97 ⎸ From Public Accounting to Firm Owner with Stephen Crandall, CPA

We want your questions! We’re putting together a special episode for our 100th episode. We’d love for you to submit a question to be answered on air! Record a voicenote and email it to support@ambitiousbookkeeper.com with the subject line: 100th Podcast

In this interview episode, I interview a local CPA firm owner, Stephen Crandall, who I met at a Young Professionals Networking event! Stephen brings 10 years of experience running his firm into a value-packed conversation with me. you don’t want to miss this one! This episode is a must listen, no matter where you are on your journey, as it will give you insight to what it’s like to grow a sizable firm.

In this episode you’ll hear:

• transitioning from public audit to owning a firm
• handling big mistakes
• when you know you’re ready to strike out on your own
• developing talent
• acquisitions and more!

About Stephen:
Stephen is a CPA and CPA firm business owner. He started his firm in 2014 and has grown to a 25 person firm with offices in Prescott and Scottsdale, AZ. They are a traditional full service CPA firm but operate with a nontraditional fun, hard working, and very friendly group of professionals.

Connect with Stephen:

• Website: https://www.scaasolutions.com/

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Transcript

Serena: 0:29

Welcome back to the ambitious bookkeeper podcast. This, lovely episode is, brought to you by me as usual, but I have another guest and, his name is Steven. He's actually local, a local CPA here where I'm at in Prescott, Arizona. And we met at a, young professionals networking event. So, Steven, would you like to introduce yourself?

Stephen: 0:53

Absolutely. So hi, Serena. Hello to your audience there. If you have other accountants and tax professionals, I'm sure that we're all just exhaling right now because we just finished the, you know, attack season and got through another one. I'm certainly excited that it's over. I took yesterday and I went out and did Some, uh, camper shopping. So I want to buy a camper so that I can go out and do some, some, some camping with my family this summer. So excited about that, but it was, it was a good tax season. And yeah, I I'd met Serena a couple of months ago, so I'm looking forward to conversation with you.

Serena: 1:26

Yeah. Continuing our conversation. It was a little tricky having a business conversation with all the noise. Was there like a, was there a DJ or a band? It was kind of loud in there. It was kind of hard.

Stephen: 1:37

It might have been a little loud. Yeah. But we started getting into some good topics. We're like, okay, yeah, I know. Yeah. This is my experience with this. And it's like, all right. And then you mentioned the podcast. I was like, I'd like to share some of my insights if I could with you then.

Serena: 1:48

Yeah. Yeah. So definitely like, I love being able to connect with other accountants and it was really awesome to be able to connect with someone local that it's kind of on the same page, same wavelength as far as like mindset and just doing things a little bit differently. And I knew you would be. A huge value add for the podcast for our audience is a lot of people that listen are maybe still in public accounting or in corporate and have a CPA license or working toward a CPA license. And, it just seems like there's not a lot of younger professional CPAs out there sharing their experience, especially when it comes to starting firms and things like that. So having you here to talk about that is going to be. Awesome. So my first question for you is, can you share a little bit about your journey of like, you know, why you became a CPA, how you started out and, what brought you here basically.

Stephen: 2:49

Okay. So, I mean, originally it was just, I didn't know that I wanted to be an accountant. I didn't have any, you know, parents or other family members that were CPAs, but I took my first accounting course. And one of my professors like, okay, well, you know, if you want to make, make some good money and you want to be in high demand for the rest of your life, become a CPA, you know, any, I remember him saying something to the effect of, you know, when you start your business or if you ever decide to start a business, I mean, really all you have to do is hang a shingle out and, uh, you know, clients will come and people will want to, you know, you know, people will want to employ you for your services. And so I thought, you know what, I want to go into a degree where I could actually learn a trade by the time I graduated from school. And I think to a certain extent you do learn a trade but obviously, as most of you know where you really learn how to do this work is on the job. And, and from there I went right into public accounting once I graduated from college. I ended up working originally for a kind of a local firm down in the Phoenix area. Okay. It had about 15 to 20 employees at the time.

Serena: 3:54

Okay. Yeah, that was going to be my question. Was it a smaller firm or regional? Not a big four, right?

Stephen: 4:00

Not a big for, although I did, I did go to work for PWC a little later on in my, in my career as well.

Serena: 4:06

what did you base that decision off of? Because I know a lot of accounting programs, they really push you to being prepared for being recruited by one of these big four firms. Did you have that on your radar or did you kind of always know that you didn't really, cause I have my story behind that too, but like, what was your take on that?

Stephen: 4:24

Well, you know, I had, I've been working for this company for, I don't know, three, maybe about four years time and I've gotten my CPA license. And I was just kind of looking for something new, something exciting, just to try to, just to change things up a little bit. And at that time, it was like 2012 or 13, a lot of the big four were actually changing some of their strategies where they were looking for more experienced professionals. And so they brought me on as a experienced associate is what they call it. So it's an associate. That has experience in public accounting. And so that was kind of the direction that they were going. And I was, I was in audit. So I started my career in audit. So my first four years was audit. When I went to PWC, that was all an audit as well.

Serena: 5:13

Okay. And now do you do audit at your firm that you own?

