February 5, 2025 • 34 mins
Joe Woodard shares his extensive background and insights into the current staffing crisis affecting accounting firms. We discuss the impact of technology and AI, and the growing popularity of outsourcing as a temporary solution.
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KC Brothers (00:06):
Welcome to another episode of Canopy Practice
Success.
I'm here with a well knownindividual in the industry
today, Joe Woodard.
Joe, how about you go ahead and,I mean, people most likely know
who you are, but give us alittle background first.
Joe Woodard (00:21):
Um, yeah, well, thank you, Casey, and it's great
to be here.
Uh, best way to describe me is,is I provide education,
coaching, resources,professional communities, and
consulting to accounting firms.
to empower them to enrich theirclients.
That's what we do over here atWatered.
And I've been honored to be athought leader within a
recognized thought leader withinthis profession for about 20
(00:43):
years now.
Um, I've taught over 150, 000accountants in my career.
So been at this for a littlewhile.
KC Brothers (00:50):
You've seen it all.
You've seen everything thatcould go right and everything
that could go wrong.
Joe Woodard (00:54):
Yeah.
And a little bit of everythingin between.
That's exactly right.
KC Brothers (00:57):
I love it.
Um, so.
I mean, we, we had a lot of,I've talked to a lot of
individuals that may have verywell been inspired by you.
You are one of the biggestorganizations that does what you
do.
I've spoken to severalindividuals who do this just as
a, a one stop shops or not onestop shop, uh, it's their job.
(01:18):
They're a single individualconsulting firms.
The nice thing about, of course,you having.
Done this you said for 20 yearsand having now a large
organization with lots of peopleis you really get a A rather
representative pulse of theindustry and what's going on.
And one of the things that stillblows my mind, I feel like I
(01:42):
first saw headlines on this 18,maybe even 24 months ago.
And I'm sure there were maybeeven things before that, um, is
just the, the supply demandchasm of talent, of accountants.
What's going on there?
Why, why is this still sopervasive?
Joe Woodard (02:00):
Yeah, it, well, it, it's not just a symptom of
COVID, though COVID did impactit.
Um, it's a symptom of this nextgeneration of humans that are
coming out of college and whatthey want to do, how they want
to engage the world.
Uh, and, and a mix of the factthat accountancy is a branding
(02:22):
problem.
So there's a lot of.
A lot of factors going intoplay, and I'm going to address
several things I've seen thathave been driving the staffing
crisis, but I kind of want tousher a weird elephant out of
the room when it comes tostaffing while we're seeing
headlines that say we're in themiddle of a staffing crisis.
We're also seeing headlines thatsay very large firms, including
(02:46):
the big 4 are laying offhundreds of workers.
How do we reconcile those twothings?
And, um, it's because the natureof the worker is changing.
So we'll get to that a littlebit more.
And so, uh, they don't have theright kind of worker for the
next generation of accountancy,but let's get to the staffing
(03:06):
crisis as a whole.
And then we'll kind of deal withthat next generation of worker.
But, um, and the 2 are, there'sa Venn diagram overlap between
the 2, but just talking aboutthe staffing crisis as a whole.
Okay.
There are more specializedrequirements that are necessary
when I hire an accountingprofessional.
It used to be if I have a degreein accounting, or I've been to a
(03:27):
trade school, and I know mydebits and credits, um, T
accounts, we used to call it wayback in the day, then, uh, or I
know how to interpret a taxorganizer to get the information
into a tax preparation softwareproduct.
I'm done.
I'm, I'm a qualified person towork in your practice, but now.
I hope.
It's more like we're, we'rehiring technicians who are
(03:49):
software experts that happen toalso know how to do debits and
credits or also know how to fillout tax forms and not everyone
is necessarily capable ofnavigating the technological
landscape that way.
And if they are, they're notnecessarily thinking.
(04:09):
Accountancy is the place I wantto deploy that, you know,
they're, they're, they want touse those schools and, uh, those
skills and those naturalaptitudes they have in something
that's more directly related tothe computer fields, right?
KC Brothers (04:23):
At this point, you're not necessarily talking
about people who have chosen togo and study accounting, get a
degree in counting, sit for theexam.
You're just talking about.
Yeah, the generation
Joe Woodard (04:36):
at large, the pool of people that may, you know, we
draw from a lot of non degree,degreed resources with
accountancy, especially withbookkeeping and tax preparation.
Um, there are a lot of peoplethat just developed the trade
skills or went to trade schoolor went to a junior college.
Those folks were never headedfor a career in quote unquote
accountancy.
(04:58):
And then so many times theaccounting finds people.
It found me.
I mean, my bachelor's degree isin classical Greek, not in
accounting.
I studied accounting at thegraduate level after accounting
found me and after I was hiredby a CPA firm.
So there are a lot of peoplethat, that came at this, this
profession sideways.
Those folks just, um, theyeither have a proclivity to
(05:21):
technology or they don't.
But now if they don't, theintersection doesn't happen.
You know, back whenever Iintersected accountancy, they
saw aptitude in me for theactual work of accountancy, and
then they discovered that I hadan aptitude toward technology.
Now, It has to be a technologyfirst person who happens to have
(05:45):
an aptitude for accountancy andthat, and I can't stress enough
that that category is out there.
The people with a strongtechnology proclivity do exist
in plenty in this nextgeneration of workers.
The problem is.
They don't naturally gravitatetoward accountancy with their
technology aptitude.
They gravitate to other businesssegments.
KC Brothers (06:07):
There are, and there are so many.
There are so many more optionsin that regard.
Yeah.
Joe Woodard (06:12):
And options that pay better, have, are more
exciting, and have better careeropportunities, better work life
synergy.
Which gets me into the nextproblem.
Our brand problem isn't allperception.
Our brand problem is, is, isalso reality.
Um, We, we, we have a seasonalworkload that is heavily tax
(06:32):
driven.
We have a realization andutilization measurement, uh,
that exists pervasively in ourprofession that values the
timesheet over meaningfuloutcomes.
And we have the.
Brand and I would think thereality of burning out college
students.
(06:52):
I mean, the idea is that youendure a trip through the
enterprise firm world to earnthe right to go hang your
shingle so you can struggle as asmall business owner for the
rest of your life and thenretire, maybe, hopefully to sell
your portfolio at somethingaround one X revenues.
Uh, yeah, that's a recruitmentpitch.
(07:12):
Um, so, so really, exactly.
We got to change the profession.
We've got to pay our peoplebetter, which means we have to
change the way we engage ourclients around outcomes instead
of inputs.
And we have to make enterprisefirms a place you want to stay,
uh, and you want to engage forall of your life, like they
(07:35):
might engage Google, or theymight engage Microsoft from a
technology side, um, or, or, orthey might engage CNN, or they
might engage ABC as ajournalist, and they just make a
career out of that larger worldthat takes care of them, that
treats them well, that pays themwell, that provides good
benefits, that fosters work lifesynergy.
(07:56):
Instead of what we have today,which is endure purgatory in
order to then go struggle as asmall business owner.
Uh, it's not a good valueproblem.
KC Brothers (08:06):
Yeah, I mean, it's so interesting.
I think back, um, to myself, um,I was in economics undergrad
with aspirations.
