Automation and AI are common phrases across the CPA industry. While others believe things will be coming shortly, Summit CPA thinks the future is now. In this episode, Jake Grimm, Director of Technology, and Summit CPA COO Adam Hale join Jamie Nau for a deep dive into the tech tools they use to serve Virtual CFO clients remotely.
“They don’t feel like they have to guess while they grow. There’s a concrete plan.” - Jake Grimm
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Jamie Nau: Welcome to episode three. In our last episode we discussed being a distributed firm here at Summit CPA. Today I'm joined by Adam Hale and Jake Grimm to talk about what it means to be the firm of the future. This is a really important goal here at Summit so it's a great conversation. I'm your host Jamie Nau and I’m going be interviewing these two as we go through this. Adam Hale is the CEO and owner of Summit CPA and Jake Grimm is the Director of IT, here at Summit. We should have a really good conversation.
Jamie Nau: I'm excited to hear more about this topic. So, Adam let's start with you. What does it mean for summit to be the firm of the future?
Adam Hale: I mean first of all I really don't like the phrase firm of the future. I think I've probably been to 100 CPE events and webinars about firms of the future and every time I get on their it's all just kind of talking about you know consulting and all these different things about getting away from compliant services and for us I mean it just feels like something whenever you say firm in the future it's like something we're going to do 10 years from now or 20 years from now. Something like that. For us it's always been what are we doing now that we can make better in the foreseeable future. So, for us firm of the future means more of right now. I know for a lot of folks that are still kind of doing the compliance, they feel that anxiety whenever they go to some of these CPA events and they keep talking about all this stuff but it’s really what tax preparers have been doing forever. It's just a matter of trying to operationalize it and put it into a nice little service rather than just giving it away for free whenever you do the taxes. So, I can tell you for us as it relates to firms of the future it's really Jake. I mean Jake we have an IT director and by IT I don't mean like just doing dev ops stuff and helping fix computers and working on servers and things of that nature. We don't do any of that stuff. You know we're in the cloud, so we don't have anybody really working on that side of things. What he's doing is managing data and trying to make it super-efficient for us and also cute I like cute. We talk about that a lot. I want to make sure the dashboards look really good so that you know for our clients to be able to access real data that is both timely and accurate which is sometimes difficult to do whenever you're dealing with real time data. So that's what Jake's been doing he's been trying to put together dashboards for our clients because I really do think that's kind of the future of our consulting. Of course, this is one piece of it though. The technology is super important but it's the conversation that goes along with it because people are building all kinds of great tools and locking down a lot of what we talk about with our clients. So, it's not necessarily building the data or having the best software that's always going to get you there it's the conversation that goes along with it.
That I think is super important. And so, whenever I think about firm in the future or firm of the now it's just making sure that you're having those proactive conversations along with this new great technology that we have.
Jamie Nau: So, let's start down the technology path. Jake it sounds like you have a lot of pressure on you? You're the man to bring us into the future so why don’t you start and talk a little bit about some of the things we're doing on the technology stack and kind of some of the areas we're working in to make sure that we are going down this path.
Jake Grimm: Yeah sure. I mean Adam kind of hit a great point that I think we talk about a lot is you know a lot of the different deliverables that we've had in the past. We feel like you're going to be commodities in the future and that's not really the reason why we keep our clients. It is the relationships. It's a conversation, it is the forecasting side of things and how we kind of interpret that stuff that we have. We've been spending a lot of time making sure that as a team we, as Adam mentioned, we're going to be efficient with our time have really strong data and accurate data and timely data. Getting that in front of our clients as quickly as possible, so we can have those conversations really that's when we add a lot of value to our relationships. So, a lot of the different things that we've done from standardizing our tech stack is making sure that across the board for all the different clients we work with, as best as we can, we use the same platforms. We also use a lot of the different automation that we see out there to make it a lot more streamlined. So, a couple of examples we've used AI, we've created some bots that kind of run Excel files for us. That is a very mundane very repetitive process that takes a lot of time and using bots to kind of get that information quickly to our team, without them having to spend the time to do it. Going forward we're making online dashboards that are directly connected to our accounting software and accounting tools so we eliminate a lot of the accuracy issues that we might have if people are using Excel templates and just getting the data straight into an online dashboard. That one is a lot faster and a lot more accurate for our team to use. Those are the two biggest right now that we've been working on as its really along that area of automation and really trying to get a lot of the time spent of prep out of our teams’ hands and more into the review side of things just makes them more efficient as a team member for Summit CPA.
