The Journey to Drive Progress in Public Accounting

This file was generated by Descript Voiceover: Maximize your accounting career by becoming high yield and low maintenance. With The Upstream Leader Podcast, your passport to improved knowledge, skills, and career potential. Stay tuned for insights, expertise, and thought provoking discussion. And now here's your host, Jeremy Clopton.

Jeremy Clopton: Hello everyone and welcome to The Upstream Leader. My name's Jeremy Clopton. Excited to be with you. For today's conversation, we're gonna be talking about how do you make something incredibly progressive in the accounting industry, and then how do you bring that into an actual accounting firm, not just a standalone type of practice.

For that conversation I have with me today, Jody Gron, partner and virtual CFO practice leader at Anders. Jody, great to have you on the show. Jody Grunden: Yeah, Jeremy, thanks for having me. Jeremy Clopton: I'm looking forward to the conversation, because you pioneered subscription-based billing and fully distributed practices decades before it was the cool thing to do.

Jody Grunden: Mm-hmm. Jeremy Clopton: but before we jump into that, I'd love to know, I'm gonna ask the same question I ask everybody. How did you become the leader that you are today? Jody Grunden: That's a funny question actually.

when I went into public accounting, it was one of those things that, I started with Crowe. I worked for bkd, so a couple larger firms, and I realized pretty quickly that public accounting wasn't for me. It was one of those things, like, I just didn't like it hours, I didn't like anything about it really. And I was actually fired from my, from BKD and was told I'd never be successful in accounting.

So it was like the, it was written on the wall that this was not my profession. So I thought, well, you know, hey. It was basically personality based and it was one of those things that just wasn't a good fit. And so I thought, Hey, let's try the corporate world.

And so I did that and I worked for a $250 million manufacturing company. Loved it. worked there for about four years. I would say the first year was like super exciting.

I was able to really take a 50, 60 work. I got down to. Really was loving things. Year two is pretty good.

Year three was getting boring. Year four, I was like, oh my gosh, get me outta here. It was like Groundhog Day. It was over and over, you know, what do I do?

And it just happened that the company was going through layoffs and I was part of that layoff committee. it was just one of those things I thought, you know what? I'm not really enjoying what I do. Why don't I step aside?

And so I talked to the CFO and he said the only way we'll do that is if, you basically continue doing our tax return and, you know, manage that. I'm like. Okay, that I could definitely do that. And so when I started, that it was like a $30,000 tax return and it just kind of got me started.

It was kind of the seed money to get me to where I'm at. And so when I did start, I, worked for a smaller firm for about, six months. I knew that just wasn't a, as like I was back in the same rat race I thought. I'm thinking, you know what?

I can do things a lot differently and a lot better than what, I've seen in public accounting. And then what I've seen at the small firm and then the corporate world, it was like, I gotta figure it out because otherwise, you know, what did I do? I got myself into a profession that I'm just, it was just not for me. And so I, dove into the, public accounting world myself, started as an entrepreneur and, you know, thought, you know, Hey, I'm gonna change the way that people think about accounting and I'm gonna do things differently.

The funny part about it was I started off just like every accountant does, bill by the hour. Sure. I worked a bunch of hours, tried to get things going. I think you really have to do that really when you're starting anything, you know, you got a lot of hours up front.

I hired my first employee without having any revenue, which was kind of interesting. And, you know, with that, he got paid more than I did for about two years and which is my wife really enjoyed that conversation. But, you know, you know, with that, he's still my number one person, you know, and, my COO and he really helped, helped get the, company to where it is today and where it was when I sold it at $10 million. And then, with Anders, he's a vital part of, The service line we put in there.

And so it was just one of those things that, you know, I found that, working for somebody just wasn't for me. And so I had to figure out another way of doing it. And I knew that I didn't like the way it was, so I had to kind of outside the box and try to figure out what works for me. And so it was super selfish.

Right? It was like it. You know what works for me and I'm gonna figure that out and that's what I want to do going forward. And it just happened that I was able to really grow a, a really nice, firm.

We basically doubled our size every three years. We were super profitable. We grew to 10 million with a 25% bottom line. High employee satisfaction, low client turnover.

Everything was just really perfect and it was, set for a really high growth, you know, so it was just one of those things that was it. It worked out, but you had to really think outside the box. 'cause you know, we did a lot of different things. You know, we did the subscription based billing, which was different.

We went virtual. We created this virtual CFO service platform, which really didn't exist prior to that. And, you know, it was all because there was different obstacles in the way. I had to figure out how to get around the obstacle and, okay, let's do this even though it's not done in the accounting world, let's try it anyways and see if it works.

And yet it did work and it just kept failing forward. You know, as I was going through, Jeremy Clopton: I'm gonna say that it just worked out. Might be. The biggest oversimplification of the conversation so far, because I'm gonna go out on a limb and say it didn't just work out.

There was a lot of blood, sweat, and tears. And I love the fact that, I mean, I'm not celebrating the fact that you were fired from anything, but the fact that you were fired from public accounting and told it was not for you, and here you are, we're talking as a you being a partner in a public accounting firm. So, Jody Grunden: yeah, Jeremy Clopton: I don't know what that says. But, it proves to me that if you really know you're in the right place, but it's just not working the way that you feel like it should, you can go be the change that you want to see.