I remember interviewing atGoldman Sachs and.
Different places, but you know,the reputation they have is
similar is 60, 70, 80 hour workweeks.
Um, and you, you put in the timefor several years with the
(08:30):
hopes.
I mean, I didn't feel like, andmaybe I was a naive
undergraduate, but I didn't feellike the prospects for that path
were as grim as the ones you'vepainted here.
And I felt like, but the samething of like, okay, if I.
Earn my stripes, then I'll befree.
I'll make money.
And the thing that kept me fromdoing that was like, I was a
(08:53):
young single girl.
It was like, I, I would bemiserable.
I'm an extrovert.
I wouldn't have a social life.
I couldn't exercise.
I'm like, I would.
Emotionally die.
Joe Woodard (09:08):
Yeah.
And I'm not, and I'm not anexpert on that segment of the,
uh, uh, the market, but what Ican tell you is most segments of
the market at least provide abig enough carrot at the end of
the stick so that if somebodydoes want to work themselves in
70 hour work weeks, there,there's a stronger prospect.
(09:28):
For well, from the other side ofthat equation, um, we don't have
as strong of a prospect forwealth on the other side of the
equation.
And if we got there, we gotthere by climbing up the
rigorous and painful partnershipladder, which is now being
undercut by the P.
E.
Infusion so, so much the bestway to describe it is the, the
(09:48):
fear, the uncertainty and thedoubt that exists around our
profession right now, includingthe potential of what our
professions even going to looklike after this massive M and a.
It's, it's just not the sort ofmind filled into which a college
(10:09):
graduate would like to step,
KC Brothers (10:12):
but there's still so much need for accounting.
Like, it's, it's not the
Joe Woodard (10:16):
need doesn't go away.
That's for sure.
KC Brothers (10:18):
Yeah.
So you've talked about it beinga staffing crisis.
And, and there is because thework is still there.
The work still exists.
Yeah.
There are still smallbusinesses.
There are still individuals whoneed their taxes done.
Like what's, what's thedisconnect?
Why?
Why?
(10:38):
Aside from those things, um,well, I guess those are pretty
good explanations.
Well,
Joe Woodard (10:44):
I got an, I've got an explanation there.
We're in the messy middle.
Yeah.
The messy middle.
between the human effort beingrequired to do that work and the
technology evolving to theplace, including AI, evolving to
the place where it is going tomake significant productions.
(11:08):
It's going to create significantproductions to mimic the actual
work of a human worker.
And it's a messy middle.
Because this next generation ofworkers, it's not like they've
done some AI analytics, butthey're reading the tea leaves.
They're listening to collegecounselors.
They're, they're hearing thepitch from recruiters.
(11:30):
They're reading the headlines.
So they're gleaning.
That accountancy is about to besmaller than it is today because
the bots are going to do moreand more and more of the work.
Um, a company out of Californiastartup just came out with a big
press release.
They planted their flag now tosay, we are the first company
that has ran, uh, that has run acomplete bookkeeping cycle for
(11:53):
an entire month for a client.
A test tube laboratory outcomeresult, but they've declared it
solely by AI.
with all of the variables thathave existed for a real life
company with no humanintervention.
All right.
KC Brothers (12:08):
And, and no errors.
And no
Joe Woodard (12:11):
errors.
Zero errors.
So now we have the laboratoryproof case that AI can do a
complete bookkeeping monthlycycle without human intervention
with all the complexities andwithout, without error.
Um, so now to scale that.
(12:31):
You know, that's going to be acompletely different horizon,
but it exists now in alaboratory and the whatever that
that arc is between thelaboratory and systemic
adoption, those kind ofheadlines cause talent to say,
well, I'm not going to invest ina career that could likely be
(12:54):
displaced within a shorthorizon, you know, but.
But we're not quite there yet.
So while we're, we are repellinga talent because of the fear,
uncertainty and doubt of ourfuture as a profession, we
aren't yet to the place where AIis actually carrying the lift.
And that messy middle meansthere's a supply demand problem.
KC Brothers (13:19):
Yes.
So, okay.
I want to dive into a, but Ifeel like there's still so what
is there still a human elementthat people need to be
considering right now?
Joe Woodard (13:31):
Yes.
And I would say it's outsourcingoutsourcing and that's why
you're seeing an explosion ofoutsource services because
that's the gap filler for themessy middle.
And it's, it's a bubble.
Uh, the bubble will burst oncethe bots replace the outsourced
worker, but the offshoringworker.
But right now, the, thecompanies out of India, South
(13:53):
Africa, the Philippines, even,even Latin America, they're
exploding right now, uh, as away of filling in the gap
between where we were and wherewe're eventually going to be.
KC Brothers (14:04):
I'm, I'm reminded of, um, just a basic user
adoption curve with this oflike, you've got your early
adopters on the far left andyou've got your laggards on the
far right.
And this sounds like a classiccase of please don't be a
laggard.
Like let's, let's adopt thisearly because, um, if, if yeah,
(14:29):
we've got this laboratory casesetting where it's executed.
Perfectly on work that many ofour listeners do.
Don't drag your feet.
Joe Woodard (14:43):
Yes.
But then if you tell thelisteners of this podcast, I'm
assuming are largely accountingprofessionals.
If you tell them, yeah, just goout and buy AI or go out and
code AI.
I mean, no, I mean, that that'snot setting up people for
success.
So the way you embrace AI is toembrace the AI powered
technologies.
I mean, let somebody else isalready doing all that work for
(15:05):
you.
And I know this is, this isCanopy's podcast, so I'm not
pandering to my audience here,but, but Canopy's a good example
of this, right?
They, they, they've, they'reinfusing AI and have infused AI
into the product that you'realready using.
I love the, the email replyassist, right?
So that, that could save someone10 minutes, 15 minutes, 20
(15:26):
minutes on each reply to aclient.
Well, you know, you, you addthose up.
And it'll add up to 2080 hoursas a full time equivalent across
a scaled organization.
Um, that's one way to addressthe staffing crisis.
Um, and then when it comes toactually doing the bookkeeping
work itself, there's this entirecategory of AI powered month end
(15:50):
close that will help thebookkeeper.
workflow is in Canopy.
That's where it should be.
The process on how to do itshould be stored there.
The document handling with theclient.
Use the workflow, use thedocument handling.
But then when it comes toactually closing the books in
Xero, closing the books inQuickBooks, Zoho, whatever
(16:10):
you're using, there's anotherlayer of AI powered tool that
will go in and assist with thatmonthly close, streamlining the
amount of work that has to bedone, including reviewing the
entries that others haverecorded.
And so now the job of an accountmanager with empowered by these
AI driven tools, an accountmanager might be able to support
(16:33):
40 clients instead of 20 clientsor whatever, you know, the ratio
is, um, depending on complexity,uh, they might be able to double
double their portfolio.
Now, the work might still bedone.
It might be done in, in, inwhatever offshoring company
you're using.
But that review cycle could cutan entire full time job on the
(16:56):
account review side.
Um, especially since part oftheir job is, is interfacing
with the client.
You streamline the documenthandling like you, you all do
over there.
Canopy really well, youstreamline my responses to the
client through some AI poweredemail responses, then put in an
AI review and close tool.
