Hello, everyone.
I'm Geni Whitehouse
speaking with you
about how you can help your
clients weather the storm.
So we're in some very, very
interesting times right now,
and so I'm here to
talk to you about what
we can do to really form a tight
partnership with our clients.
It's our role as
accountants to really add
more value than we
ever have before,
especially when
times are difficult
and when we're in, sort of, a
fluid environment these days.
And so now is the time
for us to really embrace
the partnership opportunity
that's in front of us.
And again, our clients
need us now in a way
that I don't think
they ever have before,
and it's time for
us to really shine.
So our clients
are running around
in a lot of cases trying to
figure out where to focus.
There's so many
things coming at them.
I mean, just think about any
single aspect of the period
that we've been going
through, and hopefully we're
going to come out on the
other side relatively soon.
But think about
just the challenges
and figure out what to do with
payroll, what to figure out
with all the PPP loans, the
idle loans, all the government
incentives, the law changes
that have applied to tax.
I mean, of course, they're not
wrestling with that like we
are, but they know
they're things
that are different than
what they used to be
and so they're trying to
find their way to better
decision-making.
And that's where
we as accountants
who have decision-making
tools, powers, and abilities
can really apply those skills
to help those clients figure out
where to stop the bleeding.
The cash might be flowing out.
They might be having challenges
with their own customers
making payments and
things like that.
And so we really have to
step into the full authority
that we have as accountants
and really embrace
the advisory space and the
role that we can provide,
because they need us to.
We can't sit by the
sidelines anymore.
It's our time to shine.
And so if we're going to do
that, it requires us to shift.
And I'm an accountant I'm a CPA.
I work with wineries in the
Napa Valley part of the time.
I have a bookkeeping
business that's
based on QuickBooks
Online, and I'm
also a speaker and
writer and author
and do a bunch of
different things.
But in all of that,
it comes together
in a way that requires me to use
different aspects of my brain.
I have to in an advisory role
be willing to think differently.
And as accountants for wired for
same as last year and checklist
based and linear thinking, and
so it's very difficult for us
to shift some of our approaches
that have been in grade year
after year in the
way that we operate,
the way that we deliver
service to our clients.
So the first thing
we have to do is
think about a different
mindset, and again
that's a challenge for us.
And then we're going to talk
about some new tools that
are going to help us in
some way shift the mindset
and also shift our
client's mindset as well.
And then we need to
apply some new skills,
and we might need to
just leverage the skills
that we already have.
But again, it's
up to us to really
help our clients find their
way and to invest the time
and energy to try to
make this transition.
So the first step -- and again,
I think this is the hardest
part.
It's a mental shift
that we have to make,
and that is a mindset change.
And this is where we start.
We started and this is
maybe my nerdy little brain,
and I've got to go
into my own brain
and start giving
myself permission
to not have all the answers.
And that's really difficult,
because we expect ourselves
to be able to swoop in with our
golden lasso or our red cape
and provide all the answers
and to solve all the problems.
And we think that we have
to become the experts
in everything in order
to be true advisors who
can help our clients succeed
and improve their results.
And in fact, the truth
is the opposite of that.
Our role if we really
want to be advisors
is to help them become
their own experts.
Most of our clients --
I mean, I'm in
the wine industry,
and I'm originally
from South Carolina.
So you think I'm
an expert in wine?
I know where to buy the frenzy
in a box, the big things
with the stopper and
you put it in the fridge
and you just put
your cup in there.
That's my wine experience.
So do you think there's
any possible way
that I can show up in
wine country moving here
from Atlanta and present myself
as an expert on a business
that I don't even understand?
I can't pronounce much
of what these folks sell.
So you know if that
was my approach,
I would have failed miserably.
And somehow I knew that
what I needed to do instead
was to bring one of
my core strengths
to bear, which is not
that I'm a basset hound
but I am but just
curiosity, my ability
to go I don't know
why you're doing that.
And when you walk
into an environment
where you don't have
preconceived notions
or you don't think
you know everything,
you're much more inclined to ask
different questions and really
the good questions.
They might appear dumb and
you might feel, kind of,
afraid to ask something.
But I'm not going
it all the time.
And I think by not claiming
that I know everything
and asking those questions,
we're bringing new insights
to bear for that client.
And so again, the more
questions that we ask,
the more we allow them to
tap into their own knowledge,
the more they elevate
themselves in our eyes,
and the more they
value what we do.
So it's, kind of, the
opposite of what we think.
It's that we are about
bringing this perspective
to those clients.
And that's what we bring
as external accountants,
our exposure to lots of
different businesses,
to lots of different
tools and applications
gives us insights that
we can share and gives us
again different questions
that we can ask.
And one of our native strengths
as accountants is inquiries.
It's part of what
we do as auditors.
It's part of what we do
as tax professionals.
We are skilled at
interviewing techniques,
and we're naturally good
at listening and also
more listening, less talking.
Again, the basset hound
has pretty big ears.
That's why it's
one of my symbols.
We should be doing more of the
ears and less with the mouth.
We should be listening
as much as we can,
and that's how we really become
a partner in that client's
business success.
It takes a lot of this,
grits y'all, a lot of grit
and determination for those
clients to just keep going day
to day.
I mean, we feel it in
our own environment.
It's really kind
of exhausting just
to deal with the
logistical activities
that we have to go through day
after day, much less the work
stuff and all the paperwork
and all the other things
that we have to
monitor and manage.
And so it's our job to support
them and be as responsive as we
can and help them have the
energy to apply their grit
and determination.
We really need to be
supportive to these clients who
are struggling day to day
with all kinds of things
and not just show up again
at the end of the year
when all the pain and suffering
has already happened for them.
So that mind shift, you
have to embrace that first
and then you can start
looking for tools.
And sometimes the
tools can actually
help us change our minds,
and it's one of the things
that I discovered
in my own journey.
