Request a Consultation

[Podcast] Hal Rosen of Haynie & Company Explains Small Business Accounting Services Best Practices

Topic: Podcast

In this episode of the AI in Accounting Podcast, you will meet Hal Rosen, a Partner with Haynie & Company, based in Salt Lake City, Utah. Founded in 1960, Haynie & Company is a full-service CPA firm that specializes in audit, tax, accounting, consulting, and management advisory services.

Hal offers an overview of how he sees the CAS and outsourced accounting fields adapting to the integration of AI technology in the near future:

[Podcast] Hal Rosen of Haynie & Company Explains Small Business Accounting Services Best Practices

“If you really want to make a good wage or living doing this type of work, you’ve got to get with technology. I think over the next couple of years, we’re going to see the use of AI double, at least, or maybe even more than that. … A couple of years ago, somebody asked me … ‘Well, how much change do you think is really going to happen?’, and I said, ‘Well, when I got out of college, PCs didn’t exist, and so I’ve seen incredible amounts of change throughout my career. … Over the next five years, I think you’ll see way more than I’ve seen in 40 years.’ It’s moving that quickly, and you better be staying on top of it. You really ought to be going to conferences that are talking about it, dealing with how to adopt the technology, how to utilize the technology, and be aware of what’s there.”

So, what types of technology should someone who is just getting into the CAS and outsourced accounting industry focus on? In Hal’s words:

“Let machines do the mundane tasks, use services such as vic.ai, use other apps like Receipt Bank and Liscio to make your life easier, and that helps standardize your process. Don’t reinvent the wheel but look at what others have been successful with and … what their tech stacks have been, and then … you can get more into what I like to call some ‘niche apps’ that are more industry-related … such as CashFlowTool, or Housecall Pro … or … ColdBox for collections, or Avalara for sales tax, or efile4Biz for 1099 filing. … If you’re a small practitioner, get your niche, choose a few of those apps … and become a specialist in them.”

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

  • Staying current with the evolution of AI technology in the accounting sphere,
  • Choosing the right tech stack for your niche based on the type of clients you want to attract, and
  • Delegating mundane tasks such as data entry and invoicing to your automated software so that you can take on more of an advisory role in your practice.

All this and more is discussed in detail in this episode of the AI in Accounting Podcast. To learn more about Hal Rosen and contact him with any questions about client accounting services, you can check out his LinkedIn profile and visit his bio page.

Watch the Podcast Interview

 

Watch on YouTube: Hal Rosen of Haynie & Company Explains Small Business Accounting Services Best Practices

Listen to the Podcast Interview

 

Listen to Apple Podcasts: Hal Rosen of Haynie & Company Explains Small Business Accounting Services Best Practices

A lightly-edited transcript follows below:

Hal Rosen:

And that allowed us: one, to be more profitable, two, to have a system that worked, that we could put new people into, and that they could feel comfortable with, and then that makes a scalable system, once you've got those first two things going.

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 thrilled to have with me today a very special guest. I have with me Hal Rosen, who's a Partner with Haynie & Company in Salt Lake City, Utah. Hal, welcome to the podcast. Thanks for joining me.

Hal Rosen:

Thank you. It's good to be with you today.

Joshua Feinberg:

Excellent. Well, I think the first place to start, it would be super helpful for our viewers, for our listeners, to learn a little bit more about your career journey, how you ended up at Haynie, what you were doing before you got to Haynie, how you first got into accounting. When you were growing up, did you know that you always wanted to be in accounting? Can you kind of take us through the progression that got you to where you are as a partner in Haynie & Company?

Journey to Outsourced Accounting

Hal Rosen:

