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[Podcast] Client Accounting and Advisory Services (CAAS) Best Practices with Craig Steinhoff at HBK CPAs

Posted by The AI in Accounting Podcast on Nov 18, 2020 7:30:00 AM
The AI in Accounting Podcast

Craig Steinhoff always knew he wanted to be an accountant, and, after he received his Bachelor of Science in Accounting from Capital University, he went straight into the workforce to begin making career decisions. Craig started at a small firm, doing both audit and tax, and it eventually was merged into a larger firm, where he decided to choose auditing as his discipline. But he saw that many businesses were having issues with their own internal back offices.

Craig Steinhoff is the Partner and Lead of Client Accounting and Advisory Services (CAAS Group) at HBK CPAs. When he started at HBK CPAs, Craig brought years of auditing expertise and a background in tax. He provides services such as accounting, audit, and financial reporting services to a wide variety of industries, including manufacturing, wholesale distribution, not-for-profit, retail, and entertainment.

As the leader of HBK’s Client Accounting and Advisory Services (CAAS Group), Craig utilizes his experience as a Certified Public Accountant and Certified Information Technology Professional (CITP). Craig’s specialties include IDEA data extraction software, internal and external presentations on accounting and auditing, social media, and accounting research tools.

Listen to how Craig Steinhoff uses his background and expertise to recruit the right talents for his CAAS team and his advice on how to get better and become more efficient in your personal growth and for your clients. Craig shares the ways that you can avoid scope creep and the future of Client Accounting and Advisory Services.

In this podcast episode, you'll learn how to:

  • Recruit the right talents for your team; 
  • Get better and become more efficient; 
  • Avoid scope creep through clear communication with clients; 
  • Proactively manage expectations; and
  • Consider the future changes in the accounting profession.

Watch the Podcast Interview

 

Watch on YouTube: Client Accounting Services Best Practices with Craig Steinhoff at HBK CPAs

Listen to Apple Podcasts: [Podcast] Client Accounting Services Best Practices with Craig Steinhoff at HBK CPAs

 

Highlights include:

  • "Ask why. Whenever you are being trained for any role, you should have that growth mindset. People with a growth mindset are always trying to learn, always trying to get better. I think people that are new to the CAAS world, it's imperative that you have that growth mindset, and you ask the ‘why’ question when you are being trained."
  • "The most important thing to somebody that is within the CAAS group that's client-facing is watch out for scope creep, making sure that our clients know exactly what services are entailed, and exactly what isn’t. I think that if you get that solid foundation upfront, that definitely helps your marriage, if you will, between you and your clients become a happy one."
  • "It starts off as an education on what are we actually proposing on because it might be completely different than what they are used to in their personnel that was performing these receivables, payables, controllers, CFOs, prior to us joining the team."
  • "Typically, I see the mistake being taking on the work that maybe a CAAS practice shouldn't. I know I have been guilty of that; it seems like when I took the role of leader of HBK's CAAS practice, it was, ‘I'm excited! Let's just onboard as much work as possible.’ However, when you are not efficient, you do not know what you are good at, and what you are not. Really being selective, niching, specialization, deciding, ‘What are we good at?’ And, ‘What are we not so good at?’ And staying in your lane, choosing to take on clients that fit your mold."
  • "An individual doing manual data entry work, that's not going to be the case years from now. When someone was just hard-keying entries, that's all going to be downloaded automatically using platforms. I wholeheartedly believe in that. That's the future of the CAAS practice, and that's frankly the future of the accounting profession."
  • "There's nothing more fun for me than sitting down with a new associate and really just looking at a set of financial statements and pointing things out and saying, ‘Look at this company.’ That tells a story; that will tell you whether a company is trending well or not so well, and where we should be digging in."

 

A lightly-edited transcript follows below:

Craig Steinhoff:

The issues there can get bridged simply through communication, ensuring that our clients know exactly what our services entail, and exactly what they don't. I think if you get that kind of solid foundation upfront, that definitely helps your marriage—if you will—between you and your clients become a happy one.

 

Announcer:

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.

 

Joshua Feinberg:

Hi, it's Joshua Feinberg from the AI in Accounting Podcast, and I'm being joined today by a very special guest, Craig Steinhoff from HBK CPAs in Sarasota, Florida. Craig is the partner and lead of the client accounting and advisory services group. Craig, thanks so much for joining me today.

 

Craig Steinhoff:

Thanks for having me, Josh. I'm glad to be here.

