Why Accounting Should Be a Priority as an Owner

In this episode of The Faces of Business, Susan Bryant, CPA, CTP, Founder & CEO of Unboxed Advisors, shares her unique insights into how solid accounting can drive business success and stability.

In this episode of The Faces of Business, Susan Bryant, CPA, CTP, Founder & CEO of Unboxed Advisors, shares her unique insights into how solid accounting can drive business success and stability.

As a seasoned Certified Public Accountant and Certified Tax Planner, Susan is a vanguard in revolutionizing accounting practices to foster entrepreneurial wealth and business growth.

With over two decades of expertise, Susan has transformed the financial landscapes of numerous businesses, guiding owners through optimized tax strategies and profitability enhancement. At Unboxed Advisors, she challenges the traditional accounting firm model with innovative solutions that cater to dynamic business needs.
In today’s Livestream, Damon warmly welcomes Susan. He requests her to talk about her professional background.

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Susan reveals her unconventional journey into accounting which started with a marketing degree and taking accounting classes for better job prospects, and is influenced by her mother’s encouragement. Despite lacking a double major, she accumulated numerous accounting credits and began her career as an internal auditor at a bank.

After passing the CPA exam on her first attempt, she ventured into public accounting, starting in a small firm where she wore multiple hats alongside her partner. Transitioning to outsourced accounting, she co-owned a CPA firm, pioneering outsourcing practices in accounting. Over a decade, she helped businesses lacking accounting expertise, shaping her belief in the value of proficient accounting.

Damon shows interest in Susan’s experience in public accounting and things happening in accounting today.

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Susan expresses her deep affection for accounting, referring to it as her “love language,” echoing Warren Buffett’s sentiment that accounting is the language of business. Business owners are closely connected to their accounting, as it directly correlates with their success. From entity structuring to tax planning, all these aspects contribute to building and preserving wealth for individuals and businesses.

Damon draws a crucial distinction between cash flow and profitability, a common challenge as businesses grow. He recounts a client’s experience where unchecked inventory purchases led to cash flow problems despite revenue growth.

Susan, appreciating Damon, says that business owners face these challenges when they don’t fully grasp these interconnected aspects. She praises Damon for playing his role in supporting and educating business owners to make informed decisions and avoid pitfalls.

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Damon invites Susan’s comments on AI advancement and automation she’s observed that are aiding accountants in saving time and improving efficiency in their work.

“Automation is the future.” For business leaders, it is now a necessary step to embrace technology and automation to alleviate the burdens of manual tasks in accounting. Although there has been initial resistance to change, automation is a long-term solution to simplifying processes, improving accuracy, and increasing efficiency.

Similarly, the Accounting Guru mentions various areas within accounting, such as accounts payable, payroll, and accounts receivable, where automation can be implemented and urges a cohesive approach to implementation to ensure minimal disruption to business operations.

When it comes to presentation and aesthetics in financial records, Susan asserts credibility hinges on how well they are organized and visually appealing. She advises using technology to streamline billing, accounting, and expense processes, and configuring systems correctly from the start to simplify operations in the long run.

Agreeing with the guest, Damon advises businesses to anticipate growth and implement automation from the outset to manage increasing transaction volumes efficiently. He asks Susan to share insights on what business owners should consider regarding talent management.

Susan urges business owners to recognize that as their company grows, the skills that served them well in the past may no longer be sufficient. She warns against the common pitfall of promoting long-term employees into higher-level financials without assessing their qualifications and experience appropriately. Susan shares a cautionary tale of a company that suffered due to placing an unqualified individual in a CFO role, resulting in significant financial mismanagement.

Damon relates the discussion to the expanded options for accounting services, including outsourcing and fractional accounting, enabled by tools like QuickBooks Online.

Susan, herself a CFO, thinks it is important to bridge the gap between the outsourced accountant and the business owner. She stresses that effective communication and regular supervision are essential components of successful outsourcing arrangements.

Damon shares a key control drilled into him during his career: ensuring that someone other than the bookkeeper signs checks and maintains proper records, even if the owner isn’t always present to do so. He supports a system where one person specifies payments while another approves them.

Discussing the same, Susan recounts some of the ugliest accounting scenarios she’s encountered, including a fraud case involving embezzlement by controllers and an incident where payroll discrepancies led to a negative bank balance on the balance sheet. Despite these challenges, she finds satisfaction in cleaning up accounting records and witnessing the transformation to accurate and meaningful financials.

Likewise, Susan advises caution when selecting accounting talent and encourages business owners to choose individuals who are proactive in identifying and addressing financial issues.

Finding Susan’s response great, Damon shares another anecdote of a business owner who discovered discrepancies when transitioning to new CPAs.

Susan encourages business owners to consider the best options for their business rather than sticking with familiar practices, even if it requires exploring new avenues and engaging with different types of advisors.
As the show reaches its conclusion, Susan discusses the critical role of forecasting, especially for business owners who want to sell their business and exit. She explains how creating a convincing narrative about a business’s potential requires a cohesive forecast that aligns with the vision of growth and expansion. After all, accounting is not just about recording numbers. Besides, it’s about shaping the future of the business.

The conversation ends with Damon thanking Susan for her time.

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ABOUT EXIT YOUR WAY®

Exit Your Way® provides a structured process and skilled resources to grow business value and allow business owners to leave with 2X+ more money when they are ready.

