Your Accountant May Be Holding You Back!

[music] Hey, welcome back everybody. It's the last day of a really fun week that we've had. It's been nonprofit power week with our friends over at your part-time controller. Hey Andrew Miller, you're batting cleanup this Friday. It's Friday. Are you ready? >> It's Friday. End of the week. We're here to bring it home. >> Bring it home, baby. Get them on. Get them over. Get them in. Um you can tell I love baseball. But, uh, this has really been a fabulous week of content all around nonprofit finance and accounting and bookkeeping and all the things that we need to be doing in the nonprofit sector. Um, but we're going to have this like heart-to-heart conversation with Andrew Miller today about it might be time to change your accounting partner. It's kind of like breaking up, right? And so, but how do we know when to do it, if we should do it? And And Andrew is going to help us really understand some of the nuances behind this. We have amazing partners and amazing content. We only do nonprofit power week a couple times a year. It's very special for us. Um, and so we have our partners to think about uh about this opportunity. They include Bloomerang, American Nonprofit Academy, Staffing Boutique, JMT Consulting, Third Sector Company, your part-time controller, again, where Andrew comes to us from, and Martis, our newest partner on the nonprofit show. Um, I'm Julia C. Patrick, CEO of the American Nonprofit Academy. Been super excited and honored to be meeting with so many different people from YPTC this week. Um, and we're finishing up with Andrew Miller. Andrew, as a director, your part-time controller. Talk to us about where you are and what area you cover. >> Thanks so much, Julia. Yeah, so I'm from Houston, Texas. So, uh, our Houston market, our Houston office covers our Houston and Central Texas part. I know you had Barbara on earlier this week from our Dallas Fort Worth area. >> Andrew, we got a serious thing to talk about. It's like, should we break up with our partners? How do we know? Is it time for a change? And one of the questions that that you're saying that we need to look at is that the partner that you have focuses on the tasks of, you know, finance and accounting and not the decisions. I'm thinking also strategy. Is that is that fair to say that we should be thinking about this? Yes, definitely Julia. So, you know, I want to start by just saying that changing your accounting partner can feel really risky, but I want everybody to think I want all the listeners to think about what's the cost of not changing accounting partners when you're not getting what you need. And so, we're thinking about um when accounting partners are focused on tasks and not decisions. So, I'm going to shout out to all my finance folks in the audience that, you know, we've all heard the term timely and accurate financial reports, and that's a great starting point, but it's not the finish line. You know, accounting partners should really be explaining what the numbers mean. They should be helping you identify trends and helping leaders make decisions about things like programs, grants, and sustainability. >> Interesting. Because I think a lot of us don't understand that we can get that depth of knowledge and strategic thinking that we're thinking we're more focused in on is the paperwork done? You know, did we did we reconcile? I mean, I kind of feel like we're leading that argument ourselves in some way and maybe not understanding what the finance team can deliver back to us. Is that fair? >> Yeah, definitely. So, you know, we whenever we think about this, we we know that the accounting records need to be accurate and we know that the transactions need need to all be in and that we close the books, but when we're thinking about um what a true CFO does and a true accounting partner does, we want to be leaning more into the strategy focus and how they're helping us to make make decisions. You know, um, a good way to say this is nonprofit leaders, they don't just need numbers. They need someone who can translate those numbers into action, >> right? Okay. Now, I'm not going to throw our our older CFO, you know, and finance leaders under the bus, but I'm kind of throwing them under the bus because I know I've talked to your leadership, um, some of my other partners about this wave of older finance folks, CPAs retiring at a huge rate and we don't have enough, you know, young trained um, people replacing them. But I'm wondering if you see a difference between how these younger folks are educated or how they participate maybe using technology in a different way. Is it fair to say that the younger newer folks coming in are going to be more strategic and the older folks leaving are not or does that should not that not be part of the conversation? I don't know that I want to get in trouble and latch on to what you just said, but maybe >> you're all back on me. That's okay. [laughter] >> I do I do think that there is an obviously we we've I know you talked uh earlier with Christine um the other day about about AI and advancements in technology and I do think that is that is a key instrumental part of moving forward. I think I think younger folks are definitely more in tune with how they can utilize technology to really help create efficiencies, which means that they can focus more at the top of the pyramid, more of the CFO level um areas of the of the organization. And then they're able to use things like um you know generative AI to to drop in a set of financial reports and and help them come up with key takeaways and maybe decisions that need to be made. So I think that's definitely a key instrumental part. But um uh and I definitely see that with outgoing uh