tax season turns into ‘advisory season,’ and a whole new niche is born.
^ click to play
by 卡塔尔世界杯常规比赛时间 research
gabrielle luoma, long one of the profession’s leading innovators, says the future under covid-19 belongs to the quick and the smart, in this exclusive video interview with 卡塔尔世界杯常规比赛时间. firms will need to deploy new services to attract new clients who may have not realized that they needed a firm like yours but now do.
more covid conversations: the covid outlook with darren root and joel hughes: a long, slow climb back to recovery | steven sacks: covid crisis management | jean caragher: how to fight ‘fear’ and ‘insecurity’ | sarah dobek: learning how to operate in the new normal | august aquila: what comes next? | jody grunden: covid and client communications | andrew argue: on a mission | martin bissett: covid slams u.k. accountants, too | bill reeb: separating the winners and losers |
exclusively for pro members. log in here or 2022世界杯足球排名 today.
^ play or download the podcast version
in this conversation, luoma talks about what’s going on in the business, what’s going on with tax season, and what the future holds for cpa firms and the clients of cpa firms.
speaking from her base in tucson, ariz., the ceo of mod ventures is bringing some of her dna to regional powerhouse beach fleischman through a joint venture.
we started by asking about “when it got real?”
she responds, “we truly are affected by the whole world. we have clients in new york. things changed for them rather quickly. and when they started changing, we started realizing, ‘oh, my goodness, we’re going to have to really buckle down.’ in arizona, we started seeing shutdowns mid-march. that’s when things really got real for us because then we started seeing that the businesses that we work with on a regular basis – we’re outsourced accounting, so we work with clients weekly, – we knew that we could be in trouble. we started working really hard on transitioning, and seeing what we needed to do to help our clients quickly.”
for pro members-only: get the transcript:
[00:00:00] rick telberg: we’re here today with gabby luoma from tucson, arizona, ceo of mod ventures. mod ventures is a joint venture with beach fleischman, a large established firm in arizona. gabby – always a pioneer in this business, in terms of cpa firm business model and in the use of technology – is bringing some of her dna to that big firm of 25, 26 partners. we’re going to hear today from gabby on what’s going on in the business, what’s going on with tax season and what the future holds for cpa firms and the clients of cpa firms. when did you know that the covid crisis was real? how did it impact your firm and when?
[00:00:47] gabby luoma: we’re in arizona, and we do have clients throughout the united states. to say that we’re just impacted by the arizona world is a little bit different than– we truly are affected by the whole world. we have clients in new york that things changed for them rather quickly, and when they started changing we started realizing, “oh, my goodness, we’re going to have to really buckle down.” in arizona, we started seeing shutdowns mid-march and that’s when the governor came out and really set up the who are essential businesses and such, and then the cities and towns started shutting down businesses.
that’s when things really got real for us because then we started seeing that the businesses that we work with on a regular basis — we’re outsourced accounting. we work with clients on a regular basis, weekly, and when we started seeing that things were going to be shut down, we knew that potentially we could be in trouble. we started working really hard on transitioning and seeing what we needed to do to help our clients quickly.
[00:01:56] rick telberg: when things got real, what did you have to do, what adjustments did you have to make?
[00:02:04] gabby luoma: really early on we started talking about our business owners were going to be needing to make adjustments to payments that they were going to make to vendors. we were going to have to start sending out letters asking for extensions, so we came up with a template right away. we started putting out as much information as we could through marketing in our newsletters and directly to clients what we knew as things were unfolding.
our communication just quadrupled, we had to put out information as quickly as we possibly could and let people know there’s hope. we’re going to be seeing some loans out. the disaster loans are coming out. some people were really, really in a panic, and so we had to let people know that there was hope. let’s keep a level head, lets keep moving forward. let’s start creating some plans for the future and hopefully calm the storm that they were starting to feel. i would say this started happening probably beginning of april because for sure after a week of no business coming in, it’s a whole new world.
[00:03:09] rick telberg: what do you call this new mode? it’s not tax season mode. it’s not extension season mode. is it ppt season mode? is it covid-release season mode? is it just a season or is it something that will continue for a while?
[00:03:24] gabby luoma: i don’t know how to define it exactly. i think it’s a time for us to be in the advisory mode and maybe it’s advisory season. maybe that’s what’s happening. it’s time for us to really pull our pants up and get our hands dirty, deep into where each and every client is, and see how we can help them survive. new mode [laughs].
[00:03:52] rick telberg: new mode. that would be a new advisory season mode. which clients or which kinds of clients are the most negatively impacted by this?
[00:04:04] gabby luoma: our gyms have been the worst. the gym owners have been absolutely the worst. i think it’s been really hard for them to pivot in the fact that they have this commercial building full of equipment that they are needing to either pay for or keep going, because that’s how they get paid, it’s membership-based. when people can’t come in and use the equipment or use those services, then immediately they’re impacted by membership loss.
i think that was probably one of the first clients that we saw that was dramatically impacted. now we have restaurants that have changed up how they do business and are pivoting to delivery or curbside delivery, those sorts of things. the gyms have been the worst, i think, out of most of our clients. next, i would say probably the doctors who did more the elective type of work. dentists, very, very difficult for them because their business stopped overnight as well. we’re seeing a lot of health and wellness types of clients in our work that just have not been able to really pivot. there’s really nowhere to go.
