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Special Episode: Navigating Financial Health with Heide Olson
19 Plays11 days ago
The podcast episode opens with a humorous anecdote about health jargon mistaken for financial jargon, transitioning into an in-depth conversation with Heide Olson, the founder and CEO of All In One Accounting. The discussion covers the importance of accurate financial reporting, maintaining profitability, the risks of inadequate internal controls, and the benefits of using the Entrepreneurial Operating System (EOS). Examples of fraud and theft encountered in businesses are shared, highlighting the need for robust financial practices. The conversation underscores the role of financial leadership in entrepreneurial success and the value of a trustworthy accounting partner.
Reach out to Heide on LinkedIn: https://www.linkedin.com/in/heide-olson/
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Dial It In Podcast is where we gather our favorite people together to share their advice on how to drive revenue, through storytelling and without the boring sales jargon. Our primary focus is marketing and sales for manufacturing and B2B service businesses, but we’ll cover topics across the entire spectrum of business. This isn’t a deep, naval-gazing show… we like to have lively chats that are fun, and full of useful insights. Brought to you by BizzyWeb.
Links:
Website: dialitinpodcast.com
BizzyWeb site: bizzyweb.com
Connect with Dave Meyer
Connect with Trygve Olsen
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Transcript
Introduction to 'Dial It In' Podcast
00:00:08
Speaker
Welcome to Dial It In, a podcast where we talk to fascinating people about marketing, sales, process improvements, and tricks that they use to grow their businesses. Join me, Dave Meyer, and Trigby Olson of BusyWeb as we bring you interviews on how the best in their fields dialing it in for their organizations.
Health Scare and Business Jargon Humor
00:00:26
Speaker
Let's ring up another episode.
00:00:30
Speaker
I felt bad after our Nicole podcast about her heart attack. So I went to see the doctor recently, Dave. And ohoh yeah, obviously not being a woman, I was concerned about my own heart health. So I did. And the doctor, had a nice conversation. The doctor said i had a case of, let me see, let me, I have this written down.
00:00:51
Speaker
EBITDA. Have you heard of that before? i think maybe you met with your accountant by accident. The listing that I got was that they asked me if I had involuntary use of business jargon. And I said, yeah, I do that all the time. and Delusions of profitability.
00:01:09
Speaker
And I said, yeah. An inflated self-work. I'm, of course, fabulous. And ah an avoidance of all expenses, which... I don't know. Dr. Googling may not have helped, but I think I definitely have EBITDA.
00:01:21
Speaker
So I'm excited about today's guest who's going to help talk to us about the symptoms of that and how to overcome it. But before we do that, do we have a sponsor for today's show? We sure do.
00:01:33
Speaker
Today's episode is sponsored by WeFixHubSpot.com.
Sponsorship by WeFixHubSpot.com
00:01:38
Speaker
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Speaker
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00:01:59
Speaker
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Guest Introduction: Heidi Olson
00:02:11
Speaker
Thank you, Dave. So our guest today is my cousin, Heidi Olson. She's the founder and CEO of All-in-One Accounting, a Minnesota-based firm that provides outsourced CFO controller and accounting services to businesses of all sizes.
00:02:25
Speaker
So she has over two decades of experience, and she's known for turning financial complexity into strategic clarity. Since launching All-in-One in 2004, she's helped hundreds of companies scale, improve cash flow, which would be great for me to help the EBITDA.
00:02:41
Speaker
and confidently navigate economic shifts. Heidi's passionate about making financial leadership accessible and values-led, building long-term client relationships on trust, transparency, and actionable insight. Welcome, Heidi.
00:02:55
Speaker
Thank you for having me on the show. It's great to be here. Now, just to be fair, some of that was comedy. she is Heidi is not my cousin because she spells her last name wrong. Ian Owen, we can have that debate for most of this show.
00:03:08
Speaker
that wouldn't be it That wouldn't be a very interesting show.
Understanding EBITDA
00:03:10
Speaker
but So, Heidi, first obviously I was joking about EBITDA, but for those people who are financially illiterate, what is that and why does it matter? Yes, thank you for asking. That's a great.
00:03:19
Speaker
So EBITDA is earnings before income taxes, depreciation, amortization, and depreciation. So it's essentially your earnings before you take out all the things that are a little bit more subjective or don't really. You want to look at your true income number.
00:03:35
Speaker
And the reason that EBITDA is so important, it's a common language across all businesses. And so it takes out some of that guesswork of how would my company compare to others? The other thing about EBITDA is that growing your EBITDA, focusing on your EBITDA and really having a strong EBITDA makes a huge difference.
00:03:52
Speaker
and that's something I see with entrepreneurs a lot, especially if it's more of a sales-led entrepreneur. They're really focused on all revenue. and sometimes they forget that they also have to be delivering profitably. And so sometimes we get prospects and they come in and they've doubled in sales and they're all excited and it's all good, but they're like, where's all the cash?
00:04:12
Speaker
And so it's really important that you focus on EBITDA, you focus on maintaining profitability, especially during growths. Ooh, excellent. Hey, we have our first listener question. T Olson from, was spelled with an e from Egan asks, what's the difference between EBITDA and net profit?
00:04:30
Speaker
Yeah, net profit would include those things that we're subtracting out in the EBITDA calculations. Taxes, depreciation, amortization, those things that they get added back so that you're looking at an apples to apples comparison with other organizations.
