The Modern CPA Success Show: Episode 141

If your numbers feel disconnected from your decisions, it’s time to change that. Profit-Focused Accounting helps you align operations so you can stop guessing and start leading with confidence. Discover a clear roadmap to financial maturity with the five pillars of profit-focused accounting. Learn how to build cash flow that supports growth, know why accurate and timely reporting must come first, and how objective self-assessments, from Ad Hoc to Optimized give you and your advisor clarity on where you stand. Take the first step toward profit clarity.

Adam Hale: [00:19:19] As a CFO, Tom, how involved do you get in the accounting? Because I
know we always pair up the team and you have somebody on onboarding that helps out. How
involved do get in on the understanding the maturity of the financial statement section?
[00:19:36][17.6]
Tom Wadelton: [00:19:37] Yeah. So in the onboarding, all of our clients, like you said, we have
a senior accountant that works with me as a CFO and we have two different tracks of discovery,
advisory discovery and accounting discovery. So the accounting discovery, I’m not usually in the
meetings with the client that there’s a whole list of things they’re going through to look at the
accounting, but I’m probably doing two or three different reviews with the senior account where
they’re saying, here’s what I found. And usually it will be similar to a month-end review where
they might be showing me the balance sheet. And I’ve had cases where they say, hey,
everything looks really good. And then I can point to something on the balance sheet, like, what
is this like $1.1 million owner loan? Something like that. And they’re like, oh, we didn’t get into
that. And so it’s a chance for you to look and say, hey, let’s really make it gives me a chance to
make sure that it was gone through on a basis. And then I’ve also sometimes watched the
process intake where we’re talking to the client about their processes, but more often reviewing
with them what did you learn about these different processes and are there controls in place?
Mostly an oversight kind of role. [00:20:34][56.9]
Jamie Nau: [00:20:36] Yeah, I think it’s really important that the CFO has insight into this and
understands how it works, why it’s working which way, and what level is the financial reporting
at, and how can we up-level it because oftentimes, the senior accountants can go in there. They
can do the reconciliations. They can clean stuff up, but they’re going to need some CFO help to
get from that two to a three or that three to a four. I’m like, what does that look like and how
does that process look? Because oftentimes, it’s about efficiency. And I think senior accounts
oftentimes are really good at accuracy, but the efficiency They need a little bit of an old head in
there to come in and be like, hey, we can make this a little more efficient by doing some
estimates or doing some of these things that are going to help us get things ready a little faster.
[00:21:14][37.9]
Tom Wadelton: [00:21:15] Yes. [00:21:15][0.0]
Jamie Nau: [00:21:16] Yeah, that’s a really good point. So the next section of our maturity model
is cash management. So if anyone’s ever heard us talk, they know we’re big cash guys. We
want to make sure companies have the right amount of cash in the bank. And so cash
management is our next section that we kind of walk through with the clients. And there’s five
sections within cash management, so there’s cash reserve, tax reserve, the relationship with
your banker, investing, and debt management. So those are kind of the five areas that we
evaluate all of our companies on when it comes to cache. [00:21:46][29.6]
Tom Wadelton: [00:21:48] And with a couple of measures, do you have enough cash? And I’ve
got an example where a client doesn’t have enough cash, they acknowledge that. And for
people who know what we teach, we suggest if you take a trailing 12 months revenue, you have
between 10 and 30% of that amount of cash based on the risk in your business. I have a client
who’s very low and on the investing section, they’re at a one, they have no investing strategy. At
the moment, they are comfortable with that because they don’t have the cash. So it doesn’t
really make a lot of sense to spend a lot time, What am I going to do with this cash I don’t have?
And so we’ve said that. I’m OK. Let’s not prioritize this to be better. Let’s focus on getting you
more cash. And I would love to have the problem of we’ve got enough cash and we don’t know
what to do with it, we need an investing strategy. So that might be an example where,
unfortunately, because of how their business is going, a one is OK in this particular dimension.