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51:21
SUMMARY KEYWORDS
accounting, accountants, business owners, business, happening, work, financials, started, susan, payroll, damon, talent, accounts, bookkeeper, talk, great, cfo, grow, sell, automation
SPEAKERS
Damon Pistulka, Susan Bryant

Damon Pistulka 00:02
All right, everyone, welcome once again, the faces of business. I’m your host, Damon Pistulka. And I am excited for our guest today because we have none other than Susan Brian here today. And we’re going to be talking about why accounting should be a priority as a business owner. Susan, thanks for being here today.

Susan Bryant 00:21
Oh, Damon, thank you so much for having me on the show. I’m excited to be

Damon Pistulka 00:25
here. Yes, yes. Susan is with unbox advisors out of Dallas. Susan, you’re a longtime CPA, you’ve been an tax advisor. It’s awesome to get you on the show. And I didn’t even realize that this is for 16. Today after taxes are due. You probably got to we’re we’re now at least got that big rush. Now we’re working on the extended returns. But great to have you here. I’m so excited to talk today.

Susan Bryant 00:55
Well did it was yes, it is. We are breathing a little easier now. Yeah.

Damon Pistulka 01:00
So let’s hear a little bit about your background. We always like to talk about how you got into what you’re doing today. And I think it’s going to be real important for our listeners to understand that history. So they when we start talking about how a business owner, they’re counting some of the features around it. You’ve been there done that. So

Susan Bryant 01:22
yeah, well, you know, as with some professionals, I got into accounting all sorts of backwards. So I have a degree in marketing. I took some accounting classes in college, because my career counselor said that I would get paid more money with my first job, right out of college. And I could hear my mom in my ear, like, yes, you need to give her yet get out of college. So we can start a job get a good job. Good job. So I’ve always been a fan of math. So I just kept taking more accounting, more accounting classes. And so when I graduated from UT, I couldn’t have a double major, but I just had all these hours in accounting. So I took my first job was being an internal auditor at a bank kept pursuing this. And then I ultimately passed the CPA exam on my first try and said, Hey, I’m gonna try my hand at this public accounting thing. What does it mean to be a CPA? Or public accounting? Yeah, so. So that’s where I started, I started working in a very small firm. So it was me and the partner. And you’re gonna wear all the hats when you work in a firm like that. Yep. So it was an excellent way for me to truly understand all the facets that are happening from an accounting perspective in a business. And that kind of led me down the path to become an auditor for a while. And then I, I really enjoyed the aspects of accounting that allow you to influence and create value in the organization. So I spent, oh, probably a decade being an outsourced accounting provider at at a CPA firm where I was part owner. And that was a phenomenal experience, because we were taking these businesses where they did not have the adequate talent in place. They didn’t know how to do accounting the right way. And we basically created a practice and this was, this was back when outsourcing was like, unheard of. Now, outsourcing your accounting is commonplace. If you’re not outsourcing your accounting, it’s almost like why are you were trying to hire somebody came? Yeah. So yeah, so that was a really an incredible experience, continue to manage and lead that for quite a long time. I had done taxes before. And when I first started and started getting more into the tax planning, kind of as I started functioning at a higher level with those business owners, and now at unbox advisors, what we’re finding is those business owners they need even more, they need more time with accountants to truly bridge that gap between what the more traditional accountants are doing in terms of compliance, you know, the basic blocking and tackling and all the other things that are getting to get them to where they want to be financially where, you know, their dreams come true. Yeah,

Damon Pistulka 04:23
yeah. Well, that’s a great point, we’ll get back to that because that is a big deal is, you know, when you think about the traditional compliance, okay, I’m not getting fined, you know, on a tax or something like that, to really help them people build wealth with their accounting decisions. I think that’s a definitely something that we’ll we’ll cover here today, because it’s a big deal. So when you’re back, so in public accounting, I am always amazed that public accounting compared to private accounting And so what do you think that public accounting really taught you that you’re going, it really helps me even today?

Susan Bryant 05:08
Oh, I can’t even I mean, accounting is my love language. I can’t even imagine a world without debits and credits. A few things about accounting and why it’s impacted me. So significantly. First off, I love business. And as Warren Buffett says, accounting is the language of business, it is just they are it is embedded in the business. And if you are a business owner, and you are distanced from your accounting, you are distanced from your success, that’s just all there is to it. So that’s one of the reasons why I really love accounting, they have just to me, it, the entrepreneur lives and dies by those financials, and it is important to have that function working perfectly in your business. I think the other thing about accounting is, especially public accounting, is it it’s broad, people come to accountants to have many problems addressed. And accountants are often looked to be a resource in many different capacities. Some of it is entity structuring, it’s tax, it’s tax planning, it’s the accounting, it’s helped me understand how I can make my business more valuable. And then ultimately, down the road, you know, succession planning and estate planning, it just runs the gamut of how you can influence and build true wealth as an individual. So for those reasons, I just love accounting, it is truly it is a it is a place, it’s almost a refuge of sorts for people who really love business, because they are just so tied together.