Stephen: 5:17

We, we do, but it's, I started off as a tax firm. So when I started my company. SC Audit and Accounting Solutions. I started off as, as a tax and, accounting consulting firm. And that was the original idea. In fact, when I first started the company, I was like, Oh, you know, I would just thought it was just going to be myself. Right. And obviously things have changed a lot since then, but at any rate, we started off doing tax work and it wasn't until. Maybe two and a half, three years ago, I had a tax manager from another firm, or I'm sorry, an audit manager from another firm that wanted to come and join me and bring on a book of business. And so I said, okay, you know, let's do it. And so I've, you know, had that, had that person join the firm. And, and so I've been working with them as kind of the audit manager. And it's kind of a small time, you know, aspect of my business, but we do have an auto practice at this time.

Serena: 6:14

Awesome. And the bulk of your business is still tax. Is it?

Stephen: 6:19

Yeah, tax and accounting, consulting, and, and just. And then some audit mixed in with, and we do, we do provide bookkeeping services as well. That's part of the service that we provide to our clients. Yeah. So I'm not skipping

Serena: 6:31

ahead too far. No, no, no. It's cool. Do you consider bookkeeping the same as client accounting services? I, I like to get like a CPA owner, firm owner take. Yeah. To just kind of see, cause there's a lot of different terminology floating around out there.

Stephen: 6:48

Well, I would say that bookkeeping gets you all the way up to the point of. The month in close and then client accounting services would be, you know, the services that you're providing, from, Hey, every, you know, all the books are reconciled. Now we need to do the actual accounting and potentially produce financial statements. And so that's the client accounting services. And so I certainly feel like that goes to that next level. Yeah.

Serena: 7:16

Do most of your bookkeeping engagement clients also utilize the accounting piece like the financial statements and things like that?

Stephen: 7:27

Some of them do. And, and, you know, it's some of them, it's more of a, a month end, you know, monthly, financial statement that we produce for our clients and then others, it might be just a, you know, a year end. Tax return that we're doing the accounting for. So we just, we just shore up all the accounting really at the end of the year to make sure that we can prepare a tax return.

Serena: 7:50

Gotcha. Yeah. It's always interesting to hear like kind of behind the scenes of everyone's interpretations of things, because like I own a bookkeeping firm, I don't really, I mean, CPA, but, I have a whole reason why I don't, but what I'm actually providing is client accounting services and like higher level stuff. So it's very interesting to hear what people consider what, and then it always depends on how you're really like communicating and educating the client on what it is that you do, and it doesn't really matter what you call it.

Stephen: 8:23

And that's what interested me in you. When we talked the other day, you'd mentioned, Hey, yes, I'm I provide bookkeeping services. But I'm also a CPA and so I understand all the actual accounting and so a lot of times our bookkeeping clients or some of our clients that might come to us, they may have had a bookkeeper, but they didn't necessarily have an accountant. Yeah. And so we get, you know, we might get the books and banks are reconciled but the accounting is not done. And that's just something that can really be missed. And it's, it's tough. I mean, I would say that, you know, cause I think there's a lot of, a lot of people out there says, Oh, hey, you want to become a bookkeeper and you can easily become a bookkeeper, but can you really become an accountant? And do you have the people around you that know that, that know the accounting, who can actually train you? And that's part of I guess some of the value add that my firm is provided is because we are CPAs as well. So we have bookkeepers, but we help you know we help them take that work from the bookkeeping level to the accounting level as

Serena: 9:22

well. Yeah. So, a second ago you mentioned, The books are reconciled, but the accounting might be not be done. There might be some things missed. So do you have some examples of things that you've found missed so that like, if a bookkeeper is listening, they could be like, Oh, I can look for that and not. I think

Stephen: 9:38

so. I mean, probably one of the more common areas that can get missed would be your long term debts. You know, making sure that you're really reconciling your long term debts. Sometimes we'll see that maybe the interest hasn't been properly allocated. For your, you know, for your notes that are on the books deferred, you know, deferred revenues, things like that. If you don't really understand what deferred revenues are, if they're cash versus accrual basis, the fixed assets component is something that's frequently missed and difficult to deal with because, you know, you're really trying to reconcile your fixed assets on your books. to your fixed asset manager or the program that's managing your fixed assets. And a lot of times for us, that is our tax software. Our tax software is what is going to dictate the depreciation and the balancing of those fixed asset accounts. And so I guess that those would be a couple of areas that we would see, you know, that do get missed quite frequently. And then maybe some classification issues on the profit and loss, you know, you got to be really careful with that as well. Yeah. What about you? So do you have some areas where it's like when you're working with entry level bookkeepers that they're, that they struggle with a little more than others?

Serena: 10:49

Yeah, I would say a common, area of potential weaknesses and not all bookkeepers, but a lot of the bookkeepers I've mentored. Feel very unsure about the balance sheet. So we've been talking a lot about that lately. And like you said, that's all the debt, the fixed assets, maybe inventory, things like that. And really getting a good handle on the balance sheet. I think it's really intimidating for a lot of people. And if you didn't come from a corporate environment or public accounting, where you had to go through every line on the balance sheet before you actually closed month end, like that's part of our internal process.

