Building Capacity in Accounting Firms
Speaker 1: Welcome to Account
Trends everybody. I'm Jason
Stein with Intuit Accountants.
My co-host, david Bernstein, and
I are excited to be with you
every couple of weeks to share
the latest news, interesting
perspectives and hottest trends
in the tax accounting world.
We'll have special guests on the
show to help break these trends
down and give you food for
thought as you find new ways to
deliver for your clients. Most
importantly, we plan on having
some fun while doing it. Welcome
, all right. Welcome back to
Account Trends everybody. Your
host, jason Stein, here, and
with me, as always, mr Bernstein
, how are you today?
Speaker 2: I'm doing wonderful
today. I just want to check up
on you. I think today's guest
has a dog similar to your dog. I
know what kind of dog do you
have?
Speaker 1: You surprised me. So
we both have a Cabapoo. A
Cabapoo is a King Charles
Cavalier mixed with poodle. And
there's a funny story behind
that, because I did not want a
dog. I like dogs but I don't
want the responsibility of a dog
. My wife and kids worked me for
years and finally, when the
pandemic hit, they were like
please, please, can we get a dog
? I'm like, all right, we're
going to get a dog, but we're
going to get a specific breed,
not just some random dog,
because I need the dog to have
certain qualities. So I wanted a
dog that wasn't going to be
barky, wasn't going to be
shedding a lot. I didn't want a
big, huge dog. My wife wanted it
to be cuddly and lapdog-ish,
and so then we went and we did
the research. And I'm not a
super hyper, I'm not going to
get out there and go running and
stuff kind of guy, I'm not
super active. So I didn't want a
dog that was going to require
that kind of attention either.
So we did some research and we
landed on King Charles Cavaliers
, like the royal lap dogs right,
that's where they come from and
then Poodle being very smart
and hyperallergenic Not that we
had to worry about
hyperallergenic, but I just
wanted to have a dog, that was
so we get the dog. Beginning of
the pandemic, by the way. So
she's a COVID puppy is what we
call her. She barks at the
slightest sound within a 10-mile
distance. Thankfully she's not
destructive anymore, but as a
puppy she was but super smart,
but sometimes too smart for her
own good, which Poodles can't
tend to be. So it's funny. I
went and researched breeds that
I wanted because I wanted
certain qualities and actually
turned out that a lot of those
qualities I didn't end up
getting in my dog, but we love
her none the same.
Speaker 2: I've had a lot of
dogs in my lifetime, but now I'm
the millennial in the baby
boomers body. I don't want to be
restricted at home. So no pets,
just pickleable.
Speaker 1: But wait a second, I
was going to ask.
Speaker 2: How does the dog get
along with all your chickens?
Speaker 1: They don't interact
as a matter of fact. That's a
really cool question that you
asked, because when we'd have
the we first got the chickens,
they were in like a tote in the
garage with us and so they
needed to be indoors and so the
dog was very interested in them,
but it was a weird interest.
She's like I don't know if I
should eat them or play with
them. And so you hear about
people that have chickens, and
sometimes a lot of times they
live on property to have big
dogs, and I know we had our
contractor who was working on
our renovations would tell us
about how once in a while,
chickens would get out and land
in the dog pan and didn't end
well for the chicken.
Speaker 2: So it happens but,
we'll leave the chickens alone,
now that we know your dog is the
same dog as our guest today,
kane Pollakoff.
Speaker 1: Yes.
Speaker 2: You know, I think
we're going to hear some great
things from him because he works
for let's call it a large firm,
even though it's not in the top
four, it's up there and I think
he's going to give us some
great insight if it goes into
capacity, staffing and what's
your favorite word niches or
industries, what it calls. So I
think everyone who's going to
listen today they're going to
get some practical examples of
really and we didn't talk about
advisory services, but he
brought out some points that you
want to help the client and
it's not about the financial
statements. It's like we were
talking about the restaurant
industry. I have a restaurant, I
have a profit, but if you can
help them succeed, you want to
know what's the average ticket
and what's the average check.
And then you brought out talking
to the employees to figure out
a way the accountant can say,
hey, how do you increase your
average check? And you said
bring the employees together,
let them figure that out. And
that was a great example.
Speaker 1: I don't want to spoil
it too much, but I love the
conversation with Kane here,
where we really get into the
practical of how we think about
talent and staffing, from hiring
all the way through to how they
execute, what the expectations
are, and we touch more on why do
we keep saying that it doesn't
have to be accountants all the
time that we're staffing and I
use the word accountant loosely
because when we think of
accountant it's data person
doing transactional work and
while that's still going to be
needed, we really want to think
about our talent in our firms in
completely different and new
ways. In addition to that,
because of everything we've been
talking about around advisory
and all the expectation that
clients have of firms now and
into the future. So I'm excited.
