The Modern CPA Success Show: Episode 21
Today, we are sitting down with Jamie Nau, Adam Hale, and Justin Hatch from Reach Reporting to talk about dashboarding and financial statements. Reach Reporting is a company that creates visually appealing financial statements.
Signing up for Reach Reporting one of the most valuable changes we have made at Summit CPA, so we are talking about our new processes use this tool.
Jamie Nau: Hello, welcome to today's podcast. Once again you have Jamie and Adam Hale here from Summit CPA. Today we have a special guest, Justin Hatch from Reach Reporting. Today we're going to talk about dashboard's and financial statements. So this is a change that some of our CPAs made over the last year. I would venture to guess this is probably one of the most impactful changes we've made. So we wanted to bring Justin on to kind of talk about his company and also we'll go into some of the details of the changes we made and what a great impact it has made for our clients and our employees. So Justin, you want to start us off with a quick introduction to yourself, and your company so the listeners know more.
Justin Hatch: So I'm Justin, as Jamie mentioned, I started Reach Reporting about, actually I just looked this morning and it has been about five years and six months ago, so back in 2015. We started a bit different than to what the organization is now. Same team, but when we started we were really focusing on the financials for small businesses. Just specifically, not at all in any way targeting their advisors, not providing it to their bookkeepers, to their accountants in any way, by providing it simply to the business, and thinking we could provide metrics, with the advancements of technology, we could provide these KPIs and provide them with such amazing insights that they would be able to become billionaires overnight.
Adam Hale: That's all they needed. That was the best part.
All: Laughing [in audible]
Justin Hatch: That was the part. If we could provide that, we were going to be billionaires overnight. So we built, we built, we built, and then interestingly, we found that not only was that not our target audience, I mean, indirectly it was, but directly it wasn't, because a lot of times the smaller businesses, the startups, they feel like they already know everything and they already have all of the insights. They already have all of the knowledge and they don't want it. They don't want somebody telling them, and additionally they can't afford this software. They have to be thinking lean and mean. And what we noticed over time is that we had this audience that kept coming back to us, and that was these accountants that were phenomenally professional. And they were so skilled in their trade, and they had these series of clients that they were trying to find these similar ratios, metrics, but with that custom touch. I mean it didn't take us getting hit in the head that many times to realize that this was the market we needed to be working in. So we revise the software, we changed the name and everything, and that's kind of where it's gone.
Adam Hale: From our side, it’s funny how you kind of evolved. I would say from like an accountants perspective, what we find is that those clients, sometimes they have some really cool, shiny tools, but then we don't usually find them very effective, like you said, one, because we can't play with them and tell the right story. But the other side of things is like we get a lot of clients that come to us, and we educate the clients on what the metrics are, but they don't know what to do with them. So it's like cool, I have the information now what do I do with it? So really, they need somebody like the advisor to come in and help them with the storytelling aspect. So even if they had it, they don't really know what to do with it. And so that's probably partially the reasons why you were finding also that the advisors were coming back.
Justin Hatch: Yeah, and honestly, I think it's one hundred percent because so often they're getting a metric that they're getting well, I mean, what is it really? They're getting the statements out of Quickbooks, right? So you get these like canned statements and they're like, is this good? Are we good? And it's not like they need their hand held. And they didn't. We're not condescending to them. We're not babysitting them, but we're just providing a professional analysis to accountants. And so what Reach does is it simply just enables them to bridge that gap. That ship has sailed where we think we can come up with these magical metrics to make billionaires. That ship sailed years ago. What we do now is we literally enabled the person who can make them really successful, the person that is sitting up in that in that crow's nest. They can see the land far away and they can really guide the ship to where it needs to go. They can also see the big waves coming to see these scary things. And so that's what we enable. And I think that right there is the entire value of any metric. It's providing directives. It's providing drivers. It's saying to them hey, what button do I need to push? If I push it as many times as possible or as hard as possible or whatever, that is going to make me more profitable, more successful.
Jamie Nau: And I think that's the benefit we found from Reach Reporting. Obviously, with anything we do, we always take a couple of wrong turns. And so we've tried other tools out. And I think what really benefit us from Reach is that we can make it look how we want it to look. It wasn't canned, and we were able to work on them. We were able to modify it so we could tell our clients, this is what you’re looking for, you know, this is the path you need to go down. It's not always the same for every client. Some clients it might be one metric, and for another one it might be something completely different. We wanted to make it adaptable. So I think that's the path that we went down. Adam, do you want to go down that path a little bit more, just kind of talk about the couple of steps we took in order to find Reach Reporting and kind of why it's so important for us?
