Jody Padar on What It Takes to Build a Future-Ready Firm 

Building a future-ready accounting firm requires more than adopting new AI tools; it demands a complete shift in how firms think, operate, and deliver value. As the profession moves toward automation, advisory, and AI-driven workflows, many firms struggle to keep pace with the transformation. 

In this insightful session hosted by Ace Cloud Hosting, Seth Fineberg, founder of Accountants Forward, discusses with Jody Padar (The Radical CPA), Co-Founder of XcelLabs, what it means to run a Future-Ready Accounting Firm. Recognized among the Top 100 Most Influential People in Accounting since 2011, Jody is a leading voice for CPAs and accounting firms, backed by an engaged LinkedIn community of 600K+ followers. 

In this conversation, Jody and Seth share their perspective on what firms must do today to build truly future-ready teams, processes, and client experiences.

Transcript

Seth: Hello again, this is Seth Fineberg from Accountants Forward speaking here on behalf of Ace Cloud Hosting. In another thought leadership episode, digging into topics that matter to you, the practitioner.  

Today’s topic: we are diving into what it takes to be a future-ready firm. Why AI, data analytics, and cloud are your new partners in your firm?   

I could not personally think of a better person to really have this conversation with, Jody Padar. Jody Padar, as if you don’t know her by now. I don’t know where you’ve been, but she has lived it. She has seen it. She runs a firm. She has been an advocate for Cloud since it was a word, and really is leaning very heavily into AI and what it can do and has lots of opinions on the topic.   

Jody, I’m not going to speak for you anymore. Welcome. Thank you so much for talking to me today.  

Jody: Yes, thanks for having me.  

Seth: Excellent. So, we’re going to get into it. I know what one of your new favorite topics is, to pretty much all of these kinds of check the boxes.   

But when it comes to AI, lots of different discussions are going on right now. Even as we speak, firms are kind of going from – What do we do with this? What do we do about it? Some trepidation.   

The fact that firms are discussing it at all and not dismissing it to me, and I don’t know if it’s to you, is a hopeful sign. Back when you and I were first talking about cloud and what cloud was, can you recall the kind of energy, almost the positivity at the time about cloud, as there is AI?  

Jody: No, I don’t think, I don’t think there was positivity around cloud at all. It took us forever to even get to where we are today, right? And a pandemic, and now I think AI is everywhere. Or like the conversation seems to be a little bit more positive.  

Whether people are adopting it or not is another story. But I think the conversation is not so scary. Well, like a lot of people, don’t seem so scared by it, right? They’re willing to, I think, dip their toes in a little bit easier than they were back in the cloud days, early cloud days.  

Seth: You’re a CPA, you know, accountants, you ran a firm, you’ve talked to hundreds, if not thousands, over the years through conferences, through speaking engagements.   

We’re both still very in tune with some of the psyche that the mindset of the average accountant. Why would you say AI, for all the trepidation that is surrounding it, why do you think overall people are talking about it more positively than cloud at the time? So, what’s it attributed to?  

Jody: Well, I think that AI probably has a little bit more easier experience to it, right? Whereas I think the cloud, you still had to be technical to really understand, like they used to call it digital plumbing.  

Remember, it was like how you were going to connect this app to that app and all the plumbing of that stuff. That was Doug Sleeter’s thing, right?  

Seth: Chunkification, right!  

Jody: And, and it was like you spent a lot of time getting it to like talk to each other. I think when you think about AI, whether your audience knows this or not, there’s a lot more seamless connection, right?   

The experience is better. Even if you’re used to using something like ChatGPT, you put a good command in, and you get a lot of information out. And you didn’t have to be technical to know how to do it. Now, I would argue that there are a lot of strategic ways you can have that conversation and how you should be prompting it.   

But it’s almost like easy enough where you don’t have to have this big, it’s not this big, scary thing where you don’t know where it is or how to do it. It’s just like, OK, how do I learn how to do it?    

And I can do it myself. I can create GPTs myself. I can create AI things myself, or I can just use apps or AI buried in apps that already exist that I don’t even know. It’s AI working in the background, right?    

Like, there’s probably a ton of places that the listeners are using AI that they don’t even know it’s AI. It’s just working in the background, and they don’t know any different. But I think it has a different UX to a user experience that makes it easier than maybe cloud adoption.  

Seth: I have to agree with you there. I mean, I’m sharing, so just in my limited experience, when you are in the thick of it with what you’re doing. We can get into that in a second. What I’m seeing and hearing is the element of control that there is a bit more hands-on than there was with, say, cloud or software, even that was designed and built ostensibly for you, right?   