Stephen: 11:24

And you said something important there. That I think that, you know, any, any bookkeeper could really take away from this is focusing on the balance sheet and going through every single line of the balance sheet. So when you go into public accounting, especially an audit, like, we spend the majority of our time in the work that we do. focused on the balance sheet, right? Going through reconciling every, every cash account, every receivable account. And we set up a work paper file. And I still do this with my tax practice is every single one of our business tax returns that we prepare. There's a work paper file where it's like, okay, you have the balance sheet and everything's tied out from the cash accounts, the receivables, the inventory, the fixed assets, the prepaid expenses, the accounts payable, and there's a separate, we use Google Sheets. And so we'll just have a separate tab that has like either a schedule that's built into the spreadsheet or, something that we've done, like more of a screenshot and paste it into the worksheet, but every single item on that balance sheet is tied out. And I think that if, if you're able to do that as a bookkeeper, you're going to separate yourself from the majority of other bookkeepers, just by making sure that you're focused on that, especially in the eyes of your clients.

Serena: 12:44

Yeah. a lot of clients also don't understand the balance sheet. And so they may not understand the value in that, but the thing that I always come back to is like, if your balance sheet is correct, then you know, your PNL is. So if you haven't gone through each line on the balance sheet, then we can't rely on your PNL. And the other thing, like you said, tying out the balance sheet. For anyone who maybe is unsure of what that means. It just means having supporting documentation or like you said, a spreadsheet or a schedule matching the balance and explaining like what's in that balance. So if it's the AP, it's your AP aging, and you've actually looked at every line on the AP aging, making sure it's legitimate, not a duplicate or something. Negative

Stephen: 13:29

balances, right? Things like

Serena: 13:33

that. So it's not just matching the balances, but really understanding that those balances are valid, right? Because you can export the detail of the GL and have it match the balance sheet, but it could be absolutely wrong.

Stephen: 13:46

Absolutely. You make a good point there.

Serena: 13:51

Thank you for bringing that

Stephen: 13:52

up. I'll just mention something else that we do on, on the profit and loss itself is a lot of times we'll tie out all of the payroll. Because with the payroll, that's something else that could get, you know, that could get missed or, could be incorrect. And so we're always tying the payroll expenses out to like a 941 or, you know, the year end W 2s, making sure the officer's salary agrees to their W 2. And so that's something that was really important.

Serena: 14:20

Yeah, I agree. That's something we have built into our year end. Like, we prepare basically A whole workbook in Excel or Google sheets that we give to our, each of our clients at year end with the final numbers, a trial balance, fixed asset detail, all the things that we think their tax preparer is going to need. We just add a tab for it. Like charitable contributions. Here's the detail owners draw. Here's the detail. Like every little thing that. The, the tax preparer might have questions on, we add it, we tie out the W2s, we list the number of 1099s that they've issued and all that good stuff. And, yeah, most of our clients, tax preparers don't end up having any questions because we've just handed it to them on a. Silver platter.

Stephen: 15:06

Absolutely. And that's, you know, that's how you really provide great client service by doing that. And if, you know, and if you're doing that, you're really, it's more of a self check for your own mistakes as well. Cause it's like, okay, we've tied everything out each and every month. Yeah. you know, you're going to notice things that are wrong. Yeah. Because if one item is wrong on the balance sheet, then that probably means there's something else wrong somewhere else.

Serena: 15:28

Probably on the P and L. Yeah. There's something going on. Most likely, but maybe not. But yeah. Yeah.

Stephen: 15:34

So you mentioned, you mentioned Google sheets and maybe there's something we talk about, but I will say something about Google sheets. It has been a game changer for me in the accounting profession. And especially the way that we've deployed using that, that program within our

Serena: 15:49

firm. Okay. Do you want to talk about that? Like how have you, how is it a game changer and how you use it?

Stephen: 15:55

Well, so basically we, we operate and we track our entire workflow. Using Google Sheets and the best part about it is so like if I'm in there, I'm working with a client. I think we were just I was just mentioning this and so we'll we'll take and we'll put the trial balance or a balance sheet on one on one tab and then a profit and loss on another tab and then and then we'll use all of the subsequent tabs to actually add our supporting documentation. To one single workbook. What I love about it is if you're working. So we have two offices. We've got one here. We've got one in Scottsdale. But if I'm working with my, you know, another one of my employees, maybe I'm just in my office is we're all in there in a shared setting. And we can work through things on a shared setting. I can leave comments. you know, I can right click and leave a comment and it sends them an email. I can take when I'm reviewing the work. I'll take the same exact workbook. I'll put it on one screen and I might have my balance sheet sitting on one screen. And then on the other screen, I'll have the supporting documentation, just in a separate workbook, but a separate session. So I can just, I can quickly tie out all the balance sheet back to the support. So from a review perspective, I love that too, but the sharing and the collaboration that's been introduced with that program and, you know, Microsoft offers something similar. I just happened to use Google for it all. But I, I love it. And it's, it has made a huge difference for our firm. The way that we communicate and present documentation anymore. Yeah,

Serena: 17:31

I think Google sheets is definitely better for a collaborative environment, like working on the cloud. I came from corporate, so there's functionality in Google sheets. That is like opposite of Excel. And so I kind of struggle with it, but like, there's still, like, we still use Google sheets. That's what we export financials for our clients and Google sheets and a PDF. So that they, cause all of our clients are, they're online entrepreneurs as well. And most of them use Google workspace. So it's very easy for them to just pop in there and look at things, but, Yeah, I do the same thing. Our, our balance sheet reconciliations are all in a Google sheet, but you can also like work with it in Excel and then just open it in Google drive as a Google sheet. So it's, it makes it, it makes it easier to collaborate, but there's some things that I just like, I have to do an Excel and then I pop it into Google sheets.

