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[Podcast] Outsourced Accounting Best Practices with Jeff Wilson at The W2 Group

Posted by The AI in Accounting Podcast on Feb 17, 2021 7:30:00 AM
The AI in Accounting Podcast

In this episode of the AI in Accounting Podcast, you will meet Jeff Wilson, Principal Owner of the W2 Group, based just outside of Washington, D.C. The W2 Group are experts at serving government contractors, attorneys and not-for-profits. They are QuickBooks ProAdvisors, and they pride themselves on their seamless, cloud-based approach to client services—which Jeff Wilson discusses in detail in this episode of the AI in Accounting Podcast.
According to Jeff, cloud technology is the best way to enhance your firm’s agility and flexibility in the social distancing era. He even explains how, thanks to the cloud, it’s now the best possible time to start your own practice—even in the midst of the pandemic:

[Podcast] Outsourced Accounting Best Practices with Jeff Wilson at The W2 Group

“I … consider this the golden-opportunity time for those that are going to start their practice. There’s probably no better time to start your practice because with all the technologies [like] vic.ai, you can actually be on par with larger firms. You can compete with them now … because technology is evening the field … the game is even now.”

But Jeff is not only a wealth of wisdom for those who are just starting out. He also gives some great encouragement to those who have been running their outsourced accounting practice for several years and are beginning to experience pandemic-related burnout. His best advice is something that he personally tells his staff: “Keep moving.” In Jeff’s words:

“We’ve hit some bumps in the road this year. Keep moving your feet. Keep moving. If you’re an expert … I think you can survive this particular storm. You just have to continue to be more innovative and really show why you’re the value-add.”

Listen to the episode in full to learn more about the importance of:
  • Being bold in your strategy when going after new clients,
  • Maintaining confidence and optimism during this difficult time,
  • Keeping up to date on current technology to be more innovative than your competition, and
  • Using your tech stack to your full advantage, so you can offer similar value to your clients as larger firms.
All this and more is discussed in detail in this episode of the AI in Accounting Podcast. To learn more about Jeff Wilson and contact him with any questions about client accounting services, you can check out his LinkedIn page.

 

Watch the Podcast Interview

 

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A lightly-edited transcript follows below:

Jeff Wilson:

When I started my practice, we had already decided we were going to be a cloud-based firm. Before it was a huge, popular thing, we already had decided virtual. Before cloud became a bigger thing for the rest of the smaller firms, we made that decision.

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. I'm being joined today by a very special guest. I have with me today Jeff Wilson, who is Principal Owner of the W2 Group, based just outside of Washington, D.C. Jeff, welcome to the podcast.

Jeff Wilson:

Oh, man. Thanks, Josh. I appreciate you having me.

Journey to Outsourced Accounting

Joshua Feinberg:

Well, I appreciate you making time to join us today. The first place I usually like to start out with these interviews is to understand how you got into accounting. Did you always want to be an accountant? Was this a childhood dream? Was it something you got into in college? How did you get to the place where you are with your practice today?

Jeff Wilson:

Yeah, I'm more of probably an economist/accountant. The way that I really got into accounting was really in college. I really went into finance. The stock market is really where I was really trying to go. Actually, like they say, accounting is the language of business. I've had this question asked of me a couple of times, so I feel like I may say, “Hey, I've heard him say this before.” It's the language of business, so in order for me to trade and invest, I needed to know accounting. I decided to take up accounting, just so I can really trade better. I had Wall Street dreams when I first started, Joshua. I actually graduated, and that's where I really wanted to go—to the finance services sector. My partner—who was going to KPMG at the time—was like, “Hey, you need to do one rotation as an auditor before you go to financial services,” and then I never got out of audit.

Joshua Feinberg:

Yeah, it's funny. I had a similar story—a little bit different—but I was an econ major in college—or at least, that's what I ended up graduating with. I was in accounting. I had an accounting concentration, spent a summer or two during college working in accounting offices. I did make it to Wall Street, but it was on the IT side. I did help-desk support, working for Merrill Lynch. Yeah, I got to see the sights, an interesting world.

Jeff Wilson:

At least, one of us got there. I actually ended up working at the Bureau of Economic Analysis, BEA. I call it the Bureau of Economists and Accountants. It's just something that's in the building.

