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[Podcast] Outsourced Accounting Best Practices with Jason Warford of Harding, Shymanski & Co.

Topic: Podcast

In this episode of the AI in Accounting Podcast, you will meet Jason Warford, Manager of the Outsourcing Department at Harding, Shymanski & Company, P.S.C. in Evansville, Indiana. Jason has a wealth of knowledge for those who are new to client accounting services, and those who have been in the industry for a while and have hit a wall.

For example, Jason advocates building your tech stack:

[Podcast] Outsourced Accounting Best Practices with Jason Warford of Harding, Shymanski & Co.

“Just jump into all the tech available. We live in a very tech-driven world, and the modern accounting and finance function is no different. … Just stay on top of what’s there, because you’re going to be able to leverage that tech stack against somebody that may have not been keeping up with what’s available.”

What is the primary reason to keep up with accounting technology? Automation! In Jason’s words:

“You’ll encounter situations where the client is married to their legacy invoicing system, and it doesn’t communicate with your GL package. So, [you’ll have] to … download and upload information to the system … to do their accounting work. All that takes time, and there’s room for error. So, automating the data in the system allows you to spend less time on non-value-added tasks. ‘Become a data analyzer, instead of a data aggregator’ is my mindset. … Review the processes that you have in place, and if there’s manual stuff that you’re doing, there’s probably a way to automate it. … The moment you automate all your data … you win the CAAS game. You can elevate to that advisory role.”

Why should the client see you as an advisor? As Jason explains, it’s because you want to be “that one call”:

“Look for ways to be that one call. The client’s in a pinch, and are they going to call you? … To do that, you have to be … an advisor to them before they need to make that call, so they can trust you. … So, when they have issues, you’re the first call: ‘Hey, this came up. What do I do?’”

But can you achieve this during a global pandemic? According to Jason, it’s easier than you might think:

“From a global-pandemic standpoint, I think that … everyone has gotten much more comfortable in virtual settings. … Geography doesn’t matter, as long as people are comfortable with a remote, virtual environment.”

Listen to the episode in full to discover the importance of:

  • Investing in a diverse tech stack and dedicating staff members to learning it inside-and-out,
  • Training clients to reallocate their internal accounting tasks so that their data is in good hands, and
  • Elevating your firm to an advisory role by automating as many non-value-added tasks as possible.

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

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A lightly-edited transcript follows below:

Jason Warford:

Just jump into all the tech available. We live in a very tech-driven world, and the modern accounting and finance function is no different. We've been fortunate enough that we've been able to take over four or five clients in the last 12 months. Sometimes, in our sales cycle, we run up against getting someone comfortable with an outsourcing relationship, but we've been able to just leverage our tech stack and pull clients in.

Automated:

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. Joining me is Jason Warford, who is a Manager in the Outsourcing Department at Harding Shymanski in Evansville, Indiana. Jason, welcome to the podcast.

Jason Warford:

Thanks, Josh. I'm glad to be here. Appreciate the invite and always happy to talk about CAAS and outsourced accounting.

Journey to Outsourced Accounting

Joshua Feinberg:

Well, thank you, Jason. I really appreciate you taking the time to provide your input. The first place I think would be really helpful for our viewers and our listeners to understand is how you got to where you are in your career to be leading an outsourcing team at a mid-sized accounting firm or large accounting firm. Was this something you always wanted to do? Did you grow up saying, "Gee, I'm going to go to school to be an accountant, and I envision myself being in public accounting one day and working with lots of different companies"? Or did it happen by accident? What got you to your current role?

