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[Podcast] Jenni Huotari of Eide Bailly on Client Accounting and Advisory Services Best Practices

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

In this episode of The AI in Accounting Podcast, you will meet Jenni Huotari, the Partner-in-Charge of Business Outsourcing & Strategy at Eide Bailly, a regional CPA and business advisory firm based out of Fargo, North Dakota. Eide Bailly has recently transformed from a traditional accounting services group towards advisory client accounting services. The tech-savvy staff at Eide Bailly boasts the enhanced skillset and strong accounting skills needed to manage day-to-day client needs, backend technology, and compliance procedures.

Listen to the podcast to learn more about how Jenni uses the energy boost from incorporating new technology to eliminate staff burnout:

[Podcast] Jenni Huotari of Eide Bailly on Client Accounting and Advisory Services Best Practices

“I also think new technology, ingesting some of that, and pushing it out through our team, helps resurge some energy occasionally. There's a group of people that just really geek out on new technology, love to see how it works, love to have it implemented, want to try it with certain clients, and that'll spark some energy. … The energy is contagious, and one person's success leads to others, and eventually, we're all figuring out how to best use that new technology to serve our clients.”

Jenni also shares her opinion on the importance of automating technology for efficiency. She sums it up perfectly:

“You can't keep data up to date in spreadsheets and pivot tables. There's got to be some automated technology behind it that helps us serve our clients.”

Additionally, Jenni shares her views on the future of client accounting in a post-pandemic world:

“I think all of us that have been working in the industry now for a while are doing our part at shifting what client accounting is. … It's not about what happened in the past. It's not about historical financial information. It's about what's going to happen in the future, and we're using technology in order to give us some insight into that.”

In this podcast episode, you’ll learn the importance of:

  • Discovering your niche to become a more effective advisor in your area of expertise;
  • Keeping data up to date and accurate by using the cloud;
  • Automating lower-value tasks to free up staff time for higher-value tasks; and
  • Managing staff burnout with peer-to-peer discussions and the incorporation of new technology.

 

Watch the Podcast Interview

 

Watch on YouTube: Client Accounting Services Best Practices with Jenni Huotari of Eide Bailly

 

Listen to the Podcast Interview

 

Listen to Apple Podcasts: Client Accounting Services Best Practices with Jenni Huotari of Eide Bailly

 

A lightly-edited transcript follows below:

Joshua Feinberg (00:07):

Hi, I'm Joshua Feinberg from The AI in Accounting Podcast. I'm thrilled to be joined today by a very special guest. I have with me today Jenni Huotari from Eide Bailly. Jenny is the partner in charge of business outsourcing and strategy for Eide Bailly in Fargo, North Dakota. Jenni, welcome to the podcast.

 

Jenni Huotari (00:29):

Well, thank you for having me. I'm excited to be here.

 

Joshua Feinberg (00:32):

I'm excited to have you with us, as well, and the way I like to start these podcast interviews is to understand a little bit more about how you got to where you are in your career. Did you always know that you wanted to be in accounting? Is that what you studied in school? How did you end up in your current role at Eide Bailly?

 

 

The Journey From Auditing to Client Accounting

Jenni Huotari (00:51):

Well, I knew I wanted to be in business. When I was younger, I wanted to be the CEO of Nike, and that probably would have been an okay job, too, but when I got to college, and I was pursuing business, I was convinced to go into accounting by a professor that I had in Principles, and that was the start of that. I think that was a really great choice, and I appreciate that professor to this day for helping lead me there. Then I've been at Eide my whole career. So, I started as an auditor back in 2002 and did that journey for 15 years, working with primarily small-and-mid-sized business clients, a lot in the manufacturing and distribution sector, as well as nonprofits, and felt the pull to come over to the client accounting world and work with the same types of clients but just work with them in a different way.



Joshua Feinberg (01:42):

And so, how is your team structured today? What kinds of talent do you primarily look for? How are the roles kind of divvied up?

 

Jenni Huotari (01:54):

Well, we have a variety of backgrounds and skillsets. The bulk of our team was in place when we made that transition from a traditional accounting services group that served the CPA firms that we'd been doing for the century that we've been in business, and we've been making that transition towards the more advisory client accounting service that comes with that fractional controller and CFO talent. So, I would say an enhanced skillset, stronger accounting skills, much more comfortable in technology, and so we have skillsets all over from those that are helping handle the day-to-day client needs, recording transactions, to those that are experts at working with their clients and specialize in the industries that a large amount of our clients are in, and those that help on the backside, keeping all the technology functioning like we need it to, and then some of those that help on the compliance end, as well, and our resources for strong technical questions, and compliance procedures, and filings to help sustain the quality of our work.