Joshua Feinberg:

Yeah. I remember being on a stock market club in high school, picking portfolios, talking about Gordon Gecko, and going to visit stockbrokers on this.

Jeff Wilson:

Yeah. I still do a little trade to this day, but yeah, that's what really gravitated me to it. I think that has an effect on the way that I look at accounting, or I service my clients, as well. I have a more profit-first, analytical-accounting approach, so it gets interesting.

Joshua Feinberg:

Has your location settling in the DC area influenced the kinds of companies that you work with?

Jeff Wilson:

Yes. That's always going to be a really interesting thing in the sense that the D.C. area, it's very hard to get away from government—especially with the government so heavy. The most viable industries around are going to be those that serve the government—the largest employer—because the government outsources. That's really what it does. The government helps facilitate. They don't buy all the infrastructure, so your clients in the D.C. area are going to be particularly those that the government used to help facilitate. If you graduate from college, it's the same thing. There's industry jobs that may be government-contracting jobs, or you're going to work for the government. The government takes up a lot of resources in this area. It will be interesting once Amazon fully gets here, but it's really dictated. We have a lot of government contractors that are our clients.

Joshua Feinberg:

That definitely creates some interesting challenges. I know when I've done advisory and marketing strategy work with small IT companies, they'll often ask me, "What do you think about going after large, federal-government contracts?" They're used to working with small businesses, and it's night and day, the difference between selling to a small business, where you're their outsourced IT department, versus selling to the Department of Defense, the Department of Commerce.

Jeff Wilson:

Exactly. It actually from a firm owner perspective has an effect on how you will approach business. Are you going to just do small business, regular small business companies? Or are you going to take the approach that you're going to go after federal contracts?

Advice for Outsourced Accounting Practices

Joshua Feinberg:

Yeah. So, the first big topic I wanted to ask you about today is what would be your advice to someone that's just starting up a new accounting practice? They're wondering, “Jeff, what have you learned over the years that could potentially help me?" Maybe it's someone you went to school with; maybe it's a friend or family member. A year ago, it might've been over coffee. Now, maybe a virtual coffee. But what advice would you give them on what to be thinking about as they're building that practice up?

Jeff Wilson:

One would be, “Be bold.”

Joshua Feinberg:

Bold? Yeah.

Jeff Wilson:

Be bold in the strategy because we actually did something that was pretty bold, I think. It's not as bold now because the world catches up, unfortunately. In 2011, when I started my practice, we had already decided we were going to be a cloud-based firm. Before it was a huge, popular, popular thing, we already had decided virtual. Before cloud became a bigger thing for the rest of the smaller firms, we made that decision. I think that gave us a leg up for a long time because we created that culture, and we used it for a while.

Joshua Feinberg:

Yeah. No, it's interesting. Most of the people that I talk to now—with what we've gone through over the last year, with the pandemic—point to how the cloud was really instrumental in keeping their practice going and helping their clients keep their practice going. It almost seems like everyone got there ahead of time, but when you look at more of the macro-level, I think it's just a self-selection error. Someone that's years behind isn't going to volunteer to come on a podcast to talk about technology. They're going to be covering up the fact that “Oh, well, yeah, there's no PR marketing angle we're going to talk about that we got caught short this year because our clients were still passing things around with Post-It notes on them for approval.”

Jeff Wilson:

Exactly. I think that would be the first thing, being bold. That was really part of our first set of our strategy, really being bold and taking that approach.

Getting Your Outsourced Accounting Practice Back on Track

Joshua Feinberg:

Cool. What about someone that has been building up a practice maybe over the last five or 10 years, and they've hit some bumps in the road. This has been a super challenging year. If you have clients concentrated in some industries that were really adversely affected, it could be even more challenging and stressful. Maybe they're feeling a sense of burnout. What would you tell them to help refocus and get them back on track?

Jeff Wilson:

I would say, remember what I tell my team now: “We've hit some bumps in the road this year. Keep moving your feet. Keep moving.” If you're an expert in that particular industry, I think that you can survive this particular storm. You just have to continue to be more innovative and really show why you're the value-add, other than some other business you may be competing with, some other firm. If you're the true expert of it, I think that these are the times where you don't really want just the generalist bookkeeper, who can just tell you 1+1=2; you want somebody that knows the industry enough, has insight, knows how it's moving. Even the clients that are having a tough time, you're likely to still pick up work because of that.