00:04:45
Speaker
Got it. Okay. So I'm, I'm in sales. So my job is just to make the money pile bigger. What, but I'm also working as a part-time therapist for entrepreneurs. One of the things that I generally always tell them is you have to have your numbers down first.
00:05:04
Speaker
The first thing you need to do and starting a business, name your business, buy a domain and then hire a really good account. So yeah. What are some things that you've seen over your decades of experience with all of your hundreds of clients that as somebody setting up their business, they fall down on the financial front?
Avoiding Financial Pitfalls
00:05:26
Speaker
Yeah, currently we run into so many prospects. Thank you for asking that question. so good. That haven't spent the time, energy, and made the investment into building a strong finance and accounting foundation for their organization. So when we get to them or they come to us, and their financials are not accurate.
00:05:45
Speaker
Their team is not organized in a way that makes sense. So they don't necessarily have the right people on the team or they might have the right people, but doing some of the wrong things. And the reality is their financials, when we get them, they are inaccurate and they're really unable to make any decisions based on them because they're not accurate. So to build that strong foundation is really about getting the information that we need to make data-driven decisions in our business and keeping an eye on it, right? The other thing that can happen is that you can really put your organization at risk. Let me tell you a story.
00:06:17
Speaker
So we worked with a concrete company a number of years ago and they had a fractional controller who used to come in every month and close their books. but She was an independent she got really busy. i happen to know her, so great controller, very good at what she does.
00:06:30
Speaker
But as an independent, she got too busy with her other clients and she hadn't gotten to this client in eight months. Almost eight months. What had happened was the price of his raw materials, the concrete, had almost doubled, and his teams were running so much overtime, unbeknownst to this business owner. So by the time that we got in there and got the books caught up, he had lost $250,000 and had no idea.
00:06:53
Speaker
table Yeah. So had he had that information month one instead of month eight, he could have started to change his pricing. He could have made sure that his overtime was in check.
00:07:03
Speaker
There are a lot of things that he could have done with that data to change what ended up happening because he didn't have the data, which is a very large financial hit to his business.
00:07:14
Speaker
Yeah, that's really rough. And as you're talking through with entrepreneurs and identifying those common things, of course, cash is key. that It occurs to me that having the financial checks and balances not only keeps you from unexpected issues, but maybe protects you from fraud and bad actors inside of your business, right? Absolutely. When we deliver financials to our for-profit clients, our guarantee is that we deliver actionable insights with those. So what does that mean? That means like we're going to take the information and we're going to tell you
00:07:51
Speaker
specific ways that you can increase your profitability, specific ways that you can protect your assets and specific ways that you can amplify your impact. So let's talk about the protection of assets.
00:08:02
Speaker
So 20 plus years ago, when I started this business, I would tell my clients and my goal was to protect my clients from their own team members, right? People who are embezzling, people who are stealing from you a lot of times in your accounting department.
00:08:16
Speaker
Now I'm trying to protect my clients from anybody who has an internet account. access. Yeah. Wow. wow Because that's the reality of the threats that are happening every single day to small businesses and nonprofits. And it's horrifying and it's super scary.
00:08:31
Speaker
And if you aren't thinking about it every day, you will. It's just a question of time before, for before something bad happened.
Strategies for Fraud Prevention
00:08:38
Speaker
That, that happened. There's lots of common ways that happens. And I don't want to go down this rabbit hole because wow.
00:08:43
Speaker
But If you're not paying attention to it, I get emails probably four times a week from employees on the busy web team that say, Hey, I'm changing my payroll information. Can you please redirect to, i was like, Oh, I know out loud. Now that's obviously fraudulent and false. And, but there's all kinds of stories about people that have gift cards sent to them or that request to text message, all that stuff.
00:09:13
Speaker
And yeah, I think the only way to reliably other than education is to make sure that you are tracking those numbers in that detail. Yeah. Because if you catch it within ah few days, you can go back to your bank and get it rectified.
00:09:28
Speaker
If it waits eight months, it's too bad, so sad. Actually, after recently, about two weeks ago, we had a nonprofit that experienced some lawyer fraud. Really scary stuff, you guys. But as a result of that, we have implemented a red coat alert with our team. And so our team of 105, if they suspect fraud, embezzlement...
00:09:49
Speaker
anything going wrong in any of their clients' accounts, they have 15 minutes to contact our COO because that time could save our clients a ton of money, right?
00:10:00
Speaker
So if we catch the first wire fraud, then we can shut it down. But if we don't know about it, for weeks or months, there's nothing we can do. And so that is part of the way that we continue to educate our team, make sure they have everything they need, but also put internal processes in place so that we can help protect our clients.
00:10:17
Speaker
I think it's extremely important. You actually use old school cold word technology, right? Cause we talked last time we talked, you talked about having to have passwords and stuff like that. Cause I have a, I had a friend who had his whole identity stolen.
00:10:31
Speaker
And then in order to get passwords from other people, they would use deep fake technology. So they'd make a video of him saying, no, it's Yeah. yeah For real. That stuff is for real. And part of this wire fraud that our nonprofit experience involved the bank, deepfake, and the executive director.
00:10:51
Speaker
And so having those code words is really important. So we have one at All One Accounting. We certainly have one for our family now as well. And I think those are both really important things to do. because it's only going to get more sophisticated.
00:11:03
Speaker
and Every single day it is. So that protection of assets is we take very seriously and and everybody should be. But part of it is we get the gift of seeing what's happening with 450 clients. And so we share those learnings with others.
