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[Podcast] How Outsourced Accounting Firm Uses Technology to Grow Its Business

Posted by The AI in Accounting Podcast on May 27, 2020 8:30:00 AM
The AI in Accounting Podcast

Fringe Advisory Uses Accounting Automation to Transform Their Practice From Transactional to Strategic

Fringe Advisory is the home of technology-focused accountants who are comfortable using artificial intelligence (AI) and machine learning (ML) in their outsourced accounting work. In short, they shun doing the “same old, same old.”

Joshua Feinberg sat down with Aaron Berson and Bella Hobbel, co-founders of Fringe Advisory, to discuss why change in the accounting profession is so hard and tips on how to leverage technologies like Bill.com and AI to make outsourced accounting more seamless for your clients’ workflows.

Automation to Transform Their Practice From Transactional to Strategic

In between their favorite Bill.com best practices, Aaron and Bella share how being early adopters has allowed them to better navigate the COVID-19 crisis in ways traditional accounting firms haven’t been able to.

If you’re looking to grow and scale your outsourced accounting business more elegantly, keep up with accounting automation trends and become a more trusted client advisor, give this episode a listen.

This episode has been lightly edited for clarity

 

Video: Bill.com Best Practices with Aaron Berson and Bella Hobbel of Fringe Advisory

 

Audio: Bill.com Best Practices with Aaron Berson and Bella Hobbel of Fringe Advisory

 

Outsourced Accounting Firms Get to be Nimble 

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JOSHUA FEINBERG: So I am here with AARON BERSON and BELLA HOBBEL from Fringe Advisory Co. and we're going to be talking all about Bill.com best practices. Thanks so much for joining me today.

 

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AARON BERSON: My pleasure. 

 

BELLA HOBBEL: Thank you.

 

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JOSHUA FEINBERG: So what I'd like to start out by doing is to learn a little bit more about Fringe Advisory, your roles within the firm, the kind of clients you work with, and how you got there on that journey before we shift gears a little bit and talk about Bill.com.

 

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AARON BERSON: Gotcha. So Fringe Advisory is an outsourced accounting, controller, CFO firm. We also do what we call business re-imagination which is looking at a business and thinking - if we didn't have any technology constraints from when a business was started, how can we redo that taking advantage of today's technology? So that's kind of what we do. We help all sizes of businesses from pre-revenue startups through those with $50, $60, $70 million in revenue and up.

What we're trying to do is be a real partner for our clients and advise them in the best way possible, so that they can really thrive and achieve their goals while we take on all the burden held in finance and optimizing and making everything more efficient.

 

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BELLA HOBBEL: How we got started? So we both come from the big accounting world. I worked at CohnReznick and then at EisnerAmper where I met Aaron. Aaron worked at Deloitte and then at EisnerAmper. We both were running the outsourced accounting group. 

A little more than a year ago, we decided that it was time for us to move on and do our own thing, because while working at big firms taught us a lot -  and it was a great experience, and we got to know a lot of great people and clients - big firms come with big challenges and limitations. 

Sometimes, some of the smaller or midsized customers are getting bypassed because of the price and other issues and we really want to focus on helping those companies succeed and grow by bringing our expertise to the table. So we decided that we should do our own thing. And here we are.

Add Guard Rails to your Clients’ Businesses

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JOSHUA FEINBERG: Awesome. So the focus of today's episode is on Bill.com best practices. But the first place to start is to tell our viewers and listeners how Bill.com fits in the big picture with Fringe Advisory.

 

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AARON BERSON: Yeah, sure. So we use Bill.com for our accounts payable automation and money movement. We use that and contacts on basically all of our clients when we are digitizing and making more efficient their AP process, right? And really making it where they don't have to be tied to the office anymore. They don't have to be signing checks manually.

We’re able to give them a lot more internal controls and a lot more visibility into what's going on near real-time, as well as being able to work remotely with them because everything's cloud-based. So that's where it fits in. We use it as part of our standard offering at this point for clients of all sizes.