Damon Pistulka 06:54
Yeah, yeah. I still remember the first first job that I had, where I really figured that out, when you really understand why it’s because I got an engineering degree, like you, I didn’t start out doing financial work. And as I as I started to get into running companies, and you really begin to understand how important that is. And of course, at that time, they sent me off to get more training in finance and do a bunch of that good stuff. But you know, from a practical level, when you really understand your, your numbers, the finances, and I think, more than monthly, even in the in the situation that I’m in, we like to do it, but it gives you a whole new perspective on your business is just that that perspective, you can just go home and sleep at night, because you know that things are happening. They’re going right or when they are not, you know, okay, let’s adjust something. Yeah. And

Susan Bryant 07:59
it’s your first warning signs, right? It’s Oh,

Damon Pistulka 08:04
yeah, it’s so powerful. You know, I can’t tell you how many people that that we talked to and get into a fast growing business and they go, Oh, wow, we’re not making any money. And you look at it and you go, Okay, let’s let’s just see. Cash is one thing, profits and other and they start to really understand the different pieces in finances, a business is growing. And everybody says, I want to scale from zero to $100 million in one year. And then you realize, okay, if that means that you have inventory and receivables and other things that have gone that, do you really understand what that’s going to take to do that. Because most people don’t understand that cost, the capital cost and the growth of a business. And, you know, we’ve I can remember a conversation not too many years ago, when a client grew an awful lot. And they were a client that liked to buy, like to buy inventory, and they were an importer, and of course you’re buying them in chunks of a few $100,000 A container kind of thing. Oh, I just bought I just bought five more containers you come in well, we don’t need those 500 Oh, we, you know, the supplier called me they had them ready. I just told them to ship them. And then you know, three months later, they’re like, Oh, I says I’m making money but we don’t have any money. I said well, your inventory went up by a million dollars. Right? Yeah,

Susan Bryant 09:19
that’s what your money what is cash. Now we’re all focused on inventory turnover. Right. Let’s how do we how fast can we sell this? Are we Yeah, margin that we wanted in order to turn it into profit? I mean, the whole point of inventory rate is to buy it and then sell it for more than you bought it for the hobby. That’s the goal. Right? So it is a it is a challenge when business owners are there’s a disconnect in their mind, right? They don’t necessarily understand fully how these items are all integrated together. And this is I think the role that you play And we play in supporting each other and supporting the business owners to help educate them. So they’re making better decisions. And they’re not being they’re not creating problems for themselves. I mean, I, I’m sure there’s leadership coaches all over the planet who would say you just got to get out of your own way? Well, this is one of those areas where if you don’t have the right technical support on the accounting side, you’re basically in your own way. Yeah.

Damon Pistulka 10:22
Yeah. Yeah, it is. And, you know, we’re going to talk about this in a little bit. But the one thing that I’ve seen over the years recently, in the last 10 years anyway, is the level of complexity to accounting has grown significantly. Yeah. And just so we’re kind of going down and roll, run some things. But I did want to go back, because we’re talking about why accounting should be a priority as an owner. And let’s let’s talk about first of all, some basics, the discipline of accounting, what are some of the things that you’d like to talk about about that, just just getting good accounting discipline, and how that can help you.

Susan Bryant 11:08
Just like any other good habit, accounting is one of those things that has to happen routinely. There has to be the proper procedures, there has to be the proper resources. And there has to be the proper accountability and accountants should be accountability anyway. But for whatever reason, sometimes this is just one of those areas. Well, I just couldn’t get it done by the deadline. And as a business owner, we have to understand and clear the path for how to make this discipline a priority. So you can’t over overload or overwhelm accounting function. This is very tempting business owners like, oh, yeah, they can also do it, they can handle some of the HR stuff in. And so the accounting function gets overwhelmed with all the other things that are important in the business. And then the accounting starts to suffer. So that discipline starts to fade. And then everybody says, Well, what’s going on? This is a problem that what went wrong? Well, can you got to be thinking strategically about how to use those resources most effectively, this is becoming an even more and more important thing, because events are in short supply, an excellent accountants are in a really short supply. I mean, I’m sure you’ve guys have been listeners have been hearing and seeing I mean, even the Wall Street Journal is posting articles about how now even SEC is noting IRS in 10k reports and 10 Q reports, because the quality of the auditors is just not there. And the quality of the accountants doing the work for the even the publicly traded companies is not there. So guess who’s gonna suffer even more when it comes to finding talent, smaller businesses, it’s going to be more difficult. So. So you got to make sure you’re being very thoughtful about identifying is a priority when it comes to accounting, what you’re going to put on those people and try to make sure that you’re not creating an environment where the accounting becomes less of a focus, and something else replaces it. You

Damon Pistulka 13:10
make a great point there. Because as a business grows, you know, it’s real tempting in the beginning, like you said, it can be your office manager, they could be doing HR, they could be doing accounting, they could be buying stuff, even sometimes you see that. But as our business grows, you really need to think about those different buckets and how much time they’re taking. Because when you look at it, people are going to be coming to them, you think of the squeaky wheel, they’re going to be coming to him when they don’t have materials they need. So they’re going to worry about ordering, they definitely got to make sure that payroll gets done because people want to get paid, that’s not a good thing at all, never get accounting, that just kind of gets pushed, pushed down the road. And that can really suffer first, because those other things are so immediate and urgent.

Susan Bryant 13:58
It’s true. So yeah, yeah. Business owners, I feel like they, they accounting people are people pleasers, they want to do a good job. This is just a part of the DNA of being an accountant. If you are a you’re a really good team player. When it comes to accounting, you won’t tell somebody No, you’re like, Okay, I’ll take that on. I can get that done. I’ll find a way. But really, there is a max capacity for people. And it’s up to the business owner to really provide that leadership is saying no, no. The accounting is important. And I want this to remain a primary focus for you. How can I help alleviate this? How do we get you the support that we you need?