00:11:17
Speaker
And it's part of the way that we protect our clients through our team and through that education.
Managing Growth and Cash Flow
00:11:22
Speaker
I also wanted to mention, we were talking about EBITDA and how much you love to sell. Whenever a client or a company is in high growth mode, it restricts your cash. And so that's part of what we need to understand as business owners and leaders.
00:11:35
Speaker
Those calls that I get, like, i just sold twice as much in revenue and I have no cash. Likely it's sitting in your receivables. And you need to have great processes in place. You need to have the right amount of working capital. A lot of the clients that come to me, I say, you have three months of working capital available to you?
00:11:51
Speaker
And also always ask for money when you don't need it. So we want to be strategic about that the way that we set the company up from a capital perspective and also just from a... You know, you think you're growing and you are and youre you have a lot more revenue, but it takes time to deliver that. Right. So understanding the sales cycle, understanding how you bill your clients, all of those things are really important components of cash flow and getting ahead of it so that, you know, that one of the worst uses of time, in my opinion, is chasing cash and spending all this time managing cash. Let's just be profitable and have enough working capital so that we can run the company the right way and not have to manage cash on a daily or weekly basis. That is not a good thing.
00:12:31
Speaker
use of time or efficient. Absolutely. I'm of the opinion that marketers are of the most creative people in the world. The second create great group of creative people in the world is probably accountants. The third is criminals. So I know we can talk about all sorts of educational things and we can learn at your feed, Heidi, but I want to get to the good stuff. Can you think about what is the most creative way of stealing that you've discovered in one of your clients over the years?
00:13:01
Speaker
oh Oh, my gosh. What a great question. Actually, I'm going to use it wasn't my client, but I'm going to use this because it's such a great example. So I'm from Granite Falls, Minnesota. Fagan Inc. is the largest employer there. Ron Fagan graduated with my mom from high school. So he runs this enormous business in Granite Falls.
00:13:18
Speaker
So when a gal that I went to high school with ended up being their CFO, um she ended up embezzling like $10 million dollars from the company because she set up fate companies like with everything, LLCs, with bank accounts. And then she would pay her LLCs all this money and was able to, she ended up going to jail.
00:13:36
Speaker
But that's the kind of thing that that's one example of a very large threat. Yeah. um Another one that one of my clients had was that not only were there was their bookkeeper writing checks to herself and cashing them, but she had also put a bunch of her personal expenses on their credit card.
00:13:54
Speaker
So phone bill, utility, right? So there's a lot of ways, especially if you have if you don't have internal controls within your business. So this particular bookkeeper didn't have the right segregation of duties within this organization. Right.
00:14:08
Speaker
And so she was able to do those things. So that's one of the things that is extremely important is having internal controls program and getting and updating it for for any kind of growth, change of account team, that kind of stuff. Because when you're running fast, it's really easy to miss those things, especially if that's not your background and that's not how you think.
00:14:27
Speaker
That's how this team thinks. And most accountants are going to think about how do we protect our clients. So that's a couple examples. Dave, what's what's the best example of staff that you've ever heard? I think we've been lucky that we've never had anybody be particularly nefarious and our accountant is pretty transparent, but do you have a good story you can share? it Because I have one. I want to hear what yours is. Yeah. And this of course comes from a client and we learn from others' mistakes as much as any others. And The, the biggest I'll start with the lesson and why it was important to have someone like all in one accounting, like Heidi in their corner.
00:15:06
Speaker
We had a client that had a bookkeeper, was a long time, like lifelong friend of the business owner and found out exactly like Heidi was saying with the company in Granite Falls, they were using that company card as their as they're personal, like charging, buying gas, buying groceries for the family, buying TVs, all kinds of crazy things because they knew they were the only people that looked at that, at those numbers. Right.
00:15:36
Speaker
And so they finally, they they knew that cash was just, something was off. Something smelled funny, something felt funny. And so they went in and they got ah an independent audit from a different accounting firm and they found it right away.
00:15:52
Speaker
And the funniest and saddest part is even after the business owner, our friend, he was loath to want to let the person go. oh yeah. I just, I know that they had hard times and and then finally everybody in his entire circles, he did it once, she's going to do it again.
00:16:11
Speaker
And you just have to, you can be friends with her later, but you got to cut her off from any access to your accounts because she's just going to do this again. And I think those are the most painful ones where you've had somebody who's worked for you for 20 years or 25. They typically say the read that in those cases or in any case, it's three things.
00:16:29
Speaker
It's either they have an addiction problem, gambling or drugs. They have gotten into a serious health situation where they have a bunch of health bills. you They claim out just see the opportunity because they know they're not going to get caught.
00:16:43
Speaker
The other way that that somebody would catch all of that is by having a really strong budget in place and doing budget versus actuals every month, because you should be able to see, huh, why is this account off? And that's those when you run a budget versus actual, or let's say there's five that are off. Those are the only five you need to look at, but that's where you're going to find, huh, what is that strange transaction? And then again, to your point, you smell something. and I always tell my team, if you even get the slightest little twinge or gut about something,
00:17:09
Speaker
keep digging, keep peeling that onion back because there's probably something there, right? All of those foundational things from hard month in with the analysis and then having the good internal controls, that's what's going to save you as well as educating your team.
00:17:23
Speaker
Cause they still say 90% of all of this is still human error. I click on the wrong link. I put in my input, educating your team and working with other vendors and teams that are really important.
