Ep. 366: James Vanreusel - Navigating the Future of Finance with AI and Strong Foundations
Hey, everyone. Adam Larson here, and welcome back to Count Me In. Today, I'm joined by James Vanreusel, founder of Vanreusel Ventures. James has done it all, from Wall Street to launching banks in the South Pacific, and now teaming with both fast growing startups and international nonprofits. In this conversation, James shares what pulled him into finance, what it really takes to build a strong financial foundation, and how the world of accounting is changing fast with new tech like AI.
Adam Larson:We dig into practical challenges like managing your own books, building the right team, and using AI to actually make your work better and your business stronger. So whether you're in a startup, nonprofit, or just trying to level up your finance game, this episode is packed with insight you can use. Let's get into it.
Adam Larson:Well, James, thank you so much for coming on the podcast. Really excited to have you here. And before we kinda get into the work you're doing today, I wanna go back to the beginning. Walk me back what drew you to accounting and finance in the first place and how that path eventually left led you to founding Vanreusel Ventures.
James Vanreusel:Yeah. So my going way, way, way back, you know, I I'm a a math major, and so I love numbers. And growing up, I always I I I would sit in front of the TV early in the morning kind of revising my my homework, and I'd have kind of the the stock market on in the background and kind of looking at all the charts and stuff. And so that was probably the initial impetus for, you know, you know, I I I don't know if I love it, but, you know, really enjoying the the stock market and and how things move and and and connect together. And then when I went to college, I I focused in on a lot of math and accounting and finance.
James Vanreusel:And so my progression from there has has has always been on the finance side. So going to Wall Street for about eight years, then, you know, having a desire to get into social finance. So I went into into microfinance for five years as a full time CFO where we were launching and operating banks in the South Pacific and then switching and moving from New York to San Francisco and basically focusing in on corporate finance. So a little bit of a switch there, But but but but looking at startups, both VC backed as well as just bootstrapped. And then also from the microfinance side, looking more at mission driven organizations.
James Vanreusel:So it could be social enterprises, but it could also be nonprofits, the majority of which are international. So they do their their work in Africa and and Asia.
Adam Larson:Yeah. That's amazing. That's amazing work. And and it's interesting because no matter where your business is located, no matter what you're doing, you still need a good financial foundation no matter what. And in order to be successful and to continue continue on, that's still that never changes.
Adam Larson:And I think people forget that, especially no matter how small or how big or no matter what that business is doing.
James Vanreusel:Yeah. Yeah. That's that's right. That's right.
Adam Larson:So there's there's this analogy that I love, you know. You got the construction person, the construction person who is building things all the time. But when you go back to their house, their house is never finished because they're always building everybody else's. You know, as you're someone who, you know, helps organizations get their financial foundations right, What has it been like managing your own books in your own firm as well?
James Vanreusel:Yeah. I mean, I've I've I've had some lessons here and, you know, I I I have a small company. You know, it's it's and and it's what every founder really balances, you know, right? You don't want to spend a lot of money on it because it's it's really back office. And does it really generate you know, you're thinking, does it really generate revenue?
James Vanreusel:You know, and over the years, I would actually argue that it does generate revenue. And and the reason for that is, you know, I I always, you know, the problem for for me has always been I don't really, you know, I intuitively can just look at the numbers and just say, oh, yeah, this is what I need to do. This is good. This is bad. Right?
James Vanreusel:And and in fact, that's not that's not always good because, you know, if you can have somebody else look at it, you know, and you want to close the business, close the, you know, close the books of of of your business or the business lines on a on a regular monthly cadence. So so that's kind of step number one. You need to have your, you know, ideally somebody more than just a bookkeeper because you wanna have the right chart of accounts that's gonna give you the right information to make decisions. But doing that is is really key. And then the second thing, and this is how you're really driving revenue and profit, is you you want to have somebody who's looking at profitability metrics.
James Vanreusel:Right? So what's your, you know, not just revenue per client, but also profit per client? You know, how, you know, what's your revenue per employee, revenue per contractor, you know, pricing. Right? All those things, no matter how big you are, is is really important.
