Today, our guest is Hitendra Patil. I was very fortunate to meet Hitendra about a year and a half ago at a conference out in San Diego. I think we had communicated a little before that, but Hitendra has been a very passionate leader in this profession for a long time, and so I’m very excited to talk to him today. Hitendra, welcome to The Unique CPA.

Thank you so much, Randy, and The Unique CPA for this opportunity. So glad to be here and so glad that we met in San Diego a few quarters ago. Before that we knew of each other, but obviously things were resonating even before that. So here we are on the same wavelength, right?

Oh yeah. And I’ve been very fortunate to run into you a few times since then, many times actually, and you’re always so super passionate about this profession. I gave you a quick intro, but there are many things you’re doing—author, speaker, president of an organization. Why don’t you give us a deeper background of what you’re doing in this profession?

Sure, thank you. So I lead the CPA Outsourcing Global Business for Datamatics Business Solutions. DatamaticsCPA.com is our website. Essentially, we serve exclusively only accountants, so we sell our services only to accountants, not to their clients. We don’t compete with them. Which is what I’ve been doing for the past 20 years or so. I’ve worked only with accountants in various capacities from a software company, from a services company, and whatnot. Now I tell my wife, I don’t know how to work with anybody other than accountants, but that’s a fact. 

So here I am. I’ve been an author; because I was working with accountants day in, day out, I was connecting the dots. I was saying, okay, people are getting into the same kids of challenges, and I see solutions people implemented to solve problems and started writing about them. It resonated with the market, so there were more demands, and I kept writing. I published my first book, then the second book, and then the third book. It went around 17 countries across five continents and all that stuff. That also got me into Accounting Today’s Top 100 list for the last seven consecutive years, among other lists I’ve been part of. So I do a lot, but everything is around accountants, their businesses, and their lives.

Yep. I was very happy I got to be on your Top 100 list—I say yours because you have been on there seven years. I got to be on there this last year, which was cool, because we get that because we’re passionate about this profession and we do things to help move the profession forward, because we are a little bit of a—maybe more than a little bit of a—set in our ways profession. So if we can find ways to do things better and more efficiently, it completely helps. 

One thing I wanted to ask about, because I’ve said it multiple times already, is that you and I are passionate about this profession, can you pinpoint how that started for you, where the accounting profession become a passionate thing?

Yeah, sure. Interesting question, and I have to go back in history. When I was in college, my dad had a business in the pharma sector and in manufacturing. The first two to three years, it went well, and if it did go well after that, I might have been in that industry, but then it went down for some reasons, and we were facing challenges. I was wondering what was going on, when my dad had so much experience in that industry and all that. So one of my friends, his dad was an accountant. So one fine day I went to his home just like that, and we started talking and he said, can you bring financial statements for the last two, three years for your dad’s business? Let me look at that. And I’m like, really? Okay. 

So next time I go, I carry all of that, I give it to him, I didn’t expect anything. And he says, you know what? Your dad and the partners made a bigger mistake in buying too much inventory. And pharma inventory has an expiry date. So you will end up losing things, right? And I’m like, wait, did you run a pharma company before? And he says, no, but I can see. And then I go back and ask my dad, did you buy way too much, and why? Like, and he’s like, yeah, because we thought we’ll be able to sell. So, there was a disconnect. And at that time, I’m like, how the heck did the accountant know this? 

And I went through shareholder accounting, then hedge fund accounting, and finally landed up in mainstream accounting. But at that time, the pin was planted in my head that, look, accountants can change lives. At that time, I did think, had my dad met this accountant three years ago, maybe the things would have been different. And then I know, okay, wait, if accountants are busy doing what they’re doing, they’re losing opportunities to impact lives of people. So let me go and do whatever I can to share whatever I can so that accountants kind of start seeing, look, now I have a bigger responsibility than just doing financial statements and taxes. So that’s where I think the passion emerges from. Long story.