00:17:35
Speaker
dedicated to this is important. We've started to get those questions from prospects as they should.
Vendor Financial Risks
00:17:40
Speaker
and we talk about it like this is what we do to protect our team. And this is what we do to protect you. And I think if you aren't working with a vendor who really understands the risk that you're at, you're putting yourself at risk.
Creative Theft in Businesses
00:17:52
Speaker
ah agree har The best example of theft that I ever, I didn't do it, but I saw, I was heard about it after the fact, because I was a bartender and one of the waitresses had stolen, and I think close to $14,000 of Dr. Pepper.
00:18:08
Speaker
So what would happen is she would, she'd start a ticket and then somebody come in, Dave comes in, he orders a Dr. Pepper, right? So she'd put Dr. Pepper on the tab.
00:18:20
Speaker
Then she'd get the meal, give Dave his tab. But before she checked out, she'd take the Dr. Pepper off the tab. So then you go, the $5 tip would go to $7.
00:18:34
Speaker
or $9. So she did something like that. So that what she did, she'd roll off the Dr. Pepper onto a fresh ticket. And then Heidi comes in and she orders the Dr. Pepper. And so then she the waitress was basically, she was selling somebody the same Dr. Pepper. It was my first experience with a Ponzi scheme. It was a Dr. Pepper Ponzi scheme.
00:18:55
Speaker
And i took up finally the GM of the restaurant came to me because I was the head bartender and he was like, do you see any problems with the guns in the bar? Are they leaky or anything like that? I said, no, why? And he said, oh, okay, nevermind.
00:19:10
Speaker
And it turns out that when all is said and done, because his costs of goods and services were so high compared to his sales, it's like, why? i So wackadoodle, that's how they ended up finding it. Because then at the end of the night, she'd just go to her manager and say, oh, I have this one extra ticket here where accidentally hit, I accidentally hit an extra Dr. Pepper. Can you just zero it out? And the manager would go, oh yeah, fine, zero in out. That happened all the time.
00:19:35
Speaker
Yep. That's where I learned that to be a criminal, you have to be you have to be smart, but eventually the numbers will always catch up with you. Because I wouldn't, I'm a smart guy and I wouldn't, something like that never wouldn't have even occurred to be, to be able pull.
00:19:47
Speaker
Because our brains don't work like that. That's the reality. Yeah. yeah Well, and we're in reality. The stats are staggering. It's 74% of any small business that is attacked blows out of business within six months. It's like staggering.
00:20:01
Speaker
yeah Yeah, really scary stuff. And so I personally would recommend you invest in the protection side and have a good plan if something does happen, have a great technology company that you're working with, but also make sure that all of your vendors, especially anything around your finance, that they are equally as invested in doing all the right things because anyone who's connected to your system puts you at risk.
00:20:24
Speaker
Yeah, let's talk about that a little bit, Heidi, because in past conversations that we've had, you've talked a little bit about what all in one accounting does that's different. And I think the multi-pronged approach that you have is so fascinating.
00:20:38
Speaker
So can you tell us a little bit about how that works? Yeah, so multi-pronged in terms of, okay, so we our team is educated every month through various trainings that are provided through our MSP.
00:20:49
Speaker
We have a sensitive data policy, and it's a three-strike role. So if you share sensitive information three times, you will lose your job here. um And then we we also have a policy about- And what is what classifies sensitive data?
00:21:04
Speaker
Yeah, and it has social security number, EIN, credit card numbers, bank numbers. We're dealing with all that kind of stuff. So it's not like on the personal front, like da Davis secretly likes the films of Boz Lerman. That's not... that We would blast. That would not be... Keep secret.
00:21:20
Speaker
Yeah. Okay. And then we have really rigorous policies and procedures internally. So, for example, to your point about earlier, the stuff that you shared, Dave, we require verbal confirmation on anything that we pay for the clients.
00:21:33
Speaker
Right. And that's a great payables. We have gotten clients and known friends that honestly, their accountants have wired or paid the wrong thing because of all of these scams. And so the only way that you're going to know is if you pick up the phone and call somebody.
00:21:46
Speaker
Because the clients, and this has happened to us, a client's email gets compromised. The bad actors are in there. They send us something to wire. We respond, hey, we need an approval. But they're controlling their email. So they're intercepting all that. So, of course, they're going to say yes. So the only way around that is to pick up the phone and say, hey, hey Dave, I got a wire for $100,000. Is this right?
00:22:07
Speaker
That's the only way. And now with the deepfake, we'll have to go a step further with a password. Right. Which seems to be a giant pain in the neck. On the other hand, why wouldn't you want that?
00:22:18
Speaker
In the age where everybody's trying to steal everything out of your computer, yeah why wouldn't you want to have that extra white layer of human element security? You would. And since we put our Code Red um policy in place, I think it's been three weeks ago, I think that Becky's gotten six or seven calls are already from the team.
00:22:36
Speaker
once' the what What's the Code Red? Is that a new flavor, Dr. Pepper? mean, have it. Cold red means if you suspect any kind of embezzlement fraud hacking of your client, you have 15 minutes to contact our COO.
00:22:49
Speaker
Gotcha. Because we can actually help. like Again, time is of essence. And if we can get in there faster, we can save our clients money if we're on top of it.