Adam Hale: Yeah, I mean Justin emailed me like one hundred times, I kept putting him in my folder. No, we were on this endless search. Our IT team is fantastic, and I know a lot of firms don't have that kind of resource.
Justin Hatch: I second that your IT team is fantastic.
Adam Hale: That part's cool. But even at that, we still struggled because for a lot of this stuff, you have to be a developer. And so we wanted all this flexibility that these really advanced tools would give us. But even the advanced tools, they didn't really have like a slick, or sexy front end at all. They looked really, they looked like our spreadsheets. So they didn't really look very cool either. So then whenever we'd find the slick looking stuff, I don't know, it was just one of those things where we wanted to be able to tinker with. Another big hang up that we had was the ability to actually turn it into a PDF. I know we were kind of getting away from PDFs, but at the end of the day, like, sometimes the client just needs to be able to hand that stuff off to the bank or whomever gets it out.
Justin Hatch: Print it out. Pass it out.
Adam Hale: Yeah. So, I mean, even though we were not delivering that way, they still sometimes had to deliver that way. And I don't want to give, like, their banker access to their all their dashboards with all their metrics all the time. So we wanted to be able to have that, and we weren't finding a solution for that. So whenever I met and talked to Justin, and he showed me the tour, I mean, it looked amazing. I mean, it looked like something that I of all people could kind of play around with. Probably not still completely true, but close enough as close as I'm going to get. And so, like Jake, who's our IT director, I was constantly handing him people for all kinds of different things. So that poor guy, he was like meeting people every other week for a long time. And I said, well, here's another one. Check them out, see what you think. He came back and he's like, yep, I think that's what we're going with. I was surprised only because he comes back, usually in our meetings and like, this is why it wouldn't work. Or I like this, but these are the twelve reasons why we can't go with them. So whenever he came back and said, no, I think it's scalable. I think it's user friendly. Also to the point, we were using a different product at the time, and he was tired of being the IT support for every time someone just barely touch the product. So some of it was his own selfish need to be released from that process.
Jamie Nau: That's the interesting part for me, Adam. We started with Excel where everybody was the IT guy. And of course, the complaints from our team was nine times out of ten, the file works. But if Excel breaks, I'm spending ten hours to try to get it to work, and it just ruins my whole week, and now I'm behind in all my financial statements. So we knew Excel was not the option. So then we went to a more cookie cutter program, but where it was pretty complex. There were issues where we were always waiting on our two IT people. So again, we were still hitting way too many bumps. Then we found Reach where it is a little bit of the best of both worlds. With a lot of the small fixes, a lot of the customization, it's easy enough for our accounts and CFOs to use. That's the interesting path we've gone down.
Justin Hatch: This could easily, like quickly transition from like a startup, to pump people up and get them excited about starting a business, because the funny thing was we spent to one to three, it was three and change. Three plus years just kicking against the bricks, so to speak. Everything we tried just didn't seem to quite connect, didn't resonate. It wasn't working. And part of it was, again, the audience part of it was the fact that we didn't have the advisor in there with it. That was a big part of it. But the other part of it was there was just so many little things that we weren't providing. So we spent all this time trying to make friends, and we couldn't make any friends no matter what we did on the playground. And looking back in hindsight, totally cliché, right? But looking back, I now am so grateful for that opportunity because that changed everything about how we created the software. The software really was designed for small businesses, literally was designed to deliver a message to small businesses. And then we developed it. And in that additional two years we developed it locally to be able to meet the needs of big firms. And what we looked at, as we said, is there a way that we could enable these CPAs to be the best storytellers out there? Because we know one thing we learned in those three years is that small businesses often have no idea what's happening in the business. Often they don't know what the P&L is trying to tell them. They don't even know what the balance sheet really does or its value. They certainly don't know what the cash flow statement is. That's the bottom one that nobody really ever looks at anyway. This was a major problem. So once we realized that if we can deliver a message in a way that is super, super interesting, that is actually borderline captivating where they are like yeah, these are all my numbers. This is my business. I have been looking at this for years, and now you're telling the story to me in a way that I've never been seen before. If we could figure out a way to do that, we figured that would be the game changer. That would be the thing that makes all the difference.
