The Future of Accounting with Dave Hartley

george grombacher 0:01
Dave Hartley is a CPA. He is an innovative, innovator, a podcaster. He is the partner in charge with Anders CPAs and advisory. Welcome to the show, Dave. Thank

Dave Hartley 0:11
you, George, appreciate it. Happy to share my insights and things I’ve learned over the years. Yeah,

george grombacher 0:16
excited to have you on. Tell us a little about your personal life, more about your work. Why you do what you do?

Dave Hartley 0:22
Let’s see. Well, kind of the first the first part and the last part are very much related, which I really do what I do for my family. So I have my wife, and we have four wonderful kids, and they are now to the point where they’re becoming wonderful young adults, and that is the coolest thing to see. So, you know, my kids, they weren’t really into music. I’m a big music guy, and then I started taking them to shows, introducing them to music they weren’t really interested. And then gave them a few years, and it clicked for all of them, and now they’re all successful, thriving. So that’s super cool to see. As a matter of fact, last spring, the spring semester, all of my kids got straight A’s in college. So Wow. So yeah, and they’re all in college at the same time, which means you can imagine the cash outflow happening now out of the 529 plan to pay for all of that so but very blessed on that front for work, I actually love what I do. So I started a long time ago, early 90s, passed the CPA exam, went to work at Ernst and Young great experience working in public accounting, did that for a while, left went to a startup that didn’t work, and then I realized I missed the culture of public accounting, which is, you’re constantly in teams, you’re constantly moving around. You’re constantly at different businesses, so you get to see different cultures. So that was super cool for me. So I came back to that, and I joined Arthur Andersen, and I led the St Louis space technology risk consulting practice. And some of you may not know the story of Arthur Andersen, since that happened, you know, 20 plus years ago, but that was one of the big six firms at the time that got in trouble with Enron, and it ultimately imploded the firm, which was wild to see, because it was a it was a pillar of everything. So went through that, but coming out of that, there was something good. You know, that’s one of the things I always talk about, is resilience, and you just got to keep going. Just don’t stop. So when Arthur Andersen went down, it was like the end of the world. You know, here was my thing. I was going forward, but there was something good that came out of that. About 1000 of us stuck together, and we started a new firm called Protiviti. And so I was blessed to be there for seven years. Had a great experience there was doing public accounting work, but really in a startup mode, building a new firm. After that, I got a chance to go and be CIO. So I LED technology at a public company which is one of my favorite clients. So I did that for six years, and then after that, I came back to the CPA world doing some virtual CIO work. But now I’ve been at the firm I’m at now, which is Anders, for five and a half years, and the partner in charge of the advisory practice, so not audit, not tax, but I lead the virtual CFO practice, the technology practice, so I’ve got five different service lines that roll up as part of our advisory practice. So and the great thing is now that I can look back and reflect a little bit basically every one of those stops along the way, even when good things or bad things happened, it prepared me for the role that I’m in today. And I can look at every stop along the way, and I can point to something I do today that I learned along the way. So even though, when you have no idea, you have a grand plan, but suddenly your plan is not happening and it’s a different plan. Well, you just got to have faith that it’s all going to work out at the end of the day. So George, happy to be here.

george grombacher 3:42
So you’re going to be able to look backwards, and it’s going to make sense. Yes,

Dave Hartley 3:46
you look forward, not so much. When you look forward into zoo, when you look back, you’re like, Ah, okay. Now I see there was a plan.

george grombacher 3:55
So these four, four straight A students who, who, who love music, what were some of those early shows that they rolled their eyes at you at? Well, actually,