I kind of laugh at that. Growing up, I didn't know what an accountant was. I didn't know what a CPA was. After my freshman year at BYU, I met with a counselor, and she said, "Well, you've got some choices." She says, "You can go into accounting," and I'd had two accounting classes as a freshman and gotten As in it and enjoyed it. She says, "It's going to be a harder degree to get, but you'll get better pay when you graduate, or you can stay in business management, and the classes won't be as hard but getting a job probably will be more difficult." I said, "Okay, accounting's good." That's how I fell into it, which has been great; I spent three years at Deloitte. It was Haskins & Sells, actually, when I got hired; that dates me. Then they turned into Deloitte. I spent three years as an auditor, and I haven't done an audit since I left there in 1980, but a great background that I always cherish, great people I worked with, taught me a lot of stuff. There's a lot of those auditing skills I still use today in analyzing financial statements and being able to pick stuff out that isn't so apparent to most people. Went out as a controller for a group of companies, and then, a few years later, ended up co-founding the company and licensed some technology out of BYU in the area of analytical chemistry instrumentation, and it's kind of interesting because the only chemistry I'd ever had in school was a high school chemistry class, and I tell people, "The teacher played in a band on the weekend; he was more interested in telling us about that than teaching chemistry." So, we founded this company; I was the CEO. Took me about six months to learn how to even say the name of the instrument that we were manufacturing—a supercritical fluid chromatograph. We raised venture capital—actually, three rounds in the next three years—and commercialized that instrumentation. Went from a startup with no employees to about 75 employees, and sales around the world, and our customers were large companies that you've heard of before: people like Proctor & Gamble, and DuPont, and Monsanto, and Shell Oil, and Exxon, a lot of research labs and stuff. So, that was very interesting, and the company that had funded us had an option to buy us out—which they did—and then a year or two later, they decided to consolidate operations into their Sunnyvale, California operations, and so, I was out on the street again in the early '90s, and friends started calling, saying, "Can you help me with this? Can you help me with that?", and pretty soon, I'm back in public accounting, which I had never planned on doing. I was kind of semi-retired at the time, and that was about the time that QuickBooks came out, and I'd used Quicken for many years for my personal stuff, and so I started helping people with QuickBooks, and here we are, 30 years later; I've founded and grown CPA firms. Two-and-a-half years ago, with the breakup of one of my partners, I took a couple of my best people and joined Haynie & Company here in Salt Lake—which has been a very fast-growing firm, both organically and through mergers and acquisitions—and so that's been a good change, and a little different than my smaller firms that I had for quite a few years.

Joshua Feinberg:

That seems to be a rather common pattern for someone that's leading an outsourced accounting or client accounting services group is they start in public accounting—and a large number in audit—and I guess somewhere along the way, the 80-hour-a-week, 70-hour weeks take their toll, and then they go, and some form a private industry; some go into nonprofit, and then somewhere along the line, they get the itch to come back to public accounting, and it seems the career experience with the combination of early-stage resume experience in public accounting, and then multiple chapters in private industry, make for incredibly impactful, powerful advisory work with small businesses across a wide variety of industries. Have you found a similar experience?

Hal Rosen:

Yeah, the years I spent in the industry have been a great help because I find most of my colleagues have not had that experience, and, I mean, it opened my eyes. It's almost as valuable as having been an auditor with Deloitte because I've got a different perspective that I see, and when I was with Deloitte, interestingly enough, I didn't work all that much over time. I had a lot of June 30 clients and stuff, and it was pretty even most of the time. If I'd have known what I was getting into at this latter stage of my career, I don't know that I'd gotten back into public accounting. It's just been kind of crazy, and some of that has to do with what happens when a partnership goes bad, and some of that stuff, but this COVID hasn't helped, either. It seems like I've been working at home most of the time, but it's just more work, and PPP loans and all that have just really accelerated it, but I like variety, and helping different clients provides a lot of variety, which is nice, and I can lend that expertise from having been on their side of the desk and wondered, "How am I going to make payroll tomorrow?" That's an interesting perspective that you don't forget.

Advice for Growing an Outsourced Accounting Practice

Joshua Feinberg:

Yeah. Empathy is hard to train team members on. So, the first big place I wanted to talk with you about today was to get your advice for someone that's starting up a practice like this, that's going to be providing outsourced accounting, outsourced bookkeeping, client accounting services, what advice would you give them for what you have found to be the most important area to concentrate on in the first few months, the first few years, in growing a practice?

Hal Rosen:

Well, I use what I call the “three S's”, and if you read very much about CAS, you're going to stumble across it quite quickly: make sure that your system, your program, is standardized, systematized, and scalable. Early on, when I started getting more involved in bookkeeping, I had a kind of a mantra: “We did what the client needed to be done,” and so I ended up with all types of different systems because every client was different. As we grew, and I started adding more people, then that became a harder type of thing to manage, and so it got to the point where we insisted, "Here's the way we do it, and if you don't want it done that way, I understand, but we're not a good fit for you," and we started turning clients away because they didn't want to fit into our way of doing business, and that allowed us: one, to be more profitable; two, to have a system that worked, and that we could put new people into, and that they could feel comfortable with, and then that makes a scalable system, once you've got those first two things going.

Joshua Feinberg:

So, the systems, the standards, and that's the key to making it scalable and profitable and more enjoyable, less stressful, more predictable?

Hal Rosen:

Yes.