No, that’s—hey, you can go long as you want. I’ll listen to you all day long, but that’s a cool story, to have the personal experience of seeing firsthand an accountant make a difference in the business. I think too often we, as accountants, even, neglect that. We’re good at it, but we don’t realize that we do that. We, I think sometimes too often we just look at, well, I just deliver accounting and taxes rather than I make a difference in somebody’s livelihood and somebody’s business. I correct areas that are going to make them more profitable, allow them to hire more people, allow them to send their kids to college. And I think we need to look at that more often than I’m just a reporter of what happened. And I know that’s a big change and it is happening and it has a lot, but I think with the lack of people, I think we still get caught up in the, I just need to deliver this financial statement rather than I need to analyze this financial statement.

I have a way to summarize that. And whosoever, whichever accountant I meet, one day I’m going to tell that person, you know, and I can’t resist, is, it’s not what you do. It’s not what you do, it’s what happens because of what you do.

Yeah.

If you focus on that, then your clients will start seeing more value.

Right, “what happens because of what you do.” Okay, I’m going to steal that from you. I’ll give you credit for sure, but I’m going to start using that. So, I appreciate it. So let’s just talk about accounting then, because, you know you’re involved all the time. In fact, you recently spoke at our conference, which I appreciate that, Bridging the Gap in Chicago, which was great. Unfortunately, I wasn’t able to see your session, but it is recorded, so I will watch your session because I heard great things about it. 

Let’s talk about trends. Let’s talk about what’s, you know, we can go anywhere, but what’s happening in the profession? What should happen in the profession? Are we changing from the things that we’ve been doing for the last 80 years? Should we do it? I mean, give me some of the key things that you’re seeing going on or things you think should be going on in the profession.

Sure. I think one of the topmost things everybody’s talking about and which is proven by statistics and I actually obtained, you know, data from Bureau of Labor Statistics to firsthand check everything is the number of people that left the profession in the last three, four years, 340,000 almost. And then the incoming stream of new accounting graduates has been going smaller and smaller, so obviously that’s causing a lot of problem of talent shortage, staffing shortage across all sizes of firms. 

You know, I actually conducted research, you know, end of December last year. I got hundreds of responses there and I was surprised with one of the findings in that research was, “how are accountants responding to talent shortage” was one of the questions. 42 percent said they are turning away new work. And I’m like, wait, everybody wants to grow and how, so how do I take work? So this is another way accountants think, and which is absolutely commendable is we don’t want to do anything wrong to the clients. I take on work, I must deliver. I’m ethically, morally responsible. So if I can’t deliver, I’m not going on taking on any work. 

Right. 

So that is something really commendable, but then we’ve got to solve this problem. And then this National Accounting Pipeline Group came up with a research finding and they published, on what are the causes and what we should be doing and all that stuff. Fantastic findings in that as well. But we all know the causes, you know, the CPA, 150 hours of credit, and that’s been talked about, the cost of adding more to your college degree and the time it takes and then the time it takes for people to come into profession and rise to the levels where they can feel they are succeeding. That also is very long compared to many other professions. A lot of things happening. 

Plus technology, you know, an interesting story here: I went to Baruch College to, on invitation to, you know, deliver a session to the accounting students. I think they were the final year students. And the hall was full and I was talking about AI and whatnot. Two students got up at the same time and asked, likely the same question in different words, is the perception is if AI is going to do everything, don’t you think we are going to be lazy? And I’m like, hey, you think AI is going to put money in your bank account? You have to work. There’s no way it’s going to happen. So the problem is perception of technology automating so many things, and hence, oh, what will be left? And there would be no future. The accounting profession will require lesser number of people, might be percolating in the colleges and all that. 

