January 1, 2024 • 27 mins
Tune in to listen to Adam Larson as he hosts the Count Me In Podcast, featuring a special conversation with Adam Lean, the CEO and Co-Founder of TheCFOProject.com. Lean shares expert insights on transforming the role of the traditional CFO, offering practical advice and real-life success stories. Don't miss this insider's look into the future of the accounting profession!
Full Episode Transcript:
< Intro >
Adam: Greetings, accounting professionals. Adam Larson here, host of Count Me In, and today we embark on a transformative journey with Adam Lean, the visionary CEO of TheCFOProject.com.
Prepare to break free from the shackles of the accountants' trap. A pervasive challenge that confines so many to a transactional purgatory. In this conversation, Adam unveils a potent cocktail of liberation, strategic transformation, technology-driven empowerment, and high-value service mastery. So join us on this first podcast of 2024, and together, let's rewrite the future of accounting, one empowered professional at a time.
< Music >
Well, Adam, we're really excited to have you on the Count Me In podcast. And you are the leader at The CFO Project, and you have a podcast called the Accountants Trap, and you mention that a lot. Maybe you can start by defining what is the accountants' trap, and why is it a challenge for many firm owners today?
Adam Lean: Yes, that's a great question. We have this saying here at The CFO Project, we want accountants to escape what we call the accountants' trap. The idea is that accountants, and when I say accountants I mean accountants, CPAs, bookkeepers, enrolled agents. Traditionally, accountants are trading time for money. In order to make more money they either have to work more hours, which there's, obviously, not many more hours you can work, or you have to take on more clients.
Well, the thought of taking more clients on, in order to make more money is depressing to a lot of accountants. Because most clients are high-demanding, low-paying clients, and they give you all their paperwork at the very last minute, and the idea of taking on more clients is not appealing to most people. And it's a trap because you can't raise your prices. You can't raise your prices because there's always another accountant that's willing to do it cheaper than you.
And if you think about it from the viewpoint of your client, and we have to always think about it from the viewpoint of our clients. On the laundry list of things that a business owner has to think about, during the day, accounting falls towards the bottom.
They think of accounting as a commodity, in a sense. It's like a gas station; you're driving down the road and there are two gas stations next to each other, one is $0.50 higher. Most people are probably not going to go to that gas station because they view fuel as a commodity, it's interchangeable. And the same thing with accounting and bookkeeping services.
What you do, A, they really don't understand, and, B, they feel that any accountant can do it. Any accountant could put the tax return together. Any accountant can do the books. So why would they pay you more, significantly more, than the average accountant? They wouldn't.
And, so, this is the trap; to make more money you're forced to work more hours for little pay, with high-demanding clients. And, so, we suggest that there's a better way.
Adam: I would hope so because, that would be really frustrating as time goes on, and to have to get more clients. And if you're an internal accountant, within a corporation
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
< Intro >
(00:05):
– Greetings, accounting professionals.
Adam Larson here, host ofCount Me In, and today we embark
on a transformative journeywith Adam Lean,
the visionary CEO of TheCFOProject.com.
Prepare to break free from theshackles of the accountants' trap.
A pervasive challenge that confinesso many to a transactional purgatory.
In this conversation, Adam unveilsa potent cocktail of liberation,
(00:27):
strategic transformation,technology-driven empowerment,
and high value service mastery.
So join us on this first podcast of 2024,
and together, let's rewritethe future of accounting,
one empowered professional at a time.
< Music >
(00:47):
Well, Adam, we're really excited tohave you on the Count Me In podcast.
And you are the leader at The CFO Project,
and you have a podcastcalled the Accountants Trap,
and you mention that a lot.
Maybe you can start by definingwhat is the accountants' trap,
and why is it a challengefor many firm owners today?
– Yes, that's a great question.
We have this saying hereat The CFO Project,
(01:10):
we want accountants to escapewhat we call the accountants' trap.
The idea is that accountants, and whenI say accountants I mean accountants,
CPAs, bookkeepers, enrolled agents.
Traditionally, accountantsare trading time for money.
In order to make more money theyeither have to work more hours,
which there's, obviously, notmany more hours you can work,
(01:32):
or you have to take on more clients.
Well, the thought of taking more clientson, in order to make more money
is depressing to a lot of accountants.
Because most clients arehigh-demanding, low-paying clients,
and they give you all theirpaperwork at the very last minute,
and the idea of taking on more clientsis not appealing to most people.
(01:53):
And it's a trap becauseyou can't raise your prices.
You can't raise your prices becausethere's always another accountant
that's willing to do it cheaper than you.
And if you think about it fromthe viewpoint of your client,
and we have to always think aboutit from the viewpoint of our clients.
(02:16):
On the laundry list of things that abusiness owner has to think about,
during the day, accountingfalls towards the bottom.
They think of accounting asa commodity, in a sense.
It's like a gas station;you're driving down the road
and there are two gas stations nextto each other, one is $0.50 higher.
Most people are probably notgoing to go to that gas station
(02:37):
because they view fuel as acommodity, it's interchangeable.
And the same thing with accountingand bookkeeping services.
What you do, A, theyreally don't understand,
and, B, they feel thatany accountant can do it.
Any accountant could putthe tax return together.
Any accountant can do the books.
So why would they payyou more, significantly more,
(02:59):
than the average accountant?
They wouldn't, and, so, this is the trap;
to make more money you'reforced to work more hours
for little pay, with high-demanding clients.
And, so, we suggestthat there's a better way.
– I would hope so because,that would be really frustrating
as time goes on, and tohave to get more clients.
And if you're an internalaccountant, within a corporation,
(03:22):
you have to help all the differentoperations of the business
to get everything together, do the budget,
and that can bring a different typeof accountants' trap challenge.
– Yes, absolutely, your candleis burning at both ends,
and there's no give.
– Yes, there's no give at all.
(03:43):
So how important is it?