[00:05:19] rick telberg: gabby, do you have an idea of how long these conditions might continue?
[00:05:27] gabby luoma: people are scared and so i don’t think it matters what state you’re in. there’s going to be some people who are going to go out and do business as usual. then there’s going to be a third that will be waiting just a little while, and then there’s going to be a whole another third that is going to be like, “we’re not going out until august or september.” it’s going to be a slow progression.
i think we’re seeing a lot of things across the news where restaurants are saying, “i can’t open just partially. there’s no way i can make a living.” those shutdowns may last for longer. it really probably just depends on the industry and it depends on the state that you’re in.
[00:06:06] rick telberg: how much damage will covid have caused by the time we get on the other side of this, whenever that is?
[00:06:14] gabby luoma: it really has been minimized by the need for new service. what we’ve, let’s say, lost or may be discontinued for a brief period of time, we’re gaining back in new business. although a lot of firms may be completely losing clients, we’re gaining clients, i would say, but only because of our business model, and what we do for those businesses with outsourced accounting services, it’s like another disaster measure that they can take to outsource their accounting and have it in the cloud, which they didn’t have before.
i hate to be so optimistic, but this is an opportunity for us and for cpas across the nation to really move their practice into a virtual type of format. i call them our big brother firm, beachfleischman. they had to go virtual very quickly and having to have a remote workforce. very quickly, they had to move into that direction. we were very fortunate in that we were already there. the damage of not being able to move quickly, they’re not going to have that same problem because they moved quickly but other firms who are unable to move quickly, who are not set up the way that we are, will have a lot more challenges in the future, let’s say.
[00:07:38] rick telberg: some people have told me that the things that they were planning to do for five or six years and were insisting couldn’t be done, they figured out a way to do it in five or six days. a lot of firms have gone virtual, gone remote, figured this out in a hurry, and are still working out some of the wrinkles. you were there first. you were there early. you were prepared. what kind of new business services and what kind of new business are you bringing in these days?
[00:08:09] gabby luoma: we’ve had a lot of people who have just really started paying attention to their finances. i’m going to say that we’ve had clients that have been waiting to come to us, they’re aware that we’re around and they now feel like they need to pull the trigger. i think that the awareness that we’ve already created in the community in what we do, the urgency has just increased. that’s a big part of what’s happened. i don’t know that we’re doing a whole lot of different things. ppp obviously is a whole nother nut to crack but we provide the information, we’ve helped people through that process.
it just seems like something that we do on a regular day basis, anyway. we have the information already done. it’s already provided there. we made a decision early on that we were not going to be hooking up banks with the clients, clients had to find their own banking relationship and work with them but we would provide that information. it’s nothing different than what we would normally do. really, it’s just digging in deeper to what we currently do, and providing those services to people who are now ready to say yes to the service line we already have.
[00:09:26] rick telberg: how well are they working?
[00:09:28] gabby luoma: that’s a really good question [laughs]. i’m seeing across the board that the smaller community banks are doing a better job, and we’re hearing that from everywhere. the whole profession is saying so. my friends that are working with other clients in their areas are saying the same things. i think the small businesses that are working with community banks are doing better. i think the small businesses that got stuck with the larger banks, the chases, obviously, wells fargo, who couldn’t even really help very many of their clients, kind of gotten stuck.
we don’t have a lot that actually qualified for the ppp loan forgiveness. we’re gathering information now to see how many but i want to say it’s probably a handful, no more than 10. out of a business, let’s say, of a total of 500 clients, various ways, 10, it’s not very good. in many ways, i’m happy that we’re starting to get business back going because there’s no help coming for a lot of small businesses. there’s just none.
[00:10:36] rick telberg: that sounds scary.
[00:10:38] gabby luoma: it is.
[00:10:42] rick telberg: what’s going to happen with those small businesses with no help coming?
[00:10:48] gabby luoma: i think a lot of them are going to have to go into a re-start-up mode. it’s a whole new world and they’re going to have to rethink their business back when it was, let’s say, two to three years old. they’re going to have to be really good at marketing. really good at marketing and bringing in their local people to help support them. in the tucson area, we have a big local market where people want you to shop local and they support each other, they post each other’s advertisements on instagram and facebook, and there are groups.
we have a really strong market in the tucson area for shop local. i think that you’re going to have to make friends with a lot of these local businesses so that they support you and make friends with the people, your clients, your customers so that they support you as well so that you can keep around because it’s word of mouth, word of mouth, word of mouth. that’s the best way these small businesses, i think, are going to stay alive.
