Tune in to listen to Adam Larson as he hosts the Count Me In Podcast, featuring a special conversation with Adam Lean, the CEO and Co-Founder of TheCFOProject.com. Lean shares expert insights on transforming the role of the traditional CFO, offering practical advice and real-life success stories. Don't miss this insider's look into the future of the accounting profession!

Full Episode Transcript:
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Adam:            Greetings, accounting professionals. Adam Larson here, host of Count Me In, and today we embark on a transformative journey with Adam Lean, the visionary CEO of TheCFOProject.com.

 

Prepare to break free from the shackles of the accountants' trap. A pervasive challenge that confines so many to a transactional purgatory. In this conversation, Adam unveils a potent cocktail of liberation, strategic transformation, technology-driven empowerment, and high-value service mastery. So join us on this first podcast of 2024, and together, let's rewrite the future of accounting, one empowered professional at a time.

 

 

Well, Adam, we're really excited to have you on the Count Me In podcast. And you are the leader at The CFO Project, and you have a podcast called the Accountants Trap, and you mention that a lot. Maybe you can start by defining what is the accountants' trap, and why is it a challenge for many firm owners today?

 

Adam Lean:   Yes, that's a great question. We have this saying here at The CFO Project, we want accountants to escape what we call the accountants' trap. The idea is that accountants, and when I say accountants I mean accountants, CPAs, bookkeepers, enrolled agents. Traditionally, accountants are trading time for money. In order to make more money they either have to work more hours, which there's, obviously, not many more hours you can work, or you have to take on more clients. 

 

Well, the thought of taking more clients on, in order to make more money is depressing to a lot of accountants. Because most clients are high-demanding, low-paying clients, and they give you all their paperwork at the very last minute, and the idea of taking on more clients is not appealing to most people. And it's a trap because you can't raise your prices. You can't raise your prices because there's always another accountant that's willing to do it cheaper than you.

 

And if you think about it from the viewpoint of your client, and we have to always think about it from the viewpoint of our clients. On the laundry list of things that a business owner has to think about, during the day, accounting falls towards the bottom.

 

They think of accounting as a commodity, in a sense. It's like a gas station; you're driving down the road and there are two gas stations next to each other, one is $0.50 higher. Most people are probably not going to go to that gas station because they view fuel as a commodity, it's interchangeable. And the same thing with accounting and bookkeeping services.

 

What you do, A, they really don't understand, and, B, they feel that any accountant can do it. Any accountant could put the tax return together. Any accountant can do the books. So why would they pay you more, significantly more, than the average accountant? They wouldn't.

And, so, this is the trap; to make more money you're forced to work more hours for little pay, with high-demanding clients. And, so, we suggest that there's a better way.

 

Adam:            I would hope so because, that would be really frustrating as time goes on, and to have to get more clients. And if you're an internal accountant, within a corporation, you have to help all the different operations of the business to get everything together, do the budget, and that can bring a different type of accountants' trap challenge.

 

Adam Lean:   Yes, absolutely, your candle is burning at both ends, and there's no give.

 

Adam:            Yes, there's no give at all. So how important is it? Because, like you said, a lot of times for owners, they don't understand the importance of the accountant. How do you change that role for the business owner, if you are the CFO, if you're the controller, you're within the organization, and you're trying to say, "Hey, this is an important part." How do you help change that view, at the top of the organization?

 

Adam Lean:   Yes, this is the frustrating part because accountants are very valuable, they're needed. But the people that use accountants; so the company you work for or your client, if you have a business, and if you work for clients, they don't view it that way. Which, again, goes to what I was talking about with the accountants' trap. They don't view what you do as important as they should. Having great books is important, it's needed. And what you do to ensure that the books are kept accurately and timely, and the taxes are filed, is very important. 

 

But until your client, whether it's your boss or whether it's your actual clients, business owner clients, until they view you and your work as highly valuable, they're not going to pay for that. So the idea is to shift in your client's mind, in your constituent's mind, your value.