Dave Hartley 4:03
there was a really cool I drug them all to a thing called, it’s a St Louis based festival called twang fest, and it’s run by there’s a couple of my friends, part of the twang gang that ran the festival went on for almost 25 years. So I take, I’d buy seats every year pass for the thing. And I take my kids, each kid one night, and it was a four night thing, so it worked out perfectly. And so it was Americana music. A lot of, you know, kind of folk oriented, those types of things. But they were, they were okay with it. They were intrigued, but it wasn’t really their thing. And then I started taking it into other shows, and it just kind of build on that. Now, actually, a very interesting and strange thing is that my kids, so I was listening to some things during the pandemic. My daughter was listening to the same thing I found out. And I was like, wait a minute, why are you listening to that? And she said, Why are you listening to that? So like the whole, I really like the whole, the EDM electronic music. Music, those types of things. And I think I just read an article about, I think, why I like it, because there’s, there’s studies now being done on it, and the fact that it basically has such a positive impact on your mood and it brightened. There’s all these other benefits that come from it. But I really like sort of that upbeat, energetic type of music. And turns out my kids do too. So then that’s really weird, because now we’ve gone to shows together, which is one of the super cool things, and so I’m kind of the dad whenever I go to those shows, and I really enjoy them, but the kids with my kids know that I’m looking out for them at the same time, keeping them safe and making sure they have a good time. Yeah,

george grombacher 5:35
yeah. I appreciate that. The CPA who’s running the CPA firm at the EDM show with his kids. I think that that’s wonderful.

Dave Hartley 5:46
It is. It is often puzzling. When I tell that story, people do start scratching their head, and I I agree. I’m not the typical CPA I think, you know, and that’s one of the great things about the CPA profession, is it is becoming more diverse. It’s becoming more accepting, and it’s really becoming much more inclusive. And now one of my kids has chosen to go into public accounting, and I’m excited for her, because when I look back, you know, at where we are today compared to where we were when I started over 30 years ago, it’s substantially different. You know, when I started, it was very much a you fit the mold, and if you don’t fit the mold, you’re out. And now, as one of the leaders in the firm, I can say honestly that that we look for, that we look for people that have, you know, real lives, and they they do something outside of work, and they really enjoy that, and they’re passionate about life. I mean, those are all things that we look for today that going back a couple decades wasn’t the case.

george grombacher 6:39
Yeah, yeah, I don’t imagine I I’m 40, so to be 46 years old, and I’m aware of Arthur Anderson, but I think that it all sort of fell apart before I was a professional. If you would give me 1000 guesses as to what the name of the firm would be that rose from the ashes of Arthur Andersen, that it was protivity, I would have never guessed that.

Dave Hartley 7:03
Yeah, it was. And I tell you, one of the things that was great, another sort of unintended consequence of that was so the so Arthur Andersen was a great firm. I have absolutely no knocks on the firm. Something bad happened, and so that was terrible. However, I got to work with pertivities. Since we were in startup mode, I got to work side by side with some of the most experienced Anderson partners who were the masters of their craft, and to sit by them and to learn from them. That was unbelievable. So out of a very, very bad situation, I learned in those first two or three years, when we were starting protivity, I was flying to Chicago. We were working on drafting things. I was down in Houston. I mean, just all these stellar professionals that I got to work with, and I learned a ton from them. I mature. I thought I knew everything at that point. And I met these I met these folks, and I just learned so much, and I respect them to this day, you know, sort of everything that I took away from working side by side with them, and that’s one of the things I preach to my kids, they’re in a job, they don’t like it, and I’m like in everything that you do, you should learn. And even if you don’t like a situation, you’ve learned something from it. If you work fast food and you don’t like working with the public, well, you’ve learned you don’t like working with the public. So each one of those steps, that’s why I encourage internships. It’s so important to get to an environment and try it out and see whether you like it or not, and then, based on that feedback, you can make better decisions going forward, because you’ve actually experienced it and, you know, as opposed to, you know, going to school, going to college, thinking you like something, but then when you get a chance to actually work in that environment, I think it’s huge. So that the whole concept of trying things and experimenting and seeing what you like and don’t like. I’m a huge advocate for that. Yeah.

george grombacher 8:47
Amen really well said. So every organization needs to be recruiting new members. You the CPA industry, the accounting field, field of accounting needs new accountants and needs new auditors, and has the field been you mentioned being more inclusive and just maybe being more cool, or whatever the term is, has that been something that’s been talked about and kicked around a lot recently or for a long time?

