Scott Dawson has more than 20 years of accounting experience that has led him to a director-level position in CFO services. Scott brings diverse experience in both public and private accounting, uniquely positioning him to anticipate client needs and provide clients with tested solutions.
Scott received a Bachelor of Science in Accountancy from Marquette University and went on to receive a Master of Business Administration from the University of Maryland, and a Master of Accountancy from Michigan State University. After receiving his degrees, he had the opportunity to move to the east coast during the technology boom, which led him to become a CFO and gain a number of years of experience in the software industry.
Scott recently joined the Kruggel Lawton CPAs firm last year as the Director of Client Accounting Services, bringing with him experience in both public and private accounting, specifically including CFO experience in manufacturing, automation, start-ups, packaging, and the software/technology space. At the director level, some of Scott’s service areas include operational and strategic planning, business plan development, evaluation and improvement, cash flow strategy and management, and cost reduction and optimization.
Listen to Scott Dawson’s diverse career experience and how he applies that expertise to client accounting services. Scott offers some great advice for those who have been running a CAS practice, and the importance of staying current with your resources to add the most value to clients, as well as where Scott believes the world of client accounting services and outsourced CFOs is heading!
In this podcast episode, you'll learn how to:
- Play to your strengths and leverage relationships and technology;
- Understand that you need time for reflection;
- Continue to add the most value for clients by dedicating resources and staying current;
- Voice your problems and invest in your service providers; and
- Stop rushing the initial steps and plan correctly for successful processes.
Watch the Podcast Interview
Listen to the Podcast Interview
- “A couple of things that I think are important to focus on: Play to your strengths, depending on what your firm has historically specialized in, and where your skillsets lie within an organization—whether that’s industry-specific, whether that’s skill-specific. I know for us, a lot of ours has grown out of really leveraging those relationships and technology to make those processes more efficient and effective.”
- “Don’t forget that the key is relationships and adding value. How are you going to add value to either your existing clients as you expand a relationship in CAS, or how are you going to go and penetrate new clients and convince them that you’re the right partner?”
- “Everything is kind of an evolutionary path, in terms of where you are going. I think it’s really stepping back, in terms of if you are the business leader, or on your leadership team in a CAS practice. This year is a great year for reflection and looking at where the compass is going to look like in 4-5 years, in terms of how important CAS is going to be to that practice.”
- “One of the things that we encourage—and I think every firm, and everyone in a CAS practice can encourage—understand the interests and likes of your own staff, and where they want to go. Give them a little latitude to go out and do some homework and come up with some ideas. Have them identify with something that they deal with in the field that’s been a pain point for them and have them do some research on a solution and present it to the group.”
- “You shouldn’t limit yourself to what you have always done. Now is a great time to be very open-minded. If this problem is large enough, there’s going to be a technology that’s going to help make it less painful. How are we using all the people in our CAS practice to identify those opportunities?”
- “There’s a shortage of CFOs in almost every geography, and how do you leverage that? How do you get what you really need out of that? How do I compliment them with skillsets we need? And that’s where the CAS model really lends itself. We can be the complementary resource to what you already have, and we can really help what you have, and your resources.”
A lightly-edited transcript follows below:
As you have clients that are at every step of the journey, we have people who are early adopters, people who are late adopters. From a technology standpoint, I think everybody has to use some level of technology in their business, and so what we've been able to do, really, from a firm standpoint, is try to meet our clients where they are.
Welcome to the AI in Accounting Podcast, which helps accounting, bookkeeping, and finance professionals prepare for the future of outsourced accounting and accounting technology. Plus, you'll learn how to use artificial intelligence, AI, automation, and machine learning to scale your accounting practice. Now, here's your host, Joshua Feinberg of Vic.ai.
Hi. It's Joshua Feinberg from the AI in Accounting Podcast, and I have a very special guest with me here today. I have Scott Dawson from Kruggel Lawton, the Director of Client Accounting Services, and Scott, you're based in South Bend, Indiana? Right?
Awesome. Thanks so much for joining me today, Scott.