 

So instead of being thought of as the person that just keeps the books or that just does the taxes. Because you have to remember that your client doesn't really understand what you do. You know what you do, and so you know all the effort and time and energy you pour into it, but they don't. So they're not going to place the value on it as much. 

 

But if they can wrap their mind around your value, then, they will find you more valuable. Which means they'll pay you more and you can escape the trap. So the idea is to be the financial professional, in your client's life, that they actually want. And what is it that most business owners want? They want someone that they can trust, to tell them what to do to have a growing and successful business.

 

So if you, as the accountant, can be that person that a client trusts to tell them what to do. To give advice on something that they really care about, which is their business, then, your stock with them will go dramatically up.

 

They'll pay you as much as you command, as much as you want, and they will not think of you as just the person that records the books or just this commoditized, necessary evil that I've got to pay. And they'll start to view you as somebody that's a trusted confidant, an advisor, somebody they want to talk to every month.

 

Adam:            Yes, that advisor, the term that we use a lot is that business partner. You want to be that business partner, not just the number cruncher.

 

Adam Lean:   That's right. You'll still provide the same value, that in your mind they need, which is accurate books, taxes. But you're going to shift the value in your client's mind. Which, I mean, let's be honest, it's really the only thing that matters is your client perception of you. That's what's going to pay the bills. If you get more clients who have a higher perception of you, that means you can earn more money, and that's how you escape the trap.

 

Adam:            All right, so you work with a lot of different organizations and folks within the accounting space, and the accounting world. Maybe there's some short story or two you can share, of people who have effectively navigated this traditional role to the more advisory position that you've seen that was successful, and some lessons that you've seen and learned.

 

Adam Lean:   It's a good question. So we have a membership program where we train accountants, and bookkeepers, and enrolled agents, and CPAs on how to be an outsourced CFO. Right now we have, I think, 325 people in the program. One of my favorite stories is this guy who's been a tax practitioner for about 20 years.

 

We have what we call a Wins' Board in our online portal, and he posted in the Wins' Board a few months ago, and he says, "I've owned a tax practice for about 20 years." And he goes, "Every single tax season, I've dreaded it. But I joined the CFO Project two years ago. Last year I sold my tax practice, and instead of having..."

 

I think he had about 400 tax clients, he now has less than a dozen CFO clients. And he said that he's made more money, this year, so far this year, than he's ever made as a tax professional and he didn't have to go through a tax season. And I'm not saying there's anything wrong with going through tax season, but it's just not for everybody. And we have plenty of members that still do taxes for their clients.

 

But they've enhanced their tax service, to be this all-encompassing CFO advisor for their clients. So they'll do CFO work and tax work, or CFO work and bookkeeping work, and they'll bundle it all together. And that's how they differentiate themselves from all the other accountants and all the other software that's trying to compete with accountants out there.

 

The beauty of this is that by giving your client what they want, which is advice on how to have a successful business. And not to digress, but success to us, financial people, means a business that is generating consistent, positive cash flow every single month, that is a successful business. Because if you think about it, every business that failed would have not failed if they were able to generate consistent, positive cash flow. So that's our job as CFOs.

 

So if you could do that to your client, they're going to value you way much more, and you'll be able to separate yourself from all the other accountants, who are just, and I use the word just in jest, recorders of the past. In the minds of your clients, they think of you as somebody that just records the past, puts the right numbers in the right boxes, makes sure the IRS is happy, and makes sure that the books are closed, whatever that means.

 

Adam:             It's interesting because as you work with so many different CFOs, in that interim capacity, whether it's a client or that fractional type of role. How do you see this CFO role changing, and are there specific critical skills for somebody who wants to get into this line of work?

 

Adam Lean:   It's a good question. In terms of the CFO role changing, there are CFO terms being floated out there, in the accounting space. Fractional CFO, advisor, outsourced CFO, part-time CFO, and there's really not a good definition of what it is. In our view, we like to call it a productized CFO service. You're offering an outsourced CFO service, but it's a productized CFO service, that's in direct opposition of a fractional CFO service.

 

A fractional CFO service, you're going to a client and saying, "What do you need? What problem do you need me to solve?"

