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[Podcast] Outsourced Accounting Best Practices with Tony Boschetto of KLR

Posted by The AI in Accounting Podcast on Nov 4, 2020 7:30:00 AM
The AI in Accounting Podcast

Tony Boschetto helps companies grow using their value and his expertise to lead their businesses to successful transactions. With over 20 years of leadership experience  growing businesses in various industries, Tony has even led a leveraged buyout of a $30M business, resulting in the strategic growth and eventual sale of the company. 

After receiving his Bachelor of Science in Business Administration from Boston University, Tony received his Master of Science in Taxation from Bentley University. Tony is also a Certified Public Accountant, a Certified Value Growth Advisor, and a Certified Merger and Acquisition Advisor. He has experience in accounting and CFO advisory, as well as financial, operational, and administrative management. 

[Podcast] Outsourced Accounting Best Practices with Tony Boschetto of KLR

Tony recently transitioned back to the public accounting market after working in the private industry in many roles, leading up to CFO. He found himself wanting to get back to public accounting to help privately-held business owners by using his years of expertise. 

Tony Boschetto is now a Partner at KLR Outsourcing, where he works with privately-held businesses in various stages of growth, using mergers and acquisitions, capital formation, financial modeling, corporate finance, capital planning, cashflow forecasting, and software and systems implementation. 

Listen to Tony Boschetto’s career experience and expertise from both the public and private accounting markets. Tony offers some great insight and best practices that he applied while building up KLR Outsourcing!

In this podcast episode, you'll learn how to:

  • Consider your options in the public and private accounting sectors;
  • Learn to be comfortable in business development ventures; 
  • Always put yourself out there in the marketplace to be open to new connections; 
  • Find, prioritize, and empower the talent that is out there; and
  • Educate and appreciate the value that accounting can bring to business growth.

Watch the Podcast Interview

 

Watch on YouTube: [Podcast] Client Accounting Services Best Practices with Tony Boschetto of KLR

 

Listen to the Podcast Interview

 

Listen to Apple Podcasts: [Podcast] Client Accounting Services Best Practices with Tony Boschetto of KLR

 

Highlights include:

  • “For many people out there—like myself a few years ago—I never thought transitioning my career back into the public accounting firm was even a viable option. More firms are starting to realize that there are a lot of valuable resources out there with a lot of experience and expertise that can bring a set of skills and services to the marketplace. Anyone who is in that position, I would encourage them to consider that as part of their career path.” 
  • “Get in the market. One of the greatest successes I have had is really being very active in the marketplace. I joined some various associations and organizations, where I can collaborate with other professionals.”
  • “As accountants, we generally like to be behind our desk, crunching numbers, analyzing or providing that client delivery. If you’re going to be successful—especially if you are going out on your own—you really have to get out there in the marketplace and make yourself a known quantity in the market and network with those people as much as possible.”
  • “The key is to consistently be out there in front of people. Never kind of rest. Our goal is for our client to grow and become self-sufficient, where we can transform them into their own staff/team of people. You have got to keep filling that funnel to keep the practice going. You have to consistently be out there in the marketplace.”
  • “Finding good talent. A lot of people in the industry are really good at what they do. When you’re leading the practice or managing the practice, you have to become more reliant or dependent on the skills and resources that you can bring to the table. Finding and empowering talent is something that I would probably encourage people to do.”
  • “While many see competition as a bad thing, I think I see it as a good thing. The more people in the market offering these services and delivering them, the more it will make businesses owners appreciate the need.”

 

A lightly-edited transcript follows below:

 

Tony Boschetto:

They're migrating to outsourcing from an internal resource. They've either outgrown what they have internally, or they have a great person internally, but they just have to supplement the team with a higher level of CFOs. So, that's more on one spectrum, which is more supplementing their accounting capabilities with a senior-level resource.

 

Speaker 2:

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:

It's Joshua Feinberg from the AI in Accounting Podcast, and I'm being joined by a very special guest today. I'm with Tony Boschetto from KLR and Providence with offices all over New England. Tony, thanks so much for joining me today.

