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Tune in to listen to Adam Larson as he hosts the Count Me In Podcast, featuring a special conversation with Adam Lean, the CEO and Co-Founder of TheCFOProject.com. Lean shares expert insights on transforming the role of the traditional CFO, offering practical advice and real-life success stories. Don't miss this insider's look into the future of the accounting profession!
Full Episode Transcript:
< Intro >
Full Episode Transcript:
< Intro >
Adam: Greetings, accounting professionals. Adam Larson here, host of Count Me In, and today we embark on a transformative journey with Adam Lean, the visionary CEO of TheCFOProject.com.
Prepare to break free from the shackles of the accountants' trap. A pervasive challenge that confines so many to a transactional purgatory. In this conversation, Adam unveils a potent cocktail of liberation, strategic transformation, technology-driven empowerment, and high-value service mastery. So join us on this first podcast of 2024, and together, let's rewrite the future of accounting, one empowered professional at a time.
< Music >
Well, Adam, we're really excited to have you on the Count Me In podcast. And you are the leader at The CFO Project, and you have a podcast called the Accountants Trap, and you mention that a lot. Maybe you can start by defining what is the accountants' trap, and why is it a challenge for many firm owners today?
Adam Lean: Yes, that's a great question. We have this saying here at The CFO Project, we want accountants to escape what we call the accountants' trap. The idea is that accountants, and when I say accountants I mean accountants, CPAs, bookkeepers, enrolled agents. Traditionally, accountants are trading time for money. In order to make more money they either have to work more hours, which there's, obviously, not many more hours you can work, or you have to take on more clients.
Well, the thought of taking more clients on, in order to make more money is depressing to a lot of accountants. Because most clients are high-demanding, low-paying clients, and they give you all their paperwork at the very last minute, and the idea of taking on more clients is not appealing to most people. And it's a trap because you can't raise your prices. You can't raise your prices because there's always another accountant that's willing to do it cheaper than you.
And if you think about it from the viewpoint of your client, and we have to always think about it from the viewpoint of our clients. On the laundry list of things that a business owner has to think about, during the day, accounting falls towards the bottom.
They think of accounting as a commodity, in a sense. It's like a gas station; you're driving down the road and there are two gas stations next to each other, one is $0.50 higher. Most people are probably not going to go to that gas station because they view fuel as a commodity, it's interchangeable. And the same thing with accounting and bookkeeping services.
What you do, A, they really don't understand, and, B, they feel that any accountant can do it. Any accountant could put the tax return together. Any accountant can do the books. So why would they pay you more, significantly more, than the average accountant? They wouldn't.
And, so, this is the trap; to make more money you're forced to work more hours for little pay, with high-demanding clients. And, so, we suggest that there's a better way.
Adam: I would hope so because, that would be really frustrating as time goes on, and to have to get more clients. And if you're an internal accountant, within a corporation, you have to help all the different operations of the business to get everything together, do the budget, and that can bring a different type of accountants' trap challenge.
Adam Lean: Yes, absolutely, your candle is burning at both ends, and there's no give.
Adam: Yes, there's no give at all. So how important is it? Because, like you said, a lot of times for owners, they don't understand the importance of the accountant. How do you change that role for the business owner, if you are the CFO, if you're the controller, you're within the organization, and you're trying to say, "Hey, this is an important part." How do you help change that view, at the top of the organization?
Adam Lean: Yes, this is the frustrating part because accountants are very valuable, they're needed. But the people that use accountants; so the company you work for or your client, if you have a business, and if you work for clients, they don't view it that way. Which, again, goes to what I was talking about with the accountants' trap. They don't view what you do as important as they should. Having great books is important, it's needed. And what you do to ensure that the books are kept accurately and timely, and the taxes are filed, is very important.
But until your client, whether it's your boss or whether it's your actual clients, business owner clients, until they view you and your work as highly valuable, they're not going to pay for that. So the idea is to shift in your client's mind, in your constituent's mind, your value.
So instead of being thought of as the person that just keeps the books or that just does the taxes. Because you have to remember that your client doesn't really understand what you do. You know what you do, and so you know all the effort and time and energy you pour into it, but they don't. So they're not going to place the value on it as much.
But if they can wrap their mind around your value, then, they will find you more valuable. Which means they'll pay you more and you can escape the trap. So the idea is to be the financial professional, in your client's life, that they actually want. And what is it that most business owners want? They want someone that they can trust, to tell them what to do to have a growing and successful business.
So if you, as the accountant, can be that person that a client trusts to tell them what to do. To give advice on something that they really care about, which is their business, then, your stock with them will go dramatically up.
They'll pay you as much as you command, as much as you want, and they will not think of you as just the person that records the books or just this commoditized, necessary evil that I've got to pay. And they'll start to view you as somebody that's a trusted confidant, an advisor, somebody they want to talk to every month.
Adam: Yes, that advisor, the term that we use a lot is that business partner. You want to be that business partner, not just the number cruncher.