[00:11:57] rick telberg: that sounds like a difficult situation. it sounds like the american economy is going to look a little bit different on the other side of covid.
[00:12:04] gabby luoma: again, i want to be optimistic. i really do, i want to be optimistic, but i really don’t think we’re going to have the roaring 2020 that we were hoping to have. i think it’s going to be the roaring 2021. i think there is a lot of pent up demand. there are people who want to buy but people are going to be putting off making those buying decisions because of the uncertainty, and because of uncertainty, people will hold on to their money.
i think it will be a time where there will be a little– we’resaying, what? 30 million people that are unemployed. it’s going to take time to get all those people back into the workplace safely, and for all the different safety measures to be taken and implemented properly.
[00:12:59] rick telberg: how many accounting firms won’t make it?
[00:13:05] gabby luoma: i think the accounting profession is a really interesting profession. you have large firms, like the top 50 and they are the ones that are going to be top 100, top 200. they’re the ones that are going to be able to weather the storm probably a lot easier than a smaller practitioner. if you’re a small practitioner and you’re older and you’re getting up into your retirement years, you’re going to have to make a decision. i think this has been the same decision that you’ve had to make probably for the last 10 years, do you want to learn more, or do you want to retire, or do you want to sell and can you sell?
it’s the same decision, it’s just do you have anything to sell them now? that’s where the smaller professionals are going to have a hard time. i really think it’s not just a cpa profession, any profession like if it’s a dentist practice or orthodontist practice we’re all bumping up to the same succession problem. the cpa profession, in particular, technology has been this head butting experience and if you don’t want to learn it, and you don’t want to invest in people learning it in your firm, you will not survive this, it’s not possible, i don’t think you can survive it.
[00:14:21] rick telberg: for many firms, they’re going to have to recommit to a new kind of capital investment whether it’s intellectual capital or hardware capital in terms of technology, or the learning capital in getting everybody up the learning curve, or the marketing capital to re-position, remarket your firm. there’re many firms that don’t run with a lot of capital reserves, they run atms; and for those firms who have to make a pivot, it’s a bad time to try to make a pivot.
[00:14:58] gabby luoma: yes, you’re losing clients because they no longer can afford you or they’re no longer in business. you need to invest in technology, you need to invest the time. that does take time. as you mentioned before, a decision you were going to make for five years out you can make in five days, it’s literally that quick. some of the decisions we made to switch to certain platforms really didn’t take that long once we saw the need.
you have to really want it. if you’re two or three years out from retirement, do you really want it? i think that’s the bottom line is you’re going to have to really want to make those changes. the technology cost has really come down. it’s not quite so much the technology cost, it’s more so the intellectual capital and time you’re going to have to spend diving deep because if you have no one else in your firm to do it, it’s you.
are you going to take this time this low and use it to learn something new? in businesses, people, cpas, are seeing that this is a low time, which a lot of people are seeing this as an opportunity to learn something new. it’s a perfect time. i’m doing that, even though we’re ahead, i want to see what the next thing is. i’m spending time investing an eight hour day each week to see what else we could be doing to improve.
[00:16:27] rick telberg: now, that’s interesting. you’re spending an eight hour day each week investing and seeing what you can improve. what’s that eight hour day look like? what do you do during that eight hour day?
[00:16:38] gabby luoma: well, there are so many different things that are starting to come out like training. i’ve never been a person that just goes to cpa training only. i would go out of my own profession. last week, there was a class with the storytelling brand i think it is. he had a whole day on, “how do you build a story? how do you write a book? how do you write an instagram post?” it was all day and it was $99 investment, really inexpensive and you learn from the best of the best on how to build a story.
that’s what my eight hours look like last week, and they happen to be on tuesday each week. this week was an online conference that had to go online that we would not have had the opportunity to do. it’s called accounting salon. i sat through nine hours of cpe webinar and learned from people who are doing some really amazing things. i didn’t even know about it, but it was just by talking to another colleague in the business that i found out about it.
i’m searching out ways to improve my knowledge and surround myself around different people. it’s been really cool to sit down and say, “i’m going to spend eight hours.” or, “i’m going to take a system and break it down and build out a new process over eight hours.”
i’m using this time to build a better firm.
[00:18:02] rick telberg: when this is all over, what will accounting firms look like, particularly smaller accounting firms?
[00:18:10] gabby luoma: i believe smaller firms are going to come out of this and realize that they’re more than the tax return, that’s my hope. their advisors, they know so much more and they can help so much more and they’re going to realize that it’s so valuable that they learn to charge for it too.
[00:18:31] rick telberg: gabby, i hope you’re right, i hope you’re right. what’s next for the firms that are already virtual?
[00:18:39] gabby luoma: i think the next for the virtual firms are to really define their service lines, get really, really serious about what they’re going to be providing to their clients as they’re evolving their business during this time, getting super tight around process and systems, and building a firm that if you’re not there, will run without you. i think of what are the virtual firms that we have, i mean even the smaller practitioners, they’re predominantly the person and knowledge-bringer of that business.