Two Top 50 Firms, Carr, Riggs & Ingram and PKF O’Connor Davies, separately announced Monday they scored funding from investment firms, marking the latest examples of accounting firms attracting outside financing from venture capital and other sources.

CRI, based in Enterprise, Alabama, received funding from Centerbridge Partners, a private investment management firm, and Bessemer Venture Partners, a VC firm. PKFOD, based in New York, received funding from Investcorp, a global alternative investment firm, and the Public Sector Pension Investment Board, one of Canada’s largest pension investment managers. (Investcorp formerly owned Accounting Today’s parent company.)

The amount of investment was not disclosed in either case. In both cases, the firms will be splitting their attest and non-attest sides in an alternative practice structure, as is common practice when private equity firms invest in CPA firms. 

Carr, Riggs & Ingram, L.L.C., as an independent licensed CPA firm, will provide assurance, attest and audit services. CRI Advisors, LLC (including its subsidiary entities) will operate as a separate legal entity, providing clients with tax and business consulting services. 

PKF O’Connor Davies LLP, as a licensed CPA firm, will provide attest services, while PKF O’Connor Davies Advisory LLC and its subsidiary entities will continue to provide tax and advisory services.

CRI ranked No, 24 on Accounting Today’s 2024 list of the Top 100 Firms, with $455.36 million in annual revenue. PKFOD ranked No. 26 with $380 million.

CRI plans to use the extra funding for M&A, technology-driven service delivery, and client-centered innovation. 

“Centerbridge and Bessemer recognize the value that CRI has already built and see the potential for where the company can go,” said CRI chairman Bill Carr in a statement Monday. “We are thrilled to gain partners whose vision aligns with ours. We believe this strategic investment will greatly benefit our talented team members and certainly our valued clients as well. We’ll be able to invest more into our staff, create new opportunities, and continue doing what we’ve always done, which is delivering exceptional results to our clients.”

Centerbridge has approximately $40 billion in assets under management as of Sept. 30, 2024, while Bessemer has more than $18 billion in assets under management. Centerbridge and Bessemer are taking a combined 51% voting interest in the firm.

“This combination is truly groundbreaking—CRI is the accounting profession’s ‘feel good’ story of the century,” stated Koltin Consulting Group CEO Allan Koltin, who consulted with CRI during the investment research and transaction process. “CRI is the only top 25 firm in the country to grow from a start-up to $500 million in a little over 25 years, making it the country’s fastest-growing first-generation firm. From its humble beginnings in Enterprise, Alabama, and Destin, Florida, CRI has become the youngest top 100 firm ever to receive a private equity investment as a foundation firm. Many private equity firms courted them during this process, but they chose Centerbridge and Bessemer for their similar values and shared vision of what CRI can become at the national level. There is no question in my mind that CRI will grow substantially over the next years while maintaining the ‘family feel’ culture they have had since day one.”

CRI engaged William Blair & Company, L.L.C. as its financial advisor and McGuireWoods LLP as its legal counsel for this transaction. Simpson Thacher & Bartlett LLP and Vedder Price served as legal advisors, and Citizens M&A Advisory served as financial advisor to Centerbridge and Bessemer. 

Courtesy of PKF O’Connor Davies

PKFOD plans to use the outside investment to improve its competitiveness and long-term sustainability, strengthening its balance sheet to provide flexibility for increased M&A activity as well as invest in new technology and service lines. PKFOD did not disclose whether Investcorp and PSP will be taking a majority interest in the firm.

“Since inception, our identity as an organization has been our enduring commitment to service. This investment from Investcorp and PSP further validates that we have an attractive business with a great brand, great talent and great customers,” said Kevin Keane, PKF O’Connor Davies’ Executive Chairman. “Investcorp and PSP Investments have a long history of backing profitable, industry-leading companies with demonstratable growth avenues and were impressed by PKFOD and the culture that we have built.”