Stephen: 18:23

So I've kind of, you know, I should, I should say our firm has kind of figured out how to actually operate in Google sheets. similar to the way that I think most people would want to within Excel. You know, we, we do, uh, conditional formatting, lookup formulas, filters, kind of all the things that you'd have to do that you'd want to use Excel for. Google sheets does have those features. They're just a little bit different and you have to figure out kind of how to use them. And we've invested a lot of time and effort to make sure that we figured it out because of the fact that we use this platform, but anyway, so I love it. You know, and it's something that makes the collaboration for us so much easier. And, the. Other aspects of that program that we've used people, some people might kind of laugh, but then when they realize what we actually have done, they might say, wow, that's pretty interesting. So can you give us an example? Well, so we track like during tax season, we have created, most people are familiar with like an engagement memo when it comes to a project, right? And so the engagement memo has the client name, maybe the amount of time that you've spent on On that work. You know how you're going to deliver that work, which returns are going to be filed kind of everything that you'd want to know to process that specific, project or tax return, etc. So we've created a process which is, essentially using Google sheets to manage. Well, it's it's a spreadsheet that has taken place of a paper engagement memo and just the way that we've utilized that has allowed us to go back and we're tracking statistics, year over year, because we use this exact same format. And so we can compare and figure out. The number of tax returns that have been prepared through a certain period of time, the dollar amounts of those tax returns, which staff has prepared a certain number of returns, and we can compare that to the prior year. And it's taken a long time to develop it. But I, I absolutely love it and I'm excited to kind of further developed this to, you know, essentially help manage the workflow of our. Yeah.

Serena: 20:35

So you mentioned, earlier too, that you, you not only use, you're not only using Google sheets for like your actual work papers and things like that, but you're using it for this. And then you also said you're using it for managing the workflow. Does that mean you have like monthly checklists and stuff in there or?

Stephen: 20:50

Yeah, absolutely. And you just use the filters so like each staff would filter. So like if a staff member goes in there and they just filter on their workflow. You just filter out what your workflow is, and you can see specifically, like, which projects you have, the status of them, have they gone to review. And kind of where everything is at, but it's just, it's so convenient, you know, for me, the way that I got to this point, and the reason why I wanted to utilize this program is, I remember early on in my career. I worked with a program called Go Systems. I think that's what the name of it was. But essentially it was a trial balance software. And it, it's, I think it's an old school trial balance software. And I was using it a number of years ago when I first got into public accounting. And, uh, it's a trial balance software. And, and it had like an interface and I was remember like I kind of knew like what was behind the scenes, it was essentially just using spreadsheets behind the scenes, and, and it had this interface that you could go to. But then I figured out like kind of somewhere along the way, how I could just like. Pull all the data behind the scenes and just work with it more or less in Excel and get the information that I wanted so much quicker from that program. And so I've always kind of been a believer of just understanding the data and the way that it works, but then you have to really be able to manage it from an interface standpoint, but I never liked interfaces because like, sometimes they're just. They're they're customized and you can't make it do the things that you want it to do. So that might be a little bit of a rabbit hole, but it's something that I am passionate about. And I love that, these concepts and ideas that come out of it. Yeah,

Serena: 22:30

that's really awesome. we use a project management software. Called a sauna. But for like anyone listening, if you don't want to pay for an extra software, like this absolutely can be done in Google sheets, even in corporate, like we use Excel to track our month end. Like it was a giant checklist in one tab. And each month we would copy the tab, make a new tab, uncheck everything. And you'd have the column for like, You know, prepared, reviewed, yeah, whatever. And

Stephen: 22:59

similar to that. And there's dropdowns. So we've got like dropdowns where you start typing in the client's name and it's reading, you know, it's reading, Yeah. Like a data validation. Yeah. So it's reading like a data validation and then the client pops right in there and you just kind of move it through it. But anyhow, I love the efficiency of it. And, and, uh, just the collaboration, you can kind of see the work all happening in real time. Really.

Serena: 23:24

yeah, absolutely. Okay. So the other question I have, like you kind of got your backstory on what led you here. When did you realize that you were a ready or really felt the pull to. Start your own thing.