But unless you had some technical ability or you could code or whatever, even lightly, probably just we’re hoping that it did when you turned it on, when you logged into your browser and got into the training, you’re hoping it did what you needed it to do.   

I think there’s a similar hope now, but now there are elements of AI that I do want to get into, both for the office, for the firm, and then for the client of control. So, I think maybe in my theory is that’s lending to some of the more comfort or at least positivity of going.   

Yeah, you know what we’re going to try something. Tax season’s basically behind us, and we have an opportunity to maybe set ourselves up for the next kind of rising tide. So in your experience, where are you seeing some of the more, I guess, obvious or highlighted, if you could highlight some benefits of the role of AI in the firm?  

Jody: Well, I think when we think about what we should be thinking about of AI in the firm, I’ll go back to, I’m now a co-founder at XcelLabs, and we believe in that. It’s the professional first, and what’s in it for me.  

So, how do you use AI to upskill yourself first? How do you use it in leadership? How do you use it in your own ability to strategically think about tax problems, accounting problems, or solving everyday client problems?   

Then if you put all of those people together, then you can kind of create an AI-first firm or an AI-first firm mentality where again, the humans are central, but they’re going towards looking to solving problems utilizing AI and future-ready kinds of things. And then you put all those, all those firms together, and now you have kind of this AI-first mentality of the profession or the ability for the profession to evolve into the year 2030.   

Because I think AI is coming a lot faster than people realize. And I think if we don’t start to evolve ourselves and upskill ourselves to become better AI-fluent professionals, then the reality is, is where we’ll be in 2030 if we haven’t like figured it out.   

And so that’s what I would encourage the listeners to do is how do you show up better with AI? Because the reality is, AI is going to do accounting, it’s going to do bookkeeping, it’s going to do the tax work. So what are we as professionals going to do? And how do we make ourselves ready for the future by 2030 when all that work is really done?  

And I’m going to be excited about it. I’m not going to be like, Oh my God, I want to do a bank wreck. I’m going to be really excited because it’s like, OK, I can actually spend time with my client. I can think with them about more strategic problems. I can actually go home at 5:00. I don’t have to be here till 10:00 at night doing something that I didn’t really want to do anyway, but I had to get it right.  

And so when AI can come in and take away a lot of that busy work, we can really kind of uplevel ourselves. But we as professionals have to kind of take that lead and say, yes.  

I want to learn new skills, I want to learn how to work with AI differently, and I want to upskill myself because the work that we do today is not going to be the work we do tomorrow.  

Seth: Absolutely. I would go so far as to say just the very nature of being an accountant, being an accounting professional, how you’ve gone about, big finger quotes here. The work is changing, and it will change. Could you highlight maybe one of those just from a functional perspective? And then I want to get into the client side of things. Just think of a task or group of tasks that you do.   

Jody: So, I heard a really good use case for an agent, and I thought that was like, oh, well, that’s pretty smart. So, IRS notices, everybody hates IRS notices, right? Like, but I heard of a use case where a firm, a top 400 firm, built an agent that responds to IRS notices.  

Now, in the old days, you’d copy-paste it anyway, right? Like you’d go grab it. Oh, what did I see this? I copy paste the notice response. I changed a couple of things, and I would send it out.  

Now they have an agent doing that work. I thought that was a really good use case for an agent because basically, a lot of it is repetitive anyway. You’re using the same verbiage, the same copy pasting,  

But now the agent is responding to notices, and now, like you just reviewed that notice, it’s already redone, signed off on it, and sent it to the IRS. So, think of that like work that used to spend even if it took you 1/2 hour to copy and paste that notice to adjust it for the client-specific situation.  

Now, if you have an agent doing it, that’s pretty cool, right? Because I don’t want to say you’re not going to get paid for it anyway but think of how much correspondence goes back and forth between the IRS; that kind of gets lost anyway. So, I think, it’s a pretty good use case.   

Seth: Yeah. And on that notice, like that, you’re going to get paid for is kind of bundled in right to just being there for just being a human and letting you know the AI. I don’t want to say the robots, but the AI is doing the automation. AI is your “Assisted Intelligence”. 

Jody: And I think what’s interesting about it, too, is like, you know, there’s been back and forth about should the AI write your emails? Because if you write an email, the AI writes it back. Where’s the human involved? Do you really need a human to write a notice response to the IRS? No, right.   

Seth: Or if you’ve got a bunch that you’ve got to do, and like it’s the rinse and repeat, rinse and repeat. You could go into bookkeeping work, too. There’s a lot of that sort of rinse and repeat, but the fact that someone’s doing it, maybe you’ve outsourced it somewhere, or you have a junior accountant.   

