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Boomer’s Blueprint: Transactional + transformational growth

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The business environment is changing rapidly, and CPA firm leaders and their clients face the twin challenges of managing current operations while positioning themselves for future growth. We can achieve this balance by understanding and leveraging transactional and transformational growth.

As technology disruptions — particularly artificial intelligence — reshape markets, it’s impossible to overstate the importance of mastering these two types of growth.

This article takes a closer look at the significance of transactional and transformational growth, and how they impact cash flow, future investments, and the technological landscape.

In my opinion, too many mergers and acquisitions are focused on transactional rather than transformational growth. Focus on the top 20% of your firm’s client’s requirements to prioritize your growth strategies. Too often, firms focus on the bottom 80% rather than the top 20% of their clients. Focusing on the top 20% gives you a competitive advantage and allows you to continuously improve your service line offerings. This will increase the value and profitability of your firm in the long term.

Transactional versus transformational growth

“Transactional growth” refers to the incremental improvements and efficiencies gained through optimizing current processes and operations. This type of growth is essential for maintaining cash flow, ensuring profitability and achieving short-term goals. Examples include refining billing and collection practices, enhancing client service delivery and implementing cost-saving measures.

On the other hand, “transformational growth” involves radical changes that fundamentally alter how a business operates. It encompasses strategic initiatives aimed at long-term success, such as adopting new service lines and business models, entering new markets or leveraging disruptive technologies like AI. Transformational growth requires significant investment and a visionary mindset, but can yield substantial returns.

Both types of growth are essential, and balancing transactional and transformational growth is crucial. Here’s why:

1. Cash flow management

  • Transactional growth. By focusing on optimizing current operations, firms can ensure steady cash flow. This includes efficient billing and collections, reducing overhead costs, and improving the client experience. These efforts contribute to a healthy bottom line, providing financial stability for day-to-day operations.
  • Transformational growth. While it may strain short-term cash flow, investing in transformational initiatives can lead to significant long-term financial gains. These investments often involve upfront costs but position the firm for future growth and increased profitability.

2. Investment in the future

  • Transactional growth. This provides the necessary resources to fund transformational initiatives. The efficiencies gained through transactional improvements free up capital to reinvest into transformative projects.
  • Transformational growth. This ensures that the firm remains competitive in an evolving market. By embracing new technologies and innovative business models, firms can attract new clients, enter new markets and stay ahead of industry trends.

3. Technology disruption and changing markets

  • Transactional growth. This helps firms adapt to technological changes by improving existing processes. For example, adopting new workflow software can streamline operations and improve service delivery. AI-powered tools for routine tasks like scheduling, data entry, reconciliations and basic tax return preparation improve efficiency and free up talent for higher-value activities.
  • Transformational growth. This allows firms to leverage disruptive technologies like AI to fundamentally change their business models and develop compelling new service lines. AI can automate routine tasks, provide deep insights through data analysis and enhance decision-making capabilities, positioning firms for long-term success.

The Transformation Triangle

To effectively navigate both transactional and transformational growth, CPA firm leaders must focus on three critical areas: leadership, project management and process management — collectively known as “The Transformation Triangle.”

1. Leadership. Leadership is the cornerstone of both transactional and transformational growth. Effective leaders inspire their teams, drive strategic vision and create a culture of continuous improvement. They understand the importance of balancing short-term operational efficiencies with long-term strategic investments.

  • Vision and strategy. Leaders must articulate a clear vision that balances transactional improvements with transformational goals. They should align this vision with the firm’s overall strategy and communicate it effectively to all stakeholders.
  • Change management. Transformational growth often involves significant change, which can be challenging. Leaders must be adept at managing change, addressing resistance and fostering a culture that embraces innovation.

2. Project management. Project management is critical for executing both transactional and transformational initiatives. Effective project management ensures that initiatives are completed on time, within budget and to the desired quality standards. Project management differs from process management in that each project has an end date.

