JOURNEY OF A $9M VIRTUAL CPA FIRM WITH ENTIGRITY

About Summit CPA Group:

Summit CPA is a virtual CPA firm with a non-traditional approach to accounting. They have an amazing team of virtual accounting professionals (CPAs and accountants) who provide professional Virtual CFO Services and 401(k) Audits for companies all over the United States — many of which are remote companies as well. 

Summit CPA Group prides itself on offering a host of services to the clients without having to meet any of them in person. No wonder they were recognized for their innovative accomplishments in 2017 with the inaugural Indiana CPA society Innovation Award. Hiring at Summit CPA group is all done virtually as well. Entigrity being an example! 

Recently they launched a CPA Firm Augmentation service, coaching other CPA Firms on how to successfully provide Virtual CFO services. They fully understand the accounting, bookkeeping, cash flow management, and business tax nuances that come with being distributed. Every day they are truly helping their clients overcome these challenges through experience and expertise.

About Jody Grunden:

Jody Grunden is the Co-founder and CEO  of Summit CPA Group headquartered in Fort Wayne Indiana. Jody focuses his attention primarily on Virtual CFO Services.  He virtually meets with business owners on a weekly basis to assist them with Cash Flow Management, Forecasting, Budgeting, Debt Restructuring, Cost Accounting, and Cutting Edge Tax Planning. A thought leader on virtual CFO services, Grunden offers courses and delivers webinars on the topic. As an innovative practitioner, Grunden led Summit CPA Group in pioneering Virtual CFO services, introduced the concept of subscription-based billing, and transitioned his firm in 2013 from a traditional brick-and-mortar firm to a digitally-focused fully distributed model with 50+ employees. Summit has more than 60 virtual employees in the US and 17 offshore staff with Entigrity.

How did the Subscription-Based Pricing model start?

In Jody Grunden's words, “We completely bootstrapped the company, we didn't have funding of any kind, just left public accounting and we wanted to start something a little different, do something different than we do in other public accounting firms. So when we started, we did the hourly billing, we did that for the first two years and it was horrible”. 

After that, he started providing virtual CFO services in 2004 and it became even more apparent that they couldn't continue on with that for many reasons. 

Furthermore, “It was apparent we had to do something differently, but the real driver behind it was if we want to be real honest and transparent, I had zero money and so no money meant that I couldn't be the bank. It was just too expensive to have three hundred thousand dollars sitting out there at that time waiting for people to pay and worrying about payroll and all that kind of stuff as a young entrepreneur starting a CPA Practice”.

So it came down to not having enough money in the bank; it was just the type of service they were providing. Summit CPA Group had to make a decision and the decision was "hey let's go and do a recurring business model”.

This market leader also states, “We didn't know what it was called at that time “subscription-based billing” as no one was doing it. We got reported to the ethics committee because they thought that we were doing something that shouldn't be done because no one else is doing it. That was a great idea so we went through with flying colors”.

Summit CPA Group has a 94% retention rate and their clients just love the service, and it's very fulfilling for them as the entire staff is trying to help them grow to the next level. 

Jody mentions, “It's pretty nice having a 9 million dollar firm with no accounts receivable, actually negative accounts receivable if you look at it because we collect our money before we actually do the work. So it's pretty fulfilling for sure.”

The majority of the clients come to Summit CPA Group because they want to implement CFO services, they want to forecast KPIs, they want Summit CPA to handle their banking relationships and all that goes with it 

Grunden started dabbling in the remote world back in 2013 and went fully remote in 2014. With that big change, they exhibited at the AICPA Engage and DCPA conference. Talking about an Accounting Finance Show, he says, “we'd get a lot of people to come up to us to say that's a really cool model”.

Hierarchy - Structure of the Team:

For every engagement they have a CFO that's in charge of the engagement and so under that CFO, they have an accountant, a senior level accountant; someone between 4 to12 years of experience, typically CPA’s. They oversee the financials and actually meet with clients if they have cash meetings as part of their service.

