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[Podcast] Client Accounting Services Best Practices with Michele Maybaum of Raich Ende Malter

Posted by The AI in Accounting Podcast on Sep 23, 2020 7:30:00 AM
The AI in Accounting Podcast

Michele Maybaum has over 25 years of expertise in the world of client accounting services. At the young age of 14, Michele Maybaum used to help her father with bookkeeping and found a true passion for helping clients find solutions. Michele loved listening to the stories of how her clients started their businesses, and she had hopes of being part of the solution to the issues that stood in the way of her clients’ business ventures. 

Prior to her current position, Michele co-founded her own firm with her father that they ran for over 25 years. Michele has a passion for helping her clients build successful and efficient systems and processes that facilitate the improvement of their profits and long-term success! Michele builds relationships with her clients to provide valuable financial practices to help them reach their business dreams. 

[Podcast] Client Accounting Services Best Practices with Michele Maybaum of Raich Ende Malter

Today, Michele Maybaum is a Partner at Raich Ende Malter & Co., REM, in Midtown Manhattan. Michele’s main focus is on outsource CFO services, profitability consulting, and technology solutions. Michele’s current concentration is on expanding the cloud-based client accounting service practice at REM. 

Listen to some of Michele Maybaum’s terrific institutional knowledge and best practices. Michele shares what a good client looks like, as well as the challenging and potentially dangerous clients whom you may encounter. Michele Maybaum also offers her insights on the future of outsourcing in accounting after the pandemic, and how she helps her clients stay on the right track! 

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

  • Create a plan to be successful while starting to provide outsourced client accounting services or outsourced CFO;
  • Pick the right client accounting solutions that work for you and/or your firm;
  • Determine the tech that is best for you, and how to manage the tech properly; 
  • Find a balance in the industry when it comes to clients and your niche; 
  • Understand the importance of a proper client set-up; 
  • Embrace the client-advisor relationship to give clients the best idea of how finance and accounting works; 
  • Jump onboard with the idea of outsourced CFOs;
  • Focus on the cash flow, and how to get the chart of accounts right; and 
  • Guide clients through uncertain times, which is now more critical than ever. 

Watch the Podcast Interview

 

Watch on YouTube: Client Accounting Services Best Practices with Michele Maybaum of Raich Ende Malter

Listen to the Podcast Interview

 

Listen to Apple Podcasts: Client Accounting Services Best Practices with Michele Maybaum of Raich Ende Malter



Highlights include:

  • The most important thing for someone that’s new to providing outsourced client accounting services: “They definitely have to start with a plan. They have to figure out what it is they want to do specifically, and how they want to do it.” 
  • “Managing the tech is probably the biggest challenge by far, overall, in the space. There’s no question.” 
  • “I love the fact that I’ve gotten to learn so many different industries. So, there’s a real balance there.” 
  • “That’s another thing people have to understand about technology: It still has to be done properly. The most critical part—again, more advice for people starting out—when you set up a client, be really careful. The set-up is so critical. If you set up the chart of accounts—and especially the items, and the products and services—if that’s stuff is not set up right, you’re just asking for the thing to really not accomplish what you’re looking to accomplish.”
  • “I want to help business owners, and I want to make sure that the numbers are accurate.  I think that’s important because I think that if you’re making decisions based on long numbers, that’s pretty scary.” 
  • “That’s where the value is going to be for the accounts. It is going to be all about helping the client. It’s going to be about figuring out what’s not working … I think what’s scary for a lot of the accountants is also, you can’t just live in the financial shell. You’ve got to … see how operations and marketing and people also affect the overall … business.” 

 

A lightly-edited transcript follows below:

Joshua Feinberg: Welcome to today's episode of the AI and Accounting podcast. I'm being joined today by a very special guest, Michele Maybaum of Raich Ende Malter, who works out of the office in Midtown Manhattan. Thanks so much for joining me today, Michele.

Michele Maybaum: Thanks for having me.

Joshua Feinberg: My pleasure. So, I usually like to start out these podcasts by learning a little bit more about your background, how you got to where you are in your journey, how your team is structured within the firm as a whole, and where you see things headed.