So I was a partner in
a CPA firm in Atlanta.
I started with Deloitte in tax.
I did a bunch of tax rolls.
I spent 15 years doing tax, and
eventually made it to partner
in a tax firm in a
CPA firm in Atlanta,
a small firm doing tax.
I also did computer
consulting with clients,
and I was frustrated
in the tax role
by my inability to really have
an impact on those businesses.
And I would sit down
with these clients
and help them improve
their business
and work through processes
and transactional stuff.
And then I would go
back to the office
and do tax work, which
is totally unrewarding.
I'd have to tell somebody
bad news 90% of the time.
And so I left.
As soon as I made
partner, I realized
that wasn't where I belong.
I went into technology.
But it was finding
technology that
allowed me to have a
conversation around the metrics
that actually helped me
change the mindset that I had.
And so from those tools
that I discovered,
I went in search of a
methodology that would support
the technology that I found.
And that's where I found my
way to what really changed
my life as an accountant.
I found a toolkit
called Mentor Plus.
And there a bunch
of tool kits now.
I mean, Mentor Plus
this was in early 2000,
and I found this when I was
working for a software company
because I was looking for
training around advisory
that I could use to supplement
the technology that I
was trying to talk about.
And I would just --
when I saw this toolkit, I
was just like overwhelmed.
And why didn't I know about this
when I was inside a CPA firm,
because this is
exactly what I needed.
I needed a methodology I could
follow that would guide me
through this stuff that I
hadn't really done before,
how to have conversations around
things that I didn't know.
And so I needed a roadmap,
and I think we all do.
Now when I started, there
weren't very many tools
or roadmaps or
even people talking
about how to do advisory.
They've always been talking
about that we should,
we should, we should, but
there aren't many tools
that say here's what you do.
Step one, step two,
step three, step four.
And that's what I needed to have
the confidence to really start
doing this with my clients.
And so the Mentor Plus
methodology is about --
it's called Level 5
advisory services.
And it's about taking us from
this traditional hindsight
perspective, this
historical view
that we bring to
bear as accountants
and moving us into this
foresight proactive
perspective where our
clients need us to be.
And so it's a journey
of that, and it really
starts at where we're most
comfortable at Level 1 which
is the core traditional
accounting services
and moves us into a, sort of,
kaizen continuous improvement
process offering service
that we can provide.
And so along the way, there are
tools, there are methodologies,
there are presentational
decks that you can use.
It's a complete package
set of everything
that you need to know in order
to be an advisor all providing
different levels of
step-by-step guides.
Many of them are still a little
more conceptual, and the reason
that this one works for me is
because its hands on stuff.
It's not just here's why,
and that you need to do it.
It's here's how.
Here's how you start.
And here's how this looks
when we're doing client.
So I want to share
this with you.
You can take it and use it.
You can apply this with whatever
else you're already doing,
but it gives you some guidance
into what advisory really
looks like.
And I'm doing this every day
when I'm working with wineries,
and I can tell you that it's
just mind boggling what you're
able to do just by having
the competence to ask
these kinds of questions and
knowing that you have something
that you can apply to help.
So pick something that
works for you, whatever
methodology that might be.
If this is one you're
interested in, reach out to me
and I'll be happy to
tell you more about it
or work with you on it.
So here's how this
works, and I'm
going to show you some tools.
Again, these are
tools that you can
apply with or without
the methodology,
but I want you to see
the kinds of things
that we need to be doing at
each level of client service.
So the first level is
really the core step
where many traditional
firms have stayed for life.
This is where we are --
this is the bread and butter
of the accounting profession.
This is where traditional
firms spend most of their time,
and that's in
building the, sort of,
core financial technical
foundation around bookkeeping
accounting.
We used to call bookkeeping
write up back in the olden
days, accounting
services where we're
doing a financial
statement prep, an audit.
And all that stuff,
compilations and reviews,
the tax return services,
and some of those skills.
But what I'm here to tell you is
even at that level of service,
there is more that
we can be doing.
Even if we do nothing
else if we continue
to offer core traditional
services and not
depths of advisory
services, there
are things we need to do to
make what we provide more
relevant to our clients and
to make it more proactive
in terms of what we're
able to show them.
Level one is still a very
historical perspective.
We're looking at what happened.
We're counting the dead
bodies on the battlefield.
We're not preventing the
deaths before they happen.
And so our role
has to become more
about this proactive
here's what we see
and here's what we
need to do about it.
But still at this
Level 1, I want
you to think about
how we can communicate
the financial information
in a way that resonates more
clearly with those
clients, because that to me
is our biggest challenge
as a profession.
It's our inability to
communicate what we do in a way
that the value of
those services can
be appreciated by the clients.
And tools like the ones
I'm going to show you
are going to help you bridge
that understanding gap that
keeps us from getting the value
that we so desperately deserve.
We are doing a
service for the world.
We're powering the economic
engine of this planet
through the information that
we have at our fingertips,
and it's our job to
enlighten those people depend
on this data so that they
can do what they need
to do to keep employing people.
If this economic engine
breaks, that nobody
is going to have
ability to survive.
We're powering the businesses
that power the payroll.
And you see how
important payroll
was when the
government's first choice
of funding to get to people
was through small businesses.
They funded the businesses
to fund the employees.
So it really heightens
the connection,
the importance of
these businesses
to keep us all
going successfully.
And so it's our job to
support those folks in doing
the jobs that they are doing.
So this is part of
[QuickBooks Online] QBO now.
I love that they've integrated.
There's this whole business
performance aspect that's
part of QuickBooks Online.
And this is my
sample winery that we
use for all of our case studies
in my CPA firm, Le Cou Rouge
Winery.
It has its own website
and everything.
And so it gives me a bridge,
and this is one of the things
that I've discovered is
that breaking down the fear
is the first step to getting
somebody to listen and learn.
