Editor's Note: This is the fourth in a new podcast series featuring the "2016 Most Powerful Women in Accounting."
In Part 4 of our "2016 Most Powerful Women in Accounting" series, Joe Woodard sits down with Dawn Brolin, managing member of Powerful Accounting. Dawn discusses how her accounting and consulting firm recently added a powerful niche to their services – IRS audit & bankruptcy accounting.
Joe and Dawn examine her journey from sole practitioner to firm builder, how she has created standard processes and procedures to maximize her firm’s growth, and some of the challenges and opportunities for QuickBooks ProAdvisors in today’s changing technological landscape within the accounting profession.
You can hear this podcast and others here.
Thank you for tuning in to this episode of the "Scaling New Heights Podcast."
Full transcript of the episode follows:
Joe: Thank you for tuning into this episode of the Scaling New Heights Podcast. During this episode, I will continue my conversations with a few of CPA Practice Advisor's 2016 Most Powerful Women in Accounting. Although there are more women than men in the accounting field overall, the representation of women in leadership positions, particularly in large firms, has lagged.
However, the past few years have shown that women are increasingly obtaining positions of authority, including two women who are currently CEOs at the Big Four firms. Well, the women who are named as the 2016 most powerful women in accounting are at the forefront of the leaders within the profession. They're having this amazing impact on the entire accounting world.
Today, I speak with another one of these powerful women, Dawn Brolin.
Before I get into the conversation with Dawn, I want you to know that this podcast series and our episode here with Dawn Brolin is made possible through the generosity of our podcast partners, SmartBiz Loans, Entryless, and Neat.
If your firm has reached the point where it is time to expand, SmartBizLoans.com may be the perfect answer to your capital needs. They are not an alternative lending company; those organizations serve a purpose, especially when you need immediate cash. But, faster than you could possibly imagine, SmartBizLoans.com will manage the traditional SBA application process.
They will get you to that goal, you'll get your clients to that goal, in a fraction of the time and with a better chance at getting the capital that you need. These are traditional, low interest bank loans and you can learn more about that as well as the special offer to our podcast listeners of $500 off loan closing costs, at Woodard.com/Podcast.
I'm going to tell you a little bit about Dawn. Dawn is a CPA, an advanced certified QuickBooks ProAdvisor, and managing member of Powerful Accounting LLC, a nationally recognized accounting, tax, and QuickBooks consulting firm. Dawn is also the manager of her firm's IRS representation, bankruptcy accounting, and forensic divisions.
She discovered the importance of this relationship between good accounting records, good business process, and running a successful business through her own experience as a business owner. She now strives to “leave people better than she found them." If you've ever met Dawn in person, sometimes that means she just leaves you laughing a little bit, making you feel better.
The conversation with Dawn today will be full of energy, full of information, and probably a couple of those laughs. If you're driving, drive carefully, and know that you can listen again and take notes.
Now, here's the first nugget for you today. Bill pay automation is low hanging fruit when it comes to implementing all the back-office automation for you and your clients. If you're performing bookkeeping services for your clients, Entryless accounts payable automation is a must-have solution. They not only automate the entry of the bill, but the payment of the bill, all the general ledger integration and all the document management. They talk to QuickBooks Online, QuickBooks Desktop, and a wide range of general ledger solutions.
Now for our listener audience, exclusive to you guys, Entryless is offering you 2000 automated bills for free to check them out. You can learn more about that at Woodard.com/Podcast. All right, let's get started with our conversation with Dawn. Dawn, welcome to the podcast.
Dawn: Joe, as always thank you so much for having me. These are always fun conversations. You know I get very pumped up and excited, so people, make sure ... Maybe you want to get in your car and listen, so you can put your seatbelt on.
Joe: That sounds great. Well, let's just jump right in and get to driving. Your practice has changed a tremendous amount over the past couple of years, and I've been following that journey alongside you. It was, what? Just about three or four years ago, you weren't a CPA. Start at that point and tell us your journey from then to now.
Dawn: Okay, well, since this is a five-hour podcast, I intend to do that.
Joe: Let's do the condensed version, right?