Because, like you said,a lot of times for owners,
they don't understand theimportance of the accountant.
How do you change thatrole for the business owner,
if you are the CFO, if you're the controller,
you're within the organization,and you're trying to say,
"Hey, this is an important part."
How do you help change thatview, at the top of the organization?
– Yes, this is the frustrating part
(04:05):
because accountants arevery valuable, they're needed.
But the people that use accountants;
so the company you work for oryour client, if you have a business,
and if you work for clients,they don't view it that way.
Which, again, goes towhat I was talking about
with the accountants' trap.
They don't view what you doas important as they should.
(04:28):
Having great booksis important, it's needed.
And what you do to ensure thatthe books are kept accurately
and timely, and the taxesare filed, is very important.
But until your client, whether it's yourboss or whether it's your actual clients,
(04:49):
business owner clients,until they view you
and your work as highly valuable,they're not going to pay for that.
So the idea is to shiftin your client's mind,
in your constituent's mind, your value.
So instead of beingthought of as the person
that just keeps the booksor that just does the taxes.
(05:13):
Because you have to remember
that your client doesn't reallyunderstand what you do.
You know what you do, andso you know all the effort,
and time, and energy youpour into it, but they don't.
So they're not going to placethe value on it as much.
But if they can wrap theirmind around your value,
then, they will find you more valuable.
(05:33):
Which means they'll pay you moreand you can escape the trap.
So the idea is to be the financialprofessional in your client's life,
that they actually want.
And what is it that mostbusiness owners want?
They want someone that they can trust,
to tell them what to do to have agrowing and successful business.
(05:57):
So if you, as the accountant,
can be that person that a clienttrusts to tell them what to do.
To give advice on somethingthat they really care about,
which is their business, then, yourstock with them will go dramatically up.
They'll pay you as much as youcommand, as much as you want,
(06:21):
and they will not think of you as justthe person that records the books,
or just this commoditized,necessary evil that I've got to pay.
And they'll start to view you assomebody that's a trusted confidant,
an advisor, somebody theywant to talk to every month.
– Yes, that advisor, the term thatwe use a lot is that business partner.
(06:42):
You want to be that businesspartner, not just the number cruncher.
– That's right, you'll stillprovide the same value,
that in your mind they need,which is accurate books, taxes.
But you're going to shift thevalue in your client's mind.
Which, I mean, let's be honest,
it's really the only thing that mattersis your client perception of you.
(07:04):
That's what's going to pay the bills.
If you get more clients whohave a higher perception of you,
that means you can earn more money,and that's how you escape the trap.
– All right, so you work witha lot of different organizations
and folks within the accountingspace, and the accounting world.
Maybe there's some short storyor two you can share, of people
who have effectively navigatedthis traditional role
(07:25):
to the more advisory position thatyou've seen that was successful,
and some lessons thatyou've seen and learned.
– Yes, it's a good question.
So we have a membership programwhere we train accountants,
and bookkeepers, enrolled agents, andCPAs on how to be an outsourced CFO.
Right now we have, I think,325 people in the program.
One of my favorite stories,
(07:46):
is this guy who's been a taxpractitioner for about 20 years.
We have what we call aWins' Board in our online portal,
and he posted in the Wins'Board a few months ago,
and he says, "I've owned atax practice for about 20 years."
And he goes, "Every singletax season, I've dreaded it.
But I joined The CFOProject two years ago.
(08:08):
Last year I sold my tax practice,and instead of having..."
I think he had about 400 tax clients,
he now has less than a dozen CFO clients.
And he said that he's made moremoney, this year, so far this year,
than he's ever made as a tax professional
and he didn't have to gothrough a tax season.
(08:30):
And I'm not saying there's anything wrong
with going through tax season,but it's just not for everybody.
And we have plenty of membersthat still do taxes for their clients.
But they've enhanced their tax service,
to be this all encompassingCFO advisor for their clients.
So they'll do CFO work and tax work,
or CFO work and bookkeeping work,and they'll bundle it all together.
(08:52):
And that's how theydifferentiate themselves
from all the other accountants,
and all the other software that's tryingto compete with accountants out there.
The beauty of this is that bygiving your client what they want,
which is advice on how tohave a successful business.
And not to digress, but success to us,financial people, means a business
(09:14):
that is generating consistent,positive cash flow every single month,
that is a successful business.
Because if you think about it,
every business that failedwould have not failed
if they were able to generateconsistent, positive cash flow.
So that's our job as CFOs.
So if you could do that to your client,
they're going to valueyou way much more,
and you'll be able to separate yourselffrom all the other accountants,
(09:36):
who are just, and I use the wordjust in jest, recorders of the past.
In the minds of your clients,
they think of you as somebodythat just records the past,
puts the right numbers in the rightboxes, makes sure the IRS is happy,
and makes sure that the booksare closed, whatever that means.
– It's interesting because as youwork with so many different CFOs,
(09:59):
in that interim capacity, whether it'sa client or that fractional type of role.
How do you see this CFO role changing,
and are there specific critical skills
for somebody who wants toget into this line of work?
– Yes, it's a good question.
In terms of the CFO role changing,
there are CFO terms being floatedout there, in the accounting space.
(10:24):
Fractional CFO, advisor,outsourced CFO, part-time CFO,
and there's really not agood definition of what it is.
In our view, we like to call ita productized CFO service.
You're offering an outsourcedCFO service, but it's a productized
CFO service, that's in directopposition of a fractional CFO service.
(10:51):
A fractional CFO service,you're going to a client
and saying, "What do you need?
What problem do you need me to solve?"
And you're relying on themto say, "Well, I need X, Y, and Z."
And then you're creating
this very customizedengagement for your client.
Well, the problem with that
is that because it'scustomized, you can't scale it.
You can't take on many of theseclients because each client,
(11:13):
each take-on, will feel like a part-time job.