Damon Pistulka 14:39
Yeah, yep. Yeah, that that’s a great point. So these accountants are getting busier and busier. So we hear a lot of talk about automation. We talked about AI. What are some of the things that you’re seeing that are really starting to help accounting departments and accountants themselves saved? Time in what they’re doing.

Susan Bryant 15:03
Okay. Automation is the future. I mean, we all know it. I mean, come on the chat GPT. I mean, it’s coming. The key for recounts is that maybe the auditing in the DNA of accountants is that they don’t like to change.

Damon Pistulka 15:16
Yeah.

Susan Bryant 15:19
So we’re, we’re gonna have to fight against that as business leaders. And we are going to have to encourage technology. I think ultimately, once it is, the business case is proven that automation will make your life easier. And it will decrease the burden that is on you of having to do things manually speed things up, making them more accurate, it will get easier, but that initial like, Hey, we’re gonna automate accounts payable, we’re gonna get every app that we have syncing with the accounting software, so we don’t have to record all things manually. That’s the future, it’s got to happen. We just are going to have to work with people differently to give them time to get those things set up. You can’t, hey, I need all this stuff, keep doing it, keep doing it, keep doing it. And by the way, I need to have three initiatives where you’re automating these four, it’s you again, you can’t do it, you need the right leadership on spearheading those automation projects to get them done effectively. So they don’t create more problems down the road. So that would be my automation is the future, it needs to be done. That includes AP payroll, I mean, AR I mean, now even there’s programs that will do all of the automation of accrual entry is recognition of, of deferred revenue, you name it, there’s software out there that does it. It’s just a matter of configuring and implementing it in a very cohesive way that it doesn’t disrupt all of the other things going on in the business. Yeah,

Damon Pistulka 17:02
yep. So what are what? So we’re talking about automation. And I know we can get far down the road in in automation. But what are some I like, I’m looking at automation today. What’s like step one, and step two, maybe step three, that you would start to look at as a business owner thinking about this. I’ve got an accountant that’s there, it’s getting harder for him to get things done.

Susan Bryant 17:31
Yeah, I think it’s sort of like how people say, to talk to business owners and say, What are your biggest pain points? It’s the same thing. When you talk to accountants? What are the things that are taking you the most time? If the financials are getting done late? What is it that’s causing that? Where are these systemic issues in the processes that are delaying the ability for you to get the things done quickly, efficiently, accurately, without having to go back and like limit? Let me fix that? That’s not right. So that’s where I would start, I would start with a conversation of really trying to diagnose where are the where are the bottlenecks? Where are the hang ups? Where are the things that just take a lot of time where we could really leverage technology as our free hand to make things faster, better, easier? And ultimately, you know, improving quality of life for the accountants who are under the gun to get stuff done?

Damon Pistulka 18:24
Yeah, yeah. Well, I’ve got a, there’s a ton of comments. I’m gonna say thank you to the people with the comments here today. I not seeing a lot of the pictures of people. But there’s a great question here. Any guidance for solopreneurs of those getting started? How to build a solid accounting infrastructure that will grow with your company?

Susan Bryant 18:44
That’s a great question. The first thing that comes to mind is have a good chart of accounts. Oh, my gosh, I, Damon, I’m sure you could speak to this. I mean, I think that is the starting point. For every solid accounting infrastructure is chart of accounts. And think about what it is that you are going to want to see on the back end of that, that reporting and what’s going to make sense to eight profitability, to evaluate performance to evaluate revenue, revenue mix, like all of those things, the chart of accounts is really the beginning part of that. And for all those people who are like, Oh, I just like QuickBooks auto, create the chart of accounts, delete, delete it and start over. Okay, and you can email me and I’ll give you one. Okay.

Damon Pistulka 19:36
I love that, delete it and start off using numbers to

Susan Bryant 19:39
please use the numbers. Okay. Yeah. And, you know, the other thing that I mean, this is sort of tangential to that like, but pretty matters when it comes to Financials. A lot of times people say, Oh, well, you know, you know, I’ve got it doesn’t really matter. It’s in there. It doesn’t have to look good. I beg your pardon. Accounting records have to be pretty because if it doesn’t look pretty, it doesn’t make pass the sniff test. Like, if it doesn’t look good, it’s not credible period. So just make sure presentation is really on the list of things to consider. So outside of that, I would begin trying to leverage every piece of technology as you are billing and accounting structure, infrastructure and a new business. Think thoughtfully about getting those things configured and create user adoption from the beginning. If you’re going to automate accounts payable, automate it from the get go. Wait, it doesn’t make sense. Same for like expense reports. And if you’re using a payroll service, set up the where it maps all the way into your software, and it pushes take the time to get those things set up right from beginning it will just make your life way easier.

Damon Pistulka 20:47
Yeah, yeah, that’s huge. Those integration between different systems, even in a solopreneur company, if you’re doing credit card payments, all these other things, they can all be integrated to be able to so you’re not manually entering. That’s a huge thing.

Susan Bryant 21:03
Yeah, I mean, there are still people manually entering payroll, or accounts payable, or bank transaction. I mean, it’s happening. And it really needs to be questioned. Yeah,

Damon Pistulka 21:15
yeah. Especially when you look at it, and I, we work with a fair amount of ecommerce clients and, and in E commerce, a lot of them do 1000s of transactions a week. And when you’re Yes, when you start to look at this thing, and you start out today, I go, I sold 10 things on my site today, but what’s it like when you sell 100? Or what’s it like when you sell 1000 And just think of the difference in workload, that means and it it gets in, we’ve seen it, it gets to a point to where you go, all we’re just gonna do spreadsheet, download spreadsheet up, or when you start to do that, that even gets ugly, after you get you get going, you know, so you really need to think about this and see your, your map, I guess, to know how you’re gonna go from where you are to where you’re going to be, and like you said, Start automated in the beginning, if you can, because it’s so much better.