 

Tony Boschetto:

Thanks, Josh, appreciate the opportunity.

 

Joshua Feinberg:

Well, you're very welcome. Now, the way I usually like to start out these conversations is to get a feel for how you got to where you are in your current role leading the outsourcing team at KLR, and how your team is built, how it fits in with the rest of your firm. Can you give our viewers a little bit of background?

 

From Public Accounting to Private Industry and Back to Public Accounting

Tony Boschetto:

Sure. Yeah, I can honestly say, after many years of my career, I never thought I'd be back in a public accounting firm. Early in my career, I started like many in public accounting, normal traditional audit tax consulting roles, and went into private industry, had the good fortune of working with the many different organizations and various roles leading up to CFO, some private equity-backed businesses, turnaround experience, and then had the opportunity to take a couple of companies through a transaction, and then work for a large global company in various operational and strategic roles, and a large part of my career doing M&A advisory buy-side acquisition work, and then wanted to get back into helping privately held business owners using all the expertise that I learned over the years, and I started doing some consulting and realized that the accounting industry really has started to transform itself and really was committed to helping provide consultative services to clients and found that KLR was a great fit for providing those types of services in the marketplace, and here we are today, and I am leading what's called an “outsourcing group”, but it is really around providing what I call “operational accounting”, helping business owners with their back-office accounting services, as well as strategic consulting, higher-level strategic CFO advisory services, as part of that kind of holistic suite of offerings.

 

Joshua Feinberg:

Yeah, it's really interesting when you said that you didn't think that you'd end up back in public accounting, yet when I speak to so many people in similar roles that are leading client accounting services teams or outsourced accounting teams, it seems to be a very common trend.

 

Tony Boschetto:

It is.

 

Joshua Feinberg:

In your 20s, right out of school, a couple of years in public accounting, going and spending the next five, 10, or 20 years, what have you, in private industry, and then, all of a sudden, you're an extremely valuable asset for a very traditional accounting firm that wants to work with a lot of entrepreneurs and small businesses.

 

Tony Boschetto:

Yeah, and I would say, for many people out there who, like myself a few years ago, never thought that transitioning my career back into a public accounting firm was even a viable option, I think more firms are starting to realize that, to your point, there are a lot of valuable resources out there with a lot of experience and expertise and can bring a set of skills and services to the marketplace. So, anyone who's in that position, I would encourage them to consider that as part of their career path.

 

The Role of Outsourcing at KLR

Joshua Feinberg:

So, how does your outsourcing team fit in with the rest of KLR? What other parts of the firm do you tend to work with most, where the peripherals go back and forth?

Tony Boschetto:

Yeah, so, we work very collaboratively. I see a lot of our clients we work with. Obviously, it is an accounting firm. We do perform assurance work and compliance. So, we have to be very, very respectful of the independence factors. So, we want to make sure we work those issues with our clients, but many of our clients have tax services. We have clients that we've brought in that have done some consulting in the past, but now they need a more robust set of skills, and the nice thing about being aligned with a firm of our size is if we're doing the client accounting services, and there's some level of accounting complexity, I have some great technical resources I can tap into. So, I leverage them as much from a knowledge base as I do from a client referral base. So, it's great to have that stable of resources available that will bring technical expertise that I personally don't have, or maybe some of our consultants may not have.

 

Joshua Feinberg:

\Yeah. I imagine that provides a big competitive advantage, as opposed to just a small CPA firm going after similar kinds of clients.

 

Tony Boschetto:

Yeah.

 

Joshua Feinberg:

So, this is relatively you getting back into an outsource role?

 

Tony Boschetto:

Me personally, or the firm?

 

Joshua Feinberg:

Yep. You personally, yeah.