Scott Dawson: Well, thank you, Joshua. Pleasure to be here.
Likewise. So, the way I usually like to start these conversations is to get a better understanding of how you got to where you are in your current role in the CAS practice at Kruggel Lawton. Did you go to school for accounting? What were you doing before you got to the firm? And walk us through what all that was like, and then can you give a little bit of background of how your team is set up today?
The Journey to Leading the CAS Practice at Kruggel Lawton CPAs
Sure. I'd be happy to. So, I did major in accounting and started my career back then, it was the Big Six, and so I was with Pricewaterhouse and started mostly in their financial services, advisory, and assurance side, working in a lot of mutual funds and insurance companies. I moved out to the East Coast, to the D.C., Maryland area with Pricewaterhouse. They had just merged with Coopers and Lybrand. So, it became PWC at that time. One of the mega-four big firms, and so it changed the dynamic a little bit, and so it just became a much bigger place, and so at that time, there was a real technology boom out in the Maryland, D.C. area, and so I left to go on to a public company and become their SEC Reporting Manager of a supply chain optimization software company. I did that for a number of years, and then I was the CFO for a private company that was planning to go public. That was a global trade optimization software company. So, really, that's where I spent about five years in the software industry, and it really merged that technology background with some of the accounting stuff, and then we moved back. We're from the Midwest, and so we moved back to the Midwest when that company sold, and so I went back to another accounting firm, BDO, and really was more involved in manufacturing at that time, being based out of Michigan, and there was quite a few manufacturers, and so I got back into the assurance and advisory, on the M&A side there. I did that for a number of years, and then really went into, via a private equity company, got into the CFO for privately held companies. Did that in the RV industry, the packaging industry, and, most recently, in the manufacturing industry, as a CFO, and so I had worked with BDO. Kruggel Lawton is an alliance firm of BDO, and I had worked with Kruggel Lawton in a number of my CFO jobs, and I really wanted to look at doing something else and started talking to the partners here, and they had a growing CAS practice and were looking to expand that and grow that leadership, and it was an opportunity for me to do work with multiple clients and leverage my skillset both in technology, as well as in accounting, and come back to do that. So, at the beginning of this year, I came back. We, right now, have about 23 people in our CAS practice. It's one of the fastest-growing—if not the fastest-growing—parts of our business. We have about 125 professionals total in our firms, and we service the region: South Bend, Southwest Michigan, over to Elkhart County, Indiana, and in the surrounding areas, and so we've really seen an acceleration in the current environment of the services that we offer in CAS just because of some of the remote dynamics being way more embraced now, and so we see it as just a great time to continue to develop and continue to leverage technology, and the skillsets and relationships that we already have. So, just an exciting time to be in the CAS practice.
Yeah. It seems most of the CAS and outsourced accounting leaders that I talked to, whose practices are thriving right now, had taken the very proactive steps in the last one, two, three years of moving all of their team into the cloud, moving clients into the cloud, already investing in technology and automation, which set the stage for having the resiliency to be able to make their firms stronger now, to help their clients weather what we're going through. With all that in mind, for somebody that's brand-new to getting a CAS practice off the ground, what advice would you offer to them about what's going to be most important to them in their first one, two, three years of growing the practice?
Advice for New CAS Practice Leaders
Yeah, that's a great question, Joshua. A couple of things that I think are important to focus on is: One, I would play to your strengths, depending on what your firm has historically specialized in, and where your skill sets lie with an organization, and so whether that's industry-specific, whether it's skill-specific, I know, for us, we have a lot of relationships with professional service firms, and so a lot of it is outshoot from that practice, and things that we already did well. But really, just leveraging those relationships and technology to make those processes more efficient and effective and continue to really focus on those relationships. And the other one is: Really, don't forget that the key is relationships and adding value. So, how are you going to add value to either your existing clients, as you expand a relationship in CAS? Or how are you going to go and penetrate new clients and convince them that you're the right partner? And I think it's all about being able to demonstrate that we're using technology as a tool to reduce costs but also to add value and getting them closer. The closer you can get to adding value every step of the way, I think, the more impact you have, and the deeper those relationships get, and the easier it is to keep that continuity. If you worry about too much of it becoming a commodity and really transactional, I think you worry about getting a lot of price pressure. There's a lot of larger firms that can put price pressure and provide those transactional services at maybe a more competitive rate. But if you blend your relationship and your skill sets with that, you can then have a very defensive position within your client base, and also one that is high-value add and can be a long-term annuity relationship that you want to develop in their CAS practice.