Adam Hale: I mean whenever you're talking about future. I mean that's a great point Jake. I mean in the future of Summit CPA I don't want to ever hear the word excel template anymore. I mean that is the most awful thing in the world. We built them with the purpose of we had so many little accuracy errors and you know not changing dates and having to update these things on our deliverables that the excel template served a huge purpose. We were able to download things, we didn't have those grammatical errors but then you end up with people overwriting formulas and it just became one of those things I think whenever we looked into it we were spending three or four hundred hours a month. You know, we had a couple team members of full-time team members just doing nothing but building these things. Like I said the reports they’re there, you know you can pull them out of traditional stuff. They need to be organized in a more productive manner for the clients to be able to you know because our job isn't really giving them the financials, it's interpreting them and helping them. So, we've built a lot of these templates and these dashboards to be able to help us tell the right story which is great, except for we lose a lot of our ability to think about the client which Jamie you know you and I talk about this all the time. We need more think time and you know less, I don't need somebody whose fingers I need their brain. So that's been a big focus for us. Jake's been instrumental in making sure that all that big data goes into a and the bots have been huge. Like he said you know having those bots move the data has been big for us, but he's also putting it into a gigantic database for us. Then to be able to use the dashboard and project it up. So, I think whenever you talk about your tech stack it's important to try to get on the same accounting platform like Cubillo or zero or whatever and going to an online version of that is definitely way more effective, way more efficient and it allows for a lot of these other things to connect to a might build dot is a great add on. I mean we can we can kind of talk through the tech stack a little bit if you'd like but really as it relates to being the firm in the future it's about making sure that you're cloud based if possible and you're connecting all these great tools and that's what Jake's been able to do for us.
Jamie Nau: I think on top of that you know a lot of people come to Summit, we hire a lot of really smart people. In any interview you do you always ask the question about Excel. Are you any good in Excel? Yes, I work in it all day long. Oftentimes when they come to Summit, they're like, wow I guess I thought I was good at Excel, like we really did a lot of Excel. Honestly, even though we have some of the best Excel people, I think in the industry, working for us we still moved away from it because it is just too many errors caused by it. I think we definitely made that move and it was a move that we hesitated, maybe at first, because we thought we got this down but now that we're making it you can definitely see the errors going away you can see the employee happiness is going a lot up because you're not trying to figure out these Excel formulas that take up six paragraphs to try to figure out what's wrong with something. So, I think it's been a big move for us for sure.
Adam Hale: Yeah, I think a lot of people hear about AI and think again it's something that's in the future but it's right now. I mean those robots that we're using Jake deployed those earlier this this last year they've been a huge help and times savings, but also just all the cloud-based stuff. I mean that's really, I mean Bill.com for example it will automatically enter the bills now. So instead of you know you being the inputter now your teams are the reviewer and there's a lot of value to being able to review as well and so is much of that work is you can push the better. So definitely making sure that you're leveraging technology and you're always kind of looking at the newest software that's what it's meant to Summit. We've done that from day one and we've went down the wrong path a couple times. You know we found some software that maybe didn't work but we're always up for looking and seeing if there's a better way to do things and not kind of getting stuck because we found something that works. There's always something a little bit better. A great example of that is Jake built a fantastic cashflow template so for us whenever we're doing forecasting you got long term planning and then you've got the short-term cash flow. For a lot of our clients we're managing their day to day cash flow meaning we're helping them determine when they're deposits need to come in, what's going out and they can kind of see the ebbs and flow from day to day. So, we built this super elaborate, Jamie I think you had your hands in it too. To me it’s an absolute nightmare has like 30 tabs on the bottom. It was painful for me to watch people update it. Now the team loved it and it was super slick to the client, but for me who maybe isn't as savvy in Excel.