Dave Hartley 9:16
Well, it’s a major focus right now, and I’ll tell you why. So in the CPA world, we have a couple of factors that are affecting us, but at the end of the day that the the net effect of that is that the pipeline is down, and so we have less kids interested in coming into accounting and becoming CPAs. And whether that’s it takes 150 hours, whether it’s I don’t want to sit for the CPA exam, whether it’s, you know, starting salaries are too low, you know, there’s all these issues that are kind of culminating in this perfect storm right now. So this is, this has been a major focus for the last, you know, two to five years, I would say. And you know, probably one of the, the biggest aspects in my mind is that the CPA world hasn’t. Image problem. You know, if, if somebody, if you said, Hey, I’ve got a CPA coming onto the podcast, how many people would actually listen to it? Because they would think snorefest. And he’s going to talk about tax regulations. I have no idea what the guy’s even talking about, that kind of stuff. And so, and when you look in movies, how are CPAs and accountants portrayed in movies? It’s never positive. The CPA is never the hero. And so there’s a lot of things that we need to do as a profession, and we need to tell our story better, and that has been a major focus, sort of, what’s going on? Why are Why are younger students not interested in going into accounting? Why don’t they want to take the C CPA exam? Why don’t they want to go into public accounting? So there’s been a lot of soul searching going on, and there’s there’s changes that are being proposed and new things that are happening, but I think the core of it, a lot of it is, is just people look at it, and they’re just not interested in what we do. And I think that’s one of the shifts that ha that’s happening. Both is the profession is becoming much more future focused as opposed to just accounting for past results. The focus is really shifting to, it’s really going back to the way it was years ago, when CPAs were really, you know, you were mentored into the profession, and you coached your clients and you made them better. And that’s becoming much more of what CPAs do today, which is really, you know, that’s, that’s great. You know, certainly for audits, we have to be the trusted voice in the corporate world, and I think we do that really, really well. But I think in a lot of other areas, you know, clients don’t just want us to account for what they’re doing. They want us to make their businesses better. They want us to be a catalyst to making their lives better. And that’s part of what we can do as CPAs, and that’s the story we’re not telling. A lot of times, you go out and talk to somebody and it’s like, oh, yeah, my CPA saved me. He did, you know he, he or she told me to do this or that, or whatever. And man, that advice was so wonderful. And we never tell that story. You have an opportunity as a CPA to have a substantial impact on so many people on so many levels, and we don’t do a great job at telling that story, and that’s one of the things we’re recognizing, is that we’ve really got to do that more frequently, and we’ve got to be more articulate in the benefits and the impact you could have as a CPA.

george grombacher 12:12
Well, said, All right, so you mentioned that there are five total areas, maybe six, tech, virtual CFO offerings. What are the other what are the other areas?