 

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JOSHUA FEINBERG: So it sounds like it's a big part of productivity efficiency helping your clients modernize and to especially be relevant in times like we're in right now.

 

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AARON BERSON: Exactly. 

 

BELLA HOBBEL: And internal controls are important; that's one way that we can bring internal controls into businesses of all sizes. 

Cloud Technology Lets You Float When Everyone Else in Sinking

AARON BERSON: And with what's going on now. Like you just said, Josh. I think we had pretty much no disruption in servicing our clients or in their processes or anything with everything being the way it is. And despite all the changes, even with them being remote and us always being remote, we didn't have anything fall through the cracks, because everything just basically continued as normal, even though we had all this disruption that we've had over the last few months.

 

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JOSHUA FEINBERG: I think in a lot of ways, companies that were thinking about business continuity for more routine things like, if you're on the East Coast of the U.S., there's hurricane season; if you're in California you’re contending with the earthquakes; and the Midwest deals with tornadoes and flash fires and floods. This is definitely forcing a lot of companies to reinvent the playbook on the fly that hadn't planned ahead, but it sounds like you're quite a bit ahead of the curve and a lot of your clients should be, as well.

 

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AARON BERSON: Yeah. Fortunately.

To Reconcile Your Tech Issues, Limit Your Stack

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JOSHUA FEINBERG: It's good! Somebody's got to think practically about these issues cause a lot of them to get stuck in a day to day grind and don't necessarily think that far ahead. So the first place I wanted to start with Bill.com is what is your favorite tip that you would give to those who are just starting out using the Bill.com platform?

 

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BELLA HOBBEL: So my first tip would be if you're a beginner, go to your settings and configure settings. I think it's very important to set up both your email settings and notification settings. This is important because it's very easy to get your mailbox blown up by all the emails and notifications you get. And then you're like, ‘Oh my God, what do I do, why are they emailing me?’ It just becomes very frustrating and scary and a lot of users just forget about it. And they’re like, ’This is junk. I don’t want to hear it.’ And then they miss stuff. 

So that's one of the important things, and another very important thing that I want to stress is that if you choose to use Bill.com, stick to just Bill.com. Forget about paying all the other payment methods. I'm not talking about credit cards, but don't do Bill.com and then occasional wires or occasional checks because that creates issues for us accountants and it just starts chasing you; figuring out what's what creates double work, overpayments, or underpayments. So if you do choose it, stick to it and just make it your number one AP process. Use that only.

 

AARON BERSON: Yeah and I’d add to that - a tip for beginners in my mind.

 

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AARON BERSON: I mean, maybe it's not so much a beginner thing but sync with your general ledger or with something like Vic.ai, if you're using that in conjunction with Bill.com.

But make sure that you're clearing those errors that come up inevitably in a timely fashion, because otherwise, things don't flow through to all your different systems, and you might end up going through a close process and not realizing something wasn't recorded because of it. Or you might have reconciliation issues if you're not keeping everything in sync with one another because there's these errors where things couldn't push back and forth.

And also in the context of that, understand the sync and what's going on there so that it makes it easier to clear those errors as they come up. Unfortunately, it's just a side effect that working in the cloud, you have these connection issues that come up all the time.

Avoid Invoice Processing Over Communication Using Your Settings 

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JOSHUA FEINBERG: So it sounds like the first thing is getting tabs on what the communication cadence is going to be, and how many email notifications are going to come in. The second part of it is just once you've standardized on Bill.com, use Bill.com largely across the board. Make sure that you're clear on how your cloud accounting systems are going to sync with each other and be mindful of the kinds of errors that can come up.

What is normal, Bella, coming back to your advice on the email inbox? What's a normal number of messages that a typical end user client would see?

 

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BELLA HOBBEL: My recommendation is to go into the settings and see what's important to you, depending on what kind of user you are. If you're an approver, you want to get emails saying that hey, there's a bill ready for you to approve, because otherwise you miss it. And whether you want to get it after every bill was entered into the system, or whether you want to get an update just once a day, or once a week - that's up to you, depending on how many bills you process.