And that's exactly what it sounds like you did. Jody Grunden: Yeah. Jeremy Clopton: I'm curious, you said when you went to corporate Jody Grunden: mm-hmm. Jeremy Clopton: That you automated your 50 or 60 hour work week down to 30.

Yep. I'm gonna go out on a limb and say, that wasn't in the last five years. So when was that you were automating everything to where you were only working 30 hours a week? Jody Grunden: That was back in what, probably 19 nine?

Probably 1998. So a long time ago. Jeremy Clopton: Okay. Jody Grunden: Yeah, Jeremy Clopton: back in the 19 hundreds.

I mean, goodness gracious. Right. So you were Jody Grunden: automating things back then? It kind of, Jeremy Clopton: yeah, Jody Grunden: because they were doing everything by hand.

They were doing, you know, they were, even though they had Excel, they weren't using it properly. they were doing the tax return and, we're talking a two 50 million manufacturing company. They're doing their tax return all by hand with all these paper schedules and stuff like that. And it was like, I knew there's a better way of doing this.

And it was like, and if I was gonna do this for 20 years, which when I went there I thought, you know, that's what I was going to do. I gotta figure this out because I can't do this. I sure this would be so boring. And so when I automated everything, it made it really nice, but also kind of eliminated a lot of what I was.

Hired to do, you know? Jeremy Clopton: Sure. Jody Grunden: and it took my work week down to know you, Jeremy Clopton: you automated yourself out of a job. Jody Grunden: Yeah, pretty much.

Yeah. And I could have done other things, you know, there was a lot of things I could have done, but I was like, ah, I just didn't wanna do that. I didn't wanna to branch out further than what, you know, I really enjoyed doing. And so that's what it was.

You know, it just. It was just automation, trying to think things differently. I think that's kind of just inherent in what I do from no matter what it is. Yeah, Jeremy Clopton: I think that's a really good lesson for leaders that are listening into this though, is when you've got someone who's perhaps newer to a role and they can see that there's a better way.

I'm gonna go out on a limb, Jody, and say that. Your superiors probably did not believe you because they probably didn't see the better way, because who's this guy coming in 1998 saying, we're gonna automate stuff? Jody Grunden: Mm-hmm. Jeremy Clopton: We were still trying to get people to do that in 2026 and not having great success always with automation.

So here you were. Almost 30 years before it was the cool thing to do. Voiceover: Mm-hmm. Jeremy Clopton: Right?

Saying, Hey, we're gonna automate this. They could have easily just said, no, you're gonna keep doing it the way that we've always done it. So there's a lot of value there from a leadership standpoint to say you've, we have to listen to those individuals that bring a new perspective because even if we can't see it. There could be a better way.

I'm curious, how did you convince them there was a better way through automation at that point? Jody Grunden: That's great question. And that's probably the first time someone's asking that question. We, when I took over the position, the gentleman that was there, he was probably in his 65 seventies.

he was an older gentleman that he had done it this way the entire time. And this was the tried and true way of doing it. You know, there was really no other way of doing it. And, he made sure that I understood and knew that.

And so as I'm learning it, I had to figure out what he was doing. And that was a big part of it, understanding the whole process before just jumping in and trying to say. Change the process because I didn't know, I mean, I thought maybe this is the best way of doing it. you just don't know.

So you can't assume that there's a better way necessarily. And so then when I got into it, it was like, wow, I can do all these different things. And I started just making those changes and back then it was basic changes. You, you know, like Excel perfect example, way back in kind of a newer product, you know, in the back in the nineties.

Mm-hmm. You know, a newer product. And, I'm going through it and I'm thinking, why aren't these tables and everything? Footing properly, and I'm, looking through and it took me about an hour to kind walk through and I'm missing something.

Then I realized he didn't have any formulas in it. He was just typing it in as a piece of paper with no formulas, adding things up. It was like, like, oh my gosh, you know, what's going on here? And so that was just, so, that was just a simple fix.

Like, okay, let me. Lemme go and formalize everything and put in the formulas and so that it, fits out right then my job to start increasing responsibilities. But at the same time, the automation was happening. And then I was fortunate enough to have a boss that every time I came to him and, you know, said, you know, Hey, I wanna spend a little bit more money and look into this.

And see if I can make this quicker and faster and better. and Andy gave me that leeway, which was nice. 'cause I really didn't have that in public accounting. the folks that I was working with directly in public account, I, I really didn't have that.

and I had more flexibility here and I think it's because they saw that, hey. You already took a 55 hour work week down to a 40 hour work week, you know you gotta doing something right. And, you know, you're doing things well, getting results and all that kind of stuff. and so it, it was the fact that I looked at it first to understand the process, to see what process I could change, which at that point we were just low hanging fruit.

Very simple stuff. And then from there, as I saw the results, you know, then approach and say, you know, Hey, I think I can do this a little bit differently if I use this software or if I did this and, you know, I was given that opportunity. Now if I would've. Taking that opportunity and failed miserably over and over again.