Yeah. It's really fascinating to me when I look at where this is as a whole business model, it's not enough to just be good at building the right team and having the right tech stack and having the right process. It really takes an entrepreneurial mindset to find the right entrepreneurs to work with. You're, like, literally building a practice or a business within a traditional accounting practice. You just have to think like a product manager.
Yeah, absolutely, and one of the things that we've seen in our area, in particular, is you have clients that are at every step of the journey. We have people who are early adopters, people who are late adopters from a technology standpoint. I think everybody has to use some level of technology in their business, and so what we've been able to do, really, from a firm standpoint, is try to meet our clients where they are, and we look at it as two pieces of the puzzle. We have people in technology, and they have infrastructure and processes that they already have established, and what we look at is how we can fit together with where they are currently, but also then provide them a roadmap to get them to where they want to go, and that's a lot of discussion, and a lot of planning. That's showing them why it's important to add these, and how this technology can really impact their business in a positive way, and I think—as you well know—the rate of change in technology in this area is continuing. People are investing in developing better and better applications of AI and technology, and that convergence is really crossing a lot of businesses now that before maybe were hesitant to adopt it. But I think we're seeing that adoption rate is really increasing, and so, I think, for all firms that want to continue to play in this space, it's very important to be aware of that because geography may not limit you anymore, and we may be able to service a client in Florida just as well as a Florida firm, given the use of technology, and I think that you've got to really change your mindset and say, "Hey, I'm not only competing with my local firms. I'm competing nationally, and sometimes internationally, with firms providing these services." And so, how do you differentiate yourself? And how do you continue to add value and develop those relationships outside of just providing the good technology advice and helping them get onboard with the right technology pieces?
Yeah. Coming from a software background, I can probably appreciate it if you look at the technology VARs, and the managed service providers 15, 20 years ago, they had to start confronting this. I remember in the work I was doing for Microsoft in the late ‘90s, seven miles or a 30-minute drive was the magic number, and then, all of a sudden, once cloud started to pick up steam, once SAS started to pick up steam—thanks, Marc Benioff, for inventing a whole new business model—all of a sudden, yeah, you could be in South Bend; you could be in Southern California, and you wanted to find clients that had FaceTime. But overall, the clients that were national, the clients that were global, naturally, were more open-minded about the partners they were working with, and slowly but surely, accounting is becoming more technology-centric.
Scott Dawson: Absolutely, and I think it's going to continue that way. One of the other big factors—at least, for a lot of our small-to-medium-sized client base—is that the price of a lot of the technology and the service offerings has really come down dramatically—as happens in technology—as it gets adopted, and as it continues to go out and permeate the market. We used to get a lot of pushback on price point, and we used to get a lot of pushback on why people want a desktop because they didn't want to pay for cloud, or they didn't want to pay for backup services. They didn't want to pay for upgrades, and now, with the rate of change—and the fact that most people need to have backups automatically in the cloud anyway for disaster recovery and business continuity purposes—and having those things all built into relatively inexpensive applications that almost any business of any size can use, it really gives us, as accountants and service providers, great tools to be able to go and engage with either existing clients or new clients, and we really can, like I said, add value, and I think, ultimately, that's where we get a lot of satisfaction out of it is we want to have those relationships add value and continue to grow and stay, and every time we leverage a tool that we already are familiar with, it reduces our risk and our cost, as well, and so I think we can be very competitive, and we can stay very competitive because we're getting that skill set internally developed, and we're leveraging that across multiple clients.
