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[Podcast] Client Accounting Services Best Practices with Gregg Genovese of Bonadio

Posted by The AI in Accounting Podcast on Oct 28, 2020 7:30:00 AM
The AI in Accounting Podcast

Gregg Genovese uses his 25 years of experience in accounting to work together with businesses to reach their goals of growth, improved profitability, and risk reduction. Being from a family of CPAs, Gregg believes that accounting is in his DNA.

Gregg graduated from Niagara University with a Bachelor of Arts in Accounting. After working at a few firms, Gregg joined the Bonadio Group about 11 years ago and formalized the outsourced accounting practice three years ago. Since then, Gregg has seen steady and significant growth in the firm.

[Podcast] Client Accounting Services Best Practices with Gregg Genovese of Bonadio

Gregg Genovese is the Practice Leader of the Outsourced Accounting and Finance Team at the Bonadio Group. He also serves on the firm’s Board of Directors. Gregg helps owners, organizations, and executive officers navigate growth while using technological tools and advisory solutions to guide the way. Gregg oversees the overall planning, organization, supervision, and completion of client engagements at the Bonadio Group. Gregg also has service expertise in areas such as accounting and auditing, transaction advisory services, tax, outsource accounting, and small business advisory. 

Listen to Gregg Genovese’s advice for those developing their outsourced accounting, and the ways to avoid becoming complacent in their personal growth. Gregg stresses the importance of the remote workforce, and the acceptance of outsourced accounting, which he believes will continue to grow and transform!

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

  • Devise a plan to transform the standard and make way for outsourced accounting;
  • Avoid becoming complacent as you continue to master your skills; 
  • Continue to add value through the expertise you bring to your clients;  
  • Understand the importance of the chart of accounts, and why less is more;
  • Consider the pros and cons of using a preferred accounting system to add the most value to your deliverables; and
  • Provide value with your expertise and always be clear about what you are bringing to the table.

Watch the Podcast Interview

 

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Highlights include:

  • “Having a remote workforce, and the acceptance of clients accepting that the accounting personnel doesn’t always have to be in the office. I think COVID pushed that forward a little bit, helped prove the concept that cloud-based accounting, paperless, really are important facets of accounting today.”
  • “I think the biggest thing is to have a plan. Really put pen to paper of what you want your practice to look like. Understand what sandbox you want to play in; try not to be everything to everybody. Understand what type of clients you want to serve, what you want your team to kind of look like, what technologies and applications you want to use. Really documenting a well-thought-out plan of really what that practice is going to look like. It doesn’t mean that everything happens according to plan. But go back to it and reference it.” 
  • “I think that’s the biggest thing: Don’t really get complacent. Continue to grow, continue to evolve, and continue to look for new technologies like AI to increase efficiency and automation.” 
  • “We continue to try to bring our firm’s expertise to our clients, and that hopefully adds value to what they’re doing, and, again, as time goes on, and clients can see what we’re doing, hopefully they see the value for what we are delivering today.”
  • “What we found for business owners and our key stakeholders; less is more. We can provide them with that detail if they want it. From a presentation standpoint, what we have seen, the chart of accounts has gotten a little haywire, but we’ve definitely tried to make that an overall simplified reporting.” 
  • “The information is going to be there, and you’re not going to have to sit there and process transactions. The advisory, strategy, and the forecasting, all the things that clients really see the value in, I think that will be a lot more significant as time goes on.”

 

A lightly-edited transcript follows below:

Gregg Genovese:

That's a lot of it. We try to do as much as we can because most of our referrals do come internally. Over 75% of our referral opportunities do come from inside the firm. So, we're always trying to message out, “What do we do? What industries are we focused on?” Trying to develop some case studies, so our partners and principals can understand what we do for clients and the value that we can bring them.

 

Speaker 2:

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 thrilled to be joined today by a very special guest, Gregg Genovese from Bonadio, upstate New York in Rochester. Gregg is the partner and practice leader of their outsourced accounting team. Gregg, thanks so much for joining me today.

 

Gregg Genovese:

Hey, thanks for having me, Josh. I appreciate the opportunity here.

 

Joshua Feinberg:

Very welcome. The first place I usually like to start is to get a little bit of background on your career journey. What led you to your current role? How did you get to Bonadio? What did you do in preparation for all of this, and what does your team look like today?