Joshua Feinberg:

Yeah. I do see a big trend where most people are wanting to get deeper into advisory work and use technology to free up the time to be able to do that more, to help their clients at a higher level, who need them now more than ever.

Jeff Wilson:

Yeah, but what does “advisory” really mean? You can't just pick up an advisor on the industry. You have to get the research. It still costs time to learn about an industry. It's like an accountant who doesn't subscribe to the association, or the industry that they serve; how much do they really know? You need those things, so I think that's what I would tell them. Continue to deepen their understanding of the industry because their clients are looking for that value, that extra information, in a hard time. If you can do that, you will still win more clients in the backseat.

Joshua Feinberg:

So, they should keep moving forward, and be mindful of industries that they have some knowledge in because that can be incredibly valuable, to actually be the true advisor, as opposed to the aspirational advisor?

Jeff Wilson:

Be the true advisor. Saying “advisory services”, I think, is getting really interesting because people are like, "Well, now, I'm going to give you the KPI, and I know how the accounting industry goes." We're going to be like, "Hey, we're going to give you the KPI." The KPI, the current ratio, is not going to really help anybody do anything, but I know how we do. It's about those who can really help their client understand their cost structure, can really say, "Here's the trends in our industry. Here's where the worst and the best are,” and then be able to assist with that. Yeah, I think that's what you do. You keep your feet moving, and you keep growing yourself, your knowledge base in that industry and master that industry. I think a lot of times—especially in bookkeeping—no one mastered the industry. A lot of our firms would be a lot further ahead if we did that.

Joshua Feinberg:

I'm thinking, too, that with remote accounting teams and working from home, and now companies all over the country being a lot more receptive to looking beyond their local boundaries, I would also argue for more specialization because in the past, there may have been someone that said, "Hey, I specialize in chiropractors," or “I specialize in plastic manufacturers.” How many plastic manufacturers that are the right size to outsource all of their accounting are there, really, across our local region? There may not be enough in Minneapolis, but if now, it's the whole country, as opposed to just that, it changes the dynamic.

Jeff Wilson:

Exactly. We looked at a pool of associations before we would just look at one state. We have a system that pools, so we can look at all associations across because they are also a customer base for us. Technology has opened up the ability to get agile, for an organization to get bigger, an accounting firm to get bigger, using this technology. It's created these opportunities, too, but it still takes time. You may have to acquire an expert, but that's just business, right?

Mistakes in Outsourced Accounting

Joshua Feinberg:

Jeff, when you take over a new client, and they either were handling accounting and bookkeeping internally by themselves before, or maybe they were working with another firm, what do you see as the biggest mistake they're making that you end up having to fix as top priority, most urgently, before you can move forward?

Jeff Wilson:

The setup of the income statement.

Joshua Feinberg:

Income statement?

Jeff Wilson:

Yeah, and I'll tell you why. It's the chart of accounts. That's the real problem. When I look at it, I see a generalized business. That's it. It doesn't really provide any value. We've onboarded about four clients in the last month, and one thing I've always seen; I asked the client, "Quick, what's your margin?" They're like, "I don't know." I know they don't know because I can tell how the chart of accounts is set up. If they don't even know that, then I know no one's had a very analytical conversation with them about how their business really is operating—especially if the owner is getting paid out of that, too. Yeah, that's always the biggest one. The second one is if they've been using apps or technology. That's the second one.

Joshua Feinberg:

So, how they're using technology, and then how well put-together, how well thought-out their chart of accounts is, and whether it's actually feeding good information to know their true profitability?

Jeff Wilson:

Exactly. Yeah, their true profitability. Maybe they have their gross margins, net profit margins, because it's hard to do comparisons that way. When you do things like KPI comparisons, like benchmark comparisons, against others in in your industry, it's harder to really gather how well you're doing because they don't have it set up correctly.

Joshua Feinberg:

I guess having a significant concentration of clients in the same industry gives you an enormous edge, too, because you know what it's supposed to look like.

Jeff Wilson:

Yes, exactly.

Future of Outsourced Accounting

Joshua Feinberg:

Yeah. Cool. The final area I want to talk with you about today is to get your thoughts on what's going on now in the accounting industry that we're going to look back on 12 months from now, 18 months from now, 24 months from now, we're going to say, “Wow, this was the inflection point that really changed the future course of what it means to provide outsourced accounting.”