So, that's some great foundational advice for someone that's building a new CAS practice. What advice would you offer to someone that's been running a CAS practice for four, five, six years or more, and they've lost their way, they're trying to figure out what to do next? What do you think is super important to keep your eye on as you start hitting certain milestones?
How to Keep a CAS Practice Healthy Long-Term
Yeah. I think that's a great question, as well, and everything is on an evolutionary path, in terms of where you're going, and I think it's really stepping back. I think, in terms of if you're the business leader, or you're a leadership team in the CAS practice, it's really stepping back, and again, this year is a great year for reflection and looking at where the compass is going to point going forward. What is it going to look like? What is our firm going to look like in four or five years, in terms of how important is CAS going to be to that practice? How important is it today? And when we look out, and we see the technology impact on assurance, the technology impact on tax, and what that's going to mean for our professional mix, in terms of where we're going to grow, and where we're going to continue to sustain relationships, and across the accounting profession, as you have people retiring, or maybe working different flexible work arrangements, remote work arrangements, how are you facilitating that? How are you making sure that your CAS practice is really current with that? And I would say, dedicating resources, Joshua, to staying current on what's new, and what can continue to add value. I think most of our clients, they really rely on us to stay abreast of that and to come to them with ideas. They're very busy running their businesses, dealing with the challenges, the ups and downs—as we've all seen, obviously, in the current year—but just a normal business with turnover, and growth, and customers, and so, when they look at us as a service provider, we want to come to them with solutions that really make their lives easier and get them the information that they need to run their business faster, and by us staying current on that technology and dedicating resources. So, if you've had a CAS practice, and you feel like it's paused, or maybe you're not where you want to be, there's a ton of great resources out there. Every day, there's more and more technologies coming up. So, maybe list your top five, six pain points that you see with your clients, and then do a little research on what's out there. What are the technologies that are solving this? Where is it going? Who are my clients that are most likely to be early adopters of this? And is this a tool that I can use to really transform my firm going forward? Because I think technology, being able to leverage it, is really one of the great aspects of it, and so if you can find something that solves a problem for one client, it likely solves that problem for other clients, as well, and so I think that's a great way to reinvigorate your CAS practice if you feel like you've hit a wall or maybe you need to know what's the next direction to go in. I always look at what problems you're facing and your staff's facing on a daily basis, and, “How do we get better at solving those?” And if we can solve it in one place, and then take that solution to other places, it really can have a huge impact and reignite that direction that we're going, and so there's a lot of resources out there. This podcast is a great example of what people are doing. The rate of change is fast. So, if they didn't have it six months ago, they might have it. The other thing I would encourage people to do is talk to your service providers. If you're a big user of QuickBooks Online, if you're a big user of Bill.com or Vic.ai, they want feedback. They want to know what problems are out there that they should be working on solving, and the accounting practice is a big influencer of that, and so if we go back to them and say, "Hey, it does this. That's great. But if it could do this, that would be even better." We've had a lot of success with them listening and coming out with, at least, attempts to try to solve some of those problems, and I think you're seeing that across the board, that people really want that feedback. They want to continue to know what aspects of their technology they should be developing to continue to add value and be relevant.
Yeah. Actually, that's part of our thought process on investing and building a resource like this. If we can be the person, they take their tablet when they're on their Peloton. Or they listen to the version on Apple podcasts. Or they're out going for a walk or a run in the morning. It's this whole idea of continuous improvement, and if you look at the spike in interest in taking online training courses across the board over the last six months, I think there's a lot of people that are waking up to just how critical it is to really stay in front of digital transformation.
And I think, Joshua, that's a great point because one of the things that we encourage—and I think every firm, or everybody in the CAS practice can encourage this—is understand the interests and likes of your own staff, and where they want to go. And give them maybe a little latitude to go out and do some homework and come up with some ideas. Have them identify something that they deal with in the field, and that's been a pain point for them and have them do some research on the solution and present it to the group, and again, a lot of these technologies will embrace trial offers, and they want to engage with your firm and see that, and so you shouldn't limit yourself to what you've always done. Now is a great time to be very open-minded about, “Hey, if this problem is large enough, there's going to be a technology that can help make it less painful, and so how are we using all of the people in our CAS practice to identify those opportunities? And how are we sharing that intelligence amongst ourselves, and then rolling it out to our clients?” So, I think that encouraging them to do that, to listen, to engage and stay current on what's out there, is really important, too, because now it's not just the leaders of the practice. It's the whole practice getting better and sharing that information.
