The FirmLever Weekly Roundup: Issue #53

Within the next 6 months the smartest accounting firms will be unstoppable.

For the past two years the most pressing issue has been lack of talent.

75% of currently licensed CPAs are eligible to retire within ~15 years according to the Rosenberg Survey and AICPA pipeline reports.

Many firms get pitched weekly on staffing, offshoring, near-shoring, augmentation, flex-teams, and other combinations of solving this problem.

At best you land a great new team member although perhaps not as cheap as you had expected.

At worst you spend more time reviewing errors for that offshore "bargain" you got and they have yet to tell you that they sent that 1040 to the "wrong person".

Ouch.

Until now hiring a great CPA or outsourced CFO meant paying well over a six-figure salary + benefits. Even quality bookkeepers can take weeks to find, train and put to full utilization.

Of the 300+ FirmLever Network firms I've glimpsed a tiny fraction of them solving talent problems not with more staff but less.

But this is not just about finding great new clients, nor landing the best talent--it's a deeper tech play.

Firms that have gone beyond automation, BPO, and entry-level AI to the new paradigm of agentic AI.

We hear how its saving time but what interests me is the leverage and labor arbitrage play.

I've recently been testing a new platform that goes beyond the typical tax prep workflow--it literally does the work of an entire tax team including intake, prep, workpaper build, review and tax advisory based on workpaper findings.

Its not what I would classify as a workflow application as its literally a team of AI agents that has been benchmarked against top CPAs and can literally build out the entire tax prep workflow live and instead of hours or days on complex 1040s with various schedules, it can complete in minutes.

The CPA simply does a final human-in-the-loop review at the end and files the return with full citations, workbook, IRC proof and line-by-line audit-friendly calculation references down to the line number.

It's almost scary to watch.

I'll be sharing more on this system in the coming weeks as we test and benchmark.

But from early calcs, what used to take a $275/hr CPA hours now collapses into minutes.

The future is no longer "we need to hire more people" but "we need to invest in agentic AI".

To be honest, the biggest hurdle isn't tech anymore its human behavior. Most cringe at trusting a fully automated tax pipeline to an AI--and rightly so.

From a security and compliance perspective its currently a can of worms. That is the major hurdle--not tech.

I'll be sharing how the security issues are being overcome and depending on how far along we are, will start sharing some recorded videos too.

I'm truly excited about the changes coming over the next few months and if you are interested in seeing this in action, reply and let me know as I'll be sharing some early agentic AI videos that will be mind-bending (looking for early feedback).

Half of this problem we have already solved with our new FirmLever Optimizer (now in beta), which not only handles the client interview--it figures out what you should be charging, creates a good/better/best client proposal, finds tax strategies and now advanced CFO-level financial strategies, then sends the proposal for e-signature. The firm owner literally "drives" and approves--Optimizer takes care of the rest.

But as advanced as Optimizer is, the next frontier is actually doing the work for you. But you can't manage what you don't measure.

This is why we created a new Accounting Firm Operations Benchmark that literally tells you how you compare to hundreds of other firms on metrics like leverage, margin, Rev/FTE, etc--oh, and its free.

We'll soon be updating this benchmark for AI-readiness (I'm not gonna lie--most firms are nowhere near ready).

Until then, start to think about your most expensive cost: human capital. Start to ask yourself: What would your firm, your revenue and your life be like if you could reduce the cost of labor by 50%, 60% or 75%+?

How much more valuable would that make your firm?

This is what's keeping me up at night and what I've been doubling down on lately.

If you're a firm runner who is interested in getting on the "early bus" reply and let me know your biggest challenge that you wish AI could solve for you--chances are its a problem that has already been solved--and you just didn't get the memo.

That's it for week #53 of this newsletter.

Until next week.

Marc

P.S. - I'll be back in the Washington, DC area in June--if you're in the area let me know as I'm getting together a small group of firm runners for an informal meetup.