There is no talent shortage in accounting

Well thanks, Michaelist, for having me.

that's a great question, and one I get a lot and answer a lot. Pursuit is actually was born out of burnout. before with launching Pursuit about five years ago, I was working in another firm of wonderful, lovely human beings, but they were still running their accounting practice the way that most accounting practices across the globe run, of billing by the hours and just working nonstop. and so my old life was I would start working Saturday mornings in January. in Canada, the intense tax time is March and April. and so I would start working Saturday mornings in January and that would grow to Saturday at dinner by the end of February. And then I would work 61 days straight. Sometimes those days would be 12 or 14 hour days. and then I'd be burnt out for May. And then we have some more tax deadlines in June. And I loved my job from July to December. But I got sick and tired of being sick and tired and only living for the second half of every year. and so I found a way. through a coaching program and a mentor and now friend of mine on how to revamp our my practice in a way where we don't have to kill ourselves to make a living anymore. and that is just being a little bit more selective with the types of clients you serve and giving just a little bit more value so you can charge a slightly more premium price, but to deliver way more value to those smaller number of clients so that we can get our work done and hit the revenue goals we want in a reasonable amount of time. And It took a few years to get to exactly where we wanted. but in our fourth year, our entire team went through a tax season with no weekends and no overtime, which is practically unheard of in Canada and the US. so that that's where where my practice changed, and my business partners didn't want to evolve. So I I kind of moved out of that partnership to be able to run my my practice the way

I wanted to run it in a way more sustainable way.

so things it would do differently is I'd invent a time machine and do it ten years earlier. although I just probably wasn't in the right spot or maybe didn't have the confidence for that. So it probably found me when it should have found me. We've grown a lot now and we have a big team and we have to support that. I think in the early days, if I was to do something differently, I would get a little bit more selective about the niche or niches of industries that we serve. to just make it easier to differentiate ourselves and make it easier for our team to level up on being advisors for those clients rather than trying to be a generalist across, you know, a broad range of industries.

Yeah, so it we're different in two ways. One is we don't bill by the hour, we work on a subscription basis. So we determine what's going on and what we're gonna do for you and your business. and then we set a monthly price. And so you know what you're paying. We collect it monthly to smooth your cash flow. And we go a little bit more in depth than most accounting firms. We actually build like a personal net worth statement for every one of our clients to figure out where we're at and help them plan where they wanna go. We don't replace their investment advisors, they we still work with them and you need those. and we We have this concept called the four financial pillars because we exclusively work with entrepreneurs. So if you don't have a business or you're not entrepreneurial minded, you we we don't have room for you because you'll only need to come and see us in March and April in tax time, which is our busiest time. So we that's how we remove that constraint and got that work-life balance. And so those four financial pillars are your business plan. What are we doing? Are you running a business to sell? Are we going to just run this until we retire? Your wealth plan. your retirement plan, do you know what you're gonna do if you're a an entrepreneur that's working 50, 60 hours a week when all of a sudden you don't have that to do anymore? Like, what are you gonna do to fill your days so you don't end up divorced two years into retirement? and then the fourth pillar is estate and legacy planning. and obviously there's some Canadian specific tax attributes to each of those, but for any entrepreneur across the world, those are all important things that they would need to consider and make sure that they're focusing on. And because they all have just a little bit of tax implications to them, the accountants need to understand all four areas of that really, really well. And then we figure out where that entrepreneur wants to be down the road and then work with the rest of their advisors, their lawyers, their investment advisors, their insurance people, to help make sure that everybody's rowing the boat in the same direction to get that entrepreneur to their bigger, brighter future as fast as possible.

all all kinds of things. how to look into new different types of projects you do and price them absolutely poorly, where you can spend two years spending a lot of time and effort and never get paid. we had an instance like that that I would probably go back and price slightly different. because the reason that we didn't successfully complete the project, it was trying to help a business sell. but we didn't tie it to the motivations of the owners to want to sell, which meant we kept coming up with reasons we didn't sell to buyers that were valid people for things that were completely out of my control. So I would have priced that one instead of a hundred percent contingent, I would have priced that one a little differently so that the my clients who I was already working with would would be motivated to get us all to the same spot. and then I am a very trusting person. We've got an awesome team of people. not everybody on our team has always been awesome and we've had a few exits. And I think I need to be better going forward of trusting professionals to do their job, but also double checking and verifying that they are and not just assuming that everything's fine if you don't hear any complaints. so to to continue trusting, but to verify a little bit better. Yeah.