 

Gregg Genovese:

You could say it's always been in my DNA. My whole family are accountants and CPAs. So, for as long as I can remember, dealing with ledger paper, and green bar paper, and all that other stuff; it's been around my whole life. I guess, from that aspect, I'm used to it, and I enjoy it. I joined the Bonadio Group approximately almost 11 years ago. I was at a couple of other different firms, and the opportunity here was just tremendous. I would say a traditional—what we call “small business accountant”—did both taxes and planning, and all those different facets, what CPAs do in today's environment, and then opportunities came a few years ago, where we really formalized what I would call our “outsourced accounting practice”. We've always done those types of engagements and had those projects, but we really formalized our practice approximately three years ago, and we've had pretty steady and significant growth since then, and there's certainly a lot of opportunities—especially with the current COVID-19 pandemic. We certainly aren't slowing down anytime soon. So, full-steam ahead, and a lot of opportunities here to do what we do best.

 

Joshua Feinberg:

Yeah, it's really interesting. When I look at the patterns with the different casts and outsourced accounting leaders I speak with, a very common theme is starting with an interest in accounting sometime around high school, teenage years, and sometimes it was a family member. Sometimes it was a part-time job. But the seeds were planted young. I think the youngest so far, somebody told me they were selling fruits on the side of the road at age eight or nine, and were keeping it in a ledger pad. My dad was a controller, had me do an accounts receivable subledger on my paper. It's interesting stuff. But when we look at that, getting started with ramping this up three years ago versus starting now, I guess the timing worked out reasonably well. It'd be a very different situation to be starting up an outsourced accounting group right now.

Gregg Genovese:

Yeah. Again, I think hindsight's 20/20; I think it's one of those things that you continue to learn and evolve right as time goes on. Starting one up today may be a little bit different than it was three years ago, and how that works. I do think having a remote workforce and the acceptance of clients, accepting that the accounting personnel doesn't always have to be in the office. I believe COVID helped push that forward a little bit, helped prove the concept that cloud-based accounting, obviously paperless, and all those other things really are important facets of accounting today.

 

Joshua Feinberg:

Yeah. One of the things that's remarkable about that as we look at the challenges of helping outsourced accounting teams, CAS teams, being able to do digital transformation themselves, but the reality is, you have a big barrier in trying to get your small business clients to come along on that journey, too, probably with varying degrees. Some people are really for it. Some people are like, "I don't know." It was kind of like that meme that was going around that in the first couple of weeks of this, looked like, “Who was most responsible for digital transformation at your company? Was it the CEO, the CIO, or COVID-19?” Then you're, like, all of a sudden, “We never did online grocery shopping before this.”

 

Gregg Genovese:

I think business as usual has changed. I mean, a lot of things changed, and what COVID has done over the past five months has taken a long time in the accounting profession. It's been years to get that transformation kind of pushed forward, and the outsource accounting to almost be standard—or certainly, an easier barrier to get through—because that was always one of our challenges, as well. "Oh, I need someone to be here to do this; I need someone physically to be here in the office to do certain things." I think obviously, with technologies and things going on today, that's really not the case anymore.

 

Joshua Feinberg:

So, given that you're three years into this journey of building out the team and had a long successful career in public accounting before this, what advice would you offer to someone that's just starting out to build an outsourced accounting team today?

 

Gregg Genovese:

Yeah. I think that the biggest thing is to have a plan. Really put pen to paper of what you want your practice to look like. Understand what sandbox you want a plan. Try not to be just everything to everybody; understand maybe what type of clients you want to serve, what you want your team to kind of look like, what technologies and applications you want to use. So, really documenting a well-thought-out plan of really what you want that practice to look like. That doesn't mean that everything always happens according to plan, but to go back to reference it, and I do that every six months, look at my plan that I had written—obviously, a year-and-a-half, two years ago. I've kind of modified it continually because what I thought may have happened two years ago may have changed. So, those things are important to have. Definitely having a plan and understanding kind of the roadmap of where you want to go.

 

Joshua Feinberg:

So, it almost seems like there's elements of having a startup in a pretty large mid-sized accounting firm, like working with entrepreneurs, but having that entrepreneurial mindset yourself.