Adam Lean: That's right. You'll still provide the same value, that in your mind they need, which is accurate books, taxes. But you're going to shift the value in your client's mind. Which, I mean, let's be honest, it's really the only thing that matters is your client perception of you. That's what's going to pay the bills. If you get more clients who have a higher perception of you, that means you can earn more money, and that's how you escape the trap.
Adam: All right, so you work with a lot of different organizations and folks within the accounting space, and the accounting world. Maybe there's some short story or two you can share, of people who have effectively navigated this traditional role to the more advisory position that you've seen that was successful, and some lessons that you've seen and learned.
Adam Lean: It's a good question. So we have a membership program where we train accountants, and bookkeepers, and enrolled agents, and CPAs on how to be an outsourced CFO. Right now we have, I think, 325 people in the program. One of my favorite stories is this guy who's been a tax practitioner for about 20 years.
We have what we call a Wins' Board in our online portal, and he posted in the Wins' Board a few months ago, and he says, "I've owned a tax practice for about 20 years." And he goes, "Every single tax season, I've dreaded it. But I joined the CFO Project two years ago. Last year I sold my tax practice, and instead of having..."
I think he had about 400 tax clients, he now has less than a dozen CFO clients. And he said that he's made more money, this year, so far this year, than he's ever made as a tax professional and he didn't have to go through a tax season. And I'm not saying there's anything wrong with going through tax season, but it's just not for everybody. And we have plenty of members that still do taxes for their clients.
But they've enhanced their tax service, to be this all-encompassing CFO advisor for their clients. So they'll do CFO work and tax work, or CFO work and bookkeeping work, and they'll bundle it all together. And that's how they differentiate themselves from all the other accountants and all the other software that's trying to compete with accountants out there.
The beauty of this is that by giving your client what they want, which is advice on how to have a successful business. And not to digress, but success to us, financial people, means a business that is generating consistent, positive cash flow every single month, that is a successful business. Because if you think about it, every business that failed would have not failed if they were able to generate consistent, positive cash flow. So that's our job as CFOs.
So if you could do that to your client, they're going to value you way much more, and you'll be able to separate yourself from all the other accountants, who are just, and I use the word just in jest, recorders of the past. In the minds of your clients, they think of you as somebody that just records the past, puts the right numbers in the right boxes, makes sure the IRS is happy, and makes sure that the books are closed, whatever that means.
Adam: It's interesting because as you work with so many different CFOs, in that interim capacity, whether it's a client or that fractional type of role. How do you see this CFO role changing, and are there specific critical skills for somebody who wants to get into this line of work?
Adam Lean: It's a good question. In terms of the CFO role changing, there are CFO terms being floated out there, in the accounting space. Fractional CFO, advisor, outsourced CFO, part-time CFO, and there's really not a good definition of what it is. In our view, we like to call it a productized CFO service. You're offering an outsourced CFO service, but it's a productized CFO service, that's in direct opposition of a fractional CFO service.
A fractional CFO service, you're going to a client and saying, "What do you need? What problem do you need me to solve?"
And you're relying on them to say, "Well, I need X, Y, and Z." And then you're creating this very customized engagement for your client. Well, the problem with that is that because it's customized, you can't scale it. You can't take on many of these clients because each client, each take-on, will feel like a part-time job. And if you have multiple part-time jobs where you're doing very different things, that's just a recipe for burnout, and it's not scalable.
Well, what is the definition of scalable? If you think about a manufacturer who manufactures, I have a coffee mug on my desk, coffee mugs, they've created the product once, and then manufacture it over and over again, that is scalable. Well, that's what we need to do. So we say offer a productized CFO service. Have one standard CFO service where you're telling the client, "This is what you're going to get and why you should hire me."
But because you created it once, you can do that same system over and over again, with your client. But because it's still a service and your client highly values it, they're going to pay you like it's a service, but your cost is going to be like that of a product. And, so, that's a productized CFO service. And, so, that's the difference between all the other outsourced CFO services out there, fractional CFO services.
So you've got to have a system that's scalable, that will, A, get results and B, that you can do the same steps with every single month, with every single client. The second part of your question in terms of how an accountant needs to think of themselves as an advisor, the mindset shift, is that when you're advising somebody, you have two critical jobs.
The first is you've got to give them advice that actually is helpful, which a lot of accountants struggle with. I mean, that's why they give their advice away for free because they're not sure if the advice they're giving is the best advice, but I digress.
So you got to give advice that is actually helpful. That's really going to help your client grow their business, have a successful business, meaning generate positive cash flow. But the second component is you have to get your client to actually take that advice.
That is a hard skill. You could be the most credentialed CFO on the planet. You could be the CFO for the biggest company in the world, and I think right now it's Apple. You could be their CFO and still fail at being the CFO for a small or medium-sized business. If you can't get that client whom you don't control to take action. You don't control them, they're your client. But you've got to get them to take action and if you don't, you will fail at your job of CFO. And, so, that is an art as much as it is a science.
Adam: Well, and I think that goes back to as a CFO coming to the table, and having a voice at the table, and being that true business partner so that you can help make the strategic decisions because otherwise, you'll never be able to do that. Like you said, you can be the CFO of the biggest thing and still fail because you're not helping with the direction.
