What makes some accounting firms thrive while others struggle to gain clients, develop new services, and attract talent? Often, the difference lies in firm leaders’ ability to think like entrepreneurs.

For decades, firms could rely solely on traditional transactional and compliance services to achieve steady growth. But today, leaders must adopt an entrepreneurial mindset to stay competitive.

An entrepreneurial mindset is a set of skills that allow leaders to identify opportunities, overcome and learn from setbacks, embrace agility and innovation, and take calculated risks.

So, how can you cultivate an entrepreneurial mindset to ignite innovation, drive strategic growth and position your firm to lead change?

Why entrepreneurial thinking is essential

First, let’s dig into why an entrepreneurial mindset is so crucial.

The accounting profession is at a crossroads. Technology advancements and shifting client expectations push firms to rethink traditional business models. Firms that embrace an entrepreneurial approach — prioritizing bold decision-making and proactive leadership — find themselves ahead of the competition.

As the saying goes, “If you think you can or you think you can’t, you’re right.” This mindset is especially crucial for firm leaders navigating today’s unpredictable environment.

Igniting innovation

Innovation doesn’t just happen; firm leaders cultivate it through their actions. Entrepreneurial firms create a culture that encourages experimentation and recognizes failure as a learning opportunity. Here’s how firms can ignite innovation:

1. Encourage cross-functional collaboration. Bringing together diverse teams can spark fresh ideas and uncover new ways to approach old problems.
2. Invest in technology. From analytics powered by artificial intelligence to cloud-based automation tools, technology allows firms to offer non-traditional services that were unimaginable a decade ago.
3. Empower employees. Give your team the freedom to propose and test innovative solutions. A culture of ownership fosters engagement and drives results.

For example, firms that once focused solely on compliance now offer advisory services like wealth management, business consulting, and strategic planning. These non-traditional services are rapidly becoming essential as clients demand more than a historical view of their finances.

Driving strategic growth

An entrepreneurial approach to growth means your firm is in control. Instead of being reactive, you’re seizing opportunities, taking calculated risks, and positioning yourself ahead of the curve. Consider these strategies:

1. Adopt a growth-first mindset. View growth as a series of small wins that become major wins over time.
2. Diversify revenue streams. Expanding into areas like advisory services, outsourced CFO solutions or cybersecurity consulting can create sustainable growth.
3. Measure success differently. Growth isn’t just about revenue but client satisfaction, employee engagement and market positioning.

Entrepreneurial firms often succeed because they’re proactive, not reactive. They leverage data to identify trends, listen to the client’s voice and pivot quickly when opportunities arise.

Transforming leadership

Leadership is the cornerstone of an entrepreneurial firm. Bold leaders inspire their teams to embrace change, attract top talent and foster strong client relationships. Here’s how to lead with an entrepreneurial edge:
1.  Model resilience. Leaders who bounce back from challenges and setbacks set the tone for their teams.
2.  Invest in talent development. Offering mentorship, training and growth opportunities attracts and retains high-performing employees.
3.  Lead with purpose. Today’s employees want to work for firms with a clear mission and values.
Strong leaders get their firms further ahead than the competition. So, embrace an entrepreneurial mindset to create a culture where teams feel empowered to innovate, take risks and grow alongside the firm.

Embracing a bold future

Your firm can thrive in the next decade if you dare to think differently, act boldly and prioritize your client’s evolving needs. Develop new services and empower your team to innovate without guarantees. This will help you adopt an entrepreneurial mindset that’s no longer optional — it’s essential.
Are you ready to take the driver’s seat and propel your firm into the future? It’s time to think bigger, act faster and lead with entrepreneurial confidence.

Accounting’s AI revolution not only continued into 2024 but actually seemed to accelerate, as it has now become near impossible to go to a conference, sit in a strategy meeting or even shop for new software without hearing those two famous letters, often preceded by the word “generative” and followed by the word “powered” or “driven.” This might seem rather strange, as around this time last year we were marveling at how far AI had come in such a short time, and yet at the end of 2024 we find ourselves in this place once more as the current generation of AI tools makes last year’s seem almost quaint. 

This is why, in our second annual AI Thought Leaders Survey, we asked experts in the field what they thought of the past year. The field of AI is both vast and ever-changing, and we wanted to see what people deeply enmeshed in AI in accounting thought of all the changes they’ve seen this year. 