I guess my limitations would've been pretty, you know, would've been there. So I was fortunate enough to be able to pick the right software, you know, help out with the automation. Jeremy Clopton: Yeah. Jody Grunden: And then just make sure I put the time in.

now, during that phase, it's not like my work week went from 55 to 40 and 30. When I put the automation and jump back up, you know, I'm working 50 hours, I'm putting a lot of data in, creating the automation. To bring it down. So it wasn't like, it just was automatically a gradual thing going down.

And they saw that they saw that as putting the effort in. And I think that was a big part of it, is just the fact that they saw that I was doing it. They knew I was passionate, they knew I had the curiosity, that, you know, really was needed in that position and, I was going to make sure it happened. Jeremy Clopton: Well, and you approached it with respect, which is I'm not just gonna come in and say there's a better way before I actually know the current way.

Jody Grunden: Right. Jeremy Clopton: So you approach the traditional method. With respect rather than contempt, which I would expect built a lot of relational equity with your predecessor and with the other leaders within that organization because it wasn't like, here's this new young guy coming in saying there's a better way and he doesn't even know what we're doing. It was first, I'm gonna respect and understand.

Jody Grunden: Mm-hmm. Jeremy Clopton: And then I'm gonna say, I think there's a better path. This is what it would look like. Let me build it out.

And I love what you shared there so often with technology. It's easy to think, oh, well, somebody's just wanting to work less. But unless you've ever built something like that, you don't recognize, you don't get to efficiency until several months, quarters, or years down the road. Once you recover that initial investment of building the automation, it's not like it's push button and all of a sudden the world is automated.

Jody Grunden: Correct. Jeremy Clopton: It takes so much time, and especially back in the nineties to automate things wasn't even as efficient as it is now. So. I love that, and I think that's a great lesson for leaders is just because somebody is coming in with a new way that can make it more efficient or save time, it doesn't mean that they're inherently looking to work less or that they're lazy.

Arguably, they're looking to invest time in making it better. So let's not confuse time with value. Jody Grunden: Hundred percent agree, because when I started Summit at the time, now working for now working with Andrews. Mm-hmm.

But I started Summit at the time. I was a real big, reader of books. And so I read books like all the time, Hey, what's the newest book that I can read? that's gonna help me, you know, get through this journey?

Because again, I was failing. I was like, I created this great, I was in public accounting. I failed. I went in the corporate world.

I was exciting. Then I, then it was, I failed because I just didn't like it, you know, that was. Feeling for me it was like, you know, what did I needed to do? You know what I need to do?

And I read a book, called E Myth by Michael Gerber, great book. And it, really said, you know, hey, you gotta really build processes and you gotta build repeatable processes and you've gotta be able to make yourself in, essence worthless. You know, the company. And the more worthless you become, the more.

Valuable you become. Right? Because now the company is working on its own. and I gave that to Adam, my, you know, my partner.

I said, you know, hey, read this book, you know, this is what we're gonna do. And he read it and he is like, well, that means I'm gonna do all the work. And you're not, no, no, you're misunderstanding. Jeremy Clopton: Neither of us Jody Grunden: are doing the Jeremy Clopton: work.

Jody Grunden: Yeah, exactly. We're gonna build this company and really leverage and that was a big part of the start. Jeremy Clopton: Yeah. Jody Grunden: And when we did put those hours at the very beginning there, it was a lot of hours.

I remember two o'clock in the morning giving him a call, knowing he'd be up. You know, trying to, working through all these processes, you know, when we started out, so it was a lot of hours, a lot of time. You know, you fast forward to, I'd say about, eight, nine years ago where I wasn't doing any of the accounting anymore. Truly running the business, doing the marketing, and you know, that sort of thing.

You know, my time was. Went way down. Yeah. You know, so it's like, you know, not working any client time, you know, working a ton of client time to no client time.

It just took time to get that automation to work and I failed miserably year after year. I know you, you think as smart as an accountant would be, it's like, man, all the mistakes I made. And every year I thought, you know, Hey, I, this next year's gonna be the best year ever. and it, we hit obstacles I wouldn't even think about and then all of a sudden I'm telling my wife again, Hey.

Don't worry about last year, this next year is gonna be great. And then it was like a thing and it's like, you know, she's like, Hey, when you just gonna give up? And it's like, we're not, yeah, we're gonna figure this out. and it took a while, especially with the subscription based building.

That was a tough one. You know, we, it took us about eight years really to get it to where we were super profitable. And really working to where it was. And so it was a long process and that's why when I talk to different accounting firms, I talk about the importance of, you know, you gotta, just jump in and do it.

And then, you know, hey, hopefully I can relate and give them all the things I did wrong so that their window's not eight years and, you know, maybe a year, you know, that type of thing. Jeremy Clopton: And that was, that's probably something that sets you apart from, and I'm not gonna say from firms, but from many, well, frankly, in all professions, not just our profession, is you were willing to keep making mistakes and. For a lot of individuals, especially in the public accounting profession, mistakes aren't exactly encouraged, Jody Grunden: right?

Jeremy Clopton: There is this air of perfection. You're not supposed to make mistakes. Everything's gotta be perfect. And don't get me wrong, from a technical work standpoint, yeah, we've gotta be accurate.

That's part of what we are known for as a profession. It's part of the prestige. It's everything that comes with hiring an accountant. Yes, you expect the technical stuff to be correct.