 

Joshua Feinberg:

Likewise. The first place I usually like to start these conversations is to understand how you ended up in your current role. Did you go to school for accounting? Were you always working in public accounting? Were you ever in public industry? Was there ever any area that you were tempted to get into besides accounting? And how does all of that fit in with what you do today?

 

The Journey to Leading Client Accounting and Advisory Services (CAAS) at HBK CPAs

Craig Steinhoff:

Well, I've always known that accounting was going to be in my future. Even growing up, people said at a young age, I told my parents, "I want to be an accountant." And I majored in accounting from Day One in college, and it's been exactly where I wanted to be. Now, of course, fast-forward, getting into an accounting firm right out of college was when you had to start making your choices. I started with a small firm in Columbus, Ohio and did both sides, meaning audit and tax. That firm merged into a larger firm, and overnight I had to pick a discipline, and I went with audit, and then fast-forward into my role in HBK, and it was one thing that I had been an auditor for all those years. I had a background in tax, but it just seemed like so many businesses were having issues with their own internal back-offices, whether it be their receivables or payables function, or controllers, or CFOs, and we had been talking as a firm for a while about, “How do we help these clients of ours?” They would always come to us for help, saying, "Hey, I lost my CFO. Can you help me interview and find a new one?" And we were saying, "Listen, phenomenal CFOs aren't falling off the trees and knocking down our doors, but we do have the skillset internally to do a lot of the things that you're looking for. How about we offer those services to you?" And I was all about it. I raised my hand and said, "Guys, I love this. If this is the route we're going to go, I would be honored to take the lead and put together the team that HBK is going to offer."

 

Joshua Feinberg:

Yeah. It sounds like it was very much born out of client needs, what they're asking for, and the frustration with being able to recruit the right talents.

 

Craig Steinhoff:

Yeah, yeah.

 

Joshua Feinberg:

With all of that in mind, what advice would you give to somebody that's brand-new to starting up a CAS group or outsourced accounting virtual CFO group? What's the school-of-hard-knocks knowledge? What are they likely going to skin their knees on the first couple of years that you'd like to help them avoid?

 

Advice for Those Building New CAAS Practices

Craig Steinhoff:

Well, I tell them a lot, “Ask why.” Whenever you're being trained for any role, you should have that growth mindset. I don't know if you've ever read or seen the book The Growth Mindset, and it talks about people with a growth mindset are always trying to learn, always trying to get better, and I think those that are new to the CAS world, it's imperative that you have that growth mindset, and you ask the "why" question when you're being trained. We're looking to always get better. We're looking to always improve and get more efficient in what we're doing for our clients, and so as we're training these newer people, I want them to understand not just what we're asking them to do, but why because their “why” might turn it into, “Well, why not? Why aren't we doing this differently? Why aren't we doing it better?” Ask those kind of probing questions and don't just be a robot and do exactly what somebody told you because they told you it. Think. Think for yourself; think, “How can we do this more efficiently? Are there things that we can push back a little bit onto our clients and train them to do things to help us out as a back-office solution for them?” That's really #1. They should always be learning and critiquing any of the processes that we as a firm are training them on.

 

Joshua Feinberg:

Yeah. No, that makes a lot of sense and actually came up in a workshop that we did last fall with CAS teams on the future of outsourced accounting and accounting technology. There was a general concern that some of the students who are coming out of school are only used to doing accounting using cloud accounting apps and never had to deal with the equation, never had to challenge, like, “Hey, is this really correct instinctively?” And I think that's going to be an interesting problem that's going to evolve. On the one hand, you could end up with digital natives who are ideal to be working with AI and advising on change management and processes within the organization. The challenge, however, is making sure that as some of the people that are in the admitted “later stages” of their career, impart their fundamentals on them to make sure that they can challenge, like, “Is this correct? Does this look accurate?”

 

Craig Steinhoff:

Right. Right.

 

Joshua Feinberg:

So, with that in mind, what advice would you offer to somebody that's maybe five or ten years into running a CAS practice, and they're not quite sure they're on the right track, they're questioning their assumptions? What do you think a veteran CAS leader would benefit from?