Yeah. You mentioned clients, and one of the thoughts, one of the areas I'm usually super curious about is, as you onboard new clients into your CAS practice—regardless of whether they're coming from an internal resource, like maybe a bookkeeper that's in over their head, that needs more help, or maybe they're coming from another firm, where they weren't getting the service or the attention they were looking for—what's the biggest mistake that you see being made when you onboard a new client? What's the thing that you cringe, and you just wish that people knew about to save themselves from all the headaches?
What to Expect When Onboarding New Clients to CAS
Yeah. Again, if I could do it over, I think it's really listening and meeting your clients where they are. I think one of the biggest mistakes is we rush through the initial steps, and I think it's an old thought process. But planning is very important to a lot of this and to having a successful process, and if I see a mistake made repeatedly, it's that there wasn't enough engagement and discussion upfront about what are really the key drivers, and what are really the key pain points for this client? In some of the situations you mentioned, if they weren't getting the service they want, or they weren't getting the data that they want, what is the issue? Is it an internal process issue? Is it a technology issue? Is it an unrealistic expectation issue, where that needs to be managed? And identifying, really, what that root cause is? And then, coming up with a solution that fits that, and, to that point, one of the things that I often see is people want to switch softwares right away. Right? So, they say, "I need a new system," or, " This doesn't work for me," or, "That doesn't work for me." But they really haven't done their own homework on their own institution, and maybe they're not accessing or using the technology correctly. Maybe they're not adopting their processes to how the technology works, and I think one of the things that we have to encourage our clients to do is also be a little bit flexible, and you have to be flexible enough to tailor your processes to the technology to get the highest utilization out of it, and I think that often gets missed, and I think what you see a lot is people want to take what they do offline, and then have it work identically online, and if they're moving to a technology, they think, “Well, here's the way I always did it, and here's why I did this,” without thinking that a lot of those processes you maybe were doing offline—if it's a verification or reconciliation—can now be done automatically, and so you don't need to do that anymore, and you can skip those steps, and so one of the tools that we've used a lot, and a lot of firms come out with, is really a process mapping. I think that that step in the beginning, a process mapping into the technology, so they can clearly understand how it works. I think in a CAS practice, there's nothing worse than promising that this technology is going to help do this, and then have it not deliver. I think then you immediately build a barrier to that next adoption, and so you really want to make sure, on that first adoption—whether it's a bill-paying software, or QuickBooks Online, or a Vic AI, whatever you're implementing for that client, or you're helping them get—make sure that they have a real positive and successful experience with that because then they become an advocate, and they see the value right away, and I think, a lot of times, we experience that value, and we skip that first step and maybe don't meet the client where they are in their process, and I think that's important.
Yeah. A lot of managing expectations and driving change. Speaking of change, where do you see this business model headed—client accounting services, being an outsourced CFO, outsourced accounting? What's going on right now that's just going to make a huge impact in the next, say, 12-24 months?