Started Accounting Career at Age 14

Michele Maybaum: Okay. Well, I've been doing, you know, accounting for quite a while. I started out, actually, I was 14 years old, and I decided to help Dad out with some of the bookkeeping, and I really liked it, and what I really loved was dealing with the clients and listening to the stories of how the clients started their businesses, and the issues that they had all along, and so, you know, just from the very beginning, it was always an advisory piece to it, and, as time went on—even before everybody was in the cloud—we were always looking for the next computer technology. So, we were always, you know, like, having computers before, and before there was, like, Windows and stuff, we had something called Unix, trying to have multi-user, because at the beginning, we were having diskettes with red dots and green dots and sort of the history. I’m dating myself a little bit about the history of computers and accounting, but we were able to find programs that ran on the Unix system, but we had to have, like, a standalone PC for things like Lotus and to do loan amortizations because that stuff, nobody was writing for that yet in what was basically the beginning of networking, networks, and computers, and then as time went on, you know, obviously, along came probably one of the biggest transformations, was in the '90s, when you had this thing come along called “QuickBooks”, and, you know, we were putting everybody on QuickBooks Desktop, and we ran Desktop, and in 2014, our rep at the time came and said, “Listen, you guys got to come to the first QuickBooks Connect. It's going cloud-based, and, you know, I know the product that was here a couple of years ago was not so good. We've made it better. We're going to keep making it better." And I basically moved all my clients, you know, with very few exceptions, into the cloud-based arena, and, you know, doing the same thing I always did is, “Okay, here's how we did last month, and this is what's happening, and let's have conversations about it, and, you know, what is it that you need, and how can we help you reach your goals and fix what's really going wrong in the business?” And that's sort of the kind of history in a nutshell.

Joshua Feinberg: What's fascinating about that, to me, is talking with a lot of people like yourself, you'd be surprised how often the seeds of being an accountant are starting in teenage years, working side-by-side in Dad's practice. So, they must be doing something right there to keep the profession healthy and vibrant and maybe it's a matter of looking to the past and seeing what can be done going forward to keep accounting an exciting place.

Michele Maybaum: Yeah, and we have my nephews working with us now, too.

Joshua Feinberg: Awesome. If it keeps going, it keeps going. The family tree. That's terrific, and it's funny, too, when you mentioned Unix, I remember I had an econ professor in college who got everyone started on Lotus 1-2-3, and I remember the keyboard shortcuts at the time, and that was really something to be able to build electronics but just probably two or three years before the first iteration of Windows and yeah, I remember the original QuickBooks Desktop coming out.

Michele Maybaum: We were all really, really, really young back then.

 

Advice to Those New to Client Accounting Services (CAS), Outsourced Accounting, or Being a Virtual CFO

Joshua Feinberg: Cool. So, most of what I want to talk to you about today is client accounting services, outsourced accounting, being an outsourced CFO. If you were to run into somebody who's brand-new to this, what would you tell them is the most important thing for somebody that's new to providing outsourced client accounting services, being an outsourced CFO?