  • Planning and execution. Detailed planning and execution are critical for transactional projects. This includes setting clear objectives, allocating resources and monitoring progress. You may need a more flexible approach for transformational projects, as these initiatives often involve uncertainty and require adaptability.
  • Risk management. Both types of growth involve risks. Transactional projects may face risks related to process disruptions, while transformational projects may encounter strategic risks. Effective project management includes identifying, assessing and mitigating these risks.

3. Process management. Process management focuses on optimizing and innovating business processes. Continuous improvement is the primary goal. It is a journey, not an event, and it involves analyzing, improving and redesigning processes to achieve both transactional efficiencies and transformational breakthroughs.

  • Process optimization. Process optimization involves identifying inefficiencies and implementing improvements for transactional growth. This can include automating routine tasks, streamlining workflows and eliminating bottlenecks.
  • Process innovation. For transformational growth, process innovation involves rethinking how work is done. This can include adopting new technologies, redefining roles and responsibilities and exploring new business models.

Plan of action

To harness the power of both transactional and transformational growth, CPA firms and their clients can take the following practical steps:

1. Conduct a growth assessment. Evaluate current operations to identify areas for transactional improvements and potential opportunities for transformational growth. This assessment should include reviewing financial performance, market trends and technological advancements.
2. Develop a balanced growth strategy. Create a growth strategy that balances transactional and transformational initiatives. This strategy should align with the firm’s overall vision and include clear objectives, timelines and resource allocation.
3. Invest in leadership development. Develop leadership capabilities within the firm. This includes training leaders in change management, strategic thinking and innovation. Effective leadership is critical for driving both types of growth.
4. Implement robust project management practices. Adopt project management best practices to ensure the successful execution of growth initiatives. This includes defining project objectives, setting realistic timelines and managing risks.
5. Embrace technology. Leverage technology to drive both transactional and transformational growth. This includes adopting new tools and software to improve efficiency and exploring emerging technologies like AI to transform business models. Consider an innovation budget of 2-3% in addition to your transactional technology budget of 6-7% of revenue.
6. Foster a culture of continuous improvement. Create a culture that values continuous improvement and innovation. Encourage employees to identify opportunities for transactional improvements and support them in exploring transformational ideas.

Balancing transactional and transformational growth is essential for CPA firms and their clients to thrive in a rapidly changing business environment. Firms can achieve sustained success by focusing on cash flow management, investing in the future and embracing technology disruption.

Transformational growth, while riskier, can help your firm stay ahead of the curve, especially in the face of AI and other disruptive technologies. The Transformation Triangle — leadership, project management and process management — provides a framework for navigating these growth paths effectively. By developing a balanced growth strategy and fostering a culture of continuous improvement, CPA firms and their clients can survive and thrive in the face of technological disruption and changing markets.

Think, plan, grow!

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Accounting

The Importance of Backing Up Bookkeeping Data

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Importance of Backing Up Bookkeeping Data

Protecting Your Business’s Financial Lifeline

In today’s digital business environment, backing up bookkeeping data is not just a good practice—it’s a critical part of financial management. Your financial records are among your company’s most valuable assets. Losing them can lead to serious consequences, from lost revenue and legal penalties to a complete breakdown of operations. Whether you’re a small business owner or a large enterprise, understanding the importance of data backup in bookkeeping can save you from irreversible damage.

Why Financial Data Backup Matters

Financial data backup is essential because data loss can happen at any time. It can come from hardware failures, cyberattacks, software crashes, natural disasters, or even simple human mistakes. One accidental deletion or system crash could wipe out years of financial records, including invoices, receipts, tax filings, payroll data, and customer information. Without a solid backup plan, restoring that information can be impossible, leading to compliance violations and major setbacks.

Business Continuity and Bookkeeping Reliability

One of the main goals of any data backup strategy is business continuity. When your financial information is backed up and easily restorable, your business can continue to function even after an unexpected event. This minimizes downtime and ensures your bookkeeping stays accurate and up to date. Whether you face a cyberattack or a flood, a reliable backup ensures you can access your critical financial records and get back on track quickly.