If you’ve got a larger firm, particularly in CAS practice, you know, you have people who are still doing the work. Now it’s, you know, it’s not that you don’t need them, you don’t need them for that, but you need them for these other things.  

Let’s talk about the client side, client work, client-facing stuff now, cloud obviously, and automation in general, you know, really has allowed for speed to have the idea that you were able to bill hourly at one point for things just kind of really shrunk, and it’s on.  

It’s now really put a spotlight on the outcomes, right? So, let’s talk about AI in client work. What have you seen? What can it do currently, and what do you think it’ll be able to do?  

Jody: Well, I think AI should be doing a lot of your client work. I think that, you know, even before I sold my firm, AI was doing or automation, whether it be AI or automation was doing a lot of the work already, right?  

So it already exists. It’s not like we’re saying, OK, this is a future-ready thing. This is like happening today, where 85 to 90% of the work should be done by automation or AI with very little oversight of a human on top of it, on like the routine stuff, right?  

So now, if that’s happening, you know, I’ll go into pricing. How do you build that, right? 

Well, you can’t bill on time because the automation is doing the work. You’ve got to change your pricing model, and you need to start pricing on outcomes.   

And so, if there ever was a time to really switch to either subscription pricing, value pricing, outcome-based pricing, whatever you want to call it, now is the time to do it because the reality time is not factored in there.  

Time has no factor in what work you’re doing. So, what is the value to the client, and how should you get paid appropriately for the value you delivered to your client?  

And I think that’s an awakening for many accountants to think about. Okay, if it’s automated away, how do I still get paid, because I don’t want to have 500,000 clients?  

Well, obviously, you’re going to have to price differently because you can’t build in 2 seconds; it doesn’t work. I used to say you can’t build in 2 minutes, can’t build in 2 seconds, you’ve got to restructure your pricing model.  

Seth: Yeah, definitely. And you know, again, AI being the next level of automation, but it only works as well as the data it has, doesn’t it?  

And that kind of goes to my next question, really, is the importance of data that firms, you know, hold on to, how they can ultimately, potentially derive more meaningful sort of business insights from it.  

And really, it just kind of begs the whole, you know, whoever’s really been avoiding or not being able to really firmly define advisory work. This almost seems to be your key.  

Jody: Yes, I think so. I mean, I think the idea is there’s a ton of unstructured data in firms that we need to turn into structured data. And so, what does that mean?  

It could be a phone call, like on a Firefly conversation or a Teams conversation that you recorded, or in a Zoom conversation, right?  

Like you can take that phone call recording and you can get a ton of information out of that phone call and create advisory services around it, create an agenda, create all the things that need to happen that maybe we didn’t have in the past, or we were so busy.  

I would say we always had advisory. It’s just that we were so busy that we would practice random acts of it, right? But now you can actually schedule it; you can structure it.  

Seth: Ultimately charge for it, right?  

Jody: And charge for it because, well, the bookkeeping is going to go away; the tax is going to go away, all that’s going to be done. So how are you going to add strategic value to that compliance work?  

Now there’s going to be compliance work to do, but you’re still like it when I say it’s going to go away. The input of doing the work on it is going away.  

You’re still going to sell the compliance. I would hope so. Or you know, some people may give it away for free in charge of the strategic advisory, whatever.  

Seth: Like again, bundle it in like a new business model, right? You weren’t necessarily charging for payroll work. I mean, because somebody else did it, but you were the administrator, you made sure that things were done, and then you could have real conversations,  

Jody: Right? But now you’re going to have to have a real conversation around it. And what we’re doing at XcelLabs is we’re really helping those conversations evolve.  

So we’re putting the Human AI in AI or the AI in Human, and we’re helping upskill your people, upskill your team, upskill yourself to have better conversations because everybody can learn to communicate better.  

I don’t care where you are, whether you’re a partner, a team member, everyone can work on their communication skills. That’s the number one problem in businesses. People don’t communicate clearly. We have emails, we have phones, we have texts, yet nobody understands, right?  

And so, how do we upskill our communications? And that’s what we’re trying to do, that’s what we’re doing, XcelLabs is we’re using AI to help us be better humans and communicate better, which evolves to advisory. So, the way Amazon stalks, I would love advisory to love you.   

Seth: I like that. One final comment on just the data side of things. You know, in an average firm, I mean, you have data in a lot of different places, maybe categorized in different ways. 

Would you say AI actually has the potential to kind of unify that and then help you work with it better?  