Capstone Partners served as sole financial advisor while Levenfeld Pearlstein served as legal advisor to PKF O’Connor Davies. Gibson Dunn served as legal advisor to Investcorp. Weil, Gotshal & Manges served as legal advisor while McDermott Will & Emery served as regulatory counsel to PSP Investments.

“In recent years, Investcorp has established itself as a partner of choice for ambitious professional services organizations seeking to grow,” said Steve Miller, co-head of North America Private Equity at Investcorp, in a statement. “Together with PSP Investments, with whom we have a strong investment track record in the professional services sector, and more than 200 PKFOD partners, we are excited to build upon the organization’s decades of success.” 

The generative AI revolution, now several years old, has materially accelerated the software development cycle, allowing solutions providers to design, build and release new products faster than before. But this extra efficiency has not served to reduce stress but rather increase it among leaders as the widespread use of these tools has turbocharged already intense competitive pressures. 

Coding 

Beyond text generation, coding support has been touted as one of the primary use cases for generative AI, with several studies this year finding that software engineers have been more productive (though not necessarily everyone). Overall, there was remarkable uniformity among leaders in just how much faster generative AI has made projects, as everyone when asked this question provided a figure between 10-20%. 

However, there was also remarkable uniformity in saying that code generation capabilities were not the primary factor in why generative AI has sped things up. Indeed, there was a general recognition that generative AI, left to its own devices, does not produce quality code. Chris Szymansky, chief technology officer of accounting and auditing platform Fieldguide, spoke for many when discussing the quality of AI coding. 

“Certain activities are not as useful yet. Like writing high quality code itself, like the code a senior engineer would write, those tools are not helping with that yet,” said Szymansky. 

Rather than writing the code itself, generative AI has instead been an invaluable tool for helping engineers review, analyze and optimize their own code, identifying root causes of bugs and errors, testing and evaluating their work, and making suggestions when they’re stuck, all of which are as important as the coding itself. 

“I think this drives speed into the development process, but also more importantly for us, it drives long term quality improvements into our products as well in terms of how they perform at scale,” said Joel Hron, chief technology officer for Thomson Reuters. 

This, ultimately, has facilitated the prototyping process. Coming up with new products and quickly making a prototype has become much easier, as has making iterative improvements on it, according to Dan Miller, executive vice president of Sage’s ERP division.

“The greatest benefit of generative AI accelerating our product development is the rapid prototyping of new feature sets to ultimately drive the value for our users. Sage customers have always recognized the tremendous value our platforms have been able to deliver relative to cost, and this product acceleration only supports our ability to deliver the best value. By saving development times, we can gain more and more efficiencies to help our customers grow their business by delivering greater value,” he said. 

Non-Coding 

However, product development is more than just code. A project is built on not just the technical aspects but myriad other factors like design, user experience, market research and overall business strategy. Generative AI has had a huge impact in these areas, serving to accelerate the overall product development cycle. Leaders cited uses like summarizing progress meetings, drafting reports, and tracking key metrics and milestones. Enrico Palmerino, CEO of accounting automation solutions provider Botkeeper, spoke for many in saying it has also been valuable for analysis and research in seconds that normally would take days. These insights are then employed to improve product design. 

“If we have a question and we can’t understand what is going on with our users [it can help]. I just did this in an executive meeting recently: [I asked] what is the biggest problem people are experiencing? And before, it used to be we needed someone who would look at all the tickets coming in. Now you can just ask the AI and it will be like ‘16% is this, 35% is that,'” said Palmerino. 

Sage’s Miller, also mentioned analytics as an aid to development, adding that this has greatly facilitated not just prototyping for current products but ideas for future releases as well. 

“From a non-code perspective, we can pipeline product development more efficiently using data from user metrics, such as product features that our users are leveraging more than anticipated and what new features they might benefit from in future releases. In other words, generative AI is facilitating market research for us in the most efficient way possible and uncovering user patterns at a rapid pace,” said Miller. 