 

Joshua Feinberg (03:03):

Have you gotten far enough along in staffing your team that when HR brings you a candidate, or they take you to an on-campus fair, or something in different times, and you meet someone, and you’re like, "You know what? This person would be perfect for client accounting, or outsourced accounting, versus auditing, or tax work, or something like that"?

 

Jenni Huotari (03:23):

Yeah, I don't know if it's completely to the point where I'm 100% accurate every time, but I do feel those strong instincts and pulls, when you see some of those candidates, and it happens from those who might be applying for us—whether out of school or from a prior position—or those that are already present within the firm, working within different roles, and you can tell by the way that they generally pull towards working with their clients, where they ask a lot of questions; they want to understand the operations on the audit side; they might be some of those that are less comfortable with the whole “materiality consideration” and really like to be precise and more accurate than that position needs them to be, and so we've certainly gotten some talent that was previously working in other parts of the firm and has felt the pull towards client accounting, just wanted to have a more in-depth relationship with their clients.

 

Joshua Feinberg (04:19):

Be interesting to see over the next couple of years, we've seen, in general, there's a big trend towards the branding, and the business model, and everything that comes along with client accounting services, outsourced accounting. It's going to be interesting to see in the next couple of years if it filters down to undergraduate accounting curriculum, to the point where you have professors building entire courses on CAS practices, as opposed to just being mentioned in passing.

 

Jenni Huotari (04:42):

I agree with that, yeah. It's an underrepresented service offering right now that, actually, so many are pulled into, and whether it's in this, or it's within industry. But yeah, we end up having to educate a lot of the new graduates that are coming out because it's not something that they've heard a lot about so far.

 

 

Advice for Building a Successful Client Accounting and Advisory Services Practice

 

Joshua Feinberg (05:03):

So, given that you've built, by most measures, a very successful CAS team, what advice would you give to a peer that you were talking to—maybe it was someone you met at a conference, or a virtual conference, maybe someone you went to school with, and you're having coffee, and they were starting up a practice like this—what should they expect in the first couple of years of building a CAS practice, and outsource accounting practice?

 

Jenni Huotari (05:25):

I think one of the things is to be okay with being wrong. I think a lot of the things that we thought we were going to do early on, or the way that we were going to go about doing them changed, and we were comfortable enough just gathering data and making decisions, and then changing what we had planned because it wasn't quite what we thought; it wasn't received how we thought it would be or didn't just flow and offer what we wanted, and that might've been from the technology that we were going to use, the process that we were going to follow, the industries that we were going to pursue, and we were okay with being wrong and just learning from that and changing the plan, changing the ship's course of direction as we were sailing.

 

Joshua Feinberg (06:07):

The key thing is being okay with that there's going to be course-corrections needed, being okay with making mistakes, and recognizing that needs change over time.

 

Jenni Huotari (06:16):

Yeah. Yeah. There's been a lot of learning lessons along the way.

 

Joshua Feinberg (06:20):

Does client practice vary, depending on the mix of clients you work with? I know you said you work with a lot of manufacturing and distribution companies, and a lot of not-for-profits. Do you think there's certain sectors, certain verticals that introduce more instability, more uncertainty than others? Or is it just the nature of the beast, with being committed to client accounting?

 

Jenni Huotari (06:43):

There are certain things that we learned along the way. For example, if you work with a client base that is open all the time, like restaurants, they'll present needs 24-7 because they're always on, whereas you work with a medical practice who's primarily clinic-based and is working in more of an 8-5, Monday-Friday structure, their needs typically follow more of that, and it's nothing that can't be handled. But just preparing the team and just being aware of the fact that you're going to get more contacts outside of the typical work hours, and they're going to have things that need to be responded to, and you need to be prepared for that, and then in some industries, they come with very industry-specific software that's more prone to be used by the client than we might see in others that are on accounting systems that we work with all the time and are really comfortable, and part of that has led us to some decisions of which accounting systems we can be comfortable working on and feel like we're efficient and effective for our clients, and that doesn't end up being every system, so in some ways, that can rule out some industries, as well.

 

Joshua Feinberg (07:50):

Yeah. I know when I talk with CAS leaders from other firms, one of the pain points that most feel and seem to have a fairly good degree of control over is standardization on supporting their preferred platform, their preferred tech stack, and I imagine that a lot of the ability to make that stick comes down to having a fair degree of consistency among your client base.

