Accounting firm founder shares unique approach to recruitment, AI

On a recent Under the Hood podcast, JD Scott & Co founder James Scott discussed his experience as the owner of a small accounting firm and outlined the typical obstacles that many small firms face.

For many people, owning a business is a key life goal. For Scott, following a wealth of experience across BDO, Westpac, Ernst & Young, and QBE, he decided to set up his own firm.

"I sort of always felt like I'd want to get back to helping proper businesses, real businesses, achieve their goals. And that was the kind of driver of setting the firm up. At the end of the day, it was like, I want clients to almost appreciate what we do ... you get a lot closer to the action with a small business owner and helping them achieve their goals," Scott said.

Whilst running a business can be rewarding, it also comes with significant personal responsibility.

Scott discussed the realities of burnout among business owners, arguing that while the pressure can be intense, the sense of ownership and control often makes it different from burnout experienced in large organisations.

"We all go through ups and downs in a small business, but you accept it because you're in control,” Scott said.

"For a lot of small business owners, sometimes just that weight of being responsible for everything can be a bit much”.

Talent shortages have affected the accounting profession, and Scott noted that, particularly for small businesses, finding the right expertise can be difficult.

As such, Scott has implemented a rather unconventional hiring strategy, recruiting graduates from fields such as psychology and marketing rather than focusing exclusively on accounting degrees.

"We don't hire accounting graduates anymore. If you've got ambition, willingness to learn and EQ, I can teach you what you need to know about accounting”.

At the same time, his firm has aggressively embraced AI tools, which he believes are reshaping the future of the profession.

"Claude was an absolute game changer. It is fundamentally shifting what we do. It’s an absolute god-send for accountants,” Scott said.

“The ability for it to build a financial model in five minutes flat without me doing anything is just staggering. You know, it has taken so much grunt work out of what we do.”

“What it's doing, it's getting rid of all the work. A lot of that crunch work, which is beneficial because it means we can focus on proper client issues”.

As such, Scott noted that with the emergence of AI replacing the skills a young accountant would learn early in their career, emotional intelligence will be the largest factor in the hiring process.

“The best accountants going forward will not be the ones with the highest IQs and the best ability to run a spreadsheet,” Scott said.

“The most important attributes going forward are EQ. Can you relate to your clients? Can you think about your clients? Can you think about their needs before they need it?”

“I think the message of small practice owners is, don't panic, just keep at it,” Scott advised.

“I would also suggest to small firm owners that, you know, look at your client list. If you've got clients that you know aren't A or B clients, if you've got a D or an F client, the person that complains doesn't pay their invoice, it's time to cull some”.

“Have a good hard look at your practice and make sure that you've got the right clients going forward”.