James Vanreusel:And and the the the I would say the problem of not being really tight on your finances is that you might have, you know, widely varying profit margins for different customers. And and if if if you wanna if you wanna say, look, I need a I need a gross margin of 50%, that's gonna impact your pricing. And and and if you're the sole owner, you might say, oh, well, they can afford this, so I'll go with with that price and they can afford that and I'll go with a higher price. And it starts to kind of be all over the place that, you know, that's not a good thing. And so having having somebody else who's really looking at this and challenging your thinking, I think, is really important.
Adam Larson:Yeah. You almost need that third party because you are an expert. You can do all that yourself, but as the founder, you shouldn't be doing all that yourself. You kinda need those checks and balances within the organization.
James Vanreusel:Yeah. Yeah. Exactly. Exactly.
Adam Larson:So, you know, you you deal with clients from a very wide spectrum. You've already mentioned, you know, you do help with start ups to non profits to, like, scaling companies. When you're working with them, are the challenges the same at both ends of the spectrum? Spectrum? Or because I I think people would assume that it's just the same problems, just different sizes.
Adam Larson:Or does it just depend on what industry you're in and what that what you're looking at?
James Vanreusel:Yeah. I would say I would say yes and no. You know, all companies have the same challenges. You're just adding, you know, one or two extra zeros to the top line. So whether it's it's a 10,000,000 revenue or a 100,000,000 revenue, similar problems and and and you can mature the company in very similar ways.
James Vanreusel:However, you you are dealing with different issues as well. So for for smaller startups, like like you said, you know, the foundation needs to be there. You need to make smart decisions. Lot you know, larger companies, you you are maturing. Right?
James Vanreusel:So you have different software setups. Right? Maybe you're using QuickBooks for smaller companies. Now you're using NetSuite or, you know, some of the newer accounting software is like a Rilla that's that's been kind of grown, you know, with AI in mind. And and so so that's really important, you know, just just running the, you know, keeping the trains running on time isn't enough anymore.
James Vanreusel:Now you're looking at, okay, how how can, you know, my monthly close go from twenty days, right, to fifteen to ten to five? What do I you know, how big does my team need to be? So you're also looking at, you know, this this, you know, we're kinda jumping around a bit, but team structure. Right. And I think early days, you know, the whole fractional gig economy is is just so incredible for you for young companies because you can get higher levels of thinking at much lower prices.
James Vanreusel:And you can get, you know, you can get much higher quality work done now than probably twenty or thirty years ago because you can you can have, like, four different finance and accounting people on your team instead of just one full time person. So so I think that's great. And then the challenge, the art is how do you transition from fractional and part time to bringing people full time in house? And who do you start with for your company, which might be different from another company? So that's so yeah.
James Vanreusel:So so so having somebody guide you through that team transition is is really important.
Adam Larson:Yeah. What does that look like, especially if you're you have fractional or contractors and people kind of just temporary in transitioning to that full time? Cause that fractional person might not be the best person. You might not need to bring somebody else in. What does that look like as you work with teams that are doing that?
James Vanreusel:Yeah. So, you know, sometimes we come in and and, you know, there's kind of an upgrade to who they're using fractionally. Sometimes sometimes it's the CFO, but sometimes it's just, hey. We've just been using a bookkeeper. Right?
James Vanreusel:And and and we're ready, you know, we're at 2,000,000, and we're ready to go to the next level, and we just need some more firepower, some more strategic thinking. Sometimes it is it's a jump from we had a full time CFO controller. You know, we've gone to the next level, and we need to upgrade. But but that upgrade is is just taking a long time, and there's a gap. And so they need an interim person to come in, you know, and, you know, they always say steady the ship, but I would say the interim person should come in and start identifying areas to upgrade.
James Vanreusel:So if you're if you're a good consultant, right, you come in, you know, you know, they always say consultants write write reports, but you're really identifying the different gaps, and then you start implementing immediately as you identify them. Maybe it's new software, you know, maybe there's a team member that's significantly underperforming that needs to be, you know, needs to be replaced by somebody much more experienced. Yeah. Just I you know, those are some of the things that that we see. And I think every time you move to the to another level, you need to start reevaluating systems, processes, people.