So NAPG did, you know, touch upon this, that we got to go and tell a better story and tell the right perception. And, you know, I wrote a piece of article for Accounting Today, seven years ago. It was titled, “Why Your Child Will Not Be an Accountant.” And I was addressing the issue then, that look, the way technology and accounting are being seen, the way accounting is defined in the dictionaries, is very wrong. It’s not what accountants do nowadays. It’s just so much more. I actually wrote to the Cambridges and the other dictionaries, they didn’t listen to me. They said, we can’t change the definition. And one of them told me, “this definition comes from 15th century,” you know? How can you ask me to change? Come on, that is why it needs to be changed. 

Exactly!

So I think the perceptions are really what they are. We’ve got to change. I run a little poll, anonymous poll on the web. It’s directed towards not accountants, but their clients. So say when you hear the word accountant, what is the first word that comes to your mind? In the last six, seven years, I’ve been getting three things: Balance sheet, financial statements, tax returns. That’s the perception, and that is causing a lot of trouble to attract talent. Technology will do whatever it is. I do, this AI for accountants, I wrote that book and I do these presentations in events and all that. And I’m saying, look, if you understand how AI is created, how it learns on its own and how it works, it will become the biggest tool in your hands. So, you don’t have to worry about AI doing everything. You put a balance sheet, upload it to ChatGPT, and say, give me analytics on that, it will give you something. But not necessarily it’s correct. Because what’s inside the data, AI can figure out. But what’s inside the heads of your clients, only you know. No AI knows that. So you have your territory marked there, you know, as accountants.

Yep, and so what it does is, technology, as you said, it’s not going to get rid of accountants, but it’s going to allow us to use our brains to do the things that we’re probably most passionate about doing, which is helping, which is identifying opportunities, which is seeing, helping companies be successful, and if you can use AI as a tool to do that,  I mean, that’s exciting. And that’s what people want to do. I mean, and that’s what clients want too. I think I’ve heard you talk about this. I mean, clients want to pay you for this higher-end service, and we are stuck in this area where we just can’t do it because we think we just don’t have the time. 

And so what’s the solutions then? A better perception of what the profession is, but we also have to change the, not only the narrative, but the reality. And so the integration of technology and AI into as much as we can, is important—sorry, I’m going on a rant now. Correct me where I’m wrong or expand where I’m right. But in addition to this technology integration, there’s so many things that accountants do that we can outsource, we can delegate, we can collaborate with others. And so just finding those places where you’re most passionate and being able to outsource, delegate, automate, everything else I think is really going to be important. I don’t know, what are your thoughts on that besides the integration of technology?

Oh, sure. So I do work for an outsourcing company for a reason, because I know there is a staffing shortage. Plus I know accountants with experience and expertise need to deliver the benefit of that expertise to their clients. And if they get busy in input equal to output, they’re not going to be doing that. So irrespective of what technology you use, and you know, sometimes like, you know, compare with the healthcare profession: You go to a doctor’s office, you go there, you know, and the doctor, they’ll see you, they’ll recommend medicines, whatever it is, they’ll try to get you in a better shape, right? At that time, we don’t ask them, you know, what’s the software you’re using? Can I see that? Can I get access to that? 

We don’t do that at all. Here in our profession, the clients kind of see everything. So they are accessing cloud solutions and whatnot. They’re learning about AI and that’s a challenge as well as a good thing because then you’re not really, you know, a messenger of information. Clients can self-serve, but at the same time, clients know, look, you know, everything is getting done by technology. So what are you doing, Mr. or Ms. Accountant, is a question that would be in their minds. And that’s what I say, okay. If you see something, say something. So if you see, oh, you know, your profit ratio, profitability is going down because of these two things, tell them. And now it’s not like you have to sit with those financial statements to figure out. Technology actually brings those insights to you. 

Yes. Sure. 

Even if they’re not paying, you send them two, three times. I’m sure they’ll start taking notice. Wait a second. What’s happening? You know, how come I’m getting this? It’s not like, okay, here are your six reports for the month and give me my payment. That’s not the way it works. So unless we change the experience of our clients, that’s going to be very difficult because their expectations are also changing.