Where Client Accounting Services is Headed Next
Yeah, I mean, obviously, I think it's going to continue to grow. But I think some of the drivers are that you're seeing, again, you're going to have another wave of entrepreneurial factors, and I think this generation of entrepreneurs is very technology savvy and embraces technology and doesn't really want to go back to a paper-based process, and so whether it's the next generation taking over an existing business, whether they want to embrace technology more, and they want to use technology and maybe an outsourced leverage model to do that to really get that high-end skill where they need it but not have to worry about, “Hey, how do I find the right CFO?” One of the things we always run into is there's a shortage of CFOs in almost every geography, and how do you leverage that? How do you get what you really need out of that? And maybe you have a really good person, but they're only good at these things. “How do I complement them with the skillsets we need?” And that's where the CAS model really lends itself is because we can be a complementary resource to what you already have, and we can really help what you have, and your resources, get what you need for your whole business side of it. So, I think that's one of the things. I think that this generation is much more open to that model. I think the technology that we're using right now—people being able to connect face-to-face, even if they're not in the same physical location, and people now have all pretty much had to embrace that model to continue to do business and continue to have meetings—I think that's going to continue to open up opportunities where, like I said, somebody doesn't have to necessarily be in the same city to be your service provider and to feel like you can develop a one-on-one relationship with them, and then really just that rate of change of technology. I think we know that it's not going to slow down, and I think that it's going to continue. You see the interest, and the convergence of some of these technologies being put in place—whether it's AI, sensors, just quantum computing—all this stuff converging and just making some of these transactional processes more and more automated, and I think where it's going to really impact accounting is not only in CAS and opening up opportunities but also taking some of that work out of the, like I said, the tax side, and the assurance side, and leveraging those technologies on those sides is going to reduce maybe that physical footprint that you needed to do those services, as well, and so I think the firms that are able to embrace the technology and really connect the dots with their clients are going to be the ones that continue to grow and continue to have success, I think, as we go forward, 2-3, five years out.
It's a very challenging time. It's a time of great change. But from this great change, there appears to be a lot of progress. Reminds me of that cartoon or meme that was going around a couple of months ago on, “What was the single most important factor in driving digital transformation into your company? Was it the CEO? Was it the CTO? Or was it COVID-19?” And it's weird and morbid for somebody to be talking about it in that sense. But it's very, very clear that my family had never bought groceries online before, and yet we haven't stepped foot in a supermarket since March, and these are changes. All the companies are figuring out a way to be able to do business from whenever, wherever, and you see things in the mainstream media of a CEO that's wanting to bring people in. But at the same time, there's a lot of big technology companies that say, “This is the new reality.”
Yeah, and I think we all thought that was going to happen, but it was just going to happen over a much longer timeframe, and I think that this caused a lot of people that weren't maybe ready to take that leap to take that leap because their business or their livelihood maybe depended on it, and so I think that it's unlikely that we take a step back from the things that people found that worked well. I think that wouldn't be a good step, and so we want to continue to build on those, and really lean into it and continue to say, "Hey, we're going to leverage this." If I can use Zoom, or if I can use Microsoft Teams to make myself more efficient, and I can service more clients with the same staff, from a firm perspective, that's huge. If I can continue to leverage technology, if I can build more time for people to educate themselves on tools that create value, I think it increases engagement in the firm, and that's good for your clients. So, yeah. So, I think, again, it's obviously a very unusual and challenging time in a lot of ways, and we are still seeing a lot of our clients struggling if they're in the restaurant industry or entertainment industry, and it's going to be a long road back for a lot of those businesses, and so, again, how do we help? How do we continue to maybe take cost out of their models, so it helps them get back on their feet? Those are things that we're looking at and to continue to go forward.
Scott, what's the best way for somebody to connect with you, to learn about your practice, to learn more about Kruggel Lawton?
Yeah. LinkedIn is probably the best, I think. Connect through LinkedIn. I think it's a great way to connect. Obviously, you can message me through that. You can email directly to me at sdawson at klcpas.com. I think that it's great to connect with thought leaders in this space. I think this is one where, by sharing, we all get stronger, and we can continue to share that, and again, I think there's a lot of opportunity for everyone. I think this technology, maybe if you're not embracing it, it can help. It will change jobs, I guess, is what I'm trying to say. People sometimes don't like to embrace it because they're afraid it's going to displace them. But I think if we embrace this technology, people are going to see a lot higher satisfaction, and some of the transactional work is going to go by the wayside, and you'll really get to add value, which, I think, increases job satisfaction, and client satisfaction. So, yeah. Reach out. I'm happy to engage in any conversation about CAS and AI.
Thanks so much, Scott. I really appreciate you taking the time to share all of your best practices and words of wisdom. It's been super helpful.
All right. Thanks, Joshua. Have a great day.
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