Adam Hale: And from my perspective, like I think I'm a pretty good damn storyteller. So what I wanted was something that my team could put together fast and easy, that I didn't have to reinvent the wheel, or in Excel that would crash, or waiting two hours for something. I wanted something that my clients could tinker with. Our clients like to tinker, and have access so that can say oh hey, you forgot to upload my financials, or send them to me or whatever. They have access to it real time. I love the fact that I can send different reports. I can send it to like eight different people on the client side instead of just a client, and then pay for each additional user, like that always sucked. So that flexibility is super cool. And then I just wanted something that look cool.
Justin Hatch: The best story books look cool, true story.
Adam Hale: Optics matter. So whenever the client pulls it up, and as Jamie mentioned, we might see the story change each time. So I might pull these two or these three, and the cool thing is we've been like assembling a library of stuff. I mean, you have great templates that you put together. But then we've also been assembling a library and we can pull that stuff in and out. We might have a ton of different dashboards, but whenever we go to look at the books, if we hop in and we see, oh, this looks messy, we skip all the other stuff, we just go straight to where the mess is and we're able to, like, go down that rabbit hole a little bit. I mean, it makes a world of difference in terms of the storytelling, because we have all those metrics already built out and we know how to, like, funnel through them which is cool.
Justin Hatch: It's interesting too, that a lot of the accountants we work with, they will have a dashboard for their client that is specifically designed for them to look at. They don't ever share it with any of their clients, which I think is fascinating because even us, we want to have the story told to us, but in a way that we understand, and that goes down to that DIWK pyramid that we've talked about before. Whatever level of understanding are we at, whatever level that is, we want to have that knowledge disseminated to us. I was sitting in front of a board. I think I shared this before, Adam. But I was sitting in front of this board of directors at my former company. I was their VP of Business Development. I was running this department of Mechanical Engineers among a bunch of other things that we were doing. We created all these phenomenal products. So I go into this board meeting and I'm like, all right, they have the smartest people on earth on this board, I'm not even kidding. We have the CFO of NASA. We have guys that are running big investment firms. We have got I mean, these guys are phenomenally intelligent. And so I'm like, I'm scared, right? I had those little drops of sweat up there on my brow. So I go into this meeting and I'm dropping every big word that I know. I'm about three minutes in and, it was the CFO of NASA that stopped me. And he said, he's the NSA dude, and he's like Justin, can you give it to us in a way that we can just make some decisions off the information? I'm like, what? We were talking about flame impingement rectification, you love this stuff. And they were like, we don't know what those words mean. And I'm like the CFO of NASA doesn't know, and I'm sure he did. I'm sure he was probably just trying to have me simplify it. But the lesson I learned is that if any time we disseminate information, any time we provide information, no matter when, no matter where we are, no matter who we're talking to, we absolutely need to absorb complexity. We need to make the story simpler.
Jamie Nau: That's a hundred percent true. I've had my whole career in finance and accounting and I learned that pretty early on. What I have always said in any role is, because you have accountants coming in and trying to explain this really complex thing to you, and you're like, whoa, whoa, slow down. Pretend I'm my 10 year old daughter and explain this to me in that way. I think that's again, that's the key to finance. There's really brilliant people in finance and accounting, but they can't get down to like the average person's level. And so I think that is key. I think that's what's great about us being able to build our own dashboards and financial statements. A lot of times business owners, they know their business inside and out, but when you start talking finance, they get intimidated and they get confused and they're like oh, well, wait, wait, wait, wait let's slow down and talk about this in a different way. So Justin a lot the companies that listen to this are a 2 to 3 person accounting firm. So Adam mentioned we have a brilliant It guy, Jake. But if I'm a 2 to 3 person accounting firm, I'm interested in Reach Reporting, what would that process look like to get it set up? Can you walk us through that a little bit?