And so this view is a great way
to just introduce your clients
to some of the aspects of what's
going on in their business.
And most the owners
from my experience
are not looking at what's
happening in QuickBooks Online.
They're relying
on somebody else,
and they're not
engaged with what's
happening because
they don't really
want to see a
financial statement,
black and white
numbers on a page.
But this view will tend to
appeal better to that owner.
So whether it's --
and this is in the
accounting only view here.
So you need to bring
it up on your screen
and then share that in
as in meeting with them
and just talk about some
of the stuff that you see.
Now most of the owners are
going to intuitively know
this is going on, so they're
going to go yeah, yeehaw.
But it might give you some
conversational guidance here.
What happened in this month
that made, in my example
here, March so bad.
And let's talk about what it is.
Is it something we
can work on, or was
this just an aberration or let's
talk about what's going on.
And maybe we can
make some decisions
about what needs to change.
So this is at Level
1 core counting.
All we're doing is bringing
up this business performance
screen and bringing
information to that owner
in a much more visual way.
And the goal is to
open the dialogue.
It is not again to
come in and swoop in
and say, well, you need to
fix that and fire so and so
and cut that.
It's where do you think
you can tweak some
of these aspects of
your business to achieve
your financial goals.
If you're going to have that
conversation, of course,
you need to know what
their financial goals are,
and that's one of the questions
that you should be asking them
as well.
The next thing I would
advise still at that Level 1
at the core basic
financial stuff
is a review of our chart of
accounts for that client.
This is a service that many
of us do if there's an issue
or if they come to us and say
I need to find better insights,
but I think we should be
driving a chart of accounts
review for a client.
And that starts
by asking them are
you getting the
information you need
from your financial reporting.
And in most cases,
those owners are not.
They're probably going outside
of the financial statements
and presenting data
in a different way,
in an Excel spreadsheet or
somewhere else because they
aren't used to -- they aren't
getting the financial insights
from that P&L or from
that balance sheet.
And one of the problems I
think we have as accountants
is that we create a chart,
a financial statement
output that works for us.
It's GAAP compliant.
It looks pretty according to you
know all the balance sheet is
lined up in order of liquidity.
That's fine.
We don't want to mess with
that balance sheet stuff.
But the P&L we do
for our standards,
it can be as
summarized as possible,
because we don't want
to see all that detail.
But if you're a business
owner, we need to use classes.
We need to break it
out by department.
We need to pull out all
the revenue categories.
We need to do different
things for that P&L
in order to make it more
managerial in nature
versus GAAP compliant
or FASB specific,
which meets our
requirements but not theirs.
We need to make sure
they're not doing
tax basis accounting,
which is the worst
way to manage a business.
And so just sitting
down and saying let's
look at your financials.
Let's look at your
chart of accounts.
Let me ask you what of
this matters to you?
What are you using
day to day to see
if your business is on track?
I always ask that
question, and it is never
I'm running the
P&L. It is always
I'm running something else
that I don't get from my core
accounting, or from
my accountant I'm
doing my own thing over
here and that may or may not
tie out to what we're
doing over at accounting.
So we think we're doing
all the great stuff,
because our bank
statement reconciles
and because it's GAAP
compliant and EBITDA
is where it's supposed
to be on all that stuff.
But it's useless to that owner.
So our job is to find a
bridge between what we need
and what they need.
So ask them what is the
most relevant insight
that you look to,
and most of them
might say the bank balance.
And if that's the case, then
make sure that's highly visible
and they can track
that over time.
Create some graphs
that work for that.
So find out if the information
that they're getting
is supporting their needs
for insight in a business.
And again, as an advisor
that should be our goal.
What insights can I make
visible and available
to you that are timely,
relevant, and then accurate.
The third requirement
especially in rapidly changing
environments like
we're in right now
timeliness and relevance
are 10 times more important
than 100% accuracy.
Now I'm not encouraging
you to do sloppy work,
but I'm encouraging
you to get it out
there faster than you normally
would even if it's not perfect
and say these are not final but
I wanted you to have something
to look at while we're still
working on whatever we're still
working on.
There's always something
that's still being worked on
from my experience.
So that's Level 1.
Core stuff, if you
do nothing else,
just think about more
service delivery value
that you can deliver
at that level,
and how you can get insights
in the hands of these owners
faster than you normally
would in a non-fluid kind
of environment that
we're in right now.
All right, Level 2 and we're
still moving from this accuracy
focus to this
relevance focus. we're
moving from hindsight
to foresight
as we work our way through
different levels of service
that we can provide
to our client.
Level 2 is when we
start to move out
of that standard
traditional mode as a firm
and we start becoming more
proactive in what we provide.
So there are two aspects
of this section of Level 2.
There's this, sort of, insight
and analysis perspective
that we want to share.
We really have to start
educating our clients.
That's again, one of
the biggest failings
that I think we
have as a profession
is that we tend to use our own
knowledge as kind of a weapon.
It's kind of our power
that we know stuff
that they don't know.
And that is a disservice to
us, because I don't value
something I don't understand.
And so we need to spend
a lot more time educating
not only owners in a way
that is not condescending
but also their teams,
because we have owners trying
to drive financial outcomes with
a building full of people who
don't understand at all
what their connection is
to the financial outcomes.
And so at Level 2, we're going
to try to provide some insights
and conversational training
to leaders and to owners
and to teams, and we're going
to show them not tell them
what some of these ratios
mean and how they're
connected to each other.
And that's an extremely
powerful thing to do.
Again, if you pick one
thing out each one of these
and just try it
with your client,
you're going to see how
light bulbs come on in a way
that they never come
on when you pass out
the financial statements in
those nice little binders
and the client puts
them in the same drawer
every single time,
the same drawer
that they stick the tax return
in that they don't look at.