00:23:00
Speaker
So we took it really seriously. Yeah. Cause that's the alternative is as an employee of busy web, I don't get the emails that Dave gets. If somebody asking to change their payroll, but what I get is I get two emails a week from Dave, ah allegedly Dave saying, Hey, can you send me $500 in Apple gift cards?
00:23:17
Speaker
Right. When I had seen him five minutes ago, Oh, I'm at a conference. i need $500 in Apple gift cards I can get home. I'm like, On these guys, i the other big one that I've seen recently is taking what is a legitimate invoice and adjusting it and getting that. through So we had a client who got a LinkedIn invoice that was fraudulent, looked, and they had LinkedIn voices. And to the point now where I just refuse to click on anything almost and send everything for a technology company. Because even like yesterday, I got a phishing email from one of our attorneys.
00:23:46
Speaker
And I thought it was strange. Sent it to our MSP. It wasn't. So I let him know right away, hey, you've been hacked. And now so that's, it's just, and it's probably, unfortunately, it's probably going to happen to everybody. So you also have to have a great plan in place for what happens if it does happen.
00:24:02
Speaker
We have another another listener call, listener
Roles in Accounting: Accountants, Controllers, CFOs
00:24:05
Speaker
question. Excuse me. Dee Meyer of Crosslink, Minnesota says, I know what the difference between a CFO controller and an accountant is, but could you tell Trigby?
00:24:17
Speaker
Absolutely. Okay. So an accountant or bookkeeper is the one who's going to handle handle the transactional piece of your business. So creating invoices, running payables, doing payroll, reconciling your bank and your credit card accounts. For us, they do the majority of the month end process, which is...
00:24:36
Speaker
We have a repeatable Excel doc. Every balance sheet account is reconciled. And we have a work paper for every account. That is the only way, in my opinion, to do month end because you can it will ensure that it's accurate.
00:24:47
Speaker
So that's what the accountant does. And I always say like accounting in any business is probably like 70 to 80% of the work. Most of the work in accounting is transactional and transactional support.
00:24:58
Speaker
Then that the controller is really responsible to issue the financials. So review them, do all the analysis, present them to the client, talk about KPIs. They would also be leading budgeting, forecasting, cash flow management.
00:25:11
Speaker
They're leading that accountant. And so they're still looking backwards for the most part. What are our results based on what we've done? A CFO is going to be the person who's going to help you think about your business strategically and very forward facing.
00:25:24
Speaker
So what's the future look like? What are those risks and opportunities that are coming down the pipe that we need to be aware of? How do you compare to your industry? New products and services, really more high level, but really having that strategic piece is so very important for any business.
00:25:40
Speaker
So if the account is 70 to 80%, I would say the controller is like, 10 to 20 percent and the CFO is like 5 to 10 percent. And I think those percentages move over time as your organization grows.
00:25:52
Speaker
The bigger you get, the more you need CFO because then you're dealing with more banking things, more regulatory things, more going into multiple states, whatever the case may be. But growth at that higher level it does require more CFO. So over time, those buckets tend to move and shift and change.
00:26:08
Speaker
But every single business and every single nonprofit meets all three tiers. And they're different people with different skill sets. And so what I get concerned about when we start working the prospect and they have one individual doing everything.
00:26:24
Speaker
a that's not possible. Like of course you have a really odd skill set, right? Which is not likely what you do to be transactional to strategic. But most of the time they've hired a really strong accountant and they need to layer in some controller and CFO over that to help them be as successful as possible.
00:26:41
Speaker
i've I've seen it a bunch of times where in in just smaller clients of ours where there there is that one person and that one person happens to be the spouse of the owner. oh yeah And it's so important too, because when you think of also increasing the value of your business, there's sort of four things I think that are imperative.
00:27:00
Speaker
One is your financial output, and that's just not your performance and your EBITDA and how profitable you are and how much you're growing, all those things. But it's also your processes, your systems, your people, your internal controls. It's all of those things. And think of all the conversations we've had around theft right now and protection of assets.
00:27:18
Speaker
You could be doing everything right on the operational side. Have the right team, have the right processes, have the right product. But if you are not spending ample time protecting yourself, someone could steal all that away, which is so scary.
00:27:32
Speaker
You want to have sticky client relationships, right, with repeatable revenue. That's another huge piece. You want to have a stable team. That's why I'm incredibly proud to say that we have less than 2% turnover on this team and that we monitor this. It's something that's on our scorecard and we work really hard to recruit, retain, and retrain our team. right It's extremely important that that continuity for our clients, not to mention the fact that we spend an incredible amount of time educating our team.
00:28:00
Speaker
it's you They're going to classes, they're learning, they're growing in both their technical skills, but also in their leadership skills, I would say. And then your leadership team, like first team first, you have had you, in my opinion, have you have to have an amazing leadership team to grow up a business.
00:28:17
Speaker
So those, I think, are the four pillars. And to me, the easiest one of all of those is a accounting. You can hire somebody to help you do accounting really well. The other ones are really specific, I think, to that team and that business owner. And don't you, Dave, want to work on the things that you're passionate about and why you started your business?
00:28:34
Speaker
Absolutely. and then That included accounting? Yeah, not so much. I'm a marketer at heart. And one of the things I tell my team at the beginning, when every new hire that we bring on, i was like, there's one big thing you need to know about Dave.