Speaker 2: I'm excited too. Are
we ready for it?
Speaker 1: Let's do it so, David
. I always introduce our guests.
Why don't you take this one?
Speaker 2: Okay, I'm looking
forward to this. I'm going to do
a long introduction. Today we
have Kane Polakoff with us. He's
the principal client advisory
services practice leader for a
very large firm, kohn Resnick,
and he's also on the board of
the information technology
alliance, ita, which is another
great organization that a lot of
firms join. In addition, and
you probably don't know this,
he's on the Intuit Large Firm
Advisory Committee and I think
that's QuickBooks mainly, and
he's also on the billcom
advisory council. So he is up to
date with technology. So, kane,
how about telling us a little
bit about your background and
what you're doing?
Speaker 3: All right. Well,
thanks, david and Jason. The
first of all, I live in that
lovely city of Detroit, michigan
, so I don't know if a lot of
you have come out and visited.
Actually, the weather's been
great here. I have just a little
bit of background. I've got
about 28 years of experience in
consulting and accounting work
and specifically CAS. I have had
the luxury of being on a BPO
business process outsourcing
firm as the chief operating
officer, have run organizations
and over the last five years
I've been really focusing on
client advisory services, where
I was at a previous large firm
where I started the practice
from scratch and recently now
I'm at Cohen Resnick, as you
guys indicated, and really
building out the practice,
looking at from a technology
perspective as well as people
and process. So it's been fun.
I've had experience on the sales
side operational when you look
at optimization. So I've had a
lot of different experience over
my career and happy to share it
as much as I can with you guys
today.
Speaker 2: We appreciate that.
Jason, you want to take the
first question today?
Speaker 1: Yeah, I'm super
excited to have you here with
all your experience consulting
and then being a part of Cohen
Resnick and having that
practical experience and dealing
with all the stuff that we talk
about on the show that's
happening in the accounting
profession and one of those.
Let's dive right into that. One
of the things that I think is on
everybody's mind is we keep
hearing about the capacity
conversation and that's
affecting firms of all sizes. So
what do you think about that
whole conversation? What does it
really mean?
Speaker 3: Yeah, and that's a
great question because capacity,
especially over the last four
or five years, has been a big
challenge for a lot of the firms
and even specifically I've
encountered If you think about
COVID and everything that's
happened specifically for CAS,
the CAS industry and providing
outsourced accounting there's
just been a tremendous demand
for our services, to the extent
that you have to really build
the capacity to be able to take
on the work. I mean, during the
pandemic there were
opportunities left and right
where the prospects were
reaching out to us and asking
how we could help them and how
we can support them. And in
order to do that, you have to
have capacity to do that. And
it's not just at the high level,
it's at all levels. So when you
think about it from an
associate to a consultant, to a
manager, senior manager and vice
versa and really the question
is how do you build that
capacity and how do you project
what your pipeline is gonna be
or when it's gonna hit? And
that's a tough situation because
you gotta figure out the
chicken versus the egg. Do you
build a bunch of capacity now
and then wait for the work to
come, or do you have the work
come and then you build your
capacity and in most
organizations at least three,
four years ago, wanted the work
to come in to build that
capacity. But the hard thing
about CAS is normally when you
get an opportunity clients need
help, like right away. You can't
wait three months or you can't
wait five months for that work
to come, so you have to really
move. What I ended up doing was
I built my capacity first, so I
looked at hiring a bunch of
individuals, bring them on board
, getting them trained Cause it
does in some cases, depending on
the technology, can take four
to six weeks to get them
certified and trained on the
different technology and the
processes that you have. And
what I did which was great and I
recommend that for others was
we had dedicated recruiters that
are working for us internally
that were constantly looking at
resumes, interviewing. I spent a
good portion of my first couple
of years at my last firm just
interviewing and talking to
individuals and bringing them on
, and luckily that worked out,
because there was such a demand
that by the time we brought
people on, we trained them and
got them ready, there was
already work for them, so that
worked out very well. Now fast
forward to where we are today.
The challenge is how do you
generate the demand in the
marketplace, and that's not very
difficult. As I see here at
Coen Resnick, we continually
have opportunities. Most of
these opportunities are a lot
larger. So we have some clients
that we may need to provide 10
resources, others five or six.