That shows you that
there's no perceived
value in that
information, and they'll
go back to doing
whatever they did before.
So it's our turn, our
time now at Level 2
to take some of this ratio data
that we do, we might pencil it
in, and turn it into something
that helps that owner
make better decisions.
And so this is a case
where tools actually
helped me change my mindset.
So I found back
in the day a tool
that had an interactive
Goalseek capability.
And if you're as
old as am and have
been doing this
for a long time, it
was actually called ACCPAC CFO.
It's like in the
desktop product.
And it was the first time
I had a ratio tool that
let me change things so that I
could communicate to my client
the interrelationship
of different factors
from both the P&L and
the balance sheet.
Because I'd been always
trying to answer the question
for those clients, their
number one question,
which is if I made a
profit where's my cash?
And it would talk about things
like the balance sheet drivers
and the inventory is growing
too fast and accounts receivable
are --
but they never got it.
And you're just
scribbling on the ratios
and you're doing a bunch of math
on the printed ugly financial
statements, and it just
doesn't connect to that CEO.
They don't get it.
But when I found a
tool like that --
and this one is a much more a
cloud-based similar concept,
and I'm always on the search
for tools like this that have
an interactive capability.
It's not just giving
me a chart, which is
better than a piece of paper.
But still I can't do
anything with a chart
and show the impact of changes.
And Fathom --
FathomHQ is the link --
has an interactive
Goalseek where
I can sit-in front of my client
and talk about these ratios
and then change
things and show them
how they can improve
their business results.
And I've yet to meet a
CEO who is not totally
wowed by this one thing.
And fathom has a whole bunch
of other capabilities as well,
but this one feature really
knocks their socks off
and, again, sets you
up for standing out
from all the other advisors
who are on the planet.
So this Goalseek screen, we
set our financial objective,
and there are a bunch of
them that you can choose.
Operating cash flow
is generally the issue
that everybody is
wrestling with.
And then you sit down, you
put this on your Zoom screen,
and you share it
with your client.
And you start asking questions.
You say what's your goal.
Is cash flow your
biggest problem?
OK, what do you want to achieve?
And you set the number
that they give you.
Maybe it's more than that.
And you type in, OK,
you want to do $125,000.
OK, let's talk about what
we can do to get there.
And they're going to
go, well, I don't know.
I've got to fire
people or something.
If I want more money, I
got to fire all my staff.
Well let's look at it.
So this is going to
show us the factors that
influence my ability to achieve
that cash flow increase.
It starts with price,
volume of what we sell,
and then the variable
costs of sales.
And so if I want to improve
cash flow, Mr. or Mrs. Client,
and price is the
most sensitive thing
that I can change, what is
our flexibility on price?
Can we just go in and raise
our sticker price tremendously?
If so you can see the impact
that has on your cash flow?
Most of my clients and you
know in the wine industry
and in most
industries right now,
we can't just go in and
raise the sticker price.
But there are
underlying activities
that we can undertake
that will effectively
raise the average price
across all of the products
that we sell.
So in the wine
industry, the price --
the average price
that I see reflected
on the financial
statements is driven
by a combination of the channel
mix and the product mix.
And so if I'm having a
conversation with the client,
I say what can we do here?
What's your ratio of wholesale
sales to retail sales?
Because wholesale
has a lower margin.
It has a lower
price point as well.
So if I can sell more retail or
less wholesale, more e-commerce
and less wholesale,
then I'm going
to effectively increase
the average price that I
achieved for my business.
If I can sell more of my
higher priced items, which
in my industry is the Cabernet
and less of the Savignon Blanc
which is a lower price,
then I can, again,
raise the effective average
price of what I'm selling.
So those are the conversations
that we want to get out
of this whole dialogue.
It's about generating
a conversation.
It's about not being afraid
to have that conversation
with your client.
So then we can look at volume.
We can look at cost.
Now this is an interesting
aspect of this.
It actually tells me
to sell fewer units.
Now can you imagine
telling your client,
just sell less stuff and
you'll be better off.
Why this happens is
that if in this model
it assumes that the
relationships between all
of these factors are constant.
So for each sale
that I make, I have
the similar a fixed
percentage of receivables
that I'm not collecting.
So it says if I continue
to sell this way
and managing my inventory
and my receivables
and my payables the
same way, it behooves
me to sell less because
I'm not collecting enough
of what I'm selling in dollars.
So that's how this works.
It's a ratio between all
of these different aspects,
and it's assuming that
ratio is constant.
So by default, it
says if you keep
selling more yen as with
all of these other factors
in the same relationship, you're
going to sell yourself out
of business because you're not
generating enough cash based
on how you're managing the
balance sheet and other aspects
of the business.
So that's a conversational
discussion point as well.
If these are things that
you don't intuitively
know by looking
at this yourself,
every time you look
at a client you're
going to start to see
what this is telling you
and how to have the
conversation around it.
We might fire people.
We love to fire
marketing and sales.
We're accountants.
We like those people with
the fancy shoes and people
taking all the money out.
But if we do that,
there's nothing
to be sold in next month.
So we've got to look
at that carefully.
But here's where they
don't understand,
this receivable days has
a huge impact on cash
and that's why profit and
cash are not the same.
So I can sell a ton of stuff,
but if I haven't collected it
and it's all sitting
in receivables
I'm not going to have
cash in the bank.
So that's where you show
that when they see that
and they see the impact
of reducing inventory
on hand on cash
flow, they're going
to be engaged with the whole
financial discussion in a way
that they've never been able
to do before when you hand them
that static after the
fact financial statement.
So I want you to really
think about using Fathom.
Again, this is one
of many features.
It has a really cool
reporting capability.
This license to
Fathom is provided
free with clients who have
[QuickBooks] Online Advanced,
and so they already
have a license.
So just take advantage of that.