 

Jenni Huotari (08:13):

Yeah, and I think in a larger firm, we get referrals from so many different outlets from our partners and managers across the firm, and so it can be really hard to stay narrow with what you do and still feel like you're flexible to pursue some of those opportunities. In some ways, I think, "It would be so attractive to be part of a boutique firm," who they are what they are. They know what they're trying to be, and they're very defined, and that's not the situation in a large firm. But then we benefit from so many other resources. That's a great offset to that, as well. But you can get so distracted and bogged down by trying to be everything to everyone, and that would be one of my pieces of advice, too, is you've got to say no to some things. Not everything is going to be an ideal client—not that you don't want to work with and help every client. I think we all have the goal of seeing all of our clients be successful. But in some cases, they're better served by someone else because it's not using the technology or the process that you best serve your clients, and we need to be okay with not trying to be everything to everyone.

 

Joshua Feinberg (09:21):

So, if a prospective client comes to you, it seems like that's one type of letdown, to tell them that, "Hey, we're not a good fit." But how does the dynamics work when an internal stakeholder, when a partner, when one of your peers in the firm says, "We've been doing work for this firm for 15 years, and you're going to tell me we can't take on their client accounting work?"

 

Jenni Huotari (09:42):

It's a delicate conversation, certainly, and we weigh a lot of things, and there might be some that we would do, that we would continue to work with, that we wouldn't ordinarily because of a prior client relationship. But in some cases—I'll just explain from a pricing perspective, even—that we can't be an affordable option for them. Some might be. If it's an attest client, or an insurance client, and you're trying to maintain some level of independence, you could work with them and put enough safeguards in place in order to still be independent. But the safeguards end up taking up a lot of your valuable time you're not using for something that's better suited for that time. So, from a cost-benefit perspective, they're better off working with someone else because for the fees, they would get more actual accounting and advisory work than us spending time on the backside, adding in all the safeguards. That's an example. Or just learning a unique system to us. We tell our all referral partners we can work with them, but we don't know that system very well. So, when they have questions, we won't be able to answer them, or everything that we do in that might take us 25% longer than it should because it's just not inherent to us. It's not something we work with all the time. So, if they do find someone who is more familiar, it just might be a better fit for them. It might be a more cost-effective solution that actually produces a better product, as well.

 

Joshua Feinberg (11:07):

You ever been in a situation where you're looking at literally needing to bring on another full-time resource to satisfy one particular client? Or is it to the point where if you're making that recommendation already, it's like, "Hey, this is probably the person they should be hiring internally"?

 

Jenni Huotari (11:24):

And that's from a hiring perspective, Joshua?

 

Joshua Feinberg (11:26):

Yeah, yeah. I'm just curious; if a partner comes to you and says, "We really would like you to take on the outsource work for this client," and you look at what they really need, and from a capacity standpoint, it's like maybe the equivalent of a half a person, but from a skills and industry background, it's an entirely new set of requirements. Is that something where you'd sit down and say, "Hey, we would literally need to bring another person on the team to be able to handle this particular client"?

 

Jenni Huotari (11:50):

Yeah, and that's happened before, and it's been something that we've pursued if it feels like it's a strategic opportunity for us. We always talk about trying to avoid the one-offs, or the very unique opportunities, because we want something that we can replicate because then we can get really good at it, and we can be really efficient with it. But someone always has to be first. So, in some of those situations, someone comes in with a unique client, but then they'll say, "But there's dozens of them like this that we're connected to, and they can all use this help. So, how would we do that?" And then it becomes planning around how we would best serve that initial client, but then build around it so that there are opportunities for others within the industry, others who are a unique client like that, and that happens fairly often.

 

 

Tips for Established CAS / CAAS Practice Leaders


Joshua Feinberg (12:42):

So, I'm curious. So, we started talking about the best practices for someone that's building a new CAS practice. I’m curious; for someone that's been leading a CAS practice for five or 10 years, where it may feel like things are stalling out—maybe the team isn't as profitable as it once was, maybe the practice leader's feeling a little bit of a sense of burnout, and they're trying to figure out what to do to recruit—what advice would you give to them?

 

Jenni Huotari (13:08):

Yeah, I think that the whole “burnout” thing can happen occasionally. I always feel like all my batteries are recharged when we do have the opportunity to go to conferences, like you and I were talking about before, and see some of our peers and hear their best practices and gain energy from them. But I think pursuing something different for us, recently, it's been more of a shift towards industries where we want to align our talent, serving some of our prioritized industries so that we're really effective for them. When you spend time within the industry, when you attend their conferences, you read their thought leadership, you concentrate your business around that, we think we can be more effective and help elevate our skills, and our offering, which also then allows us to build backside product to serve those, and then to help continually improve that product because we're serving a larger client base with it. The advisory side, I think, is continually enhanced with that industry concentration. In my opinion, it's really hard to be an effective advisor to 10 different industries. We can concentrate that down. You actually do know that industry. You're invested in it. You spend time within it, and it's inherent: your understanding, and the advice that you're giving as a result. I also think new technology, ingesting some of that and pushing it out through our team, helps research some energy occasionally. There's a group of people that just really geek out on new technology, love to see how it works, love to have it implemented, want to try it with certain clients, and that'll spark some energy. I personally get a lot from seeing the team use it really well, and then share it and have it spread—hopefully, like wildfire, or somewhat close to that—where the energy is contagious, and one person's success leads to others, and eventually we're all figuring out how to best use that new technology to serve our clients.