Another major non-code aspect is content development. Brian Diffin, chief technology officer for Wolters Kluwer, noted that their own products have a lot of content which needs to be drafted, edited and curated. Generative AI has significantly sped up this process, allowing them to draft materials much faster. 

“Some of our products—let’s say Research for example, where we have editorial people who are finding new legislative content and then curating that content and summarizing it into more digestible language and concepts for our research products—the editors are using generative AI to help them do that and it is saving a lot of time,” said Diffin. 

Jayme Fishman, chief strategy and product officer for Avalara, made a similar point, saying that content generation has been vital not only for documenting use cases “because for everything you build you need to document it,” but for content generation as well. 

“We don’t have a product that does not rely on content, because we are a compliance solution and everything we do is governed by some law somewhere that needs to be translated to business logic, and using it to help in that definitely helps accelerate our ability to do more with less,” he said. 

Time and money

While a project may require fewer labor hours than it did before, this has not necessarily translated into lower development costs. Diffin, from Wolters Kluwer, noted that while projects require fewer labor hours than before, there are still technology costs to consider. For one, generative AI is very compute-intensive, which can lead to higher data fees from cloud providers. It is a challenge, he said, to balance functionality with cost. 

“We’re doing a lot of experiments with this, there’s so many approaches on how you implement a generative AI based piece of functionality in the software—we’re evaluating not just the large language models but what their capacities would provide and what is going to be the cost of that feature when we go into production. … We’re seeing some companies right now develop small language models to lower the cost of compute, so we’re doing a lot of experimentation now on what is the best way to release this from a feature perspective and how we can optimize cost,” said Diffin. 

Hron, from Thomson Reuters, though, felt that costs, whether in terms of labor hours or technology infrastructure, is beside the point. The benefits of increased efficiency and capacity outweigh these kinds of considerations, and vendors are usually more focused on the product’s quality than the speed at which it is brought to market. 

“These things are making it easier than they were before to provide more flexibility on how we deploy our resources across teams, and how we bring people to bear on new problems. I’d emphasize quality in terms of applications—not just shipping things faster but better. I think for us that is as important or even more important than speed,” said Hron. 

And at any rate, even if a project does take fewer labor hours, no one is using the extra time to take a vacation. Everyone, instead, puts that saved time into more work, whether that’s adding features and refining the quality of the existing project or starting up a new one entirely. 

“We’re a startup company so anything we can do to move faster and be laser focused on our customers, that is where we put our power into. If we can do that X percent times more, that is huge. So that is where we’re putting the time: more R&D, more product, shipping more product, faster dev cycles, happier customers,” said Fieldguide’s Szymansky. 

So even if AI is saving people labor, it seems people are working more than ever. Botkeeper’s Palmerino noted that while AI has saved tons of hours in the product development cycle, people—including himself—have even less free time than before. 

“What you will see is people going beyond, because they are trying to benchmark the new output expectations. Inherently, we tend to do more. … I’m not seeing work hours come down. They all said AI would mean we work shorter days, but you actually work longer days,” said Palmerino. 

Competitive pressures

A large factor in this situation is that generative AI has greatly improved efficiency at many companies, including the competition. Consequently, competitive pressures have increased significantly since the introduction of generative AI, as everyone with these tools is developing products at an accelerated rate to the point where this pace is more or less the new baseline. Hron, from Thomson Reuters, said that as much as he’d like to be sitting on a beach sipping mai tais, the current market environment just doesn’t allow that. 

“The interesting dynamic is the degree to which this technology has moved everyone forward in terms of pace, not just Thomson Reuters. The entire market can move faster, and our customers can move faster, and their appetite for more has grown as well. … If anything, I would say it is pushing us to do more, even if we can do each bit a little faster than we were before,” said Hron. 