 

Avoiding Scope Creep with CAS / CAAS Clients

Craig Steinhoff:

Well, I think the most important thing to somebody within the CAS group that's client-facing is watch out for scope creep. That seems to be the biggest issue we run into, and a lot of that, the issues there can get bridged simply through communication, making sure that our clients know exactly what our services entail, and exactly what they don't. I think if you get that kind of solid foundation upfront, that definitely helps your marriage—if you will—between you and your clients become a happy one, and it's a really good thing. I mean, the newbies coming in—if they could learn that, as well. That's something we're talking to our auditors about is scope creep and trying to be more efficient. I think it's great for almost anybody in the accounting industry to understand what you should be doing and should not be doing as part of any engagement. But I've heard over and over again from people in other CAS practices that scope creep is their biggest issue and if only our people knew when it was happening and if only our clients knew when it was happening. I do think with the advancement of technology, it helps us get more efficient and therefore what somebody was doing manually in 40-45 hours, we might be able to come in and do in half the time, and trying to tell some of our clients that they're going to be paying a fee for our services that might be at the level that they were paying somebody 40-45 hours—or maybe slightly less—but yet we're going to be doing it in 20 hours is hard for them to grasp, and therefore they think, “Oh, well, you got extra time. You can do A, B, and C for me, then.” And “Well, no, not exactly. That's not what we signed up for.” Or “Hey, we have to invest in this technology. We're getting trained in it; we're knowing how to utilize it properly to gain those efficiencies; therefore there's some value in those services.”

 

Joshua Feinberg:

Yeah. I mean, it sounds like, in a lot of ways, the business model itself is becoming more challenging because a lot of firms are looking at the competitive field and feeling like they have to respond. They're acting reactively around it. However, it seems a much better way to think about it is to proactively manage expectations, use a lot of education. Because firms like yours, teams like yours, are experts at selling client accounting and advisory services, but how many of your clients are actually experts at buying those services and knowing the right questions to ask? Because you see a lot of these online bookkeeping services with all-you-can-eat low prices, and some CPA firms feel like they have to react to it. The reality, though, is the clients in many cases have no idea what they're actually buying. So, I imagine podcasts, webinars, eBooks, just all this stuff, thought leadership, of being able to be seen as a teacher and a subject-matter expert has got to be hugely, hugely important to getting the right balance.

 

Craig Steinhoff:

No, you're absolutely right. It is an education. It does; it starts off as an education on what are we actually proposing on because it might be completely different than what they're used to, and their personnel that was performing these receivables, payables, controller, CFO duties prior to us joining the team.

 

Joshua Feinberg:

Speaking of prior to a client coming onboard, what do you see as the biggest mistake when you take on a new client? What were they doing wrong that's just cringeworthy? Maybe it was a client that came from another firm, and they weren't getting the service they need. Or maybe it was a client that was struggling and limping to do this together in-house with an overworked bookkeeper who just didn't have enough time. What's the single biggest mistake you see being made?

 

How CAS / CAAS Practices Can Make Sure They Engage with the Right Clients

Craig Steinhoff:

Well, typically, I see the mistake being taking on work that maybe a CAS practice shouldn't. I know I've been guilty of that. It seems like when I took the role of the leader of HBK's CAS practice, it was, “All right, I'm excited; let's just onboard as much work as possible.” And while that's great for the top-line revenue, you're not efficient. You don't know what you're good at, and what you're not. So, really being selective. I think all accounting firms should be looking at that niching, specialization, deciding, “What are we good at and maybe what aren't we so good at?” And staying in your lane and choosing to take on clients that fit your mold. We've discussed that internally as a CAS practice, that we're really good serving clients in certain industries: not-for-profits, we're phenomenal at; the healthcare industry, we're great; family offices; the cannabis industry, and so there are industries that are great and fit what we're offering, and frankly, there are other ones that we're probably not the right fit for, and we should be walking away from those or not even bidding on them or letting them know. I see too many times that a CAS practice, a bookkeeping firm, they're taking on work that they really don't have the skillset, don't understand the commitment that it's going to take to properly serve some of these clients.

Joshua Feinberg: That's where it sounds like there's another opportunity for firms like this that are working in the cloud, that have remote teams, that if they really do want to niche and just focus on non-profits or just focus on a certain aspect of healthcare, all of a sudden there should be a much wider field of enlightened clients that they don't care whether you're in South Florida or whether you're in Southern California or Seattle, right?

 

Craig Steinhoff:

Absolutely.

 

Joshua Feinberg:

You're the best person for their business model, for the size that they're at, for the structure. So, it definitely seems like it's going to open up additional opportunities. Where do you think the business model as a whole is heading? Is there anything in particular that you see on the horizon that's going to change everything about what it means to run a CAS practice in the next 18, 24 months?