Many noted that AI has gone from being a novelty or an experimental tool in many cases to being a practical, widely-adopted technology integral to daily operations. In this respect, even those who may not consider themselves tech-savvy are now using sophisticated AI tools that would have seemed like science fiction as little as ten years ago. Strategic decision-making, advanced analytics, and personalized client interactions are just the tip of the iceberg when it comes to use cases for accountants. 

“At the beginning of the year, AI in accounting felt like an emerging trend that many were watching from the sidelines,” said Kacee Johnson, vice president of strategy and innovation at CPA.com, talking about the noticeable shift since then. “It’s no longer just about automation; the conversations have evolved to exploring how AI can enhance advisory roles, improve decision-making, and solve capacity challenges. I’ve seen more professionals embracing AI as a tool they need to understand and leverage, not just something that might affect their work down the line.” 

The speed at which AI has advanced this year impressed many, especially its generative capabilities and its application to data both structured and unstructured. In a short time it has transformed workflows, increased productivity, and uncovered new insights their human users had never considered. Meanwhile, the recent rollout of specialized AI agents capable of limited autonomy to handle complex tasks like fraud detection, tax analysis and data reconciliation tells them there’s still so much more to come. 

“We have all seen AI advance significantly in the past year, especially in the area of automation of manual tasks. Think about areas like bill pay, invoicing, expense management, financial statement analysis, etc. AI is putting accountants into more strategic roles and getting them out of the trenches in doing the manual tasks. This past year I have seen a number of players in the tax space surface by leveraging AI. Although many of them still continue to be a work in progress, we are going to see AI totally change the tax space and eliminate the massive tech stacks that exist in many firms today,” said Jim Bourke, managing director of Withum’s advisory services.

Of course, all technologies have their risks and AI is no exception. Indeed, as the technology’s presence in firms grows, so too have the concerns about its use. Our experts cited security risks like data breaches and misuse of sensitive information by AI systems, and many were still worried about the accuracy of their outputs given the tendency to “hallucinate” (i.e. making stuff up). But they also raised broader ethical concerns, such as the perpetuation of bias as well as potential job displacement in the short term. Our experts didn’t think AI was going to wholesale replace accountants anytime soon, but some conceded that it would serve to disrupt job dynamics in certain parts of the profession. 

“It’s poised to replace certain jobs or at least automate specific tasks within jobs. AI agents will influence particular roles, potentially altering the premium placed on certain skills, leading to some traditional jobs disappearing entirely,” said Prashant Ganti, head of product management in Zoho’s Finance and Operations business unit. 

In this, the first of three parts, we look at what our experts—drawn from CPA firms, software vendors and academics all deeply involved in the field of artificial intelligence in the accounting world—thought of three questions: 

* How has your perception or impression of AI in accounting changed from the beginning of this year to now?

* What scares you the most about AI today? What is your biggest concern? 

* What’s impressed you the most about AI this year? What really got your attention? Both in terms of accounting and overall.

We’ll have more from our experts next week.

Technological competency and outdated provisions are two areas refreshed by proposed regulations from the Treasury Department and the Internal Revenue Service for certain tax pros who practice before the IRS.

The proposed regulations, if finalized, would amend Circ. 230 “to account for changes in the law and the evolving nature of tax practice.” Among other changes, the proposed regs would remove or update the parts of Circ. 230 related to registered tax preparers and return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circ. 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date. 

The regulations would affect registered tax return preparers, CPAs, Enrolled Agents, enrolled retirement plan agents, enrolled actuaries, Annual Filing Season Program participants, attorneys, appraisers and other practitioners. These regulations propose to:

• Eliminate provisions related to registered tax preparers;
• Classify the use of certain contingent fee arrangements by practitioners as disreputable conduct;
• Establish new standards for appraisals and the disqualification of appraisers;
• Provide rules related to appraisers, including the standards for disqualification; and,
• Update certain provisions.

Additionally, the proposed regulations would incorporate new provisions that require practitioners to maintain technological competency and would clarify some provisions, such as confirming that the IRS Office of Professional Responsibility retains jurisdiction over practitioners who have been suspended or disbarred from practice. 

The proposed regs are slated for publication in the Federal Register on Dec. 26.