In this episode of the AI in Accounting Podcast, you will meet Elinor Litwack, a Partner of Outsourced Accounting & Advisory Services at GRF CPAs & Advisors, based in the greater New York City area. GRF CPAs & Advisors is a full-service CPA firm, including auditing and tax returns for both for-profit and non-profit organizations.
Elinor gives some great advice about choosing the right tech stack and how to best utilize younger staff members who are new to your team:
“They love the technology. They don't want to sit there, punching in vendor names, and the amount that's owed to the vendor, and the coding. The system does it for them, and then they get to approve the bills, instead of entering the bills. There's just more to accounting than punching in numbers.”
She also explains why picking a niche that you care about is so important within the outsourced accounting industry. In her words:
“I think the classic advice you would hear is, ‘Pick a niche,’ which is great advice. You absolutely need to focus because depending on the type of industries you're working with, their wants and needs are different; their measurements are different, but I would go further to say, ‘Pick a niche that you care about.’ … Part of it is having your heart into it. If you're just in there and thinking about your bottom line and not actually caring … your clients are going to feel that. … It’s a more rewarding career and path if your heart is in it.”
Listen to the episode in full to learn more about the importance of:
- Choosing the right tech stack and becoming an expert in it, rather than dabbling in every single one that comes your way;
- Fully utilizing the talents of your younger staff members and immersing them in your tech stack early;
- Picking a niche in an area that you are passionate about to ensure your career is as rewarding as possible;
- Finding and eliminating duplicate data from your records to promote efficiency and decrease miscommunications; and
- Getting vital internal buy-in from your stakeholders and peers to ensure everyone is on the same page.
Watch the Podcast Interview
Listen to the Podcast Interview
Joshua Feinberg (00:02):
Hi, I'm Joshua Feinberg from the AI in Accounting Podcast, and I'm here with a very special guest today, Elinor Litwack from GRF CPAs & Advisors. Elinor is the partner in charge of their outsourced accounting and advisory services, and Elinor is based out of the greater New York City area office. Elinor, thanks so much for joining me today.
Elinor Litwack (00:24):
Thanks, Josh, for having me. Excited to be here.
Joshua Feinberg (00:26):
Excited to have you here. The first place I usually like to start with these interviews is to learn a little more about how you got to where you are in your career. Did you always want to be an accountant? Or did something just happen along the way?
From Accounting 101 in College to Partner, Outsourced Accounting & Advisory Services
Elinor Litwack (00:41):
I actually grew up wanting to be an architect; it's funny you ask. My dad was gung ho; I was always his little architect, but I never actually knew much about what was involved there. So, in high school, he plugged me into an internship, and I realized I am not creative. This is not the way my brain works. So, I pivoted away from that, and he still loves me very much, but I wasn't really sure what I was doing, and I went to business school just as a general bachelor's in college, and then when I took Accounting 101, I was like, “Ah, this is great! Everything has a place that it belongs, and everything makes sense.” And I enjoyed it so much. I know that sounds very nerdy, but that's really how I got into accounting.
Joshua Feinberg (01:31):
What's interesting in going through so many of these interviews is a lot of times, there is a family member that was a CPA that influenced the person to go into it. In this particular case, though, it sounds like there's a college professor that deserves the finder's fee.
Elinor Litwack (01:45):
Outsourced Accounting & Advisory Services at GRF CPAs and Advisors
Joshua Feinberg (01:48):
So, in your current role at GRF CPAs and Advisors, how is your team built? How many people are on it, and what are the different roles? How does it fit in with the rest of the firm?
Elinor Litwack (02:00):
Oh, sure. So, GRF is a full-service CPA firm. Our biggest department is audit, and we have a tax department, one for for-profit tax returns, and then we have a tax department dedicated to non-profit tax returns, 990, ‘cause our biggest client base is nonprofits. I'm in the outsource accounting team. So, out of a firm of about 120 people, our team is about 25 people with three partners, and then staff, primarily in the DC area, but now we're spread all over and fully remote, much like most of the world right now.