Avalara’s Fishman noted that this space has always had an “innovate or die” dynamic so the types of competitive pressures they’re facing are nothing new, but what is new is their sheer scope and scale. At this point, pretty much everyone is using AI tools, so adopting the technology can seem less about seeking advantage and more about avoiding disadvantage. 

“AI really has the promise of making your solutions better, strong, faster. But that is the worst kept secret in the world. You can’t turn on the news or read an article in Accounting Today without reading about AI. Everyone’s awareness creates a dynamic where a choice as to whether or not to use AI is an illusion: there is no choice. You have to, or you will become obsolete,” he said. 

Diffin, from Wolters Kluwer, pointed out that beyond incumbent competitors becoming more efficient, AI has also made it easier to launch a startup. With this technology lowering the barrier for entry in this market, there has been an explosion of niche products released at “almost a hypersonic speed because things are now easy to develop.” 

“Someone, just a few programmers, can go to Azure, orchestrate a bunch of services, including OpenAI services, with just a bit of business logic and make a solution they can sell into the market,” Diffin said. Though, this may not be all bad. “We’re seeing evidence of that happening quite a bit. And of course we look at those startups as potential acquisition candidates.” 

What’s a product anyway?

Botkeeper’s Palmerino noted, though, that as AI becomes increasingly intertwined with software development, the concept of a product release might start to lose its meaning. Right now, AI is still highly focused on specific applications, even if one interacts with these AI using natural language. In the future, he envisioned, AI might become advanced enough that it won’t necessarily need a discrete feature to do what users ask, it will just do it. In such a world respect, talking about a development cycle might not be as relevant to the experience of solutions providers as it is now.

Today, for example, someone might ask an AI built for insights how they can make their company more efficient, and the AI will say it found 12 financial institutions across four clients, all of which are capable of connection. Later, it might not only find those 12 financial institutions, it will prompt the user if they want the AI to connect to them now, and if so will just do it, all without a specific feature or functionality built in. It will just know how to operate the software.

“That is where AI is heading: to do full stack task completion for you, which will make it hard to understand releases. We do true releases where there is an update to the version or a very segmented or defined functionality change, but with the open-endedness of AI and the ability to do full completion of tasks, pieces will mostly be behind the scenes, I don’t think you’ll see or hear about them and, in many cases,” he said.

As firms grow, they need to move their sales pipeline from inside their head into a more formal process, says Sarah Dobek of Inovautus Consulting, to gather the right data and hold everyone involved accountable for growth.

Transcription:

Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Dan Hood (00:04):
Welcome to the Air with the accounting. Today I’m editor-in-chief Dan Hood. It can take dozens of contacts with a prospect before they become a full fledged client and it’s way too easy to lose track of them in that long process unless you have a well structured sales pipeline here to talk about what that is and why your firm should have one. And even if you do have one, how do make it better is Sarah Dobek. She’s the president and founder of Inovautus Consulting and a well-known consultant to accounting firms. Sarah, thanks for joining us.

Sarah Dobek (00:28):
Thanks Dan for having me.

Dan Hood (00:30):
Alright, I want to dive right into this. I know a lot of people on listening, we’ll probably know what a sales pipeline is, but let’s give everybody a basic understanding of what it’s all about.

Sarah Dobek (00:41):
So a sales pipeline really is a visual representation of the stages that potential clients will move through from initial contact to becoming a client, whether it’s a client or a prospective client to the firm. It really talks about their buying journey within the firm. And what it does is it helps facilitate this conversation around firms tracking progress, identifying bottlenecks, and quite honestly forecasting future revenue.

Dan Hood (01:12):
Do firms have them? Do a lot of firms have them? Do you find most of your clients have them, for instance? Or do you go in and find a lot of firms that are like, or, Hey, here’s the real question. Do a lot of firms say they have them and then you look at it and you’re like, well, no, no, no, no. That’s not all.