You, you've cut headcount.
KC Brothers (17:18):
Yeah.
You make a really good pointtoo, about like the way you're
approaching AI.
Um, AI has a huge learning curveif you're going to try and do it
directly with an AI tool.
Joe Woodard (17:31):
Yes.
You're going to code.
KC Brothers (17:33):
Yeah.
It's, it's tricky.
It's tricky to incorporate itthe right way, to feed it the
right information, to prompt itthe right way.
But when you have good software.
That has already incorporated itin.
You don't have to worry aboutthose mental processes of
wrapping your brain around.
How do I get this to give mewhat I want?
Joe Woodard (17:54):
Exactly.
KC Brothers (17:56):
And if
Joe Woodard (17:56):
anybody's used chat GPT, which I think is everybody
listening, you know, that howyou ask the question is 90
percent of the battle and youend up spending all of this
energy, figuring out how to askthe question.
And, and so even if there aresolutions that are calling to
generative AI.
Maybe even calling to the sameAI platform that you're
(18:19):
interfacing with directly atChatGPT or wherever, whatever
you're using, Copilot, whateverit may be.
It, it's their lift to figureout the exact way to frame the
question underneath the surface,um, to get you just that right
email response or get you justthat right, uh, month in close
analytic.
KC Brothers (18:39):
Right?
And that's just generative.
But then there's the examplesof, um, the word I'm thinking of
is.
Uh, contextual of like, okay,I've got AI where my data is,
let me use the AI to interactwith the data to, in some
examples, you've said, um,review, um, the work, but in
(19:03):
something like canopy too,you've got all of your, your
firm data.
You've got.
Time, you've got invoices,you've got documents, you've got
client information.
Let's use AI on top of aplatform like that to help you
find information to, um, I'mgonna just let the cat out of
(19:25):
the bag here.
Um, we've got some really coolnew AI functionality to help you
summarize content within anemail thread.
Those things can get hairy andyou don't want to.
Joe Woodard (19:38):
Yeah.
All these last 20 exchanges.
These are the three actionitems, that kind of thing.
It's huge.
KC Brothers (19:43):
And even helping someone not just generate a
response based on a prompt,which we have now, but
suggesting an appropriateresponse to match the writer's
tone.
Which saves even more time.
Um, you mentioned documents.
Doc I often talk about clientsbeing the lifeblood of the
accountant and documents beingthe lifeblood of their work.
Joe Woodard (20:06):
That's a good way to phrase it.
KC Brothers (20:08):
You are stopped in your tracks when you don't have
the documents you need.
Um, but having a I layered inwith your documents to help you
check.
Did they?
In fact, give me everything theyneed.
Are they labeled correctly?
Are they classified the rightway?
Joe Woodard (20:25):
Or even just going in and mining out the data that
you want, you know, instead oftrying to find that basis
statement.
For that particular Schedule Dthat you're working, item you're
working on right now, could,might you just, and it's not
theoretical, it exists, be ableto ask AI, what is the basis of
this?
Particular investment and youdon't even even if you know, you
(20:49):
can go straight to the report.
You even know where on thereport to look.
It's so much faster just to askthe question and have the
question answered almost like a,like a, an internal Google
search on steroids.
Right?
And that's where you're going tosee AI cutting tax prep way
down.
I, whatever I did tax prep and Ispent years doing it.
The schedule D and specificallythe basis research around
(21:13):
schedule D, me.
That was about half of theenergy of the 1040s.
And what if you could cut thatback by 90 percent to that kind
of data mining activity?
You know that that's where I seea I creating a solve for the
staffing crisis.
But I also then think we getback to the part, first part of
the conversation.
(21:34):
That's where I see AI shrinkingthe profession.
I, I believe in the future wewill have a smaller profession
and hopefully a bettercompensated one with better
work-life balance, work-lifeharmony or, or synergy.
I like to call, I like to useword synergy.
Hopefully it'll be a betterprofession.
(21:56):
But there is nobody I don'tbelieve who has questioned it
will be a smaller one becausetax preparation and bookkeeping
and financial analytics and somany of these other disciplines
that require human effort aregoing to be done by the bots.
So, you know, if you're in asituation now where we're kind
of like in the future and you'rethe president, I'm facing a tax
(22:18):
season, I can't find workers,right?
AI is not yet to the point whereyou can go just say, Hey, do my
tax returns, right?
We're not there yet.
Um, you still have to findcandidates and I, I, the time
we're recording this, we'regoing into the big 2024 tax
year.
And, um, so a couple of things Ifound that work well, Casey is,
(22:40):
is online recruitment tools.
They're really good.
Um, the, the negative side ofthem is you're going to get a
ton of resumes and even somespammy stuff.
You got to cut through all thenoise.
But if you cut through thenoise, um, there, there are
diamonds in the rough.
Right?
Uh, if you, if you've had theability to do the admin lift on
it, um, recruitment agencies, ifit's a good 1, great, just still
(23:04):
screen the candidates.
Don't assume that because theyhand you 1, it's a fit.
That's the big mistake you makewith those.
LinkedIn is a great place tofind workers because now they
have job postings like any otherkind of online service.
Um, but if you are going to useLinkedIn to find people that
work within your profession,just make sure that you're,
(23:28):
you're doing it respectfully.
You don't want to get into thepoaching activity, right?
Um, you know, at least that's mypersonal ethic, but, but, uh,
so, so make sure you're not tooaggressive with it, but still,
you might find people that, thatnonetheless would be good
candidates.
They often have their, their,where they live, if local
(23:48):
matters to you in their profile.
And it's heavily searchable, butthe most above board way to do
it.
And probably the most effectiveis just create a job posting on
LinkedIn.
And we found that typically it'sa higher.
Qualified candidate to numberof, of resumes ratio.
Um, and I want to address thiskind of part time contractor,
(24:12):
seasonal worker thing.
I know to get through this nexttax season, you may have to do
whatever you have to do, but II'm not a fan of the part time
worker.
I'm not a fan of the seasonalworker.
And because the work is morethan the production, it's about
(24:32):
the team you build and theculture you build.
Right?
And bringing somebody in just tokind of work the shop for 3
months and they come and they goand there's a different person
coming and going or the sameperson cycling in and out.
Are they ultimately representingyour brand, your vision, your
mission, your purpose?
(24:52):
Do they have year longrelationships with clients?
Are they looking foropportunities to engage clients
in July rather than in Februaryaround tax analysis and tax
planning?
They just don't have that frameof mind.
Um, so, in as much as possible,it's better to hire full time
people on one side of theequation.
(25:15):
And then if you have bubbles ofproduction, then use a
combination of bots andoutsourcing to get the actual
entries into the right fields,but keep that person who's
client facing with you aroundyear round, pour into their life
professionally.
(25:35):
And as a team member year roundand let them always be
representing you from a brandperspective, because, I mean,
could you imagine going toDisney World and and the
experience being people who aretemp workers who only have a 6
week stint with Disney, youwould not experience the same
(25:57):
culture.
As engaging a year round teammember who's been through their
training, who understands theirvision, mission and purpose.
Um, and has been inculcated intothat culture.
That's the experience we'regiving our clients if we're not
careful.