Advice for Getting Your Outsourced Accounting Practice Back on Track

Joshua Feinberg:

That's great. So, at the other end of the experience spectrum, think about someone who has been leading a practice for five, 10 years, or more, and they've just been through a brutally difficult year. Maybe their client list had a lot of exposure to industries that were really heavily impacted by the pandemic, and they're feeling a sense of burnout. Maybe there's been a lot of churn among their clients. Maybe there's been a lot of turnover among their team. What advice would you offer to a colleague who reached out to you and said, "Hal, what am I doing wrong? How do I get this back on track? How do I recharge the batteries?"

Hal Rosen:

Well, it's interesting because I go right back to the three S's again because what I see most of the time is, they don't have a standardized, systemized, scalable process. They need to go back to the basics. If they do have that, then we're ready to move forward with some other things, like AI—which I like to refer to as “augmented intelligence”, rather than “artificial intelligence”. Let machines do the mundane tasks, use services such as vic.ai, use other apps like Receipt Bank and Liscio to make your life easier, and that helps standardize your process. Don't reinvent the wheel but look at what others have been successful with and maybe tag onto what their tech stacks have been, and then as you move that forward, then you can get more into what I like to call some “niche apps” that are more industry-related, and if you've grown—and this is something that we're doing right now, that I'm getting different people that are specializing in certain niches that way—using apps, such as CashFlowTool, or Housecall Pro—which is for those that are making house calls for construction—or using ColdBox for collections, or Avalara for sales tax, or efile4Biz for 1099 filing. If you get some specialists in that way, if you're small, you maybe just got one niche. We're a large firm—in fact, we’ll probably be a Top 100 firm this year—and so we've got a lot more resources, and so I'm trying to get specialists in each one of those areas because we've got a lot of clients that need that help but trying to do that all by yourself, it's tough. If you're a small practitioner, get your niche, choose a few of those apps, choose two or three that are going to work for you, and become a specialist in them.

Joshua Feinberg:

That raises an interesting question, as well, as I talk a lot on the podcast with the benefits of specialization by verticals and industries, and I'm sure there were some really natural fits, based on your experience before you went back into public accounting, and I imagine you find similar kinds of pockets of expertise as you're recruiting and growing people on your team. What I'm curious about is, historically, public accounting has been very local. So, if you were going to specialize in construction in Salt Lake City, you would need most of your expertise within a half-hour-to-an-hour drive of where clients were, maybe a little bit more. Do you think the pandemic and work-from-home has opened people's eyes that you can have your experts in a certain industry that are in an office in one part of the country, and clients are all of a sudden now a lot more open to working with an industry specialist who may not be in their immediate region?

Hal Rosen:

I think that's been happening over the last 5-7 years. I think the pandemic has accelerated that. Technology allows us to do so much. I mean, we're affirmed with 15 offices in six states, and so when the pandemic hit, I mean, we're all into the same server. I've been working from home most of the time since that happened. I haven't been in the office for over three weeks now, but I'm logged in, just like I'd be logged in if I was sitting in my office at work, so it really doesn't matter. I teach QBO classes, and the last couple that we've taught have all been virtual, and we've had people from all over the US in those classes, and so you can do so much virtually, but I think you're right; people have gotten more used to it, but it's been coming for quite a while, and this has accelerated it, and I think opened people's eyes that, “Hey, we can work this way.” I used to use Zoom occasionally, or whatever, but we've had to increase our licenses at our firm, and when I look at the calendar, those calendars are full; everybody's scheduling those out, but we've gotten used to using Zoom, and I'm even seeing people that were doing webinars on GoToMeeting and stuff like that are now going to Zoom because they've gotten used to it through this pandemic, and it's really more user-friendly, and you can see the people on your webinar, and there are advantages to that. So, lots of stuff has really, I think, improved, and will continue to improve because of the pandemic.

Joshua Feinberg:

Yeah. I've noticed that among a lot of the CAS and outsourced accounting practice leaders, they seem to have developed a lot of experience in not only being on podcasts but presenting webinars because a lot of what would have normally happened at industry-specific events, or their own seminars internally or externally for clients, seems to be everyone's getting good webcam presence and getting good at presenting virtually.

Hal Rosen:

Yeah. I think it works really well for a lot of stuff. Some of the things, like my major QuickBooks conference that I go to each year, I actually went. It got postponed twice, but about 3/4 of the people attending attended virtually, and there just wasn't the same energy as there was when we've got a big group of people together. The vendors on the floor I don't think had the same contacts, and many of those were virtual, also, and it was a little harder to communicate and develop a relationship that way. So, I think there are some things that maybe aren't best served this way, but the teaching, having small meetings, being able to pull people together very quickly and not have the expense of travel has got some advantages.