Unfortunately, for a lot of leaders that bleeds over into how they run the firm and how they run their practices or their offices, is it's almost approached through a lens of fear of mistakes. Jody Grunden: Mm-hmm. Jeremy Clopton: A fear of failure that if we do this and it's wrong. That somehow diminishes our worth.

It diminishes our ability to be successful. And what you just shared is the willingness to keep making mistakes and keep learning from, and apply those learnings to the next iteration, even though it may not be right. That's actually the path. To a better way forward because you pioneered subscription billing, you mentioned that.

And that was back in the early two thousands, if I recall correctly, from our previous conversations. So if you think about really when subscription billing as a cultural norm. That would be iPhone App Store. Everybody is now, everything's a subscription.

Set it and forget it. And this was what, at least five, six years before that was even a thing, let alone common. How were you able to convince people of the value. A subscription when you were admittedly trying to do less of the work yourself?

Jody Grunden: Yeah, so when we created the subscription based billing, it was not done because I had this great idea and we were gonna work it out. It was because I bootstrapped my company, had no cash and could not be the bank anymore. It was like, it was one of those things I was trying to create a bundled service. Yeah.

You know, and here I'm talking to clients and I see our bill on the thing and I know they're behind and I'm like, oh, don't worry about that. You can push that out. It, was like I was being super nice to clients. Voiceover: Yeah.

Jody Grunden: You know, because I saw that their position, you know, why they came to me, all that kinda stuff. And it was like, you know, this isn't working out. You know, then we were arguing about, 'cause I was billing by the hour at the time, we're arguing about who was in the meeting, who wasn't in the meeting. And it was like, it was just all these things that really didn't help.

Help anybody didn't help me. Didn't help them. Jeremy Clopton: Mm-hmm. Jody Grunden: And I had to get, I had to get rid of that noise.

And so when we bundled our services, we thought, you know, hey, what, could we do? And bundle these up. So we created all these different bundles. We included tax as part of it.

And, we, gave 'em the option to have tax or not tax, and then all these different things, bookkeeping and accounting, you know, versus the CFO side. So we, kind of bundled all these different things and we thought this is great. And so then we started charging it again by the hour, not by the hour, but we kind of put in a price, but we actually. Didn't get rid of my issue because I still sent the bill.

It still took 'em time to pay. And I thought, you know what? This isn't gonna work out. We gotta take it even one step further, otherwise we gotta figure out how to downsize or do something because it, just wasn't working out.

And so I thought, you know what? I'm just gonna tell 'em I'm gonna zap their account every month. And, that's how we're gonna do it going forward with every new client. I didn't do it to our existing clients at first, but every new client, this is how we were gonna do it.

And I got zero pushback. I thought for sure everybody would be like. What? No, can't do that.

It was like, no, like, oh, that's how you do it. Great. And that's what we did. It was like, we didn't even send an invoice out every first of the month.

We, we did that and we thought, this is awesome. And clients loved it. They had no, they loved it because it's like, oh, like me, I don't have to send an, you don't have to send a bill out. You don't have to then pay it Jeremy Clopton: easier for them.

Jody Grunden: Yeah, it was super easy. it was predictable too, which was great. And I, I started thinking about it and I'm like, you know what, you know, we're meeting with these clients so often, you know, in some cases we meet them weekly. Why are we billing them monthly?

I thought, you know what, and the other thing was that when we had clients leave and come, then it was like, well, how do you do a. Percentage of a month, you know, I was trying to think, do you do the whole month? You know, then there was a con conflict again, you know? Jeremy Clopton: Yep.

Jody Grunden: Between the client and us trying to figure this out. I thought, you know what, let's just do this weekly. Instead of doing a monthly bill, we're gonna hit their account every single Monday and that's it. And you know, what, if they change their scope at all and we change the service, then the very next Monday the, it, changes and we're off and running, and if they cancel, boom, it just stops.

Right? Right. Immediately. And it was awesome.

You know, I thought, this is great. When I told Adam, Hey, this is what we're gonna do, he like. Dude, we will not get any clients if you do this. I'm like, like, yeah, we'll trust me.

You know, e every time I, we put something new and he was the sound of reason. Yep. No, it's not gonna work. It's not gonna work.

And guess what? it, we had no pushback at all. So much so that the clients that were doing monthly, we saw, you know, we introduced that to him. They were.

Yeah, let's do that. I'm cool with that. You just hit our account every week. I have no problem with that.

And so we started implementing it backwards to our existing clients until we had all of our clients on a weekly bill. That's Jeremy Clopton: great. Jody Grunden: And you know, that's why I say, I always tell everybody Mondays my favorite day of the mon or the week because man, it's like that's, we get all of our money and, cash Jeremy Clopton: flow Monday, Jody Grunden: cash Flow Monday. It's awesome.

You know, we, grew a 10 million firm with negative ar. Jeremy Clopton: Wow. Jody Grunden: Think about, that's kind of cool. Negative ar because we got all of our money before we actually did the work every single Monday.

It worked out extremely well. Cash started turning around, you know, it was one of those things that I was telling my wife, Hey, it's gonna turn around. It's gonna turn around. Boom.