 

And you're relying on them to say, "Well, I need X, Y, and Z." And then you're creating this very customized engagement for your client. Well, the problem with that is that because it's customized, you can't scale it. You can't take on many of these clients because each client, each take-on, will feel like a part-time job. And if you have multiple part-time jobs where you're doing very different things, that's just a recipe for burnout, and it's not scalable.

 

Well, what is the definition of scalable? If you think about a manufacturer who manufactures, I have a coffee mug on my desk, coffee mugs, they've created the product once, and then manufacture it over and over again, that is scalable. Well, that's what we need to do. So we say offer a productized CFO service. Have one standard CFO service where you're telling the client, "This is what you're going to get and why you should hire me."

 

But because you created it once, you can do that same system over and over again, with your client. But because it's still a service and your client highly values it, they're going to pay you like it's a service, but your cost is going to be like that of a product. And, so, that's a productized CFO service. And, so, that's the difference between all the other outsourced CFO services out there, fractional CFO services.

 

So you've got to have a system that's scalable, that will, A, get results and B, that you can do the same steps with every single month, with every single client. The second part of your question in terms of how an accountant needs to think of themselves as an advisor, the mindset shift, is that when you're advising somebody, you have two critical jobs.

 

The first is you've got to give them advice that actually is helpful, which a lot of accountants struggle with. I mean, that's why they give their advice away for free because they're not sure if the advice they're giving is the best advice, but I digress.

 

So you got to give advice that is actually helpful. That's really going to help your client grow their business, have a successful business, meaning generate positive cash flow. But the second component is you have to get your client to actually take that advice.

 

That is a hard skill. You could be the most credentialed CFO on the planet. You could be the CFO for the biggest company in the world, and I think right now it's Apple. You could be their CFO and still fail at being the CFO for a small or medium-sized business. If you can't get that client whom you don't control to take action. You don't control them, they're your client. But you've got to get them to take action and if you don't, you will fail at your job of CFO. And, so, that is an art as much as it is a science.

 

Adam:            Well, and I think that goes back to as a CFO coming to the table, and having a voice at the table, and being that true business partner so that you can help make the strategic decisions because otherwise, you'll never be able to do that. Like you said, you can be the CFO of the biggest thing and still fail because you're not helping with the direction.

 

Adam Lean:   Yes, I love the word partner because if you think about the partner in a marriage or dating, sense, they're somebody that you view as an equal. Somebody that you trust, that you want their advice, that you're confident on, they're somebody that you lean on for support. That's exactly what you should be to your clients.

 

And, so, an outsourced CFO should be somebody that the client intimately trusts. Because there's not that many people in a client's life that they could trust, if you think about it. They can't really trust their employees because their employees don't get it, and at the end of the day, they're employees. You could trust your friends and family, but they don't understand numbers, or business, or financial strategy. They're going to be supportive, but they're nary not going to help you.

 

Your banker, the other numbers person, in most business owner's life, they've never ran a business themselves. They don't get it. Business coaches, oh, my goodness, business coaches, there are many of them out there, and most of them are terrible. Because the advice they are giving, they have no idea how that impacts cash flow.

 

How their advice has impacted cash flow because most business coaches are leadership coaches, or management coaches, or sales coaches, or whatnot. And I'm not saying they're all bad, there are some that are good, but the good ones are really expensive. And, so, who does a business owner turn to for help? If you could be that person, oh, my goodness, they'll pay you a lot of money, and you will be thought of as their trusted partner.

 

Adam:            Mh-hmm, so we can't talk about transforming the role and becoming that good business partner, without talking about technology. Technology has played a huge role, and it's continuing to play a huge role with the advancement of generative AI, and different accounting technologies. How are these new technologies reshaping the role of the CFO and the accounting industry? And then how can you, like you've been saying this, outsourced CFO, how can you utilize those technologies to do better at your job?