00:28:49
Speaker
There's actually, there's five things you need to know about Dave. Dave doesn't do detail. Oh crap. I can't even get the five. Dave does not do detail. there There you go. See, that would be even better, but that would work. So yeah it's important for all of us to understand what our limitations are and identify our blind spots. It's our job as leaders to bolster those. And if you have people that are all exactly like you,
00:29:15
Speaker
You have massive blind spots because we all have pros and cons and things that we're good at. Let ask you a question. Yeah. When your accounting is run well and you have confidence in it, how much does that free up for you to think about other things that you're not having to worry about accounting?
00:29:33
Speaker
Yeah, it's a huge amount of headspace that's just open. It's the difference between it's allergy season right now in Minnesota. And so it's the difference between being completely stuffed up and being able to breathe.
00:29:44
Speaker
Love that analogy. Very good. Yeah, for us, if you're constantly worrying about how you're going to or if you have money in your accounts to pay the bills or, you know, what your cash forecasts are, you can't make future plans. Yeah.
00:30:00
Speaker
It's taken up space left there where you could be selling, working with your, developing new products and services, all the things that only you can bring to your business, Dave. I don't even think that's a fair question because accounting is not a department unto itself. It is literally the thing that permeates into and every part of the business. If you are not delivering at a high level, then that means that you've got people not doing anything.
00:30:23
Speaker
And because they're you're having customer churn, which is affecting revenue, if you are not bringing in the high level accounts, then you can't feed the other thing. As Dave said, if you're not managing your cash correctly, then how are you supposed to plan for the future? or How are you supposed to ah grow and retain a business? Well, until that point, of the things that I would say is a lot of times what shows up in the financials are that things that are broken in operations, right? Yeah. so But if you aren't even getting to that point where you first have to be getting to timely accurate, then you can say, gosh, why why are our margin margins eroding so much? Gosh, look at all that overtime we had. Or look at, we had to do a bunch of reruns or whatever the case may be.
00:31:02
Speaker
Or maybe we're not selling to the right clients. Maybe they're not profitable. So again, you have to have accurate, timely accounting to even get to this point to be asking these questions, which are so vital.
00:31:13
Speaker
Yeah, I sold a million dollars more of revenue to clients, but guess what? It was at a lower margin. So was it worth it? and yeah That's where all those dot-com bubble companies in the early 2000s got in so much trouble. We're going to make it all up in volume, baby.
00:31:29
Speaker
They spent all their money on fancy chairs and hockey tables and school tables and all that stuff. and All the things. No cash. Yeah. yeah Yeah. And it's surprising to me when I start working with a business leader, owner, and I really ask them, how do you make money?
00:31:45
Speaker
And it's fascinating to me how many times the owner really can't speak to that as well as they never know the answer to that.
00:31:55
Speaker
It's important to know how you make money and what those levers are. But honestly, it's like marketing for me. Guys, now wait this is my best example. I'm an accountant. No one starts their business to do accounting unless you're an accountant.
00:32:07
Speaker
Guess what I did not start my business to do? Marketing. Guess what I get to lead and try to understand to the best of my ability? Marketing. But I can tell you, like it does something in my mind because it's not my thing. And yet I have to lead it and understand it. But it takes up way too much headspace for me.
00:32:25
Speaker
as a leader. Completely understand. And i am the same way on the accounting side. yeah And so having a partner who you just trust will show up and do the right, right thing for you and walk alongside you. Like that is so important.
00:32:40
Speaker
Absolutely. and hard And can be hard to find. Like you have to find the right person that you believe in them, their process, their people, their, their guarantees to you. i would really ask about those things when I'm looking for resources in these areas.
00:32:55
Speaker
I want to go back to something you said a little earlier about needing to have a CFO, a controller and a bookkeeper.
When to Hire Full-Time Accounting Roles
00:33:02
Speaker
Yeah. i one In your experience, what is an appropriate company size to have three full-time people in the accounting department?
00:33:10
Speaker
Oh, you don't have to have full-time in any of those roles for quite some time, unless you're a manufacturer, like those guys get to those full-time. lot of volume there. Because of the cost accounting is a lot more intense, but won I would say that If you're professional services firm, you don't, you likely don't even need a full-time accountant until, again, it depends on the business, but maybe 10 million, 15 million. You certainly don't need a full-time controller or CFO until you're 20 or 30 million. There's just, it's not, you can get all that done on a very part-time basis with the right team.
00:33:43
Speaker
And I actually wouldn't recommend that you hire those roles full-time because if you don't, you have the right person who is, eager and hard worker, they're going to get bored, right? So I think you have to balance out the needs of the organization with the kind of talent that you can get. And there's not full-time work there, they're going to get bored and leave if they're the right person.
00:34:02
Speaker
Which leads to the whole value of all working with a company like all in one is that you have those people that you can deploy fractionally as the individual company needs. And then we always recommend our own exit. So if any if the accountant, controller, or CFO gets to three plus days a week, so 24 week,
00:34:20
Speaker
It's time for you to hire. Just from a cost standpoint, that's what we would encourage you to do. and you know, if if we've got an account with you four days a week, that means that we need to help you hire somebody because that that just doesn't make sense anymore for you financially.
00:34:34
Speaker
We want to make sure that those and that that's part of this accounting journey that every business owner goes on. Right. I did my own accounting forever. Right. And then I had a part time account. Well, guess what? I have a full time accountant. I have a full time CFO on this team.
00:34:48
Speaker
because that's the size that we are. But it's been an evolution, right? And we're towns, we understand. All things work and we still have those kinds of resources and they're doing amazing things to help us run this business.