You don't have to charge
them anything extra.
But you can add this value
added service that you
can charge big bucks for.
Once a month, we have an
hour long conversation
with the client.
We look at the results
as they happen.
We don't have to wait for them
to reconcile or time everything
out.
We can look at sales in
some of these actions,
and then we can see from here
if something is out of whack
because the accounting
wasn't completed.
Then we can help them go through
and look at what the underlying
problem is.
But this is a great place
to start with just advisory.
We actually show our sample
client winery in prospective
customer meetings -- we call
them customers in our firm --
client meetings.
We bring up a
sample and say these
are the kind of things we
want to do with you if you're
open to this.
If you're interested
in more than just a tax
return or financial
statement, we'd
love to have a dialogue with you
and eventually with your teams
where you can set some
goals and then help hold you
accountable to achieving them.
And so it's a great sales tool.
It's a great consulting tool.
It's a great way for you to
get started with advisory
without a huge investment.
I also have a spreadsheet.
I can share with you
that is what to do around
each of these things.
So if you go
through the Goalseek
and it says you need to raise
price, I have a list of actions
that you can do that
support raising price.
I have some things
you can think about
if volume is the thing
you need to work on.
So I have some
detailed actions that I
can share with you about what
to do with each of these things
need to be fixed when you
get to this goalseek screen.
So I'll provide my email
and you can reach out to me,
and I'll send you the document
if you're interested in that.
And it'll give you more comfort
in having a conversation
around these aspects
of what you're doing.
So let's go back to the slides
here and talk about that.
So FathomHQ, check it out.
The what-ifs -- anything that
has a what if interactive
nature to me is the
tool that I want.
So I'm always
asking these vendors
there are great tools
out in the marketplace,
and I always want to know
where the what-if capabilities.
Because for me,
that's what changes
the dynamic with the client.
It really lets them see
things in a way that
just printing something
out or showing them
a graph doesn't do.
So that's Level 2.
That's really breaking down
the conversational barriers
that we have and helping
them understand information
in a different way.
So the next thing we want
to talk about is Level 3,
and this is where we
really dig deeper into some
of the aspects of the business.
There are a ton of tools that
are part of this methodology.
They're looking at measures.
We're looking at process.
We're looking at
all kinds of things,
including things like the
customer journey mapping.
And then once we understand
what's really going on
in the business, the other
aspect of level for me
is to go in and create
plans for our clients.
This is critical right now.
They're struggling
to get budgeting
and forecasting in place.
They need short-term
immediate cash
flow management and planning.
We can take the tools
that are out there today
and really leverage those in
helping our clients do that.
And there are a bunch
of different tools
that thankfully are
available in the marketplace.
But again, we're trying to help
that client find their answers,
and we're sort of supporting
them in that journey.
Again, we're not swooping in and
just solving all their problems
for them.
We're really giving
them tools that they
can bring to bear on whatever
issue they're trying to face.
And so there is
some planning tools.
LivePlan is like the leader
in planning and budgeting,
really has opportunities
around startups.
It does some great stuff
in building the pitch
and putting the
whole story together,
but it also has current actual
data that you can pull in
and then project
forward from that.
So check that out.
And LivePlan has got some
great people on their team,
and they're doing some
things with advisory as well
specifically around
using this tool as part
of your advisory
service offering.
What I like about PlanGuru
is it's very detailed,
so you can start
at the sales level
and then build from there.
This graphic that
you see on the screen
is my excel spreadsheet that I
created for the wine industry.
So I actually built
the model myself.
I teach forecasting
and budgeting
for wineries at a
local university here,
and I needed a tool
that would start
at the detailed retail side,
the detailed sales calculations
because that's a big part of
the complexity in my industry.
So I actually went to
Score, which is a website.
It's retired people in
finance, and they offer a bunch
of tools for businesses.
And I went to their website
and I found a template
for a cash flow forecast model.
So I took that
template, and then
I just modified it
for the wine industry
so I had something
to deliver that met
the unique requirements
of the wine industry.
So those tools are available
on the web as well,
and there are other
tools like this.
The third planning tool
that's, again, a cloud solution
is called Jirav, and you've
heard a lot about this.
They're heavily marketed.
They have some really
cool dashboard stuff,
but beyond that, there's
a bunch of really detailed
formulaic work that you can do.
You can really build
a model yourself,
and it's one of
the things that I
haven't had the time to do
yet for the wine industry.
But this is one of
the tools that I'm
going to look to build industry
specific models that I can then
roll out across
multiple clients.
So I encourage you
to look at that.
It's one of the
deepest ones I've seen.
It has a lot of capabilities.
But the more capabilities you
have, the longer it takes to,
sort of, figure out
what you want to do,
and I just haven't
invested the time.
But they've got some great
folks on their team that
are really helpful
that I've worked with,
and I need to get back
to that and do some more.
And again, my client base
is desperate for this stuff
right now.
But all of these thankfully
integrate very easily
and nicely with the
QuickBooks Online applications
and, again, set you apart from
your competition and your space
who aren't providing these
kinds of proactive insights
for clients.
So we've talked about mindset.
We've talked about
tool set, and now we
are ready to talk about new
skills that we might apply.
And I'm here to tell you that
it's not really new skills.
It's leveraging your existing
skills in a different way.
And so I want you to have
confidence in your core skill
set.
We understand the transaction
flow in businesses,
and that understanding is the
launchpad for everything else
that we do.
Our biggest problem is we don't
have confidence in those skills
and in our knowledge and our
insights and our perspective
that we bring to bear.
And you can get that confidence
just by starting a dialogue
with a client, and
you'll see that you
know way more than you thought.
I mean, this was my challenge.
I run, again, a wine industry.
I don't know the wine industry.
I don't know much about
anything in this area.
I don't know --
California is not my
native land either.
I don't understand many things.