It was painful. Jake went and found a software at one of the conferences that seemed to mirror kind of exactly what we were doing and with Jake's help they're starting to craft it into a more usable format. That's something that we can use, and our clients could leverage that's going to save us an enormous. I mean do you remember how much time you said that was going to save us alone?
Jake Grimm: I mean it was probably 15 to 30 minutes per client and we're talking about 50 clients. So that's on a weekly basis. I mean it's weekly so it's big time savings across the teams.
Adam Hale: And it's a lot slicker too. Not only do you just get done with whatever you're doing in the accounting package but then you throw it up to the client just instantaneously you're reviewing it with them. They've got a product that they can also interact with instead of this big clunky Excel spreadsheet which is what we're trying to accomplish with the financial statements as well because we are really heavy into forecasting. So, for us again not only is it on the technology side that we already just kind of walked down but Jamie, you know forecasting, I would say is also a big part of it.
Jamie Nau: Yeah. No, I agree. I think the one big part know just to hit on that point one more time and then ask a couple of questions about the tech stack as well. But I think one of the things that I really feel makes us the firm of the future, the firm of now is we're not afraid. You're not afraid to commit, you're not afraid to move on. You know talking about the cash flow tool. The amount of hours that was spent on that cash flow template was a lot, but once we saw a tool that was better we forgot about those hours and we just moved on to the next thing and it's similar with our financial statements. For a while we were using the bots, we were using bots to create our finance statements, it definitely saved us some time. But as soon as we found an online tool, we jumped right into it started using that instead of creating that. So I think that's one of the big things that makes you know, in my mind, this from the futures were not afraid to commit to something and then just move on.
Jamie Nau: So with that Jake I'd like to ask you a little bit before we go into what our tech stack is. Explain how you go about interviewing or talking to these potential tech companies you know I know I got an e-mail a week at least an e-mail a week of, hey you can use us for AP, you can use us for payroll and obviously we could be having a ton of meetings to talk to those, but how do you go about evaluating a potential tech partner?
Jake Grimm: Yeah I mean that definitely kind of depends on a lot of different avenues. The first part is really the cloud-based side of things. As Adam's favorite word, cute dashboards for like any of our products that we deliver. So I think anything that we're wanting to transition to you know being cloud based and having basically a dashboard view is important and also being able to give clients access into those tools so you know historical stuff of the past like Excel templates like that's not something that our clients ever had. It could interact with where we're looking for things that they can interact with what they need to because once again we feel like a lot of this stuff is being commoditized. That's not the value that we bring. They could go somewhere else and sign up for these things themselves, it's the relationship and it's the conversation that is driven by this information. So that's one of the things that we look at. Now that's how I look at first when I'm getting a bunch of different offers to kind of review something and there is a little bit of like for example even on a cash flow side. I had another cash flow tool that popped up probably three weeks after we started this new one. So, there's a little bit of a time difference to just making sure that I'm solving a problem and not just switching to switch. So, like that for example right now it's not something I'm interested in looking at because we're still in the implementation side of this other cash flow tool that we're pretty excited about. But, even then you know that probably a year from now if I see something else out there from a cash flow side I'm going to look at it a little bit more to see if there are items that are lacking in this other tool. If anything else, I'm just learning what type of things I might ask or can provider for. Like where I realize that we're missing this on your tools is something that you can implement. A lot of times we find that they are excited for that type of feedback and work with us to kind of get those things implemented.