Dave Hartley 12:22
Yeah, so our so we do have five service lines, so virtual CFO is, is one of our practices, and that’s really focused on cash flow forecasting for really small businesses, say, between three and 20 million in revenue. Lot of times those companies are founder LED. Maybe it’s somebody that developed a product, or somebody that’s really good at sales, but often they’re not good with money. They hope that they still have cash in the in the bank at the end of the month. It’s like, no, let’s do forecasting. Let’s help you make better business decisions, and let’s make sure the accounting is right. But let’s really help improve the future of you and your business. That’s really the focus of our virtual CFO practice. Next is Anders technology. So in our technology service line, we’re really a managed services provider where we outsource and CO source technology for small to mid sized companies, and we help them with Microsoft, because 95% of our clients are Microsoft shops, and they don’t know the capabilities they’re already paying for. And we help them realize that, get it implemented and figure out how to, you know, improve their business with technology, not just run the technology. Next is our healthcare team. So we have an interesting niche in healthcare in that we help physician practices with, like, typical CPA stuff, and then we go into compensation planning, operational planning, those types of things. But we also have another really interesting niche, so there’s a process called credentialing and provider enrollment. So basically, when a doc joins a small healthcare organization, or any healthcare organization, they basically have to get set up with the insurance plans. And right now, that process is done horribly inefficiently in a huge number of smaller healthcare organizations. And so it sometimes takes four to six months for them to get a doc enrolled in all the insurance plans. We can do that in a couple of weeks because we’ve automated it. We know the process really, really well. We know all the payers. We know exactly what they want. So as a result of that, it’s a very high value offering for these smaller healthcare organizations. So we’ve got a really interesting niche in that, and so that that’s kind of an interesting and fun area. Next is sort of what you would expect in a CPA firm. So it’s our forensics, valuation and litigation services area. So these are folks with deep expertise, whether in fraud detecting and, you know, sort of recognizing, doing the accounting once fraud has happened, those types of things. Valuation, hey, I’m going to gift part of my business to my kids, so I need evaluation done those types of things. Then litigation services. Whenever there’s a dispute between parties, the attorneys will come to us and say, Hey, we need you to be an expert witness, or to be somebody independent, to look at this and help us with this case. And so that that’s a role that we. Play there. So that’s the fourth, and then the fifth and final line is Anders talent. So so clients come to us to help us find the talent they need for their business. So often this is finance and accounting, but also we go into other areas as well, and this has been a significant challenge, as pretty much everybody’s aware of, over the last couple of years. And I would like to say that it’s getting better, and it is a little bit in terms of people being able to find or firms being companies being able to find the people that they need. But there’s still certain areas in certain parts of the country that are very restricted in terms of there’s just nobody available, there’s nobody on the market. So those are our five advisory service lines today, and then we’ve always got a wish list, because Anders, my firm, has been around for 60 years, and so we’ve got great, decades long relationships with clients, and they trust us, and they know we do good work. They just wish we would have more services that we could provide to them, that, of course, are high quality and cost effective. And so we’re out looking for boutique consulting firms, different types of things that we need to have as part of our firm to effectively meet the needs of our clients. So that’s kind of that’s a spend about half my time on our existing lines and really helping, you know, with strategy and helping those things come along. But then the other half of my time I’m out prospecting. I’m looking for firms that have a unique offering, something that we’re interested in adding to the firm, and trying to help them see and understand what we’re building at Anders, and trying to attract them and seeing if they’ve talked to us about maybe part of their journey coincides with our journey.

george grombacher 16:39
What is the most challenging part of that is it, oh my gosh, there’s a million different opportunities out here, and I want to bring them all in, but you know that you can’t bring them all in? Yeah,

Dave Hartley 16:50
probably, probably the biggest opportunity, especially sort of right after the pandemic, like everybody thought, what they had was worth a trillion dollars, and the multiples were crazy, and so we’d have a great conversation. The number one thing that we look for is cultural fit. There’s not a cultural fit, then the rest of the conversation is irrelevant. But once you get the cultural fit, then you figure out both sides recognize the value, then you get to talking about, sort of financially, how are we going to structure this, and that’s when a lot of it falls apart, because just there’s unrealistic expectations in the market for some people on what they think their businesses are worth. So that was probably the biggest obstacle coming out of that. But there are a lot of great, you know, young, not necessarily young, a lot of great businesses out there, a lot of great consulting firms, consulting practices. And so those are some of the things that, some of those cool things that they do, we want to bring in. And you know, have that expertise as part of the Anders umbrella.

george grombacher 17:52
You mentioned lifelong learning and being able to take something away from all your different experiences. You’re obviously a thoughtful guy. You strike me as being empathetic. You like music, going to shows, what are. And when we talk about culture, that’s a sort of a sort of a big word. What? What do you consider your culture to be? What are? What are some of your core values that you think is leading to that good culture? Yeah.