[00:22:34][45.8]
Jamie Nau: [00:22:35] And I think with cash, it’s the one area. A lot of these, we feel like we can
get companies up to a three, if not a three or two, by the end of onboarding. And that really is a
lot of what we’ve been doing all along is like, okay, you didn’t have a forecast, now you have a
broadcast that you can access at any time. That just moved you from a one to a 3. But when it
comes to cash, this is the slowest moving one. Because I wish I could get you from having zero
dollars in the bank to having $500,000 in the Bank in eight weeks, but that’s not gonna happen
with a lot companies. This is the slowest moving one of a lot of them and so it’s really important
for us to establish those timelines with the goals when it comes to cash. Yeah, great point.
[00:23:13][37.8]
Adam Hale: [00:23:15] Or you stop spending all the money and then, you know, then the cash
magically shows up. Yeah, it is an interesting conversation because this is a point where the
clients get a little bit bullish sometimes on where the money is located. And I get it, from a
concentration standpoint, you don’t necessarily want a ton of money in the business. It’s
exposed from a legal perspective. And so the 30% is kind of a… Is probably on the extreme
side. But typically 10 to 15% is probably what you’ll see in most cases. And that’s generally
sufficient if they have a pretty good cash cycle. But we can do the math and we can show it to
them and why it matters. And they can easily look to how many payrolls that is. Oh, that’s only
two payrolls. Yeah, we’re not asking for a ton of money here. So yeah, I just think it leads to a
lot of interesting conversations. And as you mentioned, Jamie, it is the ultimate lag indicator.
And so this is also a spot where we can kind of express the value of the forecast being the map
to get us to this destination, you know, at the end of the day, if we want to improve enterprise
value, we’ve got to improve EBITDA, right? You know, cause that’s what people are going to get
paid on. Whenever we improve EBITDA, what happens to the cash? Unless again, unless
there’s a ton of distributions, it’s showing up on the balance sheet. So it’s just always, I think in
every single one of these instances, it’s really easy to kind of point back to the forecast and the
importance of the forecast and how we’re gonna use that as our navigation point and our
foundational tool. [00:24:56][100.6]
Jamie Nau: [00:24:59] Yeah. And I think it also, to Adam’s point, like it gives, it allows us and it
gives us the avenue to have those tough conversations early on. Hey, you’re having a retreat
every other month in these exotic locations and you’re spending, you know, $200,000 to do that.
A good way to save some cash is to maybe cancel a couple of those and build some cash
reserve, you or, or you know I have a client that’s just spends crazy amount of money on in
office food and like I’m getting on them for a while to be like, you could cut some of that back
and we could build this cash reserve pretty quickly or you could just keep doing what you’re
doing and it’s going to take us twice as long. [00:25:28][29.7]
Adam Hale: [00:25:29] Well, I mean, I had a client recently where I had three owners and the
probably the smallest owner of the mall, the minority owner was like in charge of operations and
they looked at their cash account and they’re like, we never have any cash and it’s because the
other owners were like, Hey, this is a service-based business. We believe that it should always
just self cashflow and it just is what it is and we’re the owners and we’ll just going to grab all the
money. And so whenever I came in and I was like, hey, no, we need to establish this policy, he
was just like, oh, thank you. Like I’ve been trying to get him to wait for cash in the bank,
because they’re not the one that has to run payroll. And then like see these ebbs and flows and
whenever a receivable doesn’t come in and I need to borrow from the line of credit, they get all
been out of shape. And, you know, the story that I always go back to and it happens, it’s
happened to me more than once is that, and I tell owners this all the time, it was like, if Jamie
and Tom both want to take money out of the company, cool. But if I go to Jamie and tom, I need
both of you to go, Hey, remember that 500 K you guys took need to bring it back to make
payroll. Well, I can tell you what happens is Tom says, yeah, absolutely. I’ll, I’ll deposit it
tomorrow. Where do you, which account do you want it to go to? And Jamie goes, what
$500,000? I don’t have that. Thanks for watching Do you remember that boat I got? Yeah, and
it’s like, it’s like, Oh my gosh, you know, so then you have one partner having to come to the
table with cash that creates partner issues. So I always just tell people it’s, like, Hey, it keeps the
piece. It keeps everything going. I’m not asking you to put tons of money in here. Again, I can
show you the cash cycle, how that works, how many payrolls it is, all those kind of things. 10%
is usually about two months worth of expenses. That’s asking for the world. But you do need to
diversify a little bit. You know, we know that there’s some limits to what the Fed, you know,
reserve guarantees in terms of that kind of stuff. And we saw some scary stuff with some
smaller banks. So it’s not that we’re toned after that, but you want to make sure that there is no
business interruptions due to poor cash flow. And this is the best way to do it. Important to
mention. [00:27:43][133.8]
Jamie Nau: [00:27:44] So the next section is, we’re starting again to some of our smaller