But I do understand accounting,
and I know how to connect
the dots between --
no matter what industry you're
in, there's a general ledger.
So I can find my way to that.
And if I can work through
the transactional flow,
I could start to make sense of
the processes in the business.
And that's where you start to
add real value to clients when
you can understand
the process flow
and then help them
automate aspects of that
and then help them do the
accounting in a way that
gives them, again, the
insights that they really need.
So when it comes to
different approaches,
what we need to
think about is how
we can get teams engaged
in business results,
and this is when we start
to get to Level 4 or 5
where we take skills
like facilitation.
And facilitation is
basically sitting
at the front of the room
asking a bunch of questions,
documenting the answers, and
putting them up on a wall.
That's facilitation.
It's a scary thing, because
you're just asking questions.
And you have to resist the
urge to answer all of your own
questions, but that's how you
-- that's how you facilitate
a group meeting.
And it is a skill set
that very few people have.
And as questioners, as
introverts primarily,
as people who are
deep thinkers, we
are really good at listening.
And so come up with a
series of questions related
to whatever problem you're
trying to address and then
gather a meeting
together and then have
people provide the answers.
And we use a methodology --
we were trained as part
of the Mentor Plus program
that I went through we
had facilitation training.
There's a group called --
I believe it's
called ToP that we
went through and
got certification
in being facilitators.
But basically, you
gather people in a room,
you give them paper
to write on, and we
use I like to call them
sticky notes, Post-It Notes.
We pass those out to people
and we ask questions,
and we have them write
down individual answers
on an individual sheet, on
an individual Post-It Note.
And then when we're all
done writing down our stuff,
we have them stick it on the
wall, arrange it in categories,
and then talk about what
came out from the group.
That simple thing, leading
that group allows people to get
heard across an organization
in a way that a typical
brainstorming gathering doesn't.
So what you do is by
having people write down
their thoughts, even
the quiet people
get heard because
they're all writing down
and nobody's being over
talked or nobody's opinion
is being discounted.
You get all that written
down, and then you share it.
And then you see that yes
people have similar ideas,
but everybody in that
room gets to be heard.
And then you just
organize the information
and then show them what
you got out of the meeting,
and then you document it and
send it out as follow up.
And you are the
hero of that event.
It doesn't require you to
know everything, again.
It requires you to lead
people to consensus,
and that's what you're doing.
So that's facilitation
is another's skill,
and one that I use all the time.
I'm doing stuff with
non-profits to just
be the facilitator for
meetings, because few people are
trained in how to do that.
And then education,
we can't, again,
assume that because people
are in leadership roles
that they have ever had an
opportunity to be trained
in accounting terminology
or financial statement
management or metrics and
measures or any of that stuff
that we just expect somehow
magically people acquire over
the course of their career.
And if you think about it,
I mean, it doesn't happen.
We just throw stuff at them.
We ask him to do budgets
with no guidance.
We ask them to -- we pass
out the financial statement.
I'm just a director in a
software company, I'm the VP,
later they pass out the
financial statements,
show us the results, and say,
OK, now go back and increase
revenue by 20%.
We'd be in the meeting,
and the CFO or whoever
presented the financials
will go, "Everybody get it?"
"Yeah, got it."
"Uh huh, I'm good.
I'm going to go do it."
And then you go
out in the hallway,
and everybody
goes, "I don't know
what I'm doing with this stuff.
I'm just going to go back
and do what I did yesterday."
This doesn't give me
any insight into what
I need to change to achieve
whatever financial goal
the company has set.
And so it happens all the time.
And so what we need to do
first before we expect somebody
to produce the results that
we want them to produce
is to give them some insight
about what the numbers mean.
So one of the things we
do is that Fathom screen.
Just show them receivable
days, collecting on the stuff
that you guys in sales
generate is a big part of us
being able to pay your salary.
So not only do we
want you to sell,
but we want to make sure that
we can collect on those sales
later.
And so that's why
our accounting team
has credit policies in place.
So we want you to
understand the implications
of what you're doing
and what the rest
of the people in our
organization are doing as well.
So those conversations
can be led
by either the internal
accountant or people coming in
from outside and saying
let me just walk you
through some of these financial
statements and what this means.
So we want to engage the
teams with facilitating
open discussions.
We want to educate those teams.
We want to empower
those individuals
in those organizations to
behave differently in order
to line up with the financial
goals we're trying to achieve.
And then what we can
bring as skill sets is
a new level of
accountability, and this
is one of our strengths.
We are accountants.
Let's hold people accountable.
So what I have on
the screen here
is another skill that we can
bring to bear for our clients,
and this is just documentation.
This actually came
out of a class
that I taught on
point-of-sale systems.
And if you've ever done any
work with point-of-sale systems,
you know that they are
always interesting.
Let's just say it that way.
From my technology
experience, they
were always one of the
hardest applications
to work through,
with, and around
and can be older technology.
And so we had people in
our industry complaining
about the point-of-sale
applications
not meeting their needs.
So I said come to this class.
Let's talk about what the
issues and challenges are,
and we'll see if we can come
to some sort of a conclusion
and work with these
vendors in our local market
to make it better.
So I had them come in, and
all I did was sit at the front
and said, OK, tell me what
happens when the tasting room
on the retail side of business.
Tell me what happens when
we have Wine Club, which
is an aspect of wine history.
What's going on in accounting
where all this is going on?
I set up the thing on the
wall and had them just write
things on sticky notes, and we
organized them in a flow chart.
And then we captured
that, and I turned it
into a printed document
here that I sent back
to everybody at the meeting.
So now I'm the documenter, but
I provided a service to them.
I convened people to
gather to share their ideas
and perspectives,
and then I documented
what they shared and then
sent it out to the folks.
And now I look like a
winery expert, right,
even I'm just a
flow chart creator.