Jason Warford:

Yeah, so, maybe not a complete accident, but I started college out as not an accounting student and just morphed into that as I got more familiar with the subject matter and seemed to be halfway decent at it, and then pretty quickly got on the Big Four trajectory and ended up starting my career in KPMG's audit practice in the Nashville, Tennessee office and did that for a while, and my home is Evansville. I ended up working my way back home. Gave up the Big Four auditing and moved to a really small, niche firm here in the area. They did a lot of tax consulting with small businesses, and that's where I really started seeing the impact that a good advisor can have on a small business and working with Big Four and working with large corporations; most of the time, they've got a lot of policies and procedures in place to help them facilitate the financial function that your smaller, closely-held businesses don't have. Yeah, so, it was when I was working with this local firm is where I really realized the benefits that smaller businesses can leverage from a good advisor, and from a tax perspective, we were able to do a lot of things, but throughout the year, they were having to make a lot of business decisions without solid records to make informed decisions on, and that's when I started really seeing the light that what is now known as a “client accounting advisory service” could really provide. That's when I got in touch with the folks at Harding, and they already had this practice up and running and were looking for somebody to come in and really help continue to take it to the next level and to continue to grow it, and so that's how I came to become part of the management of a CAAS practice, and I would say we're a big local firm. We've got an office here in Evansville, and we've got an office in Louisville, Kentucky as well. So, we're not by any means a large firm by those definitions, but we have a lot of internal resources that give us the ability to be pretty siloed. I don't touch tax returns. I don't touch audits anymore. I'm fully dedicated to this CAAS practice.

Joshua Feinberg:

You work with small business owners. You're working with entrepreneurs all the time, so you can provide much more impact than you would if you were working on an audit team and a Big Four.

Jason Warford:

Yeah, and that's impactful. I don't have to take a three-month hiatus from serving those clients. Some firms have a toe in the CAS world, but yet their CAAS team is still responsible for serving audits and tax work, which causes a little bit of a burden to get that CAAS work done during those months where they're just inundated with, obviously, tax work and audit work the first three months of the year.

Advice for Growing an Outsourced Accounting Practice

Joshua Feinberg:

Yeah, no, that seasonality definitely makes a lot of sense, and I could totally see how it would be a huge advantage to clients to have that as a resource. The first big area I want to cover with you today is to understand what advice you would offer to someone that is building out a new outsource practice or CAS practice, what they should be thinking about in the first few months, the first few years, to set themselves up for success. Maybe it's a peer that you've met at an online conference, or, prior to where we are right now, in an offline conference; maybe someone you went to school with, and they reached out and said, "Hey, Jason, this just got landed on my plate. I have no idea what to expect." What advice would you offer someone in that role?

Jason Warford:

Yeah, I think a big thing is what I just mentioned. You need to make the investment, dedicate staff to it, and let them really focus all their energy on not only the work—the January, February, March statements. Again, some firms that don't dedicate resources; they get a little behind on staying in touch with their CAAS clients those months throughout the year, just because they're overloaded with tax and audit work. So, I would say, dedicate some staff; make the investment. Obviously, the revenue side will come. You have to make that investment on the front end to essentially take someone offline if they're already existing in your audit and tax practice and dedicate them to this, so they can get their head around what it looks like. So, dedicated staff is one, and then just jump into all the tech available. We live in a very tech-driven world, and the modern accounting and finance function is no different. We've been fortunate enough that we've been able to take over four or five clients in the last 12 months. Sometimes, in our sales cycle, we run up against getting someone comfortable with an outsourcing relationship, but we've been able to just leverage our tech stack and pull clients in. That decision's been made years ago, but they're working with a firm that is not necessarily incorporating and staying on top of the technologies that are available to run a CAAS practice. So, I would say, jump into the tech, learn it, and it changes; it evolves, but just stay on top of what's there, because you're going to be able to leverage that tech stack against somebody that may have not been keeping up with what's available.

Joshua Feinberg:

Yeah. I know with a lot of the people that I interview on this podcast; some firms actually do have separate IT teams that sell IT services out to clients. Obviously, they have their own internal IT support, but it's been amazing to me to find out just how IT-savvy and technology-centric a CAAS practice leader or CAAS manager needs to be. It's hard to imagine hiring someone for this role, and someone being successful that's tech-phobic or not constantly looking for ways to improve their efficiency with technology.