sections now with less subsections, but it is still really important. And it’s, we call it profitability,
but basically it’s making sure you understand your income statement. You know, if you’re gonna
understand cash, you’re going to understand how your business runs, you have to understand,
you know, what your revenue drivers are and what your income statements is. And so the next
session really is, since we call profitability, and there’s only three subsections to that, it’s
benchmarking. It’s valuation and financial KPIs. So again, what depth do you understand your
income statement? Not just at, oh, I know how we’re doing, but how does it compare to the
industry? How does it compared to our expectations? How does is it affect the value of our
company? And so that’s kind of the next section we really wanna make sure our clients have a
good understanding of is that profitability. [00:28:26][41.3]
Tom Wadelton: [00:28:28] Yeah. Each of those categories, the better you get or the higher you
go in the scoring, whether it’s benchmarking, valuation, or I forget the other one. KPIs. KPIs,
thank you. It’s how are you using them to set goals and targets, right? So on one hand, if you
think benchmarking like, I don’t even know what the benchmarks are at the lowest category.
And then you might be able to say what they are. But are you actually saying, do you know you
lag that the industry might be a 50 percent gross margin and you’re sitting at 35? Am I setting
goals to work my way to where I understand what the reason is why it’s lower and what I can do
to make it higher and then starting to work my way that direction? That’s when you’re getting to
those higher levels that are in there. And we see that with a lot of where they might have a
valuation for their company, but you’re saying, okay, but if it’s lower than you want, you got a
multiple that’s really low compared to the industry, what are we doing so that that’s a higher
number so that if you decide to take an exit that you get the most that you can? [00:29:21][53.6]
Adam Hale: [00:29:23] Yeah, I think that’s on a pretty regular basis just had that one actually
with a different client the other day, um, because they were cash flowing. They have no debt,
finally paid everything off and they’re like, Hey, just enough money. I’m good. And I’m like, cool.
So whenever you retire in five years, your business is approximately worth this. And they’re. Oh,
well that sucks. And I was like, yeah, I agree. I don’t like that number either. Because what we
talked about was over the next five years, you’re going to be putting away this amount of
money, which the cash is, you know, there’s enough barely in the company to be able to do
that. You’re going basically bleed it dry of the net income every year to be able to this. It might
end up with a small deficit every year, to hit your savings goals. But then ultimately, at the end
of the day, you were going to hit this bogey with your purchase price. And that was what was
going to allow you to retire. Um, but because you’re off these metrics, you know, from the
industry that we should be able to drill into now, operationally, you need to figure out like, let’s
have conversations. Like you said, Tom, about why we’re off and, you know, sometimes it’s
okay. Sometimes it’s up here instead of down there. And, you kind of move those things around,
but those are great conversations to at least investigate. And then I said, Hey, and then I put
together a quick thing. Like, this is how much you have to reduce expenses by, or this is how
much she have to do sales by. And here’s a combination of the two, you know, go find me
$300,000 in revenue and go find $200,000 and expense savings and we’ll hit that bogey. And
they’re like, okay. And then they came back and they had this really long list of all the initiatives
they were doing, all the things that we looked at that they were off and they’re digging into them
and they are changing different things. I was like, well, if you can do all that, and we can do that
for the next year, then we’ll get our evaluation back up. [00:31:11][107.7]
Jamie Nau: [00:31:12] And I think the important thing is, is having that understanding of what it
is. Like the example I use when I onboard clients, as I say, We’ve all had that feeling in our 401k
right where the quarterly statement comes and it’s one of those bad quarters for the economics
and you look at you’re like what my funds only grew by this amount that’s crazy that you’d get
that in your stomach when you see that report but no one knows that when they’re running a
business like and the problem was a big difference you know 401k because you kind of like put
that money and you forget about it but with a business it’s like oh the quarter happened and
guess what i just put 500 hours into this quarter and now what’s my business valuation right so
like you want to make sure you understand is your business going up business going down
because that’s ultimately what this business is worth to you and you want to if you’re putting that
many hours into something and not only hours are putting that much money into something you
want to make sure it’s growing and not just sitting there stable. [00:31:58][46.0]
Adam Hale: [00:32:00] Yeah, I think the other thing is how these all interplay together is, like I
said, with that valuation. I know we talked about it in cash and what kind of relationship do you
have from like an investing financial advisor or somebody like that. One of my questions is like,
what’s the number? I think one of those financial institutions had that commercial program, but
that’s legit. What do you need to retire? You know, what do you have in social security benefits?