 

Tony Boschetto:

Oh, no. I've been doing this here for probably close to four years. I started out on my own again with a large emphasis in my particular practice area, in the M&A space. So, I spent a lot of my time working with business owners who were actively looking to prepare their business for a transaction and/or going through a transaction or buying companies. So, that's where I spend a lot of my personal time is from my client directions, and the nice part about being with the firm is I have an opportunity to build out the practice with the breadth of consultants with different expertise. So, even though I'm leading the practice, I still do have some client responsibilities, which I enjoy. I like working with the clients, but I also share my time with identifying and finding talent that we can bring to our clients, as well as business development and finding new business opportunities.

 

Advice for Those New to the Outsourced CFO Role

Joshua Feinberg:

So, being four years into this role, what advice would you offer to someone that's relatively new to an outsource CFO practice or a client accounting services practice?

Tony Boschetto:

Yeah, I mean, there's a lot of great affiliations out there. I would say, get in the market. One of the greatest successes I've had is really being very active in the marketplace, joined some various associations and organizations, where I can collaborate with other professionals. I spent a lot of my time working with attorneys and investment advisors, investment bankers. So, as you probably imagine, Josh, is accountants would generally like to be behind a desk and crunching numbers or analyzing or providing that client delivery, but if you're going to be successful—especially if you're going out on your own—then you really have to get out there in the marketplace and make yourself a known quantity in the market and network with those people as much as possible.

 

Joshua Feinberg:

Has that posed any new challenges over the last six months during the pandemic? Do you find yourself gravitating more towards the more digitally savvy colleagues?

 

Tony Boschetto:

It's interesting. I'm fortunate. It's definitely changed. I mean, I was the type of person who would meet anyone anywhere, anytime, and I was on the road a lot. Obviously, that's changed. I'm fortunate that some of the organizations I participate in have done a really nice job providing virtual networks. So, like this, I've become very astute at Zoom, and so, two or three times a day, we'll be having Zoom meetings with colleagues and associates, just trying to get in front of people as much as you can in a virtual world. It takes a little getting used to, but I was fortunate that some of the associations I was with did a really nice job kind of facilitating that process.

 

Joshua Feinberg:

So, it seems like, at the core, being really comfortable in business development and client relationship management is a huge part of success in the early stages of building a practice like this.

 

Tony Boschetto:

I agree, and I will say, it wasn't something I was comfortable with at first. I was fortunate enough to have some people that guided me in that direction, and again, getting involved in the right networks took some time to really get comfortable doing that, and, over time, you get better at it, and you can develop those skills, and that expertise. But I think it's definitely a critical success factor. If you want to get out on your own and start your own practice, it's one of the things that you probably haven't been doing as much in your career that you really have to adapt to.

 

Joshua Feinberg:

Have you found that your network of professional contacts has led you to certain concentrations of industries or vertical markets?

 

Tony Boschetto:

Yeah, that's a good question. No, not really. Again, I spent a lot of my time in the M&A space. So, dealing with investment bankers or M&A attorneys has guided me more towards business owners that are looking to transition or sell or buy. So, I think that's been more of where my personal interests have been that have guided me in that direction. One of the things we probably could do better—and I think some people getting more involved in certain trade associations, if you do want to have an industry focus—finding a way to get embedded in some of those trade associations will probably help lead you more towards that particular industry versus kind of general networking groups.

 

Best Practices for Established Outsourced CFO Leaders

Joshua Feinberg:

So, if you think about someone that's had at least as many years of experience running a practice like this—maybe even a few years more—what tip would you offer to someone that's kind of found their legs already around business development and growing client relationships? What's your favorite tip that you’d offer to an advanced or highly veteran cast leader? And it's interesting because this business model as a whole—it's debatable exactly when it started; was it five, 10, 20?—the whole idea of “small business services” seems to be relatively new, but for someone that has been doing this a while, what's something that you figured out along the way you think that they'd find super helpful?