Joshua Feinberg:

Excellent. We're all looking forward to a time when we can travel again and can have in-person events.

Hal Rosen:

Amen.

Outsourced Accounting Mistakes to Avoid

Joshua Feinberg:

I think some of these habits will stay; some of it will be a combination. It'll be really interesting in the next six, 12, 18 months to see what the right mix is for different kinds of clients, and different kinds of industries. So, I wanted to get your thoughts, also, on onboarding new clients. When you are bringing on a new client—regardless of whether they were handling accounting and bookkeeping functions internally or maybe they were working with another firm—is there any really big single mistake you see being made across the board that your team almost always has to start by correcting before you can really have a productive relationship with that client?

Hal Rosen:

Well, first of all, one of those mistakes we've made a lot in the past is probably not setting up a budget and an agreed-upon amount for that onboarding. Some, we're able to onboard very quickly and very easily, but more and more, I'm seeing that we've got a bunch of cleanup work to do. Prior accountants have kind of left them on a mess, and that's what prompted them to want to change, and we've eaten a lot of fees that I'm not too happy about, and so that's been a part of the discussion here in the last week or two is, we need to do a little better due diligence as to what needs to be done and go into it with an expectation of the client that they're going to be paying for that. That's not part of what we're doing going forward. For example, if I brought on a client that we're going to take over their bookkeeping, payroll—basically, their financial preparation services as of January 1—that does not include what we've got to do for last year. So, you've got to be careful that way, or you can really get hurt. Onboarding, you've also got to be careful because it can stretch out. If you don't have good client participation, then it can drag on for weeks, and you really want it to get taken care of very quickly, so I'd just be aware of that.

Joshua Feinberg:

That first part of the challenge of scoping out and going way beyond the estimated time and being in a hole with that client, I've actually heard a few times, and I'm not sure how it's being figured out on an industry level—maybe it's something that the AICPA will take up—but it does seem to be an issue where: one, it can slow things down that were intended to be a couple of weeks to a couple of months, and two, it can really make for a very unprofitable relationship out of the gate. That sounds like it could take months or years to even bounce back from in that particular relationship.

Hal Rosen:

Yeah, it can, and the bigger the company you're taking this over for, the more exposure you've got, obviously. Most of the ones that I've been working on are smaller, but we find that you've got to set the expectations with the client, and if you had done enough due diligence, then you've got a feel for what type of client they are. Are they going to be cooperative? Are they going to get done things quickly? The hard part is when you take over one—like we did last August—and they've turned over their people twice, and the last one was much more verbose, just wanted to talk constantly. We actually terminated that at the end of last month, but our time on that doubled in January with this new person, and I'm going, "I'm glad to get rid of them." I feel bad, and it was a nonprofit, and I had a link to who the nonprofit was founded after that I'd knew when I was a young kid—that was my mother's mentor in adult education—and appreciated being involved with them. They had a very good cause, but this new person just made it financially impossible. So, sometimes, you run into that, and you've just got to be aware of it. So, you need to know those things going in. Most of the time, I don't find that's a problem. That's kind of an unusual situation. My guess is that person's not going to be there that long, and they'll be gone, but I wasn't expecting a triple turnover in a matter of five months when we picked that client up.

Joshua Feinberg:

Yeah. Oh, there's been extraordinary times in the last eight, 10, 12 months with what's been happening in the country, but it almost seems like the world's gotten very used to reviews, and you think about, like, Amazon, and Yelp, and Glassdoor, for example, it almost seems like there needs to be a review system where you're rating the clients, but how do you do that without stepping over the line in a trusted advisor relationship? I guess you can look for a proxy. You can look at how happy their employees are to be working there, and cultural issues, and approve of CEO, and everything, but yeah, it's a challenge because it's not just technology; it's not just the financials; you're working with people.

Hal Rosen:

Yep, and everybody's different, and, I mean, generally, I've had a very good experience with it, and people have really been good to work with. To me, it's more the exception that we get somebody that's difficult to work with. Most of the time, everything's worked out really well, and people have been great.

The Future of Outsourced Accounting

Joshua Feinberg:

Terrific. The final area I wanted to get your thoughts on today has to do with where the business model is heading. If you think about what's going on right now, and how outsourced accounting, or outsource bookkeeping, entrepreneurial services, CAS, how it's delivered, is there something that you see going on right now that's going to fundamentally change this business model in the next 12-24 months?

