Bruce Phillips of Aprio Cloud recently joined Karbon’s Stuart McLeod on an episode of the Accounting Leaders Podcast to discuss mentorship, the future of accounting, and mergers.
A strong proponent for building valuable relationships, Bruce believes in the power of mentorship and looks to young, emerging talent in his pursuit of lifelong learning.
Bruce anticipates a surge of mergers in the future. "I think you're going to see a lot more of the smaller specialty groups get swallowed up. And the opportunity [with acquisition] lies in a firm’s ability to offer additional specialty services to their existing clients."
Bruce Phillips is always on the lookout for a good ping pong partner.
Although he started his journey as a CPA in a traditional accounting firm stacked from floor to ceiling with paperwork, he’s evolved over the years into a champion for the cloud and paperless accounting at Aprio Cloud.
If you offer him a hard copy of something, he’ll likely respond with a confused look and ask for the nearest recycling can.
At the dawn of a new, paperless era, Bruce dreamed of replacing the antiquated stacks of files with his very own ping pong table—a symbol, of sorts, for the innovative work cultures coming out of Silicon Valley at the time. But he didn’t realize the irony in his vision.
Bruce laughs with Stuart McLeod, founder and CEO of Karbon, on the third episode of the Accounting Leaders Podcast as he recalls discovering that cloud accounting and remote work go hand in hand. As the files dwindled, the number of remote employees soared.
“I had no one to play ping pong with. I was the only one in the office. I had to put the wall up and play ping pong with myself,” he chuckles.
Being a relationship-driven person, Bruce is committed not just to scouting young ping pong talent but also spotting and coaching up-and-coming accountants.
Together with Stuart, Bruce gives advice for young CPAs just entering the field. They also discuss what they believe is on the horizon for the accounting industry and important questions to ask when considering a merger.
Bruce has learned a lot in his journey from an audit guy to the managing director and partner of Aprio Cloud, a leading cloud accounting firm.
As a forward-thinking and curious professional, he considers himself a lifelong learner and is always looking for new and exciting innovations in the field.
With an eye for both mentorship and innovation, Bruce’s outlook complements his current work as leader of the Technology and Innovation Group at Aprio.
He and Stuart discuss three key insights for young accounting professionals just starting their careers.
Bruce found himself as a partner of Halligan & Associates (a boutique local CPA firm in Atlanta, Georgia) after leaving EY, at just 30 years old after the tragic and unexpected loss of his mentor. Thrown into tax accounting for some of the firm’s largest clients, the audit accountant was in over his head.
As his team worked to reassure their clients of the sudden structural changes, competitors nipped at their heels. Bruce found himself at a loss for the specific skills and knowledge needed to serve his clients in this new capacity.
But he didn’t panic. Instead, he phoned a friend.
Bruce reached out to his longtime friend and now partner, Bill Harshman. As a CPA specializing in tax, Bill was able to fill in Bruce’s knowledge gaps. So he came on board, and together, they navigated the tumultuous transition.
The partnership was a perfect union. Eventually, they formed their own company, Harshman Phillips in July 1992.
Bruce understood his limits, but instead of giving up or faking it, he reached out to someone that could support his needs. “We surrounded ourselves with really good people like Harshman. I got to learn from him. And then, before you know it, we’re growing,” Bruce explains.
Bruce bucks the system and says that being a generalist, to some extent, is valuable.
While many veterans advise finding a niche in accounting, Bruce believes it’s not quite so simple. He progressed in his career from audits to tax to accounting and then technology. “I have all four, and there’s not a lot of people nowadays who actually have that,” he reflects.
Bruce encourages professionals new to the industry to seek a broad knowledge base.
“Being a generalist allows you to be successful at picking out your niches.”
Bruce wishes more accountants took risks—calculated risks. He believes that, by nature, accountants fall on the cautious end of the spectrum. But he also believes that taking chances is essential when building a successful career.
“If you can understand the risk and figure out how to mitigate those risks, they’re going to pay off. It was a risk when I started my own firm at 30. I had no idea what I was doing. Who knew back then that I’d completely change our traditional firm into a cloud-based firm? That was a risk.”
Bruce believes that with careful planning, risk assessment, a willingness to learn, and the right relationships, calculated risks can and will pay off.