 

Tony Boschetto:

Well, I don't know if I figured it out yet, Josh. But I think the key is I don't think you can rest on your laurels. I keep talking a lot about being in the marketplace. I think you have to consistently be out there in front of people and never kind of rest. Even though we have a fairly good practice, and a great group of clients, we're always looking. It's a great consultative service offering for a client in accounting firms. As you're aware, many of my colleagues know it doesn't have the length of recurring revenue. I mean, obviously, some of our clients are longer-term relationships, where we're providing a full suite of back-office solutions, but many of our clients, I mean, our goal is for our client to grow and become self-sufficient, where we can transition them to their own staff, or their own team of people. So, you have to keep filling that funnel to keep the practice going, and you have to consistently be out there in the marketplace, and then I would say, finding good talent. I mean, I think a lot of people in the industry are really good at what they do, and when you're leading the practice or managing a practice, you have to become more reliant and more dependent on the skills and the resources that you can bring to the table, and finding and empowering talent is probably something that I would encourage people to do. You’ll build a much better, bigger practice if you have a breadth of resources available to bring to the marketplace.

 

Joshua Feinberg:

So, that brings up a really interesting question, too, is that if you think about the importance of prioritizing business development and getting known in the marketplace and thinking about being in the mode of always recruiting and building out talent, how does this get done today? If I think about early on in my career, I met a lot of accountants going to chamber-of-commerce meetings and networking events and cocktail parties, and for at least the last six months—and for at least the next several months—most of that is on hold. What kind of replaces that? What have you found to be effective?

 

Tony Boschetto:

Well, I mean, you're a technology company, so technology is taking leaps and bounds here. One of the things I didn't mention as far as the collaboration with the firms: I'm very fortunate in that we, as a firm, have an executive search practice. So, I have the benefit of having multiple recruiters in the marketplace who are actively sourcing talent for permanent positions, and that has allowed us to have a database of people. We spend as much time kind of knowing who's in the market, working at what positions, and so I've been very fortunate to have that skillset and resource available to me. But I spend a lot of time on LinkedIn. It's a great place to meet people and to identify resources and talent. There's other tools out there that are equally suitable. So, you got to spend your time with the technology and sourcing people, as much as opportunities.

Joshua Feinberg:

Yeah. I mean, that's the interesting part with beginning the relationship on a place like LinkedIn, as you know, kind of by default that the people that you're talking with are fairly tech-savvy, digitally friendly, which tends to align reasonably well with the staffing needs around most roles in these practices, too, is that outsourcing becomes more and more dependent on tech.

 

Tony Boschetto:

Yeah. Yeah.

 

When Firms Outgrow Their Internal Resource

Joshua Feinberg:

I guess so many people spend a lot of time talking about their technology stack, and what they're going to do, and the next steps in their increasing role. Just got a question: Do you typically take over accounts where they've never worked with an outsourcing partner before? Or do you sometimes take over accounts where they've worked with another accounting firm? And do you ever see mistakes that people are making that you just wish that if people knew better, they could prevent them?

 

Tony Boschetto:

Oh, yeah. That's a good question. A lot of our new clients, I think, it's more they're migrating to outsourcing from an internal resource. They've either outgrown what they have internally, or they have a great person internally, but they just have to supplement the team with a higher-level of a CFO. So, that's more on one spectrum, which is more supplementing their accounting capabilities with a senior-level resource. On the outsourcing, and the back-office operations, many of the clients have been working with maybe some solo practitioners, and they're maintaining their books and records on QuickBooks, but they really don't close their books until the end of the year, just for purposes of preparing a tax return, and they’ve really outgrown that, where they need monthly financials; they may need a budget; they may need budget variance reports, and they need kind of to elevate to the next step, and I'm very respectful of the long-term relationships, and so I'll work with them, and their existing accountant—if that makes sense—and we can supplement those services to get them what they need. But I always think it's important to respect those long-term relationships that they may have with an advisor, and it may not be that person's area of expertise to do the type of work that we do, but they do a great job at the end of the year, preparing tax returns or helping that client in that regard. So, we try to be respectful and work with them in that manner.