What are you going to get in social security benefits? What are going to have nested up, you
know, that you’d be able to draw from? And then what do we need to solve for with the
enterprise value of the business? Once you start making those connections to people and then,
you know, if they don’t, again, you hook them up with a financial advisor or whatever so they
can figure out what that number is. Even if they’re 36 years old, you know, it doesn’t really
matter, like, you know, you’re still running at a target. You want to know that at the end of the
day, I’m covered. If I need to, you know, that kind of a thing. So having those conversations and
connecting those dots between these different sections is really important. Yeah, excellent
point. [00:33:07][66.5]
Jamie Nau: [00:33:08] So the next section is one that we probably said this word 50 times
already in this podcast. So it’s obviously a word that’s near and dear to us, but it’s the category
of forecasting. And so when it comes to forecasting, really looking at three different areas, what
are the non-financial KPIs or the revenue drivers? What’s your understanding of gross profit and
then what’s your understanding of your revenue capacity? And so that’s, that’s really the
elements that we use to help build a forecast. And, you know, a lot of times when you’re talking
about forecasting with a client, we are talking about, about non-financial stuff, like what drives
your business, what really gets your business to do well and not do well. And so, that really kind
of the, the essence of those three categories is understanding your business at one layer
deeper. And the fun thing to me about forecasting is a lot of times the company already knows
the answer here, but they’re not focusing on it like they know what drives their business they’re
just not as paying as much attention to it as they probably should be. [00:34:00][52.5]
Tom Wadelton: [00:34:01] Yeah, I agree. And oftentimes, we’ll get owners who will have goals. I
want to grow by this percent, or I want to have this top line number is often a vanity goal that
they have. But if you know there’s revenue drivers, you’re getting in, OK, what would it take? If
you’re here today and say that’s 30% bigger next year, what’s going to be different? Let’s break
it down into, is this a sales problem? Is this a product problem? Is this is a service delivery
problem? What are the different things we have? And when you’re looking at cost things, we
can look and say, you know, we’re seeing what’s changing in here and challenging them to say,
if we’re trying to get cost out, like Adam, I think you said $200,000, helping them with that and
saying, would that be people or are there other things they’re spending money on that we’re
suggesting that? And then you can forecast out and say this would be the result if you can do
those things and show them. Usually, it could be a pretty dramatic increase in profit if you could
hit it. But then you start focusing on what’s it actually going to take to make those changes.