They’ve got two dedicated people on every team. So CFO and Sr. Accountants don't do taxes, the tax level person does the taxes. But in addition to that, depending upon if the client wants them to do back-office accounting work, our Entigrity team actually performs those functions.

He also mentions that “We have 15 VCFOs today and 30 senior accountants who report to them and each senior accountant has at least 1 offshore staff to assist them. With the added cost advantage, we are able to expand our clientele and in turn, it is fueling hiring of both on-shore as well as offshore staff. We anticipate adding 5-10 on-shore and offshore staff every year”.

Choosing Entigrity as an Offshore Partner:

In Jody Grunden's words states, “Even though we have staff in nearly every state in the US, we faced challenges in staffing and tried outsourcing as a solution. But, it turned out to be quite a nightmare. It was a black box where you have no idea who is working for you, zero consistency in quality of work, deadlines don’t remain sacrosanct, coordinating with the vendor was a major challenge. As a result, we completely gave up the idea”.

They met Mr. Shawn Parikh at the Accounting & Finance Show New York in 2018 and looked for Entigrity. Summit CPA clients are spread throughout the United States, Canada, and many different countries.

On this matter, Jody thinks, “Why does it make any difference, if our team is from India, the Philippines, or the Czech Republic, it doesn't make any difference where they're from, just as long as we can communicate and we're in the same time zone”.

So the nice thing about Entigrity is that we allow our team to work in different time zones so that we can actually work with clients hand to hand. 

Communication with Offshore Staff:

His visionary is on communication with staff, “Our offshore staff speaks very good English as it was another big issue for us. Now it's really great that we can understand things and English as a second language in India, people speak better than others. So it's important when you're interviewing offshore staff depending upon the level of English that you need to have if that staff is more client-facing”.

He further adds, “The other important thing when interviewing offshore staff or when meeting them is looking for the skill sets. With Entigrity it was nice because you can truly interview the candidates that are going to be on your team which is nice whereas the other firms didn't allow that ''. 

Integration of Offshore Team with On-shore Team:

Summit CPA Group Started with 10 offshore staff in a year then hired 4-5 offshore accountants every year. 

Summit CPA Group started with hiring just 1 offshore staff to check it out. Soon, they hired a few more staff members, and today, Entigrity is a key partner of Summit CPA with a 17 person offshore accountants team. 

Talking about onshore versus offshore, Jody mentioned, “We've got specific roles that our offshore people do. So we don't hire people onshore to do those roles. With the number of Entigrity folks, we have actually lined up one for one, so if we have an accountant, we also have an Entigrity Staff responsible for, so if we have 15 accountants then we've got 15 Entigrity folks out there. We found out that it works really really well”.

It's vital to ensure that you have the right team in place, whether onshore or offshore because they're all working on the same team as a whole. We really need to promote people based on growth and capacity and benefit as the organization grows. 

Three Things That Led To Their Offshoring Outsourcing Success Were:

• Successful integration of onshore and offshore teams and treating them at the same level. 
• Empowering leaders and managers with the right team.
• Investment in onboarding and training.

They wanted to make sure that we had all of our compliance and security was super tight in terms of access. How they accomplish that is with a tool called Last Pass and they only give view-only access to the websites, but it ensures that the team from Entigrity is able to launch websites, they have view-only access so that they can carry out their job and they don't have to worry about giving any compromising information and bank account information IDs or anything like that. 

Jody concludes, “The nice thing about being virtual is you get access to talent all over the country and now all over the world. So instead of having to worry about finding specific talent in a small geographic footprint, now we can go everywhere. Offshore teams can handle anything that an onshore team can handle from a back-office standpoint. Our team is really focused on the advisory service. We already had all the S.O.P. in place, just needed somebody to take them over. Once we were able to see that, your team could come in and just knock it out really quick. Being distributed is one of the best things that we ever did”.

Entigrity™ is a trusted offshore staffing partner to 725+ accountants, CPAs, and tax firms across the US, UK, and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants,' Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management; still, you are left with the least to worry about compliance, payroll taxes, overheads or any other benefits. To offshore accounting services, bookkeeping, Tax, and audit services, visit us.