James Vanreusel:Those those three things is usually where where the changes need to happen.
Adam Larson:Well, from what you're saying, it sounds like it's the job is never done. We're we should always be continuously looking at our processes, looking at our technology, making sure it's meeting our needs. Because otherwise, you're gonna fall behind very quickly.
James Vanreusel:Yeah. That's right. And I and I think that also counts with vendors. Who who are you working with? So if if Yeah.
James Vanreusel:You know, if you get audited, right, initially, you say, you know, I don't need PWC. Right? I, you know, I'm good with, you know, a tier three firm, and I'm paying them 40,000 a year, which is already a lot of money, And that's enough. But but as you get bigger, right, if it's VC backed, you know, let's say you go series c or series d, all of a sudden you say, hey, I need to go tier two. And then if you're three years from an IPO, you need to go, you know, maybe you go big four.
James Vanreusel:Right? So so that's that's like one one thought trajectory of, like, who are the vendors that I'm working with? Because your customers are gonna look at that as well. And they're gonna say, you know, maybe you're not as good or you're not as big as we thought because you're not working with PWC or, you know, you know, there's been a lot of roll ups now. So that the top 10, this there's like top 10 They're really, really big CPA firms now.
James Vanreusel:You know, if you're not working with one of those and you're gonna IPO, that's that's kind of a worrying sign for an investor, for example.
Adam Larson:Yeah. You don't have enough money to actually to actually go through with things that there could be some money troubles if you can't pay for the top tier. Is that is that basically what you're saying?
James Vanreusel:I mean, there there's some of that, and there's also, you know Okay. Just their experience of of what they bring to the table. You know, may maybe it's the same for for a a law firm. Right? Who are you using?
James Vanreusel:So if if you're in the VC VC backed space, right, if you if you're working with Cooley, they're not definitely not the cheapest, but they have a huge brand name in VC. Yeah. So everybody's gonna say like, oh, you work for Cooley. Everything, you know, everything should be good. Right?
James Vanreusel:I's are dotted, t's are crossed. You're working with a different firm that's small, they they might be fantastic, but just that confidence level might be lower because because, you know, the investor hasn't hasn't heard of them.
Adam Larson:Yeah. That makes sense. So, you know, we can't have this conversation without talking about AI. You know, AI is transforming finance and accounting. Maybe you can pay a pinch or for our listeners of what you're actually seeing in practice.
Adam Larson:You know, not just the promise, but the day to day reality when you're trying to put these tools into work.
James Vanreusel:Yeah. So so so we're working very hard on AI. We're working with an implementation team as well, just internally for us as we learn how to do that for our clients. You know, AI is a little bit of a challenge for me when when I'm trying to do, you know, it's it's great that I can do more than I ever could. Right?
James Vanreusel:So usually, for example, you're trying to create a term sheet for a convertible note offering. Usually, that's the corporate attorney who does that. Right? But but now you can go into Claude and say, hey, you know, I need a term sheet and and you do need to know what what you're looking at and and understand it. So, I mean, there is a baseline knowledge you need, but the whole setup can be done that way properly, you know, using Claude, for example.
James Vanreusel:But your prompt and your continuous kind of feedback loop, I find is is pretty extensive. Right? So you'll you'll do a good prompt. And then and then you'll literally need to go through every single line item and double check it and double check it with with Claude and just say, are you sure? You know, what would you know, if if if you're a partner of from Cooley, would you agree with this?
James Vanreusel:Would you not agree with this? Is this the market rate? Is it not? And a lot of times, it'll just change its mind. You know?
James Vanreusel:And and so it's it's not a here's one prompt and it's done. It can take several hours of back and forth and then, you know, going to your to to the CEO or going to somebody else and just say, hey. Does this make sense to you? Is this what you want? And they'll say, no.
James Vanreusel:I don't like this. You know? And then and then you might go back to Claudine, and they'll say, like, you know, I'm sorry. That was a mistake. I think I'll I'll you know, I think we should change that and increase it by 5%.
James Vanreusel:Right? So so it's a a yeah. My my experience has been for more sophisticated things, you need to work pretty extensively with it. You know, there is the whole agentic AI side as well that we're getting into for automation. If you're a smaller business and you don't have, you know, a million dollars to spend on it with consultants, You know, having having help and having a firm or somebody who's very good at coding these things, I think, is important.