Joshua Feinberg:

What's usually the way that you're introduced to someone that is looking for an outsourced CFO relationship, as opposed to more complete back-office outsourcing? How do you know?

 

Tony Boschetto:

Yeah, usually it comes with some sort of pain point, right? Someone's left the organization; they suddenly realized they had a gap in what they were getting; they may have had a new banking relationship, where suddenly the bank needs them to provide debt covenant requirements on a quarterly basis that they've never had to figure out what to do in the past. So, usually, there's a particular time in their business lifecycle, or a pain point that will say, "Hey, I need more than what I'm getting today," and in those circumstances, a referral may come from a banker; it may come from a lawyer; it may come from their existing accounting firm to say, "Hey, you've got to find someone that can do this for you because you don't have those capabilities internally." So, usually, it's those types of events that get them to think that they need to do something differently. You asked earlier about what type of secrets I could offer people if I had a secret sauce or a magic that would get privately held business owners to value their accounting department more and appreciate that making an investment in their accounting department would actually help them grow their business. I'd like to do that more. I mean, you had talked earlier about when did this practice area really start? And I think, for firms, it probably started a few years ago, but I think if you go in the marketplace, and you talk to business owners, they're probably not even aware that it's as available as it is in the marketplace. I think educating business owners is probably one of the biggest challenges that this industry is going to have to really grow into the future.

 

Joshua Feinberg:

Yeah. We actually did a small research study and put out a report on this about a year ago, and one of the biggest challenges that CAAS teams were facing was educating and managing expectations and getting clients to really understand what it's all about, and the strange part is that there certainly should be some parallels. Most of these same kind of businesses are probably used to outsourcing IT services to a evaluated reseller, or managed service provider, or something like that, and many of them are used to working within an attorney for small business. Many of them likely have a relationship with an insurance agent. They may have a relationship with an outsourced marketing firm, but it seems like the nature of it, and it's not so much that they never worked with a CPA firm before. I don't think in a lot of cases they really ever thought that this was even possible, and it seems like with what we're going through right now, it looks like this whole business model is primed to accelerate.

 

Tony Boschetto:

Yeah, I hope so. I hope you're right. It's interesting because I think, unfortunately for the industry, over the last many years, the CPA industry, the accounting firms’ products have really become commoditized, and where I think if you looked at the firm 20 years ago, they probably would have been a partner in an accounting firm, in addition to providing tax, and maybe even audit services, and probably was the trusted advisor to that privately held client, but because of the necessities of the commoditization of the products, they have kind of moved away from really providing that level of service, and it's nice to see the industry coming back to offer that level of consultative services, but I think it's been kind of an evolution in the industry. So, I don't think business owners truly valued the steer CPA firms as being—I hate to use the word “trusted” advisor—but I don't think they value the services as much. I think it's become more commoditized. So, I do think it's going to take some education to get them to appreciate what a real strategic partner can bring to them in their business.

 

The Future of the Outsourced CFO Business Model

Joshua Feinberg:

Yeah. No, that makes total sense. Where do you think we're headed now? Where do you think, if you look at where the idea of outsource CFO services, client accounting services, what are we going to look back on 12, 18, 24 months from now and say, "This was the big thing that made the biggest difference in where that whole category of service is existing"?

 

Tony Boschetto:

Yeah, that's a good question. I don't know. I don't know if there's any one particular point. I think things like this—and, to your point, the fact that the industry as a whole is really educating the marketplace—I think the more that's being done, I think the more it will grow the market overall. Unfortunately, I do think the challenges we're facing today—between the pandemic and everything else that's going on in the business challenges that business owners are facing—unfortunately, I think that's going to force them to really understand the need for strong financial information, understanding of how to analyze their business more effectively, looking more proactively at the future, cashflow analysis. So, unfortunately, I do think—while this is a difficult time we're going through today, and I think business owners are going through; some are succeeding; others are struggling—I think it will force them to look a little bit more closely at how they manage their business, and the types of systems and tools and information they're getting, and how they can better manage their business in the future, and hopefully they'll understand and appreciate the investment there that they need to be better prepared for the future.