So you really have to build a
finance and accounting
department for our clients per
se. So you have to look at
controller level down to the
associates. So we've kind of
taken the same model a little
bit different, here, where we
have we've built a very strong
leadership group here, so having
different verticals. So what we
did is we hired based on five
different verticals that have
that experience at the
controllership later level,
which was important, and then
also built the capacity offshore
, which from a transactional
level to support that, that was
a huge benefit. And then
leveraging the technology to
automate and standardize across
our practice, and that made it
easier to build our capacity but
also allows our capacity to be
more flexible, to be
cross-trained or up-skilled,
depending on what the
opportunities were. But we
continue to build our capacity
and what we're trying to be
smarter about is when we want to
take on these accounts too,
because the lesson you want to
do is take on an account and
you're not prepared to do that.
So we have discussions during
the sales cycle kind of
positioning and looking at
scheduling ahead of time. So by
the time a client's ready to
move forward with us, we have
capacity for that too. Plus, we
also built in when you look at
attrition and other ways to
build that additional capacity
to be able to support that. So
that's when I look at capacity.
That is one of the most
important factors when you run
an operation, which we do, to be
able to execute and support our
clients going forward.
Speaker 1: And you're talking
about capacity at a high level,
but what I'm gathering is it's
even just capacity to meet
essential services like tax prep
and bookkeeping and that kind
of thing, not just capacity to
have additional services like
advisory right.
Speaker 3: Yeah, I mean I think
you look at it from my team
there's really three things that
we do. We do the back office
accounting work. That could be
from transaction all the way up
to CFO. So there could be cases
where a client loses a CFO or a
controller and we have to jump
in and support that as an aspect
. The second option could be a
client that needs to make a
change on the technology side.
So they have outdated systems,
they're no longer being
supported, they have manual
processes and they're looking
for a tech stack that can help
improve. So we have to have
resources that have knowledge
and the technology that are able
to implement the solution and
provide that. And third, we have
the standardization of the
documentation. So a lot of our
clients do not have SOPs or they
don't have any of that in place
. So we actually have to have
people that are understanding
kind of how they're set up and
help document, making sure
there's separation of duties,
making sure there's efficiencies
in place. So every client's a
little bit different, but we
have to have capacity in that
side. And then also to your
point, whether it's tax prep or
other services that are
complementary to what we provide
in our practice, they also need
to be able to build up and have
that capacity to support that
Jason.
Speaker 2: Let me ask you a
question. We keep using the word
capacity. Are accounting firms
changing? Is the latest trend in
CPA firms to hire non-CPAs to
fit different roles, to really
be the accounting department for
any size organization?
Speaker 3: Yeah, I mean, I think
it's a combination of of course
you want to have the CPAs and
the strong accounting background
, but I have folks on my team
that don't have accounting
background. They're very strong
relationship managers, they're
very strong in project
management, they're very good
analytical thinkers. So if you
think about engineering or if
you think of folks like in
business and when we talk about
advisory, the aspect of sending
a financial statement is really
a deliverable. But it's not just
sending a financial statement
over the fence and just hoping
that the client understands it,
but you need to be able to
communicate with the client to
be able to talk about what it is
, look at the historical data,
but also looking at projections
out with the client and how they
can improve their operations.
So you soft skills, I'll say, is
such an important piece of the
puzzle. We can no longer hide,
you know, inner desks and just
crunchy numbers all day, because
what our push is to try to get
out there in front of our
clients. Now it's tougher, of
course, with as we're on a video
conference right now, but back
in the day we used to spend most
time in our brick and mortar of
our clients and doing that work
with them, but now a lot of
it's over video conferencing and
recordings and things like that
. So you know, I think it's
important as we kind of move in.
The trend is that clients are
expecting a lot more. The
financial statement, that's just
checking the box. It's what you
do beyond that and we have to
have the accounts that love to
have interaction with our
clients or able to problem solve
. But we can also bring in
engineers or business majors and
to be a compliment to that
service as we move forward. So
yeah, I mean, I think it comes
down to the training aspect.
That helps in that case, but
some of my best employees are
folks that don't have accounting
degrees today.
Speaker 2: No, that's what I'm
seeing across the board. You
still need the CPA and you still
need the CPA firm, but we're
providing so many services,
you're doing everything, but
you're really trying to get the
higher level service at this
point.
Speaker 3: Yeah, yeah, I mean
it's almost. I'm not used to the
analogy. We're an extension of
their team, but accounting is
only one aspect that they ask us
questions about. You know,
they're asking us about HR and
their payroll and they're having
challenges on this or that, and
we have to build an ecosystem,
whether it's within our firm,
that we can support that or have
individuals or partners that we
can work with to provide that
solution for our clients. And
they're expecting us to be that
quarterback to help identify who
can help them and insert as
things come up, whether it's M&A
, when you look at financial
institutions, you look at
getting money there's a lot of
different things or even looking
at strategy that's becoming
even more prevalent as they
looked at potentially
consolidate or shrink in size.