James Vanreusel:Right. And there's a whole process to it of mapping out your workflows, figuring out what you can automate, doing one thing at a time. So not trying to do five things at once, because I think there's a big compounding effect, but you have to do one thing at a time is important. And I think now is is the time to start doing that. Right?
James Vanreusel:The this kind of this progression. I I think you have to go through the progression to learn, but we we have been going through this progression of, okay, we know how to use Claude like we used to use Google search. Right? Like, you know, people are getting used to it now. So then the next step is x, the next step is y.
James Vanreusel:And and I think people who are more on, you know, the forward edge is starting to look at, okay, what's this agentic AI thing? Can we implement it? Can we automate things? Can we get, you know, our close from ten days down to two days by using it? You know?
James Vanreusel:And it's and it's definitely possible. Right? The larger the your organization, the more challenging it is. But it's it's, you know, I can I can I can see a world in three to five years where every company has a, I don't know, a three day close or something like that?
Adam Larson:Yeah. Well, and especially with these new ERPs that are popping up, you know, saying, hey, we can have real time, you know, real time closing, time, like, bank numbers and getting those things connected. It's gonna be interesting to see as those develop and to see companies in there using it because, you know, you hear what the we hear what those companies are saying they're doing, you know, but like they're just they're kind of just getting started. So, be interesting to see as we get into this more to see, you know, how close can that close be because there's processes that used to take two or three days that can be done with just a click of a button now, you know? And so but I I think trust has to be built, especially when it comes to the AI because, you know, like you said, it'll change its mind or say, oh, suddenly or or the hallucinations are very real.
Adam Larson:And so how are you guys balancing that as you're trying to get through these things, especially for things like financial analysis and even closing the books?
James Vanreusel:Yeah. So I I mean, we're taking it very slowly. Yeah. And there's a lot of review and checking because you don't wanna you don't wanna submit something or have it be wildly wrong. That's the you know, I think that's that's the biggest concern.
James Vanreusel:And and it can be. It can be, you know, just very, very wrong. And and the thing with AI as well is the simp the simpler the data that you feed it. Right? If you feed it a whole workbook with 10 tabs, it's really problematic because it can't figure out which tab.
James Vanreusel:And if you tell it the tab and the column to look at, it'll it might even still pick the wrong column of data to to look at. Yeah. And and, you know, and I've experienced all those things, and you just have to go back and really double check everything. And and one of the interesting things as well is kind of this, you know, closed loop finance system where you create something that, you know, if you're closing every month, it learns every month. So it's not a, hey.
James Vanreusel:We just closed it. Great. And it forgets how it did it. It's this kind of closed loop where, okay, we closed January. Now I'm closing February, and I'm learning from what I did in January.
Adam Larson:Yeah.
James Vanreusel:And and that's that's really important to integrate, you know, and and these are all pretty new things that that everyone's figuring out right now. And and I think that, you know, it'll it'll get easier and easier to do as time goes on. But but probably, you know, as they say, the one you know, it's hard now, and the ones that implement it now will have some advantage for a while. But I think everyone's gonna catch up.
Adam Larson:Well, everyone's gonna catch up and most softwares that people use are are implementing some form of AI within it, whether saying, hey, here's an agent for you or here's like an AI element that you can put into. So like, I feel like the more that these companies add those elements, the more people will be be able to catch up. Maybe not at the same pace, but eventually we will everybody will kinda be at that same level, I think, at least.
James Vanreusel:Yeah. And and I'm and I'm also wary of just internally how much money do I wanna spend now to build something that six months from now might be integrated into a software. Right? That that yeah. You're just spending a lot of money creating something that's just it's gonna be in there soon.
James Vanreusel:So you're you're in a way, you're wasting a little bit of
Adam Larson:money. Yeah. But are are you wasting money? Because in that case, you're you're kind of doing the work and kind of understanding how it works so that when it is implemented, you're in a better place to utilize it within that software or maybe that's not the best use of your money because I feel like in some ways you kinda have to prepare and and learn how these things are working before it gets implemented in one of your softwares that you're using.