Joshua Feinberg (02:37):
It sounds like you're doing business at quite a good scale there to get some efficiencies, and some good learning. So, I'm really looking forward to hearing a little more about your advice, and what you learned along the way.
Elinor Litwack (02:48):
Yeah. When I started with the firm, it was about 12 years ago, and our team, we were called “client services”, and we were very much an after-the-fact write-up shop. But we quite quickly sort of evolved into more of a tech-savvy, proper client accounting services team. So, back then, there were seven of us, and now, like I said, we're up to 25, and we keep growing, which is right in line with where the industry is, but it's been really an adventure. We've seen the type of services we do evolve in front of our eyes, and we're able to help other firms along now, that came from the same place we have, or they're still there and want to know how we've done it, but it's the type of thing where you have to keep up with the change and be active about it, or you might drop, to put it bluntly, as you know so well.
Advice on Starting an Outsourced Accounting Practice
Joshua Feinberg (03:48):
That cues us up perfectly for the first big area I want to learn a little more about is what advice would you give to somebody that is just starting out a brand-new outsourced accounting practice? Maybe it's somebody you went to school with that's making a career change. Maybe it's somebody that's at the beginning of their career, and they've been thrust into this role. What should they expect in their first couple of years of building an outsourced accounting practice?
Elinor Litwack (04:12):
It's a good question. I think the classic advice you would hear is, “Pick a niche,” which is great advice. You absolutely need to focus because depending on the type of industries you're working with, their wants and needs are different; their measurements are different, but I would go further to say, “Pick a niche that you care about.” So, I hate to get touchy-feely, but part of it is having your heart into it. If you're just in there and thinking about your bottom line and not actually caring, if you work with manufacturing, or clothing shops, if you're only worried about your bottom line, your clients are going to feel that, and so I think there's a big part of success, which is actually genuinely caring about your clients, and the industry that you work with, and you're looking out for them in the best way. If you put all the technology stuff aside, and the real day-to-day work—and that's also what keeps me going—it's a more rewarding career and path if your heart is in it. So, if you asked me for advice, that would be the first thing that comes to mind.
Joshua Feinberg (05:17):
It’s picking a niche and making sure that you have the empathy, making sure that you care enough?
Elinor Litwack (05:23):
Joshua Feinberg (05:25):
You don't have to go too far to turn on reality TV—like “The Profit”, or “Shark Tank”, or something—to realize that your ability to spot good things, and potentially bad things, financially that are going on with the firm have real implications for viability, keeping people gainfully employed—especially in these times.
Elinor Litwack (05:43):
Yeah. I'm a huge “Shark Tank” fan. I'm happy you said that. I learned a lot from “Shark Tank”.
Joshua Feinberg (05:49):
It's really interesting to see how the Sharks have kind of taken on this celebrity life of their own. They're doing their own podcasting; I've seen multiple ones give keynotes all over the place. So, the ones that didn't have a high profile, now everyone wants to tag along with Mr. Wonderful, and Daymond John, and Mark Cuban, and Barbara Corcoran.
Elinor Litwack (06:08):
Right. That's the dream.
Advice for Experience Outsourced Accounting and CAS Leaders
Joshua Feinberg (06:11):
So, Elinor, what advice would you offer to somebody that is kind of at the other end? They have been running a practice like this for five or 10 years, really starting to feel a little bit of burnout. They're having problems retaining clients; there's a lot of client turnover. Maybe there's a lot of turnover within their team. They're having a hard time recruiting the right people, and the wheels seem to be falling off five, 10 years in. What advice would you give to them to help them regroup and get back on track with building a successful outsourced accounting or CAS practice?
