who are are pain in the ass, type people. So it's interesting. So there's a couple different things here. There's macroeconomic stress, so broad decline in demand, job cuts, shifting sentiment. That is happening. Where it all ends up, you know, I believe it's going to be great and fine, but I'm just telling you that's what's happening. The winners, tech adopters, AI, friendly niche specialties, the losers, traditional sectors, under invested or low tech, right? That is changing. So what is the structural shift? AI, automation and workflows you have, the talent shortages. You have aging workforce. How many boomers are getting ready to retire? We see it all the time in our own client base, people that we've worked with for 2030, years retiring, and then obviously you're gonna have regulatory challenges.

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So what is the bottom line where we have both macro issues and select winners versus losers? 

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And I think this is going to create widespread pressure across the industry. So we've heard recently, like some firms, again, like Rebecca was talking who they're like, I'm losing clients. I'm not I'm struggling all of a sudden, and then we go to another client who's adapted everything we're talking about and doing the user experience with AI. 

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And and helping save times and hours and and scraping data and preparing data, and doing all kinds of fun things with technology, they're killing it. So the question is, you know, what do I do?

Let's talk about kind of things. So the tax prep industry, it remains profitable, right? Everyone, the big thing now is advisory demand is rising. Okay? There was a report from Thomson Reuters that said 75% of firms say tax return preparation for businesses and individuals remains the remains their most profitable line. Yet you're seeing this huge shift in client expectations. Three quarters of respondents to that report said their clients strongly desire more tax and business advisory in addition to basic tax services. Okay? So there is the the opportunity, right? So efficiency through tech adoption is going to be a key priority. And we're going to now talk about kind of how this works, and then we're going to go into how to use AI for the visibility, trust side, authority building side, and then how to use it for workflow automation. Okay, so what you're trying to do with technology, and maybe I shouldn't use the word AI, because it just scares people, but basically, in the way we're doing it, so we build our tool Max. We trained it on top of some underlying chat GPT models or Gemini models, and we basically have it so it's really, really accurate, okay? And what are we doing with that technology? Is we're now able to create custom written content that is human, curated, tech reviewed that we can now have it scale for 1000s and 1000s of clients, so meaning, if they're focusing on restaurant firms or not. Firms, restaurants, we can create content and campaigns that proactively push out on the behalf of the CPA firm, for example, personalized to their firm, so it has, you know, their personality, their bios, their style, their memories. You know, it's localized. It's very localized meaning using the towns or the States or the niche that they're working in, okay? And what this does is it takes a big shift in staff from doing all call administrative tasks like trying to create content on your own is monumental right to higher value advisory work. So instead of worrying about writing all the content or creating the content and accuracy, they're able now just to focus on the client work. So what you're seeing is smarter. Firms are using tech to scale. They're enhancing data security, which is a huge deal. We still have clients, believe it or not, that don't even understand the risks they put in on the security side, you know? So you need to start stepping up. Clients care about security. It's their personal data. They want to work with people that know them, know their firms. So you see a lot of firms that are differentiating their services, and they're competing with larger firms. And what's happening is that people are now able to do more advice giving. So I'm going to then go to the advisory services. So rapid growth and emerging challenges a staggering 80% of accounting firms report increasing demand for services such as what, financial planning, business strategy, technology consultants, all cornerstones of this client, advisory services. So Rebecca as a content person, if you have clients are now you know more into this over holistic look, whether you call it a virtual CFO, but you're now able to help a client do much more than just complete a tax return or reconcile books. How would you now start creating content strategies around that and start communicating it? Because if they don't know you're doing this, people aren't going to upsell and you're not going to attract new clients Exactly. So that's where AI can really come in handy. It can not only help you create these different multi channel we call it. So if you're using blogs and email campaigns and social media to reach people, we call that a multi channel approach. And with AI, you can create these really cohesive multi channel approaches. Max is great at it where it's going to spit out content plans for you, pieces of content for you that are geared towards your niche. They're geared towards your area. And when you do it this way, and everything is optimized, everything is localized. That's how you get visibility within these AI systems. They love recommending local firms. They love recommending niche firms.