 

Gregg Genovese:

Yeah, exactly. I speak to our senior, our management committees, and again, how we talk about it is this is kind of like a startup, although we've kind of always done it. The team is different; we operate differently; we don't have peaks and valleys of busy seasons, where traditional CPA firms will have. Our pricing is generally different. We try to bill flat fees, and we don't bill on an hourly rate, and that's all a little bit different than traditional CPA firms. So, a lot of different things, a lot of startup things that we think about—in terms of our metrics and all those different things—are something that’s certainly comparable to a startups versus a firm like ours, who's been around for 40+ years. There's a lot of things that we're learning, and a lot of things that we continue to learn as we continue the journey here.

 

Joshua Feinberg:

Do you find that you spend a lot of time on internal communications with other leaders, managers within the firm, trying to get them to understand the kind of clients you're looking for, who's a good referral, what the pair is for cross-pollination?

 

Gregg Genovese:

Yeah. That's a lot of it. We try to do as much as we can because most of our referrals do come internally. Over 75% of our referral opportunities do come from inside the firm. We're always trying to message out, “What do we do? What industries are we focused on?” Trying to develop some case studies, so our partners and principals can understand what we do for clients, and the value that we can bring them. So, communication's key to what we're doing, both internally and externally.

 

Joshua Feinberg:

With the case studies, and the kind of clients you're looking for, have you found there were certain industries or verticals that worked out especially well for you? Was any of that dependent on what your background was like before you started the practice?

 

Gregg Genovese:

It's not generally what my background was. As a firm, what our skillsets are in, what we were pretty dominant and skilled in, is the not-for-profit tax-exempt arena. So, we developed a fairly robust practice around that industry—certainly professional services, doctor groups, and healthcare organizations, as well as franchises and restaurants. Those are things that we, as a firm, have always had some experience in, and so we've developed certainly some industry-focused expertise around those areas.

 

Joshua Feinberg:

So, thinking ahead, now, with three years of experience in this space, you have a pretty experienced level, and understanding this business model of how it fits in with a more traditional CPA firm. What advice would you give to other people who've been running a CAS team or outsourced accounting team for a couple of years? What's one of those more advanced steps that took a little while to figure out?

 

Gregg Genovese:

I think not being complacent. Always trying to get better at what you're doing. Not going through the motions, always trying to get better, always trying to add value to your clients. Of course, we can continue to do the accounting, and the reporting, and every month, go through the same process, and we do that. But how do we get better? How do we evolve? How do we deliver value-added services to our clients, so they can grow, and they can advance, and all those other things? I think that's the biggest thing is don't really get complacent; continue to grow and continue to evolve and continue to look for new technologies like AI, and all those different things that'll help, again, increase efficiency and automation.

 

Joshua Feinberg:

So, you mentioned something interesting, too, with clients and their perception of value. To what extent do you feel like you and your team are driving how value is perceived versus clients kind of showing you what they consider value? Do the two intersect? Are they at odds with each other? How does that all work?

 

Gregg Genovese:

Yeah, I think each client situation is different, and so some perceive the value to be there because maybe, based on their recent experiences, they've never had someone who provides daily reporting, daily insights, the ability to have expert advice on a regular basis. We're always available for our teams, and so when people call and say, "Wow, I never could get ahold of my controller before, or they would never really have the answer," we make sure that whether it's me, my partners, or my team, or some other partners who are not on our team provide that value and expertise. So, we continually try to bring our firm's expertise to our clients, and that hopefully adds value to what they're doing, and again, I think as time goes on, and clients can see what we're doing, hopefully, they're seeing the value for what we're delivering today.

 

Joshua Feinberg:

Are there ever any clients you've come across where it looks like it's just not clicking, and you feel like this isn't just a matter of them getting comfortable and allowing the relationship to evolve over 3-6 months, but they're just not going to get it, they're not a fit? Are there any red flags that you see?