Dawn: We can do the condensed version, but I always like to make that joke. It's an old one but a goody.
Back when I first started just doing bookkeeping and accounting and just using QuickBooks as the only real technological tool way back in '99, and the change since then that I have just embraced tremendously in the world of technology. Because of that, our firm has been able to move from just being able to have 50,000 file cabinets to having zero, because we're all electronic.
I've found, through my journey of being a sole practitioner, then being in a partnership scenario, and then going back to a sole practitioner, and then hiring enough staff to make it a real team of people … My practice has just moved in a direction since 2011.
You're right, I didn't receive my CPA certificate until January of 2012. I remember getting that CPA certificate, and I knew as a practitioner, in my opinion and for what I wanted to do for my future and my firm, I needed to have that certificate. I knew that would put me in just a different world within the accounting profession, and I just knew that had to be done. I did that, I went back for my master’s degree.
I didn’t have to get my master’s degree, but I chose to because I believe truly in education. Then I went and earned, with blood, sweat, and tears, my CPA certificate. Which, by the way, if you've never seen a miracle, that'd be the first one you'd see. I am not a memorizer, so that was a very, very special moment in my life that I will never, ever forget.
Through that process of getting my CPA certificate, I realized that I learned a lot of discipline through doing that. I learned a lot about really paying attention and due diligence and all those kinds of things that I think is part of the process of becoming a CPA or whatever profession you're in, or whatever designation. It is part of the process.
Now, we have been working with a specific law firm out of New Haven, Green & Sklarz.
They're phenomenal businessmen, attorneys. They do bankruptcy, IRS representation. We've streamlined, and part of my point about that is, we've streamlined the accounting writeup process. We don't have our team members spending hours and hours having to, obviously, enter transactions or those kind of things, as you were saying about the accounts payable, everything should be streamlined. Because we have accepted and embraced that, we've now moved into a whole other world of IRS representation, bankruptcy accounting, and things that.
We had someone today. They were like, "Okay, six returns haven't been done. We need it done today." No problem. Process payment, we receive payment before we touch it, and then we get somebody on it. We get the tax returns done, you make $1500 in a three-hour period.
Joe: I want to break down what you just said, because some folks listening are going, "Okay, that's phenomenally efficient." Is it the size of your team? Is it your defined process? Your defined delivery system? How is it that you're able to accomplish that?
Dawn: I love that, it's a great question. Honestly, the processes and having processes and procedures for just about everything ... Once you have a common procedure, they're not exactly the same for every client, but when you have a common element of technology where you're like, "This is how we're going to do this. You're going to get on QBO, you're going to get on this one, you're going to get on TSheets, you're going to get on this."
We just say, "This is how you're going to run your business." When you introduce that and say, "This is how you're going to run your business, client," then we don't have a learning curve of all their systems. We have systems to implement with them, that make it streamlined, saving time. Our team, our client base is growing, our revenue is growing, but we don't necessarily need to add ... For every 10 clients, we have to add a new staff member. I would say it's probably for every 20 to 25, maybe 30 clients, we have to add a staff member.
Joe: You credit your systems and processes with being able to scale client base disproportional to human resources?
Dawn: Absolutely. 100%
Joe: All right, so that's absolutely huge, folks.
Dawn, as somebody who has built those processes and has ... The term that I use, you've democratized your knowledge. That's really the way to describe it. You've democratized your knowledge, and you've turned your knowledge into intellectual capital in your practice.
Joe: What advice would you give those folks listening in, who have not taken that journey? Now, there are two reasons they haven't, so keep both target audiences in mind when you're talking. Some are sole practitioners and they might be thinking, "I don't need to democratize my knowledge. I am myself." Second, it might be folks that do employ team members, but each team member is a lone ranger, doing their own thing in their own way. Can you address that a little bit?
Dawn: Yes. I could talk to you for days, really. This stuff is just so fun and exhilarating, honestly. First, as a sole practitioner, you're yourself. Maybe that's your plan to stay as yourself forever, and regardless of whether you grow and add team members or you just stay a sole practitioner – which neither is correct, it is what it is for you – I truly believe in those procedures that you should have, and I say in writing for yourself, when a new client comes onboard.