Jeff Wilson:

I think we've hit it already. COVID was it. I think it was the thing that's changed there. It's changed it, and it's accelerated it. It's accelerating at such a fast pace that the one thing I would say, this advantage sped it up. I think that this COVID era sped up the way that technology is being adopted, how fast it is. Because of it, it's changing the way we do our jobs as accountants. You're half-IT systems engineer and accountant, and I think that's really affected how we're going to have to learn. Tom Hood, he said a lot. He said we're going to have to learn at the rate of change, faster than the rate of change. We're seeing that influx of, “This is it.” Some people cannot learn that fast, and I think we're going to see that. We're going to have to learn a lot more things, and we're going to see that going forward.

Joshua Feinberg:

These changes, have they all been good for your firm? Have some of them been challenging for your firm? Has it been mixed, the acceleration of technology adoption?

Jeff Wilson:

For a younger firm, we've probably worked it to our advantage. We haven't been around 40, 50 years, so I think we're a little bit more agile and flexible, and we've been on cloud technology for a while. I, right now, consider this the golden-opportunity time for those that are going to start their practice. There's probably no better time to start your practice because with all the technologies, vic.ai, you can actually be on par with larger firms. You can compete with them now. You can almost get very close to them. Not better but good enough service offering because technology is evening the field now. There's a reason that large, big, full firms were trying to do the bookkeeping for a smaller business—because they know it's even. The game is even now. They went for the lower fruit, and they did that because of that, so that's how.

Joshua Feinberg:

Yeah, it's so interesting, how the cycles work. Three, four, five years ago, a lot of the large firms didn't want anything to do with this line of business at all. Then, all of a sudden, about a year or two, they go, “Wait. Actually, a lot of small businesses eventually grow up to be bigger businesses and actually need a lot of the services that are our core.” They're kind of looking at it.

Jeff Wilson:

Yeah. I think it's the golden age for a new, startup accounting firm. You also don't have some of the old habits. You can be technology-first. I think we're technology-first. I don't know if you recall; I don't remember when the words “tech stack” came out. It wasn't a thing until a few years ago, where it was like, "Hey, what's your tech stack?" You have to have a tech stack name. You go to some, honestly, some firms, maybe some of the older ones that they had leadership, they're not thinking about a tech stack. "We're just going to do this." It's like the golden age, from a startup standpoint. I'm really excited. I'm still excited now, just to have started just early enough to be in the moment of the technology, but it's great for somebody who's just starting up right now.

Joshua Feinberg:

That's terrific. It's a great time to start a practice, too—as long as you're open to using technology.

Jeff Wilson:

Yeah.

Joshua Feinberg:

Excellent. Jeff, what's the best way for somebody to learn more about you, to learn more about your practice? I know you're active on LinkedIn, right?

Jeff Wilson:

Yes. Yeah. LinkedIn, we're on Instagram. You may see me working in, working out. That's what I typically do. That's all I get to do. But yeah, LinkedIn is probably the best one. Yeah. We're on LinkedIn, Facebook, and a lot of Facebook groups that we're in. I like Facebook groups with other accountants, and stuff like that, just because I learn so much information. I've got to try to be really active on there and learn all I can.

Joshua Feinberg:

What's your website URL?

Jeff Wilson:

Website URL is wiicpas.com.

Joshua Feinberg:

Okay, great. We will make sure to link to that in the show notes with the podcast, as well. Jeff, I really appreciate you taking the time to join me today on our podcast. It's been super helpful to learn about your background, and how you started out in the economic side, how you've ended up growing your practice, being so focused on technology, being so focused on small businesses by nature of your location, working a lot of businesses that are selling to the federal government, and getting your thoughts on where we're all headed next. I really appreciate you taking the time.

Jeff Wilson:

Oh, man, no problem, Josh. I appreciate you having me. Thanks.

Joshua Feinberg:

Thank you.

Announcer:

Thanks for listening to this episode of the AI in Accounting podcast. To subscribe and leave a review, check us out at blog.vic.ai, or wherever you like to consume podcast episodes, including Apple podcasts, Google podcasts, and YouTube.

 

What's your favorite outsourced accounting tip? And what did you find most valuable from Jeff Wilson'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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