Michele Maybaum: They definitely have to start with a plan. They have to figure out what it is they want to do specifically, and how they want to do it. Why do you want to do this? Where's your place in the market, and who do you want to serve? And I think that then, the first thing you have to do is, you have to pick your client accounting solutions—especially if you're starting out, and you're doing business on your own. I'm part of a firm, so we can offer, you know, more different solutions, and more industries, but if someone's kind of going out and is trying on their own, they really need to pick. Are you going to do QuickBooks Online? Are you going to do Xero at some point? Or do you want to even specialize and do a higher level? Like, we work with Sage Intacct. So, I think you have to really pick that, and then you have to build the rest of your tech stack, you know, which bill payment if you're going to do bill payment, payroll, picking all of the different pieces of the tech stack, which I think is probably the biggest challenge that's out there because, you know, I remember going to the first QuickBooks Connect, and there were 300 app partners, and then next year it’s 1500, and now there's just thousands, and then some of them get bought up and become part of some of the other, you know, things consolidate, and it's continually moving. You always sit there and say, "Who's going to be the next application to be purchased?" So, it could be kind of overwhelming because I sit there, and I'm like, "We can't do every piece of technology." So, it's really, really hard to decide which ones you're going to use. The client accounting piece is probably the easiest. We've always done QuickBooks, so we stayed with QuickBooks. I've never really worked in Xero but knowing the size of the clients of our firm is why I've started to do Sage Intacct and sitting there and being able to—with a client maybe that's a little bit larger—being able to sit there with the client, just having conversations about really watching freight compared to cost of goods sold, and things like information that the client really wants and creating all these dashboards, and if you're using QBO, there's your spotlight, your fathoms, all of those kinds of reporting that can help out to expand upon what you can do in QuickBooks to really get that information, and that's what the client wants. We had a great client meeting yesterday, and a client that's on Intacct and I made my partner come in, so he could start to see what we're really doing, and he was totally blown away because then the client's all into it, and it's a husband and wife, and we basically were dealing with the wife, and, all of a sudden, the husband's there. Now, we're talking, you know, heavy-duty numbers, and the keys to what's going on in their business, and now, all of a sudden, he's sitting there next to her. I've been working on this client for years, and this is just a brand-new occurrence, so it's really, really cool because this is the stuff the clients want. They don't really need tax return. “I file my return; I don't really want to pay. Do I need a financial statement for a bank? Okay. Yeah. I really don't want to pay for that.” But now, help them with their business, help them really understand the numbers and some of the drivers, and every business has different key performance indicators, so it's really, really important to help the client figure out what those are and listen to what they're telling you, what they're trying to find out what they think they are and working with them to really build the dashboards, so the clients can make those decisions, and because sometimes, what happens is they'll have a big customer, and the big customer will put pressure on them about pricing, but, you know, that's great. You know, the joke is if you had another million dollars in sales, you'd be bankrupt. So, that's the direction that we're taking it, which is really more of your outsource CFO, and the way I do it is putting the client onto working with anybody that's on the client staff, you know, and not saying, "We have to do everything." I don't believe in that, necessarily, depending on who they have on staff, and we just piggyback on top.

Joshua Feinberg: Yeah. It's really interesting. With a lot of the people that I've spoken to about Intacct, there seems to be a general trend towards wanting to move smaller companies there sooner rather than later, where I guess the conventional wisdom three, five years ago, was you start out on, like, QBO or Xero, and you graduate up to Sage Intacct. It seems a general message that I'm hearing more of is trying to get even small businesses, even startups to adopt, and I guess pick certain parts of it, too, so it's a less technical debt to move later.

Michele Maybaum: The reasoning is you're not really supposed to go into details about it with the client but because of the Sage Intacct accounting program, they make it, let's say, a lot more attractive for a smaller company to go in. So, for the first one that I did, we picked someone small because anybody who starts with a really large one is just asking for a disaster. So, matter of fact, when I joined the program, I asked people; I picked people's brains, and this one person said, "Yeah, I sold this big new client, and it was a disaster because that's what he chose for his first Sage Intacct implementation, and that's not necessarily the best choice.” You want to start with something, so you could really see the inner workings without being drowned in the volume and the complexity.

Joshua Feinberg: Yeah, so I totally see how a big part of the strategy plan is picking your tech stack and setting that as a foundation to build the whole practice on top of. I spoke to somebody a couple months ago, also, who was, like, really tasking, and it was relatively small firm, whose job was to investigate third-party apps, be in perpetual R&D mode, going through the app store and coming and saying, "Hey, we should try that. We should try that." But there's only so many hours in the day.

Michele Maybaum: Yeah, and again, that's not revenue-generating. That’s a bit of a problem, and you have to really balance that and sometimes—a lot of times—it's like I have to be honest, something on the fly because the client needs it, and you've got to see how some of these things work, and what's an issue is that you've got a different client, and, for example, let's say one particular inventory application is the one you like, but it may not work exactly the way your client wants to do things. You know? Because we'll have one client who's doing builder materials. We have one client where, if you're making clothing, you have, like, the matrix where you've got color and size, and so, builder materials, it's a specialized scenario because you can't sit there and go and say, "I'm going to make size small in green, and then medium in green," and so on and so forth, and then start with the blue and have to keep going through that process within your accounting software to record the cost of the builder materials. So, you really have to have something that you could put the matrix in, and it understands how to pull out the quote-unquote “recipe” for the garment, and you’ll know how to do it in that matrix, so that gets to be a little bit tricky. So, you have to kind of pick, and that may not be the same as the inventory application that you'd normally use. You know? And it's more like it goes along with inventory and production, as opposed to just inventory. Managing the tech is probably the biggest challenge by far, overall, in the space. There's no question.

Joshua Feinberg: Yeah, and it seems like that's clearly the direction that most of the industry has morphed in over the last five or 10 years—especially with outsourced—is not only are you trying to solve real business problems and provide value to help them grow, but you have to really act as a technologist.