Elinor Litwack (06:44):
Yeah. Well, the situation you described brings to mind more of a traditional client accounting services team that might be holding by the same metrics as traditional accounting metrics that are still used by many across the country. So, audit and tax and those same metrics might not be the same for a client accounting services shop to succeed. So, I think it's about refreshing the way you think about things; your profitability and your KPIs should be measured differently. We're still all public accountants, and we're in the same sort of career bucket, but the economics of the practices are very different. So, I think when you say that, we come from a traditional CPA firm, so we have to sort of maneuver in the same way, where something that's best practice for client accounting is not necessarily being done at our firm, firm-wide, because we're part of the audit, and the tax, and everything else. So, it's a matter of juggling those together and making sure that you don't get lost in the shuffle of doing after-the-fact accounting and being measured on billable hours and billable rates. You have to think big, and there are a lot of resources out there to help you along and to succeed, and we've gained a ton, also, just from learning from our peers and being in various groups. So, that's where I would go with that.
Moving Away from Billable Hours and Working with Internal Stakeholders
Joshua Feinberg (08:25):
Yeah. That's our hope with this podcast is to help spread great best practices around to help elevate the whole industry. One thing that you mentioned about getting off of the wheel of billable hours, and the right best practices, who do you think is more challenging to manage expectations with—other internal stakeholders within your firm or clients—when it comes to kind of the transformation stuff and thinking about the business model?
Elinor Litwack (08:50):
Internal stakeholders, for sure.
Joshua Feinberg (08:52):
Elinor Litwack (08:55):
Yeah. Again, the business models are so different, and audit service, or tax return service, is so different than actually being an outsourced accounting provider, and the way we sell, or when we describe our services to clients, or prospective clients, it resonates much better with them when we are using value terminology, and nobody really cares how many hours you put into something. “We just want clean books at the end of the month, and reports that our board can find useful, and we would like you to present them to our board. It could take you 100 hours to do it, or you could use technology, and it could take you 30 hours to do it, but it should be the same price to us.” And giving them that consistency means a lot. So, I think it's much easier to explain to the outsiders. It's really getting the buy-in from the more traditional accountants, and other service lines if those are your partners.
Joshua Feinberg (09:56):
And you find it actually easier to take accounting novices—like entrepreneurs and small business owners—and explain this to them, as opposed to trying to change the way of thinking of decades of the CPA industry?
Elinor Litwack (10:10):
Joshua Feinberg (10:13):
It's fascinating. The next area I want to ask you about is when you take on new clients that are potentially coming from other accounting firms, or bookkeepers, or internal accounting, what do you see as the biggest mistakes that are being made that cause a lot of problems as you're onboarding a new client?
Avoiding Duplication of Efforts
Elinor Litwack (10:36):
There's lots of duplication of efforts out there. So, we do not only outsourced accounting, but also systems review. So, going in and looking at a set of books, and the people involved, and the systems involved in the processes, and we find similar patterns—especially from those that speak those reviews—where something is being entered once, and then it's being entered again by somebody else, whether it's in a spreadsheet, on another spreadsheet, or a spreadsheet, and then the accounting system. So, it causes errors and redundancy, and it's a waste of time, and where we come in is making things more efficient, removing those bottlenecks. Technology's our best friend. Although, there's still very much human involvement that's necessary in orchestrating it all and giving those high-level services. But if you could at least solve the grunt work, and the transactions with technology—which, in many cases, does a better job than somebody sitting there and punching in data—then you'll be in much better shape.
Joshua Feinberg (11:41):
So, just having a dropdown list alone won't solve the problem of somebody spelling “New Jersey” five different ways?
Elinor Litwack (11:49):
One little dropdown list in Excel. Yeah. That does sound very fancy.
Joshua Feinberg (11:56):
So, yeah, I guess that's the promise with a lot of the technology, too, is it's looking for anomalies and making suggestions and correcting, and it's really something we're going to, I think, look back on in a couple of years and realize that if you think about how many times you type something on your phone now versus speaking, and it figures out exactly what the characters should be, and sometimes it does it right; sometimes it doesn't, but it's definitely something that very few people envisioned 10 years ago, and now it's just such a mainstream part of what we're doing.