longtime CFOs. I I see nonprofits scrambling to um you know, they've been they've been keeping the books for 15 or 20 years and they're not sure what to do. So, YPTC has definitely been a resource for a lot of those organizations. >> Yeah, I've got to believe that you're getting uh new business inquiries and just in general, your folks, the folks that you work with are experiencing this, right? I mean I I don't know about you but man every day when I go on LinkedIn I'm just shocked by the number of people that are this is my last month you know I mean in ter from from the financial sector that they're retiring out and um it's it's got to be a a tough thing for everybody right um so I I kind of feel like that's part of this discussion it's not just about breaking up with with who you have but it's that you might be for you're being forced, they're breaking up with you, right? Because they're retiring um or cutting back. So, interesting interesting piece of this. Talk to us about this notion that uh maybe your financial partner, accounting partner, somebody that you're contracting with is operating outside of your organization. What does that mean? Because I don't think I understand that. So, I I want to take a minute to say that, you know, here at YPTC, a lot of our um a lot of our client service staff, they're working remotely. And so, I think an accounting provider can technically be external without feeling disconnected from the organization. And that's really what I'm driving at here. >> Okay. >> So, thinking about some warning signs that that it could include and this could be an internal CFO too, working in isolation. Maybe there's unclear responsibilities or duplicate effort. Maybe there's program staff doing things that are in the finance function and they're they're duplicating efforts. Um, also look for information gaps or just program staff or development staff not receiving the reports that they need. So, an ideal partner is working as an extension of the team. They understand the operations. They're communicating consistently and they really help align people, systems, and workflows together. >> Yeah, really interesting. I I think that uh you said something very interesting and that is this aspect of people kind of doing the same work to get the same information. I'm wondering if you see that with folks that might have um a grant administration administrator or even your fundraising and development because they're now more reports that are needed. Are you seeing that crossover or bleeding that those functions as well? >> I think it's highly important that an accounting partner or a CFO is working directly with those staff. they need to be meeting regularly, sharing information, sharing insights that they're seeing. Um, and I think at the the core of it here, a great way to rephrase this is outsourced shouldn't mean out of touch. >> Yeah, I love that. I love that. Well, it seems to me, Andrew, that as we have more um reporting requirements from our funders, certainly if you're dealing with any government contracts, um everybody feels like being they're being pinched for more data and more reporting and not just like at the end of a contract or postcontract, like you know, ongoing. It's got to put even more pressure on the the financial team. >> Absolutely. Yeah. I think that um one of the one of the things that can really help here is we talked already about technology and streamlining these processes. So, how quickly can we get these reports pulled together and still ensure that that our our team is is finding opportunities to connect and and and talk about strategy as well. You know, I think about um with this one that uh there was a client that I worked with and they wanted me on site one day per week and I and I and it was an hour and a half drive. I'll be honest. It was across Houston, so it was a long drive. Houston's an hour from Houston if you didn't know. And so I was starting to worry about, okay, well, am I am I getting the most out of my visits here? And one time I was sitting in a cubicle and I overheard this conversation in the next cubicle over talking about a special event that was coming up and talking about they were the need for um taking in at the check-in table taking in cash and other things. And that was a clue to me I needed to interject myself into this conversation. So I did. We talked about best practices around cash handling procedures. We talked about um the the operations that needed to happen at the check-in table. and I was able to to help steer them in the right direction whereas they they didn't quite have the great uh the greatest in internal controls built into that that process. So it it just made me remember um helped me remember why I go on site and why I want to be part of these finance teams and in these discussions. >> Yeah, it's really interesting. I I was uh talking uh earlier in the week uh actually with my producer Kevin Pace and and I was recounting about how over the years I have observed how fearful folks on teams are to ask the finance department people anything. They don't want to appear to be dumb. They they feel nervous that they're not going to understand what the responses are. And it can be pretty basic stuff. Um but it's an interesting aspect about these silos that just keep getting perpetuated because people are fearful and and won't engage right and I think you have to be uh open to being engaged right from the finance team's part and if you you've got a team that's somehow put up mental visual or physical roadblocks like don't ask me anything type of thing which we've all seen we've all seen this in play. You know, it's a it's an interesting thing about how you operate and how you welcome uh dialogue um and