Adam Lean: Yes, I love the word partner because if you think about the partner in a marriage or dating, sense, they're somebody that you view as an equal. Somebody that you trust, that you want their advice, that you're confident on, they're somebody that you lean on for support. That's exactly what you should be to your clients.
And, so, an outsourced CFO should be somebody that the client intimately trusts. Because there's not that many people in a client's life that they could trust, if you think about it. They can't really trust their employees because their employees don't get it, and at the end of the day, they're employees. You could trust your friends and family, but they don't understand numbers, or business, or financial strategy. They're going to be supportive, but they're nary not going to help you.
Your banker, the other numbers person, in most business owner's life, they've never ran a business themselves. They don't get it. Business coaches, oh, my goodness, business coaches, there are many of them out there, and most of them are terrible. Because the advice they are giving, they have no idea how that impacts cash flow.
How their advice has impacted cash flow because most business coaches are leadership coaches, or management coaches, or sales coaches, or whatnot. And I'm not saying they're all bad, there are some that are good, but the good ones are really expensive. And, so, who does a business owner turn to for help? If you could be that person, oh, my goodness, they'll pay you a lot of money, and you will be thought of as their trusted partner.
Adam: Mh-hmm, so we can't talk about transforming the role and becoming that good business partner, without talking about technology. Technology has played a huge role, and it's continuing to play a huge role with the advancement of generative AI, and different accounting technologies. How are these new technologies reshaping the role of the CFO and the accounting industry? And then how can you, like you've been saying this, outsourced CFO, how can you utilize those technologies to do better at your job?
Adam Lean: So a lot of people have different opinions on technology, especially things like AI, and it's easy to feel scared about the future, when it comes to things like that. I've read statistics that 95% of what accountants do, today, will be replaced, within a decade, with AI. And one of our members sent me an article last week, that said that AI has been able to close, and reconcile a set of books, in less than four minutes, which is nuts.
But, here's the thing, I think this is a wonderful time for the accounting profession. Because embracing technology and things like AI, and software, and whatnot will allow us to do less, spend less time, on tasks that are, menial, and spend more time on higher-value tasks. Things where you're able to charge more money to your client. So you could be your client's tax person or your client's bookkeeper and be their advisor, but now you're able to spend much less time, or you will, in the future, spend much less time on those transactional or compliance things.
Instead of having to spend a lot of time looking up tax code or figuring out the best scenario for a client. Let the software do it, and then you spend more time advising your client. I mean, it's going to happen, whether we like it or not, technology is going to happen, we can either embrace it or not embrace it.
I mean, if you think about it, in 1902 nobody had a vehicle. Everybody rode around on horses and buggies, and all of a sudden, this vehicle came. You could be scared by it, or you can embrace the possibilities of what this thing is going to help you accomplish.
Adam: I like that. I like how changing your mindset of saying, "Hey, this is a tool that's going to help me get rid of the tasks that I don't like doing and that can be cumbersome, and then it allows me to be more strategic." So in some ways, we have to learn the new technologies in order to become more strategic.
Adam Lean: Right, I agree, and I think there's plenty of places to learn it. But I don't think anybody should feel this overwhelming sense of, "Oh my goodness, I'm behind the eight ball." Because things like AI and software change all the time. Just slowly read a couple of articles, and then try it out yourself, and then just see where it takes you, and then go from there. I mean, at the end of the day, regardless of how you accomplish your job, your client just wants this trusted partner, like we've talked about. They don't really care how it gets there.
Adam: That's very true.
Adam Lean: It's like somebody going to the store to buy a drill. Most people that go to the home improvement store to buy a drill, they're not really concerned about the drill itself. They really just want what the drill provides, which is the hole. That's why people buy the drill. And, so, you have to remember, your clients are buying you for what you provide, they don't really care how you provide it.
Adam: That's true. Well, and you can also, like you said, be aware, read articles, and a lot of technologies that you're probably already using are going to start integrating different generative AI into their software, so that you don't even have to learn it. It'll probably just be a click of a button or type a question in, and it'll answer things for you.
Adam Lean: Absolutely. I mean, anybody that's used QuickBooks Online has seen this morph over the past several years. QuickBooks used to be desktop, obviously, and then they moved to online. And then a lot of accountants don't like it because it's automating, it's trying to automate a lot of tasks. But that's essentially what AI is going to do. They're going to say, "All right, well, this transaction, we think should go in this account, is this correct?"
I mean, QuickBooks has been doing that for years now, and you set up rules around that. Well, that's essentially, by setting up rules, you're training the software to think like you. That's essentially what AI is, you're training something to think how you would think, and then next month you just run all the rules and boom, it's done. That's really what AI is. So you don't have to think of it as this big, scary thing. I mean, you've been doing it more than I think most people realize.
Adam: Mh-hmm, that's very true. So somebody listening to this and they're like, "You know what? I've been an accountant for a long time." How do you shift your mindset from the way you've always been doing things, to be more aligned with this, be the advisor, be the partner. Because I imagine it's very difficult to make that transition, especially, if you've been doing it a long time.