It should be the same exact process and just about thoughtless, a little bit. When I say that, I mean it should just be a standard procedure. "Okay, here's your engagement letter. Here's your payment authorization form. Excellent, once I get that back then I'll touch your stuff."
That's just your process, and that's it. I know, been a sole practitioner, was a sole practitioner for years, those administrative costs around "I treat clients differently" was extremely costly, from an administrative perspective. If you are a sole practitioner, it's irrelevant whether you are or are not, but for those people, don't think that necessarily what you've always been doing is the best way. Seek out the opportunity to minimize the pain that you're going through as a sole practitioner, like not being able to have dinner at the table with your family every night.
Joe: I love that. You're absolutely right, Dawn. There's a direct connection between a uniformity of process and a perfection of process and a maximization of efficiency. The way we say it at Woodard Institute, we say, "Variation of process is enemy number one." That would apply if you have a team or if you're a sole practitioner. Talk a little bit, since you have a team ... Talk a little bit about the benefits of that documentation and that uniformity when multiple team members are involved.
Dawn: Well, I can tell you, Joe, I've done it all wrong, and now I'm starting to do it somewhat right. I say that because treating team members as they're coming on, or training the team members, which we have now a full employee onboarding process where they get training. We actually set their hours on how they're going to train, who they're going to train with, what are they going to train on.
I didn't always have that process for the team members. People would come on, I'd be like, "Okay, we use Smart Vault, TSheets, we use QuickBooks, we do this, we do that, we're hosted, we're not hosted," blah blah blah. We'd go through and I'm like, "Okay, now get it figured out. Get your email set up," and they're just staring at me.
Unfortunately, because I didn't have a set process for those team members, it was a struggle to onboard and boy, was it costly. Now with that process we've solidified, it's all in writing. Every person will come on exactly the same way no matter what their role is, because they still need to be familiar with what we, as Powerful Accounting, represent and what we use. The second thing I think is really important is the streamlining of onboarding a client; that process is just as, if not more, important.
If you don't have a streamlined onboarding process for a client and you have one person that's in charge of that, that person actually probably goes on vacation. I can tell you who isn't going to be onboarding a client, and that'd be me. Very easily can Nicole pick up a new client onboarding if Tracy is out, and vice versa, and Ann can do it. The team can take care of itself because we have systems that they can refer to, that make that process streamlined and most importantly, keep me out of the way.
Joe: That's great. For turnover as well as delegation, having a standardized process is going to create in your firm an asset. It will allow your team to become greater than the sum of its parts. Now, the greater of the sum of its parts is why you're getting 10 new clients onboarded without necessarily having to hire someone, right?
Joe: It's also why you can turn around those engagements so quickly. You're building this asset, you're building a firm, Dawn, that's bigger than you, greater than you, and is purchasable. Somebody could acquire Powerful Accounting LLC without Dawn even necessarily coming along with it for the long haul, and have value. Darren Root would say that's the ultimate test of your firm's stability and maturity. Would somebody buy it without you?
Dawn: I love that you said that because I literally rolled over out of bed yesterday and said, "Wow, I don't even know if I need to work today. They do such better work without me if I stay out of the way.” I think about and I analyze the financials and say, "You know what? If I stayed out of the way, this company could run on its own." It really was an aha moment for me, and I 100% give the credit to having procedures, policies in place.
The people are important – you've got to have the right people and sometimes that takes a process - but I always say, "I wouldn't trade this team for a billion dollars."
Well, maybe a billion.
Joe: That would be a firm acquisition you could really feel good about, right?
Joe: It's so funny that you're saying a couple of things that are key here about the right people, because Jim Collins says that people are not your greatest asset. He pauses when he's doing this live, so it can sink in, and the horror and the, "Where is he going to from here, and how is he going to rescue himself?" People are not your greatest asset. The right people are your greatest asset. That's exactly what you just said.