That's a huge thing that AI is looking for. And we've said this before, but I'm going to say it again, because I think it's very important AI is giving smaller and mid sized firms a chance that they never had on Google. It does not care if you're Forbes, it cares that you're putting out super hyper relevant content, and that's what it's looking for. So with these content clusters, these Max playbooks that Leigh is talking about, it's making it really easy for you to establish yourself within generative search. We actually have a name for it now, Geo, as opposed to SEO, so it's generative engine optimization. We're. 

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Really important, something I'm obviously heavily focused on in my line of work. But we want to make sure that our clients are ranking within those generative systems. And that's a huge part of what playbooks are doing. Specifically, yeah, and when, in regards to advisory services, and I just talked about, you know, what people are looking for, we've created playbooks that are basically managed by Max. And what I mean by a playbook is think of it as an advertising campaign. So we create a series of blog posts, social media posts, perhaps some outbound emails. We can add the content to your current newsletter, but we start talking about the value add your you know a these are some new services, why a firm should look at us for virtual CFO. And what this does over time is it starts feeding the AI engines and perplexity, by the way, done a bunch of research. They're kind of like Google the old days, where they are looking for Forbes, they are looking for the IRS, but chat, CBT levels the playing field. So there's kind of some nuances there. So there's definitely things to think about, but basically what I'm saying is you need to start communicating this value to your clients, and that's a level in the client relationship layer that a lot of people are missing, right? So more statistics. I just want to keep backing it up, some social proof here. The future. Ready? Accountant, report. Wolters, kluwers did this, 83% of firms already offer advisory services, okay, and 20% more plan to expand into advisory. But this is the kicker, right, high growth firms are nearly 50% more likely to focus on advisory as their growth lever, okay? 

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This is something that goes counter to some of the stats that I had talked about in the headcount side. But there's some forecasts that say financial accounting advisory services are booming right now and expected to grow from one point or I think it's 101, I think one point. What is it? 100 billion to I think 165 

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billion by 2034 that's huge, huge growth. Okay, so let's start talking about this. How do you now scale up? So many firms are struggling to scale the advisory services across their client base, and a lot of this is about the client data, and where is it all located. So we accountingworks are basically building out our platform to do a bunch of things with client data. So we have our client hub, we have Max as the brain client hub, as the data. And then are we able now to scrape this data from input forms, from, 

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you know, interviewing your client, from your client conversations, from some other ways of gaining data about your client. So we can scrape financial statements, we can scrape tax returns. We now have all this data inside a system that can proactively be looking at that data and start recommending services for clients, strategies, tax planning strategies, perhaps, you know, identify, just, let's say it's a tax firm, identify your clients that have young children. They have dependents, okay, is there an opportunity to help them with... 

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...education savings? Right? I think this is kind of where it's going. And sometimes I think the disconnect is understanding that is the power of AI. AI can now scrape all this data, put it into context, and now be able to, in an instant, analyze that data and proactively come up with suggestions and solutions for you. So this is the future of the way I think tax and accounting firms are going to be run. So the firms that are still, you know, the guys that are going to succeed are not the ones still doing the hourly pricing. They're going to embrace non hourly pricing, right? They're going to bundle their services. They're going to do deeper specialization. Those are things that I think you're already starting to see the winners and the losers. So let's talk about a little bit of like the segment. So the tax services still highly profitable, clients increasingly want advisory add ons, so there's your upsell. So now you have a client that was only spending, Melissa, say, $5,000 a year with you. Now you know you're at 15. You know automation is freeing up bandwidth for this strategic work. And when we talk about automation, this could be as simple as just your client onboarding. Set up a proposal for a client. Client gets a personal one to one proposal that speaks directly to that restaurant owner. And if you're using AI tools, you're going to have a proposal that talks in their language. It's going to speak specifically to restaurant owners and in the proposal. So the first time they're getting ready to work with you, you're starting a conversation. You don't have this template proposal or this I charge hourly black hole, and you know, I'm going to stop a little bit. But So Rebecca, why would that be important from a user's point of view? You know, if I have someone that's writing a personal proposal, I pro. 