And if you have multiple part-time jobs
where you're doing very different things,
that's just a recipe forburnout, and it's not scalable.
Well, what is the definition of scalable?
If you think about a manufacturerwho manufactures,
(11:34):
I have a coffee mug onmy desk, coffee mugs,
they've created the product once,
and then manufacture it overand over again, that is scalable.
Well, that's what we need to do.
So we say offer aproductized CFO service.
Have one standard CFO servicewhere you're telling the client,
(11:54):
"This is what you're going to getand why you should hire me.
But because you created it once,
you can do that same system overand over again, with your client.
But because it's still a serviceand your client highly values it,
they're going to pay you like it's a service,
but your cost is going tobe like that of a product.
And, so, that's a productized CFO service.
(12:14):
And, so, that's the differencebetween all the other outsourced
CFO services out there,fractional CFO services.
So you've got to have a system that'sscalable, that will, A, get results,
and B, that you can do the same steps
(12:34):
with every single month,with every single client.
The second part of your questionin terms of how an accountant
needs to think of themselves asan advisor, the mindset shift,
is that when you're advisingsomebody, you have two critical jobs.
The first is you've got to givethem advice that actually is helpful,
(13:01):
which a lot of accountants struggle with.
I mean that's why they give their adviceaway for free because they're not sure
if the advice they're giving isthe best advice, but I digress.
So you got to give advicethat is actually helpful.
That's really going to help yourclient grow their business,
have a successful business,meaning generate positive cash flow.
But the second component
is you have to get your clientto actually take that advice.
(13:25):
That is a hard skill.
You could be the mostcredentialed CFO on the planet.
You could be the CFO for thebiggest company in the world,
and I think right now it's Apple.
You could be their CFO andstill fail at being the CFO
for a small or a medium-sized business.
(13:46):
If you can't get that client whomyou don't control to take action.
You don't control them, they're your client.
But you've got to get themto take action and if you don't,
you will fail at your job of CFO.
And, so, that is an artas much as it is a science.
– Well, and I think that goes backto as a CFO coming to the table,
(14:10):
and having a voice at the table,and being that true business partner
so that you can help makethe strategic decisions
because otherwise you'llnever be able to do that.
Like you said, you can bethe CFO of the biggest thing
and still fail because you'renot helping with the direction.
– Yes, I love the word partnerbecause if you think about the partner
in a marriage or dating, sense, they'resomebody that you view as an equal.
(14:33):
Somebody that you trust,that you want their advice,
that you're confident on, they'resomebody that you lean on for support.
That's exactly what youshould be to your clients.
And, so, an outsourced CFO
should be somebody thatthe client intimately trusts.
Because there's not thatmany people in a client's life
that they could trust,if you think about it.
They can't really trust their employeesbecause their employees don't get it,
(14:56):
and at the end of theday, they're employees.
You could trust your friends and family,
but they don't understand numbers,or business, or financial strategy.
They're going to be supportive, butthey're nary not going to help you.
Your banker, the other numbers person,
in most business owner's life, they'venever ran a business themselves.
They don't get it.
(15:17):
Business coaches, oh, my goodness,
business coaches, thereare many of them out there,
and most of them are terrible.
Because the advice they are giving,
they have no idea howthat impacts cash flow.
How their advice has impacted cashflow because most business coaches
are leadership coaches,or management coaches,
or sales coaches, or whatnot.
And I'm not saying they're all bad,there are some that are good,
(15:38):
but the good ones are really expensive.
And, so, who does a businessowner turn to for help?
If you could be that person,oh, my goodness, they'll pay you
a lot of money, and you will bethought of as their trusted partner.
– Mh-hmm, so we can't talkabout transforming the role
(15:59):
and becoming that good business partner,
without talking about technology.
Technology has played a huge role,
and it's continuing to play a huge rolewith the advancement of generative AI,
and different accounting technologies.
How are these new technologiesreshaping the role of the CFO
and the accounting industry?
And then how can you, like you'vebeen saying this, outsourced CFO,
how can you utilize thosetechnologies to do better at your job?
(16:22):
– So a lot of people havedifferent opinions on technology,
especially things like AI, and it'seasy to feel scared about the future,
when it comes to things like that.
I've read statistics that 95% ofwhat accountants do, today,
will be replaced, within a decade, with AI.
And one of our memberssent me an article last week,
(16:43):
that said that AI has been able to close,
reconcile a set of books, in lessthan four minutes, which is nuts.
But, here's the thing, I thinkthis is a wonderful time
for the accounting profession.
Because embracing technologyand things like AI, and software,
and whatnot will allow usto do less, spend less time,
(17:08):
on tasks that are, menial, and spendmore time on higher value tasks.
Things where you're able tocharge more money to your client.
So you could be your client's taxperson or your client's bookkeeper
and be their advisor, but now you'reable to spend much less time,
(17:29):
or you will, in the future,spend much less time
on those transactionalor compliance things.
Instead of having to spend alot of time looking up tax code
or figuring out the bestscenario for a client.
Let the software do it, and then youspend more time advising your client.
I mean, it's going to happen,whether we like it or not,
(17:50):
technology is going to happen, we caneither embrace it or not embrace it.
I mean, if you think about it,in 1902 nobody had a vehicle.
Everybody rode aroundon horses and buggies,
and all of a sudden, this vehicle came.
You could be scared by it, or youcan embrace the possibilities
of what this thing is goingto help you accomplish.
– I like that.
(18:10):
I like how changingyour mindset of saying,
"Hey, this is a tool that's goingto help me get rid of the tasks
that I don't like doing andthat can be cumbersome,
and then it allows meto be more strategic."
So in some ways, we have tolearn the new technologies
in order to become more strategic.
– Right, I agree, and I thinkthere's plenty of places to learn it.
(18:33):
But I don't think anybody should feel
this overwhelming sense of, "Oh mygoodness, I'm behind the eight ball."
Because things like AI andsoftware change all the time.