Michele Maybaum: Absolutely.

Joshua Feinberg: As a CTO.

Michele Maybaum: Yeah. It's really challenging, and it's frustrating because sometimes—and for a certain, particular area—you pick one, and then you're, like, mad because you realize that other one you didn't pick was much better than what you picked, and one of the things, also, for some of the people who are jumping in, they should be going onto some of all these different QuickBooks Facebook groups and stuff and really listening to what everybody's talking about. They’re actually having people having a debate on a Slack versus Teams. I'm like, "Okay.” You know? I get it, but our firm, we use teams, and so that's what we use. But the video conferencing part's not as good as Zoom, so I still have my Zoom account.

Joshua Feinberg: Yeah. At some point, you get fixed standards; otherwise, supporting multiple platforms is tough to get the efficiency right.

Michele Maybaum: Yeah. So, it's a balancing act between saying, “We want to have a standardized tech stack,” and we bring every client in and say, "This is what you have to use. This suite." And that might work, you know, in some percentage—whether it's 70%, 80%, 90% of the cases—but we find that so many things—especially industries—and that's why I know they talk about “niche”, and there's this balancing act about niches, whether you're going to go into a niche, or you're going to go into, you know, a vertical or micro-vertical, and, you know, it's interesting. We lost a client years ago. We had a ton of healthcare professionals, but we lost our chiropractor to someone who specialized in, specifically, in chiropractors, and I thought, "Okay, that's, you know, very, very narrow, and I guess it's okay." But, like, then I'm thinking, "Do I want to spend every single day doing accounting for chiropractors? Or do I want to...?" You know, I love the fact that I've gotten to learn so many different industries, so there's a real balance there, and, you know, depending upon the type of industry, you know, do they need a specialized industry application, and then does it work with QuickBooks? Does it work within Intacct? And everything's open API, but integration costs money, so it becomes kind of a challenge, and, you know, we have a couple of clients where we're going through that now with Intacct, looking to do some of these more heavy-duty integrations, and, you know, you’re going from 5-6 figures on some of these things. That client has to be able to be big enough to afford that.

How the Outsourced CFO Gets the Insider’s Track

Joshua Feinberg: Yeah, and actually, their outsource CFO should have a good pulse on being able to know what they can afford, too, and advising them on that. On other companies in their industry, other companies their size, what they typically are investing in accounting software.

Michele Maybaum: Yeah. Well, one of our clients is purchasing a business from someone, and they're using Intacct, so now this client wants Intacct because the seller is using Intacct, and originally, the CFO was going to come, and now the CFO's not coming, so we might wind up doing the whole deal because they need somebody that's going to be able to hold their hand through the process. So, you know, it's definitely challenging.

Joshua Feinberg: You ever seen a case where there's an M&A situation where the buyer is really impressed by the sophistication of how they're keeping the books, and that actually adds a little bit to the valuation?

Michele Maybaum: Yeah, I've seen it both ways, and then you see the, “Oh my God, how are these people operating?” And, “Geez, I hope that the numbers, when we did our due diligence, that we were actually looking at good numbers.” You see both ways, I mean, you go in, you take on a client; a lot of times, it's messy. We have one where, in QuickBooks, it's so bad that we spent all kinds of time, and we got everything fixed, and then all of a sudden, the inventory has gone crazy in July because it's pulling, like, a crazy cost so that, you know, the cost is six times the sales, so there's a problem, and we can't figure out what the client did and if it's the client, or there's a glitch because the cost it's using is a cost for something else, it looks like. We're not sure. We were going to call QuickBooks, and the client, his inventory, we're trying to get the client maybe to go to Intacct, but they're a little hesitant, you know? They got used to QuickBooks Online, but they had another accountant helping them with it for years, and, you know, it was like three GL accounts when we took over that actually maybe had accurate balances. Everything else had to be fixed, you know? And that's unfortunate, and you have to try to explain it to a client. I've pitched clients where I'm telling them, "Okay, that's $10K to clean that up." I don't get the client, and I'm like, "Well, I'm not spending $10K or more of time not to get paid to clean up the mess that you let someone else make, or you made yourself.” I mean, that's what happens out there, and that's another, you know, thing people have to understand about the technology. It still has to be done properly, and the most critical part—again, more advice for people starting out, when you set up a client, is be really careful. The setup is so critical. If you set up the chart of accounts—and especially, the items, and the products and services—if that stuff's not set up right, you're just asking for the thing to really not accomplish what you're looking to accomplish.

