Practice Profile: A virtual success

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Many firms that have embraced remote work or even become entirely virtual still find themselves struggling to uncover a quantifiable way to measure the success of these new models — but not Indiana-based Gineris & Associates, an almost entirely virtual firm that recently implemented dashboards for each employee to measure profitability data.

The technology, powered by Microsoft BI and custom-built from a few different data sources, was first provided to Gineris’ 17 employees in October 2018, but it’s the same kind of output the 75-year-old firm has been measuring since it first moved to a remote Citrix environment in 2012.

Around that time, managing principal Patrick Gineris’ family situation required him to work from home more often, and the firm hired its first remote employee, tax accountant Maria Lucente. “She was the first remote tax helper — she was great, super productive, and encouraged others to work remotely,” Gineris shared.

“She had worked for a midsized tax firm, had a young child, and didn’t want to put in grinding hours,” explained chief success officer Dave Betz, adding that she lived down the block from Patrick’s Uncle Mark, the firm’s previous president, who retired last year. In terms of billable time, Lucente achieved 92 percent or better, compared to the output of 65 percent from staff in the office, Gineris and Betz reported.

“From a billable time, productive time standpoint, it was great for her and great for the firm,” Betz added. “Virtual was a win-win.”

Since that Citrix onboarding, which was quickly followed by the firm implementing cloud-based accounting software Xero, these output percentages have been formalized for every employee, giving all team members a chance to track key metrics for themselves and be eligible for firm bonuses.

The numbers are in aggregate and on a per-client basis, drilling into each client to provide all cost information (out of pocket expenses and managed/associate labor) and time information (manager time and associate staff time).

‘An insane number of hours’

What the resulting personalized screens reveal for Gineris employees — now fully remote with the exception of administrative staff in the firm’s Dyer, Indiana, office — underscores what firm leadership discovered when Gineris first transitioned to the cloud.

“[Employees] were in the office an insane number of hours,” Gineris recalled. “Tax season productivity was even worse. They were hanging out 18 hours a day; you’re not going to be productive 18 hours a day. Maria, working from home, was producing as much … for the time billed: 92 percent.”

The firm’s new technology refines the data even more. “Since we have fixed service agreements, flat monthly fees, the boards do split out unearned revenue on projects that are behind and adjust revenue earned where we are overbilled,” Gineris explained.

“Each staff has a base rate that represents the percentage of the labor margin that we are willing to pay that staff member for the accounts that they manage,” Gineris continued. “The system compares the manager’s project-based earnings, based on their rate, and compares it to their salary and benefit costs for the same period. The overage, if applicable, is the accrued bonus. The system also tells them their realization per hour, overall and on a per-client basis. They can rank their clients by profitability and drill into clients that we are not doing well on and evaluate what is going wrong, so that they can make adjustments.”

While staff and clients appreciate this real-time visibility, the transition to being virtual, for an older firm like Gineris — which was established by Patrick’s grandfather William in 1945 — was not instantaneous. The firm’s entrepreneurial foundation and culture made the move more seamless internally, according to Gineris, but a few of the firm’s older legacy clients remain wary of the technology.

The simple solution is that those clients can still drive into the office during tax season, when the firm provides in-person meetings on a limited basis, though it reports that less than 10 percent of clients take advantage of this option.

“For the most part, it’s been overwhelmingly positive,” Gineris continued. “We have meetings all the time, and it has the [same] feel, when we see each other’s face and talk, and it’s very easy to jump in a Zoom meeting for 15 minutes. Otherwise you are scheduling a meeting, driving to the office, sitting in the waiting room. So much time is invested, then you have to drive back to the office. We have more meetings now with more clients.”

Betz similarly lauds the efficiency. “It’s quick, you jump on, have the meeting, and resolve it. No drive time. If you have a question, we use Slack as a communication channel, you can have a Slack chat going, or jump into a quick Zoom meeting. People are loving it. New clients are coming to us, in part because of it — the real-time accounting, virtual, cloud-based and real-time communication, as opposed to a client statement, a static PDF emailed to a client, and if they notice a discrepancy, there’s handwritten notes, and they have to email it back. [Instead] we jump back on Xero, we’re cloud-based with them, and we screen-share with clients, to fix it in real time. People like virtual, they want real-time.”

Process first

This philosophy extends to the firm’s internal training capabilities, which Gineris has been building via its virtual learning library, housing about 250 to 300 videos and 25 to 30 courses covering a gamut of processes and best practices. The firm has been creating these learning tools to refine the operations of its current staff — which breaks down to be about one-third tax, one-third accounting, one-third administrative support — before making proactive plans to expand it.

“We’re not aggressively marketing ourselves yet,” Betz shared. “It’s process first, then people, then promotion. We’re trying to really dial in all the processes needed to support the infrastructure of the firm. We moved to the CCH Axcess suite a few years ago now, and still things are relentlessly, continuously improving. We grew last year, added several clients, but our capacity is constrained. We didn’t want to add people over bad processes, [but work on] tightening up those processes.”