Adam Hale: So, I think that's an important part of it to Jamie as we've always been kind of early adopters in terms of also trying to get on board with beta programs. So, there's several software’s that are pretty popular right now that we were in the early stages of. So, for us what it's been nice to be able to impact how the product is going to look. So, whenever you get into some of those early stage developers they're more apt to. There might be a little bit more fine tuning that has to happen, but they're also open to suggestions and you can kind of help you navigate what the end product is going to look like. We've done that several times. That's huge.
Jamie Nau: I agree. I think to Jake's point like a lot of companies I think a lot of people are hesitant bringing up those things. I know every time we've brought them up, they've been really excited to hear it and they are like oh really? Let's do work on that or you know let's talk through how they can do better. So, I do think it's really important to me not be afraid to ask that question because it's helped us more often than it's hurt us for sure.
Adam Hale: Yeah, we're constantly hitting Jake up with all kinds of things and sending emails to him so he gets them all the time. So, we just ignore half of them.
Jamie Nau: So, Jake I know you want to give an example of some of the tools we do use? You know again I know Adam has mentioned a couple but just to make sure you know there's a lot of CPA firms out there listening to this and again we're not endorsing these. But again we went through the process of choosing these and these are the ones that we found to be the best. Want to give an example of some of the tools we use and what exactly we use them for?
Jake Grimm: Sure. So, on the accounting side Bill.com, like to bill pay even invoicing perspective is has been a big one for us. We are a distributed team and we're also distributed with our clients. So, the ability to pay bills from a cloud-based perspective we could do it from our phones if needed anywhere that we might be located. We can hop in and review. It has a really great approval process just a really slick tool that also integrates to our accounting platforms you know. They integrate with Quick Books and Zero and get a lot of that information sent directly into our accounting software. We use Plan Guru. From a forecasting perspective really love that tool. We've been working with it for a long time and it’s just great to be able to do our planning with our clients from an income statement perspective but more importantly from a balance sheet perspective and making sure that we're building plans with our clients that they're excited for. On the cash side of things, we mentioned a cash flow tool produced by Phinograph called cashflowtool.com. That's a new one that we've been using from cash flow perspective that we're pretty excited for. And then you know dashboarding we use Kilipfolio to do a lot of our dashboard when we're working with clients and we use just simple databases to compile all that information that drives our online dashboards. Those are some of the biggest ones that I can think of. I don't know, Adam if you have any others that pop to your head right away?
Adam Hale: Yeah, I mean expense tracking is big for us so I would say Expensify and now you're starting to going to go down the road of Divvy. Sounds like that one might be potentially another option for folks on the Expensify side just tracking credit cards. You know the receipts and everything that's kind of the bane of our existence outside of time tracking so that toll has been huge. And then from an accounting perspective we're a little bit agnostic. You know we don't necessarily care if somebody is using Netsuite or Workamajig or SAGE. But we prefer those cloud based solutions like Cubillo or Zero only because they do have just some natural connectivity and a lot of people that are building tools out there that we find super helpful are connecting first to those. So, that's the reason why we usually try to gear people more towards that side in terms of the accounting software itself.
Jamie Nau: Yeah, I've definitely seen a shift a little bit more in that direction because as we started to use more of these tools that integrate with each other what they integrate with is really important to us. So, you know I think that for example the cash flow tool only integrates with Quickbooks and books online. So like you know if someone comes in with something different we have to say well okay great but you're going to get an Excel version of the cash flow tool and so it's helped us limit that a little bit more than we probably used to or in the past to say whatever you guys are using we're good and we're going to be able to do everything with it. So, it's definitely changed us a little bit.
Adam Hale: Jamie I'm disappointed though, you didn't mention your favorite software.
Jamie Nau: I was waiting for you to mention it.
Adam Hale: Oh no I don't want to take that away from you.