Joshua Feinberg: Is that exploratory foundation work super critical?

Michele Maybaum: Yes, and when you're coming in to do a cleanup. That's why my favorite thing, when I get a new client, is, "Hey, let's start over. I'm really big on starting over.” Like, I want to create my own file, my own chart of accounts, and I've done that, and we took one where it was on QuickBooks Desktop, and we went into QuickBooks Online, and the cash basis, the balance sheet actually imbalanced by a couple hundred bucks. Cruel, it did. We can't figure out exactly how they got it out of whack, and for every item that happened, instead of just putting it into an account that already existed, the guy made a mistake. So, instead of running it through, he called it a "mistake on such-and-such a date” and set up a GL account for it and whatever, and it's a doctor's office. He had all these GL accounts, and I looked at the client, and I'm like, "We're not fixing this. There's no fixing this." And sometimes you have to tell the client, "We've got to start over." And you can't be afraid to tell the client that. If the books are not good; you're better off. We'll make it so that we'll have this as a place in time, the end of whatever year it is, and those are your books and records. God forbid, IRS comes calling, and we'll get the opening balances into a new file, and it'll go good.

Get the Chart of Accounts Right at the Outset

Joshua Feinberg: Yeah. I was going to ask you about what you see is the biggest mistake, but it seems by far and away, it's messing up the setup, and the chart of accounts, and the foundation stuff.

Michele Maybaum: Setup is a really critical file, and what happened is before QuickBooks came out with their pro-advisor program, they tried to go directly to the business owner. They’re back to doing that with their live program, and they're probably doing it a little bit smarter, and I've heard mixed things. I don't really get involved, but when they were doing it, when they were promoting it and telling clients, "You could do this yourself. Do it yourself. We're trained with school, and we've been doing accounting for all these years, but everybody can be an accountant." They can't, and I have two brothers that prove that point. The two worst I ever saw, my two brothers. But, you know, when you're working through it, you have to explain to the client that, you know, you set this up, and it just doesn't work like that, and then the people come in with the Excel spreadsheets. I won't even do a tax return for any business that has their stuff in Excel spreadsheets. That does not qualify as a dual-entry accounting system. It just doesn't. You're not going to get the information you need out of it. It's just a pile of stuff to throw in Intacct.

Joshua Feinberg: Actually, I've seen a lot of Intacct consultants talk about that. “Send me your spreadsheet, send me a screenshot of this, and we'll make it a point of building a dashboard or building reports to make that spreadsheet history.”

Michele Maybaum: Yeah, but the spreadsheet a lot of the time doesn't say anything. I'm just talking about, they're just quote unquote, “writing up their books that way”. Here's my list of deposits; here's my list of checks. That doesn't qualify.

Joshua Feinberg: Yeah, in 2020.

Michele Maybaum: Back in the day, when it was Quicken, and people using Quicken, I had a client that insisted on using Quicken. I said, "Okay, but your fee's going to include putting that into QuickBooks because Quicken doesn't count." The best was, they finally came, and he goes, "We've decided to do QuickBooks. We'll have to get a file." I said, "No, you don't have to get a file. I have one. I'll just give it to you." Continue on. You have to be willing to invest enough in having the information, you know? And if all you're looking for is to have information to throw on a tax attorney. It's not somebody I personally want to work with. That's for a tax preparer. You want to be a tax preparer, and you're okay with the numbers. I don't. I'm not okay with it. I'm not going to have someone just come to me and say, "Here's the numbers. Put them on my tax return without any backup information and sign my name to it.” Yes, you get the client to sign off that they're saying this; they're swearing to you that the numbers are right, but that's not, like, the type of business I want to do. I want to help business owners, and I want to make sure that the numbers are accurate. I think that's important because I think that if you're making decisions based on wrong numbers, that's pretty scary.

Joshua Feinberg: Yeah. It's all part of that trusted advisor relationship two-way street of them leaning on you for what you're best at.