There's a lot of questions that
our clients ask and they expect
of us to either know the answer
or quickly come back with a
response to that too.
Speaker 1: Yeah, it's funny, we
talk about full service firm
right. This is full service
right. It's not just I'm doing
all the accounting services, but
you're doing all the business
consulting services. Right, and
just being a one-stop shop for
literally everything for your
clients and their businesses,
from starting it up to selling
it off and everything in between
.
Speaker 3: Yeah, we do a lot of
startups too, so there's a lot
of cases where we're standing up
at an organization and they
have only a small number of
individuals, and the finance and
accounting side is one aspect
of that, but operationally, we
get into many different facets
of their business to help
support them, as if they only
have limited amount of employees
. We're taking the brunt of
doing a lot of that work. As an
example, there's a lot of
organizations, like in Europe
and other parts of the world,
that are opening up operations
and they rely on us to help set
them up and help drive strategy
for them, which is very
interesting, and you think about
it from a technology side too,
where they're looking for us to
evaluate where they are and
define what their tech stack is
going to be, and it may not just
only be accounting. It is well,
so it's helping to define how
that's going to work, how to
implement that and how that's
going to provide really a
backboard for our clients going
forward.
Speaker 1: Well, and I would
imagine, too, that you're not
sitting around waiting for the
clients to come ask you for
these things. These are
questions that you ask and
things that you observe and then
say here's what we think you
need, right.
Speaker 3: Yeah, and I think
that's the change in mindset
that we're all trying to do in
our industry, and I think it's
instead of waiting for a client
to come and say, hey, well, what
about this or what about that?
But we're trying to educate our
staffs, and not just at Coen
Residoc, but if you look at it,
I think it's industry wide, just
from my conversations with
other cast leaders. It's how do
you ask those right questions
and have those discussions with
our clients? To pride? Right To
kind of ask those certain
questions and do a lot of
listening, but they're looking
for us to become more of the
experts and if we sit around and
wait, then we'll find out that
they're going to go somewhere
else in the long term and we
really need to have those
individuals at low to think
about that and are able to drive
that. They're using the numbers
, of course, to help navigate
the waters, but you have to be
comfortable having a sometimes
difficult discussion for clients
too. Maybe some things they
don't want to hear. As an
example, yeah, it's easy to have
a conversation with somebody
when it's when things are going
great, but if if you need to
help change course or you want
to identify something that they
may not like. You got to have to
be comfortable having those
discussions as well, which is, I
think we all know, not a very
easy thing to do.
Speaker 2: Yeah, what I think
we're all saying is accountants
have to become more advisory in
what they do, but they're really
becoming business coaches and
being proactive with their
clients. The compliance work is
never going to go away, so we'll
always be doing that. But it's
all those other services and I
like the word you use. I think
of a CPA firm where there is
sole practitioner, or a large
firm like yours. If the CPA firm
is the quarterback for that
business, they move them in
every right direction.
Speaker 3: Yeah, no, I think
that too. I mean even within our
firm you know we're a
quarterback to try to bring the
right resources. Not everybody
in my practice is a certain
expert in certain things, so we
have to go through our
organization to help bring the
right people onto the calls or
having discussions to have. And
that's part of, I think, the
synergy that a lot of the larger
firms are having. Is, how does
advisory kind of work with the
compliance side too, or vice
versa? How do we bring in the
tax group and others, depending
on the situation that comes up?
So that's a big area of bringing
awareness within the
organization of what type of
services that we have. I mean,
we have over 4,000 employees in
the US. How do you make sure you
know what? Especially if we get
into renewable energy or
different things like that,
there's certain laws and things
that you want to make sure we're
up to speed on, so we need to
bring the right resources in
place to support that, and
that's why we're building I'm
building my practice based on
vertical expertise too, so they
understand the nuances and you
don't want somebody who has no
idea of how to restaurants run
to have discussions with a
restaurant owner, as an example.
So we're trying to find those
individuals that have that
expertise that can have those
discussions with our clients
going forward.
Speaker 2: You mentioned five
verticals. I think before. Yeah,
yeah, what are the five
verticals that are most popular?
I guess if you're picking
verticals, other people aren't
too.