So at Level 4, this is
when we again really start
to move the needle on our value
and on the business results
that we can help
our clients achieve.
Now we're taking that
financial insight.
So we've gotten
the basics set up.
We've asked questions
about what owners look to
for their decision results.
We've shown them how to change
the drivers that influence
whatever financial outcome
they're trying to achieve,
and then we've helped
them work through sort
of what their core
issues are which
helped them redefine that.
And then we've helped them
build plans and models
for future results
and improvements.
Now it's time to get those
individuals on their teams
in lock step agreement
with what they need to do,
how they need to change
their behaviors to achieve
the goals that we've
agreed on as a company are
important to the business.
So this is where we
need to look for tools
that really take the
activity, take us back
to the activity level.
We take it out to
the line worker
level of what they're
doing at their position
and help them see what they
need to change to contribute
to our financial goals.
So we're going to take
all this information we've
gathered from
leadership, from owners,
and then we're going to
ratchet it down a level
so that it is
activity based insight
for everybody in the company.
So here's the tool --
an example of the tool, and
this is a screenshot of one.
So what we do is take a
given aspect of the business.
So again, in my case, we're
looking at e-commerce.
Those are online
web sales of wine
or whatever products
you're looking at.
And we want to
break that activity,
and that's a revenue
generating activity, right.
We're trying to drive more
revenue from our online sales.
And we break that
activity, that goal that we
have for increasing revenue.
And we look at the
drivers of revenue
for that particular
aspect of the business.
And so when we do
that, we break it down.
These are the things that
influence our sales online.
How many customers we
have, how many customers
we're adding every
month, which relates
to the marketing
activities that have
to happen before we
start selling anything.
Then we look at
how many customers
we're losing every month,
because we have some churn.
We have people in, and
we have people out.
And then we come up with
a total customer count.
And then from that we look at
if we have this many customers,
how often do those customers
buy from our website?
Now obviously, we want them to
buy often, not just once a year
but more frequently than that.
And then we look at
how many cases --
once that person buys, what
is their average case count.
So how many units do
they buy when they buy,
and then we want to
look at the dollars
that that purchase represents
on average across all
of our customer base.
Those are the things
that we can control
to move the lever on revenue.
And again, clients are
not used to us accountants
breaking this down
to the point where it
is actionable by their teams.
So this is a spreadsheet.
It's called the Profit
Equation Planner.
It's a tool that I got,
again, from the Mentor Plus
methodology that was really
so enlightening for me,
because now I can do
the leadership stuff.
I can set the overall
intention for the business.
I can get them connected
to the high-level finance
ratios and metrics,
and then they
can create the business plan.
And then I can get in
front of the people who
can make this
happen and show them
what to do to
achieve these goals.
So it's a whole
set of things that
fit together to get
those results moving
in the right direction.
So let me show you this model.
So this is a lovely spreadsheet.
These are spreadsheets designed
by an accountant y'all, and I
took this driver based way of
thinking that a Mentor Plus --
Edi Osborne is the brains
behind Mentor Plus.
I took the information
she shared,
and she has models for spas and
different kinds of businesses
looking at the different
input metrics like this.
And I took this and created
a retail sales model.
And I use this all the
time in client situations.
And again, it's my same sample
winery that we're working with.
But I take this into those
meetings with the tasting room.
So I do a core financial
education for those folks,
and then I say here's
what you do that impacts
these financial statements.
And then I go to
this and say if I'm
looking at driving more
retail sales, that's
driven by two main components,
volume, how many units I sell
and the price pound
per unit on average.
And then I have them tell me
what things they want to change
and show them the
impact of that.
So when you're
talking to salespeople
and you ask them why
can't they sell more,
their tendency is to point
to the people prior to them
in the chain of
business process flows.
So if I'm a salesperson
in the tasting room,
which is a retail facility.
I mean, it's basically
a storefront that
has a bar and wine and
my job is to sell wine,
my complaint is going to be.
That I can't sell
enough, because marketing
isn't sending me
enough visitors.
So I'm always going to
point to the step before me
as the reason that
I can't sell more.
So with this model if they say
that's the problem I can say,
OK, I'm going to put 10 more
visitors into the tasting room.
So what it did is change
the way the visitor traffic,
and it did not have any
impact at all on revenue.
This section of the
graphic is where
I can see if revenue is
moving up or down based
on the decision
they've told make.
I say, OK, I'm going to shove
10 more people in that space.
That doesn't change
anything unless you
sell more of those people
who come into the space.
So let's not focus on that
let's focus on no more people
showing up but you closing one
more sale in that tasting room.
Now look what happened?
If I can get you to
close one more sale out
of that same number of
visitors that appear,
then I'm starting to make an
additional revenue impact.
And that's what you can control.
You can't control what
comes in, but once they're
there you can close a higher
percentage of those folks
and then you can impact revenue.
And if we're going to sell to
one more person, what else can
we do to drive revenue up?
Well, maybe we can buy --
maybe we can get that person --
so my standard number of
bottles is 4.62 bottles,
which is a portion of a case.
So if I can increase that to
on average five bottles a day,
which is that weirdo
fraction, then you
see the impact on sales.
So now I see that my revenue
has gone up to 96 sales.
So this spreadsheet
and this conversation
with the taste room
people empowers
them to change their
behavior tomorrow
or as the day is going
forward and focus on let's get
more people to
buy, and let's get
to buy one more bottle
apiece and then we
can achieve our revenue goals.
And then we can just walk
through all the things
that they can change.
They can tell me
what's easiest to fix,
and then those line
workers, those people
in that tasting room can decide
what they want to measure
and where they want
to focus each day.
And now it's them driving it.
It's not me imposing a
metric that I put over them
as a punishment weapon
or a reward driven thing.
It's now something that they
have embraced and come up
with that helps me
align with the goals
that I'm trying to
achieve for that business.