Follow the 3-2-1 Backup Rule

A best practice for data backup is the 3-2-1 rule, which stands for:

  • 3 copies of your data (one primary and two backups)
  • 2 different types of media (for example, a computer hard drive and an external USB drive)
  • 1 copy stored off-site, such as in a secure cloud-based system

This approach protects your financial data from all types of risks, including physical theft or natural disasters that could destroy all on-site backups.

Use Cloud Backup Solutions

Modern cloud accounting software like QuickBooks Online, Xero, and FreshBooks often include automatic data backup features. These platforms store your information in secure, off-site servers and regularly update your data in real time. While this offers a great layer of protection, businesses should still maintain independent backups—either through cloud storage providers like Google Drive or Dropbox or through physical external drives.

Automate Your Backup Schedule

To avoid the risk of forgetting manual backups, it’s smart to set up automated backup schedules. Most businesses benefit from:

  • Daily incremental backups (to capture changes made each day)
  • Weekly full backups (to maintain a complete and up-to-date copy)

Additionally, consider making extra backups after major financial activities, such as closing the month or completing annual reports. This ensures that your most important financial data is stored securely at critical checkpoints.

Test Your Backup Systems Regularly

Backing up your data is only half the job. The other half is making sure you can successfully restore it when needed. Many businesses make the mistake of assuming their backup systems work, only to discover too late that their files are corrupted or inaccessible. Set a quarterly schedule to test your backup restoration process. Restore files in a test environment and make sure they are complete, accurate, and usable.

Keep Backup Data Secure

Your financial data contains sensitive business information, including banking details, employee records, and customer data. This means your backup system must be just as secure as your main systems. Use strong encryption, require password protection, and enable multi-factor authentication (MFA) on your cloud accounts. Make sure that only authorized personnel have access to backup files, and regularly audit access permissions.

Store Physical Backups Off-Site

If you use external hard drives or USB devices for backup, store at least one copy off-site. Keeping all backups in the same location exposes your data to risks like fires, floods, or theft. Consider storing a copy at a trusted partner’s office, a secure storage facility, or even using a backup vaulting service.

Stay Compliant with Legal and Tax Requirements

In many industries, financial records must be retained for several years to meet legal and tax obligations. Failing to back up your bookkeeping data can result in penalties during audits or investigations. Keeping reliable backups helps you meet these requirements, providing a digital paper trail of your financial activities.

Make Backup Part of Your Financial Strategy

Treat your bookkeeping backup system as an essential part of your business strategy. It’s not just about preventing disaster—it’s about preserving your financial history, supporting compliance, and keeping your business running smoothly. Regular data backups give you peace of mind and a safety net to fall back on when the unexpected happens.

Conclusion: Backup for Long-Term Success

Backing up your bookkeeping data is one of the smartest moves you can make to protect your business. With cyber threats rising and unexpected issues always a possibility, a strong data backup system ensures your financial records are always safe, accessible, and intact. By following best practices like the 3-2-1 rule, automating schedules, securing your data, and regularly testing your system, you build a reliable foundation for your financial operations. Make data backup a non-negotiable part of your bookkeeping routine, and you’ll be well-prepared for whatever challenges come your way.

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Accounting

13 firms combine to form Sorren

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Thirteen accounting firms have united to form Sorren, a national firm backed by private equity firm DFW Capital Partners that will have over a thousand employees and 20 offices across the country.

Operating in an alternative practice structure as Sorren CPAs PC for attest services and Sorren Inc. for business advisory and non-attest services, the combined firms have 85 partners and approximately $170 million in revenue, with plans to add more firms going forwards.

Many of the founding firms met as members of the BDO Alliance, and their leaders had gotten to know one another as attendees at alliance meetings and managing partner roundtables, according to Josh Tyree, the president of Sorren, who was previously president of Harris CPAs, an Idaho-based firm that was the first of the group to go the PE route, signing up with DFW in January 2024.

Sorren's headquarters in Boise, Idaho

Sorren’s headquarters in Boise, Idaho

“Harris had started looking at that process with DFW for a good chunk of 2023,” Tyree recalled, “and I remember we were having a managing partner roundtable meeting in Nashville that year in the fall, and they were all there and I raised my hand after two hours of talking about PE and I said, ‘Hey guys, I think I’m going to jump in feet first and you guys should all come and join us.'”