and engagement. Let's talk about this other aspect because all accountants and accounting functions are not the same. And [laughter] so if you've got a provider that doesn't specialize in nonprofits or even within your specific sector, that could be a problem, can't it? >> It can. And so whenever we're talking about this, we're thinking about, of course, general accounting experience um is is definitely needed for any CFO level or accounting partner. Um but that's not always necessarily enough. You know, nonprofits, as you and I both know, Julia, they face distinct requirements around grant reporting and donor restrictions and functional expenses. Oh my, I feel like I had to say that at the end of >> you did have to say that. That is fabulous. >> And then there's, you know, things like audit comp audit and compliance that need to happen as well. And honestly, even nonprofit experience can be too broad. So now we're we're looking at different types of sectors of nonprofits. You've got associations and foundations and education organizations, arts. I mean, you know, there's there's all these different subsectors of nonprofit organizations, and they're all going to have their own nuanced needs and and um uh systems that they're using and and reporting realities. So, really, the right partner should understand um the the nonprofit accounting and the specific subsector that you're in. You know, Andrew, I think a big part of that is even the vocabulary that there are certain words that people use um in within their organization. I was touring a a shelter earlier in the week in my own community and I used the phrase uh veteran and I was thinking about and I was talking about leadership and I said, "Oh, well, veteran leadership da da da." And this shelter dealt with veterans, like military veterans. And so for a good 15 minutes afterwards, somebody said, "You know what, Miss Patrick? I think I heard you say veteran and I went right to the veteran, the military veterans that we serve because they're a certain class of client." And I was like, "What?" And then I was like I was talking about the experiential level of I didn't want to say older leaders. I so I chose the word veteran leader. Well, we had lost a chunk of time because we were both using different vernacular and our brains were in a different part. And it was fascinating to me. It was such a good lesson. such a good lesson about how different we think we're all the same because we're in this sector, but it's very different. >> Yeah, we got to choose our words carefully and we got to know the acronyms. You know, nonprofits, we love our acronyms, so that can get confusing over time. And I know you were you were talking to Deanna earlier this week who runs who leads our specializations department at YPTC and um they they have uh resources and tools and webinars and case studies all built around all these different subsectors and it's a it's a great resource both internally to our YPTC staff. Maybe they get on a an association organization client that that they they've never served with with an organization before and so they can get quick tools and tips as they go into this and understand the vocabulary like you said and it can also be we also have a lot of resource resources externally um to these organizations specific to their needs and strategies. I love that because I think um that saves a lot of time and money >> because somehow those things are going to have to be uncovered. But if it if you're just dinging around with trying to get some basic, you know, vocabulary and processes, you're wasting time. Get, you know, you're absolutely wasting every everybody's time, right? So, you know, get those tools up front. Um I love that you brought that up. that kind of dubtales into um this one of our last things and that is a lack of support as your organization grows and I would even say growth comes in different forms right it's not just the financial size of your of your of your organization but you know are you leaning into technology more are you doing things differently are you streamlining growth comes in a lot of different forms and fashion how should we looking at this lack of support. How do we know I guess maybe is the question when we're not getting that support? >> You made a great point there, Julia. So growth isn't just about larger budgets, right? That's what we think about when we think about growth. >> What what happens with nonprofits is there's an added layer in really any business. There's an added layer of complexity. So, in nonprofits, this shows up as maybe there's additional complex grants or government grants, reimbursement contracts. Maybe they're they're growing and they're going to add new programs. Um, we, you know, think about specific things to nonprofits. Maybe there's a cost allocation that needs to be implemented. So, a partner who can handle basic month-end close may not really be the same one that can help you scale and help you with these complex matters that a true growing nonprofit really needs. >> Yeah, Andrew, that almost seems like uh going back to your very first point, finding somebody that can be a strategic thinker and strategic leader as opposed to doing the tasks. That that's absolutely correct and it's one of the reasons why now at YPTC we're really training our staff on this CFO mindset because as we gain efficiencies with technology and streamlining processes and implementing system you know connections as we gain these efficiencies we're really focused on those higher level CFO uh type decisions and recommendations for the organizations that we serve And that's that's how we're going to move the lever on the lever on on growth and overall direction for the nonprofits that we work