Speaker 3: Yeah, yeah. So
there's so many verticals that
are out there. I mean, what I
see is real estate. A good
majority of our firm is in real
estate, so that's a big area
focus, large non-for-profit
specifically. There's a lot of
need because it's hard for a lot
of these organizations to get
quality staff and even look in
the technology side. Renewable
energy is one of the biggest
growing areas I see in the space
and there's just a tremendous
amount of opportunity there.
Everybody look at hotels and
restaurants, and then we also
what we call trust. So that's
another area for managing money
and helping to ensure. So those
are the five that we have now.
We'll continue to look at other
industries which were in our
organization, but we wanted to
make sure we had the right
leadership within those five
industries and that we
identified the tech stack that's
specific for each of those
industries and we're helping our
clients. So that's the focus
that I'm putting into play to
help support our clients going
forward.
Speaker 1: It's just a ground on
the nomenclature. Do you see
the word vertical and niche as
sort of one and the same?
Speaker 3: So, yeah, I mean, so
you look at a niche market. I
mean if you look at hospitality,
there's niches within
hospitality, right. So it could
be specific to a small hotel or
a small restaurant. So I mean
we're looking for larger
multi-unit restaurants is what
we're focusing in, and the
hospitality using that as an
example. So our vertical is
hospitality. Our niche may be
multi-unit restaurant, as an
example. So, because you can, I
mean if you look at renewable
energy or if you look at
non-for-profits, you've got
schools, you've got all these
different things. So we're
trying to even break down within
that vertical what type of
focus that we want to have, so
that so we're good at where
we're good at. We can't be good
at everything, so we want to
make sure what we're good at we
can provide the right service to
our clients. Because that goes
back to the advisory side. If
you don't know what you're
talking about, how can you
advise your clients? So that's
why it's important to have those
niches and to have that
industry vertical so that we can
support our clients and help
them and provide the value that
they're looking for.
Speaker 1: You know I love this
topic. Right here I want to peel
back the layers on it some more
, because there's I feel like
there's two schools of thought
that happen as it relates to
skills and talent and
approaching verticals or niches.
You know, you ask Jeannie
Whitehouse. Right, she'll say
you don't need to be an expert
in your client's business. But
then there's this fear that
people have like, well, I don't
know this industry very well,
and so how can I, how can I
center around this vertical and
have the confidence that I can
serve it well? So how do you
think about all of that?
Speaker 3: I'll have to talk to
Jeannie again because I was with
her a couple of weeks ago and
tell her that she needs to have
some kind of vertical expertise.
But I mean, it's a good. It
depends on what level you're
looking to go. If you want to be
, I just use bookkeeping just
reconciling bank accounts, doing
transactions, creating
financial statements and then
sending them out and not
providing any advice beyond that
. That's agnostic, I mean. I
think that there's still a lot
of business out there today
where businesses or firms are
doing that, but what value do
you provide them? There are
clients out there that are not
even providing. They're getting
their only time in an accurate
financial. So that's a big plus
for them. But what happens? When
they get timely and accurate
financials? They're going to
want more than that. So I think
that you know it depends on how
far you want to go from an
advisory side and what value you
want to provide to your clients
. And I mean, if you look at
accounts payable, accounts,
receivable yeah, you could be a
horizontal and it may be not be
an expert in any vertical, but
that's on the transactional
level. But the advice is really
becoming at the control,
leadership or the CFO level and
those individuals need to be
able to understand what's what
the numbers really mean. And I
think you do need to have a
vertical expertise or having an
experience, I'll say, in those
areas if you want to provide
great value. It's just the next
level. I mean, you can probably
get by if you're agnostic, but I
think that individuals and
companies are going to get
smarter. They're going to want
to do business with firms that
have specific knowledge in
certain areas, and I think
that's where the trend is moving
towards. Being a generalist,
you can get away with that, but
what value would you be able to
provide and what are you going
to be able to charge for that?
So that's what I guess I would
challenge. You know, jeannie and
others, that they say, hey, you
can only be agnostic, but
that's why I'm being very
focused on when I was my past
firm, I was being more generic
and we were able to do the
blocking and tackling, but to do
it the next level, we had to
bring individuals in that had
that expertise.
Speaker 2: I I I'd agree with
you 100% there that you have to
be knowledgeable. Your client
knows how to run a business
because they started it and have
a password, but you need the
expertise to help them with all
the flying points I defer to you
. Jason, I know you were about
to say something.
Speaker 1: Yeah, Well, I was
going to just clarify, you know,
like also this and we're, I
didn't mean to like beat up on
Jeannie because I love her.