Stephen: 23:40

Yeah. You know, I think I've always been the type of person that is always trying to kind of figure out the next big thing or try to make and try to do something in the profession or in my own career. That's going to take me to that next level. So even when I first started in public accounting, I was always kind of anxious to get out and maybe start my own company and become an entrepreneur and do something. Kind of outside of the wing of, of my employer, but I also recognize the value of, of the training and the understanding of the profession that you can only get in an employment, you know, setting. And so I really appreciated that. And so I kind of knew in my mind that, you know, I wanted to, I wanted to run my own business at some point. early on, but I also knew that I wanted to have maybe like five to seven years experience before I wanted to make that move. And so for me, It was just, you know, kind of thinking to myself, do I have enough experience to get out there and essentially, you know, chop the cord and go out, you know, as an entrepreneur and go out on my own. And looking back on where I was, I think I was ready. You know, I think I was ready to make that move. You know, I certainly could have done a lot of things better, that's for sure. but I was ready. And, Sometimes you get out and and if you're really serious and you're willing to put in the work, things just start to happen for you. You know, things just come together. I remember when I first went out on my own. I literally was going into my like six month annual review with my employer. And I had decided a couple of days before that, that I was just going to just, just go for it. Just take the leap. And I remember I maybe had like 15 or 20, 000 in my 401k and I was living in a one bedroom studio with my wife and like two kids. And I was like, honey, I just want to make this happen. You know? And I was like, somehow, some way, you know, I'll just keep working hard and, you know, we'll live cheap and just make it actually happen. And I decided that, and I'm literally, I'm sitting in my six month review and the conversation, rather than going, you know, going from, Hey, how, how are you doing? Went to, Hey guys, I want to let you know that I'm going to go out on my own. And going to try to make it, you know, and I remember my, my boss kind of smirking at me. He's like, Oh, I say, you're gonna, you're gonna go strike out on your own, huh? I'm like, well, I guess so. So anyhow, and I did, you know, and I went out there and I remember my first year, I was able to, I don't know, somehow just by myself with really no clients at all. Just started working, doing some tax work and some other consulting jobs. I think I was able to rummage up like 50, 000 in revenues just by myself without doing much. You know, other than just working hard the whole year and that was enough to get me by, you know, and then the next year did more and this and that, you know, and now we're 10 years into the progression of our firm. Wow. But it was a big leap though I mean looking back on I was like, wow, you know, but sometimes you just have to go for it's like, you're standing up there on it, you're gonna jump off a cliff into the water you know you know how you stand there and go back and forth and you're not sure if you want to jump or not. I just jumped. Yeah. And you're fine.

Serena: 27:09

I like that. Yeah. I appreciate the point you made about like kind of figuring out how much experience you wanted to have before you made that leap. Because a lot of people will come and be like, well, I don't know if I have enough experience to start out. I really want this, but Like, so for someone that's kind of like juggling that decision right now, what do you think was one of the big indicators that you did finally feel like you had like the right amount of experience? Like granted, we're always going to continue to learn. Like you're always going to be a little. Underconfident is not even a word about your skills when you strike out on your own, even if you have 15, 20 years of experience, because it's just different being an entrepreneur. Yeah.

Stephen: 27:53

Well, in public accounting, I mean, I'm still learning something new every day. Yeah. And so that's always going to be the case for me. it was after I had worked on some big jobs that I knew I was taking from start to finish. I know what I'm doing like I can, you know, I can go and I can provide a consulting service and I can help. Clients that are in need take their books, which might be in kind of a mess, and I can help them get them to an audit level product where they could take that product and they could give it to an outside auditor and they would be really happy. The auditors would be really happy with the workbooks and the documentation and just everything that I provide to them. So I knew I could take. The process from start to finish and have more of a deliverable to provide. And so I knew I could do that. And that's what gave me that confidence to go ahead and, you know, make that move.

Serena: 28:49

How did you, like logistically. You were able to, you knew that you were able to do that in the public accounting world because someone was overseeing your work and they're like, yeah, I have no feedback, really like no, no big corrections, just tiny little things. Right.

Stephen: 29:05

I think that's it, you know, and it's not for me, it wasn't like I was. issuing audit reports at that time when I first started. So we were doing more like consulting services, just a little less risk, you know, it's like, okay, well, at least that's when I started, I was providing more consulting services where it's like, okay, I'm helping get all these schedules ready to go to the auditor, you know, and maybe in some ways it was some bookkeeping that I was doing, right. But I was doing the bookkeeping and accounting kind of at a high level. And if I did make some mistakes, Well, the auditors are the ones that might catch it, but it might be something small, but ultimately I knew that what they got from me was at least from, the clients that I would get and that's the reason they hired me, would be better than what they could produce because they needed my services. And so hopefully that gives some insight, but I just kind of knew, hey, I can get it to a certain point. And then, you know, really. You know, you just got to take some risk, you know, it's being an entrepreneur is all about taking risks and that part never stops. You're always, you're always taking risks. And, and so you've got to be willing to take some risks to reap those rewards. That's for sure.

Serena: 30:19

Yeah, for sure. So do you have, since you've been in business for 10 years, I'm sure you have at least one experience that stands out in your mind of like a big, big ish mistake that you made maybe with a client or I don't know, within your firm that. At the time, maybe you felt like you were never going to be able to come back from it. Do you have a story like that to share?