Sarah Dobek (01:26):
So do a lot of firms have sales pipelines? Yes. I would say that there are a lot of firms that do have sales pipelines. I think firms have them, whether they realize ’em or not, they don’t always document them, but every firm has a buying process, whether you are paying attention to who’s in that pipeline, whether you’re doing something with that information, that’s probably the better question is whether that’s happening. And to answer a question that’s part of evolution and growth. If you’re a sole proprietor, it’s all on your head. You don’t need typically an Excel spreadsheet. If you have reminders or to-dos or whatever, that’s fine. But the larger you become, the more important this becomes in being able to manage growth inside of your firm. Gotcha.

Dan Hood (02:09):
And obviously, I mean that’s assuming every firm wants to grow at least somewhat, at least to replace the attrition that happens every year. Is there more beyond the style? You said when you’re small, you can keep it in your head. Why do we need to have it out on a piece of paper as we get bigger on a system in a piece of software or whatever the case may be?

Sarah Dobek (02:30):
Yeah, I think one of the biggest mistakes we see of growth is just lack of execution. We forget because we’re all human, at the end of the day, we all have a million things vying for our attention. And so one of the things that we’ve found is it enhances accountability, a great deal towards growth, and it keeps the team focused and motivated around growth, especially if we’ve established growth goals in our firm, whether that be at a firm wide level, practice area level or individual level, it US stay really organized around that information. The other thing that it does is it enhances forecasting By tracking our prospects and existing expansion of client services, firms can more accurately forecast future revenue, whether we’re going to hit our growth goals for the year, they can help plan for capacity inside of the firm. If we know that we are on track to hit our goal or exceed our goal, well guess what?

(03:27):

Now we can go to the HR and the recruiting team and say, look, here’s what we need. This is what we’re planning. We need to start hiring now because this is a service-based people business. This isn’t that we turn up production, we have to have the people to turn up production in an accounting firm. And then the other thing it does is it increases our efficiency. So it brings a line of sight to our bottlenecks and places where we’re breaking down in our sales process where things aren’t converting the way that they’re supposed to or even protecting our bandwidth. What are we bringing in the door? Is it the right business for the firm? And so there’s a lot of things that our sales pipeline can really do to support our growth in the firm.

Dan Hood (04:09):
And you mentioned this, you described it as the journey of the client potential client. Are there ways of becoming a client whether they know they’re going to become a client or not? Maybe you talk about, and I realize this will vary very differently by firm size even by type of client, but are there a set of stages that the average client will pass through in a pipeline?

Sarah Dobek (04:29):
Yeah, I mean when we think about the buying process that usually the pipeline stages can be a little bit more granular, but there’s this idea of people having this idea that something’s wrong, there’s a problem that they need to solve in their business, and that can be triggered from a lot of different things depending on the surface. And so we generally align that with lead generation and qualification in the sales process. Lead generation is usually like we’re identifying and capturing a potential client through various marketing or networking activities. There’s been some indication of engagement with the firm. Qualification is when they’re giving some indication of being in a buying process and we have to further qualify whether they actually are, they’re sort of what we call just kicking the tires. They’re doing research but they’re not really ready to purchase. Once we’ve brought them through a qualification stage and we’ve actually had contact with them, then we go through this process of some sort of a needs analysis.

(05:31):

We’re doing discovery calls with them. Sometimes that’s one call, sometimes that’s a half dozen calls to figure out what it is that they need. And part of that includes scoping of the services, right? For firms that might be looking at past tax returns or audited financial statements, it might be looking at their accounting system. If we’re talking about cas S, but getting to the point where we can accurately say, these are the services, we can price those services and put them into a proposal or a modified proposal some way to give them pricing around what we’re doing and what we’re going to be doing for them. And we often call that a proposal. And some firms use proposals, some don’t. Different markets sort of require different things here. Once that proposal’s delivered, then we’re typically waiting to get feedback from them. Sometimes we’re negotiating, what’s it going to be?