 

Joshua Feinberg:

And I mean, from the perspective of looking at the kinds of content that people are sharing online, and the webinars, and similar kind of content they're doing, it seems like a big core group of people got an express MBA on the PPP and the CARES act earlier this spring—whether they were planning on it or not—out of necessity to help clients, like, literally keep the doors open. So, yeah, it would make sense that's going to be a wake-up call for those kinds of businesses. But yeah, so much is, like, how do you get clients to see the value of it? And much the same way, trying to get someone to understand the value of making investments in different facets of their business and planning for contingencies.

 

Tony Boschetto:

Right, right. I agree. Yeah. So, I think there's a bright future. I'm encouraged by this. Obviously, the opportunity to talk to you and other firms. I'm encouraged by the fact that I think it's one of the concepts that “rising tide raises all ships”. So, I think the more the industry is out there talking about it, the more it becomes commonplace, and business owners appreciate it, I think the easier it will be for myself and firms like ours to grow the practice. While many see competition as a bad thing, I think, actually, it's a good thing. I think the more people in the market, offering these services and delivering them, the more it will make business owners appreciate the need.

 

Joshua Feinberg:

Yeah, and it definitely creates a lot more category awareness, which is one of the more important areas. Tony, what's the best way for somebody to learn more about what you do and KLR outsourcing and learn more about you? Are you active on LinkedIn?

 

Tony Boschetto:

Yeah. So, I'm on LinkedIn every day. I think that's a critical piece to staying in front of the market, and both connect to people and clients. As a firm, I'm very fortunate; we have a fairly robust marketing group. We publish a lot of our own materials. We issue newsletters. So, klroutsourcing.com, and if you're in the New England marketplace, and you want to join me for a networking group, let me know. I'm happy to introduce you to some of the other associations that I participate in. I do believe in collaboration and meeting with other professionals and helping others, as well.

 

Joshua Feinberg:

Well, one of my personal goals is by getting all of these best practices together and making it possible for people to learn from each other, I'm looking forward to, as things normalize and people go back to conferences, someone coming up to you at a conference six, 12, 18 months from now, and saying, "Tony, I know you; I watched your interview. Thanks for sharing that great tip on prioritizing getting out of the marketplace and building a relationship with a trusted advisor."

 

Tony Boschetto:

Yeah. I appreciate that, and I hope that's true. I just hope it's not 12-18 months. I'm hoping it's closer to like 3-6 months.

 

Joshua Feinberg:

Knock on wood. Yeah.

 

Tony Boschetto:

Yeah.

 

Joshua Feinberg:

That's all you can do. Can't accelerate the vaccine fast enough. Normally this would be a time of the year where I'd be up in your neck of the woods in Boston. I usually am up at the big HubSpot conference, which is almost always in August and September, and this year, no JetBlue, no Boston Seaport, but maybe next year.

 

Tony Boschetto:

Yeah. I think the hotels are missing out on all that, the leaf-peeper season. It's a beautiful time of year. People want to get out.

 

Joshua Feinberg:

It's usually a very appreciated break from the heat and humidity in South Florida to spend a couple days in downtown Boston this time of year. But yeah, Tony, I really appreciate you taking the time to share your best practices on what you've learned from growing KLR outsourcing. It's been super helpful.

 

Tony Boschetto:

Thanks, Josh.

 

Joshua Feinberg:

I wish you all the best, and let's definitely keep in touch.

 

Tony Boschetto:

Absolutely. Thank you. Appreciate the opportunity. Thank you.

 

Joshua Feinberg:

You're very welcome.

 

Speaker 2:

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 Tony Boschetto's podcast interview? Let us know in the Comments section below.

 

Learn even more about outsourced accounting 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.

 

Topics: Podcast, Client Accounting Services Best Practices

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