Jason Warford:

Yeah, our firm, we made the commitment. Again, it's an investment, but we hired someone in a role that we called “IT Project Specialist”. We're accountants. We're very up-to-speed on everything from a technical standpoint on the accounting side, and we've just learned that we have to be “accounting technologists”, which I think is the term a lot of people use. Now, I'm never going to try to sit there and say I know IT. That's why we have someone that's been in a networking-type role and understands how programs communicate, as we try to bring in more automation to the platform. A lot of the items that are available in the marketplace play nice together. Some don't, and so we've got him involved to where we can understand and communicate to him what we need out of it, and he can help fill in the gaps from a tech standpoint, but you're right. I mean, before we ever go to him—or even to a software provider—we have to understand what's available, and how it can benefit us, and so I think that the term “accounting technologists” is something that's going to continue to be used and become probably full-time positions in firms.

Advice for Getting Your Outsourced Accounting Practice Back on Track

Joshua Feinberg:

Yeah. No, that makes a lot of sense, and I'm sure it's going to filter into school curriculums at some point, as well, if it's not already. The next area I wanted to talk to you about is the advice for beginners focused on technology. Put the staff in place; be prepared to make an investment and make the technology strong, so you can onboard clients rapidly and efficiently—even during times of crisis—but what advice would you offer to someone that's been running a practice like this for several years, and things just aren't going great? Maybe they've had a lot of churn among clients. Maybe they've lost a couple of key staff members. Maybe their client mix just had a brutal year last year. Maybe they were especially exposed to hospitality or entertainment sectors that were especially hard hit by COVID, and they're feeling a sense of burnout. What would you tell someone like that to help them get back on track?

Jason Warford:

Yeah, so, for someone who's been doing this—and I came into this CAAS practice after it was off the ground, so I never had to launch it from scratch; a lot of those first things were done, but when I talk with people at conferences, and things like this—the common thread is “automating the data” because it’s not just, “Our firm has an initiative to be more advisory-related with our clients.” That's everyone's goal—or at least, it should be. So, I guess that's one, is looking for ways to be that one call. The client's in a pinch, and are they going to call you? Or are they going to call the attorney? And depending on maybe what kind of trouble; they need to call the attorney first, but we want to be that one call with our clients from a business sense, but to do that, you have to be able to be an advisor to them before they need to make that call, so they can trust you, and we've got a big push right now in automating the data into the system and letting tools such as Vic.ai—and we launched that seven, eight months ago at this point, and we're learning to leverage more of it, as more build out occurs, but our goal is to—automate the data by whatever means necessary, whether that's a tool like Vic.ai, or just having things happen more in the system, instead of off-system. You'll encounter situations where the client is married to their legacy invoicing system, and it doesn't communicate with your GL package. So, you're having to—at a best-case scenario—download and upload information to the system that you're using to do their accounting work. All that takes time, and there's room for error. So, automating the data in the system allows you to spend less time on non-value-added tasks. “Become a data analyzer, instead of a data aggregator” is my mindset, and that allows us to use the data in an advisory relationship with our client, so we can do more than just provide them with a P&L and a balance sheet every month. We're providing them with KPIs, and just insight into, “Hey, this looks a little off. Here's what I think it is,” and that's the client's homework for the month, and we got a pretty good use case on that just a couple of months ago. We had a client that was a pretty good biller for us every month and had a good relationship, but we took it to the next level, and, quite frankly, blew them away. We sat on a call with the Chief Operating Officer, and the husband-and-wife President-CEO team that owned the company. I hadn't heard the husband speak more than three words in two years since I've been working with him. We make the shift to not producing a P&L and a balance sheet and going through the traditional review. We make a shift towards thinking about, “What are leading indicators? What needs to be tracked? What needs to be monitored?”, and we started talking about their market share, and what their target market was, and just all these things that are not accounting-and-finance-related. They're consulting-related, but we have the data to digest and use in those conversations, and so we were able to increase that bill $1200-ish a month, and it's more fun work, but you can't do that work until you automate the data-cycle end, so you can analyze it on the back end and provide that insight to be that advisor. So, when they have issue, you're the first call: "Hey, this came up. What do I do?" So, that's advice from someone who's been doing it for a while, is review the processes that you have in place, and if there's manual stuff that you're doing, there's probably a way to automate it, and that always sounds easy. That's simple. “Automate it.” Well, then, the question becomes, “Well, what would I need to automate it?”, and that's where we're at. It's identifying what we're doing on those client jobs that's manual and trying to research and investigate how we can get away from it, and that's challenging. That's not easy. That's challenging, but the moment you automate all your data in; you win the CAAS game. You can elevate to that advisory role.