Dave Hartley 18:18
So we do have, we have defined core values. We have seven core values. You know, transparency is a big one for us. We try to be, you know, fairness is huge as part of what we do. So we try to reinforce those core values. But, you know, the primary thing is, what are we here to do? And the thing that we’re here to do is to serve as a catalyst for those striving to achieve their highest potential. And when I look at that, I view that in a couple of different ways. One is obviously, for our clients, they want us to be a catalyst, because they’re striving for something, and success is different for everyone. And so basically, what we try to do is figure out, how can we be a catalyst for that person to basically achieve their goals. So that’s the way most people would look at it, but I also look at it, and especially as a leader in the firm that my job, I’ve got, we’ve got 400 plus people in the firm, and they all have individual aspirations, and they’re striving to achieve something. And so I’m also trying to be a catalyst for them to help them achieve their goals. And so I think that that those aspects are a huge part of our culture. And I think people look at this firm and come here and we get a lot of feedback that I really enjoy working here. I feel my skills are being used in the best way they can. And I also feel like the firm wants me to advance. It’s not like I think a lot of times when you think of public accounting, a lot of people generally think of, oh, they’re just trying to push people down and, you know, work them really hard and those types of things. And really, our job is to find the talents of these, these younger professionals, and help them advance, help them achieve their goals. And I think that’s that’s a big part of both Anders as a firm, but I think also as the CPA profession, that’s. The way it’s been. You bring somebody into the profession, you mentor them, you teach them, and you bring that along. And so as we grow, I mean, we’ve doubled the size of the firm in the last four years. Maintaining and evolving that culture is super important to us as leaders in the firm, and so we’re trying to be very intentional about that, and and we’ve so we’re putting in all the programs we’re doing, you know, we’re doing engagement surveys, we’re doing a lot of things to really take the pulse of our team members and find out what they like, what they don’t like, and how can we make the firm better? I mean, as we’re rolling into this time of year, we’re constantly looking at benefits. It’s almost open enrollment time, so we’re looking at what is really valuable for our team members, and what don’t they value very much? And how can we shift the investment that we make in benefits to something that’s going to have the greatest impact on the most number of people? So that’s the kind of thing that is leaders. It’s basically our fiduciary duty to do that for the firm, but for our people. And then if we take care of our people, we believe that they will take care of our clients, because they’re they’re learning, they’re passionate, they’re engaged, and that’s really what we’re what we’re striving for, is to be able to achieve that.

george grombacher 21:08
Well, based on that, it’s pretty clear why you’ve grown or doubled in the past couple of years. So I think that that’s awesome. And it’s not always easy to put your finger on culture, but I think we can all identify a good culture when we see one. So awesome. Well, Dave, thank you so much for coming on. Where can people learn more about you? How can they engage where can, where can potential clients find you? Where could potential aspiring accountants and CPAs find you? Yeah.

Dave Hartley 21:34
So the George, I’ve enjoyed it. The number one thing I would say is connect with me on LinkedIn. So linkedin.com/dave, Hartley, H, A, R, T, L, E, y, connect with me there because, and I push LinkedIn for a number of reasons. One, that’s where I’m most active. But the other thing is, I learned a ton from LinkedIn. When you connect with the right people and you see the things that they’re doing, it inspires me some of the things that are happening now with AI and different tools, I see how other people are using it, and I’m like, I never would have thought of that now that can do that, but then also I could now use it over here in this way. So learn a ton from LinkedIn. So connect with me on LinkedIn. I share a lot of stuff there. In addition to that, I also co host a podcast as well. It’s called, but who’s counting. And so we’re in season three of but who’s counting. And the theme of season three is innovation. So we’ve had, I think we’ve had 10 guests on this season, and we’re really focusing on both their thoughts on innovation and their journeys. In terms of a lot of when you look back, a lot of people have reached an inflection point where they’ve had to make a decision, go, go left or go right, and or they had to come up with their another path, not the left or the right. I got to do something different. And so we’ve talked with a lot of folks about their stories of how they did that, and where does innovation come from, and what are their theories behind it. So but who’s counting and LinkedIn, as well as my firm, Anders cpa.com we post a ton of thought leadership on our socials, and so you can learn a ton just by following us and seeing some of the materials that we put out.

george grombacher 23:12
Awesome if you enjoyed as much as I did, show Dave your appreciation. Share today’s show with a friend who also appreciates good ideas. Find Dave on LinkedIn. It’s Dave Hartley, H, A, R, T, L, E, y, check out the but who’s counting podcast? What a wonderful podcast name that is, Dave. Well done. And then go to Anders. Is it Anders? Cpa.com, Yes,

Dave Hartley 23:35
correct. A, N, D, E, R, S, Anders. CPA,

george grombacher 23:38
excellent. Well, thanks

Dave Hartley 23:40
again. Dave, Okay, thanks, George,

george grombacher 23:42
appreciate it till next time, remember do your part by doing your best. You.

george grombacher 16:00
So if I want my iPhone, and my Tesla and my Bitcoin to work, we need to get the metal out of the ground.