 

Gregg Genovese:

Yeah. There are. I mean, there's times when it doesn't work, and that's okay. I mean, failing and making a mistake and if we get a client, and it doesn't seem to work because they either don't understand the process, go outside of our scope of what we're doing. We had a recent engagement where they said, "Hey, we're going to do something different." I said, "Hey, that works." Because it wasn't working for us, and it wasn't working for them, and we weren't going to continue to bang our head against the wall, trying to make this work, when what their expectations were, and what we can deliver, and how we can deliver didn't really match, and that's okay. It's better to recognize those efforts sooner than later. So, that's what we did, and I constantly evaluate our client engagements on a quarterly basis and look at profitability, and resources, and what we're doing for them to make sure that we're meeting expectations, and if we're not, how do we get better?

 

Joshua Feinberg:

You think it's any easier with businesses with professional services, entrepreneurs, that they get a little bit more about what your value proposition is all about? Or is it more challenging because they're constantly trying to tell you, "Well, Gregg at our law firm, this is how we do it"?

 

Gregg Genovese:

Yeah. I think you see a little bit of both of that. I think they understand the professional service world, whether it's how the billing and the budgets and all those things work. Again, I would be hard-pressed to think that one industry is easier than others. I think they all sometimes have challenges. I think it depends on each individual engagement, each individual client, and how you're presenting your value, and what your value proposition is to them.

 

Joshua Feinberg:

Shifting gears a little bit, when you take on a new client, is this usually their first time that they're working with an outsourced accounting team like yours? Or do they come from other firms?

 

Gregg Genovese:

I would say most of our engagements are first-time outsourced accounting clients. Most of them have had in-house personnel. We've only had, I believe, one or two other clients who've gone down that outsourced accounting. It didn't work for them, and then they've transitioned to us. But most of our current clients are first-timers.

 

Joshua Feinberg:

Do you see any pattern with any common mistakes that tend to come up when you take over these accounts, where you're like, "Wow,” you’re really cringing at what was done in the past and can't believe that this is being done? Or are most things usually in good shape when you take them over?

 

Gregg Genovese:

I would say, it's not a cringe-worthy thing. I think that the common things that we see is that the chart of accounts becomes with a lot of these different organizations, it just kind of takes on a life of its own, and what we see is that the chart of accounts becomes daunting. It's two, three, four pages of detail of everything, and we always try to get an understanding from the client's perspective. “Are you using that detail?” "Oh, no. That's just what my accountant did." "Well, can we simplify it?" Because sometimes what we found for business owners and our key stakeholders is less is more, and so we can provide them that detail if they want it. But from a presentation standpoint, what we have seen is the chart of accounts has kind of gotten a little haywire, and so we try to certainly simplify that and overall simplify their reporting.

 

Joshua Feinberg:

Does that act like a common part of your onboarding, where you're doing a review of their chart of accounts and making recommendations for housecleaning?

 

Gregg Genovese:

Yeah, always. That's one of our first things that we look at is certainly the chart of accounts, and how we can simplify that, how we map the data from historical into new, and then certainly how we can present them better metrics moving forward, and certainly chart of accounts, and how you record the transactions is imperative to that.

 

Joshua Feinberg:

Does that usually go hand-in-hand with looking at existing systems? Do you usually have the luxury of getting them to migrate to your preferred cloud accounting or your ERP platform that you're advising? How does that fit in with a messy chart of accounts?

Gregg Genovese:

We generally, for all of our engagements, only use one system—Sage Intacct. If clients want to stay in their own system, we don't generally take on those engagements. We certainly want to be experts at what we do and to be experts in three or four different platforms doesn't fit our model. It may fit others. It just doesn't fit ours. That is something that we look at initially is to make sure that, “How can we bring them to our platform to deliver the service that we need to?”

 

Joshua Feinberg:

Yeah. So, when they're switching to you, it's not like they're going to say, "We'll try this out for a couple months and see how it works." It's like, no, they need to commit enough to migrate into Intacct if they're not in Intacct.

 

Gregg Genovese:

Yeah. We make sure they understand that, and that's an important decision for everybody that they commit to what we're doing, and we commit to helping them. I never downplay that it's an easy decision because I try to make sure that they understand there's cost and resources to that, and this is a big decision, and “Here's the value that we can bring, and here's the benefits of that.” We certainly make sure that they want to work in our environment.