KC Brothers (26:11):
You, you make such a good point because again, it's
not about how necessarily well,I mean, you, you need to do it
right.
A tax return, a bookkeepingservice, um, outsource CFO work,
whatever it might be.
But where business is made andbroken is in the relationship,
(26:34):
is in the human interaction, andif If you're hiring someone,
you, I've never heard someonetalk about season on part time
work like this, just becauseit's such a mainstay of the
industry.
Joe Woodard (26:46):
Yeah, well, and we're, we're big on culture over
here in our coach program.
So it, it becomes the, the plumline and the compass for, for
all that we, that we do with ourideal practice bottle.
And that's given us thatparticular lens to look through.
Um, impracticality of itbecause, you know, canopy is
always improving.
So now you've got to retrainthat person every year.
(27:08):
If you use canopy, um, what thelatest features are or the
latest way you're using theworkflow and there's going to be
inconsistencies of deliverythere.
Yeah.
KC Brothers (27:17):
Yeah.
Joe Woodard (27:17):
And
KC Brothers (27:18):
yeah, you could have switched any system or
software.
Joe Woodard (27:23):
Yes, exactly.
KC Brothers (27:25):
The software landscape today is not what it
was 20 years ago.
Joe Woodard (27:29):
No, it's volatile would be the word I would use.
That's a little bit harsh, butyeah, it's a volatile
environment.
Yeah.
KC Brothers (27:36):
For the user side.
Yes.
Um, I mean, a little bit evenfrom the software side, like
there are always new competitorspopping up and it keeps us on
our toes, which I like, youknow, like keeps us hungry and
healthily competitive.
Joe Woodard (27:53):
Yes.
Yes.
And, and therefore also, I mean,just this week, you know, we saw
that Dext was acquired by Iris.
Um, you know, SIFT was acquiredby Xero within the last 2
months.
So when these kinds of thingsare taking place too, it, it, it
creates a volatility, uh.
You know, within, within theuser market that we have to
navigate, navigating that withseasonal workers and part time
(28:14):
workers just adds extrachallenge.
Now, some people might ask,well, if I'm outsourcing, don't
I run into the same thing?
So, when you're choosing anoutsource company, you want to
choose an outsource company thattakes what is called a pod
approach.
So, say that I'm a firm oncanopy.
And I want to outsource some,some monthly bookkeeping work,
or even some seasonal taxbubbles.
(28:35):
Then I'm going, then thatoutsourcing company is going to
train an entire pod on, actuallythey may train an entire floor
of their operational canopy,depending on how many of your
users outsource with them.
So they're going to, there'sgoing to be canopy expertise
spread throughout theirorganization.
That's why I like going with ascaled player like Canopy
because the outsourcingcompanies are cross training on
(28:57):
you, right?
Proactively.
But within your pod, the pod isgoing to be trained on your
process in Canopy and yourdocument handling in Canopy.
So if you've got a seasonalspike from January to March,
January to April, um, then thatpod might have three or four
people in it.
(29:17):
If, uh, all the way up throughOctober, you might be resourcing
from one person in the pod, butthere's always one person
remaining in the pod who hasalways worked with you
throughout the year as the podscales up and down.
And that creates a continuity ofknowledge that you can offload
to the outsourcing company, um,and not have to retrain the
(29:41):
teams.
The retraining of the teams isactually one of the benefits
that you gain.
That's their lift, not yours.
Yeah.
KC Brothers (29:47):
Seriously.
Yeah.
The, the cost of acquiring a newcustomer can be applied to the
cost of acquiring a new employeetoo.
And
Joe Woodard (29:56):
absolutely
KC Brothers (29:58):
ramp speed and time to which they're become
productive.
And then if you lose them,Shoot.
You got to do it all over again.
Joe Woodard (30:06):
Exactly.
Which is another reason I don'tlike the part time model because
it's more susceptible toemployee turnover than the full
time is.
You're not their entirelivelihood.
You haven't invested in them asa career.
They haven't invested back inyou as their career.
Um, they're not a fullinculcated member of your
culture and therefore they'remore ripe to be poached or just
(30:27):
to.
Take their other part timeemployer and choose to go full
time with them.
The risks of employee turnoverare really strong there.
And just very briefly, I want tomention this contractor thing,
because this is, this is wheresome, some firms listening in,
you may be stepping into adanger zone that you haven't
fully thought through.
(30:48):
Um, on one side of thecontractor equation, it, they
really are employees.
And I think if anybodyunderstands contractor versus
employee and understands how towalk the line, it should be the
users of Canopy.
We should be the guardians ofour small business in this.
And we know what your, youshould know what your state's
(31:10):
rules are on this.
In order for a contractor to notbe an employee, you can't give
them equipment and make them useit as soon as you do.
They are your employee.
You can't dictate the systemsthat they use to produce the
work.
So as soon as I make them useCanopy, they're an employee.
(31:32):
So what is happening, we arebringing in what we're calling
contractors, but we thinkbecause we're paying them for
short amounts of time, orbecause we think that they're
not, we're not their primarysource of income.
We're only using those twoqualifications to say their
contractors will go back andread what your state's
(31:53):
requirements are.
Your Department of Labor isprobably saying if you make them
use canopy, they're youremployee.
If you issue, uh, if, if youmake them, uh, hit certain
deadlines that are you, youknow, saying you have to get
this work done by deadline.
How the work gets done, when thegets work gets done, when you
show up, when you go home, allof those things for most states
(32:16):
make that person an employee.
It makes your firm out ofcompliance.
So we're going to, I just wantto take contractor off the board
as being impractical,unreasonable, unlikely.
And that really just leaves uswith full time, part time
outsourcing.
Part time is highly volatile andcultural problems, as we
mentioned.
So now process of elimination,we're down to full time
(32:37):
outsource.
KC Brothers (32:39):
And then AI.
Joe Woodard (32:41):
And AI.
Yes.
Now you've got a third player onthe board.
I love it.
KC Brothers (32:45):
Yeah.
A lot of things for firms tolearn now, but I would say.
More hope than I've heard in along time in regards to staffing
crisis and AI that like thecombo of it Like I think for me
at least relieves, um somepressure of finding talent and
opens up opportunity to sayThere are so many developments
(33:07):
and lots of progress being donewith AI I just need to find it
and then implement it and eventhat could even be Um, something
you use to attract the nextemployee.
Yes,
Joe Woodard (33:19):
I'm a modern AI powered firm.
Absolutely.
And just a couple of things onthat.
Yes, the future is bright.
The reason that you may belistening to this and you don't
feel that brightness or even seethat light at the end of the
tunnel yet is because you're inthe messy middle.
But just remember it's a middle.
Push through folks and, um, andI, I, I'm sorry about the, the,
(33:40):
the sort of the name drop hereon my conference, but I'd be
remiss if I didn't say thenation's largest accounting
technology expo is my conferenceand it's in June.
Canopy will be there.
You guys have a nice big spot.
Come see your friends at canopyat scaling new heights this
coming June.
Where these AI power tools aregoing to be out there to
(34:01):
explore.
It's a great place to take thatnext step.
KC Brothers (34:05):
Well, awesome.
Thanks.
So I think with that, we'll wrapup.