Susan Bryant 22:10
Yeah, and keep exploring. I mean, this is like any other facet of your tech stack, you’re gonna come back and keep looking at this stuff, how can it be better, what new tools are out there? This is just a constant refinement of the business. And accounting is just one of the things you can’t neglect. Now, a lot of times, and Daymond, I’m sure you hear this from a lot of business owners is like, but that’s going to cost money. And I’m going to have to like account just accounting. Okay, guys, like this is where I want it. Like, we got to completely change your mindset about accounting, accounting is not a cost center, it is an opportunity center, all the opportunities in your business lie and you understanding your accounting records better. Okay? So you want to spend money in that area, you want to invest? In good accounting, you want to invest in the right talent, the right technology, the right systems, write processes around your accounting. And Damon, as you also know, the first thing somebody is going to ask for when they want to buy your business is what? financial state or financials. Okay, so you will have just invested in the one thing, the one thing that will get you in front of the right buyer?

Damon Pistulka 23:21
That’s for sure. That’s for sure. And you you talked about a few things there. And when I say someone, I can’t see who it is that said it, but it says email me your Chart of Accounts, please. So you’ll have to reach out to Susan after this. And do that. But the you talked about talent. And wow, has that been a huge, huge topic with with business owners that are looking for Italian talent or with their existing? And then just because we talked about the increasing complexity, but what about as you grow, your business grows? And you really need to think about how am I going to upgrade my talent? I mean, now I’m at the size that maybe I’m have to get CPA reviews every year because I’ve got bank loans or something like that. What, what are some of the things that people should these owners should consider as they’re moving through these phases and their talent? Yeah,

Susan Bryant 24:25
I think the first sort of rule of thumb is what got you here is not going to get you there. And just keep repeating that to yourself over and over again, when it comes to your accounting talent. Okay, so, yes, when a business first starts, they don’t need a CFO, right? It’s not necessary. But as the company grows and expands, they’re going to start building out and different facets of their accounting department, their finance team, like the team sort of has his way of coming together. The danger that I see in, in this is that men Many people, they think that just because someone’s been with them a long time functioning in an accounting capacity, that that is sort of the trajectory to put them into a position that would bear the title of controller or CFO. And that is very dangerous business. I can think of one example, in particular, this has been a couple of years ago, we were actually as CPAs brought in to prepare a tax return only. But the challenge is that there was a consulting company working with this company, they wanted to sell their business. They had a, essentially a billing clerk, who had kind of risen in the ranks of the company, right, great at what they did fantastic employee, you know, checks off all the like, culture fit everything. And they put this person in the position of CFO, kind of unknowing, like, what does that really mean? And what does that person really need to be responsible for? The consulting company was brought in because when they were like, hey, we’d like to sell our company, hey, CFO, like, let’s, let’s look at the financials. There were no financials, the CFO had been working with an accountant. And basically, they would just put a set of books together, like at the end of every year to prepare a tax return. And nothing existed. I mean, payroll was getting done, billing was getting done, money was coming in, but there was no general ledger. Oh, I know. Okay, so like, that’s probably the worst possible situation. Mindblowing. That happened two years ago, okay, two years ago. So it’s still happening, that there are, there’s not the right talent overseeing these these different. And, you know, for business owners, they just don’t know the difference. They think I put, this person knows what they’re doing. I’m trusting them to do this. Like, they’re good. They’ve got the title, like, everything’s cool, you know how to do all this, and they don’t. So that’s a really important component of this. Just because someone’s been with you for a while, maybe they’re really great at one specific job does not necessarily mean that they are going to rise into the position these these higher level, more strategic financial positions. proceed carefully and with caution, like you’re doing a disservice to that person. And you’re also doing a disservice to the business. And, you know, frankly, to yourself. Yeah. And same for the small business. So like the person who’s like, Hey, how did like how to set up a solid accounting infrastructure? Like, first off, don’t hire the office manager and call them the CFO? Bad news? Okay.

Damon Pistulka 27:50
Yeah, either. Yeah. Well, and this is the thing that I see today that, as we’re talking about this comes to mind for me. And we talked about outsource, you talked about outsource accounting, and you talk about fractional accounting. Now, I mean, we have so many more options than we ever did before, especially with the advent of things like QuickBooks Online, where your accountant can be anywhere in the world, literally, doing your accounting, with some oversight to really allow you to, from the beginning, set up a solid accounting system with very talented people right from the beginning, even if you’re just buying a sliver of their time as they’re working for you.

Susan Bryant 28:37
But Damon, you hit on a really good point there. And that is the oversight. So you’re it’s not management by abdication? It’s not like I don’t know, the outsourced accountants do that. Oh, no, no, no, no, no, no, just because you hire outsource bookkeeper or accounting service, whatever it is, there still has to be this level of supervision and review that’s happening on a monthly basis, or perhaps even more frequently, depending on what’s happening in your business. It there has to be something more that’s happening there. So I, I’m a big fan of bridging that gap between the national and the business owner there needs to be a liaison there who’s helping to interpret those results, and drive and drive some of the initiatives like okay, hey, we were going to work on selling more of this product. What’s happening with this? That’s not happening. Okay, we’re system systemically. Now, are the salespeople not informed as to what we’re focusing on? Like? Right, so it’s all of those things, the communication now that gets cascaded throughout the organization as a result of getting that financial information? But yeah, supervision is the key.

