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[Podcast] Accounting Services Best Practices with Glenn Scharf of Saltmarsh, Cleaveland & Gund

Posted by The AI in Accounting Podcast on Jan 6, 2021 7:30:00 AM
The AI in Accounting Podcast

In this episode of the AI in Accounting Podcast, you will meet Glenn Scharf, a shareholder who leads the Outsourced Accounting Services Department and the Tax and Accounting Services Team at Saltmarsh, Cleaveland & Gund. Saltmarsh, Cleaveland & Gund is a full-service compliance and consulting firm that was founded in the early 1940s.

With four locations in Florida and one in Nashville, TN, they are well-known in the CAS sphere and are notable for their multiple areas of expertise, including external/internal audit and assurance, tax planning, tax consulting, tax preparation, investment and wealth management, estate planning, IT consulting and computer systems evaluation, business valuation, litigation support, human resources consulting, employee benefits administration, and other business advisory services.

In this episode, Glenn discusses what he thinks the future of CAS and advisory services will look like, based on the current trend of automation:

[Podcast] Accounting Services Best Practices with Glenn Scharf of Saltmarsh, Cleaveland & Gund

“For so long, it’s been, ‘How cheaply can I get [my bookkeeping done]?’ … Now, we’re going into a phase where bookkeeping is becoming more automated, and so, now, ‘What [can the bookkeeping] tell me about my business in order for me to run it better?’ And so, I really think that the CAS practice and the advisory piece is going to really outshine the backend accounting work.”

Glenn also explains how this can be achieved through the use of cloud technology:

“We’ve always been historians, and now we have the tools that we can move forward and … we can be soothsayers, so to speak, and help people look out and say, ‘Okay, what’s my cash going to be three months from now?’ There are programs that will tell us that, based on the timing of all your receivables, and all your payables, and things like that. We couldn’t do that before … and now, with online tools … we really have the tools that we need in order to move into that advisory space.”

Listen to the episode in full to learn more about the importance of:

  • Analyzing client history to develop foresight and see potential problems before they occur
  • Using cloud accounting tools to predict future trends based on client history
  • Implementing cross-training within your staff to ensure a wealth of specialized knowledge for your clients
  • Taking a step back and appraising your firm’s talents to ensure you are up to date on current trends and to remain relevant within the CAS sphere
  • Not being afraid to make mistakes, learn from them, and move on so that you can continually evolve your practice

All this and more is discussed in detail in this episode of the AI in Accounting Podcast. To learn more about Glenn, you can check out his LinkedIn page and visit his bio page directly. He also invites you to shoot him an email at glenn.scharf at saltmarshcpa dot com if you have any questions about outsourced accounting services, or any of the many other business advisory service offerings that Saltmarsh, Cleaveland & Gund provides.

Watch the Podcast Interview

 

Watch on YouTube: Glenn Scharf, Shareholder of Saltmarsh, Cleaveland & Gund Explains Client Accounting Services Best Practices

 

Listen to the Podcast Interview

 

Listen to Apple Podcasts: Glenn Scharf, Shareholder of Saltmarsh, Cleaveland & Gund Explains Client Accounting Services Best Practices

 

A lightly-edited transcript follows below:

 

Joshua Feinberg (00:02):

Hi, it's Joshua Feinberg from the AI in Accounting Podcast, and I'm being joined today by a very special guest. I have with me Glenn Scharf from Saltmarsh, Cleaveland & Gund. Glenn is a shareholder who leads the Outsourced Accounting Services Department, and he's the shareholder for the Tax and Accounting Services Team. Thrilled to have you with me today, Glenn. Thanks so much.

Glenn Scharf (00:25):

Well, thank you for having me.

The Journey to Tax and Accounting Services

Joshua Feinberg (00:28):

So, the first place I usually like to start out in these interviews is to understand how you got to where you are in your career. Did you always want to be an accountant? What did you study in college? What led you to the career path of ending up leading an outsourced accounting group, tax and accounting services team, at a major accounting firm?