Just slowly read a couple ofarticles, and then try it out yourself,
and then just see where it takesyou, and then go from there.
I mean, at the end of the day,
(18:57):
regardless of how youaccomplish your job,
your client just wants this trustedpartner, like we've talked about.
They don't really care how it gets there.
– That's very true.
– It's like somebody goingto the store to buy a drill.
Most people that go to the homeimprovement store to buy a drill,
they're not really concernedabout the drill itself.
(19:18):
They really just want what thedrill provides, which is the hole.
That's why people buy the drill.
And, so, you have to remember,your clients are buying you
for what you provide, they don'treally care how you provide it.
–That's true, well, and you canalso, like you said, be aware,
read articles, and a lot of technologies
(19:39):
that you're probably already usingare going to start integrating
different generative AI into their software,
so that you don't even have to learn it.
It'll probably just be a click ofa button or type a question in,
and it'll answer things for you.
– Absolutely, I mean, anybodythat's used QuickBooks Online
has seen this morph over the past several years.
QuickBooks used to be desktop,
(20:00):
obviously, and then they moved to online.
And then a lot of accountants don'tlike it because it's automating,
it's trying to automate a lot of tasks.
But that's essentiallywhat AI is going to do.
They're going to say, "All right,well, this transaction,
we think should go inthis account, is this correct?"
I mean, QuickBooks has beendoing that for years now,
(20:22):
and you set up rules around that.
Well, that's essentially, by setting up rules,
you're training thesoftware to think like you.
That's essentially what AI is,
you're training something tothink how you would think,
and then next month you just runall the rules and boom, it's done.
That's really what AI is.
(20:42):
So you don't have to thinkof it as this big, scary thing.
I mean, you've been doing it morethan I think most people realize.
– Mh-hmm, that's very true.
So somebody listening to thisand they're like, "You know what?
I've been an accountant for a long time."
How do you shift your mindset
from the way you'vealways been doing things,
to be more aligned with this,be the advisor, be the partner.
(21:06):
Because I imagine it's verydifficult to make that transition,
especially, if you've beendoing it a long time.
– Yes, I think anybody that's beendoing something for a long time
is set in their ways, and they'recomfortable in their ways.
But if there's any part of you that thinks,
"I either don't want to bedoing this much longer."
Or I'm getting paid waytoo less to be doing this."
The average accountant's salaryin the United States is $74,000.
(21:30):
We think that's very low for the experience
and knowledge that accountants have.
And, so, therefore, a lot ofaccountants are underpaid.
So if you think you're underpaidor you just don't want to do this,
or your clients are asking for advice.
They're saying things; theymay not come out and say,
"Well, I have an advice-related question."
But they're saying things like, "You'retelling me I owe $24,000 on taxes
(21:55):
because I made 150,000last year in profit,
but I only have $7,000on the bank account, why?
Why am I paying so much in taxes?"
And the accountant is thinking,"Well, I don't really understand."
Or "No, I can't help you or advise you
because I have a stack of 300other tax returns on my desk
that I got to complete before Friday."
(22:17):
This is a stressful situation for everybody
because the accountant wantsto be able to help their client,
and the client wants the helpbecause the client's clueless.
And, so, if there's any part of you
that wants to be able to be intentional
about the advice that you give to yourclients, then I would look at advisory.
Either adding on an advisory service
(22:38):
or completely getting out of whatyou're doing and becoming an advisor.
Or hiring somebody on yourteam to take the compliance
and transactional work off your plate
or hiring one of thesethird-party companies
that outsource the accounting work.
If there's any part of you that wantsto be able to make more money.
While working less, while having sucha huge impact on the thousands,
(23:03):
literally, thousands, of businessowners in your town that are struggling,
I mean, this is hands down the way to go.
– Yes, that really sounds like itand it's looking at what you're doing
and saying, "Is this whatI continue want to do,
or do I want to advance or scale up?"
– Yes, totally, it's not for everybody,
but for the people thatwould like to explore it.
I mean, I think you shouldexplore it because your clients
(23:26):
would love you to betheir confidant, their partner.
–Mh-hmm, I love thesetypes of conversations
because it's looking at the accountingspace from a different perspective.
And you have a unique perspective,
where you work withmany different clients.
And I like to ask, what are yourpredictions, as you look to the future?
(23:48):
Where do you think theaccounting space is going to go
and what should people be lookingfor, as they want to go with the tide?
– Yes, that's a good question,
and we touched on this, butI think the accounting profession
is going to be less transactionaland compliance nature,
in the future and more advisory nature.
I mean, it's just a simple factthat a lot of software, and AI,
(24:10):
and things like that, it's going to take
this complicated tax code,and accounting rules,
and all that and simplify it,and just make it easy.
And, so, the traditional need
for an accountant is goingto go away, it just is.
But the accountant is stillneeded, that's the beauty of this,
(24:31):
you're needed to do the one thing
that you've always beenneeded, by your client,
which is to give advice on howthe company can be a growing
and more profitable business.
Think about the CFO fora Fortune 500 Company.
The CFO overseesthe accounting department,
but their bigger job is tounderstand the strategy.
(24:53):
Understand where the client,
in their case, the CEO,and the leadership team,
wants to take the business, andfigure out are they on track to do it,
and suggest ways to helpthem stay on track,
and to ensure the businessis financially viable.
Every business on earth needssomebody to do those things.
And if you could be that person, youwill embrace the future of accounting,
(25:17):
of what clients need from theiraccountants, in the future.
So that's really where I think theaccounting profession is going,
but I think it's exciting.
– That's really exciting and itallows for you to not be stuck
in the same thing every day.
Because once you get into strategy,
you're thinking outside of thenormal box that you've been put in,
especially, if you grew up fromstarting with a staff accountant,
(25:37):
and moving your way upwithin an organization.
–Yes, exactly, I mean, honestly,that's what I did, out of college,
I became a staff accountant.