[00:34:56][54.9]
Adam Hale: [00:34:58] Yeah, I think that’s a great point. I mean, that’s the difference is you do
hear that vanity metric a lot. Like, Hey, I want to grow by 20%. I want. How? You know what I
mean? Like, into your point, like once you dig in, it’s like, cool, you need to do, you know, 40
more of those. And it’s, like, oh, production team raises their hand. It’s like I can’t do 40 more
those. We don’t have a machine for it or we don’t the people for it. Or we don, you, know,
whatever the, whatever the driver is, it is like, Oh, okay. Well, now we know we need some
CapEx bin too, you know? Because we’re going to have to invest in a new piece of equipment
or we’re gonna have to hire some people in order to make that happen. That’s going change the
forecast. So those drivers really are an education point for, and even if it’s the same person, it’s,
the business owner is the salesperson and the operations person. Having those drivers go one
layer deep really just kind of drives it home for them going, oh, I can’t make 3,600 sales calls a
day. That’s not possible. You know what I mean? Whatever the example is, and it helps you get
to what’s more realistic. [00:36:05][67.7]
Jamie Nau: [00:36:08] Forecasting is my go-to when it comes to sales. If I’m at a conference
and I’m working a table or if I’m doing a sales call, it’s one of the first questions I ask is, tell me
about your forecast. And I’d say about half the time the answer is, oh, once a year we sit down
and we build this budget and this is what we fall to. And I’m like, well, that’s not actually a
forecast. That’s a budget. And I ask questions about doing it monthly, like, oh, that a great idea.
And if they do happen to do a monthly forecast, then I start asking questions about, tell me
about that forecast. How often do you look at it? How often you think about it? And like, yeah,
we just kind of do it because we have to. And so to be able to talk through that and walk a client
through how important or potential client, how important it is to live and breathe that forecast
and have someone doing that for you is such a value add that this is the area I go to the
majority of the time when I’m trying to talk to someone new about like what we do because I
really think it is the it’s the highway by what we by what we do like it really is the basis behind
everything we do and so it is that important. We can easily go and do it. [00:37:03][55.2]
Tom Wadelton: [00:37:03] Whole topic on that, but I agree that the better you are on that and
then. Many of our people I’ve got a few clients who are struggling. They want to do different
models What if I modeled this happening that happening? Well, if you can start with the forecast
of I believe this is correct for how my business is running today If you think that’s right Then it’s
really easy to say what would happen if I change and got rid of two people or if I grew my top
line By this or did this and that if you don’t have that from the beginning You’re just really in
trouble with you don’t know and so you may end up saying I’m gonna fire three people and find
out that wasn’t the right solution for you to do and here you’ve just really hit your business hard
or maybe it was a really painful thing to go through and that wasn�t enough and now you’re
coming back for a second round which is much more painful than the first round.
[00:37:45][41.2]
Jamie Nau: [00:37:47] Okay, onto the last section of our maturity model. So this one was
another bit of a, an argument internally, because the word we always used was pipeline. And
this was a fight that I fought when we created this maturity model is like pipeline only applies to
certain companies, right? If you are a company that has a sales operations or a, you’re, you’re
doing sales calls, then a pipeline is really important to you. But a lot of companies don’t have a
pipeline, but they still should be looking at what their sales outlook is. And so after many rounds
and chat GPT and pulling out the old thesaurus, we went with the word sales outlook. So sales
outlook is the last section here. And basically, there’s four drivers of that is first is understanding
the drivers. Second is capacity. Third is having a process around sales outlook, and then last is
what tools you’re using for your sales outlooks. So this one is obviously super important. And
something I get really passionate about is it’s awesome to build a forecast. And it’s really
important to build the forecast. But if your forecast thinks you’re going to have five hundred
thousand dollars of revenue for the next three months. But everything else is telling you, you’re
only going to have 200,000. Like, what are you going to do with your business? And so it’s really
important to understand where that $200,000 sales outlook comes from and that processes
around doing those predictions. [00:38:51][64.3]
Tom Wadelton: [00:38:54] And especially as organizations get a little bit bigger with either
multiple salespeople or sales and production, that’s where some of these measures can get
really good because we’ve had cases where it’s two salespeople and so now a CRM tool or
something to track all your prospecting is really important that everyone knows what the deals
are and it’s got the right follow-up. Or maybe sales and productions aren’t talking. And so you
could have a case where hopefully the sales team is doing great and all of a sudden production
saying we can’t service these kinds of things and so that’s that also comes into like are those
groups working together so they know what’s coming um adam i think you use example that the
team saying we cannot make that many so are those two groups working knowing what’s about
to come down the pike and so that you can meet customers’ needs. [00:39:36][42.1]
Adam Hale: [00:39:37] Or the opposite, I mean, I use it for, I think this is the important part of,
you know, the old saying, like, I’ve never met a forecast that I didn’t like, you know what I mean?