Damon Pistulka 29:43
Yeah, that really you made made a great point there. The the interpreter, between the financial numbers and what’s going on in the businesses is key to be able to turn the knowledge into action to help your business and That’s, that’s great that yeah, and you’re another thing you said to that, and I don’t want to take lightly, I want everyone listening to think you can’t just hand your accounting off to somebody else, it’s you still have to check the books, you still have to at least know even if you’re a solopreneur, you have to know enough to go, Okay, look through the bills repaid made sure you paid who you thought you were gonna pay, make sure things tie out a little bit. And because you never know, you never know what you could be spending way more than you thought. And it’s your responsibility at the end, you know? Yeah,

Susan Bryant 30:35
I mean, internal control is still a thing. Yeah, segregation of duties is still a thing. Yeah, smaller business, monitoring controls are still a thing. And that sounds really big, like to business owners like, oh, but again, with a properly designed accounting function, those things are, are, are, are placed strategically throughout the process. So that you don’t you can sleep at night, like you said, like, my financials are going, I know, my money is my money, it’s in my bank account and not somebody else’s bank account. Yeah, it’s kind of all of those things working together. So there’s, there are a lot of components to

Damon Pistulka 31:17
Yeah, you know, you bring up the simple internal controls, I mean, why we started, why accounting should be a priority as an owner. And I’m gonna tell you, the one simple control that I was drilled into my head, as I as I work for investment owners is, you know, we have these controls in place to make sure that we don’t have to worry about these things. And the one that I always see is, if your bookkeeper can sign a check for you, it’s probably a bad thing. Yeah. Yeah, agreed, yes, you don’t need to be the one you don’t necessarily, if you’re the owner, and never there, you may not be the one that needs to sign the cheque, but somebody else needs to sign it. And somebody else that you trust needs to sign it not that you don’t trust your bookkeeper, because they may be a great person. But they’re to have two people. And I’ve seen this before to situations in life come up. And the next thing, you know, you find out that your business doesn’t have the money that it thought they did, while something happened in the family or something like that. And sometimes a bookkeeper or just, there’s a lot of money that gets lost like that every single day. And just that simple act of having somebody else or is the one that signs the checks, because we do it in all the companies we work with, if it’s not there, it gets in there right away, because you have to have somebody specifies what we’re going to pay, and somebody else approves that. And and both have to, you know, to get it submitted to get even to get in the system to get paid. Somebody’s got to approve that that knows what the heck it’s for. And you know, so you’ve got these steps in place to make sure that that money, as you said, is goes where it’s supposed to and stays in your account if it should,

Susan Bryant 33:02
right. I mean, in the fraud triangle, your job is to eliminate opportunity. Yep, that’s it. That’s it. Find a way to eliminate the opportunity for people to take money that’s not theirs. That’s best job. And not that you think somebody is going to know. I mean, we all don’t want that to happen. But if you’ve just the opportunity never exist, it never will. Period. That’s it.

Damon Pistulka 33:26
It’s it’s no different than in manufacturing factories they call Poka Yoke, it’s you make things so you can’t make a mistake. So they don’t go together the backwards, different things like that. That’s all we’re doing. We’re doing it with accounting. That’s

Susan Bryant 33:38
right, exactly. That’s a great analogy. I love that. Yeah.

Damon Pistulka 33:41
So it’s so it’s, we’re just making it so it can happen, but not but and as we go through this, you’ve been in accounting while before I mean, we’ve got some time yet I wanted to just talk about the good, the good things that you see sometimes and you walk in and you go, wow,

Susan Bryant 33:59
this is good. Yeah. Okay, I’m good things. Okay. So a lot of times the good things that I see is that business owners want there are a lot of business owners who know and want their accounting to be done correctly. And they want to dedicate they want to find the right resource to do it properly for them. So to me when I when I meet business owners who are like, I want my accounting to work, right, I want this there is a lot of good out there and there are a lot of business owners fortunately, podcasts like this and other education happening there’s a lot of good happening in helping business owners to understand why they need to focus in this area. So that’s that’s the good Okay, so there’s there is a mindset shift happening away from the it’s a necessary evil two, this is a very valuable thing. It’s happening. I see a lot in the business owners that I talked to you. The other thing is is that that I see good happening with the business owners Now that I’ve talked to is that they are getting more educated about how to work effectively with other advisors to make sure the accounting is integrated into those discussions. Okay, so how does my accounting need to be communicated to my tax accountant? And how does that influence tax planning? How do I need to communicate that to my financial advisors so that they’re appropriately putting into their systems like, Hey, this is how much cash is coming on my business? How much money should I be saving? Has that helped me to achieve my personal financial goals? They’re integrating those discussions into their insurance conversations? Do I have enough business continuity insurance, like, so there is more expansion happening around? To me anyway, these are the good things I see. I see. There’s more discussion about how to integrate these conversations. Okay. I’ll there could be more of it. But I see that as a good thing. That’s happening. Nice.