It's been a pleasure talking toyou today.
It's
Joe Woodard (34:09):
great to talk with you, Casey.
Welcome to another episode of Canopy Practice
Success.
I'm here with a well knownindividual in the industry
today, Joe Woodard.
Joe, how about you go ahead and,I mean, people most likely know
who you are, but give us alittle background first.
Joe Woodard (00:21):
Um, yeah, well, thank you, Casey, and it's great
to be here.
Uh, best way to describe me is,is I provide education,
coaching, resources,professional communities, and
consulting to accounting firms.
to empower them to enrich theirclients.
That's what we do over here atWatered.
And I've been honored to be athought leader within a
recognized thought leader withinthis profession for about 20
(00:43):
years now.
Um, I've taught over 150, 000accountants in my career.
So been at this for a littlewhile.
KC Brothers (00:50):
You've seen it all.
You've seen everything thatcould go right and everything
that could go wrong.
Joe Woodard (00:54):
Yeah.
And a little bit of everythingin between.
That's exactly right.
KC Brothers (00:57):
I love it.
Um, so.
I mean, we, we had a lot of,I've talked to a lot of
individuals that may have verywell been inspired by you.
You are one of the biggestorganizations that does what you
do.
I've spoken to severalindividuals who do this just as
a, a one stop shops or not onestop shop, uh, it's their job.
(01:18):
They're a single individualconsulting firms.
The nice thing about, of course,you having.
Done this you said for 20 yearsand having now a large
organization with lots of peopleis you really get a A rather
representative pulse of theindustry and what's going on.
And one of the things that stillblows my mind, I feel like I
(01:42):
first saw headlines on this 18,maybe even 24 months ago.
And I'm sure there were maybeeven things before that, um, is
just the, the supply demandchasm of talent, of accountants.
What's going on there?
Why, why is this still sopervasive?
Joe Woodard (02:00):
Yeah, it, well, it, it's not just a symptom of
COVID, though COVID did impactit.
Um, it's a symptom of this nextgeneration of humans that are
coming out of college and whatthey want to do, how they want
to engage the world.
Uh, and, and a mix of the factthat accountancy is a branding
(02:22):
problem.
So there's a lot of.
A lot of factors going intoplay, and I'm going to address
several things I've seen thathave been driving the staffing
crisis, but I kind of want tousher a weird elephant out of
the room when it comes tostaffing while we're seeing
headlines that say we're in themiddle of a staffing crisis.
We're also seeing headlines thatsay very large firms, including
(02:46):
the big 4 are laying offhundreds of workers.
How do we reconcile those twothings?
And, um, it's because the natureof the worker is changing.
So we'll get to that a littlebit more.
And so, uh, they don't have theright kind of worker for the
next generation of accountancy,but let's get to the staffing
(03:06):
crisis as a whole.
And then we'll kind of deal withthat next generation of worker.
But, um, and the 2 are, there'sa Venn diagram overlap between
the 2, but just talking aboutthe staffing crisis as a whole.
Okay.
There are more specializedrequirements that are necessary
when I hire an accountingprofessional.
It used to be if I have a degreein accounting, or I've been to a
(03:27):
trade school, and I know mydebits and credits, um, T
accounts, we used to call it wayback in the day, then, uh, or I
know how to interpret a taxorganizer to get the information
into a tax preparation softwareproduct.
I'm done.
I'm, I'm a qualified person towork in your practice, but now.
I hope.
It's more like we're, we'rehiring technicians who are
(03:49):
software experts that happen toalso know how to do debits and
credits or also know how to fillout tax forms and not everyone
is necessarily capable ofnavigating the technological
landscape that way.
And if they are, they're notnecessarily thinking.
(04:09):
Accountancy is the place I wantto deploy that, you know,
they're, they're, they want touse those schools and, uh, those
skills and those naturalaptitudes they have in something
that's more directly related tothe computer fields, right?
KC Brothers (04:23):
At this point, you're not necessarily talking
about people who have chosen togo and study accounting, get a
degree in counting, sit for theexam.
You're just talking about.
Yeah, the generation
Joe Woodard (04:36):
at large, the pool of people that may, you know, we
draw from a lot of non degree,degreed resources with
accountancy, especially withbookkeeping and tax preparation.
Um, there are a lot of peoplethat just developed the trade
skills or went to trade schoolor went to a junior college.
Those folks were never headedfor a career in quote unquote
accountancy.
(04:58):
And then so many times theaccounting finds people.
It found me.
I mean, my bachelor's degree isin classical Greek, not in
accounting.
I studied accounting at thegraduate level after accounting
found me and after I was hiredby a CPA firm.
So there are a lot of peoplethat, that came at this, this
profession sideways.
Those folks just, um, theyeither have a proclivity to
(05:21):
technology or they don't.
But now if they don't, theintersection doesn't happen.
You know, back whenever Iintersected accountancy, they
saw aptitude in me for theactual work of accountancy, and
then they discovered that I hadan aptitude toward technology.
Now, It has to be a technologyfirst person who happens to have
(05:45):
an aptitude for accountancy andthat, and I can't stress enough
that that category is out there.
The people with a strongtechnology proclivity do exist
in plenty in this nextgeneration of workers.
The problem is.
They don't naturally gravitatetoward accountancy with their
technology aptitude.
They gravitate to other businesssegments.
KC Brothers (06:07):
There are, and there are so many.
There are so many more optionsin that regard.
Yeah.
Joe Woodard (06:12):
And options that pay better, have, are more
exciting, and have better careeropportunities, better work life
synergy.
Which gets me into the nextproblem.
Our brand problem isn't allperception.
Our brand problem is, is, isalso reality.
Um, We, we, we have a seasonalworkload that is heavily tax
(06:32):
driven.
We have a realization andutilization measurement, uh,
that exists pervasively in ourprofession that values the
timesheet over meaningfuloutcomes.
And we have the.
Brand and I would think thereality of burning out college
students.
(06:52):
I mean, the idea is that youendure a trip through the
enterprise firm world to earnthe right to go hang your
shingle so you can struggle as asmall business owner for the
rest of your life and thenretire, maybe, hopefully to sell
your portfolio at somethingaround one X revenues.
Uh, yeah, that's a recruitmentpitch.
(07:12):
Um, so, so really, exactly.
We got to change the profession.
We've got to pay our peoplebetter, which means we have to
change the way we engage ourclients around outcomes instead
of inputs.
And we have to make enterprisefirms a place you want to stay,
uh, and you want to engage forall of your life, like they
(07:35):
might engage Google, or theymight engage Microsoft from a
technology side, um, or, or, orthey might engage CNN, or they
might engage ABC as ajournalist, and they just make a
career out of that larger worldthat takes care of them, that
treats them well, that pays themwell, that provides good
benefits, that fosters work lifesynergy.
(07:56):
Instead of what we have today,which is endure purgatory in
order to then go struggle as asmall business owner.
Uh, it's not a good valueproblem.
KC Brothers (08:06):
Yeah, I mean, it's so interesting.
I think back, um, to myself, um,I was in economics undergrad
with aspirations.
I remember interviewing atGoldman Sachs and.
Different places, but you know,the reputation they have is
similar is 60, 70, 80 hour workweeks.