Paradigm Shift Within Accounting Industry
Elinor Litwack (12:28):
Right. Right, and you'll hear the argument that, “Well, what's going to happen to our young accountants? How are they going to enter the workforce if they can't still punch in numbers?” But if you ask my team, they embrace it. They love the technology. They don't want to sit there, punching in vendor names, and the amount that's owed to the vendor, and the coding. The system does it for them, and then they get to approve the bills, instead of enter the bills. There's just more to accounting than punching in numbers. So, if you're a naysayer, you might not have a choice but to just move to the technological side of things, and then figure out what to do with your people.
Joshua Feinberg (13:10):
You get the chance to work with a lot of recent grads—either recruiting or onboarding—joining your team. Do you see a change in trust and comfort levels with these kinds of technologies now?
Elinor Litwack (13:24):
Well, actually, if we look at the history of the people that we've hired for outsourced accounting, we like taking people with experience and from the industry. Because we're in such an advisory role, we tend to take more from there. We do have some college grads, where they start fresh, and they sort of learn it on the job with us, which is great, too. But I think the audit and the tax departments would be more likely to recruit people with no experience at all, and we're also, of course, finding that we need technology people. It's not so much just accounting anymore. So, a bachelor's in accounting is great, and we have CPAs galore, but we need people that are database people and system thinkers, and they understand technology, not just what you see on the face of it, but how it works on the backend, implementations, and that's a whole different skillset than when I was in college. Not that I'm that old, but I'm pretty young.
The Emergence of Accounting Technology as a Core Skillset
Joshua Feinberg (14:30):
That's been a big change I've noticed, also, is it seems like it's really hard to be competitive in the outsourced accounting space or CAS space if the leadership team isn't really bought into technology, so much to the point, when you think about your day-to-day responsibilities of figuring this out, 15 years ago, this would have been a whole separate career—a business unit technologist, or technology advisor, or CTO, or something like that in a small accounting firm—and now, it's just expected that cloud accounting, and similar kinds of things, have made it so mainstream that it’s just expected that the business leader is running it.
Elinor Litwack (15:07):
Yeah, we had no choice but to learn it all, and now we're the technology experts, but you look at our actual CPA exam, and whatever our bachelor's and our master's is, it's nothing to do with that, but somehow we figured it out, and those that were managing are now the experts. So, my staff and my implementers, they know a lot more than me. I know enough to run this side of the business and oversee them and support them, but I think it's opposite from when I used to be managed, and the partner knew everything about gap and accounting and was sort of overseeing my technical work. It's just different now, with the way that technology has snuck up on us.
Joshua Feinberg (15:53):
Do you feel that it's gotten to the point where most of your clients see you as a go-to resource? So, the profession has go-to resources for adopting accounting technology, financial technology? Or sometimes, are they trying to push you in their direction?
Elinor Litwack (16:10):
Well, we sort of make ourselves that resource. So, we guide what technologies our clients are using when it comes to anything related to finance. So, if they came to us and said, “I heard about this cool tool for budgeting or for bill entry; could we implement it?” And it might be a lovely tool, and we might know all about it, but we're very much believers in choosing a very specific tech stack. Although we’re aware of other technologies out there, we want to be experts in the ones that we use, rather than dabbling in every single one that comes our way. So, our clients are well-trained—for lack of a better word—to have us present the ones that we use and trust that we're out there, doing lots behind the scenes with demos and understanding what's out there. If they like Expensify, but we like Tally—or vice versa—we've done that work, and both systems might be great, but we use the ones that we're trained in. So, it's just a different mentality than kind of trying to service every tool that people want to use. We wouldn't be good at it if we were a jack-of-all-technologies; we're just not big enough, I guess.
The Advisory-Centric Future
Joshua Feinberg (17:28):
Yeah, no, that makes perfect sense. The last area I wanted to speak with you about today is to get your thoughts on how you see the business of outsourced accounting changing or being in outsourced accounting and advisory services changing. Do you see anything really big going on now that we're going to look back in 12, 18, 24 months from now and be like, “That was the big inflection point”?