I mean, personally, it was justincredibly boring to just sit there,
behind a desk, and record the past.
So I purposely gotmyself involved in things
that I could help the business grow,and I enjoyed that way more than.
(26:01):
And by the way, they actually liked it more
that I was being a proactive accountant
because my predecessor, who'vebeen there for two decades, didn't.
All she did was just sit behinda desk and record the past
and nobody heard from her.
– Yes, and that sets you apart.
Certifications and thosethings can set you apart,
but actually being able to get in there
(26:23):
and do the work really sets youapart from your other colleagues.
– Totally, absolutely,we have to remember
that most people donot speak accounting.
Most people don't wantto speak accounting,
and accounting is our language butit's not the outside world's language.
So if we, as accountants, canspeak the outside world language.
(26:43):
If we can speak businessstrategy language,
then the people that you work foror the people that are your clients,
they will love it because theydo not want to speak accounting.
They want to speak business strategy,"How can I grow my business?"
– Well, Adam, I've reallyenjoyed this conversation.
I just want to thank you againfor coming on the podcast today.
– Yes, thanks for the invite, this was fun.
< Outro >
(27:06):
– This has been Count Me In,
IMA's podcast, providing you with thelatest perspectives of thought leaders,
from the accountingand finance profession.
If you like what you heard,and you'd like to be counted in
for more relevant accountingand finance education,
visit IMA's website at www.imanet.org.
< Intro >
(00:05):
– Greetings, accounting professionals.
Adam Larson here, host ofCount Me In, and today we embark
on a transformative journeywith Adam Lean,
the visionary CEO of TheCFOProject.com.
Prepare to break free from theshackles of the accountants' trap.
A pervasive challenge that confinesso many to a transactional purgatory.
In this conversation, Adam unveilsa potent cocktail of liberation,
(00:27):
strategic transformation,technology-driven empowerment,
and high value service mastery.
So join us on this first podcast of 2024,
and together, let's rewritethe future of accounting,
one empowered professional at a time.
< Music >
(00:47):
Well, Adam, we're really excited tohave you on the Count Me In podcast.
And you are the leader at The CFO Project,
and you have a podcastcalled the Accountants Trap,
and you mention that a lot.
Maybe you can start by definingwhat is the accountants' trap,
and why is it a challengefor many firm owners today?
– Yes, that's a great question.
We have this saying hereat The CFO Project,
(01:10):
we want accountants to escapewhat we call the accountants' trap.
The idea is that accountants, and whenI say accountants I mean accountants,
CPAs, bookkeepers, enrolled agents.
Traditionally, accountantsare trading time for money.
In order to make more money theyeither have to work more hours,
which there's, obviously, notmany more hours you can work,
(01:32):
or you have to take on more clients.
Well, the thought of taking more clientson, in order to make more money
is depressing to a lot of accountants.
Because most clients arehigh-demanding, low-paying clients,
and they give you all theirpaperwork at the very last minute,
and the idea of taking on more clientsis not appealing to most people.
(01:53):
And it's a trap becauseyou can't raise your prices.
You can't raise your prices becausethere's always another accountant
that's willing to do it cheaper than you.
And if you think about it fromthe viewpoint of your client,
and we have to always think aboutit from the viewpoint of our clients.
(02:16):
On the laundry list of things that abusiness owner has to think about,
during the day, accountingfalls towards the bottom.
They think of accounting asa commodity, in a sense.
It's like a gas station;you're driving down the road
and there are two gas stations nextto each other, one is $0.50 higher.
Most people are probably notgoing to go to that gas station
(02:37):
because they view fuel as acommodity, it's interchangeable.
And the same thing with accountingand bookkeeping services.
What you do, A, theyreally don't understand,
and, B, they feel thatany accountant can do it.
Any accountant could putthe tax return together.
Any accountant can do the books.
So why would they payyou more, significantly more,
(02:59):
than the average accountant?
They wouldn't, and, so, this is the trap;
to make more money you'reforced to work more hours
for little pay, with high-demanding clients.
And, so, we suggestthat there's a better way.
– I would hope so because,that would be really frustrating
as time goes on, and tohave to get more clients.
And if you're an internalaccountant, within a corporation,
(03:22):
you have to help all the differentoperations of the business
to get everything together, do the budget,
and that can bring a different typeof accountants' trap challenge.
– Yes, absolutely, your candleis burning at both ends,
and there's no give.
– Yes, there's no give at all.
(03:43):
So how important is it?
Because, like you said,a lot of times for owners,
they don't understand theimportance of the accountant.
How do you change thatrole for the business owner,
if you are the CFO, if you're the controller,
you're within the organization,and you're trying to say,
"Hey, this is an important part."
How do you help change thatview, at the top of the organization?
– Yes, this is the frustrating part
(04:05):
because accountants arevery valuable, they're needed.
But the people that use accountants;
so the company you work for oryour client, if you have a business,
and if you work for clients,they don't view it that way.
Which, again, goes towhat I was talking about
with the accountants' trap.
They don't view what you doas important as they should.
(04:28):
Having great booksis important, it's needed.
And what you do to ensure thatthe books are kept accurately
and timely, and the taxesare filed, is very important.
But until your client, whether it's yourboss or whether it's your actual clients,
(04:49):
business owner clients,until they view you
and your work as highly valuable,they're not going to pay for that.
So the idea is to shiftin your client's mind,
in your constituent's mind, your value.
So instead of beingthought of as the person
that just keeps the booksor that just does the taxes.
(05:13):
Because you have to remember
that your client doesn't reallyunderstand what you do.
You know what you do, andso you know all the effort,
and time, and energy youpour into it, but they don't.
So they're not going to placethe value on it as much.
But if they can wrap theirmind around your value,
then, they will find you more valuable.
(05:33):
Which means they'll pay you moreand you can escape the trap.