Oh, yeah. And that goes to the whole pricing model that we use then too, because if we’re integrating technology that is giving us information that then we’re able to share with the client and advise the client with, if we keep sticking with the same hourly billing pricing models, I think that’s going to drop us behind. So I don’t know, what’s your opinion on how we start pricing these services, ‘cause accountants might have this mindset. Well, I’m spending less time here. So I’m going to just charge the same, even though I’m giving more value, I’m giving an outcome, any thoughts on that?

Oh, sure. This has been a perennial topic of great interest for all of us. I actually did that, cover it in the research that I did, through CPA Trendlines, and it came out, you know, even today there are about 30 percent accountants who do charge an hourly basis. They might be charging on a fixed fee basis, a mixed basis or a value pricing basis, but there are still things that get charged on an hourly basis. Maybe, you know, you have some cases where you might feel hourly billing is better because you can’t figure out what the volume would be. Let’s say a catch-up project, you know? Somebody who doesn’t, hasn’t done, you know, two years worth of books and there’s a mess. You just don’t know, okay. 

But then, for your usual stuff, monthly stuff, whatever periodic stuff you’re giving, you need to kind of correlate the value to it. What is it that the client is getting? Not just the reports, right? What do they, again, the same thing, what happens because of those reports, right? So if you can do that, and typically I’ve seen firms doing three different levels of pricing, standard stuff, right? But then, how do you make those up? How do you define, okay, here are my three packages, the small, medium, large versus, let’s say, a bronze, silver, gold, whatever it is. But if you’re pitching that to the client, will the client be able to see the difference in the value that the client will receive? Okay, I want to go for the middle package, not the smallest one. I don’t want to see, okay, you’re going to handle two bank accounts versus four bank accounts. That’s not the difference. The difference is what happens because of that middle level package or the highest level of package. If you can express that well, articulate that well, maybe, you know, that’s where you should go. I have a list of 50 such things. What happens because of what you do.

What happens because of what you do. I got to remember that. Okay, go ahead!

I’m going to start publishing that soon. One at a time. It’s not the financial statement, okay? Because of the financial statement, what happens? So I’m going to put my thoughts on that. And again, that’s like an indication to accountants, here is how you should express your value. I think that’s very critically important. Otherwise, you know, okay, here is your tax return. Filed, done. Okay, what happens because of that? Okay, see you next year.

Right, yeah. I had a call yesterday with a CPA who was actually at our conference and he wanted to get my advice on, you know, he is in a point in time right now where it’s just, he said, there’s no income coming, tax season’s over, there’s no income coming. I go, well, okay, well then you need to change the way that you’re delivering your service and go to more advisory, and start to show the value of what you’re doing and spread out tax season, start meeting with your clients quarterly. And whether I’m right or wrong. If we’re wrong, we just need to start thinking a different business model, a different way to do business, a different way to show the value, as you just said, to our clients. 

And I mean, yes, I talk about this all the time, I thought I wasn’t saying anything all that novel, but he was just like, yes, this is what I have to do. We need to do this. And, you know, thanks for the advice and, you know, totally, keep me updated what you’re doing. So just a little simple conversation of just change the way you’re doing business. You can keep the same clients, but now you’re going to offer more services to them. You’re going to be in their office more often, and you’re going to make a difference in their business. Alright. I went on a rant again.

Oh, well, interesting, you know, I can’t resist my urge to tell accountants every time I speak with somebody and they’re looking at, oh, what’s our business model? Do we need to change pricing and all that? And I keep saying, okay, give the tax return for free to your business clients. How can you do that? So just build that into your monthly price. 

Exactly. 

I’ll do your books so that I know the books. I don’t have to catch up with the books during the tax season. I’ll do other things, advisory, whatever, but every month I’m getting paid so that I’m tax ready come January. So you already billed them in advance for the tax return to do that. And people like it, then they say, they come back to me after three, four or five months. They say, Oh, I didn’t expect 60 percent of my clients to sign up for this.