Damon Pistulka 35:57
Nice. That’s really good. So we always have to ask ugliest situation you’ve ever walked into,

Susan Bryant 36:09
oh, man, oh, gosh. Ugly, might have to have a disclaimer on that. Okay, I mean, from like, a bad like, bad accounting. I worked on a fraud case, like this was like years ago, it was like a, like a they sold like, it was like, well, this by here, buy buy here sell here a lot kind of things like was a really big, big thing back in the day. They had terrible controls, the controller and assistant controller, were writing checks to themselves personally paying their property taxes and things like that. It was crazy. The the most interesting thing about it was that they they would not let them go, we were doing the fraud investigation. And while they were still like, a few doors down, like doing their thing, Now eventually, of course, they press charges and became a thing. And you know, after we started discovering lots of problems, but that was probably one of the ugliest and most awkward things. But what was cool about it was that I got to go participate in the interrogation, like where the police questioned the the, I think was the assistant comptroller at the time. That was sort of fascinating. I mean, Damon, anytime accounting records are out of order. It’s ugly to me, and it breaks my heart. And when it gets cleaned up, and there’s just something so satisfying as an accountant. Oh, yeah, cool. A set of financials, after you’ve seen like the view to the oh my gosh, this, this is beautiful. Now, it’s so informative, it’s meaningful. It’s a useful, it’s an is an incredible experience to, like, see the transformation? So yeah, there’s countless I mean, I’ve cleaned up 1000s of sets of books in my life. One thing that happened recently, and I will tell you that this is probably some thing that I was super surprised about. But this was the person who was using QuickBooks Online. And I look pulled up the balance sheet as as a starting point for all accountants, right. Look at the balance sheet. Yeah, I’m right on the balance sheet. Negative, it was a negative $300,000 bank balance. I’m like, whoa, whoa, what’s going on here? Some sums up right? Like anytime you see that, it’s just like, This is bad. Turns out that the accountant and bookkeeper, were aware of the fact that payroll in the General Ledger was configured to come out of one bank account. Okay. But in reality, the actual payroll was coming out of it, different bank account. So it was getting recorded and duplicate on the general ledger. Hence this negative. It took three seconds to make that change, and it will never happen again. Yeah, that problem had been occurring for three

Damon Pistulka 39:24
years. Oh, my goodness. Okay.

Susan Bryant 39:27
So here’s maybe my, my cautionary tale, my words of advice, things that I would, I would say is that when you’re selecting accounting talent, when you’re choosing a CPA, when you’re choosing people to work with, whether you’re hiring or whatever, you have to make sure that these people are thinking that they are critically thinking and looking at the financials and saying, Hmm, I wonder what’s wrong here. Hmm. I think we might have to investigate this a little further. Hey, I think we might need fix that. And be bringing these things to your attention, if they don’t feel empowered, if it’s not something that they feel comfortable changing to talk to you about it. But ignoring this stuff is ludicrous. It’s crazy that you would have a negative bank balance happening for three years when it’s literally it’s just a millisecond to get this thing changed. And corrected, oh my gosh, not to mention all the entries you have to make to fix it all. To me, it’s just it was, I was astounded. I guess maybe the other thing that I would say is that, along those same lines, it’s really important to sometimes just go get a second opinion, like get somebody to come in and take a look at these things. This is why, like you were mentioning, Damon, you have the your clients who have financial statement review. It’s okay to talk to new advisors, talk to people have someone else, take a look at yourself, see if there’s something that somebody else you’ve been working with and missing, we are not meant to work with the same people for the entire lifetime of our business. It’s okay to change. And so I would just say that sometimes those changes can have really huge and tremendous impacts on the quality of the work that’s going to be performed going forward and ultimately to the value of your business. So yeah,

Damon Pistulka 41:21
that’s great advice. You know, the two things you said make sure your financial people are critical thinkers, because they can’t just be doing and not looking and, and doing a sanity check. Really, you know, because, like you said, if my bank balance is minus 300,000, and my bank balance is never minus, there’s something wrong in our system we need to fix, right? Fixed rather than just leaving it?

Susan Bryant 41:48
Yes. Well, it also told me that that business owner was not looking at their financials, because I’m almost having like a coronary, I imagine what they would have been doing, if they had been looking at their financials, they would have been like, what’s going on here? This is wrong, like, fix this, this is. So we got to correct both of those problems, right? And,

Damon Pistulka 42:05
and then a mistake like that, you wonder what other things are in there that aren’t aren’t right, as well, and are running. So these things, this is really, really a huge point that both of you said, a second opinion. And it’s sometimes you that second opinion, is just what you need to help your internal person, sometimes they didn’t know. Because there’s a lot of changes that come around, they may not know, they may not know how to fix what’s going on. There’s all kinds of things that can happen. But I cannot tell you how many times that we talked to business owners in the last that are in the last five or so years before they sell their business that have been with the same CPA forever. And we switched to the new CPA. And we find out almost every time that there are something that yes, you could do it this way. But that’s what you do when you were a starting business, not when you’re a mature $10 million business. And the things that we see is as you grow, you need to change your talent, because the just the complexity and the things that you need to get to do you have to do.

Susan Bryant 43:24
Well, and the engagement level, right? So I mean, when you first start off, I mean, maybe you don’t need to have an accountant doing a financial statement review, okay, you don’t really have a need for it. But this is an important thing, again, for business owners to be educating themselves on is like, what are the different levels of engagement that I need, as my business enters new phases of growth? And what is what what is my plan for the business? So that’s going to influence us to a significant degree, the level of engagement you’re going to need to have with the appropriate accounting, and really just planning resources of all kinds. So I wouldn’t say it’s necessarily just accountants, because there are so many different advisors that really need to be brought in at different points of time. So we have to spend a lot of times through coaching people on that, because it’s, I mean, if you’ve never done it before, it’s it is kind of intimidating. It’s like, well, I don’t know, I’ve never talked to an m&a advisor, or I don’t know, like, what estate planning really means or, I don’t know. I don’t really know what outsourcing my accounting would look like. Yeah, they it’s a lot of like, well, I’ll just stick with what I know. And that’s easier. Well, but what’s best for the business?