Using EOS for Operational Excellence
00:35:01
Speaker
I want to talk about the business process side, because I know that you and I both have a passion towards a particular business system that we both use. And the ah to everybody that's listening, if you're paying attention, is going to immediately say it.
00:35:15
Speaker
EOS! Yeah. Yes, we love EOS. How do you employ the principles? And how we can talk a little bit about EOS at the beginning, but how do you employ that as an accountant firm for your clients?
00:35:30
Speaker
Oh, great questions. Let me, the one thing I think that has the biggest impact is the fact that we hire, review, promote, and fire to our core values. And we didn't do that right away when we started doing OS. That took me a few years to figure out when I was like still putting out all these fires with team and clients. And i remember Jen and Becky and I being like, why is this happening? And Then we we had this realization that we were not truly hiring, reviewing, promoting, and firing the core values.
00:35:59
Speaker
So we made that very conscientious shift in the business and everything changed. like It was amazing. I look back at it and it's just so impactful on our business because we want to have the right people on the team that believe in your core values and are invested in your mission and your passion and your vision.
00:36:18
Speaker
Those are the people. Right. And so, of course, we hire good technical people, but that's like third or fourth on the list. First on list is core values. Then it's mission and vision. Then it's fit with where we're going. Do you want to, we work hard here. And for the right person, it just feels we get pretty filled up by this.
00:36:35
Speaker
For the wrong person, they're going to not, it's not going to work for them. So I think that was one of the things. How we actually engage with our clients in EOS. well First of all, I'm a huge advocate of EOS. So I just want to share the good news with everybody. I want every business and every nonprofit to run on EOS because I've seen what it's done for us, for our clients, for our friends, and it's tremendous. And I love the community.
00:36:55
Speaker
Quality people. all Don't we all want to work with well-run companies? Absolutely. Right? So if you get two bids, let's say for marketing, and one's an EOS company and one's not, it would not even be a question in my mind.
00:37:09
Speaker
Not at all. I don't even know. I wouldn't even care what the price point was. I know the EOS company is going to be well run and I know that they're going to do an amazing job of sourcing us. The other company, maybe. So one of the things that we do is not only share the good news, I've handed out probably hundreds of thousands of attractions books at this point, but we implement some of the actual EOS tools with our clients. As an example, when we are onboarding our clients through what we call our tenacity phase,
00:37:35
Speaker
which is building this really strong accounting finance foundation for you to go fast later, is that we do level 10 meetings with our team and their team for that whole phase. So required.
00:37:48
Speaker
We have to get on the phone with you for an hour. we talk about all the things that we're trying to get done because we're sharing a lot of information and key accounts and we're getting to know their business. The best way to do that is through strong communication.
00:38:00
Speaker
That's also where we say, hey guys, we found five bank accounts that weren't on your balance sheet. So guess what? The scope of this engagement is changing, right? So it's our chance to always, this is where we're at in terms of hours. This is where we're at in terms of what we said we were going to do. And so just that transparency and also the responsiveness. We really pride ourselves on being responsive to our clients. And this is a way that we can start to set that foundation with our clients if we're going to talk to you every week. And this is what it looks like.
00:38:27
Speaker
Oh, that's fun. And so I realized I forgot to say what EOS is, but it's the entrepreneurial operating system based on a book by Gino Wickman called Traction. And there's all kinds of follow-up books and things. And there's an entire community, especially in the Midwest. Yeah. yeah Minneapolis, Detroit, yeah really strong markets. there're Although there's I've been talking with a lot of implementers and integrators, and it's getting really popular all over the country. There's a big group in Texas now.
00:38:55
Speaker
So it's really fun to see because it works. that That's the reason that I'm such a big proponent is that it really works. yeah And I've seen the results in my company. And I also want, the reason I started on One Accounting is because I really am passionate about entrepreneurs and making their lives better.
00:39:11
Speaker
That is honestly why I started on One Accounting out of my basement 21 years ago is because I wanted to change the lives of entrepreneurs, take this burden of the accounting finance off of them so that they could focus on their passion, why they started their businesses, get back to it, hiring people, growing, supporting families, all of that.
00:39:29
Speaker
And I want all entrepreneurs to live the EOS life, do work that you love, people that you love, making a huge impact, having time for other interests and being compensated fairly. Like to me,
00:39:44
Speaker
I can tell when I get a prospect that's not living that life. And I want that for them because it really, what we do is hard, you guys. Growing a business is hard. This makes it not as hard and more fun.
00:39:57
Speaker
Because you need structure in order to understand and make decisions. and Absolutely. that's always been the biggest thing for us when we decided to go into EOS and implement. We implemented ourselves.
00:40:08
Speaker
We had a group, a CEO group that we bounced ideas off of and things. But yeah when we did, it was... We're doing all the things. I had my MBA. I was a big shot, blah, blah, blah.
00:40:19
Speaker
And it was in entrepreneurship. So I thought I knew everything. And then the biggest thing was once you really start working, you can't just wing it for everything.
00:40:31
Speaker
And no matter how brilliant you are, no matter how smart you are, how much time you have, you're never going to be able to really launch as an organization and move forward until you have structure and systems so that you can have stop gaps and checks and identify blind spots and just move forward and build your culture.
00:40:51
Speaker
Yeah. Yeah. It's interesting you say that because when we started EOS, there were only 12 of us maybe. be So for the first, i don't know how many years we had one l ten all of us sitting around one table every week.