Pierre Leveille 16:07
Absolutely. Without it, we cannot do it.

george grombacher 16:13
Why? Why is there a Why has production been going down.

Pierre Leveille 16:21
Because the large mines that are producing most of the copper in the world, the grades are going down slowly they’re going there, they’re arriving near the end of life. So and of life of mines in general means less production. And in the past, at least 15 years, the exploration expenditure for copper were pretty low, because the price of copper was low. And when the price is low, companies are tending to not invest more so much in exploration, which is what we see today. It’s it’s, it’s not the way to look at it. Because nobody 15 years ago was able to predict that there would be a so massive shortage, or it’s so massive demand coming. But in the past five years, or let’s say since the since 10 years, we have seen that more and more coming. And then the by the time you react start exploring and there’s more money than then ever that is putting in put it in expression at the moment for copper at least. And what we see is that the it takes time, it could take up to 2025 years between the time you find a deposit that it gets in production. So but but the year the time is counted. So it’s it’s very important to so you will see company reopening old mines, what it will push also, which is not bad, it will force to two, it will force to find a it will force to find ways of recalibrating customer, you know the metals, that will be more and more important.

george grombacher 18:07
So finding, okay, so for lack of a better term recycling metals that are just sitting around somewhere extremely important. Yeah. And then going and going back to historic minds that maybe for lack of technology, or just lack of will or reasons, but maybe now because there’s such a demand, there’s an appetite to go back to those.

Pierre Leveille 18:33
Yes, but there will be a lot of failures into that for many reasons. But the ones that will be in that will resume mining it’s just going to be a short term temporary solution. No it’s it’s not going to be you need to find deposit that will that will operate 50 years you know at least it’s 25 to 50 years at least and an old mind that you do in production in general it’s less than 10 years.

george grombacher 19:03
Got it. Oh there we go. Up here. People are ready for your difference making tip What do you have for them

Pierre Leveille 19:14
You mean an investment or

george grombacher 19:17
whatever you’re into, you’ve got so much life experience with raising a family and doing business all over the world and having your kids go to school in Africa so a tip on copper or whatever you’re into.

Pierre Leveille 19:34
But there’s two things I like to see and I was telling my children many times and I always said you know don’t focus on what will bring you specifically money don’t think of Getting Rich. Think of doing what you what you like, what you feel your your your your your, you know you have been born to do so use your most you skills, do what you like, do what you wet well, and good things will happen to you. And I can see them grow in their life. And I can tell you that this is what happens. And sometimes you have setback like I had recently. But if we do things properly, if we do things that we like, and we liked that project, we were very passionate about that project, not only me, all my team, and if we do things properly, if we do things correctly, good things will happen. And we will probably get the project back had to go forward or we will find another big project that will be the launch of a new era. So that’s my most important tip in life. Do what you like, do it with your best scale and do it well and good things will happen.

george grombacher 20:49
Pierre Leveille 21:03
Thank you. I was happy to be with you to today.

george grombacher 21:06
Damn, tell us the websites and where where people can connect and find you.

Pierre Leveille 21:13
The it’s Deep South resources.com. So pretty simple.

george grombacher 21:18
Perfect. Well, if you enjoyed this as much as I did show up here your appreciation and share today’s show with a friend who also appreciate good ideas, go to deep south resources, calm and learn all about what they’re working on and track their progress.

Pierre Leveille 21:32
Thanks. Thanks, have a nice day.

george grombacher 21:36
And until next time, keep fighting the good fight. We’re all in this together.