Jamie Nau: So yes it's something I have mentored recently on the operations side is a JetPack workflow. So that's obviously really important for us in terms of keeping our what we do on a day to day basis accurate but also more from an operating procedure standpoint. So, we've worked really hard on documenting everything we do but also having videos and directions behind everything we do. So, with a distributed team with everybody working on clients for a while where people felt like it was really hard to take a vacation or to be sick. You know, who's going to do this payroll for me if I'm sick? Now that we have everything documented and we have videos explaining how to do stuff it's really easy for me to take a day off and say Adam can you run that for me because we have things documented inside JetPack.
So, JetPack has been huge for us. And again, we're still in the process of implementing it. But again, we've been doing it for about six months now but it takes a while to get all those standard operating procedures documented but that is an ultimate goal of mine to have every procedure we do have a really good direction behind it. So yes, JetPack is definitely part of our tech stack.
Adam Hale: Yeah and to be clear that's not just a workflow tool. You know a lot of like Thompsons and all that kind of stuff will have the workflow tools we use Tello a lot of times if we need to do some project management that's another software that we use a lot but this is more for the standard operating procedures we wanted to come up with something that was a little workflow driven but was primarily like an internal wiki. So, like you said Jamie you know we could take vacations and people could find out exactly how to do things. So, it's all about process and making that super repeatable. We link those videos in there which is huge you know coming up with standard review Google Sheets. I think that's been a huge process for us as well. That’s something that's went a long way with the team.
Jamie Nau: And the standardization that JetPack allows. You know I think that's also the other part of it. It goes back to the standardization we talked about earlier as if we create templates of how we're doing payroll for a company or how we're paying bills for this company. I don't want anyone doing it differently every time. And so, we can create templates inside JetPack that OK these are the six things I'm doing for this client I can just go pull jobs from that template and be able to run them the same across all of our clients. Of course, there's little differences but for the most part we try to make it the standard as process from client to client as well that that also gives that ability.
Jamie Nau: So, we touched on this briefly the last part here. Let's just talk a little bit more about forecasting. So, the key to forecasting is obviously, Jakes talked a lot about standardization and our goal is to make the data as standard as possible make it as automated as possible, so we do have more time to think and talk about the client. I think one of the big parts of that is the forecasting aspect. So, Adam could you talk a little bit about how we forecast with our clients and what that process looks like?
Adam Hale: Yeah, it's really the nucleus of everything we do. So, you know we don't tell people that we can do their taxes better. We do taxes you know in terms of bookkeeping for some of our clients we'll do some of the back-office stuff so we do have those services available but we assume that we're kind of on par with everybody else. The one thing that small businesses, primarily those companies 2 to 20 million, don't get is somebody that's just really involved in the forecasting and the strategic planning of a company. Those bigger companies that have the CFO and they have the FEMA folks and all those different levels and departments they have the ability to do those things for a lot of small business owners that's just them and they have the strategy they have the mindset they know what they want to accomplish. It's our job to kind of be testing out on the financial side. So, we take those ideas and we flush that strategy out and we put together the business plan not only on an income statement standpoint but on the balance sheet. I think that's really the difference. Whenever I would talk to other CPA firms a lot of times, they would show me your financial forecasts and would be an income statement on Excel and then at the very bottom they would have you know like the change in cash. We all know all the action happens on the balance sheet anyway. That's like the true measure and there's a lot of moving pieces there. So, what we really liked about the software planning gurus specifically is it gave us that full picture of both the balance sheet and the income statement so we can kind of play those things out. From there it's just the art of deconstruction. You know you take it you break it down it's kind of like if you ever watched the fixer upper shows on TV where they come in and they're like okay here's the vision for the house let's rip it all apart let's put it all back together that's really what we do on the financial side. So, we'll go in we'll figure out what those revenue drivers are Plan Guru does a great job of letting you kind of like list all those drivers out to drive your income statement. Those are the things that we help hold our clients accountable to and really kind of measure out where they're at and where they're going.