Right, right. Yeah, and it’s a higher fee, you know, anything we can do to make more, work less, but feel more gratified with what we’re delivering. I mean, that’s a no brainer. 

That’s right.

Okay. So I keep going down roads I want. Anything else we didn’t talk about that you want to highlight that’s going on in the profession or with you personally?

Yeah, so profession, obviously there are lots of things happening at the same time. Regulations keep changing and all that stuff. So we’d all, technically, I think accountants are very well versed with the changes that are coming in. It’s just a matter of how do you adapt to them and how do you make sure you are moving fast? I think that’s where it’s important. I just recently published another article on Accounting Today, “Meet Nova Aurora, a CPA from the year 2034.” And essentially what would be a different way that a CPA would work 10 years from now. So I try to imagine as much as I could, that should be interesting to see. But at the same time, I think the key is taking actions on what you think is right. Experiment. Without experimentation, nothing happens, okay? Put 10 percent of your foot forward and say, if it doesn’t work, I’ll take my foot back. That’s okay. But don’t stand still.

Yep. We have such a, you know, consistency and everything built into what we do, I think it’s hard sometimes for people to like take a chance or do something different because that’s different than, I mean, taxes, accounting, I have to be consistent. And so I think, unfortunately, that sometimes bleeds into the way we run our practices. But yeah, I couldn’t agree more. Take a chance, do something a little different, see how it is. If it didn’t work the way you want, yeah, it’s not the end of the world. You can try something else. So where’s that article, the 10 year from now business? 

It’s on Accounting Today. 

Okay. Alright, we’ll have to take a look. Maybe we can put a link in the show notes to that. And then also, didn’t you do an article for CPA Trendlines based on the survey that we did at the conference or we submitted?

Yeah, absolutely.

Thanks for doing that. We got some of that data, more data is coming out soon. And it was an accountant’s professional satisfaction survey. And it has a lot of interesting things. In that, I’m pretty excited to start sharing and hopefully being able to help make some changes in the profession off of it. So thank you for being part of that as well.

My pleasure. It was absolutely important to spread the word as much as I could. So, always.

Thank you. Well, I appreciate the conversation today. It’s always a great time talking to you. A couple of final questions: First one is, you know, we’ve been talking about the profession, which we’re both passionate about, we both enjoy, but I’m hoping there’s things outside of the profession you enjoy doing when you’re not working and writing books and educating the profession. What do you do for fun?

Fun, technically for me, is trying to figure out why people do what they do. So being a keen student of human behavior. So it’s always like that, why did somebody say the way they said that? Or if I see a trend in social circles, what’s happening? You know, why are people going that route? And things like that. So that’s good. And for that, I love to travel, right? So I’ve been traveling for the last 20 years, constantly, every single year. So it kind of gets me in touch with reality, because sometimes what you read on the news or social media or content online is just an expression of an opinion, not necessarily a reality. So that helps.

Yeah. Alright. Well, that sounds great. And then finally, if people want to see more, hear more, find out what you’re doing, what’s the best place they can look or get a hold of you?

Yeah. So one is obviously my LinkedIn profile. I’m pretty active there. So that’s one. And two, as accountants, if you want to take a look at what I do on my professional thing, go to DatamaticsCPA.com. I’ll send you the link. And it’s exclusively for accountants, again, as I said, we don’t compete with them. We don’t sell to anybody other than them. So typically expect as if you’re talking to another accountant, with whosoever you deal with at my company, that’s what—the feel that you’ll get.

Nice, nice. So I can vouch for it, Hitendra is a great guy and everything he does is awesome. So don’t be afraid to reach out. And Hitendra, thank you so much for being on the show.

Thank you so much, Randy, for the opportunity. And hopefully we’ll get together again sometime soon.