Like, all the numbers look good whenever you throw them out there. But whenever you back in,
at least a short term outlook, like things that you know to be true. Whenever you you know, put
that back into your forecast. What does it look like? Are you cash, you know? Cause you can
instantly see in a dynamic forecast, yes, what it’s gonna do to profitability, but what’s it gonna do
your cash? What’s it going to do in the bank account? You know, right now, like after this call,
I’m gonna be meeting with a client and I’m going to be explaining to them what their cash looks
like at the end of the year based on their next, actually for this client, I have the next five months
worth of pipeline pushed in there. You know what I mean? I have the booked work that they
have. I know what their likely scenarios look like. I know all those kinds of things. And I can say,
Hey, like we’re built for this. However, this is what we know to be true right now. You know, and
this is, what it’s going to look like at the end of the year. You know? This is what our bottom line
is going to look like this, where cash has been looked like. We good, you know, that kind of
thing. [00:40:46][68.7]
Tom Wadelton: [00:40:49] So Jamie, so we’ve gotten through all those dimensions. Do you
want to talk a little bit of how we’re using it currently with our prospecting? And then we can talk
about existing, we’ve talked a little existing clients, we can probably touch on that a bit more.
[00:40:58][9.5]
Jamie Nau: [00:40:59] Yeah, so the couple ways we’re doing it with our client prospecting is
we’ve created a survey on our website. So if you guys go out to our website, you should be able
to find it where companies can come in and take a real quick evaluation. And it’s only 12
questions, I think. It’s less than 15 questions for sure. And they can answer those questions and
they can get a real quickly evaluation on it. So it basically says, you know, here’s where we
think you stand. And this is how you could be doing better. And it helps them. The first question
is, what is your goal? And so we came up with kind of four or five things that a company would
be using as their goal. And we used that to essentially… Create that baseline of this is your goal.
If you were to do this better, if you were do a better job with your sales outlook looking, then you
might be able to reach that goal a little bit sooner. So that’s really that survey that we’re pushing
people to. And then also it’s allowed us to put better presentations around profit-focused
accounting, because we’ve always done profit-focus accounting presentations, but now we have
something we can tie it back to. Like if you wanna learn more about all we’re talking about and
see where you stand, go and take this form on our website. So that really how we’re using it in
prospecting. [00:42:02][62.6]
Tom Wadelton: [00:42:03] And so as we give talks, you’re often having people in the audience
take it there. Plus, they can go to our website. And then I think you mentioned this, but I’ll make
it clear. They’re getting an output from that. It is not just a survey that pops up and gives just a
score or something. It’s going through the dimensions and helping them understand, which is
the beginning of, hey, if you worked with us, these are some of the kinds of things that we’d be
doing to give them a bit of that taste of what that’s like. [00:42:27][23.9]
Jamie Nau: [00:42:29] Yep, exactly. And then also, Adam, you want to talk a little bit about how
you use it on the sales calls when actually someone comes in the door and they start talking to
us about possibly working with us? [00:42:37][8.1]
Adam Hale: [00:42:38] I mean, yeah, go ahead. I mean go ahead and I’d love to actually hear
your perspective on that first. And then yeah, just I’d like to hear how you do it on your sales
calls really quick. [00:42:48][9.7]
Jamie Nau: [00:42:48] Yeah, the first thing I do is ask if they’re familiar with it, right? So I get to
make sure that there are at least some people come to us through that process. So they’ve
already come through it. You know, I, I’ll, I’ll turn it back on them. Okay. After you take the
evaluation, what were the areas you’re most interested in? And I can, I can kind of use that as
the guide for what we want to talk about, right. And they said, Oh, we really think we need better
forecasting. I’ll use that in the majority of the sales call to talk about our forecasting process. So
it allows me to hone in a little bit better on what the client is coming to us for and that they
haven’t take it. One of the things I’ll do is after we have this call, if you want to learn more about
what we do, this is the best way to learn more about it is go take the survey. It’ll tell you all five
areas where you fall on it and hopefully what we just talked about makes a little bit more sense.