Damon Pistulka 44:46
Yeah, yeah. And you bring up a lot of good things, especially as you’re coming towards the end and you’re thinking about selling your business that that level of review that you’re going to do at that time is is significant and you Wow, we should we could do a whole nother thing on that because you know that preparation can can save you a lot of heartache and make you a lot of money when you’re doing it the right way. In the last few years, that’s for sure. Because it’s is you know, because if we’re talking to people or listening now and you’ve got businesses that are doing 10 or 20 million in revenue a year, you have a vastly different level of expectations on the buyers, the amount of accounting talent, you have the the level of bookkeeping all the way up to finance that you have going on in your business. And it will simply limit your option to sell if you can’t do things. Well,

Susan Bryant 45:46
you know what, I’m really glad you brought that up. Because this is something that’s been on my mind lately, and especially as business owners do approach some type of exit, is you kind of have to get kind of good at this whole forecasting thing. Oh, yeah, huge. So big of a deal i forecasting is, is what, especially when it starts to integrate into this whole Exit Planning conversation, is you want to create the narrative as to why your business has so much potential, right, because that’s what people are buying. Well, the narrative that accompanies that is your forecast. So you’re going to say one thing, and then they’re going to look at the numbers, and then they’re going to look at historical and you’re going to have painted this cohesive picture. And you’ll have a lot of buyers lined up at the door for this opportunity. And that’s really, what we’re trying to create here is it’s not just accounting for the sake of accounting, it’s accounting for the sake of where are we going? How do we expand? How do we grow? How do we get where we want to go? And all of these things have to be we have to be thinking about them in different places along the way, different increments along the way, and certainly always with the future in mind. Yes, with a future focus. So where are we going? And I think it’s so powerful when business leaders have a vision, they see the potential that someone else you know, maybe they’re a little tired, they’ve been doing this for 2030 years, they’re like, Okay, I’m somebody else’s, can take this and making, you know, triple it or whatever. But it’s still up to you to paint that picture for them. So yeah, really see the potential.

Damon Pistulka 47:21
In You know, honestly, that’s where we spend most of our time with our clients, preparing their businesses for sale and working those last years to increase the value it is usually laying out good forecast tracking very closely to make sure we’re hitting those forecasts are staying really close. Because this is so underrated in the sale of a business’s when someone comes in to buy your business. And you’ve got a year or two of we forecasted that we are going to hit 10 million this year, we forecasted we’re about 15. That year, we hit 10. We hit 15 or forecast and 20 this year, and we’re halfway through the year. And we’re going to hit 20. Because we hit 10. And we hit 15. You don’t if you don’t have that ready to go. That is like losing your history books. And not understanding what the history of the United States. That’s how important it is for a business owner that wants to sell. Because if I want anyone to believe where I’m going, they have to see how I’ve gotten here. And if I’ve got a good system in place that projects with the with these projections, and then I’ve got a way to make sure my team takes us there. That is huge for that buyer, because it checks that box that most buyers can’t really check is are they really gonna go where they’re say they’re gonna go? And why.

Susan Bryant 48:50
And this is where this accounting function and the strategy begin to meet. Right? Lessons. This is where you have to marry the two together. It’s it isn’t. It’s just not as it’s not as insignificant as people like to think, Oh, it’s just accounting. It’s not just accounting, there’s no just in accounting, right? It is literally, you working on creating a future. And that’s, that’s where you marry those together. And that’s the beauty of, of what will happen. And I’m sure you have lots of success stories where when people follow your advice, solid and succinct happening, accounting happening in the background, systemic problems are resolved. Now you have the power and information to do that forecasting, then you can translate that back to the operational processes, all those things started. And then that growth will then you really feel the traction and the power of all that coming together. Yeah,

Damon Pistulka 49:50
yeah, definitely is a huge thing when you get those things working together. Well, Susan, so awesome to get to talk to you today because I knew this was going to be great. We’re going to be able to, I knew we were going to cover some great topics and just pointing out some of the reasons why accounting should be a priority for business owners. How is it that people if they want to get a hold of you what’s the best way to get ahold of you?

Susan Bryant 50:17
Well, I love when people connect with me on LinkedIn. So Susan Bryan CPAC, VP, you’ll find me there. My email Susan at unboxed. advisors.com. Send me an email. Always have if you really want that chart of accounts. Connect with me. I’ll send it over to you.

Damon Pistulka 50:33
Awesome, awesome. Well, thanks so much. Today, we had Susan Bryant here. So great. CPA Tax Advisor with unbox advisors, sharing why accounting should be a priority for business owners. Thanks for being here today. Susan, I want to thank all the guests for being here. Thanks for all the comments. I know I only got to a few but a thanks Yayasan and we had it awesome. So many people. I don’t even know who you are on here. But thank you for doing that. We’ll be back again later this week. Susan, thank you.

Susan Bryant 51:12
Thank you so much for having me on Damon. Have a great day everyone

Damon Pistulka 51:15
hanging out Susan. We’ll finish up offline.

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