James Vanreusel:I would say I would say yes to both. Okay. You know, learning it is really important. And and I've you know, I'm going through a a class right now. It's not a particularly challenging class, but it just it just opens up your mind to the possibilities.
James Vanreusel:Right? And some of it's just here's how I'm using it with PowerPoint and with Excel, and here's how I'm, you know, integrating it with, you know, we use something called shortcut dot that is it's been around for a little while. You know, it's Excel that sits on Claude before Claude was, you know, kind of became more prominent over the last nine months or so. And so that so that's been really great for Excel modeling. Yeah.
James Vanreusel:But but I'm but I'm weary of kind of, hey. Let's build 10 new agents.
Adam Larson:I see what you're saying.
James Vanreusel:You know, and spending a $100,000, and it's like, you know, twelve months from now, it's it's available for free in a way.
Adam Larson:It's available for free or very very nominal monthly fee. You're like, oh, I can do that. Yeah.
James Vanreusel:Yeah. So so so that's the you know, that's what I'm talking about. But, yeah, you've gotta somehow you have to keep learning. You know? And I've signed up for another class in July that's a lot more challenging.
James Vanreusel:So we'll see how that goes. But but but that but that'll probably stretch stretch my my knowledge ability because it goes into, you know, coding and different things.
Adam Larson:Mhmm. Well, and and organizations like Claude have, like, have added their own little plug in. You can just plug it in right into your Excel so you don't even need a separate software and you can just type it in on the side. And then, you know, they're also like, doing those free classes where people can just get in there. So I think I think they're realizing, hey, if we educate people, we're gonna get more use out of this.
Adam Larson:And it's kind of helping broaden it for more people. And even the amount of commercials you see on TV for ChatGBT or Claude, it's very interesting how much they're promoting themselves. Like, hey, here, you can go fix your car just by putting a a chat into ChatGBT and it'll tell you all the steps and then you can do it too. An interesting marketing campaign.
James Vanreusel:Yeah. Yeah. Yeah. I mean, I I I I do feel like we're we're we're just scratching the surface of how we're using You know? This is this somebody this morning just said, hey.
James Vanreusel:You know, what's that plant behind you? And so I just turned my back and took a photo of it and put it into ChatGeePT, and it actually told me, you know, hey. Some of the tips on the leaves are a little brown. Here's how to here's how to, you know, get rid of that and take better care of your plant.
Adam Larson:Yeah. It's it's really cool. The the applications even outside of our work, you know, some people are like were saying like how where we have this amazing tool in front of us and we're still using it just like a calculator. We need to start imagining all the great things we can do with it as opposed to just, you know, using it for one small thing.
James Vanreusel:Yeah. Yeah. Exactly. You
Adam Larson:know, so I wanna get back to the, you know, the accounting of things. You know, you you when we work with different nonprofits, for profit business, startups, growing companies, I mean, we kind of talked about that earlier. When you talk about, the management accounting, the accounting within the organizations, what are some of the core issues that are showing up as you're helping them become better? Does it differ depending on the industry or the type of organization?
James Vanreusel:Yeah. So so it does depend on on the industry. So I think that, you know, there's the core accounting side, right, which is the the, you know, closing the books and the the accruals and the journal adjustments and and all of that stuff. And then there's the, I I would say, the more strategic. So you take the numbers and you think about, okay, what are the important KPIs?
James Vanreusel:Right? And and that'll include, like, how do we calculate pricing? Right. Based on the margins. And and I've been telling, you know, I've been telling people how important your chart of account is now because it's always been kind of a this is just an accounting thing.
James Vanreusel:It's boring. But but it's it's really important because you need to be capturing, you know, for for a lot of organizations, you know, revenue, you know, direct margin, gross margin, operating margin, contribution margin, you know, whatever you need to calculate and you wanna see, it needs to be in there. And then, you know, for for lots of for profit companies, they have the, you know, customer acquisition cost, lifetime value of a customer. So you need to be able to look at, you know, break down, you know, customer p and l's, you know, timekeeping, invoicing. So there's lots of more detailed information you wanna dig into to do, you know, kind of, you know, what they call the management accounting a little bit and the financial analysis, you know, and the management accounting kind of kind of shifts a little bit into FP and A as well.