[00:43:28][40.0]
Adam Hale: [00:43:30] Yeah, very similar. With mine, I’m probably more on the, you know, I let
him talk a little bit and definitely at the beginning, just ask, Hey, did you take it? What are the
areas? And then I kind of like lean into those a little bit. And then the only difference is, Jamie, I
am a closer. So at the end, I tell them like, I like not to learn more about us. But as soon as you
start working with us, we’re going to dial this thing in for you. And so go ahead and take the
preliminary one as I send you over the. The service agreement. But yeah, but close. That’s what
I was looking for. You fell right into it. Thanks. [00:44:07][37.7]
Tom Wadelton: [00:44:09] So excellent for prospecting. I do like to set up. OK, so then
onboarding, we had mentioned the 30 dimensions of the five, so it’s a more intensive evaluation
that we do. And I’ve gone through this very recently with a client. And my quick story would be, I
was pretty worried about them being defensive just because of the first couple of meetings with
the existing bookkeeper that my impression was she was afraid we were trying to replace her.
And she was anxious about this. So here I am coming to a maturity model like she’s not going to
want to look bad. And the owner is there. The objectiveness was really good. And the
accounting, as you mentioned, or the financial reporting is the first section, and they were ones
and twos on almost everything. But it was things like, do you have documented processes that
are up to date? And she said, oh, they were. But that was before I had my baby, and that was
five years ago. We haven’t updated them since then. And I’m, you know, making sure I’m not
trying to make her defensive at all. But it was great as we got to the end. And then we said,
here’s how we can help you. Let’s prioritize these areas. So to me, that’s one of the big
learnings is the two times I’ve done it, people were not defensive when I thought they would be.
I thought I’ve got the bookkeeper. This is our thing. They’re going to want high scores and
they’re going to argue with me. That was good and then turning around saying, okay, let’s help
you prioritize and then as we work through like Jamie said We’re getting toward the end of
onboarding. We’re gonna come back and say let’s go back through and here’s where we think
you are now We’re I’m at my expectations. We are going to show improvement in a lot of these
different areas That are there and so I’m hoping that that is another thing for them saying. Okay,
you hit your timeline I’ve got the forecast of financial statements you promised which is great by
the way I also improved to the 30 dimensions Maybe I improved in 20 of them over this 12 week
period or eight week period of whatever it was [00:45:46][96.8]
Jamie Nau: [00:45:46] huge benefit, I think. And that really leads to that long-term engagement
that we have really always wanted with our clients. And we’ve always had it, but the question is,
is like, okay, I’ve been working with you guys for five years, what have you done for me in the
last year? And I think this really allows for us to have those conversations of beginning of every
year, like we always talk about the forecast, right? But again, that’s not us doing the work, that’s
just us like creating the outline for them. It’s like, this year you’re a $5 million company, next
year you wanna be seven, that the goals. So we’ve had those conversations, But this allows us
to peel back and have that conversation at a higher level and be like What other goals do you
have outside of just financial goals you want to you want? To use new tools for pipeline or for
sales outlook. Okay, let’s do that If you do that that’ll move you from a 3 to a 4 and you can kind
of set those one Year that’ll keep showing outside of just that onboarding period, not sure that
outside of that first year. And I think that’s what you were asking about with like long-term
clients. Like that’s, this is something we’re evaluating with all of our existing clients. And then
we’re kind of going back and at the end of it being like, okay. What are our goals? What’s the
next step? Where do we want to go next? And where do you want to go in that financial maturity
with the understanding that not every company’s goal is to be fives across the board. We
understand that, but maybe moving from a three to four in one area will help them in a number
of ways. And so it’s really being able to have that long-term conversation with our client over a
long- term basis where they see like, while we’re growing every year in our financial maturity.
[00:47:06][79.6]
Tom Wadelton: [00:47:08] And you know, each of our CFOs have certain areas of strength and
this could help if I was just evaluating my clients where I could go through each of those
dimensions and say they’re not going to be a five on everything. It’s a good exercise to say,
should they be, oh, I hadn’t really thought about this particular area. This has always been a
pain point. I can talk about this and maybe, you know you mentioned pipeline, so maybe the
tools in their pipeline every month they seem to have a challenge with that. What a great area to
say you know what we don’t have is a consistent process that’s integrated across your teams
and things like that. Here’s how I think it would help you and maybe you get their buy-in to go
there. So I think I’m thinking of it as a consulting tool. It can give me these ideas so I also don’t
become stale after a couple of years and just hit the routine of doing the same thing every time.