so because our firm is unique with that goal of not killing ourselves to make a living in the the main room where all of our students sit, in accounting, we call that a bullpen. we actually have a sign up on the wall and 12 inch letters that says Life's too short to work like an accountant. and when we go recruiting for new co-op students, we We have another side that we can take on the road that basically says the same thing with the plan of like no weekends, no overtime. The other thing we don't do because all of our clients are on a subscription basis is we don't have timesheets. And if anybody listening has never had to fill out a timesheet to account for every six minutes of your day, you are a very lucky human being. because it's not a lot of fun. So those those are kind of the the vision and promise. in a lot of parts of the world. A lot of accountants complain that there is a talent shortage. There's not enough accountants for all the jobs that are available. And I don't think that's true amongst people that are younger than me. I I still like to think that I'm young, even though I'm in my mid forties. I don't think that there is a talent shortage so much as there is a shortage of people who don't want a really crappy job, which is what most accounting firms who still bill by the hour and crush your soul in the busiest times of the year. That's what most accounting firms offer. So there's a shortage of people who want those jobs for sure, but we are routinely making offers to either full time professionals or students coming through and getting our first choices and not having issues and not having to compete and jump through hoops like I hear a lot of other of my colleagues doing.

Absolutely. I have a bunch of favorite use cases and one massive complaint, but we'll do with the awesome parts first. so yeah, use cases are things that used to take our we we use a lot of co-op students, a bit of a training ground, kind of like in a professional sports scenario of like, you know, we have the minors and then the way that co op students or s in some countries they'd be called interns, work in the accounting program in Canada is you hire one when they're in second year university, and ideally they come back every year for the busy time of year as they get better and better. And ideally if they're really good, you just hire them on full time once they've finished all of their university studies. and so there's some really intense things we do with a lot of wealthy people which have investments inside their businesses. and investment bookkeeping because of the way the Canadian tax system works can be a little bit complex. And the old way was somebody needs to manually type every line of an investment statement. into this spreadsheet that we have to give us the right answer. and for some of our clients, that could take a student, a competent student, like three to five days for one client. And now we have AI prompts that we use securely on business plans because we take clients' privacy and security above everything else. But we have AI prompts where we can now get that three to five days worth of work done in under 30 minutes. And And that's the most complex one. We've also done really simple things for people with a holding company with maybe seven transactions a month where AI could do the year-end bookkeeping again in minutes. And what it's done is it has allowed our students to elevate from data entry people to now they are the first reviewer of reviewing AI's work because it's not perfect. but that's there. Yeah. So we we had one just a couple of weeks ago as we were fine-tuning the investment bookkeeping where It went through 63 pages of transactions in under 30 minutes and gave us an answer that was 95% accurate. And it told us the five transactions it couldn't figure out. So it it did all of the really nasty work and it said, and here's five things that don't make sense to me that you need to go look into, which just figuring that part out and why it wouldn't have worked when when a human was doing it probably would have taken a couple of hours on its own. So those are some really awesome use cases where we're getting the tedious parts of our work done exponentially faster and allowing us to h spend more time with our junior staff to develop them to grow up to become the more analytical thinking and dealing with clients, which is the way more fun part of our job.

and that's that's a I I I jokingly pet peeve. the bad part of AI is I now get a whole lot more very lengthy emails from our clients who have put their tax questions into AI instead of now instead of responding to the client with a simple human being tax question, I have to respond back to their AI and explain to them why the prompt that they put into AI for their tax question was missing a bunch of important details and how it was wrong. So We get a bunch of tedious work done. I am now spending a little bit more time on tedious emails to respond to my clients' AI's questions.

Yeah. I haven't had any of those interactions. because of our different value proposition of dealing with entrepreneurs who are generally growth-minded who want to have that advice and that human sounding board as the most important part of the relationship. We don't have a lot of people who are coming to us to buy the grudge commodity tax return purchase. So that's there. Kind of my belief, and I'm not the only one who came up with this across the more forward-thinking leaders in the accounting industry, the people who are at speaking at conferences and things that I attend, is that AI won't necessarily replace accountants completely, but accountants using AI will completely replace the accountants who are ignoring it. is what what I think will happen. And particularly in what we do with Canadian tax at a deal deal with business owners. So it's not as simple as just your personal tax. It's the Interplay between your business taxes and your personal taxes and where we're trying to grow. And because 80% of Canadians live within a two-hour drive of the American border, it's really hard to run a Canadian-based business that doesn't also have some US customers or US implications. and they're like 10 times the size of us. and so then also how to run a Canadian-based business while dealing with US tax complications just furthers that. That's the stuff that I find really challenging and really interesting and rewarding to deal with. And that stuff is just so intertwined and complicated that I feel like it if AI can replace that, it's probably replaced almost all of knowledge work and we're in a much bigger problem than than just the accounts are, you know, extinct.