So the idea is to be the financialprofessional in your client's life,
that they actually want.
And what is it that mostbusiness owners want?
They want someone that they can trust,
to tell them what to do to have agrowing and successful business.
(05:57):
So if you, as the accountant,
can be that person that a clienttrusts to tell them what to do.
To give advice on somethingthat they really care about,
which is their business, then, yourstock with them will go dramatically up.
They'll pay you as much as youcommand, as much as you want,
(06:21):
and they will not think of you as justthe person that records the books,
or just this commoditized,necessary evil that I've got to pay.
And they'll start to view you assomebody that's a trusted confidant,
an advisor, somebody theywant to talk to every month.
– Yes, that advisor, the term thatwe use a lot is that business partner.
(06:42):
You want to be that businesspartner, not just the number cruncher.
– That's right, you'll stillprovide the same value,
that in your mind they need,which is accurate books, taxes.
But you're going to shift thevalue in your client's mind.
Which, I mean, let's be honest,
it's really the only thing that mattersis your client perception of you.
(07:04):
That's what's going to pay the bills.
If you get more clients whohave a higher perception of you,
that means you can earn more money,and that's how you escape the trap.
– All right, so you work witha lot of different organizations
and folks within the accountingspace, and the accounting world.
Maybe there's some short storyor two you can share, of people
who have effectively navigatedthis traditional role
(07:25):
to the more advisory position thatyou've seen that was successful,
and some lessons thatyou've seen and learned.
– Yes, it's a good question.
So we have a membership programwhere we train accountants,
and bookkeepers, enrolled agents, andCPAs on how to be an outsourced CFO.
Right now we have, I think,325 people in the program.
One of my favorite stories,
(07:46):
is this guy who's been a taxpractitioner for about 20 years.
We have what we call aWins' Board in our online portal,
and he posted in the Wins'Board a few months ago,
and he says, "I've owned atax practice for about 20 years."
And he goes, "Every singletax season, I've dreaded it.
But I joined The CFOProject two years ago.
(08:08):
Last year I sold my tax practice,and instead of having..."
I think he had about 400 tax clients,
he now has less than a dozen CFO clients.
And he said that he's made moremoney, this year, so far this year,
than he's ever made as a tax professional
and he didn't have to gothrough a tax season.
(08:30):
And I'm not saying there's anything wrong
with going through tax season,but it's just not for everybody.
And we have plenty of membersthat still do taxes for their clients.
But they've enhanced their tax service,
to be this all encompassingCFO advisor for their clients.
So they'll do CFO work and tax work,
or CFO work and bookkeeping work,and they'll bundle it all together.
(08:52):
And that's how theydifferentiate themselves
from all the other accountants,
and all the other software that's tryingto compete with accountants out there.
The beauty of this is that bygiving your client what they want,
which is advice on how tohave a successful business.
And not to digress, but success to us,financial people, means a business
(09:14):
that is generating consistent,positive cash flow every single month,
that is a successful business.
Because if you think about it,
every business that failedwould have not failed
if they were able to generateconsistent, positive cash flow.
So that's our job as CFOs.
So if you could do that to your client,
they're going to valueyou way much more,
and you'll be able to separate yourselffrom all the other accountants,
(09:36):
who are just, and I use the wordjust in jest, recorders of the past.
In the minds of your clients,
they think of you as somebodythat just records the past,
puts the right numbers in the rightboxes, makes sure the IRS is happy,
and makes sure that the booksare closed, whatever that means.
– It's interesting because as youwork with so many different CFOs,
(09:59):
in that interim capacity, whether it'sa client or that fractional type of role.
How do you see this CFO role changing,
and are there specific critical skills
for somebody who wants toget into this line of work?
– Yes, it's a good question.
In terms of the CFO role changing,
there are CFO terms being floatedout there, in the accounting space.
(10:24):
Fractional CFO, advisor,outsourced CFO, part-time CFO,
and there's really not agood definition of what it is.
In our view, we like to call ita productized CFO service.
You're offering an outsourcedCFO service, but it's a productized
CFO service, that's in directopposition of a fractional CFO service.
(10:51):
A fractional CFO service,you're going to a client
and saying, "What do you need?
What problem do you need me to solve?"
And you're relying on themto say, "Well, I need X, Y, and Z."
And then you're creating
this very customizedengagement for your client.
Well, the problem with that
is that because it'scustomized, you can't scale it.
You can't take on many of theseclients because each client,
(11:13):
each take-on, will feel like a part-time job.
And if you have multiple part-time jobs
where you're doing very different things,
that's just a recipe forburnout, and it's not scalable.
Well, what is the definition of scalable?
If you think about a manufacturerwho manufactures,
(11:34):
I have a coffee mug onmy desk, coffee mugs,
they've created the product once,
and then manufacture it overand over again, that is scalable.
Well, that's what we need to do.
So we say offer aproductized CFO service.
Have one standard CFO servicewhere you're telling the client,
(11:54):
"This is what you're going to getand why you should hire me.
But because you created it once,
you can do that same system overand over again, with your client.
But because it's still a serviceand your client highly values it,
they're going to pay you like it's a service,
but your cost is going tobe like that of a product.
And, so, that's a productized CFO service.
(12:14):
And, so, that's the differencebetween all the other outsourced
CFO services out there,fractional CFO services.
So you've got to have a system that'sscalable, that will, A, get results,
and B, that you can do the same steps
(12:34):
with every single month,with every single client.
The second part of your questionin terms of how an accountant
needs to think of themselves asan advisor, the mindset shift,
is that when you're advisingsomebody, you have two critical jobs.
The first is you've got to givethem advice that actually is helpful,
(13:01):
which a lot of accountants struggle with.
I mean that's why they give their adviceaway for free because they're not sure
if the advice they're giving isthe best advice, but I digress.
So you got to give advicethat is actually helpful.
That's really going to help yourclient grow their business,
have a successful business,meaning generate positive cash flow.