Stephen: 30:43

Well, I mean, there's lots of stories, right? Yeah, mistakes. I will say is that and knock on wood, you know, being in the profession of public accounting going into it, you know, knowing that, hey, we're CPAs. we've got high ethical standards. We always strive to do the best that we can and really get the work right. I think that for the most part, even if you do make mistakes. If your intentions are good you've been diligent in your approach, you know what I love about this profession is things can be corrected. You know, if you make a mistake, things can be corrected. You can amend the tax return. You know, obviously it's very rare that you'd want to amend an audit opinion. You rarely see that. But I suppose if that did happen, you could. I unfortunately have not had that experience. But we've amended multiple returns over the years, you know, we, my firm prepares what 1500 returns a year, something like that. And so, Every year it gets less and less. But, let's see mistakes that stand out. You know, there's lots of them. I'll give you I'll give you one that was kind of an interesting mistake. I had when I left one of my employers, a long time ago, I started doing. Some some work for a client of there's a very large client, be it. And this was a public entity, and I ended up in a bit of a dispute with my former employer, and I was only what like two years into the business at that point in time. And that had a big impact on me because Here I was and what they what, what are these, like these, non solicitation agreements that most everybody signs when they work for their employer. And so I was in kind of a dispute with my employer. I just started my company. Like, I was like, 2 years into it and I did a side job for a separate division of this, Of this organization, and my employer found out about it, former employer found out about it and, like, sent me, like, a notice saying, hey, like, you can't do this. It's against your non solicitation agreement. And so I wound up in a little bit of a legal battle. I will say that I said, you know what, I got two choices. Either I can, I can cower and bow out or I can go in strong and hard. And then I did, I went in and I thought, you know, I'm going to, I'm going to go out this, I'm going to try to try to beat these guys. I was kind of pissed off, you know, and it wasn't about beating them, but it was about, you know, stepping up and I had to be brave. Yeah, and I had to take a stand and essentially I hired a really good attorney to just write a letter for me and presented my position and I stood up to them and and they backed down and left me alone. And it taught me a lot about, you know, you got to be strong in business. And you got to be willing to be bold and make big moves. elsewise you can get pushed around.

Serena: 33:41

Yeah, I have a lot of like bookkeepers and students that I mentor that a lot of people come to me with that question of like, I, you know, I have a, either a non or non compete. And I'm always like. Well, for you, you were already two years out. Like it probably didn't even, maybe it wasn't, you know, it expired at three years or something. It

Stephen: 34:01

was something like that. It was like two years. Like I, maybe it started something like that. It was like two years or a year and a half, but I was still within that. Within that time frame, you know, where technically they thought I wasn't supposed to have been doing this. Yeah,

Serena: 34:16

but like I've, those are really hard to enforce, like employers can make you sign them when you work for them. But at the end of the day, like they can be very difficult to enforce because you don't, you know. That client could have come to you. It's not like you went knocked on their door and we're like, well, maybe you did, but you know, like

Stephen: 34:35

part of it now is that, and I don't, I don't even think I have, maybe I do have my employees sign these, but I've had situations where I've had employees that have left my firm and started working with other clients. And the first time it happened, it upset me a little bit. Because they ended up taking just a couple of clients but then I quickly realized like I'm so busy anyhow and the clients that did end up going with this person. We're not really servicing our serving our firm all that well anyhow. And what I what I thought about just from an employer's perspective is like, if, if I'm not doing a good enough job to keep that client. And within my firm, then probably, probably my fault that that client has left with this other person versus them taking the client. So that's how I look at it anymore. And I don't, as an employer, I'm not even worried about that. And so I would tell your audience, people that are out there, if they have concerns about that, I mean, it's just something they've got to think through, but most of the time, the employers, they're not going to do anything. Yeah.

Serena: 35:39

I, I think that that self reflection is really important. Like I always, you know, I always come back to like, what role did I play in this failing or this not going the way that I wanted? Like I, I already, I always have some sort of responsibility to that. So like you said, like, okay, well, what did we do wrong where the, the client decided to go with. You know, that employee and maybe nothing, it could have just been like, they had a really good relationship or really good rapport and they wanted, you know, to have continuity of who was doing their books or whatever, right? It's not, it's usually not personal. Yeah,

Stephen: 36:18

yeah, it's tough. You know, rejection is one of the most difficult parts of, the business, right? If a client leaves you, just that rejection from the client is really difficult, but you get used to it. You know, there's lots of difficult things in running a business, but that's just one of them, you know, and you get used to these things, you know, you got, you got employees that might leave or. You might have to let somebody go or a client fires you or you have to fire a client. These are all really difficult decisions and things that you have to deal with as a, as an employer. And, they're not fun, but you got to run a business and, people are, you know, going to do their, you know, their own thing sometimes. Yeah. So yeah,

Serena: 36:55

exactly.

Stephen: 36:57

Okay. I don't know if you had this on your list, but, can we talk about like the employee and like employee employer environment out there right now? Just kind of in our profession.

Serena: 37:06

Yeah, let's do that. What you got?

Stephen: 37:08

Well, I guess I was just kind of thinking back to when COVID happened, especially in public accounting, you know, one of the big. The big things was employees were kind of moving all around. Right. And, you know, so you're thinking, you know, wow, I had, you know, these people for this amount of time, and then they've left our firm. You know, that that's a, that's a challenge. And I know that a lot of firms out there have had, had challenges with employees kind of coming and going. I think that's changed a little bit. But I guess, you know, one of the things for, for me, is that, you know, I've always really, for our firm, we've really prided ourselves in developing staff, you know, and bringing people up, not necessarily hiring, hiring experienced professionals, but developing new professionals. And to me, Our firm, we've always been able to kind of fill those coffers, you know, we've always been able to say, Hey, we've got that kind of next man up mentality. But, just from your perspective as well, I'd just be curious, like, what have you kind of seen from COVID and the labor market to where it is today?