keeping a few things. I think they all boil down to a lack of clarity. whether that's that they are getting their bookkeeping done by somebody and nobody's explaining it to them in English, because reading financial statements is almost like a different language, regardless of what language you speak. So they're not sure what it is, or their accountant is telling them, hey, you made all of this profit, but they're like, but I don't have any money left. How does that happen? And it can happen. you know, you've repaid loans or you took money out personally. Like there's lots of ways that it's possible. So it's just that that difference of I I've got this stuff, but I don't have the certainty and the clarity. And that's that's the really important part for people is where are we? What do these numbers actually mean? Where do I want to be and what do I need to do to get there? That is The 30,000 foot. What that really means client by client can change very wildly. But I think that's the biggest one is just not a lot of entrepreneurs are confident in finance and therefore they have a lot of uncertainty. And one of my superpowers as an accountant is that I understand accounting and tax really, really well, but I joke that I have the vocabulary of a nine-year-old, so I have to explain it in really tiny words. and then people seem to like that and understand that a little bit better. I don't I don't have to use big words to prove that I'm smart if you're already sitting in front of me. so let's use the words that the entrepreneurs can understand so that they feel like they're getting value from those discussions.

Yeah, it's usually the opposite actually of they're looking at a report that says, Hey, you made $200,000 last year. And the question is, I'm like, but I don't have two hundred thousand dollars in my bank. How did that happen? that is usually it. Can it go the other way? Sure. Or the other one is, hey, we're making all of these sales. How come I'm not as profitable as I want to be? But usually it's the other way around of you're telling me I made money and I owe tax on my profit, but I don't have any cash. So how does that work? Right. And again, those things can be, well, you Took out a loan to buy a really big piece of equipment and some of the cash that was your profit you were using to pay down the principal of the loan. or often you're really nice to your customers and you know they're they're supposed to pay you in 30 days, but they're averaging paying you in 90 to 100 days. And so, yes, you made the profit, but it's currently sitting in your customer's bank account, not yours. so those those are some of the most common things we see for people when they're they're having trouble of reconciling what. feels like reality to them with the clarity of what their financials are telling them.

Yeah. and I agree. And I think because we're on a subscription basis that includes discussions with our clients throughout the year whenever they've got a question, we tend to talk to a lot of our business owner clients a whole bunch of times throughout the year so that when we get to finalizing their corporate tax return, the answer isn't a surprise to anybody, right? And so we can have those discussions through the end of the year. We we've got a client right now who has having a record year and could be three times more profitable than their best every year previously. Cool. In those discussions, every time I just leave leave that gentle nudge of, this is awesome and I'm really excited for you. Just remember that, you know, if this all happens the way we think it's going to happen, in about four months, we're going to need to write a really big check to the CRA. So don't go spend all this money. And for the non-Canadian register, the CRA the Canada Revenue Agency. It's our version of the IRS or the tax man. Yeah. So We have those discussions to to do that. whereas if you're just looking at bookkeeping and dealing with your accountant as a compliance checklist, depending on where you're in the country, like a year has passed and maybe another three to six months goes by before you get your tax return. Well, that means that if something was wrong eighteen months ago, we're just figuring it out now that you know, if you were looking at your financials on a regular basis and had Spent a little bit of time to learn how to you don't even have to do it with an account, but you spend a little bit time to how to interpret those things to say, hey, something looks wrong here, you can go and fix that, right? We have you know, clients who do manufacturing type things. And, you know, if your cost of sales has gone up by five percent, because it feels like everything in the world is going up dramatically all the time, but you don't adjust your prices or you don't adjust something else, you know, if you're selling something for a hundred dollars and you thought you were gonna make thirty. And the price has gone up and now of your your inputs and now you're selling it for a hundred dollars, but you're only making twenty-five dollars instead of thirty, and you don't do anything about that for a year and a half. That's a massive lost opportunity to have adjusted to get your profitability back to where it needed to be. Right. And so those are the kinds of things people need to be monitoring. Or, you know, you make a software switch and you forget to cancel the old one, and all of a sudden software expenses double. and Nobody's thought to look at it because we weren't looking at our statements. Like those are all easy things that you can't go back in time to fix the things that you could have done today. so those are the reasons to look at your numbers on a regular basis and treat it more than just a, hey, the government makes me do this. This could actually help me end up with more money in my pocket in the long run.

Yeah, I know for sure. you can reach out to our website, which is www.pursuitcpa.ca, because we are based in Canada. although we do cross-border consulting for Canadians looking to invest in outside of the country in real estate as well. or you can find me on LinkedIn. I'm Tim Myron, CPA. There are a couple of other Tim Irons on LinkedIn, but none of them are a CPA. I'm easy to spot in a bright pink blazer, and most of my posts are not that serious and meant to be very funny. that's another spot where I use AI is to make cartoons of myself to go along with my LinkedIn posts.

it's my pleasure. Thanks so much for having me.