She's wonderful and she gets
pushed back when she makes that
statement and it's always
interesting to see the
conversation play out. But you
know she's also coming from a
you know a firm that specializes
in wineries, right, and so you
know there is a level of
expertise that you're going to,
you're going to have when you
choose a vertical. But
everything that you just said
lines up with the studies that
we've done as well, and to it.
As we look at you know, firms
that are leading in the industry
, those that we don't see,
generalist firms, achieving the
levels of success that firms
that focus on verticals and
niches do, because of exactly
everything that you just said.
And so you know, I always
encourage firms like you don't
have to, you don't have to have
niches, you don't have to have
verticals and, by the way, don't
pick just one and focus only on
that. That's dangerous, as we
saw with COVID, right, you focus
on the hospitality industry and
the pandemic. It's your entire
client basis in trouble. So you
need to have, you know, a few
verticals, but you got to start
somewhere. Also, and a lot of
firms that are out there today,
you know, especially among the
smallest, are generalist firms
and have been for years, and so
you know, I think it's hard, and
then the whole confidence thing
plays a factor, right. So so I
was going to ask you about
skills as it relates to hiring.
So do you? How do you, how do
you go about attracting the
talent that you need in this
space? Do you go pull from,
because we already talked about
how you don't necessarily like,
just focus on people who have
accounting backgrounds, right,
case in point, these people
might come actually from those
industries. Is that an accurate
statement? And how do you go
about looking for that talent?
Do you look for that knowledge
already? Or do you bring you,
look for the skills that you're
looking for and then get, help
them get educated on the
verticals?
Speaker 3: So so it's both. So
I'll give you an example in the
renewable energy space, which
there's a lot of tax equity and
different types of nomenclature
that you have to have skills on.
What we did is we looked in the
industry itself and we were
able to identify a controller
slash CFO that had five years of
experience and she also was in
public accounting beforehand. I
mean, that's the purpose, that's
the perfect situation where
you're able to bring somebody in
that already knows how to have
a public accounting firm works
but also has that expertise and
renewable energy. That would be
one example. The other end would
be, if you find individuals
that are very analytical and
very quick in learning, that
maybe you don't bring them in at
that CFO or control level. You
bring them in as a senior or
lower level and they're able to
grow into by working with that
individual that we hired that
already have that expertise to
get that knowledge. But I think
you have to have leaders in each
of those verticals that have
that knowledge and their
responsibility is to train,
support and give the guidance.
So you have to have that
foundation in place, I think, in
order to be successful.
Speaker 1: Yeah, that makes
sense, cool. I'm trying to think
about like is there anything
else we need to unpack here?
David, around staffing?
Speaker 2: Well, I think he came
to sitting it on the head that
you're going to hire from
wherever. At this point in time,
they don't need to be a CPA,
they don't need to be an
accountant. Even with the
renewable energy that you're
talking about, you're hiring
people that know the business,
but not necessarily accounting,
because they're doing consulting
and coaching. I would tend to
think at this point, when
someone's doing the accounting,
they're doing the accounting
transactional. You want people
on a higher level to sell more
value. That's correct. They
understand the numbers and
they've been working in the
industry, so they know the ins
and outs of the right metrics to
look at.
Speaker 3: Yeah, I mean when
everybody talks about key
performance indicators and
analytics and you hear those
words that are thrown around all
the time KPIs but most people
don't know really what they are
right. So I think that that's
where you hire those individuals
that have that knowledge that
could create what are the
success factors I call them that
are going to help make this
organization successful and how
are we going to measure against
that? So, having that person
that has a renewable energy or,
if you're looking at it, at
restaurant and food costs and
labor and all that, you need to
have individuals that know what
to look at and how to articulate
that. Yeah, doing the
transactions, you could hire the
seniors and the associates that
are taking care of all the
transactions and then the weeds,
but you need those individuals
that are outside those weeds,
looking ahead and helping to
project what the future will be.
I mean, I think people call
accounts historians. That's one
aspect, but I like to say is
we're helping to project what
the future will be, or provide
substantial evidence for an
organization to make a decision
on which way they want to go,
and I think that's important and
I think organizations are
expecting more than that, not
only the large organizations,
but even the small mom and pops
too, are looking for more of
that sophistication, and I think
that by being that specific,
you know, by leveraging all this
technology that's out there,
which is great, but if you don't
use that technology in the
right way, it doesn't mean
anything. So I think that,
especially in the last two or
three years, there's been a lot
of push with FPNA and you hear
about all that. You hear about,
you know the AI and you hear
about all the great stuff, which
is great, but now we need to
figure out how to scale that, to
be able to provide that
information, so that we can
share that with our clients and
help advise them on what they
need to do.