Adam Lean: Yes, I think anybody that's been doing something for a long time is set in their ways, and they're comfortable in their ways. But if there's any part of you that thinks, "I either don't want to be doing this much longer."
Or "I'm getting paid way too less to be doing this." The average accountant's salary in the United States is $74,000. We think that's very low for the experience and knowledge that accountants have. And, so, therefore, a lot of accountants are underpaid.
So if you think you're underpaid or you just don't want to do this, or your clients are asking for advice. They're saying things; they may not come out and say, "Well, I have an advice-related question." But they're saying things like, "You're telling me I owe $24,000 on taxes because I made 150,000, last year, in profit, but I only have $7,000 on the bank account. Why? Why am I paying so much in taxes?" And the accountant is thinking, "Well, I don't really understand."
Or "No, I can't help you or advise you because I have a stack of 300 other tax returns on my desk that I got to complete before Friday." This is a stressful situation for everybody because the accountant wants to be able to help their client, and the client wants the help because the client's clueless.
And, so, if there's any part of you that wants to be able to be intentional about the advice that you give to your clients, then I would look at advisory. Either adding on an advisory service or completely getting out of what you're doing and becoming an advisor. Or hiring somebody on your team to take the compliance and transactional work off your plate or hiring one of these third-party companies that outsource the accounting work.
If there's any part of you that wants to be able to make more money. While working less, while having such a huge impact on the thousands, literally, thousands, of business owners in your town that are struggling, I mean, this is hands down the way to go.
Adam: Yes, that really sounds like it and it's looking at what you're doing and saying, "Is this what I continue want to do, or do I want to advance or scale up?"
Adam Lean: Yes, totally. It's not for everybody, but for the people that would like to explore it. I mean, I think, you should explore it because your clients would love you to be their confidant, their partner.
Adam: Mh-hmm, I love these types of conversations because it's looking at the accounting space from a different perspective. And you have a unique perspective, where you work with many different clients. And I like to ask, what are your predictions, as you look to the future? Where do you think the accounting space is going to go and what should people be looking for, as they want to go with the tide?
Adam Lean: Yes, that's a good question, and we touched on this, but I think the accounting profession is going to be less transactional and compliance nature, in the future and more advisory nature. I mean, it's just a simple fact that a lot of software, and AI, and things like that, it's going to take this complicated tax code, and accounting rules, and all that and simplify it, and just make it easy.
And, so, the traditional need for an accountant is going to go away, it just is. But the accountant is still needed, that's the beauty of this, you're needed to do the one thing that you've always been needed, by your client, which is to give advice on how the company can be a growing and more profitable business.
Think about the CFO for a Fortune 500 Company. The CFO oversees the accounting department, but their bigger job is to understand the strategy. Understand where the client, in their case, the CEO, and the leadership team, wants to take the business, and figure out are they on track to do it, and suggest ways to help them stay on track, and to ensure the business is financially viable. Every business on earth needs somebody to do those things. And if you could be that person, you will embrace the future of accounting, of what clients need from their accountants, in the future. So that's really where I think the accounting profession is going, but I think it's exciting.
Adam: That's really exciting and it allows for you to not be stuck in the same thing every day. Because once you get into strategy, you're thinking outside of the normal box that you've been put in, especially, if you grew up from starting with a staff accountant, and moving your way up within an organization.
Adam Lean: Yes, exactly. I mean, honestly, that's what I did, out of college, I became a staff accountant. I mean, personally, it was just incredibly boring to just sit there, behind a desk, and record the past. So I purposely got myself involved in things that I could help the business grow, and I enjoyed that way more than. And by the way, they actually liked it more that I was being a proactive accountant because my predecessor, who've been there for two decades, didn't. All she did was just sit behind a desk and record the past and nobody heard from her.
Adam: Yes, and that sets you apart. Certifications and those things can set you apart, but actually being able to get in there and do the work really sets you apart from your other colleagues.
Adam Lean: Totally, absolutely. We have to remember that most people do not speak accounting. Most people don't want to speak accounting, and accounting is our language but it's not the outside world's language. So if we, as accountants, can speak the outside world language. If we can speak business strategy language, then the people that you work for or the people that are your clients, they will love it because they do not want to speak accounting. They want to speak business strategy, "How can I grow my business?"
Adam: Well, Adam, I've really enjoyed this conversation. I just want to thank you again for coming on the podcast today.
Adam Lean: Yes, thanks for the invite. This was fun.
< Outro >
Announcer: This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders, from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting in finance education, visit IMA's website at www.imainet.org.
Creators & Guests
What is Count Me In®?
IMA® (Institute of Management Accountants) brings you the latest perspectives and learnings on all things affecting the accounting and finance world, as told by the experts working in the field and the thought leaders shaping the profession. Listen in to gain valuable insight and be included in the future of accounting and finance!
< Intro >
– Greetings, accounting professionals.
Adam Larson here, host of
Count Me In, and today we embark
on a transformative journey
with Adam Lean,
the visionary CEO of TheCFOProject.com.
Prepare to break free from the
shackles of the accountants' trap.
A pervasive challenge that confines
so many to a transactional purgatory.