And they did — with individual firms joining up with DFW over the course of 2024, and a large group in January 2025.

“There was a level of comfort,” he explained. “We knew all of our firms and our people and what we do and how we do it because we’d shared so much information over the years.”

Apart from Harris, the other firms currently comprising Sorren are:

  • Acuity (Georgia);
  • Aycock & Co. (Texas);
  • Capital Nomics Valuations (California);
  • Chigbrow Ryan Murata (Idaho);
  • Hoerber Tillman & Co. (Florida);
  • JRJBF (Illinois);
  • KDP Advisors (Oregon);
  • KMA Advisors (Wisconsin);
  • Pisenti & Brinker (California);
  • Roeser Accountancy (California).
  • SBF Advisors (Florida);
  • Stockman Kast Ryan & Co. (Colorado).

Allan Koltin, CEO of Koltin Consulting Group, said in a statement, “What makes Sorren stand out is the way these firms came together — with intention, shared values, and a commitment to staying deeply connected to their local markets. This group didn’t just merge for size; they united around a common purpose. It’s a blueprint for how innovative firms can grow, while staying true to who they are.”

Tyree-Josh-Sorren

Josh Tyree

The firms all have a strong focus on small and middle-market businesses and nonprofits that want a local firm feel and relationship, even if they need services across the country. As it adds new firms, Sorren will prioritizing those that are a fit with their current culture.

“If we go into another region, we want to start with leadership and good people; we’re not just randomly going out to try and find any firm that meets [a client need],” Tyree explained. “It really has to fit our culture and it has to have a leader in that area for us to go into that services.”

He also made the point that Sorren is still very much a work in progress — relying on current firm expertise to build national practices in tax, assurance, CAS and advisory.

“One goal when we originally started was we wanted to get to enough mass size that we could really start to build this by using leadership from and talent from all the firms that came on board,” Tyree said.

“It’s going to be super fun, but it’s a lot of work,” he added. “If all you’re looking to do is do a rollup or something like that, that’s probably not our style. We’re trying to create this for our type of client and our type of cultures. And we think there’s a little void there where we can do it.”

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Accounting

Trump’s ex-IRS commissioner pushes back on Harvard tax attack

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Donald Trump’s promise to strip Harvard University of its tax-exempt status prompted criticism Friday from a former Internal Revenue Service commissioner in the president’s first term, who said the process would take years and need a judge’s approval. 

“The IRS will not allow itself to be weaponized,” former IRS Commissioner Charles Rettig said in an emailed statement to Bloomberg News. Rettig, who oversaw the agency from 2018 to 2022, was asked to respond to Trump’s social media post early Friday that said: “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” 

Trump made the announcement after weeks of threatening a change to the school’s tax-exempt treatment, stepping up his attack on the Ivy League school.

Federal criminal law bars President Trump or the vice president from ordering the IRS to punish his political opponents or reward his allies. Rettig said the Treasury Department’s Inspector General for Tax Administration “closely monitors and investigates efforts to possibly influence IRS operations.”

The IRS cannot take any action on an organization’s tax-exempt status “without conducting an appropriate examination that would provide relevant information objectively supporting such an action,” Rettig said. “The IRS does not and should not conduct a ‘fishing expedition’ designed to hopefully uncover a relevant issue.” 

Organizations also have administrative and judicial appeal rights that can take years to resolve before a federal judge approves a change in tax-exempt status, he said. “Throughout that process, there are many opportunities for resolution that would not result in the removal of the tax-exempt status of an organization,” he wrote. 

Trump’s fight with Harvard escalated after it rejected his administration’s demands to reform campus policies to combat antisemitism and promote viewpoint diversity. The administration has frozen $2.2 billion in funding that supported projects including ALS and tuberculosis research. 

On April 21, Harvard sued the U.S., claiming the funding freeze violated its free speech rights, and the government cannot dictate what it teaches, who it hires, and which students it admits. 

In Trump’s second term, four people have held the IRS commissioner’s job on an acting basis.

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