Um, and you, you put in the timefor several years with the
(08:30):
hopes.
I mean, I didn't feel like, andmaybe I was a naive
undergraduate, but I didn't feellike the prospects for that path
were as grim as the ones you'vepainted here.
And I felt like, but the samething of like, okay, if I.
Earn my stripes, then I'll befree.
I'll make money.
And the thing that kept me fromdoing that was like, I was a
(08:53):
young single girl.
It was like, I, I would bemiserable.
I'm an extrovert.
I wouldn't have a social life.
I couldn't exercise.
I'm like, I would.
Emotionally die.
Joe Woodard (09:08):
Yeah.
And I'm not, and I'm not anexpert on that segment of the,
uh, uh, the market, but what Ican tell you is most segments of
the market at least provide abig enough carrot at the end of
the stick so that if somebodydoes want to work themselves in
70 hour work weeks, there,there's a stronger prospect.
(09:28):
For well, from the other side ofthat equation, um, we don't have
as strong of a prospect forwealth on the other side of the
equation.
And if we got there, we gotthere by climbing up the
rigorous and painful partnershipladder, which is now being
undercut by the P.
E.
Infusion so, so much the bestway to describe it is the, the
(09:48):
fear, the uncertainty and thedoubt that exists around our
profession right now, includingthe potential of what our
professions even going to looklike after this massive M and a.
It's, it's just not the sort ofmind filled into which a college
(10:09):
graduate would like to step,
KC Brothers (10:12):
but there's still so much need for accounting.
Like, it's, it's not the
Joe Woodard (10:16):
need doesn't go away.
That's for sure.
KC Brothers (10:18):
Yeah.
So you've talked about it beinga staffing crisis.
And, and there is because thework is still there.
The work still exists.
Yeah.
There are still smallbusinesses.
There are still individuals whoneed their taxes done.
Like what's, what's thedisconnect?
Why?
Why?
(10:38):
Aside from those things, um,well, I guess those are pretty
good explanations.
Well,
Joe Woodard (10:44):
I got an, I've got an explanation there.
We're in the messy middle.
Yeah.
The messy middle.
between the human effort beingrequired to do that work and the
technology evolving to theplace, including AI, evolving to
the place where it is going tomake significant productions.
(11:08):
It's going to create significantproductions to mimic the actual
work of a human worker.
And it's a messy middle.
Because this next generation ofworkers, it's not like they've
done some AI analytics, butthey're reading the tea leaves.
They're listening to collegecounselors.
They're, they're hearing thepitch from recruiters.
(11:30):
They're reading the headlines.
So they're gleaning.
That accountancy is about to besmaller than it is today because
the bots are going to do moreand more and more of the work.
Um, a company out of Californiastartup just came out with a big
press release.
They planted their flag now tosay, we are the first company
that has ran, uh, that has run acomplete bookkeeping cycle for
(11:53):
an entire month for a client.
A test tube laboratory outcomeresult, but they've declared it
solely by AI.
with all of the variables thathave existed for a real life
company with no humanintervention.
All right.
KC Brothers (12:08):
And, and no errors.
And no
Joe Woodard (12:11):
errors.
Zero errors.
So now we have the laboratoryproof case that AI can do a
complete bookkeeping monthlycycle without human intervention
with all the complexities andwithout, without error.
Um, so now to scale that.
(12:31):
You know, that's going to be acompletely different horizon,
but it exists now in alaboratory and the whatever that
that arc is between thelaboratory and systemic
adoption, those kind ofheadlines cause talent to say,
well, I'm not going to invest ina career that could likely be
(12:54):
displaced within a shorthorizon, you know, but.
But we're not quite there yet.
So while we're, we are repellinga talent because of the fear,
uncertainty and doubt of ourfuture as a profession, we
aren't yet to the place where AIis actually carrying the lift.
And that messy middle meansthere's a supply demand problem.
KC Brothers (13:19):
Yes.
So, okay.
I want to dive into a, but Ifeel like there's still so what
is there still a human elementthat people need to be
considering right now?
Joe Woodard (13:31):
Yes.
And I would say it's outsourcingoutsourcing and that's why
you're seeing an explosion ofoutsource services because
that's the gap filler for themessy middle.
And it's, it's a bubble.
Uh, the bubble will burst oncethe bots replace the outsourced
worker, but the offshoringworker.
But right now, the, thecompanies out of India, South
(13:53):
Africa, the Philippines, even,even Latin America, they're
exploding right now, uh, as away of filling in the gap
between where we were and wherewe're eventually going to be.
KC Brothers (14:04):
I'm, I'm reminded of, um, just a basic user
adoption curve with this oflike, you've got your early
adopters on the far left andyou've got your laggards on the
far right.
And this sounds like a classiccase of please don't be a
laggard.
Like let's, let's adopt thisearly because, um, if, if yeah,
(14:29):
we've got this laboratory casesetting where it's executed.
Perfectly on work that many ofour listeners do.
Don't drag your feet.
Joe Woodard (14:43):
Yes.
But then if you tell thelisteners of this podcast, I'm
assuming are largely accountingprofessionals.
If you tell them, yeah, just goout and buy AI or go out and
code AI.
I mean, no, I mean, that that'snot setting up people for
success.
So the way you embrace AI is toembrace the AI powered
technologies.
I mean, let somebody else isalready doing all that work for
(15:05):
you.
And I know this is, this isCanopy's podcast, so I'm not
pandering to my audience here,but, but Canopy's a good example
of this, right?
They, they, they've, they'reinfusing AI and have infused AI
into the product that you'realready using.
I love the, the email replyassist, right?
So that, that could save someone10 minutes, 15 minutes, 20
(15:26):
minutes on each reply to aclient.
Well, you know, you, you addthose up.
And it'll add up to 2080 hoursas a full time equivalent across
a scaled organization.
Um, that's one way to addressthe staffing crisis.
Um, and then when it comes toactually doing the bookkeeping
work itself, there's this entirecategory of AI powered month end
(15:50):
close that will help thebookkeeper.
workflow is in Canopy.
That's where it should be.
The process on how to do itshould be stored there.
The document handling with theclient.
Use the workflow, use thedocument handling.
But then when it comes toactually closing the books in
Xero, closing the books inQuickBooks, Zoho, whatever
(16:10):
you're using, there's anotherlayer of AI powered tool that
will go in and assist with thatmonthly close, streamlining the
amount of work that has to bedone, including reviewing the
entries that others haverecorded.
And so now the job of an accountmanager with empowered by these
AI driven tools, an accountmanager might be able to support
(16:33):
40 clients instead of 20 clientsor whatever, you know, the ratio
is, um, depending on complexity,uh, they might be able to double
double their portfolio.
Now, the work might still bedone.
It might be done in, in, inwhatever offshoring company
you're using.
But that review cycle could cutan entire full time job on the
(16:56):
account review side.
Um, especially since part oftheir job is, is interfacing
with the client.
You streamline the documenthandling like you, you all do
over there.
Canopy really well, youstreamline my responses to the
client through some AI poweredemail responses, then put in an
AI review and close tool.
You, you've cut headcount.
KC Brothers (17:18):
Yeah.