So that's how you
move the needle.
It's got to get to
the line workers
if you want to have
real and lasting change.
And when you do that,
you are now at level four
when it comes to a client work.
You have now help
them link those goals
to their financial
results, and you
have helped them and report.
So once you show them what
activities are important,
then you can really
empower everybody
in that organization to
connect what they do to that.
And one of the things
about this when
we're working with clients to
try and to drive behaviors,
we have to make sure that those
teams are getting feedback
immediately.
Again, timeliness far more
important than 100% accuracy
in what we're providing
to those people
so that they can
modify behavior midday.
Much of what we are trained to
do as accountants is, again,
to report at the
end of the process
to tell people what
happened after everything
is said and done.
And what advisory in my
opinion requires us to do
is to start counting
things sooner so
that we can change behaviors
before the P&L is created.
So we can change the behaviors.
If I know that every day
I'm trying to get one more
comes in to buy, one
more bottle of wine
then I can start
counting my success as it
happens every hour on the hour.
OK, my average bottles
per sale are now four.
I want to go to five.
What can we do -- get
a huddle together --
what can we do to get people
to buy one more bottle of wine?
And those people
the line workers,
the people at the
front of the battle
are going to come up with way
better ideas than leadership
or than we can come up with
as external people not knowing
what really happens
in the front line.
So that's the way we want to
think about this as advisors.
So when we get to
Level 5, our goal
here is to just keep
those leaders on track.
We want to check back in with
whatever is in place for them
and make sure they are
holding their teams
accountable for their
individual actions
and, again, making
metrics and measures
if we have provided them
visible to the people
that we want to succeed.
Here's another tool
that we have, again.
Spreadsheets are our go to --
our go to technology.
This is just a basic activity
calendar that we use,
we created in the
spreadsheet, and we
get people to commit to a
deadline for completion,
an activity they're
going to own.
We put their name in there.
And then we make this
our meeting platform.
So every time we convene
everybody together,
we look at what's supposed to
be happening, who's supposed
to do what in what month.
And then we code them
red, green, or yellow.
Somebody did something,
we highlight it in green
and say look Sally
got this done.
And we put ran on Jan's thing.
She didn't do whatever
she was supposed to do.
But we have an activity
guide that we can just
monitor and measure.
Now this is pretty clunky.
So I'm sure you can
find a prettier one.
You can do something
in Basecamp,
or we use monday.com inside
our booking business.
There are a bunch of
fancy whizbang tools.
But if you don't
have those, just
start with a piece of paper
and putting people's names
and date commitments on things.
And these are the
activities that we
want to start measuring.
So we have ratcheted down
from the high-level financial
statement perspective, which
is very, very far removed
from the underlying
transactions and activities
down to individual
activities people
are taking individual days
across a period of time.
And so now we've
connected everything
back to those high-level
financial goals and objectives
that we set.
So again, hold them accountable,
get their name, their date,
and then you can be the
accountability person who
checks back in with
them every month when
they meet to go over this.
So there's again a
consulting opportunity
where you don't have to
have all the answers.
You just have to
know how to keep
people accountable to
their goals and objectives.
So at the core of all this,
one of the aspects, again,
the things that I got exposed
to I going through this training
is this principle
of kaizen, which
is a Japanese really
production methodology that
came out and was started
I think by Toyota.
It was used successfully in
some of their manufacturing
processes.
But the concept really stands
for continuous improvement,
and that's what we're looking
to achieve in our advisory
and consulting work.
And it's a gradual thing.
So kaizen is not about
blowing things up in a big way
and starting over from scratch.
Kaizen is about a series
of small improvements
that you can take to have a huge
impact on the overall business.
And that's where we
can really add insight.
We can look at individual
aspects of the processes that
fit together to form
a given outcome,
and we can say
maybe we can improve
this piece of this
process and that
will have an impact on the
thing we're trying to accomplish
further along in that process.
And so that mindset
is part of the shift
that we make when we move
into an advisory role.
So we don't look
for the do all, end
all final set in
concrete measurement
that's going to change
everybody's life.
We look for series
of small steps
that we can take starting
at the level of the line
work, that employee
on the front lines,
and then going from there and
connecting those dots back
to the high level financial
goals and objectives
of that business.
So when we take the time
to really listen closely,
to ask different questions, and
if we see first to understand,
we will find plenty
of opportunities
to become the kinds of
advisors that our clients seek.
Remember our goal is
to not be the experts
but to make our clients
understand that they are
in fact the experts and to
give them the confidence
to make better decisions and
to achieve the goals that they
have in place and to weather
the storm successfully.
And so when you provide
the kind of assistance
that your clients
crave, you suddenly
discover that you
have in fact become
a hero or shero in the
eyes of those clients
in spite of yourself.
Your goal was never to
have the banner that
says expert or hero, but in
fact by being there in support
of them and empowering them to
do better things you have ended
up as a hero or shero.
And you may or may not have
the bronze statue to prove it,
but your clients will
appreciate you in ways
that you could of
never imagined.
And it's fun y'all.
This is fun to come in
there and show people things
or ask some question,
and they go, wow,
I never thought about it
that way or nobody's ever
asked me that question.
And when that happens and
you see light bulbs go on
and when they go,
oh, I can do this
and when you see those
teams go, oh, I just
need to sell one more bottle
of wine to each customer,
I can do that.
Y'all be careful when
you come to Napa Valley,
because they're going to be
trying to sell you that one
more bottle of wine.
We're educating them
out here, so watch out.
Hold onto your wallets y'all.
So with that, it's
been my pleasure
to share this with you.
If you have any questions,
you can email me,
geni@evathenerd.com.
It's been my pleasure
and honor to be here.
It's a joy to be part of
QuickBooks Connect online.
And go forth and make great
things happen for yourself
and for your clients.
Bye.