Michele Maybaum: Yeah, but I also think, too, that you really want to educate the clients. We do a lot of client education in sitting down and explaining it to them. I mean, and some have a better understanding. Listen, some people do have a better idea of how finance and accounting works, and some don't, but a client that really doesn't understand needs to understand enough that you could give them a dashboard and say, "Listen, what is it you need to know?" For example, anybody in the healthcare industry is in private practice. It's patient visits. The patient visits are there; the appointments are booked; the people are showing up; then you know the money's going to be there. Some of it, right away, and some of it, if you're waiting on an insurance company, 30, 45, 60 days, but you know it's coming. If you see, you know, that there aren't enough patients booked, it doesn't take a rocket scientist to know that there's going to be a cash crunch at some point, you know, going forward, and that's another really important piece is the cashflow piece, and the projections, and we work a lot with clients doing that. We've used PlanGuru for years, probably since there was a PlanGuru. That's the application that we use for that, and it's amazing, and you could build your model in multiple ways, and we love it. We sit with clients, and we do the what-if scenarios, and now, when they've finally really gotten it so that it's all cloud-based, it’s, “Wow!”

Joshua Feinberg: Yeah, it's terrific, and because the reality is if they don't have an in-house CFO, they don't have a controller, in some cases, they may not even have a bookkeeper, if you're not thinking about these things, nobody's up at two o'clock in the morning, worried about these things, although you could argue the CEO or the president should be, but it's your job to get them to focus on what's really going on.

Michele Maybaum: Yeah, absolutely.

 

The Future Of Client Accounting Services, Outsourced Accounting, and Being an Outsourced CFO

Joshua Feinberg: They have a real reality check. Michele, where do you see this business model going in the next two years or so: outsourced accounting, client accounting services, being an outsourced CFO?

Michele Maybaum: Well, I think it's going to continue to ramp up, but I think those who are, you know, not in it, from anybody who's doing any of this type of work and doesn't continue the automation, they’ll be lagging behind, and I know that's what Vic.ai is all about is trying to help us out with getting some of this information more automated and being as much with the robots as possible. So, hopefully, you know, I'm looking forward to that, to the robots being able to really do it. I mean, listen, you're still going to need human eyes, but by the time the human eyes get there, they should say, "Hey, something doesn't look right," or, you know, "Now, let's talk about what this all means. This is great. Here's some great financial information. Now, what does it mean?" That's where the value is going to be for the accountants. It is going to be all about helping the client. It's going to be about figuring out, you know, what's not working, and I think what's scary for a lot of the accountants is also, you can't just live in the financial shell. You've got to kind of also see how operations and marketing and people also affect the overall on the business, and if something happens, if they're having a people issue, you may not be great at handling the people issue, but at least know, "Hey, listen, you know, we need an HR type of person here," or, "We need somebody. You don't have a Head of Operations? Or you need someone to run the operations piece of it, or you need some outsourced sales and marketing help.” There's other aspects, and you tell the client, "Well, you know, based on the numbers, this is what you need. Now, I'm not skilled to do that, but you have to have people that you can rely on to go for some of those other outside items within, you know, the client’s situation because they need to be able to look at all aspects of the business.” And at the end of the day, it's really important for the client to have their strategic plan. What is the mission and vision? Where do they want to go? The best is when the client says, "I want to sell in two years." I'm like, "Why didn't you tell me that three years ago and start to plan for it and put things in place?” You know, Michael Gerber wrote in The E-Myth and talked about how they set up McDonald's but made it run without him, and so, the working on the business instead of in the business and getting the client to a place where their business can run without them. You know, we had a guy come to us, and he was afraid to take a vacation. We had to, you know, work with him to get him to the point where he had enough systems in place, and he figured out who on staff could sort of, like, watch everything while he goes away, so he could finally take a vacation. You know, there's making more money, and there's an issue of quality of life. Sometimes, we get a client; they're making enough money, but they're working, you know, 70 hours a week, and they're missing all their kids’ stuff. That is a different scenario than just the finance, you know? And one of the things is, it's hard sometimes, again, for accountants that are not used to just crunching the numbers, so to speak, that sometimes, you have to listen to the client. That's a really important factor, as well.

Joshua Feinberg: Yeah. That's been one of our hypotheses the last couple of years is that if the clients, all of a sudden, the budget that they've been spending on outsource for the last couple of years, if they're not paying for deciding what's in a document, all of a sudden, all of that extra budget can be reallocated to giving them a lot more value, being a true outsource CFO, better understanding what's going on in the business, making these deeper recommendations and talking to them, like, exit strategy, evaluation, building stronger systems.