 

Joshua Feinberg (15:09):

It's another really interesting trend that I've seen in a lot of the podcasts interviews, as well, is it seems like, to really be successful in client accounting services, it's generally people that are very comfortable with technology, and, in some cases, on the leading edge. If nothing else, they're like the right after the leading edge.

 

The Impact of Technology on Client Accounting and Advisory Services


Jenni Huotari (15:26):

Yeah. I think that's important, too. Technology has changed so much. I think—even in the last few months, as we've rolled through this pandemic, and we've felt our digital understanding and knowledge of both ourselves and our clients rapidly expand, as we had to be 100% digital in this environment—it's been important for client accounting because it's taken the shift from that after-the-fact client accounting, where we could have worked with any system and taken the financial information they had to date and just produced a historical financial statement. But now, the goal is to keep it up to date and keep it accurate. So, we need to use cloud systems so that we're simultaneously all working together—us, our team, as well as our client's team—and then we're trying to add automation for efficiency because we want to be able to spend our time on the higher-value tasks and add the automation to those lower-value tasks. I always think about, with our team, if our client could see you doing that, would they want to pay for that? 

 

And there are certain things that have to be done that they wouldn't want to pay for. It doesn't add a lot of value, but we know it has to be done to have accurate financial information. So, we pursue that type of technology, but then we also know they've got more complex items. They need to visually see their information. Forecasting both financial results and cashflow has been critically important the last few months, as our businesses, our clients have been filled with so many unknowns both for what's happening right now, and what the next year looks like. So, using some technology to help them see into more of that and help gain some comfort and just be prepared to make some of the decisions that will come up that are happening now, and that will come up in the future, is important. So, we do all of that with technology. You can't keep data up to date in spreadsheets and pivot tables. There's got to be some automated technology behind it that helps us serve our clients.

 

Joshua Feinberg (17:30):

Yeah, and that's a great way of looking at how just technology-centric CAS has become. So, one of the other areas I'm curious about is when you take on a new client, are they typically coming from having taken care of accounting and bookkeeping in-house before? In some cases, are they coming from a bookkeeping firm, or another CPA firm? And have you noticed any common big mistakes that you wish people would know about—regardless of the context where they came from?

 

 

Onboarding Clients Where Course-Correction is Needed

Jenni Huotari (18:00):

I think a lot of ours comes from those that have been handled before. It's clients where they had an office manager—oftentimes, a relative, or someone else already inside the business—that was handling it without the training and background to be able to do that, and then growth has just continued to escalate, and if they had stayed status quo, where they were early on, they probably would have figured it out and been okay. But with growth, it's just becoming unmanageable. The bank's unhappy. They're unhappy. They feel uncertain with the financial information that they have, which provides us the opportunity, and I think one of the takeaways from it for them has always been what a sense of relief that comes when you know that you have quality financial information, that you don't need to worry about that, and for us, it's for our clients to focus on why they went into business in the first place. You have a product. You have a service. You have clients that you passionately want to serve, and what this back office needs is a distraction from that. 

 

So, how much more advanced would your business be if you didn't have that distraction? If you could focus on why it is that you went into business? And for so many of them, it's just the stress relief that's removed from being able to work with a team who's dedicated to doing that, and for us, our “why” is to help our clients be successful. So, we go to work every day with the goal of removing that stress from them, so they're focused on their business.

 

Joshua Feinberg (19:33):

That sounds like it's a combination of recognizing just how much tension and pressure and stress it's adding, and then also getting them to see the opportunity cost of if you're spending 10, 20 hours a week on accounting and finance, that's 10 or 20 hours a week that you're not working on building your product, building your client base, serving your clients.

 

Jenni Huotari (19:52):

Yeah.

 

Joshua Feinberg (19:53):

And it's a challenge because, by default, some of these small business owners love to wear all the different hats.