Elinor Litwack (17:52):
Well, this has been happening for years, but it's really about advisory, and so if you have your eye focused on that, and not on the inputs of the accounting system, we're here to help the clients along and give them the high-level advice. That's really what we're about is making people's lives easier. We're not trying to punch in hours, getting their accounting system up to date. Of course, that's our bread and butter is doing the actual books but knowing that so much of that is being automated, and the hours pumped in are no longer going there, advisory is really the big thing, and a perfect example of that is actually PPP loans. So, those came out of nowhere this year. Everybody was asking their lawyers, their accountants, their payroll company. It ended up falling heavily on the CPA industry, which was fine. We learned all about it. We have a task force; it's our expertise, but Congress is doing a lot to simplify it. So, although our clients need us to sort of guide them and give them their payroll numbers if they don't have direct access, what they really needed us for was the advisory side. “So, we're going to run out of these funds; what do we do next? How do we spend them?” It's not necessarily about the technicalities of the PPP. It's more everything around that’s affecting the business. What does it mean for their tax return? So, it's nice that it came out with simple things to it. I mean, there's still a lot of technical stuff we're doing with applications and all of that, but a lot of it comes back to advisory.
Joshua Feinberg (19:38):
So, realistically, if somebody had contracted for services of an outsourced accounting and advisory group before this, they were in great shape. However, if they had been winging it or had gotten more of an a la carte offering, this probably is a time that's induced a lot of panic.
Elinor Litwack (19:58):
Yeah, exactly. Yep. Yeah, but I think CPAs came through as an industry, just giving a lot of resources and content out there. I mean, we held webinars; we didn't charge for them but just trying to help. I mean, March and April was a time to just make sure that the economy stays alive, and not just our clients, but the industry as a whole out there are in good shape. So, we did all we can to help our clients the most, and then the whole sphere of the industries we work with, without trying to nickel-and-dime or be salesy about it. So, it was fascinating to reflect on, actually. That could be another podcast.
Joshua Feinberg (20:40):
Ending times of COVID-driven advisory services.
Elinor Litwack (20:44):
Joshua Feinberg (20:45):
Advisory services is the big thing that's really changing, and clients, small business owners, entrepreneurs are putting a much more of a value, much more of a premium on what that means for their growth prospects.
Elinor Litwack (20:58):
Joshua Feinberg (20:59):
Elinor, if somebody wants to learn more about your group and wants to learn more about GRF CPAs and Advisors, wants to reach out to you, what's the best way for them to get ahold of you?
Elinor Litwack (21:11):
I can give you my cell phone number; I can give you my email. Our website is grfcpa.com. I typed it in so many times; I think that's what it is. If you Google “GRF CPAs”, you could look me up: Elinor Litwack. I'm happy to chat about this; I love this stuff. I love talking about the industry, and my journey, and my team's journey. It's all really, really great. So, I'm happy to connect with your audience.
Joshua Feinberg (21:39):
Are you active on LinkedIn, also? Is that a good place for somebody?
Elinor Litwack (21:41):
Yes. Yes, thank you. You can look me up on LinkedIn. My name is spelled “Elinor (Litwack)”, not like Rigby or Roosevelt. E-L-I-N-O-R.
Joshua Feinberg (21:51):
We'll make sure we put a link in, both to the website and to your LinkedIn profile, with the show notes, too, but this has been terrific, really fascinating to learn about how you got into the space, the role of technology, the technology stack, the importance of making sure that you get rid of duplicate data, the importance of making sure that you have internal buy-in from your stakeholders, from your peers, about what this is all about, and then the changing role of moving in the direction of advisory services. So, I really appreciate you sharing so generously.
Elinor Litwack (22:21):
Of course, thanks for having me.
Joshua Feinberg (22:24):
Thank you. Take care, Elinor.
Elinor Litwack (22:27):
What's your favorite Client Accounting Services tip? And what did you find most valuable from Elinor Litwack'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.