 

Adam Lean:   So a lot of people have different opinions on technology, especially things like AI, and it's easy to feel scared about the future, when it comes to things like that. I've read statistics that 95% of what accountants do, today, will be replaced, within a decade, with AI. And one of our members sent me an article last week, that said that AI has been able to close, and reconcile a set of books, in less than four minutes, which is nuts.

 

But, here's the thing, I think this is a wonderful time for the accounting profession. Because embracing technology and things like AI, and software, and whatnot will allow us to do less, spend less time, on tasks that are, menial, and spend more time on higher-value tasks. Things where you're able to charge more money to your client. So you could be your client's tax person or your client's bookkeeper and be their advisor, but now you're able to spend much less time, or you will, in the future, spend much less time on those transactional or compliance things.

 

Instead of having to spend a lot of time looking up tax code or figuring out the best scenario for a client. Let the software do it, and then you spend more time advising your client. I mean, it's going to happen, whether we like it or not, technology is going to happen, we can either embrace it or not embrace it.

 

I mean, if you think about it, in 1902 nobody had a vehicle. Everybody rode around on horses and buggies, and all of a sudden, this vehicle came. You could be scared by it, or you can embrace the possibilities of what this thing is going to help you accomplish.

 

Adam:            I like that. I like how changing your mindset of saying, "Hey, this is a tool that's going to help me get rid of the tasks that I don't like doing and that can be cumbersome, and then it allows me to be more strategic." So in some ways, we have to learn the new technologies in order to become more strategic.

 

Adam Lean:   Right, I agree, and I think there's plenty of places to learn it. But I don't think anybody should feel this overwhelming sense of, "Oh my goodness, I'm behind the eight ball." Because things like AI and software change all the time. Just slowly read a couple of articles, and then try it out yourself, and then just see where it takes you, and then go from there. I mean, at the end of the day, regardless of how you accomplish your job, your client just wants this trusted partner, like we've talked about. They don't really care how it gets there.

 

Adam:            That's very true.

 

Adam Lean:   It's like somebody going to the store to buy a drill. Most people that go to the home improvement store to buy a drill, they're not really concerned about the drill itself. They really just want what the drill provides, which is the hole. That's why people buy the drill. And, so, you have to remember, your clients are buying you for what you provide, they don't really care how you provide it.

 

Adam:            That's true. Well, and you can also, like you said, be aware, read articles, and a lot of technologies that you're probably already using are going to start integrating different generative AI into their software, so that you don't even have to learn it. It'll probably just be a click of a button or type a question in, and it'll answer things for you.

 

Adam Lean:   Absolutely. I mean, anybody that's used QuickBooks Online has seen this morph over the past several years. QuickBooks used to be desktop, obviously, and then they moved to online. And then a lot of accountants don't like it because it's automating, it's trying to automate a lot of tasks. But that's essentially what AI is going to do. They're going to say, "All right, well, this transaction, we think should go in this account, is this correct?"

 

I mean, QuickBooks has been doing that for years now, and you set up rules around that. Well, that's essentially, by setting up rules, you're training the software to think like you. That's essentially what AI is, you're training something to think how you would think, and then next month you just run all the rules and boom, it's done. That's really what AI is. So you don't have to think of it as this big, scary thing. I mean, you've been doing it more than I think most people realize.

 

Adam:            Mh-hmm, that's very true. So somebody listening to this and they're like, "You know what? I've been an accountant for a long time." How do you shift your mindset from the way you've always been doing things, to be more aligned with this, be the advisor, be the partner. Because I imagine it's very difficult to make that transition, especially, if you've been doing it a long time.

 

Adam Lean:   Yes, I think anybody that's been doing something for a long time is set in their ways, and they're comfortable in their ways. But if there's any part of you that thinks, "I either don't want to be doing this much longer." 

 

Or "I'm getting paid way too less to be doing this." The average accountant's salary in the United States is $74,000. We think that's very low for the experience and knowledge that accountants have. And, so, therefore, a lot of accountants are underpaid.

 

So if you think you're underpaid or you just don't want to do this, or your clients are asking for advice. They're saying things; they may not come out and say, "Well, I have an advice-related question." But they're saying things like, "You're telling me I owe $24,000 on taxes because I made 150,000, last year, in profit, but I only have $7,000 on the bank account. Why? Why am I paying so much in taxes?" And the accountant is thinking, "Well, I don't really understand."