Glenn Scharf (00:48):

Sure. Well, I don't think anybody ever chooses to go into accounting—especially when I went into it. It was just kind of something else, a process of elimination. I actually got out of high school and went to Georgia Tech for a year. I thought I was going to be an engineer, and so, I transferred to the University of Florida, kind of got into the business program, took an accounting class, and then went on from there. I think that, over the course of my career, this has kind of been something that has been growing inside of me, really trying to do what companies want right now. I've always been technology-savvy in the sense of trying to utilize within our business the technology to the best of our abilities and making sure that things always got better. I always ask that. "Why are we doing this?" I never liked the answer of, "Because we've always done it," or, "Same as last year." So, really, I've been thinking about this. I've been a tax guy all my career and outsource accounting was kind of one of those things that—especially in our firm—that just, okay, if you got a client, then you kind of did it on your own, and whatnot. So, I've been, for the last two or three years, kind of been trying to be more knowledgeable in this space. I attended actually the QuickBooks conference last year. Really got an understanding of the pulse today of what was happening. I liked using the technology. I liked doing process improvements. I really enjoy that piece of it, and so, those are the types of things that kind of got me piqued, and my firm came to me last December and asked me, that we had this kind of bookkeeping practice, and they asked me to kind of bring it all together and organize it, and then really get into trying to improve what we were doing, and then the services that we were offering our clients because the needs were growing faster and faster than we could handle just from each individual shareholder kind of trying to sell that kind of work, and so, we really kind of progressed into this. In my career, as I said, I was with Deloitte a little bit, and I did process improvement there for large corporate tax departments. So, it's always been in my blood to do this, and I really think that the technology is really fascinating on how fast it's changing these days, and so, that's kind of really how I got to where I'm at.

Joshua Feinberg (03:42):

Yeah, it's really fascinating to see how much outsourced client accounting services is morphing into being technology consulting as a really integral part of this. I think back to when I used to do SMB technology consulting 15, 20 years ago, most of these categories would have been a specialist technologist, as opposed to someone in a CPA firm. It's definitely changed, definitely evolved, and even when you look at the whole business model of taking this over a year ago—wow! What great timing to position your firm to be ahead of this, as opposed to starting when everything started to get super hectic with lockdowns and everything in March.

Glenn Scharf (04:20):

Right, and I think the technology piece, that's the piece that really fascinates me. But from a technical standpoint, I need help with that, and, in fact, today, I was having a discussion. We actually have a Saltmarsh IT practice, and I was having a discussion with our IT leader, one of my partners, Stephen Reyes, on how we could collaborate on a project that I was looking at because I needed some integration between electronic medical records software and QuickBooks Online, and so, we were talking about, okay, really, the API that we could create, potentially between the two software so that I could extract the data that I really wanted to get into QuickBooks Online, and so, it really is a morphing of accounting and information technology. It really is, and it's fascinating how much is out there that you could really accomplish if you have the right tools and the right people in with you. It's not just about implementing software. It's about solving problems, and really, the outsource accounting space is that. I talk to more clients about the problems they're having, and how we're going to solve those than actually doing their accounting.

Joshua Feinberg (05:44):

What's interesting, too, is as I've seen as firms progress and move up from using a cloud accounting platform, like QuickBooks Online, to more of a traditional cloud financial management mid-market ERP platform, like Sage Intacct, I ask everybody the question, “How did you get into accounting?”, and when you look at, like, the Sage Intacct community, every once in a while, I get people that say, "I'm not an accountant by background; I'm a technologist by background." It just speaks wonders to what level of sophistication is needed, both with running a platform like that, both for outsourced and for their VAR practice.

Glenn Scharf (06:18):

Yeah, and that's true. In fact, yesterday, I met a woman with a new piece of software that I was looking at, and they were a very small company, and she was, like, "I have no accounting background whatsoever; we just had to create a solution for this problem that an accounting firm was having," and they did, and they were able now to go to market with this piece of software, and that's what we typically find in the software environment is that a lot of these people, they're not accountants, but they understand either their technology, their niche, about what they're trying to provide to that service industry, or what they're trying to provide to us, and they're very open to listening about what our ideas are, and how we can improve their products, as well.