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Probably feel a little more comfortable like, wow, they really know me. How would that help me long term with that client? Yeah. So people want to feel like they have authentic relationships with service providers, especially when it comes to financial management, when it comes to taxes, accounting advisory, business consulting, anything kind of in the wheelhouse of the tax and accounting world, people really want to feel like they have an authentic, trustworthy professional relationship with you by setting the stage from day one that you are going to really see them, that you care, that you're going to personalize things, that they're not just a number. You're not only going to be more likely to retain them long term as a lifetime client, but you're going to be more likely to get referrals from them. You're going to be more likely to work with them on a multi generational level. All of these things that you want to drive long term growth can all start with something as simple as a personalized, AI driven proposal. And I think that's something I like to push with our clients. Is that AI can have a snowball effect. It's not just automating one task. It's proving to people that you're committed to developing this personalized relationship with them.

And then that is what's going to drive real growth and real relationships down the road. Yeah, and with this workflow and kind of this automation thing, and this is what I'm talking about, the user experience, and what's changed so ideal world, I send this one to one, personalized proposal to my restaurant owner. As soon as they accept and pay, they then get a an instant engagement letter, also personalized to them in language that they know. Now I've saying, Hey, this is how I work with restaurant owners. It details and speaks to their specific needs, nuances in the type of services again. Now it's reinforcing. They signed the engagement letter. Oh, and now can kick off an intake form built for restaurant owners, because we know what restaurant owners needs are. We know what questions to ask that is a form of a workflow that, when automated, will save you a ton of time. And more importantly, you're now scraping and bringing in this data that the AI now can analyze to help you do your job better. I mean, I'm going as far as suggesting a client interview questions. You know, drag in your tax return and say the previous tax return say, Hey, I'm interviewing this client. You know, what questions should I ask them? What kind of strategies should I perhaps look at? That is the value of using AI tools to make you smarter human in the loop? Yes, but more efficient. Okay, so advisory side, high demand or rapid growth, market expanding globally, adoption is hampered by what things communicating value, being able to scale, perhaps the client perception of what that that value is. And more importantly, how do you get this data together?

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So this is kind of the bottom line of this, and then now we're going to talk about how to how to deal with the client engagement models and how to make this work. So tax services remain a firm revenue Foundation. The focus is shifting towards advisory and clients expect deeper strategic value. Okay, advisory service are your growth engine. With firms expanding offerings and financial planning, business strategy, tech consulting and more, you're seeing more of these family office relationships where a CPA firm, for example, an enrolled agent, might have a relationship with a family office of services where they can now help their client and be that trusted source to make sure that not none of these decisions are being made in a vacuum. Okay, so the problem here is some of the implementation hurdles persist, specifically about client engagement models, and then again, how do I communicate this? So let's get into this 

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breaking out of what I'll call the compliance mindset, this is going to be hard, and you know, the traditional method equals trans transactional, right? Most firms are still structured around annual tax prep and hourly billing. This makes advisory feel like an extra, not an integrated service, okay? This is also creates a scaling problem. Advisory Services need ongoing conversations. They need proactive planning and customized strategy. So without new delivery models, retainers, subscription pricing, bundled packages, it's hard to roll this out across the entire client base. More importantly, client behavior. Okay, many clients are conditioned to think of their account as a once a year compliance partner. I can't tell you how much time we've spent writing content and creating content that go against that narrative really showing life events happen year round, people and even you know, we just did a a campaign called Tax concierge for I'll call middle to middle upper class clients to show them and the tax accountants how they can benefit from advisory This is more tax planning type of relationships, but you're talking 10,000 $20,000 a year in tax savings on a dual income family, each making 75...