Jamie Nau: Yeah so definitely the forecast is it gives us the ability to be true consultants. I feel you know if I understand a company's forecast and I understand where they told me they want to go it makes it a lot easier to answer those questions of what happens if I do this. What happens if I do that and I can plug everything back into the forecast so I'd love to hear an example I know you work with quite a few clients and have in the past work with you more clients, but if you could just give me an example of some of the conversations you've had because of the forecasts that have made you a better consultant.
Jake Grimm: I mean a lot of times with clients they have like three-year growth plans that they want to hit. So that's a big one that I've seen a lot. And so, having that kind of framework in the back of your mind as we kind of get into some day to day questions we kind of know like how does this how does this impact us to getting to this three-year plan? You know does this set us back as this kind of deviates from what we were initially planning for you know if so, how do we make adjustments to get back to that plan? One thing I can think of is a 2 million company says they want to be a five-million-dollar company three years from now. What do we need to get to we can we break all of our forecasts down. especially for service-based companies you know staff driven models. So understanding what kind of roles that we need to have you know designing ideal organizational charts with companies I mean those type of conversations add a lot of value for our clients so now they have an actual plan that we know where we have certain benchmarks we know we can hire these couple people and they really are. They don't feel like they're just trying to guess as they kind of grow you know they really have a plan laid out for them. I think that's a big one.
Adam Hale: Well and moreover I would say you know what was it? Mike Tyson said everybody has a plan, until you get hit in the face. Well that's life. As a business owner owning a business is an emotional thing. So, you have a lot of emotional reactions that the numbers are binary like it's black or white. So for us if you start with that base plan and you kind of walk through what the client wants from a strategic standpoint your kind of showing the roadmap in the path you know that's what we really do whenever we're doing forecasting we always kind of talk about hey if you want to if you want to retire if you want to go on a trip somewhere you've got to first figure out where you're going. Then we map out the best plan to get there. Well then what happens if there's road construction? You get detours. The forecast really gives you the ability to kind of map back and make that detour and get right back on path and where you need to go in having that information in your hands having that knowledge and the strategic plan and then accompanied by real time information. You're able to help the client make non emotional decisions that help get them back on the right path, and I think that is huge. I mean they really love the peace of mind on the front end but being able to get into the trenches and definitively tell them what they should or shouldn't do is huge. I think it’s a differentiator for us and not many others. I mean you could sure, you can say broadly yeah I think you should do this or it sounds like you shouldn't do that but we can point to it and draw it out and remap it and just a little bit of time. I think that's a big advantage.
Jamie Nau: Yeah. Definitely, I think the difference between a budget and a forecast is that something we explained very early on to our clients because a lot of clients feel like they're doing forecasting because they plan the year with a budget they go and so that's what we're going to do this year. But three months in when they hit that roadwork and they can't go that way it's like the budget is completely scrapped. They stop looking at it. So, I think just the fact that we're consistently there to update that forecast every month makes it much easier to consult with them and say, hey look let's get back to that then. What do we need to do? What does November need to look like in order to make this year right? And so, I think the difference between a budget and forecast is really important to our clients and that's one of the things we talk about right away.
Adam Hale: That's why I think whenever you say firm of the future immediately you start thinking about AI and technology and what I'm saying is that's permission to play now like you need all those things in there just to stay competitive to be able to offer real time information. There's a lot of data out there that needs to be organized into information. So turning data into information is what you use and then it's up to us to use the financial lens to help you navigate the path for our clients and I think whenever I'm thinking about what we do and how we're going to propel into the future that's what it's all about being super deliberate with the forecast and then leveraging the technology along the way.
Jamie Nau: Yes, so I definitely want to thank Adam and Jake for joining us today. I think that a really good conversation about this but in addition you know kind of the next steps. I think having this plan in place and having the firm of the future hiring is super important, so I'll plan our next episode. We're going to bring our HR guy on, and the plan is to talk through how you hire people that could pull these things off. So again, thanks to Jake and Adam for joining us. And that's the end of this episode.