Bruce has always had his finger on the pulse. Although he started out using 14-column ledger sheets, he says that he quickly turned into the type of person he'd seen lugging their Apple computer through an airport terminal.
Midway through his career, Bruce got involved with tech companies (there’s that generalist streak again) and learned about the cloud early on. He was hooked—and knew he had to get involved.
So, what’s Bruce thinking about today in terms of future innovations and trends in the industry? Stuart asks him to give some insight.
The workforce has experienced the most significant disruption in modern times as firms and employees navigate a pandemic and the gradual return to a new normalcy.
Bruce believes the impacts of the pandemic will be felt by accounting firms for quite a while, citing several issues to keep an eye on.
Downsizing or acquisition. Currently, CPA salaries are significantly higher than the pre-pandemic standard. These salaries aren’t sustainable for firms. At some point, firms will either have to downsize, lose good employees, or look to acquisition as the path forward.
A major workforce shift. Tax accountants are especially burned out after what has essentially evolved into a relentless, 18-month tax season. CPAs are leaving the field in droves, which will manifest into an interesting hiring market for those still willing and interested in specializing in tax.
Mergers between small specialty firms. As more and more companies embrace tech stacks that allow for remote work, businesses expect efficient access to resources and information. Small specialty firms merging with one another will become more commonplace as firms aim to offer their clients one point of contact for a wider variety of financial services.
Either way, the turnover tsunami coupled with the strain felt by the financial industry is going to take a toll. Staying current with trends allows professionals to better-prepare themselves for future challenges.
As a global company, Aprio Cloud works with accountants and clients from around the world. While it’s historically been challenging for firms to hire employees from other countries, Aprio has found a way to mitigate the increased risk and liability of this type of expansion.
Aprio has found incredible success by partnering with a global professional employer organization or PEO. The partnership allows Aprio to hire talent from almost anywhere globally. Plus, the PEO manages compliance with local employment law, mitigating risk and creating a workaround so that Aprio doesn’t have to pay and claim taxes in foreign countries.
This strategy is changing the game for Aprio and accountants looking for work. Initially, Bruce was wary—but was then pleasantly surprised to discover that many of Aprio's international hires came with prior experience in U.S. tax laws and provide work of equal quality to his stateside accountants.
Accounting is often about looking backward, but both Bruce and Stuart believe that the future of accounting lies in just that—the future.
Though automation in accounting isn’t quite happening at the rate that either Stuart or Bruce would like, both believe it’s on its way and will be fleshed out soon.
And it has major implications for accounting and financial services firms. The ability to automate even just 50% of tasks will mean zeroing in on manual tasks and providing services better than ever before. For example, firms can use data for accurate forecasting.
Considering the possibility of more firms merging in the future, Bruce shares his own experience with HPC (rebranded from Harshman Phillips in 2013). It was a big decision that Bruce grappled with. Many people cautioned him against the move, believing that he'd lose his freedom by giving up ownership.
Bruce recalls the many conversations held during that transition period.
"I remember arguing about the decision with a friend, and he said, 'Well, maybe you're not giving up your freedom. Maybe you're actually getting your freedom because now you become part of something bigger.'"
Bruce's friend was right—he loves the meaningful and big-picture work that comes with Aprio.
There are many reasons that a firm might consider merging. Bruce and Stuart highlight two benefits to consider:
More service offerings. Clients don't want six different contacts for all of their financial needs. Managing everything through a single point-person is a huge draw for busy CEOs and entrepreneurs.
Additional expertise to lean on. Before merging with Aprio, Bruce felt like he had to know anything and everything about finances. Now that he’s part of a larger firm with many areas of specialization, he's not responsible for holding all of that knowledge—he just needs to know who to call.
Bruce especially encourages anyone entertaining a merger to be mindful of finding the right cultural fit for your team. He found that perfect fit in Aprio Cloud and feels it was instrumental in aiding his team's successful and smooth transition.
Bruce is a testament to the potential that comes with a willingness to learn new things. Be it a new form of accounting, an innovative tool about to debut, a new firm to partner with, or an emerging leader ripe with fresh ideas, Bruce is interested in hearing more.
His willingness to adapt and grow has laid a foundation for success and inspired others to do the same.
What will Bruce learn next? That remains to be seen.