In this conversation, Adam unveils
a potent cocktail of liberation,
strategic transformation,
technology-driven empowerment,
and high value service mastery.
So join us on this first podcast of 2024,
and together, let's rewrite
the future of accounting,
one empowered professional at a time.
< Music >
Well, Adam, we're really excited to
have you on the Count Me In podcast.
And you are the leader at The CFO Project,
and you have a podcast
called the Accountants Trap,
and you mention that a lot.
Maybe you can start by defining
what is the accountants' trap,
and why is it a challenge
for many firm owners today?
– Yes, that's a great question.
We have this saying here
at The CFO Project,
we want accountants to escape
what we call the accountants' trap.
The idea is that accountants, and when
I say accountants I mean accountants,
CPAs, bookkeepers, enrolled agents.
Traditionally, accountants
are trading time for money.
In order to make more money they
either have to work more hours,
which there's, obviously, not
many more hours you can work,
or you have to take on more clients.
Well, the thought of taking more clients
on, in order to make more money
is depressing to a lot of accountants.
Because most clients are
high-demanding, low-paying clients,
and they give you all their
paperwork at the very last minute,
and the idea of taking on more clients
is not appealing to most people.
And it's a trap because
you can't raise your prices.
You can't raise your prices because
there's always another accountant
that's willing to do it cheaper than you.
And if you think about it from
the viewpoint of your client,
and we have to always think about
it from the viewpoint of our clients.
On the laundry list of things that a
business owner has to think about,
during the day, accounting
falls towards the bottom.
They think of accounting as
a commodity, in a sense.
It's like a gas station;
you're driving down the road
and there are two gas stations next
to each other, one is $0.50 higher.
Most people are probably not
going to go to that gas station
because they view fuel as a
commodity, it's interchangeable.
And the same thing with accounting
and bookkeeping services.
What you do, A, they
really don't understand,
and, B, they feel that
any accountant can do it.
Any accountant could put
the tax return together.
Any accountant can do the books.
So why would they pay
you more, significantly more,
than the average accountant?
They wouldn't, and, so, this is the trap;
to make more money you're
forced to work more hours
for little pay, with high-demanding clients.
And, so, we suggest
that there's a better way.
– I would hope so because,
that would be really frustrating
as time goes on, and to
have to get more clients.
And if you're an internal
accountant, within a corporation,
you have to help all the different
operations of the business
to get everything together, do the budget,
and that can bring a different type
of accountants' trap challenge.
– Yes, absolutely, your candle
is burning at both ends,
and there's no give.
– Yes, there's no give at all.
So how important is it?
Because, like you said,
a lot of times for owners,
they don't understand the
importance of the accountant.
How do you change that
role for the business owner,
if you are the CFO, if you're the controller,
you're within the organization,
and you're trying to say,
"Hey, this is an important part."
How do you help change that
view, at the top of the organization?
– Yes, this is the frustrating part
because accountants are
very valuable, they're needed.
But the people that use accountants;
so the company you work for or
your client, if you have a business,
and if you work for clients,
they don't view it that way.
Which, again, goes to
what I was talking about
with the accountants' trap.
They don't view what you do
as important as they should.
Having great books
is important, it's needed.
And what you do to ensure that
the books are kept accurately
and timely, and the taxes
are filed, is very important.
But until your client, whether it's your
boss or whether it's your actual clients,
business owner clients,
until they view you
and your work as highly valuable,
they're not going to pay for that.
So the idea is to shift
in your client's mind,
in your constituent's mind, your value.
So instead of being
thought of as the person
that just keeps the books
or that just does the taxes.
Because you have to remember
that your client doesn't really
understand what you do.
You know what you do, and
so you know all the effort,
and time, and energy you
pour into it, but they don't.
So they're not going to place
the value on it as much.
But if they can wrap their
mind around your value,
then, they will find you more valuable.
Which means they'll pay you more
and you can escape the trap.
So the idea is to be the financial
professional in your client's life,
that they actually want.
And what is it that most
business owners want?
They want someone that they can trust,
to tell them what to do to have a
growing and successful business.
So if you, as the accountant,
can be that person that a client
trusts to tell them what to do.
To give advice on something
that they really care about,
which is their business, then, your
stock with them will go dramatically up.
They'll pay you as much as you
command, as much as you want,
and they will not think of you as just
the person that records the books,
or just this commoditized,
necessary evil that I've got to pay.
And they'll start to view you as
somebody that's a trusted confidant,
an advisor, somebody they
want to talk to every month.
– Yes, that advisor, the term that
we use a lot is that business partner.
You want to be that business
partner, not just the number cruncher.
– That's right, you'll still
provide the same value,
that in your mind they need,
which is accurate books, taxes.
But you're going to shift the
value in your client's mind.
Which, I mean, let's be honest,
it's really the only thing that matters
is your client perception of you.
That's what's going to pay the bills.
If you get more clients who
have a higher perception of you,
that means you can earn more money,
and that's how you escape the trap.
– All right, so you work with
a lot of different organizations
and folks within the accounting
space, and the accounting world.
Maybe there's some short story
or two you can share, of people
who have effectively navigated
this traditional role
to the more advisory position that
you've seen that was successful,
and some lessons that
you've seen and learned.