The firm created the learning database to accomplish just that. “We’re building virtual training, e-training, so when we bring a new person on, it’s not me teaching you, but we built a video library repository: Here’s how you handle a year-end close,” Betz continued. “Until those things are in place, we are not ready to aggressively market. [Our current marketing] is more word-of-mouth and the Xero advisor directory.”

The videos are shot and edited in-house by Austin Scherer, the manager of digital marketing services, who started as a seasonal tax employee but is now tasked with cutting down longer videos to be snappier, adding in voiceover and graphics, and uploading them to the learning system.

The topics covered include general tax and accounting processes, new client onboarding, sales processes, discrete sub-processes like how to build a tax return or export data between Xero and CCH Axcess, project management, client communication best practices, and how to conduct a peer review, with future courses expected to cover areas like payroll.

Real-time results

Scherer also manages Gineris’ social media and blogging efforts, though Gineris and Betz say that the firm’s progressive business model alone attracts plenty of talent and clients.

“We get 10 to 15 resumes a week, coming through web chat, email — it’s pretty amazing,” Betz shared. “There are websites that comb the internet looking for virtual, remote jobs … so we are found and put on those sites. In 2019, we screened 100 accountant resumes, and it led to four interviews only. They didn’t have the qualifications, or in the email screening, didn’t [qualify]. Of the four interviews, only one led to a second interview. They had the right mix, the right technology and background. We’re pretty selective. It’s great to have the interest, and be out there.”

In the hiring process, Gineris tests candidate’s computer speed and requires them to send a “screenshot of their processor, the gigs of their RAM, those kind of unique things that are not on a brick-and-mortar’s radar.”

The firm needs to know if candidates have the capability for things like Zoom meetings and screen-
sharing, which is explicitly tested during what Betz deems an innovative interview process. Prior to the first interview, candidates complete an open-ended accounting test. If they have a successful second interview, they will do some work with the firm’s professionals.

“If they pass that,” Betz explained, “they do a paid working interview in real time with real work. It’s way different than [just] doing the work.”

That ability is key, as Gineris employees appreciate doing real-time work with real-time results, according to Gineris and Betz.

“For a long time, we wanted to incentivize staff,” Gineris said of introducing the performance dashboards. “When incentivized on an hourly pay structure, you work more hours, and it’s awful. Salaried is worse, but the big firms do it: They’ll pay you $80,000 a year to work ceaselessly for whatever they can squeeze out of you. Our pay structure combines salary with commission — our professional staff are paid a salary, and the wealth management practice, like any other, are paid a commission. In addition to their salary, our accounting and tax professionals are also paid bonuses based on production. Any given month, they can see where they are, if production is over or under base pay. It gives them the details to manage their practice within a practice.”

They can then share that entrepreneurial perspective with the rest of the firm, Betz said, armed with the data to substantiate any suggestions they bring to firm leadership.

“We have had many cases where clients that were not profitable were drawn into a conversation,” Gineris said. “We believe in transparency. Our clients are all small-business people that understand we are also a small business that needs profitability to survive, so these go very well.”

Gineris shared one example of a 70-year-old restaurant-owner client whom the firm told was at risk of having his fees tripled if they didn’t find a way to reduce the time spent on his account. They worked with him on a consulting basis to revamp his entire process across his restaurants, which not only improved his financial visibility, but kept his fees the same. “Although our fees did not go up, our profitability did,” Gineris said of their consulting agreement. “None of which would have happened before the dashboards.” Gineris added that the 70-year-old client is now a huge fan of Zoom meetings.

Business within a business

The firm makes identifying these kinds of client opportunities a priority. “We have meetings in May and November to review data, and decide collectively if we need to raise fees,” Betz said. “It’s preferable to do flat fees, and for project work, or in cases where the client prefers it, we do hourly billing. When we make firm decisions and have discussions about fees, we now have the data to thoroughly make those decisions.”

Firm staff members are thus “a hybrid between self-employed and employed,” Betz explained. “They can help us look at what’s going wrong.”

The lack of traditional workforce constraints goes both ways, Betz explained: “For us, I love the fact that we can hire anywhere in the U.S. We can get the best talent from anywhere in the country, and serve the best clients anywhere in the country … It’s the opportunity of being a virtual firm. There are challenges; you have to be mindful of the culture to keep people feeling connected. We have physical get-togethers a few times a year. We just had [everyone] in for a retirement party for Mark. There’s a lot of benefits to working remotely, but you’ve got to stay connected.”

Gineris believes the firm’s innovative workforce models achieve just that. “It’s so fun for me, exciting, that the focus of my job is to make my staff more successful,” he said. “My primary client right now is our staff, I’m constantly focused on making them more successful while they focus on doing the same for our clients. It’s a cool culture and environment — it’s a blast.”

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