 

Joshua Feinberg:

Yeah, and with the partnerships that Sage Intacct has built, they're slowly but surely making the industry standard for anyone that graduates beyond the more entry-level cloud accounting platforms. I see a lot of Sage Intacct consultants also trying to advocate for smaller companies, not feeling that there's really a cost barrier to get started because I guess the conventional wisdom years ago was, “I'll start in QuickBooks Online, or something like that, and I'll grow out of that and move to Intacct,” and they're overlooking all the migration costs.

 

Gregg Genovese:

Yeah.

 

Joshua Feinberg:

Is that something you run into from time to time?

 

Gregg Genovese:

Yeah. Again, we do see a lot of clients coming from QuickBooks. I think once you compare the cost of QuickBooks to Intacct, whether it's a nominal increase, or the value of what Sage Intacct can deliver outside of what QuickBooks can is dramatic and at a nominal, maybe, increase in costs. I'm not even sure what the cost of QuickBooks Online is anymore, but I certainly believe that Sage Intacct is certainly a leader in the cloud technology space.

 

Joshua Feinberg:

Yeah. That makes a lot of sense. The final area I want to ask you about is if you think ahead, 12, 24, 36 months out from now, what do you think is going to be the big inflection point that caused the most change? What's driving the future of outsourced accounting?

Gregg Genovese:

Technology. I believe technology is going to play a significant role. I mean, obviously, it already has, but I think it's going to continue to get faster and faster. The speed of change is going to get faster and faster with AI, and all the different things coming into play. In today's environment, there's going to be a lot more integrations with other applications, where the numbers are kind of going to be done for you, while all the different systems will talk to each other and integrate. Our job, I believe, is going to change a lot. It's going to be going from the number-crunching to more analytics, strategy, forecasting, and planning. We're going to have the numbers available at our fingertips, but what do they mean? What do they mean to our clients? How can we help our clients get better? So, I think technology—certainly with artificial intelligence, and machine learning, and all those different things—are going to have a dramatic impact on what we're doing, helping us really elevate our services and put our expertise at the forefront.

 

Joshua Feinberg:

So, you think it's going to make it possible for everyone to really spend the majority of their time on advisory services being outsourced CFO, as opposed to just processing and coding?

 

Gregg Genovese:

Yeah, for sure. I think that time is going to get less and less. The information is kind of going to be there, and you're not going to have to sit there and process transactions, but the advisory, and the strategy, and the forecasting, all of the things that the clients really see the value in is going to be, like I said, I think that'd be a lot more significant as time goes on.

 

Joshua Feinberg:

It seems also that will help to give your team, your firm as a whole, just a natural point of differentiation, as it moves from the opposite of a commodity.

 

Gregg Genovese:

Yeah. You're right. I used to tell people, “We can't punch the keys any faster than generally anybody else.” That's not where we deliver our value; our values are in our expertise as a firm, and what we can bring to the table. So, I certainly believe the advisory side of our outsourced accounting model will see a significant shift, and hopefully, we continue to grow and develop, as we have in the past three years.

 

Joshua Feinberg:

That's great. Gregg, I really appreciate you taking the time to join me today on the AI in Accounting Podcast. What's the best way for somebody to learn more about the work that you do at Bonadio or follow you? Are you active on LinkedIn? Is there any particular place you'd recommend for someone that wants to learn more, get in touch?

 

Gregg Genovese:

Again, I'm certainly active on LinkedIn. Go to our website. Pick up the phone and call me, Gregg Genovese at Bonadio Group. All my information on our current website, Bonadio.com. So, yeah, if anyone wants to just to have a conversation, or if I can help someone in any different way. People have helped me along the road. So, if anyone ever has a comment or is new to the game and wants some general guidance, I'd be happy to certainly help anyone on their journey.

 

Joshua Feinberg:

Excellent. Thanks, Gregg. Thanks so much for sharing all of your wisdom on what got you to where you are in your career, and your outlook on how you present these ideas internally and externally to clients, how clients think about your services, how you're thinking about the future. This has been super helpful. Really appreciate it.

 

Gregg Genovese:

Josh, I appreciate it. Thanks for having me and keep up the good work.

 

Joshua Feinberg:

Thank you.

 

Speaker 2:

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 Gregg Genovese'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.

 

Topics: Podcast, Client Accounting Services Best Practices

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