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That's a lot of money, right? So what you need to do is you need to change your expectations. In your client's mind, I'm your year round advisor. It takes both marketing and operational restructuring. 

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Rebecca, let's talk about what have we done that's been successful with some clients on getting that year round. I'm here more of a package pricing versus kind of I just do tax returns. I see you once, and then I'm on vacation. Huge trend shifting this way. I see it with lots of our clients, particularly brand new clients who are being onboarded. Almost all of them offer like subscription based services in some capacity or another. We're seeing a lot of, you know, quarterly review. We're seeing a lot of in some cases, even monthly sit downs with business owners at kind of high level packages. We're seeing a lot of virtual meetings. We're seeing monthly reports being delivered throughout the year to business owners. We're seeing even in personal situations with high net worth, like dual income, types of situations, we're seeing quarterly reports being delivered. Where do you stand? Where do your investments stand? Where does this stand? What are we doing for tax planning? So I think people are starting to realize as a whole, both on the consumer side and within the tax and accounting industry, that this package based subscription pricing is more valuable to everyone. It's helping tax professionals earn more money. They're no longer a commodity. They're not kind of this once a year person where you just drop some documents by the office and leave. And it's also helping the consumer base understand that there is value in this. They're seeing that they're saving money. They're seeing that, you know, maybe they're paying more, but they're saving even more than that in their annual tax bill. So I think the longer people see that there is true value in advisory services and kind of these subscription level services, the more popular they're going to become as people begin to recommend them, as they start to see the benefit in their own lives. I also think there's an exclusivity to it that does not exist within the commoditization of tax and accounting services, and people love that. They want to feel like they're getting something special, something that not everyone has access to. And that's a really good way for tax professionals to position themselves that, hey, look, we're providing something more. We are offering you something that not everyone in the world has access to, but you... 

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...do perfect. Yeah, and leading firms are using playbooks. They're doing the tiered packaging. I'm not going to use AI anymore. I'm going to call it tech enabled. So tech enable portals like our client, hub, hub, to create consistent engagement that moves away from an hourly into outcomes. I think that's really important. And like even we have in development right now, we haven't released it. It's a couple months. I'm teasing, but we have a new kind of tech enabled tool that will then summarize when you're delivering a final tax return, for example, or even a financial statement, it will summarize it in client speak, not accountant speak, so like a narrative form, kind of highlight what the tax returns all about, maybe some opportunities, and then get the client to read this before they then go look at a PDF of a tax return and go, I don't know.

Does this look right? Does this start right? And then approve it not. And then it kicks off at 8879 with KBI, right? So it's really important to start utilizing these tools, all right, so the hidden bottleneck 

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is the data. Okay? So you might have a tax software product. Here, you might have a spreadsheet. Here, you might have a client portal. Here, you might even have some manual notes. Who knows, right? But this fragmentation is making it hard to analyze client data quickly or spot opportunities for tax planning. This is where automation and tech enabled tools come in. So if we can now make your client hub, the brains for all this data, so Intake Forms feed into the client hub. Tax returns, financial statements, feed into the client hub. Any interviews, maybe you have a transcript from a client interview, it feeds into your client hub. All that data now is walled within that client and now the AI can start analyzing it. You know, the tech enabled tools are chasing documents, you're now spending time advising and being proactive with your advice. Okay, so this is really important, that security is a big issue here. Clients are more sensitive than ever that their data privacy. So if you're weak or have inconsistent workflows that undermines trust, so if you're the person who emails someone their tax return, 

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versus using all things in one secure hub, I think that is a big red flag, okay, 

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and a lot of this data, so what I consider the best in class responses, high growth firms are centralizing this client data into their CRM. 

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Transcribed by https://otter.ai

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