Advice on Building an Outsourced Accounting Practice

Joshua Feinberg (07:11):

Yeah, no, that makes a ton of sense. So, Glen, in your experience, in growing your team, what advice would you give to someone that you meet at a conference, or maybe someone you went to school with, or you're getting together over a virtual coffee with, who wants advice on what it takes to get started building an outsourced practice?

Glenn Scharf (07:28):

Yeah. That's one of those things that a lot of us are trying to resolve right now. It is an ongoing challenge to really build the practice, and it really kind of depends on what you're looking for, and what your firm is offering. So, for example, a standalone CAS practice—what I'll call a “client accounting and advisory service practice”—If it's a standalone practice, that's a much different skillset, most likely, than when you're building it within an accounting firm, because of what you can do on your own versus some restrictions that you have in being part of a firm, and the services that you have to provide, and so, we're always going to have clients that need assistance, whether it's just on an irregular basis with QuickBooks, or with accounting pieces and processes and things like that, and that might not necessarily fit into a niched practice, vertical type of environment that you can build if you're on a standalone practice, and so, in a firm, we have to have some hybrid people, and so, we can have everything from an AP clerk all the way up to a QuickBooks Pro advisor that can go out into the field—or now, do it virtually—for most of our clients, and really be able to help them and discuss with them their everyday needs, and so, like I said, we have a little bit of everything, as far as what we're looking for, because we're building out that traditional CAS practice, as well as we've got other little arms as part of our outsourced accounting services group that we need. You also can hire depending on the transactional level, and the strategic planning level that you really work on. So, you may hire a corporate controller. You may hire a former CFO that can really do the consulting piece of your CAS and advisory practice versus the transactional piece, where you need bookkeepers, AP clerks, AR clerks, things like that. So, it can be very, very different, depending on where you want to go with your practice.

Joshua Feinberg (09:56):

We've studied that a lot, and from the standpoint of heading up marketing strategy and segmenting different kinds of business models, we definitely see a very significant difference between a CPA firm that has an outsourced practice as one of five or six different teams or more within the practice versus companies that just do outsourced accounting, or sometimes they're positioning or branding more as outsourced CFOs. It's been really, really fascinating to see that evolve versus how traditional, how aggressive, and how leaning into remote they were, different things they do with the branding and positioning.

Glenn Scharf (10:33):

Right. Right.

Reinventing Outsourced Accounting Practices

Joshua Feinberg (10:36):

At the other end of the range, you have somebody that's just starting out in outsourced accounting. What advice would you give to someone who's been leading an outsourced accounting team or a client accounting services team—maybe they're five or 10 years into this, and things aren't going that well; it's been a really hard year; maybe there's a lot of churn among their clients; maybe there's a lot of attrition among their team; maybe they're a little bit burnt out; they're doing some soul-searching, trying to figure out what to do next to recharge and reinvent themselves—what would you tell them to be thinking about?

Glenn Scharf (11:08):

Well, that's a great question. I think everybody wants to move nowadays a million miles an hour, and I think that you kind of have to pause sometimes and really take an evaluation and take stock of what you're doing, and how you're doing it. So, it may be that you need to push the pause button and take a break from the marketing, take a break from the expansion and improve yourself internally, and so, you always have to improve in this area. You really have to do that, and sometimes you kind of get in a rut, and so, what you do for your clients is sometimes what you have to do for yourself, which means that you may have to do an assessment of your firm, and your group, and what you're doing, from everything from your processes and your people and to see what kind of group, and what kind of a firm that you really want to be. We are moving into an age where technology is becoming more and more important in our daily lives. I know my children—who are 11 and 17—by the time they are in business and established in their careers, I mean, they're going to be doing everything electronically. We're not going to have these excuses of, "Well, we've always done it this way," or, "This person doesn't fit our technology package," or, "They can't learn that," or whatever. You're going to have to do that. So, you really have to kind of take a step back and assess your practice and see, "Okay, what do I want to be in 3-5 years versus where I am right now?", and you kind of have to do that on a regular basis, or you're going to get in that rut, and you're going to fall behind, and you're going to get passed. I don't know if that answered your question.