 

Jenni Huotari (19:58):

Yeah, and it's hard to calculate opportunity costs. It's not as black and white, and that's the thing that we found for them. They're like, "Well, I can just do it all." But at what cost? What sale did it cost you? What new product line did you not have time to invest into? And it's hard to quantify. It's not black and white. You're not taking known numbers and calculating them out, and that's been the challenge is wanting to present that to our clients and tell them, “There's an opportunity cost for every deviation of your time. It's just figuring out what it is, and whether or not you're still willing to invest in that.”

 

Joshua Feinberg (20:33):

There was probably personal opportunity cost, too, where people are not getting enough sleep; they're not making time for a workout; they're not spending enough time with their family, with their kids, and feel like life is completely passing them by because they're trying to figure out how to be a controller, in addition to 10 other things they're doing.

 

Jenni Huotari (20:48):

Right? And burnout is real, and it happens to business owners, and you see the energy levels decline, and they stop paying attention to the right things, and they're paying attention to the wrong things, and what we need is for them to just be able to invest their energy in the right places, and then take some time for themselves. Yeah, you could do your accounting at 10 PM at your kitchen table, but you probably shouldn't. You should be trying to recharge your batteries.

 

The Future of Using Accounting Technology to Provide Better Financial Insight


Joshua Feinberg (21:16):

Yeah, no, that makes a lot of sense. The final area I want to ask you about today, Jenni, is your thoughts on what's going on right now in the accounting industry as a whole, the CAS business model, the outsourced accounting, outsourced CFO business model. What do you think is going to be what we're going to look back and see that this was a huge inflection point that changed the entire nature of this business 12, 18, 24 months from now?

 

Jenni Huotari (21:40):

I think all of us that have been working in the industry now for a while are doing our part at shifting what client accounting is. We're shifting it from that $75-an-hour bookkeeper down the street who's just recording transactions to that outsourced accounting package that gives you an opportunity to have fractional CFO-and-controller-level talent serving your business, when ordinarily that doesn't fit within your budget, and it's enhancing the level of service. It's not about what happened in the past. It's not about historical financial information. It's about what's going to happen in the future, and we're using technology in order to give us some insight into that. 

 

So, we're stopping the look back at what happened, and we're shifting to looking forward. I think we're at a time where, a couple of years down the road, we'll look back, and it will be hard to think that we relied so much on that historical financial information because we've now used technology so much to help us look forward accurately and insightfully at what will happen, and it'll be a shift. It will be a shift from the level of service, and the talent that serves that industry, and then the technology that we've used, and the outputs that it creates in order to serve those clients.

 

Joshua Feinberg (22:59):

Continuing to change, continuing to evolve, and figure out what gets the clients the best insight and advice. That's terrific. Well, Jenni, I really appreciate you taking the time to join me today and explain to our viewers, explain to our listeners how you got to where you are in your career, and your advice for those new to client accounting, those that have been at it a while and might need to recharge a little bit, your thoughts on some of the mistakes people make early on, and where the industry as a whole is headed. If someone wants to learn more about what you do at Eide Bailly or just learn more about how Eide Bailly approaches client accounting or wants to connect with you, where are some good places to reach out to you?

 

Jenni Huotari (23:42):

Yeah, certainly, you can find me via our website at eidebailly.com (Jenni Huotari) or on my LinkedIn profile (Jenni Huotari) or hit me up on Twitter @huotarijenni. I tweet about all kinds of random things: hockey, youth sports, women's empowerment, try to lay off the politics—especially this time of year—and then of course, client accounting, and other industry-related items. So, yeah, I love to follow along with the industry on Twitter. I think we do a great job of supporting ourselves out there. So, viewers should be out there, checking out the Twitter.

 

Joshua Feinberg (24:18):

I'm thinking in business, there's always so many great opportunities to try to draw parallels between hockey, basketball, baseball, youth sports, because there's so much team dynamics—especially when you look at how commercialized sports are, and especially the challenges that professional sports have been going through this year.

 

Jenni Huotari (24:37):

Yeah, yeah, exactly. It's interesting times for everyone.

 

Joshua Feinberg (24:41):

Yes. Well, again, I really appreciate you taking the time to share your insight, and all your school-of-hard-knocks knowledge. It's been very, very helpful. Thank you, Jenni.

 

Jenni Huotari (24:50):

Thank you for having me. I've enjoyed being here. Appreciate it.





What's your favorite Client Accounting Services tip? And what did you find most valuable from Jenni Huotari's podcast interview? Let us know in the Comments section below.

 

Learn even more about client accounting services (CAS) when you download the free report: The State of Client Accounting Services and Outsourced Accounting.

 

Download your free copy of The State of Client Accounting Services and Outsourced Accounting.

 

 

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