(06:21):

We’re like, you know what? I don’t know if we can quite afford that. What else can we do? What are some of the other options as how we can work with you? And then there’s the closing, it’s usually the verbal commitment to go forward. And then from there, the firms usually go through whatever client acceptance process. They may or may not have defined in their onboarding depending on what services they provide. So whether we’re doing conflict checks, we’re setting up engagement letters, we’re doing any other checks that we need to on the background to be able to actually onboard them as a client. And then we go through the onboarding procedures.

Dan Hood (06:54):
Got, and I’m just curious, is that sort of the end of it, right? Once we’ve got you onboarded, you’re no longer in the pipeline, now you’re somebody else’s. I mean obviously everyone cares deeply about the firm’s clients, but they’re fully out of the pipeline. Now you’re a client, we’re going to go back and look at some other people who’ve done business with.

Sarah Dobek (07:10):
They’re fully out of the pipeline until they start the process over. Existing clients can raise a hand and give an indication of additional services or consulting needs that they have. And the second that happens, they go right back into the pipeline. Because we look at the pipeline as not just new clients but new revenue and new revenue can come from existing clients or new clients to the firm. And so for every firm that we work with, we say the second they show an interest, if they call you and say, Hey Dan, I have a new entity that we need to complete tax work for, right? Guess what? They’re going back through the pipeline. Or Oh, guess what? We identified some gifting strategies we need to do before the end of the year. Guess what that’s going in the pipeline.

Dan Hood (07:50):
Got you. Because important, as you say, it’s a revenue tracker as much as it is an actual new client tracker. So keeping all of that in that place is going to be pretty crucial. We talked in an earlier podcast, we talked about KPIs for growth. And if you’re not catching that, I guess that would be something, a big thing that would be missing from your KPIs if you’re not getting what’s called the cross-selling revenue, the holy grail of so many pharmacy states is to sell a lot more services to the same set of clients. So they’ve got to go back into the pipeline, obviously for them it they’re not feeling like they’re back to the pipeline, hates boring, internally measured. That is very cool.

(08:30):

There’s so much more I would like to, we could talk about that, but as with all of our podcasts we’ve talked about there’s limited time and we do need to take a quick break. But when we come back, I want to talk about gathering the state and how it’s put together and how it’s reviewed and who looks at it and and all that sort of stuff. For now though, we’ll take a quick break. Alright. And we’re back with Sarah Dobek of Inovautus Consulting. We’ve been talking about what’s in a sales pipeline, what gets tracked in it, how when clients and prospective clients get into it and how they might end up going back into it. Because the important things to we sort of said, right, is that it gives you the ability to track future potential revenue so that you can make plans based around whether staffing broken capacity or which is all very cool stuff. But I want to talk a little bit more about the practicalities of it, practicalities of maintaining the pipeline and that sort of thing. Who should be in charge of this to the firm? Is there a natural place for this to live or is a collaboration between a bunch of different departments?

Sarah Dobek (09:29):
So often it’s sitting in the marketing and sales department of an accounting firm. And if we don’t have a large team, sometimes that could be living within a partner in charge of growth or managing partner. Oftentimes growth falls on the managing partner’s responsibility until they become a certain size. And we have a partner carved off and dedicated to overseeing that function. But usually it’s going to sit there and typically where you’re going to look to that person is to help support tracking of that information and overseeing the reporting around all of that. It takes a fair amount of corralling and administration to get the data that we’re looking for because we know all accountants listen the first time and are super good about falling process and procedures. So it doesn’t take any hurting of anything.

Dan Hood (10:24):
Hold on a second. I got to catch my breath there. That’s a bold and sweeping state better. Sorry.