If you are someone who needs to pay - again the same thing, just get what's important for you. Do you want to get notified every hour, at the end of the day, once a day, or once a month? Just figure out your priorities for what communications needs you have and what kinds of emails you want to get. If someone changes something on the bill and you don't care, then just turn it off. Otherwise, your inbox will just blow up.

 

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AARON BERSON: Yeah, and to add to that, I think it also depends on how many invoices you're processing. If you're processing 300-400 invoices a month and you have it turned on where you're going to get a notification after each one is ready for approval, I mean, you're going to die of inbox overload, and that's where the summary emails really come in handy. 

And that's one of the nice things about Bill.com. You can set those summary emails to basically come in, whenever you want them - a specific day of the week and it will be the first thing in your inbox, or specific dates of the month. So on the 15th, on the 10th, on the 20th, you can specify the days of the month, or the days of the week for it to come in. 

So I'd say do that and then make that match your process for when you're going to be paying. That's your reminder to pay. It has everything you need to do and you don't have the overload of all the different invoices every single time they're ready for you. But then again, if you're only processing five invoices, maybe you don't want to follow a cadence. You want to process them as they're ready. So it's really as Bella said, it depends on your company and how you’re using it.

But  it's definitely something that you want to get under control; otherwise you will be overloaded really fast. 

 

BELLA HOBBEL: I'll say if you are principal of the company and you have people who

 

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BELLA HOBBEL: have access to bank accounts, and they do the payments, I highly recommend that you do turn on notifications when someone makes a payment. That way, you're kind of in control. And if you see something that's ‘off,’ you can catch it early on before the payment is released. I think that's really important.

Guide Clients on Technology Features Available to Them During Invoice Processing

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JOSHUA FEINBERG: So it comes back full circle to the idea of using Bill.com as part of your internal control systems. So those are some great tips for beginners and I know the two of you go to a lot of accounting conferences; I imagine from time to time, you share tips and best practices and war stories with power users. So, what advice, or what would be your favorite tip that you could provide to a power user of Bill.com and some things you've discovered over the years?

 

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BELLA HOBBEL: Awesome. My favorite advice is as a power user, you know what you want, and know what to do, and you know where the limitations are in the system. So always give feedback, always be in touch with the company, and give feedback for improvement for something that is there that shouldn't be there.

Also discuss what they don't have, but that should be like common sense, because they do listen and it's beneficial for both you and for them and for everybody else in the industry. To me, the most important thing is really having that line of communication and the software provider being open to listening to that feedback. 

 

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AARON BERSON: And then for, for me, my favorite power tip is to actually use the more advanced functions of the system. So many times people only use 20-40% of a system They don't use all the capabilities of it. For example, in Bill.com you have recurring bills that you can set up for things like rent. You don't have to wait for the invoice. You know it's coming in and you can automate that - you have your auto bill payment. So if it's approved, you can automatically pay the bill based on the due date or based on your terms. And you don't have someone actually approve it. 

And then one other thing that Bill.com does that people don't really use at all, is their accounts receivable function. So if you're really good with the AP function, expand into the AR function, because you can use it, as well. And it works great. We use it for our firm for AR and a few clients use it, as well. It's nice to have it all in one place. So I'd say to take a look at that, also.

Figure Out What Problem You Need Accounting Technology to Solve First, Not Last

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JOSHUA FEINBERG: So it sounds like the first part is just a general line of communication to be providing your clients with insight on how they can better use the platform. And then the second part is just being aware of the more advanced features like recurring payments and if they've never thought about it, using it for accounts receivable, not just accounts payable. Cool.

So regardless of whether somebody is new to Bill.com or an advanced power user - what do you see as the single biggest mistake that people are making across the board? Maybe it's something that gets improved in the product down the road. But in the meantime, you're just like, ‘Hey, wait a second. I just want to make sure that you're aware that this can come up.’