You make a really good pointtoo, about like the way you're
approaching AI.
Um, AI has a huge learning curveif you're going to try and do it
directly with an AI tool.
Joe Woodard (17:31):
Yes.
You're going to code.
KC Brothers (17:33):
Yeah.
It's, it's tricky.
It's tricky to incorporate itthe right way, to feed it the
right information, to prompt itthe right way.
But when you have good software.
That has already incorporated itin.
You don't have to worry aboutthose mental processes of
wrapping your brain around.
How do I get this to give mewhat I want?
Joe Woodard (17:54):
Exactly.
KC Brothers (17:56):
And if
Joe Woodard (17:56):
anybody's used chat GPT, which I think is everybody
listening, you know, that howyou ask the question is 90
percent of the battle and youend up spending all of this
energy, figuring out how to askthe question.
And, and so even if there aresolutions that are calling to
generative AI.
Maybe even calling to the sameAI platform that you're
(18:19):
interfacing with directly atChatGPT or wherever, whatever
you're using, Copilot, whateverit may be.
It, it's their lift to figureout the exact way to frame the
question underneath the surface,um, to get you just that right
email response or get you justthat right, uh, month in close
analytic.
KC Brothers (18:39):
Right?
And that's just generative.
But then there's the examplesof, um, the word I'm thinking of
is.
Uh, contextual of like, okay,I've got AI where my data is,
let me use the AI to interactwith the data to, in some
examples, you've said, um,review, um, the work, but in
(19:03):
something like canopy too,you've got all of your, your
firm data.
You've got.
Time, you've got invoices,you've got documents, you've got
client information.
Let's use AI on top of aplatform like that to help you
find information to, um, I'mgonna just let the cat out of
(19:25):
the bag here.
Um, we've got some really coolnew AI functionality to help you
summarize content within anemail thread.
Those things can get hairy andyou don't want to.
Joe Woodard (19:38):
Yeah.
All these last 20 exchanges.
These are the three actionitems, that kind of thing.
It's huge.
KC Brothers (19:43):
And even helping someone not just generate a
response based on a prompt,which we have now, but
suggesting an appropriateresponse to match the writer's
tone.
Which saves even more time.
Um, you mentioned documents.
Doc I often talk about clientsbeing the lifeblood of the
accountant and documents beingthe lifeblood of their work.
Joe Woodard (20:06):
That's a good way to phrase it.
KC Brothers (20:08):
You are stopped in your tracks when you don't have
the documents you need.
Um, but having a I layered inwith your documents to help you
check.
Did they?
In fact, give me everything theyneed.
Are they labeled correctly?
Are they classified the rightway?
Joe Woodard (20:25):
Or even just going in and mining out the data that
you want, you know, instead oftrying to find that basis
statement.
For that particular Schedule Dthat you're working, item you're
working on right now, could,might you just, and it's not
theoretical, it exists, be ableto ask AI, what is the basis of
this?
Particular investment and youdon't even even if you know, you
(20:49):
can go straight to the report.
You even know where on thereport to look.
It's so much faster just to askthe question and have the
question answered almost like a,like a, an internal Google
search on steroids.
Right?
And that's where you're going tosee AI cutting tax prep way
down.
I, whatever I did tax prep and Ispent years doing it.
The schedule D and specificallythe basis research around
(21:13):
schedule D, me.
That was about half of theenergy of the 1040s.
And what if you could cut thatback by 90 percent to that kind
of data mining activity?
You know that that's where I seea I creating a solve for the
staffing crisis.
But I also then think we getback to the part, first part of
the conversation.
(21:34):
That's where I see AI shrinkingthe profession.
I, I believe in the future wewill have a smaller profession
and hopefully a bettercompensated one with better
work-life balance, work-lifeharmony or, or synergy.
I like to call, I like to useword synergy.
Hopefully it'll be a betterprofession.
(21:56):
But there is nobody I don'tbelieve who has questioned it
will be a smaller one becausetax preparation and bookkeeping
and financial analytics and somany of these other disciplines
that require human effort aregoing to be done by the bots.
So, you know, if you're in asituation now where we're kind
of like in the future and you'rethe president, I'm facing a tax
(22:18):
season, I can't find workers,right?
AI is not yet to the point whereyou can go just say, Hey, do my
tax returns, right?
We're not there yet.
Um, you still have to findcandidates and I, I, the time
we're recording this, we'regoing into the big 2024 tax
year.
And, um, so a couple of things Ifound that work well, Casey is,
(22:40):
is online recruitment tools.
They're really good.
Um, the, the negative side ofthem is you're going to get a
ton of resumes and even somespammy stuff.
You got to cut through all thenoise.
But if you cut through thenoise, um, there, there are
diamonds in the rough.
Right?
Uh, if you, if you've had theability to do the admin lift on
it, um, recruitment agencies, ifit's a good 1, great, just still
(23:04):
screen the candidates.
Don't assume that because theyhand you 1, it's a fit.
That's the big mistake you makewith those.
LinkedIn is a great place tofind workers because now they
have job postings like any otherkind of online service.
Um, but if you are going to useLinkedIn to find people that
work within your profession,just make sure that you're,
(23:28):
you're doing it respectfully.
You don't want to get into thepoaching activity, right?
Um, you know, at least that's mypersonal ethic, but, but, uh,
so, so make sure you're not tooaggressive with it, but still,
you might find people that, thatnonetheless would be good
candidates.
They often have their, their,where they live, if local
(23:48):
matters to you in their profile.
And it's heavily searchable, butthe most above board way to do
it.
And probably the most effectiveis just create a job posting on
LinkedIn.
And we found that typically it'sa higher.
Qualified candidate to numberof, of resumes ratio.
Um, and I want to address thiskind of part time contractor,
(24:12):
seasonal worker thing.
I know to get through this nexttax season, you may have to do
whatever you have to do, but II'm not a fan of the part time
worker.
I'm not a fan of the seasonalworker.
And because the work is morethan the production, it's about
(24:32):
the team you build and theculture you build.
Right?
And bringing somebody in just tokind of work the shop for 3
months and they come and they goand there's a different person
coming and going or the sameperson cycling in and out.
Are they ultimately representingyour brand, your vision, your
mission, your purpose?
(24:52):
Do they have year longrelationships with clients?
Are they looking foropportunities to engage clients
in July rather than in Februaryaround tax analysis and tax
planning?
They just don't have that frameof mind.
Um, so, in as much as possible,it's better to hire full time
people on one side of theequation.
(25:15):
And then if you have bubbles ofproduction, then use a
combination of bots andoutsourcing to get the actual
entries into the right fields,but keep that person who's
client facing with you aroundyear round, pour into their life
professionally.
(25:35):
And as a team member year roundand let them always be
representing you from a brandperspective, because, I mean,
could you imagine going toDisney World and and the
experience being people who aretemp workers who only have a 6
week stint with Disney, youwould not experience the same
(25:57):
culture.
As engaging a year round teammember who's been through their
training, who understands theirvision, mission and purpose.
Um, and has been inculcated intothat culture.
That's the experience we'regiving our clients if we're not
careful.
KC Brothers (26:11):
You, you make such a good point because again, it's
not about how necessarily well,I mean, you, you need to do it
right.