Speaker 2: I agree. I'll give
you one example you probably use
. I like to throw it out. It's
like you know the restaurants
making a profit and they're
happy, but when you ask them how
often the tables turn over each
night, they don't know. If they
knew that answer, they could
probably increase their
profitability.
Speaker 3: Yeah, I mean yeah,
and then you get into the HR
side of that payroll and all the
information, the data. So you
know, we like to say it's not
all about only the financial
information, but it's the
operational and the supporting
information that comes combined
to provide that story right and
the comprehensive information.
So you know, average check, you
know per person, you talk about
timings, seasonality, you talk
about a lot of different things.
So it's to be able to leverage
that data and make sense. So I
know that you know a lot of
folks are creating those data
warehouses and there's a lot of
great things that are out there.
But I still think we're only at
the very beginning of
understanding how to leverage
that, just because of all, of us
are so busy to keep up with
just providing the standard
right, the standard accounting
that needs to be done. That's a
big enough challenge that it is.
But I think once we really get
to that point, that's where I
see the next two to five years.
It's really the data itself and
how we use the data and how we
share it with our clients. They
don't want to see a 50 page
report, they want a two or three
page. You know a dashboard
online they can go to and they
can run some conditional ifs or
elses and to be able to see what
that really means. That's what
they want, and some of them
don't even care as much about
the financial statements anymore
. They don't care what the data
is and how meaningful that is to
them. So I think there's going
to be a shift and we need to be
prepared as an industry to be
able to support that information
going forward.
Speaker 1: But I think, david
and I would argue that that
shift has been at play for quite
some time. We just are finally
listening.
Speaker 3: Yeah, well, I agree.
I mean I think that shift is
happening, but the thing is is
most people use that as part of
a sales process but not as part
of execution. So that would be
my response. I think everybody
talks about it and everybody
wishes they have it, but when
you look under the hood, most
people don't Right they do, they
don't know how to use it. So I
think that's an area that we all
need to get better at, and even
including us is how do we
leverage that data? That's a big
part of my strategy is how do
we create that data at our
fingertips that we can then
share with our clients and scale
that? I mean, if you have a
thousand clients, how do you do
that every month or every
quarter to be able to support
them? That's going to be the
challenge that we all need to
figure out, and it may not only
be CPAs and accountants. You're
data analysts, you get into a
lot of different things, or even
computer engineers. There's a
lot of skills out there that we
can leverage to help provide
that to our clients.
Speaker 1: It's interesting I've
seen in my 25 year career in
this profession. I've seen more
firms tax accounting firms,
literally building products and
hiring software engineers to
build out this stuff. Is that
the same at your firm as well?
Speaker 3: Yeah, I mean I think
it's a big part of we have a
tech plus group that's very big
into technology and in data
analysis and all that. So that's
a big part of our strategy and
I think even the tech stack
within CAS in the last five to
10 years is now being
standardized even more. So I
think that it's going to be.
It's here, to your point, it's
here and we need to figure out
how do we deliver that and how
do we deliver it efficiently.
And I think that's where we're
at too, and in our journey we
still got a ways to go, but we
do have clients that we provide
that information. I mean, they
love the dashboards, but a lot
of it to be able to make the
data work is still the challenge
out there. It's garbage in,
garbage out. They always say but
how do you take that data, the
source of truth, and to be able
to make sense of that and then
provide that to our clients? And
I think that's an area of that.
It's still evolving in the
industry today.
Speaker 1: Yeah, I think that's
fair. And now we're really
getting to the challenges, right
. So do you have more examples
that come to mind where you know
this plays out Like how do you
and I'm thinking about the
listeners who are like I don't
know how what questions to ask,
like the restaurant example
right, many people wouldn't
think to ask a question like
that. So how do we help people
get to a place where they do
know those questions to ask? And
then they've got dashboards
that they can put together and
scale that help answer those
things and tie to the right KPIs
that get to that outcome that
the client is looking for.
Speaker 3: Well, outside of Coen
Resnick, I mean, there's a lot
of greater organizations that
provide I can name a bunch of
them that help provide even
guidance and training in some of
that. So I think one aspect is
getting folks trained, and it's
almost from a business case
perspective, as being a business
owner, how do you have that
same mindset to ask those same
questions to your client? So I
think having, when you look at
learning and development, that's
becoming such a big piece of
what all organizations are
making investments and including
Coen Resnick that how do you
train your staff, whether it's
through WebXs or taking online
courses or even going to school?