Sarah Dobek (10:32):
There’s a little bit of passive aggressive underlying tone there. It’s just S in good joke, but in reality it does take that because we’re busy at the end of the day and we should have somebody corralling that function. We should have somebody helping to support those things in the accounting firm. But it is a big evolution for firms to be able to track this

Dan Hood (10:54):
Information. And we’ve talked at different times about the difficulty of gathering information from across the firm, whether it’s coming from practice management systems or CRM systems or from the email systems of individual partners. You said something that might get you into a sales pipeline is just saying to somebody at a firm, oh, I didn’t know you guys did that. I’d like to know more about that. Because doing so, we need help in that area. So there’s a lot of different areas where this information can be coming from A couple of ‘EM central ones obviously, but there’s also a lot of different other places where little bits and pieces of it. How do you gather all that information? How do you make sure you’re getting what you need to get? How do you know what’s out there? Maybe one way to start.

Sarah Dobek (11:35):
Yeah, so I think first having a centralized system to put it in is really important. A CRM system’s really critical to support this. It used to be years ago that we really supported starting with an Excel document to create behavior change. But to be honest, the technology is so advanced that just getting it into a technology system and there’s a lot of lower cost entry level CRM systems that can be a good place to gather that. I will say equally important to that is the process. The reason that this often breaks down, all joking aside, around following process and procedure is typically due to a lack of good process and clarity and reinforcement. One of the things that we work with in a lot of firms when we do the CRM implementation is the process adoption around this. And it can take a year plus to give the behavior change that we need out of all individuals because we may only touch it a couple times a month. It’s really hard to create a habit when we don’t touch it as frequently. If we’re a salesperson and we’re in there daily, we’ll have it knocked out in three to four weeks. We’ll be good, we’ll be comfortable with, but if you’re a partner and you’re only touching it a couple times a month, realistically it’s going to take a lot longer. You’re going to forget until you need it. And so being able to align that process is really important. But also having the supportive leadership is really important around that process too.

Dan Hood (13:02):
Assuming you’re getting all the information you need, right, at some point it’s not just about putting the information in, it’s about doing something with it. And one of the things you hear people talking about people who are really good with their sales pipeline is the regular reviewing them. It’s not just getting the information in there and hoping somebody looks at it. You want to proactively be keeping track of it. Sort of like you keep track of all kinds of other KPIs going on at your firm on a daily basis. How often should firms be looking at that at a pipeline? Is it a weekly thing? Is it daily and everything may change, change by role, obviously?

Sarah Dobek (13:33):
Yeah, so I would say that weekly is probably a touch much for accounting firms that the pace at which people buy isn’t that frequent. So you usually recommend pipeline meetings at some level. And what that looks like for each firm is a little bit different, but about once a month, sometimes we flex around extension season or busy season and things like that, which really quite honestly is when we should be paying attention to most of this. But once a month, I think that if you were managing the pipeline and the data inside of it as a professional, looking at it every couple of weeks at a minimum is probably where I’d be doing that. And then the larger analysis around what’s our stage conversion look like, really looking at that month over month or even a deep dive once a quarter to look at that.

(14:23):

Our conversion rates, what’s happening with the data, what is the data telling us is really important. We look at numbers for forecasting every month. We look at where we’re going, but we really analyze that on a quarterly basis to say, are we on track or are we not? Because there will be a pattern in that data that starts to emerge if we’re off track. And that will become very apparent after month two in that pattern. And if it’s off base at month three, I’m going, something’s wrong here. It’s not just a timing issue. And a lot of times that’s what it is, is it’s a timing issue in accounting firms. So our cash, our invoices didn’t go out last month. They’re going out this next month, so this one’s going to look different compared to last month and our year over year comparison. So I think that’s really important that at an individual level, looking at our sales to dos every week to two weeks to make sure we’re following up on our actions. And that’s really what the pipeline brings is some accountability to facilitate the conversations. If I can’t tell you how many times I’m in a meeting pulling up a pipeline and saying, how is this opportunity going? Oh shoot, I need to follow up with them. I haven’t heard from them in a few weeks. So that accountability piece, that’s where the magic happens because sales is all about execution and that simple prompting of an email is what could cause the deal to close.