– Yes, it's a good question.
So we have a membership program
where we train accountants,
and bookkeepers, enrolled agents, and
CPAs on how to be an outsourced CFO.
Right now we have, I think,
325 people in the program.
One of my favorite stories,
is this guy who's been a tax
practitioner for about 20 years.
We have what we call a
Wins' Board in our online portal,
and he posted in the Wins'
Board a few months ago,
and he says, "I've owned a
tax practice for about 20 years."
And he goes, "Every single
tax season, I've dreaded it.
But I joined The CFO
Project two years ago.
Last year I sold my tax practice,
and instead of having..."
I think he had about 400 tax clients,
he now has less than a dozen CFO clients.
And he said that he's made more
money, this year, so far this year,
than he's ever made as a tax professional
and he didn't have to go
through a tax season.
And I'm not saying there's anything wrong
with going through tax season,
but it's just not for everybody.
And we have plenty of members
that still do taxes for their clients.
But they've enhanced their tax service,
to be this all encompassing
CFO advisor for their clients.
So they'll do CFO work and tax work,
or CFO work and bookkeeping work,
and they'll bundle it all together.
And that's how they
differentiate themselves
from all the other accountants,
and all the other software that's trying
to compete with accountants out there.
The beauty of this is that by
giving your client what they want,
which is advice on how to
have a successful business.
And not to digress, but success to us,
financial people, means a business
that is generating consistent,
positive cash flow every single month,
that is a successful business.
Because if you think about it,
every business that failed
would have not failed
if they were able to generate
consistent, positive cash flow.
So that's our job as CFOs.
So if you could do that to your client,
they're going to value
you way much more,
and you'll be able to separate yourself
from all the other accountants,
who are just, and I use the word
just in jest, recorders of the past.
In the minds of your clients,
they think of you as somebody
that just records the past,
puts the right numbers in the right
boxes, makes sure the IRS is happy,
and makes sure that the books
are closed, whatever that means.
– It's interesting because as you
work with so many different CFOs,
in that interim capacity, whether it's
a client or that fractional type of role.
How do you see this CFO role changing,
and are there specific critical skills
for somebody who wants to
get into this line of work?
– Yes, it's a good question.
In terms of the CFO role changing,
there are CFO terms being floated
out there, in the accounting space.
Fractional CFO, advisor,
outsourced CFO, part-time CFO,
and there's really not a
good definition of what it is.
In our view, we like to call it
a productized CFO service.
You're offering an outsourced
CFO service, but it's a productized
CFO service, that's in direct
opposition of a fractional CFO service.
A fractional CFO service,
you're going to a client
and saying, "What do you need?
What problem do you need me to solve?"
And you're relying on them
to say, "Well, I need X, Y, and Z."
And then you're creating
this very customized
engagement for your client.
Well, the problem with that
is that because it's
customized, you can't scale it.
You can't take on many of these
clients because each client,
each take-on, will feel like a part-time job.
And if you have multiple part-time jobs
where you're doing very different things,
that's just a recipe for
burnout, and it's not scalable.
Well, what is the definition of scalable?
If you think about a manufacturer
who manufactures,
I have a coffee mug on
my desk, coffee mugs,
they've created the product once,
and then manufacture it over
and over again, that is scalable.
Well, that's what we need to do.
So we say offer a
productized CFO service.
Have one standard CFO service
where you're telling the client,
"This is what you're going to get
and why you should hire me.
But because you created it once,
you can do that same system over
and over again, with your client.
But because it's still a service
and your client highly values it,
they're going to pay you like it's a service,
but your cost is going to
be like that of a product.
And, so, that's a productized CFO service.
And, so, that's the difference
between all the other outsourced
CFO services out there,
fractional CFO services.
So you've got to have a system that's
scalable, that will, A, get results,
and B, that you can do the same steps
with every single month,
with every single client.
The second part of your question
in terms of how an accountant
needs to think of themselves as
an advisor, the mindset shift,
is that when you're advising
somebody, you have two critical jobs.
The first is you've got to give
them advice that actually is helpful,
which a lot of accountants struggle with.
I mean that's why they give their advice
away for free because they're not sure
if the advice they're giving is
the best advice, but I digress.
So you got to give advice
that is actually helpful.
That's really going to help your
client grow their business,
have a successful business,
meaning generate positive cash flow.
But the second component
is you have to get your client
to actually take that advice.
That is a hard skill.
You could be the most
credentialed CFO on the planet.
You could be the CFO for the
biggest company in the world,
and I think right now it's Apple.
You could be their CFO and
still fail at being the CFO
for a small or a medium-sized business.
If you can't get that client whom
you don't control to take action.
You don't control them, they're your client.
But you've got to get them
to take action and if you don't,
you will fail at your job of CFO.
And, so, that is an art
as much as it is a science.
– Well, and I think that goes back
to as a CFO coming to the table,
and having a voice at the table,
and being that true business partner
so that you can help make
the strategic decisions
because otherwise you'll
never be able to do that.