Serena: 38:10

I see lots of different. perspectives. I think on the cloud or have like a virtual environment, like you definitely have an advantage because people want to work in that environment. What becomes more challenging is like you said, you, you have to create the time to develop the talent. Because those really experienced. Professionals are probably going to be out of your budget.

Stephen: 38:34

Maybe there's hardly out there. If you're a good experience professional, you're either doing your own thing or you're working for somebody else and hopefully they're taking good care of you. Yeah, exactly. So there are few and far in between. I feel like anymore if you're trying to, if you think you're hired just an experienced professional, it's going to be a difference maker for your firm. Yeah.

Serena: 38:50

Yeah. So creating, making sure you make the time. And this is where a lot of people get kind of stuck in limbo of like, I'm so busy. I need help, but I don't have time to train or to develop the talent. So it's like, you kind of have to prepare for the rush way before you're ready. Like I always, I try to give this example, but last year, Or over a year ago now, I guess it was the winter of, or fall of 2021. I knew I wanted to have a new team member join us by January. So I started recruiting in like October because I was like, I don't know how long it's going to take. And that it can take three to four months to, to recruit the right person. If you're serious about building a good culture and, and yeah, and that person ended up starting in January. But we would have been strapped, right? If I had waited until I actually needed the person. So, sometimes it's a little leap of faith, like jumping before the net is there. But if you know, in the future, like you're planning for growth, you're planning to bring more clients on. You're going to stifle the client growth. If you don't. make the hire and develop that person ahead of time.

Stephen: 40:00

Absolutely. We have a pretty good internship program here at our firm. And so we're constantly trying to, trying to develop, least two or three interns at a time. Yeah, you know, just to make sure that we've got kind of that next person that's, you know, that we can train and develop and bring them into our professional staff. That's really the goal is, you know, but if you get good, smart people that are, you know, well educated and work hard, you know, I've found that our team. Cause we've got, you know, now we've got, I don't train the interns anymore. My, my senior and associate staff, they all do. And so it used to be that I had to, but now we've kind of grown to the point where, but knowledge is contagious. And that's something that I've noticed is that we can get somebody up to speed. Really fast, especially now in our 10th year versus where we were maybe in our 5th or 5th year or 6th year. The way that we train and teach people has become so much more effective. And so that's been a game changer for our firm, just our ability to train and develop people. And I, you know, I invested a lot of time, effort, money, everything, you know, that I could to have this kind of setup. And You know, it's, it's, it takes a lot, you know, to, to do that. But, you know, we've always had, staffing has never been an issue for us. I mean, yeah, would we, would we want to have more experienced staff? I mean, everybody does, but we've always had the ability to deliver for our clients and had plenty of people that can get the work done. And now it's opened up new opportunities, you know, so now we've got this really robust. Staff and group of people that, you know, if we want to do something else or other moves. So we have the ability to do that, it's good to be able to deliver for your clients. Yeah.

Serena: 41:49

what do you think is one of the big components of your training program or the way that you develop staff? That was like a big game changer for you.

Stephen: 41:57

Well, be honest, it's more or less Having that comfort level just being comfortable asking another staff for help. Like we try to develop with our work culture is that we all help each other. I mean, I have an open door policy. Somebody has a question for me. I'm always willing help them and help them figure something out. And that goes for me all the way down to all my seniors and associates and everything. We communicate. Openly. And we all really enjoy each other's presence for the most part, you know, you know, everybody gets along perfectly, but for the most part, that's ingrained in our culture is a willingness. To help and really want to make sure you help somebody else get it right. And so we we try to eliminate this kind of environment where like you're kind of afraid to ask your neighbor because you think you might get yelled at or they might think down on you or tell somebody, Hey, this, this question, you know, they didn't know this or that. It's never about that. It's always about making sure that we give you the best experience. We teach you whatever we can to get you up to speed. And if you don't cut it, well, then you don't cut it. But most of the time we find that we bring out the best in people because we, we do provide that type of environment.

Serena: 43:05

Yeah. That's so important. That's amazing. Yeah. All right. So we're getting close to time. The other question that I wanted to ask you was about your firm growth. So you started 10 years ago. And when we met, you were talking about how a lot of the growth that you've had has been through. Well, I don't know a lot of it, but a portion of it has been through acquisitions. So do you want to talk about like Maybe like your first acquisition and how that went versus like your most