But the second component
is you have to get your clientto actually take that advice.
(13:25):
That is a hard skill.
You could be the mostcredentialed CFO on the planet.
You could be the CFO for thebiggest company in the world,
and I think right now it's Apple.
You could be their CFO andstill fail at being the CFO
for a small or a medium-sized business.
(13:46):
If you can't get that client whomyou don't control to take action.
You don't control them, they're your client.
But you've got to get themto take action and if you don't,
you will fail at your job of CFO.
And, so, that is an artas much as it is a science.
– Well, and I think that goes backto as a CFO coming to the table,
(14:10):
and having a voice at the table,and being that true business partner
so that you can help makethe strategic decisions
because otherwise you'llnever be able to do that.
Like you said, you can bethe CFO of the biggest thing
and still fail because you'renot helping with the direction.
– Yes, I love the word partnerbecause if you think about the partner
in a marriage or dating, sense, they'resomebody that you view as an equal.
(14:33):
Somebody that you trust,that you want their advice,
that you're confident on, they'resomebody that you lean on for support.
That's exactly what youshould be to your clients.
And, so, an outsourced CFO
should be somebody thatthe client intimately trusts.
Because there's not thatmany people in a client's life
that they could trust,if you think about it.
They can't really trust their employeesbecause their employees don't get it,
(14:56):
and at the end of theday, they're employees.
You could trust your friends and family,
but they don't understand numbers,or business, or financial strategy.
They're going to be supportive, butthey're nary not going to help you.
Your banker, the other numbers person,
in most business owner's life, they'venever ran a business themselves.
They don't get it.
(15:17):
Business coaches, oh, my goodness,
business coaches, thereare many of them out there,
and most of them are terrible.
Because the advice they are giving,
they have no idea howthat impacts cash flow.
How their advice has impacted cashflow because most business coaches
are leadership coaches,or management coaches,
or sales coaches, or whatnot.
And I'm not saying they're all bad,there are some that are good,
(15:38):
but the good ones are really expensive.
And, so, who does a businessowner turn to for help?
If you could be that person,oh, my goodness, they'll pay you
a lot of money, and you will bethought of as their trusted partner.
– Mh-hmm, so we can't talkabout transforming the role
(15:59):
and becoming that good business partner,
without talking about technology.
Technology has played a huge role,
and it's continuing to play a huge rolewith the advancement of generative AI,
and different accounting technologies.
How are these new technologiesreshaping the role of the CFO
and the accounting industry?
And then how can you, like you'vebeen saying this, outsourced CFO,
how can you utilize thosetechnologies to do better at your job?
(16:22):
– So a lot of people havedifferent opinions on technology,
especially things like AI, and it'seasy to feel scared about the future,
when it comes to things like that.
I've read statistics that 95% ofwhat accountants do, today,
will be replaced, within a decade, with AI.
And one of our memberssent me an article last week,
(16:43):
that said that AI has been able to close,
reconcile a set of books, in lessthan four minutes, which is nuts.
But, here's the thing, I thinkthis is a wonderful time
for the accounting profession.
Because embracing technologyand things like AI, and software,
and whatnot will allow usto do less, spend less time,
(17:08):
on tasks that are, menial, and spendmore time on higher value tasks.
Things where you're able tocharge more money to your client.
So you could be your client's taxperson or your client's bookkeeper
and be their advisor, but now you'reable to spend much less time,
(17:29):
or you will, in the future,spend much less time
on those transactionalor compliance things.
Instead of having to spend alot of time looking up tax code
or figuring out the bestscenario for a client.
Let the software do it, and then youspend more time advising your client.
I mean, it's going to happen,whether we like it or not,
(17:50):
technology is going to happen, we caneither embrace it or not embrace it.
I mean, if you think about it,in 1902 nobody had a vehicle.
Everybody rode aroundon horses and buggies,
and all of a sudden, this vehicle came.
You could be scared by it, or youcan embrace the possibilities
of what this thing is goingto help you accomplish.
– I like that.
(18:10):
I like how changingyour mindset of saying,
"Hey, this is a tool that's goingto help me get rid of the tasks
that I don't like doing andthat can be cumbersome,
and then it allows meto be more strategic."
So in some ways, we have tolearn the new technologies
in order to become more strategic.
– Right, I agree, and I thinkthere's plenty of places to learn it.
(18:33):
But I don't think anybody should feel
this overwhelming sense of, "Oh mygoodness, I'm behind the eight ball."
Because things like AI andsoftware change all the time.
Just slowly read a couple ofarticles, and then try it out yourself,
and then just see where it takesyou, and then go from there.
I mean, at the end of the day,
(18:57):
regardless of how youaccomplish your job,
your client just wants this trustedpartner, like we've talked about.
They don't really care how it gets there.
– That's very true.
– It's like somebody goingto the store to buy a drill.
Most people that go to the homeimprovement store to buy a drill,
they're not really concernedabout the drill itself.
(19:18):
They really just want what thedrill provides, which is the hole.
That's why people buy the drill.
And, so, you have to remember,your clients are buying you
for what you provide, they don'treally care how you provide it.
–That's true, well, and you canalso, like you said, be aware,
read articles, and a lot of technologies
(19:39):
that you're probably already usingare going to start integrating
different generative AI into their software,
so that you don't even have to learn it.
It'll probably just be a click ofa button or type a question in,
and it'll answer things for you.
– Absolutely, I mean, anybodythat's used QuickBooks Online
has seen this morph over the past several years.
QuickBooks used to be desktop,
(20:00):
obviously, and then they moved to online.
And then a lot of accountants don'tlike it because it's automating,
it's trying to automate a lot of tasks.
But that's essentiallywhat AI is going to do.
They're going to say, "All right,well, this transaction,
we think should go inthis account, is this correct?"
I mean, QuickBooks has beendoing that for years now,
(20:22):
and you set up rules around that.