It started turning around slowly. You know, it was slow thing at first because nobody really knew what virtual CFO service really even was back then, even though we. What happened was the growth, was pretty flat, where we'd pick up, you know, one to four, you know, clients a maybe a quarter or a year. It wasn't a lot.

And we're like, boy, this is not sustainable growth. You know, we're not growing as fast as we need to grow. And then once we said, you know what, we're going to focus on a certain niche, man, the hockey stick action happened. You know, we started marketing towards agencies and marketing firms and that sort of thing.

We're like. You know, let's put our marketing efforts back there. 'cause back then there was a phone book and we didn't have enough money to be in the phone book to, the degree we needed to be. So we thought, Hey, let's try this new thing.

Yeah. and put ads on the internet. We could do this. And so we did that.

We created this virtual CFO concept put on the internet, and we were like the number one ranked. Company out there. Wow. So anybody search virtual CFO, we are number one, like literally right away.

And that's because nobody searches for virtual CFO because I love Jeremy Clopton: that. Jody Grunden: So it was one, one of those things took a while, but when a hockey stick Yeah. Actually went from, you know, one to four clients a quarter or a year, whatever it was, to about between five to 11 clients a month. And it was just like, wow.

Oh geez. Now we gotta figure out how to employ those, you know, get enough people to actually service the clients. Jeremy Clopton: Yeah. Jody Grunden: Another issue that we had to solve, Jeremy Clopton: so I'm gonna pull out two leadership lessons that you just mentioned, and I wanna make sure everybody listening catches first is when you're trying something new and driving change, you don't have to do it for everybody, but it's a whole lot easier to do it for everybody new first.

Jody Grunden: Mm-hmm. Jeremy Clopton: So often it feels like leaders get caught in this. Oh, but we can't do that for all of our existing clients. Sure that may be true, but that doesn't mean you can't do it for new clients.

Jody Grunden: Mm-hmm. Jeremy Clopton: So a great way to start implementing change within your firm, draw a line in the sand going forward, it's this way, and then we'll figure out how to retrofit later, but let's at least get the change started. So I love that first, Jody, the second thing that you mentioned is specificity scales. When you got focused on a niche.

Your growth took off and so many accounting firms still fall into this trap of, oh, well, we're an accountant that's specific enough in 95. Sure it was in 2026. Not a chance. You've gotta be somebody's accountant.

You've gotta be really specific, I think about healthcare, right? So, oh, we're healthcare. Let's be honest. Healthcare could mean one of probably a hundred different things to people specifically.

Who do you serve? And when you get specific, you can scale. So many people think that specificity and narrowing that focus reduces your ability to grow. What it does is it allows you to grow quicker because you know exactly who you are and exactly who you're for.

So I love those two lessons. Jody Grunden: Yeah. Jeremy Clopton: I wanna shift to something because we got about five or 10 minutes left here. I love what you built.

I love the story of how you built it. Jody Grunden: Mm-hmm. Jeremy Clopton: Then you sold it to an accounting firm. Jody Grunden: Yep.

Jeremy Clopton: I'm gonna speculate, there might've been at least one person in that firm that was like, who's this guy? What is he doing, and why does he think we're gonna be on board with all this progressiveness and how you bill clients and do all the things. So you gotta talk to me about it. Jody, how did you convince a public accounting firm to take on the progressive nature of what you were building?

Jody Grunden: Oh, it was super easy. Everybody accepted it right away. Jeremy Clopton: They loved Cashflow Monday, they changed everybody on the dot. Jody Grunden: Yeah.

No issues whatsoever. Yeah, no, it, was a challenge for sure. And it basically started out with the fact that I wasn't ever interested in selling, you know, we were doing really well. Why would I sell?

Sure. And, Andrews approached us. They saw us at one of the events, you know, because we do a lot of speaking, we speak at all the different accounting events, and we're just. Basically telling people how to do it.

And they saw us and said, you know, Hey, would you guys be interested? And we're like, you know, we get offers from everybody, you know, in, in the world. Actually, BKD actually came back and offered us, you know, an opportunity, the firm that actually shared That's full circle. Yeah.

It was kind of cool. I was like, it was pretty cool. And that's when they were going through the four with us merger. And so they had put on pause there, but yeah, it was just kind of a funny thing.

They were very open-minded and progressive and they made it very clear. I go, the reason why we want you is 'cause you're doing things a lot differently. They liked the fact that we were a national firm. Mm-hmm.

Even though we were small. We're only 10 million and here we got clients all across the United States and Canada. And, you know, outside of the country we had employees all, all over the place. You know, because we were completely virtual, which made it nice.

And that was something that they thought, you know, hey, if we can expand without having offices. That would be pretty cool. That would save a ton of money. The fact that we were subscription based was huge also because it was like, you know, how can you take those ideas and then how can you put it into our firm?

Because we were subscription based, not only in the CFO side, but we did a value based bill for audits because we did 401k audits. 'cause someone told us we could never do it outside of virtual CFO. Hey, it's gonna work only there. That's the only place, but I'll do it for audits.

And so I did it. We grew the audit practice. About a million dollars. Jeremy Clopton: So the key is to tell you it can't be done.

That's what I'm hearing. Jody Grunden: Yeah, exactly. let's see if we can figure that out. Tax, we already figured that part out.