Joshua Feinberg:

Yeah. It seems to be a constant trend or aspiration among a lot of firms. I think some firms like yours, and some teams like yours, are doing a fantastic job of getting there, but I think sometimes, you're lucky that your client actually does have more share of the budget and can increase your services. Other times, the budget isn't going to grow for professional services for quite some time, and it's a matter of, “How do you make the best use of their budget?”, and part of it is by shifting your work from spending all the time on coding and data extraction to being able to free up their budget to really be the trusted advisor and the outsourced CFO that can deliver at a much higher level of value than just compliance.

Jason Warford:

Absolutely. We're doing nothing more than repurposing our time, delivering more value, adding services for their dollar. Absolutely.

Outsourced Accounting Mistakes to Avoid

Joshua Feinberg:

The next area I wanted to get your thoughts on has to do with new clients. When a new client lands with your team and they've come in the door—regardless of whether they were handling their accounting and bookkeeping internally, or whether they're coming from another firm—is there a common, single-biggest mistake that you see being made across the board with your new clients that takes some time to correct?

Jason Warford:

So, in reference to issues that we have when we onboard people? Or mistakes we've made in the past when we onboard people?

Joshua Feinberg:

More like you inherited. Is there a common mess that you seem to keep inheriting over and over again that you just wish if people knew, they could save themselves a lot of aggravation and set themselves up for better success before you even got to the point that they were a client of yours?

Jason Warford:

Man, we've seen some big messes. I'd say we've inherited technical accounting issues from prior folks that we've had to correct, but we're working through a giant mess right now, and I think this is the spirit of the CAS model, right? We've inherited a conglomerate that's about 10 entities strong—whole-office type of situation—to where the individual that had been doing it; someone got tasked with accounting duties that was not an accountant, and that was easy. “So-and-so, he's got time. He can do it.” Well, it's that situation when you're in grammar school and you say, "Can I go outside?" versus, "May I go outside?" He could do it, but he shouldn't have done it. So, that's a situation where I think that—from a giant-mess standpoint—is typically when someone could have saved himself a lot of heartache and energy by recognizing, “Folks, that may not be their skillset. This individual is still very valuable to the organization, just not a trained accountant.” Therefore, I mean, we inherited quite the rat's nest of entering into the accounting that hadn't been booked correctly, and so I think understanding there's an option to outsource that—and again, it goes back to a budgetary constraint, as you said earlier on. A lot of these entities don't have a big budget for an entire finance team, so they don't hire one, but I think as CAAS becomes a more “household name” as a public accounting firm offering—no one does their own tax return, from an entity standpoint—so, I think we're getting to the point where maybe down the road, no one does their own accounting because they can affordably offload that task to someone who is skilled and understands the subject matter to where they're actually getting a really solid deliverable each month, as opposed to something that doesn't make any sense. “Yes, the bills are paid. Yes, most of the time, cash is reconciled, but no, we never have a solid financial,” and if you don't have a solid financial, how do you truly understand where things are at and make decisions going forward? So, I would say, from a common-theme standpoint, there have been all kinds of other things we've inherited, but it's the situation where maybe someone by default was tasked with those activities that their time probably should have been spent at a much higher value-add to the company, doing what that person does well—whatever that is, whether that's marketing, whether that's sales, whether that's whatever as part of the organization. It just seems that oftentimes, that accounting or bookkeeping task just gets assigned to someone that understands it but maybe is wearing three or four other hats, as well, and can't quite make it all work.