Joshua Feinberg (13:11):

Oh, yeah. It totally resonates, too. My kids are just a hair younger at nine and 14, and the younger one never knew life without a tablet. The older one, I think, made it to preschool before the first iPad came out, but it's very interesting to see, like, that gap of five years, what a difference it makes, and you can totally see that in 10, 12 years when my daughter's in the job market and starting to make decisions, very, very different journey than we were just a generation ago.

Glenn Scharf (13:41):

Yeah, absolutely. I mean, my daughter, she is an artist. She loves artwork. She's a great artist, as far as drawing and things like that, and we always thought that she would go into artistry, and really, she has changed now, looking at colleges that, really, game design, which is an electronic form of art, and so, it's something very, very new that colleges are really stressing, and so, she's looking at that. So, yeah. I agree with you that things are changing. Even the toys they play with nowadays are different. My kids are six years apart, and the toys we have in our house now are completely different than they were six years ago when my daughter was his age.

Joshua Feinberg (14:24):

I haven't done much of it in the last eight or nine months, but I used to walk around the big-box stores, marveling at, like, "How are they justifying having so much square footage left for Legos and paperback books and DVDs and CDs?" I mean, obviously, they have a massive supply chain and great electronic systems for forecasting. So, obviously, if the shelf space wasn't turning over, they wouldn't be allocating it. But you've got to wonder about some of these business models, right?

Glenn Scharf (14:52):

You see, you and I used to think vinyl was vintage. Now, it's CDs are vintage.

Joshua Feinberg (14:59):

Yeah.

Glenn Scharf (14:59):

And that wasn't that long ago. When you really take into effect, the iPhone came out in 2007, that was 13 years ago, and now, look at where we are. I mean, now phones are computers in your hands, and that really goes into the CAS practice, as well. I mean, if we want to start talking about that, you can do so much accounting work from your phone now. It's absolutely amazing. You can pay bills. You can do invoicing. All those things, right from your phone. So, it's amazing when I show people how to do these types of things, and that it's just possible to do that, you see that little lightbulb that goes on above them in that they now know what the capabilities are, and so, it really kind of helps businesses in making sure that they understand, "Hey, you may not want to implement everything today, but let's design a plan to move us from A to Z. It's like building a house; you got to put the foundation first. So, let's choose our core accounting system, and now let's add on top of that. Let's do the framing, okay? So, that's AP and AR. Let's do the roofing, which is reporting. So, it's kind of, like, just building a house.” Which, I've done this year, so that's kind of what's fresh in my mind on this analogy, but it really is, and so, when you get it all done, and you're ready to go, and you're ready to move in, it's like, "Okay, what do we need to change now, and what should we have done? Oh, we made a mistake here. Oh, we made a mistake there." And it's okay, and that's the thing about this industry is that it's okay to make mistakes because you can fix them, and it's not really that big a deal. If you have a piece of software that's not working for you, and you need another feature or something, then you switch over to something new, and certainly, you don't do that every day, but there are mistakes that can be made, and it's okay. You have to realize when you make a mistake, and then move on from it and fix it, and that's what I talk about, that ever-evolving type of practice. You have to have the maturity level to know, "Okay, this has used its lifespan. We need to move on."

Where Outsourced Accounting is Heading Next

Joshua Feinberg (17:11):

Final question I want to ask you about today is to get your thoughts on where the business of outsourced accounting is heading next. What are we going to look back on 12, 24 months out from now, and realize that there was just a massive inflection point going on right now?