Hal Rosen:

Oh, I think we've been in a fundamental change here for at least the last two or three years. First of all, let me say, I think the home-based sole practitioner that's got low rates, low overhead, will probably always find work with really small businesses that don't have a lot of money, and they're satisfied with the old ways. I think there's a lack of people in our industry. There are people like myself that are baby boomers that are retiring, and it's leaving a lack of people available to take that. So, I think they're always going to kind of find a niche if that's what they're satisfied with, and there's nothing wrong with it; a lot of those are stay-at-home people, stay-at-home with kids, and they're able to do that on the side and earn a living, but I think for the rest of it, if you really want to make a good wage or living doing this type of work, you've got to get with technology. I think over the next couple of years, we're going to see the use of AI double, at least, or maybe even more than that. I've mentioned a bunch of apps earlier, and we use QBO, and all of those are increasing their usage of AI, and so you've got to stay up with that, and you need to be using those to the maximum. There are more high-tech companies that are raising incredible amounts of money from venture-capital sources that, I think, they're going to squeeze out a lot of small-and-mid-sized CPA firms that are offering CAS systems. I don't think most of those realize what's really going on. They're not attending conferences; they're just kind of status quo, and I think they're going to be surprised what's happening. There’s just a lot of that happening. There are incredible amounts of money being raised in some of these public offerings just, for example, doing AP processing, that's really interesting, and I think those things are going to go belly-up, or we're going to see some big changes, and I think it's more likely we're going to see a lot of big changes. I think some of those are going to go belly-up, and we've seen some of that in the last year or two, and the other thing is, I think you're going to see more companies looking to outsource their accounting, which is going to fuel the growth for those that are prepared, that have got their systems set up. It's just really hard to find competent help, and then if you find them, if you're a small, mid-sized, maybe you don't even have the people to train them, and so you're having to utilize these people, where if you get like a firm like ours, we've got all levels of experience, and we can train new people as we bring them in, and then using the technology; we can offer stuff or services in an economical method but also be making good money ourselves. So, I just see lots of changes. A couple of years ago, somebody asked me, he said, "Well, how much change do you think is really going to happen?", and I said, "Well, when I got out of college, PCs didn't exist,” and so I've seen incredible amounts of change throughout my career, but I said, "Over the next five years, I think you'll see way more than I've seen in 40 years." It's moving that quickly, and you better be staying on top of it. You really ought to be going to conferences that are talking about it, dealing with how to adopt the technology, how to utilize the technology, and be aware of what's there.

Joshua Feinberg:

Yeah. I mean, it's really fascinating to me to think about how technology-centric this whole business of CAS and outsourced accounting has become; I used to do SMB IT consulting 20 years ago, and I remember working with, like, a MAS 90 specialist at the time, and it was largely because there weren't CPA firms who were getting very actively involved in the accounting software, and now it's really hard to imagine someone being successful in growing this kind of practice that's not taking a strong lead in figuring out their technology stack and standardization and using that as a core part of their efficiency and delivering better services and doing this all profitably.

Hal Rosen:

I think you're correct.

Joshua Feinberg:

Well, this has been super helpful. Yeah, we do see a lot of consolidation happening at all different levels—small, medium—and it doesn't turn heads quite as quickly anymore when we see a firm with hundreds of employees, acquiring a firm that also has hundreds of employees, whereas 3-5 years ago, it may have been a little more shocking. Hal, for someone that's watching this that wants to learn more about you or follow the work you're doing or learn more about what you do at Haynie & Company, what's the best way to get ahold of you? Are you active on LinkedIn? Is there a good website to send someone to?

Hal Rosen:

I am on LinkedIn, and our website, which is www.hayniecpas.com. There's another one that doesn't have the S at the end of the CPA; that'll take you to a California firm, which actually was split off a number of years ago. So, we got the S on there. Haynie CPAs. So, it's hayniecpas.com, and there's a lot of information there, too.

Joshua Feinberg:

Excellent. Yeah, we'll make sure that we link to all those resources in the show notes, and the blog post that goes along with this, but this has really been terrific. It's been super fascinating to learn about your career, how you got started at a big eight, and then went into private industry and got involved in something super technical and came back into the journey into public accounting, working with lots of different accounting firms and seeing the big-picture trends of what's going on with needing to standardize, needing to improve the scalability, systematize everything that's going on, and then just the intense focus now on technology to provide better services to clients. So, it's been really helpful. I very much appreciate you joining me on the podcast, and I know our viewers, and I know our listeners, will really enjoy listening to your advice.

Hal Rosen:

Well, thanks for having me. It's always fun to talk to you, Joshua.

Joshua Feinberg:

You're very welcome. Take care, Hal.

 

What's your favorite outsourced accounting tip? And what did you find most valuable from this podcast interview with Hal Rosen? 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.

 

Privacy Policy