So there's different ways to be
able to do that. But I think
also the consulting arm if you
look at the Accenture and others
that are out there, the type of
questions they ask and the
intuitive are things that we as
public accounting I mean I came
from Accenture so asking those
same types of questions, you
have to teach people how to do
that and I think by having
people listen and be part of
meetings and asking those
questions, it's almost like
there's a grassroots way of
doing it too. So you have all
that training that you can
provide, but some of it just
takes experience also, and I
think by looking at some of the
large consulting firms and
potentially bringing in some of
those folks can help to provide
some of that guidance and
support too, and so that allows
people to think a little bit
differently, and I think that's
what we need to challenge
ourselves to be able to look
outside the box more instead of
being so finite of what we're
trying to achieve, so that we
can provide that right value to
our clients.
Speaker 1: Yeah, and there's a
part of that that you said. That
stuck out for me around just
getting the experience right. I
would imagine that you don't
have an expectation of your
staff, as it relates to this
topic area, that they are going
to nail it right out of the gate
.
Speaker 3: Yeah. So we have a
training summit that's coming up
. We're having all of our teams
spending three days in Denver to
go through training and part of
that will be on discussions on
advisory and how we communicate
and do enroll playing and
business cases. So I think it's
yeah, I'm not expecting my team
on day one to be able to knock
it out of the park. So I think
it's bringing awareness and it's
having them sit in calls and to
start getting comfortable with
that process and how to think a
little bit differently and how
to think like our clients think.
So I think you got to start
from somewhere, but if you put a
focus on it and talk about it,
that's a starting point. But I
think that as we look to hire
going back to our discussion on
hiring you want to look for
folks that you think would be a
good fit, that are comfortable
in those environments. Not
everybody will be right. Some
people will prefer to just do
the work, and that's fine in
most cases. But you have to find
the ones that are willing to
have those discussions and sit
in front of a CEO and to be able
to feel comfortable
communicating strategy and
discussions with them too.
Speaker 2: Yeah, I think that's
the key. You use the key word
there, discussing strategy,
looking forward, not looking
back at past transactions. How
do you make it better? And
that's where the expertise comes
in, if someone's in an industry
they know to look at. You
mentioned the word average check
. How do you up the average
check, even a dollar or two per
check? That changes the name of
the game. Accountants have to
think differently and you
pointed it out with some of
those KPI questions you were
asking.
Speaker 1: Well, and just to
build on that for a second too,
came before we hand back over to
you. That's the part, too about
we talked about like how well
do you have to know your
business right? Like quarter
backing is different from having
all the answers. So, staying
with your average check example,
david, which is perfect, you
can identify that increasing the
average check by next dollars
will get us to this KPI out and
then ultimately to the outcome.
But you don't have to know how
exactly they're going to get
there. That could just be a
matter of pulling in their team
and having a brainstorm session
and trying some testing.
Speaker 3: Yeah, yeah. And I
mean I think they always talk
about the as is and the to be
processes, and there's a
methodology that you need to put
in place to be able to set up
those working sessions and
different things like that,
which I've learned early on in
my career. So that's definitely,
if you look at, that is
important for all of us is to be
able to know what that
structure is and how do you do
the right due diligence, how do
you ask those questions and what
is that framework? And I think
that's an area when you look at
the big four as an example, they
have their consulting arm that
works with their accounting arm
and they help put together
strategies. So we're not that
size, but to have them maybe not
to be to have that same kind of
thought process, as I think, is
what I'm saying Having that
methodology in place so that if
a client says, well, how do I,
how can you help me out? Well,
let's go and do an onsite, let's
do an as is process, let's
create a process flow, let's
determine what the control
points are, what the challenges
are, and then let's, at the end,
let's create a to be a process
where we can look at people
processing technology and see
how we can implement that for
you. So I mean, there's
methodology. You hear about Lean
, six Sigma and all those things
that are out there. There's a
lot of ways that organizations
can embrace that, which changes
the game instead of. You have to
have that in place in order to
be successful. As my point, so
perfect.
Speaker 1: Yeah, what a great. I
think that's a perfect place to
end the episode. I think we've
come full circle. Really really
good discussion. Kane,
appreciate your insights. You
know both from working in the
firm and doing the day to day
pipeline of talent and how we
think about skills. Just
excellent conversation.
Speaker 3: Yeah, my pleasure
Anytime.
Speaker 1: Well, that's all we
have for today. Kane, thanks so
much for being on the show.
Speaker 3: Yeah, thank you.
Thank you, everybody.
Speaker 1: And until next time.
Thanks for listening. If you
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slash podcast Account Trends is
produced and edited by Luke
Johnston. Copyright Intuit 2023.