Well, that's essentially, by setting up rules,
you're training thesoftware to think like you.
That's essentially what AI is,
you're training something tothink how you would think,
and then next month you just runall the rules and boom, it's done.
That's really what AI is.
(20:42):
So you don't have to thinkof it as this big, scary thing.
I mean, you've been doing it morethan I think most people realize.
– Mh-hmm, that's very true.
So somebody listening to thisand they're like, "You know what?
I've been an accountant for a long time."
How do you shift your mindset
from the way you'vealways been doing things,
to be more aligned with this,be the advisor, be the partner.
(21:06):
Because I imagine it's verydifficult to make that transition,
especially, if you've beendoing it a long time.
– Yes, I think anybody that's beendoing something for a long time
is set in their ways, and they'recomfortable in their ways.
But if there's any part of you that thinks,
"I either don't want to bedoing this much longer."
Or I'm getting paid waytoo less to be doing this."
The average accountant's salaryin the United States is $74,000.
(21:30):
We think that's very low for the experience
and knowledge that accountants have.
And, so, therefore, a lot ofaccountants are underpaid.
So if you think you're underpaidor you just don't want to do this,
or your clients are asking for advice.
They're saying things; theymay not come out and say,
"Well, I have an advice-related question."
But they're saying things like, "You'retelling me I owe $24,000 on taxes
(21:55):
because I made 150,000last year in profit,
but I only have $7,000on the bank account, why?
Why am I paying so much in taxes?"
And the accountant is thinking,"Well, I don't really understand."
Or "No, I can't help you or advise you
because I have a stack of 300other tax returns on my desk
that I got to complete before Friday."
(22:17):
This is a stressful situation for everybody
because the accountant wantsto be able to help their client,
and the client wants the helpbecause the client's clueless.
And, so, if there's any part of you
that wants to be able to be intentional
about the advice that you give to yourclients, then I would look at advisory.
Either adding on an advisory service
(22:38):
or completely getting out of whatyou're doing and becoming an advisor.
Or hiring somebody on yourteam to take the compliance
and transactional work off your plate
or hiring one of thesethird-party companies
that outsource the accounting work.
If there's any part of you that wantsto be able to make more money.
While working less, while having sucha huge impact on the thousands,
(23:03):
literally, thousands, of businessowners in your town that are struggling,
I mean, this is hands down the way to go.
– Yes, that really sounds like itand it's looking at what you're doing
and saying, "Is this whatI continue want to do,
or do I want to advance or scale up?"
– Yes, totally, it's not for everybody,
but for the people thatwould like to explore it.
I mean, I think you shouldexplore it because your clients
(23:26):
would love you to betheir confidant, their partner.
–Mh-hmm, I love thesetypes of conversations
because it's looking at the accountingspace from a different perspective.
And you have a unique perspective,
where you work withmany different clients.
And I like to ask, what are yourpredictions, as you look to the future?
(23:48):
Where do you think theaccounting space is going to go
and what should people be lookingfor, as they want to go with the tide?
– Yes, that's a good question,
and we touched on this, butI think the accounting profession
is going to be less transactionaland compliance nature,
in the future and more advisory nature.
I mean, it's just a simple factthat a lot of software, and AI,
(24:10):
and things like that, it's going to take
this complicated tax code,and accounting rules,
and all that and simplify it,and just make it easy.
And, so, the traditional need
for an accountant is goingto go away, it just is.
But the accountant is stillneeded, that's the beauty of this,
(24:31):
you're needed to do the one thing
that you've always beenneeded, by your client,
which is to give advice on howthe company can be a growing
and more profitable business.
Think about the CFO fora Fortune 500 Company.
The CFO overseesthe accounting department,
but their bigger job is tounderstand the strategy.
(24:53):
Understand where the client,
in their case, the CEO,and the leadership team,
wants to take the business, andfigure out are they on track to do it,
and suggest ways to helpthem stay on track,
and to ensure the businessis financially viable.
Every business on earth needssomebody to do those things.
And if you could be that person, youwill embrace the future of accounting,
(25:17):
of what clients need from theiraccountants, in the future.
So that's really where I think theaccounting profession is going,
but I think it's exciting.
– That's really exciting and itallows for you to not be stuck
in the same thing every day.
Because once you get into strategy,
you're thinking outside of thenormal box that you've been put in,
especially, if you grew up fromstarting with a staff accountant,
(25:37):
and moving your way upwithin an organization.
–Yes, exactly, I mean, honestly,that's what I did, out of college,
I became a staff accountant.
I mean, personally, it was justincredibly boring to just sit there,
behind a desk, and record the past.
So I purposely gotmyself involved in things
that I could help the business grow,and I enjoyed that way more than.
(26:01):
And by the way, they actually liked it more
that I was being a proactive accountant
because my predecessor, who'vebeen there for two decades, didn't.
All she did was just sit behinda desk and record the past
and nobody heard from her.
– Yes, and that sets you apart.
Certifications and thosethings can set you apart,
but actually being able to get in there
(26:23):
and do the work really sets youapart from your other colleagues.
– Totally, absolutely,we have to remember
that most people donot speak accounting.
Most people don't wantto speak accounting,
and accounting is our language butit's not the outside world's language.
So if we, as accountants, canspeak the outside world language.
(26:43):
If we can speak businessstrategy language,
then the people that you work foror the people that are your clients,
they will love it because theydo not want to speak accounting.
They want to speak business strategy,"How can I grow my business?"
– Well, Adam, I've reallyenjoyed this conversation.
I just want to thank you againfor coming on the podcast today.
– Yes, thanks for the invite, this was fun.
< Outro >
(27:06):
– This has been Count Me In,
IMA's podcast, providing you with thelatest perspectives of thought leaders,
from the accountingand finance profession.
If you like what you heard,and you'd like to be counted in
for more relevant accountingand finance education,
visit IMA's website at www.imanet.org.
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