James Vanreusel:Mhmm. Because it's really analytical work. And a lot of the time, this analytical work, if if you understand what you're looking for and trying to to calculate that I think that's where AI is really strong. Because because you can you can ask, you know, with the data, you can ask it lots of great strategic questions that can unlock kind of your thinking and come up with with, you know, with with good models. Right?
James Vanreusel:I mentioned shortcut.ai. So if you're looking at pricing, what are the possibilities? What should I be looking at? You know, assuming, you know, gross margins of, you know, 30%, 40%, 50%, like lots of different scenarios. Just really just really powerful.
Adam Larson:It is really powerful. I was talking to somebody recently and they were saying that you should think of AI as kind of like your junior accountant, where you're you can put your information in and get stuff back, but you still need a senior accountant to kinda double check it and make sure that everything's good before it goes out. Do you agree with that kind of assessment?
James Vanreusel:Yeah. Yep. Yeah. So I so I think that, you know, that's where a little bit of the, you know, the agents come in.
Adam Larson:Yeah.
James Vanreusel:Right? And and can we get somebody to do the bank reconciliations for us that, you know, like you mentioned, you know, can take a couple of days to to to get done, to get right. But but do we do we really need a, you know, a human being to do it? Can AI just do it? And, know, and can it be done in real time?
James Vanreusel:Right? So if if you if you wanna close by, you know, the third of the month, you probably wanna be doing you know, the the the secret has always been you start the week before the end of the month. Right? Yeah. And you start, know, you start closing the books like, you know, closing May started May, you know, May 21, say.
James Vanreusel:And so you start, you know, for for for those ten days already closing so that you can close by June 3 or June 4. And that's really what what the agents, you know, can can help with. And and then that opens up time for for the rest of the team to to think about these deeper questions and to come up with with better numbers, you know, better better data sources to do the calculations with.
Adam Larson:Yeah. And I I think that's what a lot of the as we kinda talked about the the like, some of the newer ERPs that are they're they're proclaiming that, hey, we do real time bank reconciliations, and I wonder I think that's gonna that's gonna be a real huge difference maker in the close process for sure.
James Vanreusel:Yeah. Yeah. You know, and and and and as you think about it as like a CFO, like the manager of the whole function, you know, the like, the first ten days of the month, like, don't go to the accounting team and ask questions, you know, if you're not if you're outside of of that function because everyone's too busy. Right? It just, like, shuts down.
James Vanreusel:Right? And and and that's not what you want. You want you want people to be available to to support the organization and not just be so, like, buried in in the close every month.
Adam Larson:Yeah. So, you know, this has been a great conversation, James. I really appreciate your insight. And so, you know, if you could leave our listeners as one thing to think about differently, whether it's about their data, processes, technology, or even just how they see their own role, what would that be as we finish things up?
James Vanreusel:Yeah. I'd probably think about the, you know, the role. And I think, you know, the role in your career, you know, I I I always, you know, as a, I don't know, a consultant or a fractional person, I always think about how can I work my way out of a job? Right. And I think if if, you know, your your role, I think your role is always if you want to get promoted, you need to work your way out of your current job.
James Vanreusel:Right? And do it as as well as possible. Get you know, give as much you know, delegate as much work and be able to start looking at how can I do my boss's work? How can I excel and and think like a person at the next level? And and I think, you know, keeping up with AI and how that can help you is is really, you know, one of the keys to doing that.
James Vanreusel:You know, if if I'm a if I'm a senior accountant, how can I use AI to help me with the close? Because if if if I can spend half, you know, 50% less time doing that, that gives me 50% more time to do further analytics, help my boss, you know, and that's that's just how you're gonna excel. So I wouldn't look at, you know, AI and anything else as constricting me or taking my job. Would say, great. This is going to help me do more and move up faster.
Adam Larson:Yeah, definitely. Well, James, thank you again for coming on the podcast. Really great chatting with you, and we look forward to chatting with you again sometime.
James Vanreusel:K. Great. Thank you, Adam. It's been a pleasure.
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