We've got that as a flat fee built right into our service. So there's all these things that they knew that we currently are doing, you know, how can we bring that to them? and then, like I said, remote subscription based and just simply working together as a team. 'cause we had, you know, high satisfaction, all that kinda stuff.

Well, the nice thing about it was the, the managing partner, Robert Minkler. Very progressive in a lot of things. and he is like, you know, hey, this is gonna work. He goes, you have any pull pushback at all with anything when you come on, let me know.

And so, the, one of the stipulations I had was, Hey, we weren't gonna break up our firm. You know, it was gonna stay as a single unit inside of the, mother mothership of Anders and be our own service line. And, he's like. Absolutely.

If that's what it takes, let's do it. Whereas most of the companies that, or most of the CPA firms that approach, it's like, no, we can't do that. You know, for all political reasons, that wouldn't work. Yeah.

And it's like, well, that's how it works. Because everything that we do, from the way that we pay our employees to the way that everything is done, there's processes, there's reasons behind it. And, if you pull 'em out, then we've gotta start over again. You know?

'cause we've already went through all the headaches trying to figure it all out. Jeremy Clopton: Mm-hmm. Jody Grunden: And so it was one of those things that they agreed on. We took over an existing service line that they had, ran by a partner and, he wasn't too excited about it.

And that because of that it just, it was really kind of falling apart. So you mentioned, Hey, you, you got people that are buttoned up against you. It was like, it hit us like right away to where, you know, we were remote, they were brick and mortar. And we just couldn't, it it was just really difficult.

We're providing a progressive thing, really difficult. And we started sliding, you know, we started losing clients. We lost more clients in the first two years than we lost in the entire history of our company. Jeremy Clopton: Wow.

Jody Grunden: To give you an idea, it was like, wow, what is going on? And our employees were not as happy. Their employees were not happy at all. And so it was one of those things, it's like we still weren't losing employees, but we were losing all their employees.

Everybody was in there. Yeah. And then eventually, once they started seeing the progress, and we had a change in. And partners and stuff like that.

It started really going well. It took about three years really to go from, you know, what did we do to, okay, now this is something that I can, you know, sink my teeth in and get a lot of buy-in from the partners. The partners wouldn't even refer clients to us for the first couple years just because of the uncertainty. And what are these are these guys mavericks out here, you know, they don't even dress up.

You know, I'm wearing a Hawaiian shirt. How's that gonna work? I think Jeremy Clopton: every time we've talked you've had on a Hawaiian shirt. Jody Grunden: Oh, I, always wear Hawaiian shirts.

It's like, but they're nice, it's professional, it looks good, and you just have purpose and everything. And so they, they had all, you know, the, these issues. And then once they saw that we were actually starting to bring profit in and revenue in, and we started growing again. 'cause we went through a stage where we went flat, you know, we went flat to where that never happened before.

Ever. Yeah. That we had a year that was flat. And then once that clicked and once we had the change in partners and people that.

Just didn't wanna be part of that, which was cool. It just picked up again. Yeah. And now it's like going full steam.

You know, we're, back to where, you know, when they bought us, we were at about $10 million, I'd say about $8 million. That was CFO practice. We spun the, 401k audit side off, so I don't really know how they're doing. Jeremy Clopton: Sure.

Jody Grunden: On that side. But on the CFO side, we're gonna do about 17 million this year. And so that's, Jeremy Clopton: wow. Jody Grunden: But not doubling our size every three years.

It's kind of close. It's about four years. So we're, a little behind, you know, where we were in the past, which was pretty solid. And so, you know, and again, client satisfaction's, super high employee satisfaction, not super high.

And so everything is going really well, but it did take a lot. Jeremy Clopton: Yeah. Jody Grunden: And so now, the idea is that, okay, how do we go to the next? Step and we, how do we get the subscription based billing into other areas of the firm, like the tax department, which I think is super simple, but again, you've got a lot of folks pushing up against it saying, you know, Hey, why change something that's not broken?

It's like, well, AI just broke you, so now you've gotta figure out how to make that change. But I guarantee you, within a couple years. You're gonna see revenue dec decline. and so it's one of those things that's like, okay, now we can fi kind of figure it out.

And like you said, we're, we've got pricing calculators that we've always used. We're gonna kind of start implementing that into the new model for, you know, bringing new clients in for the firm itself. And there's a lot of things that we're. We're implementing change now that we finally get buy-in, but it took about three years to get that buy-in and, it's still not a hundred percent there, you know?

Sure. I'm not gonna, but it's going definitely in the right direction. The remote work is definitely going in the right direction on that. You we're getting a lot of folks.

Commanders that even though they can go to the office, they're working outside of it with our team. Our team can't even go to the office because we don't even live near the office. They're in St. Louis.

You know, how's that gonna work? You know, so there, there's a lot of things that are, that they're really kinda learning from us, but learning takes time and accountants hate change. We all know that. You've mentioned that earlier.

And so it's just taking a lot. You know, you know, to actually get them to go, which is really important when hiring for this. You've gotta be able to hire for people that they may have. The high skill skills is a great thing.