Andy Stanley, and I listen to his leadership podcast all the time, I recommend it to anyone. Andy Stanley says, "You delegate tasks whenever you have to. You delegate authority whenever you can." It sounds like you're the kind of leader, Dawn, you've gotten to the point in your firm where you can delegate authority, and you've got the right people. To me, that's a fantastic chapter in your journey.
Dawn: I would love to expand on that very point, because it happened today. We had a client where there was a situation with payroll and they said we didn't do what we were supposed to do. It was this whole thing that we all go through in business on a moment-by-moment basis with clients sometimes.
There was a confusion, miscommunication, and so they wanted to have this big meeting with myself, one of the team members that handles their weekly stuff, and another team member who is the small business division leader and that's Ann. They wanted to meet with the three of us. This was yesterday, this conversation by email. I emailed back and I said, "I'm sorry, I have appointments all day and I am not able to cancel them.”
I'm not going to cancel them. They're not going to dictate what I'm going to do. What I did instead was say, "Ann, you're the small business division leader. Here’s the situation. You handle it with the client." I told the client, "If there's something above and beyond that Ann and Wendy cannot handle or control or answer, they will consult with me and we'll get back to you."
The client never balked on it. It was another aha moment. I have them about six times a day.
I said, "Wow, that empowered Ann as the leader of the small business division to be able to have this meeting, to heal the relationship, or solve the issue without me in the way." Now the client knows this is the small business division leader, I don't need to always go to Dawn. That is priceless to me.
Joe: It's freeing, and it also means that your leadership is beyond you, which is a key characteristic.
I want to shift the conversation a little bit to this new ... This is another chapter of your journey. It's a new service that you've begun to offer on tax representation. At the beginning of the journey, we started with when you earned your CPA. This is an interesting one, because it's become a cornerstone of your practice, but you don't have to be a CPA to provide this service. Tell everybody listening all about it.
Dawn: Okay. That's a very good point, so we'll make sure we touch on that.
Through the course of going to various CPE event - you have to get your CPE when you have your CPA and when you're an enrolled agent, and if you're a certified bookkeeper - these are great things to attend and build relationships with other professionals. I would attend this IRS DRS Update by, specifically, Eric Green. He was at a different firm at the time, but I was going to these IRS Updates, and we just grew to be friends. There was a friendship that was in a mutual, professional respect. We just really hit it off. Eric ended up moving and having his own firm, joining with a partner, Jeff Sklarz.
The two of them, we just bonded. We just knew we were good for each other, if you will. They said, "Hey, Brolin. We got this really big case. How about if you handle the audit so we don't really have to handle it? We want somebody to go through, dig through the details, come up with what numbers make sense here, where's all the backup?" The first one happened to be just a civil audit, which was great. We went through, and my whole thing was, "This is a goldmine." I say that for many reasons.
Yes, it's a great moneymaker. You literally could be a bookkeeper and know how to use QuickBooks, know how to understand the process of you've got to have receipts for stuff, right? There's a complicated one. I built that relationship with them, and when they gave me a case, it was my number one priority. I'd stop everything else I was doing, and their case was number one priority. Because of that focus, that ... I love this stuff.
When I would get the text, I would get chills. I still do. I get a text from them, "Call us," I get chills. It's something that, number one, yes, there is profit within it, but there's also the reward of helping out a taxpayer, helping a client, helping out a family in situations. It's not just for audits, it's also for offers and compromise and being able to get someone out of a financial distress situation where they maybe have been a little bit irresponsible, but let's forgive and forget kind of thing with the IRS. That's a possibility and in the bankruptcy stuff, so it's been a huge…
Because of the relationship I built with them, and because I made the relationship a priority for many reasons, we have built this area and division of our practice. The bookkeeping and the small business development where we obviously integrate applications ... that division handles all that part. We have a division that handles all the tax representation.
Now, they can cross over in a little bit of a way with our tax division as well, as we have three divisions. Our bookkeepers help the IRS, either the offers and compromise or whatever they're handling, and then the tax people prepare the tax returns if we have to do revised tax returns. The IRS division handles offers and compromise. We handle eggshell audits, we handle all kinds of cool stuff.
It really came from the relationship I built with one specific attorney. I have not even reached out to the million other attorneys that are probably within 200 miles of my office. I can’t imagine that. Someday, right? We have visions of that. It's a relationship that we've built and an area in our practice that we love.