 

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BELLA HOBBEL: Again, going back to the users. It's ignoring emails - ignoring emails to enter the bills, ignoring emails to approve the bills, and the biggest thing that I hear from clients, especially about those who are new to Bill.com, is ignoring emails to pay. We've had a lot of clients through the years, and we've heard them say, ‘We started using Bill.com but the process is still clunky, because we've kind of forgotten to pay the bills or we don't know exactly who is the right approver, or we don't have that all set up.” 

And this goes back to Aaron's point- just set up the system properly, understand how it interacts, and understand who gets what notifications, who’s the approver, and who’s the payer. So that, to me, is the biggest mistake that I see people make. 

 

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AARON BERSON: I do a lot of work with other firms and talk to a lot of these other firm owners, both small through top 10 firms. And I'd say the biggest mistake that I see people doing with Bill.com, and I mean it's not unique to Bill.com, but it's really with any of these cloud systems, is they don't put enough planning and thought into how they're going to use the system upfront.

So adding to what Bella was saying, actually plan out your approval flows before you start using the system. See who's going to be in there, who's going to do what, and who's going to pay. Determine your payment schedule and your cadence there. 

How are you getting these invoices into Bill.com or into Vic.ai if you're using Vic.ai along with it? You need to get into digital form. Are you going to be able to get all your vendors to send it to you via digital? Do you have to have some other service or a person on the ground to scan things in? Do you have a scanner on premise for your client? We've run into that where they just don't have a scanner. Or they had one sitting in the corner, collecting dust, and they don't even know how to use it right. 

So actually plan the whole process, from the vendor sending through payment, and how it's all going to work together, both with your staff at your company if you’re the outsourced accountant, and through the staff at your client’s company. That's really where I see people thinking, ‘Oh, it's easy to set up. I’ll set it up and it'll work.’ It does its thing, and you don't realize that unless you do all these things, like configure it right and plan it through. It's not a magic bullet. It's not going to solve everything on its own. You need to give some thought to it.

Otherwise, that's where you get people forgetting to pay bills, you get people who aren't using it properly, things aren't coming in timely, and then they end up defaulting to the, ‘Oh, I need to pay a bill by this afternoon.’ And then they send a wire and now you get into Bella’s earlier point of how you're doing wires outside the system and sending checks and doing all these other things because you're not giving the proper lead time to pay bills, and you're not actually using it properly. So to me, that's the biggest mistake I see.

 

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BELLA HOBBEL: And that leads to issues, because if you have one department that makes the wire payments and every department handles Bill.com, but then the department that made the wire did not tell Bill.com that the bill was paid, and now it comes back and someone pays it twice, or something to that effect - which has happened with some of our clients. That's why it's important to just stick to one system.

When it Comes to Accounting Technology, Train Your Clients

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JOSHUA FEINBERG: So what I seem to keep hearing across the board is that there's a lot of best practices and institutional knowledge that the two of you have picked up over the years that just isn't widely known. So how does that factor into how you onboard new clients and your whole methodology for ongoing engagement? I guess in larger accounting and finance teams, they eventually figure a lot of this out, but in smaller companies, they probably need a lot more hand-holding.

 

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AARON BERSON: In smaller companies, I mean, really, with all of our clients, we do a lot of hand-holding upfront. We're investing in the relationship with each one of our clients, because we're not just going to do work with them for a month or two, in ideal situations. So I would actually say in the first two to three months, we're almost losing money on the engagement because we're investing into learning and training and educating both on their side as well as us learning their business, so that we make sure everything's fine-tuned for the way they work and the way they want to accomplish things.

Then we train all of their team members for how to use all these systems we put in place, how to use Bill.com, what that process is, giving them documentation, timelines, calendars, and all that fun stuff. There's a lot of hand-holding, especially during onboarding, and a lot of education because typically the people we're working with have never used a system like this. Or if they have, it could be they used it a year ago and with cloud technology, and how fast things iterate and how fast things change, they're not used to the newer version of it or the way that things work now. So I’d say it factors into that very heavily.