You gotta have skill, but you've gotta be able to have, change management ability. Yep. You gotta have that personality that can take change. Otherwise, man, you're fighting up, you know, hard battle there with, with change because, you know, with what we do, change is gonna happen and change is gonna happen in the, it's going forward forever.

Jeremy Clopton: Well, realistically, change has been happening in the accounting field. We would be kidding ourselves and foolish to say it hasn't. You know, QuickBooks was gonna end everybody's existence in our profession at one point, and now it's part of our service offering for a lot of firms. It's not like we have been.

Avoidant of change, like we've never had change in the profession. I mean, when I started I was given, you know, red pencils and audit briefcase and a 10 key. I don't think we pass those out anymore when people start in the profession. I don't know if anybody could even get their hands on a 10 key other than in the, you know, the museum of the firm or whatever the case may be.

So, a really good lesson though, from what you shared is change, even if it's proven change. It takes time and it takes proving the business case out. We can't go into any situation and expect that somebody is just gonna immediately buy in. Now, the one caveat that I would offer to that is something that you shared and that is when your back's against the wall.

You're making no money, it's a whole lot easier to change. Jody Grunden: Mm-hmm. Jeremy Clopton: Because the alternative is to stop. Jody Grunden: Right.

Jeremy Clopton: And by stop, I mean stop existing as a business, given that alternative, we're really good at change. And we proved that during the pandemic. Jody Grunden: Mm-hmm. Jeremy Clopton: Either you go remote.

Or you close the office or you close the business. Well, you know what? We can work remote. That's actually okay.

Well, sure, that'd be great because we didn't have a choice. Jody Grunden: Mm-hmm. Jeremy Clopton: It's when you have a choice that it's so hard and we will choose the status quo because it's comfortable. Jody Grunden: Mm-hmm.

Jeremy Clopton: Even when there is a proven path in front of us, because that proven path is somebody else's comfort level, not our own. And that is so important that we recognize it will take time, but it can happen. You've gotta be deliberate. You've gotta be intentional.

I'm sure you don't have the whole partner group wearing Hawaiian shirts to the partner meetings, just quite yet. Jody Grunden: One. Jeremy Clopton: One. Hey, that, that in three years, I am calling progress my friend.

That is progress. No, I kid. I kid. But it is so important to recognize that.

It isn't, at least in my experience, and I would think you might agree with this, but I'd love to know your thoughts. Yeah. I don't find that partners are avoidant of change with ill intent. They're avoidant of change because they're uncertain If they can individually get on board with it because it's so uncomfortable compared to what they know, I would imagine that most partners would say, I love the idea of cash coming in the door every Monday or once a month and having no AR and no whip.

Partners would. I'm sure generally speaking, all agree. I'm very pro that. Jody Grunden: Mm-hmm.

Jeremy Clopton: But I'm really uncomfortable with the idea of that much change. In my daily Habits. Habits. Is that fair?

Jody Grunden: Yeah. Jeremy, that's super fair. You know, when we started actually going out and talking to the different accounting firms, all the different conferences, we would go and we'd have the, maybe we'd talk about maybe how to provide CFO services or maybe how to do it virtually or, whatever that might be. We'd have crowds and.

Tons and tons of people. We'd have the most people by any, by every means coming and watching us and listening to us. We'd have long lines afterwards and then we'd, talk to 'em and they'd ask questions and they'd say they'd be, oh, that's cool. That's great, but that would never work for us.

And then they'd walk away. It's like, and I, it was like, that was a common theme. Oh. That we, oh, you're doing a great job.

But that would never work. Our clients wanna touch our hands and shake our hands. Jeremy Clopton: Mm-hmm. Jody Grunden: You know, our clients would never, do a flat fee.

They wanna see the detail and the bills, you know, our clients, you know, you know, basically it became pretty obvious to us that we were the reason that change wasn't happening . It wasn't our clients, it wasn't the industry itself. It was the, basically what you're saying, it was the confidence that we had that we didn't have a pain point. Jeremy Clopton: Yeah.

Jody Grunden: You know, it's working well. Yeah. The pain point is we got whip and we got chasing ar. Those are definitely pain points, but it wasn't a pain point to where I can't do my business anymore.

Right. It wasn't the pandemic where everybody said, there's no way remote could work. And you're right. Remote couldn't work.

If you have that belief and then the pandemic two weeks later, it's like, oh yeah. Well, it works really well. I can figure this out. Yeah.

They didn't do it well, but they figured it out. they could actually do it. And then some of 'em actually figured out how they could do it even better. And some said, you know, Hey, it just doesn't work because they just didn't have the technology.

They didn't have the motivation. Mm-hmm. They didn't have, you know, what it needed. Jeremy Clopton: They didn't have the belief.

Jody Grunden: They have the belief, yeah, we get that. Even with the taxes today, you know? Jeremy Clopton: Yeah. Jody Grunden: we'll approach different partners and we're like, Hey, here's how we do it.

You know, we, do it based on size of the company. We don't do it based on all the forms and all that kind of stuff, or how many hours it takes or whatever. And guess what? We get a 75% net profit margin on average.