Jody: Yes, but or yes, and right, like I think the opportunity is garbage in gives you garbage out. So, as you’re starting to use AI, the narrower you can keep your scope, the better off you are as you start to apply it. And then you can kind of expand it.   

Because if you give it, if you just wanted to like run loose on your firm data, all of it, chances are it’s going to miss things, right?  

Just like I would say, just like a person, if they’re not, if something’s happening on the other side of the room and that person isn’t even aware that it’s happening, that person may miss a nuance.  

And that’s what happens with AI. Sometimes it misses nuances because it doesn’t have the complete context. So when you’re starting to unleash AI in your firm, think about a very specific use case and a very specific place to place it, where it has kind of a container or a way to kind of control it, right before you just say, Oh, like I’m going to have an agent do everything right?  

Because it can’t do that. Like it doesn’t have that much to do. So, I think the people who are really successful with AI now are really like hyper-focused on specific use cases and limiting it to that specific data or where that data should be.  

So, I think that would be my word of caution around data. Like it can’t, not that it’s not that part. It’s just like anything else, the more containers or the more constraints you give it, the better off it’s going to be because it starts narrow and then let it go wider. I guess that’s my idea on it.  

And I, because I think sometimes people have too big an expectation for it, right? And they think, oh, it’s going to solve all my problems.  

You know, this one agent is going to solve this one problem, and it’s going to do it very specifically, versus OK, I hired someone, and they can know everything, right? Like they can’t, right.  

So even though AI is really, really smart, like the people who are finding success with AI need. 

Seth: Needs some tutelage because you’re also smart, because you’re the person who has, you know, a decade plus experience and knowledge and training.  But the fact that there is a technology set that you know is going to learn, you know, with you, so that you can go off and do these.  

Jody: And that’s what I would argue that every CPA should be doing, every accountant should be doing is they should be learning how to think strategically with AI, not even worry about automating everything away.  

How do you use AI to be a better professional? Again, think strategically because if you can do that, you’ll always be relevant.  

Seth: So, we’re going to come full circle here, Jody, and thank you so much for your time today. So, what does this mean for the cloud? It’s a term that doesn’t need to be necessarily called out as much as it used to.   

It is still how a lot of work is done, or where a lot of data continues to exist safely and securely. Should that still be a consideration in a firm’s tech stack or just in their life? Where does the cloud still fit in?  

Jody: I think you should be cloud. I don’t know how you could not be cloud. Again, I’ve been preaching the cloud for 20 years.   

Seth: I know it.   

Jody: I’m not going back. I’m not changing. It’s like, I think it starts in the cloud, right? Like, you have to start in the cloud somewhere. Like that’s like, I don’t know, it starts in the cloud, yeah.   

Seth: So, in terms of where a certain application should exist or data or a bit of both, you know, I think it seems to be a pretty good security play to me.   

Jody: But, well, I think that it depends on the question, right? Like that’s the, what is your firm? What do you need from it?  

Like, I don’t think there’s anyone who runs a firm on a laptop without either. All their applications are in the cloud, and they only use their laptop to run cloud-based applications.   

If people are still hosting things on their own laptops. I got nothing for you there. I can’t because of that. That is so old school.   

That’s why I said, like you can now run a firm from the cloud or, you know, some use a hosting solution to host your desktop, but like you shouldn’t be just having everything on your far wall, right?  

Seth: Totally.  

Jody: Yeah, that and I know there are still accountants out there who do that. So, like that’s like 20 years I’ve been on this bandwagon.  

Seth: You have, and hopefully it won’t be 20 more. But yeah, it does seem that, you know, the journey to the cloud has been long and kind of bumpy and has had some zigs and zags over here.   

But, AI, you know, being, in terms of the tool for automation, it is now, and it does offer a lot of opportunities. Any final words on AI data? Anything we’ve discussed today?   

I cannot thank you enough for your time. And I know that this audience is going to get a lot from just our brief conversation here.  

Jody: No, I just say, don’t be scared. Get started. Start moving. Like you’re not behind. You just got to move, right? Like, I can’t stress enough that you just got to these tools. You have to try. Like you don’t understand it until you touch them.   

And I think the hardest part is that you can listen to podcasts, you can listen to a webinar, whatever. But until you actually get in and you start touching AI, you don’t realize the power of it. And I think that’s really important, you know, the next step for everyone.  

Seth: Get in, start small, start narrow, but start figuring out scenarios in your work and in your life where it’s going to make the most sense.  

Jody Padar, thank you so much for your time, and we’ll see you all soon. Thank you very much for taking the time with us today.  

Jody: Awesome. Thank you. 

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