[00:47:48][39.8]
Jamie Nau: [00:47:51] Okay, as where I think we’re getting close to the end here, but I do have
a so I don’t know if people are listening to our podcasts. I’m on a podcast for digital agencies.
And the way we always end it is kind of with a fun question. And I’d like to do the same here and
bring it to you guys. And so I want to do is, I think one of the best ways for people to understand
maturity model is think about it in other areas. And So for you two, the question is, is where in
your life do you wish you had a maturity model that you could assess yourself on that would
hopefully help you grow or become a better person? So Adam is thinking, so I think Tom might
have an answer already. So I’m going to throw it to you, Tom, first. Where do you want to have
a financial maturity or maturity model to evaluate yourself I’m fine. [00:48:27][36.0]
Tom Wadelton: [00:48:28] Mine’s probably so obvious with you guys knowing me this, it’s been
my analogy of maturity models, but if I think around sort of a fitness area, I can think of
dimensions like strength or endurance or sleep or stress or things like that. I think if I look back,
it would have been a helpful thing to say, okay, where do I really want to be and realistically, at
least for me being at the top of every single one doesn’t make sense. But there are places to
say oh, I could see progression which I like to see in those areas and could I move myself up in
that area. So that’s where I would like it to be. [00:48:57][29.3]
Jamie Nau: [00:49:01] I know where you think I’m gonna go, but where are you gonna go at?
[00:49:03][2.0]
Adam Hale: [00:49:05] I’m gonna I was gonna go with the kids but like being a dad but I’m
gonna I’m going to keep it to the one that like pisses me off which is golf so there’s like
unfortunately I’ve been low on maturity for really but yeah you could definitely break that into a
maturity model if you actually matured over the last 30 years. Anyway. Um, yeah, so that’s my
golf. [00:49:34][29.4]
Jamie Nau: [00:49:35] I know you thought I was going to say basketball, but I’m not like that’s
too easy. That’s too easily. I’m obviously not about coaching basketball. I know my playing days
of well, they’re way too mature. But no, I actually, I think it’s your first answer. Like the biggest
thing for me is like in parenting, like where are the areas that I do lack, where are there areas I
can be better at? Where are my strengths? And so that’s something that I constantly think about
is like, okay, what areas could I be a better parent in? And honestly, like a better spouse too,
like a family member, you know, where are items I support my wife in and where are they ones I
might play? Like, you knows chores would be one of them and then probably one across the
board when it comes to every chore other than coaching basketball. So that might be one like, I
probably could do a little more around the house. So I think that’s my answer just to surprise
you Adam. Yeah, good luck. [00:50:18][42.8]
Tom Wadelton: [00:50:18] Of that 360 review. That’s a good example, though, Jamie, because I
think what we often do is if we don’t think we’re doing well, we’re saying in every single area, I’m
going to suddenly go from a zero to a 10. And it’s just not sustainable. But could you pick maybe
an area and get a little bit better and maybe it becomes a habit and you pick something else or
really evaluate yourself for that versus just this sort of emotional, I am going to be better
everywhere. Well, good. As we get done, then you can go do some chores and improve
yourself. Yeah, I’ve missed that four times. [00:50:51][33.0]
Adam Hale: [00:50:50] Yeah, I expect to hear that you’ve really improved with your chore-taking.
[00:50:56][6.1]
Jamie Nau: [00:50:57] You can text Adrienne and ask her. [00:50:58][1.5]
Tom Wadelton: [00:50:59] Well, this is excellent. As people want to learn more, Jamie
mentioned you can go to our website, and you can find and actually look at and take the
assessment. But we hope that’s valuable for people how they think of doing their consulting.
And it’s something that we’ve really doubled down on, and I think it’s going to be an important
thing for us going forward. Yep. Thank you, guys. Thank you guys very much.