with. And so the accounting model that you that you that got you here maybe as an organization might not be the same model. It probably isn't going to be the same model that gets you to to the next stage and where you want to go. >> Yeah, that's an that's a really interesting comment because when we think about Well, I'm going to speak for myself. When I think about accounting, the basic principles, the basic process has not changed. I mean, it's pretty consistent. But yet, what's changing is all this technology and this the ecosystem with how we report and we express and we narrate the numbers, right? But the basic concepts of, you know, liabilities and assets and wouldn't you argue it hasn't changed, right? >> That's right. Yeah, it has. >> That pressure. >> Yeah, absolutely. Yeah, it hasn't. The the foundation hasn't changed, but how we get to um you know, the end result has changed and it creates more room for us to uh focus on strategy even more as a finance department. >> Right. Very interesting. Well, you like I said, your your the cleanup batter for nonprofit power week. Um, we've had each day has been so interesting. Um, and in a standalone conversation every day, but as I reflect on five days of content and continual dialogue with your teams, there has been a tremendous amount of information that's woven across all these conversations. I know you've been watching these episodes. What are your thoughts as we wrap up? >> I think there's been a lot of great discussions over this past week with with my colleagues and um I think technology is definitely uh an area that that is of high focus right now of course and really to wrap up my topic I think the the things you look for when you're considering maybe changing an accounting partner is number one don't make an impulsive decision. look for a pattern that shows that they're not meeting the needs of your organization. Um, also transition doesn't really need to be disruptive. So, it can be structured, collaborative, and well documented. And really, the the right accounting partner does more than just keep the books. They help nonprofit leaders understand the story behind the numbers and help you make strategic decisions with confidence. >> Yeah. And I love that you added that word confidence, you know, because I think that's what funders are looking and donors are looking for. They're looking for that person that's like, "Yeah, I'm gonna mar I'm going to fund you and I'm going to march alongside of you because I believe you're going to get this done. I believe you're going to solve this problem or, you know, uh provide this service." I think I love that you said that. I think that's brilliant. That's a great way, Andrew, to lead and even just think about your organization. Yeah, absolutely. >> Really cool. Well, Andrew Miller, um the lone cowboy from years past. Um you might be seeing him again [laughter] with another Halloween incantation. Andrew Miller. He's a director with our friends over at your part-time controller. Uh based in Texas, um doing amazing work throughout the the nation. uh YPTC has been a a part of our family here on the nonprofit show since day one and that's really something that we are super proud of here on the uh nonprofit show. Um, you can learn more about Andrew, his team members, the different things that they do, the way they are leading into this CFO mindset across the organization, serving, you know, the entire nation uh with helping nonprofits to to do better and be better. It's super exciting uh super exciting time to be engaging with these types of conversations and and really understanding how the finance part is essential to how we serve. And so Andrew, thank you for being a part of this. Uh we've had amazing conversations this week. We've talked about the red flags that boards can miss. We've talked talked about adopting AI that you can trust. Not just having, you know, a immediate response to a question, but okay. Like, okay, what's the veracity of this? Um, again, Andrew talked about breaking up with your accounting partner, what should we be thinking about? How does this look? And then the questions that every leader should be asking their finance team. This was very interesting because I think it dubtales to a lot of what Andrew had to say about what is what's the thought process here people? What what do we need to be exploring? Um not just do we have enough money in the account but what is going on and and what's the future look like? And then the five questions you need to ask about software before you buy it, before you make a change. Um very interesting. I'll tease the concept here is that sometimes it's the problem of the user and not the software that we are not trained up enough to knowing to know what the software can do for us and so we just throw the baby out with the bathwater and say screw it, let's start over. Um and and so we need again a reframe. Um each episode's been really great. You can find it on our archives. Uh thank you so much Andrew for being one of these leaders this week. Thank you for having me, Julia, and I can't wait to be back on next time. >> Yeah, wi with us as well. Hey, you know, again, we have amazing partners that allow us to have these conversations. They include Bloomerang, American Nonprofit Academy, Staffing Boutique, JMT Consulting, Third Sector Company, Your Parttime Controller, and Martis, our newest uh sponsor here on the nonprofit show. As we end each and every episode, we leave with this message. And it's really important now more than ever, especially when we're talking about finance and numbers and money. And those are things that stress us out. And the message is this, to stay well so you can do well. We'll see you again. >> [music]