A tax return, a bookkeepingservice, um, outsource CFO work,
whatever it might be.
But where business is made andbroken is in the relationship,
(26:34):
is in the human interaction, andif If you're hiring someone,
you, I've never heard someonetalk about season on part time
work like this, just becauseit's such a mainstay of the
industry.
Joe Woodard (26:46):
Yeah, well, and we're, we're big on culture over
here in our coach program.
So it, it becomes the, the plumline and the compass for, for
all that we, that we do with ourideal practice bottle.
And that's given us thatparticular lens to look through.
Um, impracticality of itbecause, you know, canopy is
always improving.
So now you've got to retrainthat person every year.
(27:08):
If you use canopy, um, what thelatest features are or the
latest way you're using theworkflow and there's going to be
inconsistencies of deliverythere.
Yeah.
KC Brothers (27:17):
Yeah.
Joe Woodard (27:17):
And
KC Brothers (27:18):
yeah, you could have switched any system or
software.
Joe Woodard (27:23):
Yes, exactly.
KC Brothers (27:25):
The software landscape today is not what it
was 20 years ago.
Joe Woodard (27:29):
No, it's volatile would be the word I would use.
That's a little bit harsh, butyeah, it's a volatile
environment.
Yeah.
KC Brothers (27:36):
For the user side.
Yes.
Um, I mean, a little bit evenfrom the software side, like
there are always new competitorspopping up and it keeps us on
our toes, which I like, youknow, like keeps us hungry and
healthily competitive.
Joe Woodard (27:53):
Yes.
Yes.
And, and therefore also, I mean,just this week, you know, we saw
that Dext was acquired by Iris.
Um, you know, SIFT was acquiredby Xero within the last 2
months.
So when these kinds of thingsare taking place too, it, it, it
creates a volatility, uh.
You know, within, within theuser market that we have to
navigate, navigating that withseasonal workers and part time
(28:14):
workers just adds extrachallenge.
Now, some people might ask,well, if I'm outsourcing, don't
I run into the same thing?
So, when you're choosing anoutsource company, you want to
choose an outsource company thattakes what is called a pod
approach.
So, say that I'm a firm oncanopy.
And I want to outsource some,some monthly bookkeeping work,
or even some seasonal taxbubbles.
(28:35):
Then I'm going, then thatoutsourcing company is going to
train an entire pod on, actuallythey may train an entire floor
of their operational canopy,depending on how many of your
users outsource with them.
So they're going to, there'sgoing to be canopy expertise
spread throughout theirorganization.
That's why I like going with ascaled player like Canopy
because the outsourcingcompanies are cross training on
(28:57):
you, right?
Proactively.
But within your pod, the pod isgoing to be trained on your
process in Canopy and yourdocument handling in Canopy.
So if you've got a seasonalspike from January to March,
January to April, um, then thatpod might have three or four
people in it.
(29:17):
If, uh, all the way up throughOctober, you might be resourcing
from one person in the pod, butthere's always one person
remaining in the pod who hasalways worked with you
throughout the year as the podscales up and down.
And that creates a continuity ofknowledge that you can offload
to the outsourcing company, um,and not have to retrain the
(29:41):
teams.
The retraining of the teams isactually one of the benefits
that you gain.
That's their lift, not yours.
Yeah.
KC Brothers (29:47):
Seriously.
Yeah.
The, the cost of acquiring a newcustomer can be applied to the
cost of acquiring a new employeetoo.
And
Joe Woodard (29:56):
absolutely
KC Brothers (29:58):
ramp speed and time to which they're become
productive.
And then if you lose them,Shoot.
You got to do it all over again.
Joe Woodard (30:06):
Exactly.
Which is another reason I don'tlike the part time model because
it's more susceptible toemployee turnover than the full
time is.
You're not their entirelivelihood.
You haven't invested in them asa career.
They haven't invested back inyou as their career.
Um, they're not a fullinculcated member of your
culture and therefore they'remore ripe to be poached or just
(30:27):
to.
Take their other part timeemployer and choose to go full
time with them.
The risks of employee turnoverare really strong there.
And just very briefly, I want tomention this contractor thing,
because this is, this is wheresome, some firms listening in,
you may be stepping into adanger zone that you haven't
fully thought through.
(30:48):
Um, on one side of thecontractor equation, it, they
really are employees.
And I think if anybodyunderstands contractor versus
employee and understands how towalk the line, it should be the
users of Canopy.
We should be the guardians ofour small business in this.
And we know what your, youshould know what your state's
(31:10):
rules are on this.
In order for a contractor to notbe an employee, you can't give
them equipment and make them useit as soon as you do.
They are your employee.
You can't dictate the systemsthat they use to produce the
work.
So as soon as I make them useCanopy, they're an employee.
(31:32):
So what is happening, we arebringing in what we're calling
contractors, but we thinkbecause we're paying them for
short amounts of time, orbecause we think that they're
not, we're not their primarysource of income.
We're only using those twoqualifications to say their
contractors will go back andread what your state's
(31:53):
requirements are.
Your Department of Labor isprobably saying if you make them
use canopy, they're youremployee.
If you issue, uh, if, if youmake them, uh, hit certain
deadlines that are you, youknow, saying you have to get
this work done by deadline.
How the work gets done, when thegets work gets done, when you
show up, when you go home, allof those things for most states
(32:16):
make that person an employee.
It makes your firm out ofcompliance.
So we're going to, I just wantto take contractor off the board
as being impractical,unreasonable, unlikely.
And that really just leaves uswith full time, part time
outsourcing.
Part time is highly volatile andcultural problems, as we
mentioned.
So now process of elimination,we're down to full time
(32:37):
outsource.
KC Brothers (32:39):
And then AI.
Joe Woodard (32:41):
And AI.
Yes.
Now you've got a third player onthe board.
I love it.
KC Brothers (32:45):
Yeah.
A lot of things for firms tolearn now, but I would say.
More hope than I've heard in along time in regards to staffing
crisis and AI that like thecombo of it Like I think for me
at least relieves, um somepressure of finding talent and
opens up opportunity to sayThere are so many developments
(33:07):
and lots of progress being donewith AI I just need to find it
and then implement it and eventhat could even be Um, something
you use to attract the nextemployee.
Yes,
Joe Woodard (33:19):
I'm a modern AI powered firm.
Absolutely.
And just a couple of things onthat.
Yes, the future is bright.
The reason that you may belistening to this and you don't
feel that brightness or even seethat light at the end of the
tunnel yet is because you're inthe messy middle.
But just remember it's a middle.
Push through folks and, um, andI, I, I'm sorry about the, the,
(33:40):
the sort of the name drop hereon my conference, but I'd be
remiss if I didn't say thenation's largest accounting
technology expo is my conferenceand it's in June.
Canopy will be there.
You guys have a nice big spot.
Come see your friends at canopyat scaling new heights this
coming June.
Where these AI power tools aregoing to be out there to
(34:01):
explore.
It's a great place to take thatnext step.
KC Brothers (34:05):
Well, awesome.
Thanks.
So I think with that, we'll wrapup.
It's been a pleasure talking toyou today.
It's
Joe Woodard (34:09):
great to talk with you, Casey.
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