The Future of Outsourced Accounting

Joshua Feinberg:

That was exactly the analogy I was thinking when you described that as “the small business where people wear so many hats”, and the accounting one could be a little dangerous to wear in the wrong hands. The final area that I wanted to get your insight on today has to do with your thoughts on the future of this business model. Do you see anything that's going on right now in outsourced accounting or being an outsourced CFO or CAAS that we're going to look back 12, 18, 24 months from now and be like, “Wow, that was the big inflection point where everything seemed to change”?

Jason Warford:

I think the situation we're now in, as from a global-pandemic standpoint, I think that organizations are having to be more lean, and so I think that instead of hiring that full-time resource internally with salary, benefits, everything else—you and I were just talking before we went live, Joshua; our firm, we were looking at a lot of remote-working technologies that we really got forced into doing something immediately, and so I've talked with people that are in that situation, where they all of a sudden had to work remote, so everyone's remote, and they've gotten comfortable with the accounting function not being down the hall, and so in addition to trying to run a little leaner; from an outsource standpoint, you're never down the hall—I think that everyone has gotten much more comfortable in virtual settings, and I think that's going to add to the rate at which CAAS becomes a much more common practice for organizations, as opposed to having an internal resource, for one, and our firm's looking at our CAAS practice as one of the biggest growth-drivers for our entire firm. We have tax-growth goals. We have audit-growth goals, but I think our target's a double-digit-growth goal. Obviously, when you set goals, they have to be attainable, and each of the last three consecutive years, we haven't had an issue hitting that target because there's that much of a market for it if you're doing it the right way, and so we're looking at it from really a service leader, as far as growing the firm revenues as a whole. You couple that with the market, looking at things like that a little differently, where 18 months ago, we had to work with someone on getting them to the point where, “Yeah, I can see an outsourcing relationship working, being virtual,” and I physically sit in Evansville. We have a Louisville office, and we've got clients all over the place in those markets, and outside those markets, and so geography doesn't matter, as long as people are comfortable with a remote, virtual environment to do your work, and then do it in the cloud, and so I do think that the pandemic—while it definitely caused a lot of problems and heartache from a cash standpoint—I think it may have sped up the rate of adoption a little bit.

Joshua Feinberg:

Yeah. They're saying five or 10 years of digital transformation in the last six or eight months. It's been pretty remarkable. Jason, where's the best place for someone to connect with you if they have any questions or thoughts or just want to share some best practices, and where's a good place for them to learn more about the great work that you do at Harding Shymanski? Are you active on LinkedIn?

Jason Warford:

Yeah. I've got an active LinkedIn profile. Anyone can feel free to find me on there. Our firm website is hsccpa.com. Feel free to peruse that and see what all we do. I guess CAAS is a big part of what our outsourcing department's future is, and, as a firm, in total, that's a big growth driver for us. So, I'm happy to get connected with anybody who may want to reach out and share some knowledge. I don't pretend to know it all. I'm still in that same bucket of trying to make myself aware of who's out there, who I can contact for what, and definitely still always trying to stay abreast of new tech tools. I tell staff virtually, once a month, "If you find something that you think works, let's talk about it, because if there's a manual process that you're doing, and you find a tool to replace it, then we probably want to. I'm not saying that we will. There may be some barrier there, but it's definitely worth investigating.”

Joshua Feinberg:

That's terrific. Thanks, Jason, so much for joining me on the podcast today. It's been super helpful to get your thoughts on the importance of technology, team process, focusing, making sure the right person is in the right role at client sites, and the importance of elevating your firm's role to be seen as more an advisor. Really appreciate your help with this.

Jason Warford:

Hey, my pleasure. Anytime.

Joshua Feinberg:

Thanks, Jason.

 

What's your favorite outsourced accounting tip? And what did you find most valuable from this podcast interview with Jason Warford? Let us know in the Comments section below.

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