The Future of Outsourced Accounting Will Be Client Advisory, Not Billing

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JOSHUA FEINBERG: Excellent. So we looked at tips for beginners, tips for power users, and the biggest mistakes that people make. 

From the standpoint of Fringe Advisory, a company that does financial advisory services, outsourced CFO services, and outsourced accounting, client accounting services, when you think about the big picture business opportunity of where this entire space is headed over the next three to six months, or next three to five years, what do you think it looks like from a high-level CEO perspective? If these firms had somebody that was really like a product manager that was constantly thinking about how to iterate and improve on what their clients need most, where are we going?

 

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AARON BERSON: That's a tough question, but I really do think that, for people who are currently using Bill.com, the opportunity is really in making it a standard and making it almost a non-issue, if you will. So the fact is that we still talk about the software as Bill.com, as Vic.ai, as you know whatever other software we're using. 

But I think the real benefit is to shift away from selling software to our clients and focusing on selling the services, knowing that we have great partners like you guys behind us. And that you're improving on the technology side so you're going to keep that current and updated. But then just focusing on the human aspect, which is what we do a lot at Fringe Advisory, by asking: What are the actual pain points of your client, or of your team internally? How can you do more for them in the same amount of time or less? 

So as you automate things in Bill.com as you leverage other integrations into the systems - and we even build our own integration into a lot of these systems to automate more things that we can do - the opportunity is in that efficiency standpoint and then offering more services. Because once you're capturing or involved in all of these business processes, you can do things like cash flow management super effectively. You can do forecasting and budgeting and be prospective with your clients.

Helping them solve their strategic problems and not just being transactional with them is important. The industry as a whole is very transactional right now. Especially in the outsourced space, we focus on transactions, people price based on transactions – everything's about the transaction.

We shifted from hourly billing to transaction building. But that's all we've done. Everyone likes to say they’re value billing right now. But no, we're transaction billing. We're compliance billing, even though we want to say we're not compliance. But that's what people are basing a lot of their charges on.

So I think that the opportunity’s really in moving beyond that, into true advisory, true partnership with your clients. I mean, we call ourselves integrated advisors, because we want to be integrated into every aspect of the business, not just a financial advisor - an advisor. We want to be a team member with them. So I think really that's the opportunity - to move beyond transaction and compliance where we're actually stuck now, even though a lot of people don't want to admit it.

 

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JOSHUA FEINBERG: Change is hard.

 

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AARON BERSON: Yes, it's hard. And it takes a long time - a lot longer than people expect.

 

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JOSHUA FEINBERG: This has been excellent. I really appreciate the two of you taking the time to speak with me today all about your favorite Bill.com tips and the journey that Fringe Advisory is taking on. 

 

I’m speaking with AARON BERSON and BELLA HOBBEL from Fringe Advisory. If someone who's watching, listening, or reading this wants to learn more about the two of you or learn more about your firm - where's the best place for them to look?

 

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BELLA HOBBEL: So the best place would be our website https://fringeadvisory.co/ or LinkedIn - we’re there. Our contact information is there and we work 24/7 so feel free. Any questions - we're happy to answer. (Aaron Berson on LinkedIn | Bella Hobbel on LinkedIn)

 

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JOSHUA FEINBERG: It's the byproduct of the digital transformation. It never stops.

 

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AARON BERSON: Exactly, exactly.

 

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JOSHUA FEINBERG: It's important to have the technology to make sure it doesn't have to stop so we actually can still have lives and not have to be 24/7 all the time.

 

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AARON BERSON: The computer’s 24/7 - we get to sleep every once in a while.

 

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JOSHUA FEINBERG: That's important. Thanks so much, stay safe, and definitely keep in touch.

 

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AARON BERSON: Thanks for having us.

 

00:22:52.740 --> 00:22:53.610

JOSHUA FEINBERG: Really appreciate it.

 

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Topics: Bill.com, Podcast

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