Stephen: 43:37

recent. Yeah. I'll give you a quick, elevator story of it. So I think I was talking earlier about how I started my business and I was able to kind of rummage up like 50, 000 maybe in my first year. And I think in my second year, well, even in that first year, what I noticed, cause I was getting out and I was networking with other CPA firms in town and I was going to them saying, Hey, I started my own firm. If you, you know, if know, have any extra business, you know, please send it my way because I'm looking for work. And I found that other CPA firms were willing to like send me their overflow because they were busy. And so I thought, okay, well, that, that's a pretty good program. You know, I'm going to get out and I'm going to meet more CPAs. And it was sometime in my second year. I walk into this, small CPA, CPA practice here in town. And when I walked in, the administrative assistant, she was on the phone with a client, and she was telling this client that the practitioner, the CPA, was like sick, and he was in the hospital, and she didn't know his status. And this was like February of 2015, I think it was February of like 2015. So it was right in tax season. And so I gave her a couple of my cards. And I was like, Hey, if there's anything I can do to help you guys, let me know, you know, just out there looking for business and lots of time, no money, lots of time at that, at that point, you know? And so I was out networking and, the son of this CPA calls me and he's like, look, my, my dad's in the hospital, he's sick. And, you know, we've got this whole firm and we want to see if there's any way that you can help us. And it's like, well, yeah, let me see what I can do. And I went down and I, and I met the CPA, the guy that was sick. And, you know, he was down in like a care facility and I sat and I talked to him and told him a little bit about my background and, and right there, like, kind of made like a business proposal with him. To buy his practice from him, and he looks up at his son. He says, or no, his son looks up at his him. He says, Dad, do you want to think about this and and get back to Steven on this and and he says, Nope, I want to do it. And we literally shook hands right there and I bought this little firm from him that the that the family finance to me. It was like 80, 000 worth of business. And, he, unfortunately he ended up dying like a week or two later. So he knew like when I talked to him that he was not doing good. And so here I was, I took on this, little tax practice, you know, hardly no one knowing what I was doing. I was just going to follow his work papers and, you know, compare everything they did last month, last year, trying to figure it out, you know. And I did, and I was able to hire a few people from the local college because of that. And, and then from there, I, I thought, well, hey, I did it once. I'm going to do it again. And I went to another guy that I had met years before and asked him, Hey, you know, you're interested in selling your practices. Yeah, yeah, sure. You know, and I was just surprised that these guys are ready to retire and they want to really sell. And, and I just, I positioned myself in the market because I've And at that point, every time I would acquire a firm, I would hire multiple interns and other employees to come in and help me do the work. And we ended up doing a million dollar deal and some other smaller deals. And, you know, I think up to this point, I've acquired like six or seven practices. Wow. Yeah, yeah. And then also built my own legacy clientele all along the way, you know, today. Up to somewhere between, you know, close to 2. 5 million annual revenues. Wow. I would love to talk more about all of the acquisitions and everything that goes into it, because it's a whole other topic just in itself.

Serena: 47:16

Yeah. We're going to have to do a part two for sure, because I'm very curious on, on that front, as far as like, my end goal is always to, has always been to get my firm to a point to sell it because that's, you know, It's just a goal I have. It's not like necessarily my retirement plan, but it's one of those things that like, that's always been part of my vision. So I want to know what it like from both angles, you know, how to best prepare. And then also like, if that involves growing through acquisition before I sell too, you know what I

Stephen: 47:49

mean? So many challenges. And I thought about this earlier and you know, one of the things, if I could go back and do it all again, I would have been so much ready, so much more ready for the, the scaling that I would need to have done through all of that. And obviously knowing what you know, now you want to go back and you want to say, okay, well, these are all the processes and these are the programs, and this is how I would do things upfront that would help me so much more later on as I grow. And I wish I could have done, but sometimes you just got to learn this stuff on the fly. And, and maybe it's now, I mean, who knows? I mean, I'm, you know, maybe now we've, we're to the point where we're still somewhat small enough where, I mean, who knows, maybe our processes become, you know, maybe we develop those because I haven't done an acquisition now in like three or four years. So that was all kind of earlier on. I haven't needed to just because once you get to a certain size, all of a sudden, all of your clients, if you do good work, all your clients are going to start referring business to you. People in the community, they kind of know who you are. They're going to refer business to you. And so we've just grown quite a bit just on our own over the last three or four years, which has been, which has been really nice, but, but yeah, I mean, there's been a, extra focus on, on just our process and, and I wish I had the processes that I had today, five or six years ago, I'd be in a completely different place, but that's how it goes. Yeah.

Serena: 49:20

Hindsight. Right. Awesome. Well, yes, we're definitely going to have to do a part two of all about acquisitions. Yeah. But if somebody is interested in connecting with you, where is the best place to reach out to you? Yeah.

Stephen: 49:37

So, I mean, obviously our website would be one place. I'm not much of a social media guy. But I do use Instagram. So it's Steven underscore the underscore CPA. That's my Instagram handle. All right, I don't post anything on there. I would love to, I would love to be, you know, someone that could get to. I wish I could do more on that front where I could share more information if people are interested in hearing from me anyhow, and have more of an online presence, from, you know, social media presence, but maybe that's something that I'll do in the future here. I've been stuck on the farm, you know, you start a business like this and you just, it takes everything to make sure that it all goes and happens but I'm starting to have more time now I feel like with all the people that have helped me do this. But, uh, our website is s c a a solutions. com. And that's another way to contact me. Awesome. Well,

Serena: 50:36

thank you so much for taking the time to come on the podcast. It's been a pleasure, being able to talk with you and I'm looking forward to having you back. Okay.

Stephen: 50:46

All right. Thank you. Thank you.