Well, I definitely love it. I want to put eye black on, my bulletproof vest, and go out there with a headband and save the world. It's just an exciting area of a practice that anyone can do if it's something they were passionate about. Which, you know I'm passionate about just about everything, but this is just an area that you can not only make good, good, good profitable money on it and grow your firm if you'd like to, and be able to help people at the same time.
Joe: You can represent a client to the IRS if you are an EA, correct? There's education involved in that, and there's a great organization called Surgent that will prepare you for the enrolled agent exam and also is accredited to help you maintain your EA credits. Plus, it sounds like this conference that you went to, the New England Tax Representation Conference. Isn't that what it's called?
Dawn: Correct. IRS Representation. New England, yep.
Joe: Exactly. You can go to that. Eric Green, Google it. You can get EA credit there. For the first time ever, you're going to be able to get EA credit at Scaling New Heights, and it's because Eric Green and you are partnered on a track around this. Tell us a little bit about that.
Dawn: Yeah. So, Eric and I of course are super, super pumped about number one, being able to present together, because he and I just feed off each other when it comes to just having this conversation. We're going to talk about how we built our relationship. What happens when, let's just say, a new client walks into Eric's office and says, "Okay, I'm under audit. Help me."
What happens from that moment forward, between Green & Sklarz the law firm, and Powerful Accounting, the accounting firm? How do we work through those relationships? Who pulls the transcripts? Who has the power of attorney? Who has the 2848, who's on the 2848, the power of attorney, to talk to the IRS? Does the attorney want at all to be involved with the auditor? What are those steps? What do those steps look like? How do you handle an auditor?
It's a skill; it really is a skill. We're going to go through how all those pieces work. Where does the client come in? What do we need from the client? What's the process of onboarding that client? Because it is different than our small business division. Onboarding those clients are very different than onboarding someone who is in trouble with the IRS.
Joe: You're saying this is a massive opportunity for even the listeners of the podcast that aren't currently CPAs, EA’s. Maybe their whole career is certified bookkeeper, certified QuickBooks ProAdvisor. What kind of journey are they looking at to embrace this opportunity? Could they actually become an enrolled agent within a year?
Dawn: Well, I love that you asked that question, because Sharon from our firm just became an enrolled agent in October. She started the process around June of this year.
Joe: It's very achievable if you work at it intentionally. That's good.
Joe: If you're listening, folks, I want to tell you, Dawn has already gone down this path. You've heard her, she's a case study of one here, and I'm sure that there are other examples if you go Google. In Dawn's case, the secret sauce is building a relationship with an attorney, a tax attorney, who is representing clients to the IRS. There's this symbiosis – you and I have talked about it a lot, Dawn, getting ready to add this track to Scaling – this symbiosis between you, bookkeeper and accountant who understand all the numbers, and that tax attorney who understands all the legalities of the case law for the IRS and how to represent the legal issues for the client.
You can't represent the client in certain areas when it comes into legal matters, so you need to partner with an attorney. If you're not an EA, if you're not able to represent the client to the IRS, then four months is what one of Dawn's people went through.
Now, Dawn, we're about to wrap up here. I want to summarize what you've talked about so far, and then I have a whopping question for you to answer on your way out.
Joe: Up to this point, Dawn has encouraged you to examine your process, examine your technology and your delivery systems, whether you're a sole practitioner who plans to employ, a sole practitioner who never plans to employ, and especially if you're a current employer. Through the documentation of process, you get the perfection of process. With the perfection of process, you get higher profitability and more consistency of delivery for your clients.
Then Dawn said invest back in yourself into new areas within your practice. Prioritize education. In Dawn's case, she went straight for the CPA, kudos to her. I would say examine that path at whatever point you are in, in your career. The EA path, we just learned, is extremely achievable in a shorter time period, and could be an incremental step to CPA.
Earn that first, and then you can continue the journey towards CPA if you wish to do so. If you become an EA, obviously tax preparation is a service you can provide, but it's a crowded field. Dawn's encouraging to check out this tax representation field, which is expanding and not as crowded. Through the right partnership with the right attorney, it could be very lucrative very quickly for you.