Like you said, you can be
the CFO of the biggest thing
and still fail because you're
not helping with the direction.
– Yes, I love the word partner
because if you think about the partner
in a marriage or dating, sense, they're
somebody that you view as an equal.
Somebody that you trust,
that you want their advice,
that you're confident on, they're
somebody that you lean on for support.
That's exactly what you
should be to your clients.
And, so, an outsourced CFO
should be somebody that
the client intimately trusts.
Because there's not that
many people in a client's life
that they could trust,
if you think about it.
They can't really trust their employees
because their employees don't get it,
and at the end of the
day, they're employees.
You could trust your friends and family,
but they don't understand numbers,
or business, or financial strategy.
They're going to be supportive, but
they're nary not going to help you.
Your banker, the other numbers person,
in most business owner's life, they've
never ran a business themselves.
They don't get it.
Business coaches, oh, my goodness,
business coaches, there
are many of them out there,
and most of them are terrible.
Because the advice they are giving,
they have no idea how
that impacts cash flow.
How their advice has impacted cash
flow because most business coaches
are leadership coaches,
or management coaches,
or sales coaches, or whatnot.
And I'm not saying they're all bad,
there are some that are good,
but the good ones are really expensive.
And, so, who does a business
owner turn to for help?
If you could be that person,
oh, my goodness, they'll pay you
a lot of money, and you will be
thought of as their trusted partner.
– Mh-hmm, so we can't talk
about transforming the role
and becoming that good business partner,
without talking about technology.
Technology has played a huge role,
and it's continuing to play a huge role
with the advancement of generative AI,
and different accounting technologies.
How are these new technologies
reshaping the role of the CFO
and the accounting industry?
And then how can you, like you've
been saying this, outsourced CFO,
how can you utilize those
technologies to do better at your job?
– So a lot of people have
different opinions on technology,
especially things like AI, and it's
easy to feel scared about the future,
when it comes to things like that.
I've read statistics that 95% of
what accountants do, today,
will be replaced, within a decade, with AI.
And one of our members
sent me an article last week,
that said that AI has been able to close,
reconcile a set of books, in less
than four minutes, which is nuts.
But, here's the thing, I think
this is a wonderful time
for the accounting profession.
Because embracing technology
and things like AI, and software,
and whatnot will allow us
to do less, spend less time,
on tasks that are, menial, and spend
more time on higher value tasks.
Things where you're able to
charge more money to your client.
So you could be your client's tax
person or your client's bookkeeper
and be their advisor, but now you're
able to spend much less time,
or you will, in the future,
spend much less time
on those transactional
or compliance things.
Instead of having to spend a
lot of time looking up tax code
or figuring out the best
scenario for a client.
Let the software do it, and then you
spend more time advising your client.
I mean, it's going to happen,
whether we like it or not,
technology is going to happen, we can
either embrace it or not embrace it.
I mean, if you think about it,
in 1902 nobody had a vehicle.
Everybody rode around
on horses and buggies,
and all of a sudden, this vehicle came.
You could be scared by it, or you
can embrace the possibilities
of what this thing is going
to help you accomplish.
– I like that.
I like how changing
your mindset of saying,
"Hey, this is a tool that's going
to help me get rid of the tasks
that I don't like doing and
that can be cumbersome,
and then it allows me
to be more strategic."
So in some ways, we have to
learn the new technologies
in order to become more strategic.
– Right, I agree, and I think
there's plenty of places to learn it.
But I don't think anybody should feel
this overwhelming sense of, "Oh my
goodness, I'm behind the eight ball."
Because things like AI and
software change all the time.
Just slowly read a couple of
articles, and then try it out yourself,
and then just see where it takes
you, and then go from there.
I mean, at the end of the day,
regardless of how you
accomplish your job,
your client just wants this trusted
partner, like we've talked about.
They don't really care how it gets there.
– That's very true.
– It's like somebody going
to the store to buy a drill.
Most people that go to the home
improvement store to buy a drill,
they're not really concerned
about the drill itself.
They really just want what the
drill provides, which is the hole.
That's why people buy the drill.
And, so, you have to remember,
your clients are buying you
for what you provide, they don't
really care how you provide it.
–That's true, well, and you can
also, like you said, be aware,
read articles, and a lot of technologies
that you're probably already using
are going to start integrating
different generative AI into their software,
so that you don't even have to learn it.
It'll probably just be a click of
a button or type a question in,
and it'll answer things for you.
– Absolutely, I mean, anybody
that's used QuickBooks Online
has seen this morph over
the past several years.
QuickBooks used to be desktop,
obviously, and then they moved to online.
And then a lot of accountants don't
like it because it's automating,
it's trying to automate a lot of tasks.
But that's essentially
what AI is going to do.
They're going to say, "All right,
well, this transaction,
we think should go in
this account, is this correct?"
I mean, QuickBooks has been
doing that for years now,
and you set up rules around that.
Well, that's essentially, by setting up rules,
you're training the
software to think like you.
That's essentially what AI is,
you're training something to
think how you would think,
and then next month you just run
all the rules and boom, it's done.
That's really what AI is.
So you don't have to think
of it as this big, scary thing.