 

Or "No, I can't help you or advise you because I have a stack of 300 other tax returns on my desk that I got to complete before Friday." This is a stressful situation for everybody because the accountant wants to be able to help their client, and the client wants the help because the client's clueless.

 

And, so, if there's any part of you that wants to be able to be intentional about the advice that you give to your clients, then I would look at advisory. Either adding on an advisory service or completely getting out of what you're doing and becoming an advisor. Or hiring somebody on your team to take the compliance and transactional work off your plate or hiring one of these third-party companies that outsource the accounting work.

 

If there's any part of you that wants to be able to make more money. While working less, while having such a huge impact on the thousands, literally, thousands, of business owners in your town that are struggling, I mean, this is hands down the way to go.

 

Adam:            Yes, that really sounds like it and it's looking at what you're doing and saying, "Is this what I continue want to do, or do I want to advance or scale up?"

 

Adam Lean:   Yes, totally. It's not for everybody, but for the people that would like to explore it. I mean, I think, you should explore it because your clients would love you to be their confidant, their partner.

 

Adam:            Mh-hmm, I love these types of conversations because it's looking at the accounting space from a different perspective. And you have a unique perspective, where you work with many different clients. And I like to ask, what are your predictions, as you look to the future? Where do you think the accounting space is going to go and what should people be looking for, as they want to go with the tide?

 

Adam Lean:   Yes, that's a good question, and we touched on this, but I think the accounting profession is going to be less transactional and compliance nature, in the future and more advisory nature. I mean, it's just a simple fact that a lot of software, and AI, and things like that, it's going to take this complicated tax code, and accounting rules, and all that and simplify it, and just make it easy.

 

And, so, the traditional need for an accountant is going to go away, it just is. But the accountant is still needed, that's the beauty of this, you're needed to do the one thing that you've always been needed, by your client, which is to give advice on how the company can be a growing and more profitable business.

 

Think about the CFO for a Fortune 500 Company. The CFO oversees the accounting department, but their bigger job is to understand the strategy. Understand where the client, in their case, the CEO, and the leadership team, wants to take the business, and figure out are they on track to do it, and suggest ways to help them stay on track, and to ensure the business is financially viable. Every business on earth needs somebody to do those things. And if you could be that person, you will embrace the future of accounting, of what clients need from their accountants, in the future. So that's really where I think the accounting profession is going, but I think it's exciting.

 

Adam:            That's really exciting and it allows for you to not be stuck in the same thing every day. Because once you get into strategy, you're thinking outside of the normal box that you've been put in, especially, if you grew up from starting with a staff accountant, and moving your way up within an organization.

 

Adam Lean:   Yes, exactly. I mean, honestly, that's what I did, out of college, I became a staff accountant. I mean, personally, it was just incredibly boring to just sit there, behind a desk, and record the past. So I purposely got myself involved in things that I could help the business grow, and I enjoyed that way more than. And by the way, they actually liked it more that I was being a proactive accountant because my predecessor, who've been there for two decades, didn't. All she did was just sit behind a desk and record the past and nobody heard from her.

 

Adam:            Yes, and that sets you apart. Certifications and those things can set you apart, but actually being able to get in there and do the work really sets you apart from your other colleagues.

 

Adam Lean:   Totally, absolutely. We have to remember that most people do not speak accounting. Most people don't want to speak accounting, and accounting is our language but it's not the outside world's language. So if we, as accountants, can speak the outside world language. If we can speak business strategy language, then the people that you work for or the people that are your clients, they will love it because they do not want to speak accounting. They want to speak business strategy, "How can I grow my business?"

 

Adam:            Well, Adam, I've really enjoyed this conversation. I just want to thank you again for coming on the podcast today.

 

Adam Lean:   Yes, thanks for the invite. This was fun.

 

Announcer:    This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders, from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting in finance education, visit IMA's website at www.imainet.org.