Now that we've summarized all of that, Dawn, and that's incredible advice you've given us, plus some great leadership tips. I'm going to ask you the whopping question, and it's twofold. What is the one biggest challenge in your opinion, facing the account profession right now? What is the one biggest opportunity for us right now as accounting professionals?
Dawn: Great questions, of course, as always. I would say one of the biggest challenges in the profession right now is acquiring really, really committed, dedicated, and loyal team members. I would say that we need more of them. We need people who want to work. I think that's another important thing. The change in the way, I think, team members look at a salary as a 40-hour work week, not a 55-hour work week or a 65-hour work week.
I think that mentality, though achievable through the use of technology, if you are a tax firm, is unrealistic during that part of the season. I definitely think that we need more dedicated, committed, educated ... I say educated whether it's experience, education through experience or whatever it may be. I know for us it has been very, very tough to find qualified, educated, committed, and loyal people outside of ... Obviously, we have a great team, but it wasn't easy finding all of them.
Joe: That experience, by the way, is matched by a tremendous number of your peers. In a study conducted by Karbon, and it was scientific, extensive, and global, the number one challenge according to their research in the US CPA profession particularly, is talent, acquisition and retention. You're tracking with your peers very, very tightly there. What about that opportunity, Dawn? What's the biggest opportunity we're facing?
Dawn: Of course, with technology, and everyone always says this, with the technology I truly believe the expansion of your practice is easier now than it has ever been before. I say that because with those systems we talked about earlier, with the opportunity to grow a practice, with the use of technology and like we said earlier, the ability to not necessarily have to expand your team just because you're expanding your client base, is a really, really big opportunity.
I also believe keeping your eyes and mind open to things that are out there like this IRS representation work, like ... We didn't even get into forensic accounting, or get into embezzlement, and some of those other types of things, and fraud, which is still huge, unfortunately. Those kinds of things where it's not just about reconciling anymore. That's my favorite quote, "It's not just about reconciling anymore."
It's so much bigger than that. Your firm can expand the opportunity, expand your bottom line - number one, really important – but also maybe to gain and capture back some of your time, even if it's a couple hours a week, because you implement one new system that saves you two hours.
Joe: We're seeing firms on the bookkeeping side that are consistently automating up to 80% of the accounting process, and many times that's nonprofits, professional service companies. The point is powerful. The more of that automation you can put into play, especially in this window we have, which I estimate is about 10 years before it becomes commercially available and generally acquired by small businesses directly. We have a window where we curate that technology and leverage it on behalf of our clients, at fixed fee or value pricing and extreme margins and scale.
Tracking right there with you, Dawn. That's a massive, massive opportunity. It has been great having you on the podcast, as always. You are always welcome back and many congratulations for everything you've built in your practice. I'm excited that you're going to be sharing some of that at Scaling New Heights 2017.
Dawn: Well, I thank you for the opportunity, Joe. I always, always enjoy our conversations.
Joe: Thank you for tuning into this podcast, and our conversation with Dawn Brolin.
Our podcast is only possible through the support of our partners, and Neat is one of our partners. I cannot speak highly enough about them. Neat provides highly innovative automation technology software. It is an example of that automation technology that Dawn and I were just talking about. It extracts data from both emailed and scanned documents.
It doesn't really matter how you get it to Neat. Neat is a software solution, Neat is not a scanner. That software solution will dissect the data off the paper, liberate it is what they call it, and parse it is the technical term, and place it into the general ledger intelligently, with the document attached and searchable.
If you're interested in automation - and if you're not, you should be after hearing Dawn says it's the biggest opportunity in her opinion facing the industry - today is the perfect day to get started with Neat. They're going to offer two months free for you, and you can learn all about it at Woodard.com/Podcast. Go try it out today.
For more information about today's episode, to explore other episodes in this podcast series, or to learn more about our annual conference called Scaling New Heights, visit Woodard.com.
As always, we encourage you to stay tuned, stay connected, never stop learning, and scale new heights.