I mean, you've been doing it more
than I think most people realize.
– Mh-hmm, that's very true.
So somebody listening to this
and they're like, "You know what?
I've been an accountant for a long time."
How do you shift your mindset
from the way you've
always been doing things,
to be more aligned with this,
be the advisor, be the partner.
Because I imagine it's very
difficult to make that transition,
especially, if you've been
doing it a long time.
– Yes, I think anybody that's been
doing something for a long time
is set in their ways, and they're
comfortable in their ways.
But if there's any part of you that thinks,
"I either don't want to be
doing this much longer."
Or I'm getting paid way
too less to be doing this."
The average accountant's salary
in the United States is $74,000.
We think that's very low for the experience
and knowledge that accountants have.
And, so, therefore, a lot of
accountants are underpaid.
So if you think you're underpaid
or you just don't want to do this,
or your clients are asking for advice.
They're saying things; they
may not come out and say,
"Well, I have an advice-related question."
But they're saying things like, "You're
telling me I owe $24,000 on taxes
because I made 150,000
last year in profit,
but I only have $7,000
on the bank account, why?
Why am I paying so much in taxes?"
And the accountant is thinking,
"Well, I don't really understand."
Or "No, I can't help you or advise you
because I have a stack of 300
other tax returns on my desk
that I got to complete before Friday."
This is a stressful situation for everybody
because the accountant wants
to be able to help their client,
and the client wants the help
because the client's clueless.
And, so, if there's any part of you
that wants to be able to be intentional
about the advice that you give to your
clients, then I would look at advisory.
Either adding on an advisory service
or completely getting out of what
you're doing and becoming an advisor.
Or hiring somebody on your
team to take the compliance
and transactional work off your plate
or hiring one of these
third-party companies
that outsource the accounting work.
If there's any part of you that wants
to be able to make more money.
While working less, while having such
a huge impact on the thousands,
literally, thousands, of business
owners in your town that are struggling,
I mean, this is hands down the way to go.
– Yes, that really sounds like it
and it's looking at what you're doing
and saying, "Is this what
I continue want to do,
or do I want to advance or scale up?"
– Yes, totally, it's not for everybody,
but for the people that
would like to explore it.
I mean, I think you should
explore it because your clients
would love you to be
their confidant, their partner.
–Mh-hmm, I love these
types of conversations
because it's looking at the accounting
space from a different perspective.
And you have a unique perspective,
where you work with
many different clients.
And I like to ask, what are your
predictions, as you look to the future?
Where do you think the
accounting space is going to go
and what should people be looking
for, as they want to go with the tide?
– Yes, that's a good question,
and we touched on this, but
I think the accounting profession
is going to be less transactional
and compliance nature,
in the future and more advisory nature.
I mean, it's just a simple fact
that a lot of software, and AI,
and things like that, it's going to take
this complicated tax code,
and accounting rules,
and all that and simplify it,
and just make it easy.
And, so, the traditional need
for an accountant is going
to go away, it just is.
But the accountant is still
needed, that's the beauty of this,
you're needed to do the one thing
that you've always been
needed, by your client,
which is to give advice on how
the company can be a growing
and more profitable business.
Think about the CFO for
a Fortune 500 Company.
The CFO oversees
the accounting department,
but their bigger job is to
understand the strategy.
Understand where the client,
in their case, the CEO,
and the leadership team,
wants to take the business, and
figure out are they on track to do it,
and suggest ways to help
them stay on track,
and to ensure the business
is financially viable.
Every business on earth needs
somebody to do those things.
And if you could be that person, you
will embrace the future of accounting,
of what clients need from their
accountants, in the future.
So that's really where I think the
accounting profession is going,
but I think it's exciting.
– That's really exciting and it
allows for you to not be stuck
in the same thing every day.
Because once you get into strategy,
you're thinking outside of the
normal box that you've been put in,
especially, if you grew up from
starting with a staff accountant,
and moving your way up
within an organization.
–Yes, exactly, I mean, honestly,
that's what I did, out of college,
I became a staff accountant.
I mean, personally, it was just
incredibly boring to just sit there,
behind a desk, and record the past.
So I purposely got
myself involved in things
that I could help the business grow,
and I enjoyed that way more than.
And by the way, they actually liked it more
that I was being a proactive accountant
because my predecessor, who've
been there for two decades, didn't.
All she did was just sit behind
a desk and record the past
and nobody heard from her.
– Yes, and that sets you apart.
Certifications and those
things can set you apart,
but actually being able to get in there
and do the work really sets you
apart from your other colleagues.
– Totally, absolutely,
we have to remember
that most people do
not speak accounting.
Most people don't want
to speak accounting,
and accounting is our language but
it's not the outside world's language.
So if we, as accountants, can
speak the outside world language.
If we can speak business
strategy language,
then the people that you work for
or the people that are your clients,
they will love it because they
do not want to speak accounting.
They want to speak business strategy,
"How can I grow my business?"
– Well, Adam, I've really
enjoyed this conversation.
I just want to thank you again
for coming on the podcast today.
– Yes, thanks for the invite, this was fun.
< Outro >
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