 

The Future: Better Dashboards, Better KPIs, and Better Conversations with Clients

Craig Steinhoff:

The last couple years of conferences—whether it be just that the AICPA Tech+ Conference—it's funny how many sessions have been focused on CAS, and a lot of them have talked about the future of CAS. With AI and other technologies coming, the fact that an individual, a person doing manual data entry work, that's not going to be the case years from now, and where somebody was just hard-keying entries, that's all going to be downloaded automatically from the bank, or we're going to be using platforms in order to pay bills and receive payments from our customers. I wholeheartedly believe in that. That's the future of a CAS practice. That's frankly the future of the accounting profession, where those—I don't want to say lower-level—those entry-level positions are going to be performed by technology and computers and artificial intelligence. We're already seeing it in the audit world with artificial intelligence helping us mine data and analyze data and point where the risks are that our auditors should be tackling. The same thing in the CAS world, where the transactions are going to be automatically entered into the general ledger software, the financial reporting software, and maybe only the errors or exceptions or ones that seem erroneous to certain vendors or at certain dollar amounts are the ones that are going to get pointed out, and those are the ones you're going to focus on, and so it's going to be more of the advisory side, that skillset, the value-added things that come with a CAS practice of analyzing the data that your clients have. I think it's going to be important to have better client-facing technology and software. So, the importance of dashboards, the importance of establishing KPIs with your clients, and really having conversations about the numbers, rather than, "Here are your numbers." That's going to be what differentiates a well-performing successful CAS practice from one that isn't, or one that's struggling.

 

Joshua Feinberg:

It's an interesting, complex dynamic, too, where you see there's a certain amount of fear among certain accounting firms that they might be disrupted. But on the same hand, I keep hearing all the time that there's just not enough accounting graduates to fill the jobs of those that are retiring, and then you look at even what an entry-level accounting job is going to look like in two, three, five years, and it sounds like it's a lot more like a Junior CFO or CFO-in-training or doing advisory services for smaller companies and eventually working their way up to mid-sized companies.

 

Craig Steinhoff:

Absolutely. Absolutely. There's nothing more fun for me than sitting down with a new associate and really just looking at a set of financial statements and pointing things out and saying, "Look at this company; look at what their receivables did, what their payables did. Look at some fluctuations on their P&L. That tells a story. That'll tell you whether a company is trending well or not so well and where we should be digging in. Let's look at their margins and other ratios." Owners of companies love talking about their business, and those are the conversations that we should be having as advisors. I want to have more of them. I want to have more time to have more of those conversations, and frankly, the technology that we have nowadays is allowing that.

 

Joshua Feinberg:

Yeah, it seems one of the biggest promises is being able to get the business model right, get the pricing model right is so critical, because it's like you're taking the time and budget that you saved from data entry and coding and trying to reallocate that to really being a true business advisor, a true CFO. For the right kind of client, it's a fantastic idea, but the wrong kind of client that wants to scrutinize and micromanage? So, a lot of it is about being in front of this and really having the right strategy, I guess.

 

Craig Steinhoff:

Yep. Yep, you got it.

 

Joshua Feinberg:

Yeah. Craig, what's the best way for somebody to learn more about the work that you're doing at HBK CPAs? Are you active on LinkedIn? Is there a good website that you'd recommend?

 

Craig Steinhoff:

Yeah, yeah, yeah. Check me out on LinkedIn, Craig Steinhoff, and hbkcpa.com is our firm's website. You can take a look at all the regions that we're in, all 17 offices. We're in Ohio, Pennsylvania, New Jersey, and Florida, and that's the beauty of the CAS practice is we have people in Pennsylvania serving clients in Florida, and vice versa. It's all about, “Where are the best people within the firm to service the client—regardless of where that client's located?” And with technology like this—a Zoom call, some video conferencing, “Let's get on the phone,” or sending things through email—we get our job done any which way, and it's been a lot of fun watching it grow.

 

Joshua Feinberg:

That's the power of technology. Overnight, you went from being 17 firms that was, like, national-ish to now truly being national. It's just a matter of where they concentrate on next. But this has been terrific. I really appreciate you taking the time to share your expertise, and how you got to where you are, and your advice on how to use technology and change and find the right kind of clients. This is terrific. Craig, thanks so much.

 

Craig Steinhoff:

Thank you very much. I appreciate it. Thanks for having me.

 

Joshua Feinberg:

You're very welcome.

 

Announcer:

Thanks for listening to this episode of the AI in Accounting Podcast. To subscribe and leave a review, check us out at blog.vic.ai or wherever you like to consume podcast episodes, including Apple Podcasts, Google Podcasts, and YouTube.

 

What's your favorite Client Accounting Services tip? And what did you find most valuable from Craig Steinhoff'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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