Tell me about your new position with Whitlock and why the change of leadership?
We’re going through a transition like a lot of businesses are right now, passing off to the next generation as baby boomers get closer to retirement. Our former managing partner, Joe Page, had done it for 11 years. (He) and I have been working on this transition over about a year and a half. Also, as we’ve grown, we’re in need of a different model. That’s something that seems like a lot of CPA firms, professional service firms, are going through. We were always more of the traditional partnership model where it’s decision by consensus and partners would vote. We’re getting to the size where it’s just not manageable to do that anymore. We need quicker decision-making. There was an intentional decision made to call this the CEO position instead of a managing partner role. I’m in charge of a lot of the day-to-day stuff, and Joe and a couple of our other senior partners are on an executive committee, sort of like a board of directors, that I directly report to. We have about 50 full-time equivalents and three offices: Springfield, Kansas City and Joplin.
What are your goals with this position?
To enhance our communication. Communication gets even more important as you grow so everyone feels like they’re connected to the organization. Part of that also is the hybrid work environment. We have employees working all over the country. As we transfer to more of a corporate model breaking things into teams, [it’s] making sure we have good leaders of those teams and we’re communicating well as an organization just to keep people connected to our purpose, which is enhancing our clients’ prosperity and developing great people.
For those employees working across the country, have they moved since you hired them, or are you hiring from a nationwide pool?
With most of them, it is people that we were already connected with in some way and were moving other places for different reasons. A lot of businesses are struggling with hiring right now and getting the right people. Once we have them, we want to make sure we offer flexibility to keep them.
The phrase zero-day close seems to be gaining traction in your industry, fueled by technology. What are you seeing within your firm, and is that a goal?
That’s referring to having the accounting books closed quickly and (having) quicker information than what has historically been the case. That is definitely something we’re focused on. One of our growing areas is our client advisory services where we actually help businesses run their accounting back office. We’re investing in and constantly looking at a lot of automation tools to do that because a lot of business owners, if they get financial information three weeks, four weeks, after their month-end or year-end is already closed, it’s not as valuable for them. They can’t take as strong of action on that. We’re really pushing toward that zero-day. Over time, we want to make sure we’re giving them some forecasting tools so they can take that information and project it out into the future and help them make decisions for where they’re going to invest their money: Are they going to have enough cash flow? Do they need to hire? The dream we’ve kind of set out is that a business owner can sit on the beach with their iPad and know exactly where their business is at that minute. I think that’s where the industry is going.
Do you have a timeframe for that goal?
I would say we’re two years out from that.
What regulatory changes are you navigating?
The current tax structure that has been in effect since 2017, those are set to expire in ’25 and ’26, so we’re starting through the process with our clients and making sure they’re aware of the tax changes that will occur and how they may need to change structure. The big thing is some of the rates are going to be changing. The Tax Cuts and Jobs Act back in 2017 cut rates at certain levels, at different tiers of income tax; those are going to go back up to what they were. It also changes some limits on gift tax, estate tax. Community banking is a big focus for us, and there’s not any big regulatory changes right now, but with all the turmoil that’s happened in banking this last year, there’s a lot of talk in Washington [D.C.] about regulatory changes. Those are focused on bigger banks, but inevitably those always end up filtering down to the community bank space. We’re keeping an eye on that to see if there’s anything that’s going to change regarding capital requirements or liquidity requirements or reporting requirements. As there’s more regulatory requirements, the bigger banks are able to absorb that a little bit better, and it causes more consolidation. That’s the big way it trickles down to us.
This spring, SBJ asked business leaders how long they could sustain operations with cash on hand. Half said indefinitely, and another quarter said seven or more months. What’s behind that?
I almost saw that more last year. It may be tapering off a bit. Because of some of the supply chain issues, some of the staffing issues, we saw more businesses holding. If they were an inventory-intensive business, we might see them building up their inventory level so they could sustain shocks if there were delays in shipping. A lot of businesses were raising prices mostly to offset higher inventory cost or personnel cost. In some cases, that’s mediated and has allowed them to take a little bit more in profit and build up their cash levels. I think a lot of businesses have been intentionally doing that because we’re just in an uncertain time right now. It seems like it goes back and forth by the day now. Are we going to go into a recession in the next year or are we not? They’re trying to build up a little cushion in case.
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