00:41:03
Speaker
We did our, all this in Excel. We had all, we didn't have Bloom Growth or 90 or any of the things yet. But I can tell you with 100% confidence, there is no way that we would have been able to grow to this point without EOS and the way that we live in this 90-day world, the way that everyone in the team understands EOS is in an L10 every week, knows what their number is, and knows how they are impacting the success of this of our company together. And the state of the company is like...
00:41:32
Speaker
That was a little bit foreign to me when we started. And now it's, I don't know how we would run this business without those because it's our chance to tell the team, this is how we did. this is how we performed. And this is the plan. And this is our plan moving forward. And people, they need that. We're not sitting around one table anymore. In fact, we have team in 26 states now. So course we're not sitting and that's going to continue to happen. So we have to be very deliberative about that communication with our team.
00:41:58
Speaker
And making sure that they have rocks, that they understand how they contribute to the success and that they share on the success. i All those things would be like almost impossible to me if we weren't running on the U.S. Did you say 26 states?
00:42:10
Speaker
Yeah.
00:42:13
Speaker
Gravy. Yeah. I've had a lot of tax returns these days, guys. I bet you do. Wow. My goodness. That's new area of of focus. And that's all because COVID too. Like before COVID, we were like 60% remote. Now our work is almost like 95% remote. and So now we hire the absolute best people we can find because it doesn't matter where they live.
00:42:34
Speaker
And so isn't that fun? And honestly, you guys, okay, can I tell you a little secret? So in my three-year plan for EOS, one of the bullet points of what I think this is going to look like is that people are knocking down the door to work here.
00:42:48
Speaker
I just found out my leadership team meeting this week that we have had three candidates that don't have enough experience to come and work here who have all said, I'm going to go work somewhere for a couple of years, but I'm coming back here because this is where I want to work. And so that cultural vision is becoming a reality, you guys. And I'm so excited.
00:43:04
Speaker
Like the team here, like they are so good, but not only experts in what they do, they have a love and passion for entrepreneurs and nonprofits. But they care and they become part of your team. And so like, it's really fun for me as a leader to see all of that happening.
00:43:19
Speaker
And it all be because of the OS system though, like you work at every quarter, you have your annual plan, you communicate, everyone's part of it. That's the beauty of the OS. And it's the joy of living your business from mission, vision, and values because you attract more of who you are.
00:43:38
Speaker
Yes. And if you're not clear on that, you're just going to get more on clarity. So the fact that you've got people beating down your door for that means that you're living that loud enough that people saying, that is me.
00:43:49
Speaker
That's where I want to be. Yeah. It's really fun. It's really in a lot of hard work from my leadership team. We're all... as It's a lot of work and it can be really hard at times, but man, it is so rewarding when I think you live your mission, vision, core values and everyone alongside you. It doesn't feel like work necessarily. It feels like this other cause because we're impacting our clients so much and our team, like part of it.
00:44:12
Speaker
And I can say that's been a big aha moment for me because when I started on One Accounting, it was all about the clients. I was very client-centered because guess what, guys? That's what I knew what to do. I knew how to make clients happy. i knew how to be a great CFO.
00:44:24
Speaker
Guess what I wasn't good at doing? Growing a business. Like i always say, like no one taught me in college how to grow a business. They really didn't. Of course, I'm struggling with all these other areas and also realizing I shouldn't be even doing any of those because as you said, Dave, I have terrible follow-up.
00:44:40
Speaker
so Visionaries are not good with the details, even though I'm an accountant, so I thought I should be good at all those things. I can help you with a CRM that can make that easier. Oh, please. We love Habs that everyone should on Habs that too, by the way.
00:44:53
Speaker
We'll do a second round on that. We'll come back to that next season, but Heidi, if somebody is looking for all-in-one accounting, they're looking for help with accounting and they want to ask you about EOS, where can they find you?
00:45:06
Speaker
Oh, absolutely. And I love talking about EOS and I love just talking about accounting. Anyone can reach out to me. i just want to help solve problems. We're a help first organization, but you can email me Heidi, H-E-I-D-E at all in one accounting.
00:45:19
Speaker
You can go to our website and book a meeting at www.allinoneaccounting.com or you can call me 612-845-0398.
00:45:30
Speaker
Always available and wanting to help. Just pretend you're not. Don't pretend you're Dave. Don't ask for Apple gift cards. Exactly. Okay. won't. Dave, anything classy and inspirational to say as we wrap up?
00:45:42
Speaker
As always, it's a joy speaking with Heidi and Heidi, thanks for sharing kind of the underpinning of business. And this is one of those things. It's almost like accounting and the financial side is really the blood flow of the business. And if you don't have everything set up, if you're bleeding money somewhere,
00:46:05
Speaker
you're going to go out of business. And so it's so important to have competent people that can cover all of the correct parts of your business and to identify those blind spots. So Heidi, thank you so much for joining us today. Thank you for having me. It was a great conversation. I'd love to do it again sometime.
00:46:22
Speaker
Yay. Thank you. This has been another episode of Dial It In, hosted by me, Trigvi, and him, Dave. Dial It In is produced by Nicole Fairclough and Andy Witowski.
00:46:33
Speaker
For more episodes, visit us online at www.dialitinpodcast.com. And finally, with apologies to Tony Kornheiser, we will also try to do better the next time.