Dan Hood (15:48):
Right, right. Well, and it’s fascinating though because in addition to doing that, being that sort of prompted nudge and reminder for the sales team or whoever’s looking at it, it could be a reminder for the partner to go out and say, oh yeah, I’m going to talk to ’em. But it’s also, those are all important because in the end, the data that coming out of that can also inform your revenue expectations, which has got to change your strategic thoughts at the very top of the firm. So I mean, whether you’re hitting your growth goals, they don’t have the time necessarily to look deeply into the pipeline, but they can look and say, yes, pipeline is saying revenue numbers are going to be in good shape or not.

Sarah Dobek (16:25):
Absolutely. Yeah. I mean a regular cadence is probably most important. And when firms start this journey, that cadence can look a little bit different. I would also say that as firms grow, how they review the data, where that review sits looks a lot different, right? When we have practice groups that have really evolved, we review a very narrow view of what that is, a practice group level. We have managing partners that as they meet with their partner group, pull up their progress against their own individual business development goals, we empower our partners through CRM system to have dashboards of their own goals. They should all know exactly where they’re at at any given point in time and be able to pull that information up. And that’s part of the power of having it in a CRM system is the ability to be able to do those things.

(17:14):

And when we see that is when we see the most successful adoption of CRM is when we’re actually using the information because the partners are then understand how this is helping them and it doesn’t become what we hear is an administrative burden and it’s reframed as this is something that’s going to help us. This is critical to our growth. So the adoption of this is all joking aside to what I said earlier, this isn’t something we’re having to pull and drag out of them to get updated. It’s just adopted and it’s used and there’s not an issue with them putting the data into the system because they understand it and they see the value in it.

Dan Hood (17:52):
Well, that’s the thing, right? Once they start to see the value, then they understand the necessity for original, it is a little bit of a burden, but you start to understand the value of why you want to do it. It’s fascinating stuff. And as you say, every firm has one. It’s just a question of many cases of getting it out of somebody’s head and getting it down on some kind of system where you can share it, where people can follow through on it and really make sure that it’s a useful tool as opposed to just something you keep in the back of your head and remember if you number of point. Very cool stuff. Any final thoughts? Anything as people look to take their sales pipeline and take it to the next level? Any final thoughts for them?

Sarah Dobek (18:34):
The only final thoughts I would have is process is really important. And I think sometimes we get stuck on what it should be. And there’s tons of great examples in the profession of how firms have different processes and what works inside of our culture. And so knowing your firm, knowing what’s going to work and what will be successful, that’s how we get the right adoption. That’s how we get to the end result. And the outcome that we’re looking for to be able to do some of these things is understanding that I sat through a great conversation yesterday with a firm that had less ideal process than what you might typically describe, but it worked really well for them. And so I want to encourage firms that are listening to this to figure out what that process is going to be and what that might look like for your firm. And lean into that and don’t get stuck on what we think success looks like with CRM and sales pipelines, which is like everybody has to enter their own data and it all has to look exactly like this. There’s some best practices for sure, but you can find success in creating a process that works for your firm.

Dan Hood (19:45):
Yeah, actually that’s awesome because all the best implementations of whatever it is. Start by saying what works here and what do we need here? And making sure that we’re not just leveling everything. You’re getting rid of baby with the bath water style, getting rid of everything just to put in this new system. It takes account for the things that work already. So very cool. Great advice. Alright, Sarah Dobek with Inovautus consulting. Thank you so much.

Sarah Dobek (20:09):
Alright, thanks Dan for having me.

Dan Hood (20:11):
Thank you all for listening. This episode of On the Air was produced by Accounting Today with audio production by Wen-Wyst Jeanmary. Review us on your favorite podcast platform and see rest of our content on accountingtoday.com. Thanks again to our guest and thank you for listening.