Michele Maybaum: Yeah, and, like, since the pandemic, it's really like that. I think the big buzzword for the pandemic was “pivot”. Everybody was pivoting and watching and getting a good laugh; everybody's pivoting into masks, and other PPE. So, now there's, like, 7 bazillion people doing that, but I think that's important, and we helped everybody get their financing through this. But also, looking at cash flow because some people are looking and watching to see, like, you know, “We have a restaurant,” they can't have indoor dining, so they're hurting, and they're like, "Okay. Right now, we have enough money to hang in there until October," and then to see, “If there's not a second round of PPP, what are we going to do?" And sitting there and keeping abreast and listening to all of the discussions about what's happening along those areas. I don't know of a time when we've had so much legislation and adjustments to legislation that we've had now, and the rules of the game, you know, everyone was worried about using up that money in eight weeks, and I'm like, "No, wait. Just from a business perspective, you're not open. So, what are you going to do? That's like throwing the money out. Like, wait until you open, and then see what happens." Unfortunately, they pushed it to 24 weeks, so there were a lot of businesses—not so much bars and restaurants—but a lot of businesses that were able to now use up this money and actually get something for their money because if you pay people to do nothing, then you're throwing the money out. You might as well give it back to the government or back to the bank. It doesn't make sense. So, I know I'm planning, but by watching people's cash flow and looking at what they think they're going to do is becoming more critical. I mean, every business should have been doing it before, anyway, you know?

Joshua Feinberg: Yeah. Definitely guiding clients through uncertain times is more and more critical than ever.

Michele Maybaum: Right, but if you're not working through the numbers, and they don't have the accuracy, you can't say to the client, "What's my break-even, and where can I cut, and if I cut so much, how much, you know, do I still have to generate to at least break even?” Or, “I have this much PPP money; how much was my shortage, and how long is that PPP money going to last?" These are questions that clients need to know.

Joshua Feinberg: Yeah, and if they're not asking them, you need to tell them that they should be. They should be asking.

Michele Maybaum: Absolutely.

Joshua Feinberg: It's your job to sound the alarm before the iceberg. Cool. Michele, it's been super helpful. If somebody wants to learn more about you or follow what you're up to, are you active on social media, LinkedIn, and, like, where would you recommend people go?

Michele Maybaum: I'm out there. Probably, preferably, LinkedIn, and someone certainly could reach out but usually, I'm willing to connect with whoever is interested in connecting. To be honest, I'm so busy with clients, I have the beginnings of a plan, but I haven't executed it yet, to be honest.

Joshua Feinberg: Well, my goal with most of these podcasts is so, whether it's six months, a year, two years down the road, somebody's going to come up to you at a conference and say, "Michele, you know that podcast that you did with Joshua Feinberg? Remember when you were talking about the importance of getting the chart of accounts right? That totally saved me from taking on a nightmare client. Thank you so much." That's the goal of all of this.

Michele Maybaum: I hope so, and like I said, there are some really great people out there, and listen, you have to sift through who's out there speaking on social media, but some of the groups are good, and they get some discussions, and some differences of opinion, and so I think that it's really important. Actually, somebody at Intuit mentioned me, and I went to my first Facebook group, and it's been really good since that. I think it's really good just to watch what's going on, how much you participate or not.

Joshua Feinberg: Online communities, yeah. They're great for meeting people from all over the country, in some cases all over the world, but likeminded people, and, in a lot of ways, until we get back to normal, this is going to take the place of a lot of what used to happen over coffee or drinks at conferences and in the hallways.

Michele Maybaum: I look forward to the coffee and drinks again someday. It would be nice.

Joshua Feinberg: They're coming back; they're coming back. But yeah, this has been terrific.

Michele Maybaum: Well, thank you so much, and I really look forward to seeing what Vic.ai is going to do to help us going forward, so that's an exciting thing. I know you guys are working on a lot of stuff.

Joshua Feinberg: Yeah, that's terrific, and I really appreciate you sharing all your terrific institutional knowledge, and best practices, and more stories of what you go through, what's a good client, what's a challenging, potentially dangerous client, and what you do to make sure that everything stays on the right track.

Michele Maybaum: Thanks.




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Topics: Outsourced CFO, Podcast, Client Accounting Services Best Practices

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