Justin Hatch: Oh, yeah. Yeah, absolutely. Reach Reporting is designed to be really, really intuitive for when you connect the company. So the very first thing you when you get it in there, it points you to how to connect QuickBooks or Zero Company and then you can connect the company. And what we like is, we like to absorb complexity and we are serious about it. So as soon as you log in, as soon as that company is connected, we've already populated a whole series of dashboards and a whole series of reports for you. They're populated with the clients numbers we have their finances. In fact, we also throw in a bunch of metrics that are pretty high level metrics, I'll be honest. But they're still metrics that provide insight. We believe very strongly just as a tangent, but we believe very strongly in how to tell the story and that a story needs to be told in a milk before meat fashion. We start with the simple stuff and then you can get into the complex stuff. But so often when we receive a report, it's just all complex. And so we have to really buckle down to understand it. So when an accountant comes in they will connect the clients Quickbooks or Zero Company. Those reports are populated. And then I would encourage them to just go through each of those reports and start looking and saying okay, what are these reports saying? What's the message that you're delivering? Most of the reports are pretty candid in such a way that you can literally go up to the top left, PDF it, and it will it'll drop right onto your desktop and you can send it to your client. I personally love just kind of combing through the numbers for the first time, looking at the trends, because it's so interesting. Even for accountants it's interesting for us to see okay, this is a different way of looking at these numbers. I've been looking at it this way. This is now showing a trend and it's comparing this ratio to this ratio on the same graph. That's really interesting. It's providing even me, the accountant, this deeper understanding of the business. Then as you start to get into that, then really listening to the client, what's the client saying? What's the client not saying? That is sometimes just as informative as what they're saying, what they are not saying? So listen to those things to really understand where they stand. Our egos want to protect us all the time. Just like I did in that board meeting, we try to say all the big words that we know, we try to protect ourselves, and that's totally human and it's totally amazing. But we have to recognize that as we're talking to our clients to try to understand okay, what are they saying? What do they really understand, and what do they really want? And then how do I provide reports that can deliver that?
Adam Hale: I think that even from a beginning dashboard face, like you said, I mean, if you want to keep it industry agnostic, you've got to start with the high level metrics anyway. But I really do think just the value in having something that's connected, I mean, QuickBooks’ reports are ugly. I mean, they just again, I'm going back to the cuteness factor. But when people are paying you a lot of money for advisory stuff and you give them just like some canned piece of crap out of the accounting software, like, it's definitely a knock on your professionalism for sure. So those things just don't look that great. And in some instances, clients have never really seen those reports in QuickBooks anyway, you know what I mean? So they haven't even looked at their financials. So just being able to have a medium where they can log in and see a digital product that you've kind of put together, even if it is just literally you've connected it and go, I think that's a huge win to be able to print it in a nice fashion, and make it look good.
Justin Hatch: Clients go crazy for it.
Adam Hale: Yeah, that's what I'm saying. I think the money's worth it just in the delivery. I get so many CPA firms that come up to me and they're just like, how do you deliver the product? I need to clean this thing up and make it look good every time. How do I get it from A to Z as fast as possible.
Justin Hatch: Without spending so many hours that your margins are so thin you just can't do anything.
Jamie Nau: That's where it saved us. That was our big thing you know, we have our accountants and we're always trying to get them to have a larger book of business. How many clients do you manage? And when each financial statement takes six hours, that's very limiting for how many clients we can give a senior because most people want their financial statements in a very short period of time. It's that second, or third week that we have to get all financial statements out and if the financial statements take too long to produce we're limiting their book. Where if we have these things that are just done instantly, and we're spending our time reviewing and we're spending our time actually looking at the accuracy of these reports, and then they look, to Adams point cute, I mean it just makes us look so much more professional.
Adam Hale: I like cute.
Jamie Nau: Yes. Adam likes cute.
Justin Hatch: And look, the client likes feeling sophisticated. That's really what it is. When my graphic designers give me something that's Reach Reporting and it's like super good looking and professional, I'm like, yes, this is cool. I'm proud of it. I want to show other people, and our clients are going to do that.
Adam Hale: That reminds me of the old days. Whenever I do the binders, we had our company colors, had the clear cover at the beginning, had really thick paper, I felt like a million bucks walking and putting it on the table. It was like my business card is nicer than yours kind of thing. But it definitely does speak volumes in terms of delivery. And then just again, ease of use. I think whenever we estimated it, I mean pretty fair numbers. We think we save about fifteen thousand dollars a month in just delivery, that is at a cost level. We do a one hundred and twenty five, or so monthly financials. But I mean, just saving a couple of hours each month per person.
Justin Hatch: Well, and then you can scale and add three more clients, especially if they're in certain verticals, because now you're using I mean, that's another thing that's kind of cool about Reach. I don't want to have a shameless plug in here, but what I really love and one of the things with that a lot of complexity is the ability to build one report for one client, and then share it with another client and have it populate with that client data. Say you are building for it for cross fit boxes and you've worked really, really hard on, you can now distribute it to the next one and the next one, and it'll automatically populate with that relative client's own data.