Glenn Scharf (17:26):

Wow. 12-24 months. The last 12 months have seemed like 36-70 months. So, in the next 24 months, I really think we're going to see more and more clients struggling with finding the people that they need in order to run their business effectively. For so long, it's been, "How cheaply can I get done my bookkeeping?" Okay, and now, we're going into a phase where bookkeeping is becoming more automated, and so, now, what is it that the bookkeeping can tell me about my business in order for me to run it better? And so, I really think that the CAS practice and the advisory piece is going to really outshine the backend accounting work. I mean, you need the backend accounting work in order to get to that, but the reporting, the dashboarding, and things like that you can do. I was looking at something the other day that was a reporting package that had, like, these “what if?” scenarios, and it was basically just sliding a button back and forth. “If I moved my cost-of-goods-sold prices down 3%, what would happen to my profitability? If I raise my price by 1%, what would that do to my profitability? How can I better control my fixed costs? Okay, what would happen to my profitability if I did that?” And so, those are the types of things that we're going to see start moving in a mainstream area of our practice, because that kind of knowledge, and that kind of help that's available to businesses today, really, it wasn't available five years ago because the technology wasn't there, and the data wasn't there. We've always been historians, and now we have the tools that we can move forward and see, okay, now we can be soothsayers, so to speak, and help people look out and say, "Okay, what's my cash going to be three months from now?" There are programs that will tell us that, based on the timing of all your receivables, and all your payables, and things like that. We couldn't do that before because we couldn't even get to our clients’ QuickBooks because they were on their own desktop, and now, with the online tools that we have, we really have the tools that we need in order to move into that advisory space.

Joshua Feinberg (20:01):

That's great. So, it's a combination of the tools, the technology, the platform is changing, and by the nature of that, the people that will operate them are all changing. All good progress. Glenn, where's the best way for somebody to learn more about your firm, Saltmarsh, Cleaveland & Gund, learn more about your team, website, social media, and what's a good way for someone to get ahold of you if they want to talk, connect, have any questions?

Glenn Scharf (20:26):

Yeah. Our website is always a great place to start. We are a full-service firm. Our website is www.saltmarshcpa.com. Certainly, you can shoot me an email: glenn.scharf at saltmarshcpa dot com, as well. I'd love to be able to talk to people. On our website, we have webinars that we do all the time, different things. Last week, I did an accounting automation webinar myself, which was very well attended. We had about 100 people on there, and it was really something that we do, and so, you can find us on YouTube; those sessions are recorded. Then they're also on our website, as well. So, that'd be a great place to start in just learning more information about just what's out there, and that was really what that webinar was about was to educate people on what was out there.

Joshua Feinberg (21:23):

Are you active on LinkedIn, too?

Glenn Scharf (21:25):

I am. Yep.

Joshua Feinberg (21:26):

Okay, great.

Glenn Scharf (21:26):

I can also be found on LinkedIn (Glenn Scharf).

Joshua Feinberg (21:28):

Okay, great.

Glenn Scharf (21:28):

Glenn Scharf. Yep.

Joshua Feinberg (21:30):

Great.

Glenn Scharf (21:30):

My name is spelled G-L-E-N-N, two Ns, and S-C-H-A-R-F, with only one F.

Joshua Feinberg (21:36):

Great, and I'll make sure we put links into those on the show notes when it goes up on our blog. But Glenn, thanks so much for joining me today on the podcast. This has been terrific. I really enjoyed learning more about your career, how you apply technology, where you see the whole business going, and your thoughts on what's coming next.

Glenn Scharf (21:53):

All right. Well, thank you for having me, Josh; it's been a great experience.

Joshua Feinberg (21:56):

Thank you.

What's your favorite Client Accounting Services tip? And what did you find most valuable from Glenn Scharf's podcast interview? Let us know in the Comments section below.

 

Learn even more about client accounting services (CAS) when you download the free report: The State of Client Accounting Services and Outsourced Accounting.

 

Download your free copy of The State of Client Accounting Services and Outsourced Accounting.

 

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