And then they look at it and it's like, well, you know, that wouldn't work because all these different exceptions, it's like. Okay, well let's look at your client base. Jeremy Clopton: Yeah. Jody Grunden: You know, can we do this for 80% of them where the only thing that you're doing at the end of the time, you know, literally, I've been in this position, you know that they, go through all this whip and they go through all the time entries and everything, and then all of a sudden they look at what they build last year and they say, let's mark that up 5%.

Boom, it's 5% more. And then they write everything off to that 5%. It's like, well, that's. What we do.

Yeah. We increase our fees every year by five to 10%. That's it. Jeremy Clopton: Yep.

Jody Grunden: We, do track time, we track time for profitability. We don't track time to have a whip and to build into the client any of that. And then, it's like, well, what if they do all these extra things like. Okay, great.

Yeah, we do those extra things. We lose a little bit on that client for that year. Big deal. I'm looking at the long term, not, the short term, you know, or if you have these, you know, issues where you're worried about them stepping outside of it.

Create scope, you know, Hey, here's the scope, you know, for, you know, let's, it goes outside, here's the. Additional fee for it before we start doing it. You know, those are the types of things. It's like there's solutions to all these things, but there's still that fear that, you know, Hey, I'm not gonna get the money that I'm supposed to be getting, or I'm gonna do something wrong, or clients aren't gonna, are gonna push back.

In reality, the fear is internal. it's not a real, it's not a real result, in my opinion. From what I can tell clients don't care. Jeremy Clopton: Yeah.

For as non-creative as we're supposed to be, as accountants, man, we tell good stories, don't we? Jody Grunden: Mm-hmm. Jeremy Clopton: We make up all these stories about the supposed reality. We have never actually asked, we've never actually floated the idea by the client, but we buy into these stories.

We are a great storyteller. So if you're an accountant listening to this and you're thinking you are not creative Jody Grunden: mm-hmm. Jeremy Clopton: But you've bought into anything that Jodi just said about why you can't, you can hear it from me first. You're remarkably creative.

You're a great storyteller. My, my challenge would be start telling a different story. Let's go out there Jody Grunden: and Yeah. You know, to your point there is that, hey, when we do that hourly bill, guess what we're like, I wonder if the client is gonna be okay with this.

Then, the client gets a response back and they're really mad, like, what happened there? And all that kind of stuff. Mm-hmm. And then it's like, okay.

And then you have other times when you mark it up a lot, you're thinking, oh, the client's gonna hate this. And then they come back and they say, oh, that's not as bad as I thought. You're like. I probably left money on the table.

Uhhuh. You know that's the exact thing you're telling the story in your head, whereas if the client knew what they were gonna pay before you even started the work, story's gone. Clients accepted Jeremy Clopton: this well, and how many service providers is that the case for? I mean, nobody goes to the mechanic and wants a surprise, like it's gonna be five grand.

No matter what happens, no matter what happens, cool. Go get it done. Jody Grunden: Mm-hmm. And if you don't wanna go somewhere else Jeremy Clopton: Yeah, exactly.

But at least you know upfront and there are no surprises. I'm a huge fan of, I, I'm not a big surprise guy. Jody Grunden: Yeah, me neither. Jeremy Clopton: Especially when it comes to paying for stuff.

Mm-hmm. Jody Grunden: I Jeremy Clopton: don't want a surprise. So why would we? Why would I love that?

Yeah. Well, Jody, this has been an incredibly enjoyable conversation. We could probably go on for hours, but we probably ought to wrap it up. If someone would like to learn more about your story, what you're doing at Anders, or just get in touch and follow you and everything that you're putting out in the world.

Where can they find you? How should they connect with you? Jody Grunden: Yeah. It's kind of funny because I'm an IU grad and, the Curt Cignetti thing was Google me.

It's like, really? If you Google me, I'm out there all over the place. Fair enough. he took my saying.

I was like, oh, Kurt, whatcha doing? I said that first. But, if you truly do, I, we do a lot of YouTube things. You know, we put everything out there.

You know, everything is an open book for us. I mean, you know, the way we look at it, if the whole industry can change and get better and learn from what we did and what we did right and wrong, then, you know, great for them. And it just improves everything. Improves our life, improves their life.

it's, it comes back and folds. but if you wanna reach directly out to me, just email me and it's, j Gruen, G-R-U-N-D-E-N. At Anders CPA dot com, I'd be happy to schedule an hour meeting, chat about whatever you want to chat about, and then, no cost or anything like that just to kind of help out. But, yeah, feel free to take advantage of it.

You know, I, offer it a lot and then some people take me up on it and a lot of people don't. Again, it's that, that risk. Jeremy Clopton: Yeah, Jody Grunden: you know what's the hidden thing behind it? There is nothing hiding behind it.

You know, it's just what we've done from day one. Jeremy Clopton: That's awesome. Well, Jody, thank you so much for that offer and thank you so much for joining me on the show today. I really enjoyed it and, hope we can talk again in the future.

Jody Grunden: Absolutely. Jeremy, it was fun. Voiceover: Thanks for joining us on The Upstream Leader podcast. We hope today's episode has enriched your understanding of what it takes to become a high performing leader in the accounting profession.

If you'd like to hear more episodes, subscribe on your favorite podcasting app, and visit our website where you'll find full show notes and more TheUpstreamLeader.com Jeremy Clopton: ProfessionalProductions.net.