Adam Hale: Building off that, I was just going to say Jamie, what I think is really important too, is the combined financials. I don't know if you're going down that road in the classes. It's really hard to build a combined financial statement in just Excel, or whatever and get everything to line up. It's sometimes. same way with the classes to be able to get something that's really digestible and to be able to do that with such ease. If you are stacking multiple companies together, or if you're having multiple classes, this is a great product for that as well.
Jamie Nau: I was actually going down the onboarding road. I'm not sure in that calculation that you threw out there Adam, that onboarding was even put into that savings, because that's one of the areas I think that we're saving a ton of time. Every time we had a client come in, we had to figure out how to put them into our Excel financial statements, and we had to have fully dedicated IT guy spend a full week working through that part of the onboarding. Now, like you said, it's plug and play. We connect the financial statements, we connect the forecast, and it's already in there. So it's more like, again, I talk about this quite often, it's more about reviewing than doing the dirty work. If you spend 20 hours trying to get numbers put together, you're not going to be willing to spend too many hours doing the review. Where if it's just a push of a button, you're willing to spend 10 hours really diving into those numbers and making sure they make sense.
Justin Hatch: We become curators at that point.
Jamie Nau: Exactly.
Justin Hatch: There was this sweet lady, her name is Billy Ann, and she's a really good friend of ours, and when we were first starting down this path, we were talking about all of the work she had to do to build each record every single month. She brought it out of QuickBooks. She would put it into Excel to build it, and she would reconnect everything. She would build all of the KPIs for several charts and graphs, we took screenshots of that. She would drag it over into Microsoft Word, and make her comments in Microsoft Word. And it actually broke my heart because we loved Billy Anne, and we were like this cannot happen. This absolutely cannot happen. We have to figure out a way for her to not have to do this again next month. And then the beauty is instead of becoming this person that's constantly in this mode of creating a new report, you become a curator. That's a completely different thing. Now you're dealing with something that is entirely different. And if you decide, like you said, Jamie, to spend 10 hours one month, you're now improving this report so dramatically because the following month it's going to have all of the stuff you did before, plus all of the template that you built it off of, plus all of the stuff you did last month. And it's now providing that additional level of knowledge, understanding, wisdom even, into the specific needs of the client. The client can say, hey, I'm a little bit confused about this. I'm wondering about this? Can we see the sales goal, or what's this going to do? You can build that right into the report. Then the next month, it's still there. It's already updated with new numbers. Boom you are gold.
Jamie Nau: Awesome. So we are getting a little close on time here, so I'm just going to throw our email address out there because again, we trying to make this podcast for our listeners. So if you have any topics, if you want to be a guest, feel free to email us at: firstname.lastname@example.org. We'd love to hear from you. So Adam, Justin, any final thoughts before we end this podcast?
Adam Hale: If you want a discount email us, we've got a connect. We know the CEO, so let us know. We've got a code.
Justin Hatch: It is a good discount, so please definitely use it.
Adam Hale: Yeah, it is. So he's been gracious enough to work with our CPA community and everything that we're trying to create to get people delivering VCFO services. So if you have been stuck, or if you feel like it's been a tough process, I know it was for us, you know, just trying to get the right tools. My advice would be just to give it a shot, get started. For us Reach Reporting was definitely more user friendly than the options that we went down with in the past.
Justin Hatch: I'm going to even spin that around and say I deal with a CPA firms all day, every day. With accountants that have one, two, three clients, to accountants that have hundreds to thousands of clients. I've never even really told you this, but I have been so impressed at the operation you guys are running. It is one of the most efficient operations that I've seen ever. Most of the time people are living in the Stone Age, and accounting firms are no different. There's a lot of them that could be making so much more money if they would just kind of come into the 21st century a little bit more. So thank you for having me on the show. Thank you for all you guys are doing for the industry as a whole, and really moving it forward.
Jamie Nau: Yeah so if any of our listeners out there feel like they are in the Stone Age, I think Reach Reporting is the place to start. We started this year, and to me, you know, we did the cash flow podcast as well, but I think those two changes have helped us in so many ways that we all covered in this podcast. So I think this is a great place to start, because it's just it makes you look much more sophisticated and it saves so much time. So those are two huge benefits. Thanks for joining us, Justin and Adam. Thanks to our listeners. We will be back soon with the next podcast.
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