Jan Haugo, CEO, ICB USA
Editor's Note: This is the second in a new podcast series featuring the "2016 Most Powerful Women in Accounting."
In Part 2 of our series spotlighting the "Most Powerful Women in Accounting 2016," Joe Woodard speaks with Jan Haugo. Last year, Jan took her passion, expertise and thought leadership in the bookkeeping profession to a whole new level by starting up the U.S. member association of the Institute of Certified Bookkeepers.
Since then, she has achieved massively increased recognition of the bookkeeping profession by setting stricter standards, forging new partnerships, establishing meetup groups and social networks, and building a membership base of 500 members to date.
During this episode, Joe and Jan discuss the future of bookkeeping, the relationship between and accounting and bookkeeping, and the role of bookkeepers with Cash Flow and Analysis.
You can hear this podcast and others here.
Thank you for tuning in to this episode of the "Scaling New Heights Podcast."
Full transcript of the episode follows:
Joe: Thank you for tuning in to this episode of the Scaling New Heights podcast. During this episode, I will continue my conversations with a few of CPA Practice Advisor’s "216 Most Powerful Women in Accounting." Now the editor-in-chief of CPA Practice Advisor, Gail Perry, made a statement that I agree with wholeheartedly, “These leaders are shaping the profession through their work as partners, mentors, innovators, and thought leaders."
Today I will speak with Jan Haugo, CEO of ICB USA, the Institute of Certified Bookkeepers in the United States.
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Someone who has always been forward-thinking in terms of technology adoption is today's guest, Jan Haugo. Jan has run her own bookkeeping and accounting firm for 20 years. For seven of those it's been completely virtual. During that time, she's been an active thought leader and advocate for the bookkeeping community, which she differentiates from the CPA community and the tax preparation community.
Last year, Jan took her passion for the bookkeeping profession to a whole new level by taking the leadership role in the Institute of Certified Bookkeepers USA Division. Now this is a global association and she is heading up the USA efforts. She's achieved massive recognition for the bookkeeping profession and has forged partnerships, established meet-up groups, and social networks. She's built this membership base of over 500 members already within the US. Most recently, Jan was recognized as one of those 216 Most Powerful Women in Accounting.
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Now, let's get started with our conversation with Jan.
Jan, welcome to the podcast!
Jan: Hey, Joe, great to be here, thanks so much for having me!
Joe: Well, it's great to have you on board. I know we've got a lot we want to ask you and we have a limited amount of time. I'm going to jump right in. I want to talk about ICB as an organization. A lot of our listening audience, a tremendous number of them, are either career bookkeepers or they do a tremendous amount of bookkeeping work; meaning they're CPA's who employ full time outsourced bookkeepers.
You're coming to Scaling New Heights and you're presenting at Scaling New Heights. I know you have some exciting new things you're going to share. Our podcast audience does not yet know about what's going to happen with ICB and Scaling New Heights. I'm going to let you tell them. What advantages does ICB see from their involvement in Scaling New Heights? Tell us about it, tell us why you're excited about it.
Jan: Absolutely. ICB is so excited because we get the opportunity to be right in front of the bookkeeping professionals to let the community know what ICB is about, why we are there to elevate the bookkeeping profession. We want to help the community learn how to streamline and implement the changes, specifically, that are designed for the bookkeeping professionals to lift and help shift them from that data entry and advisory role that everyone is talking to them about, but we want to help them do it from the bookkeeping perspective.
We also want to really help them learn how to become indispensable to their clients. Also, to really help give that bookkeeping professional the upper-end user, that you have there at Scaling New Heights, that vision of what the international flavor is, and the future of bookkeeping from the ICB World and from the ICB USA perspective. That's what we're looking for and really presenting there at Scaling New Heights.
Joe: I want to drill down on something that you said there because it was all of it was tremendous value, but I heard this undercurrent of "be the best bookkeeper you can be, but don't just be the best bookkeeper you can be, add a layer to that." Can you drill down a little bit on the sort of value-added component of bookkeeping?
Jan: It’s more about really giving back to your clients, but doing it in the way that we know how traditionally in terms of using the efficiencies that you have, right? Giving back in terms of giving that consultant advisory role and really making yourself indispensable. That’s what ICB is really trying to give to you coming back from that bookkeeping level and then pulling yourself up into that advisory service role. That's really what we really need to give back to the bookkeeping professional community.
Joe: That’s a fantastic way there to segue into the second question I wanted to ask you. Your thumb is very close to the pulse of what's happening in the bookkeeping profession and that's here in the United States as well as globally, with ICB's global reach. From that perspective, what do you see as the future of bookkeeping?
Jan: That’s a great question. Thanks so much for asking. I think, obviously, there's a more consultative role that the bookkeepers have the opportunity to play in terms of being operational with the niche selection, not just for themselves, but for their clients; helping their client on selecting and implementation of third party apps; and working with their clients on being more strategic and forward thinking, which is something, Joe, that you always have really been talking to your community about.
Typically, the bookkeeper has been in the backseat and I think that the forward-thinking role has been focused on "the accountant role.” We think here, as far as ICB, those things should start to become more of the bookkeeping role – helping the clients with their choices on software implementation, workflow solutions, goal driving techniques.
The bookkeeping professionals, as ICB sees it, are futurists. We're the person who makes the predictions of the future based on the current trends. That's using the financial statements and looking forward, but we've got to start thinking about global. We've got to start looking at that, because maybe the bookkeeper doesn't want to look at global, but their clients might be. They might be working international and that's how ICB can help with that, but they need to start looking at those trends that their clients are working on now and starting to predict those future trends and moving them forward as well.
Joe: Is that sort of what you mean by "accountant lite?" I've heard you refer to "accountant lite" before.
Jan: It's a great term, because the bookkeeper doesn't want to step on toes. The bookkeeping professional definitely wants to be a community player. Going into that consultant role is a new territory for us. We can't be sitting in the data entry seat. We've got to move forward. We've got to help our clients in terms of forward-thinking, reaching those goals, and achieving those goals.
That's a new role for us. They look at it in terms of being the accountant’s role, but it's not. It's the bookkeeping professional’s role of the future. That's an accountant-type role, so that’s why I say "accountant lite" meaning we're not stepping on toes, but we're there. We're in a unique position of having that great relationship with our clients, so we are "accountant lite" and we can do that. We can help with those roles and those forecasting and consultant advisory services that we need to provide.
Joe: By the way, I love the fact that ICB is focused in this direction. I had the privilege of sitting with your founder on a panel, Gary. He made a very powerful, very accurate statement that bookkeepers are the ones sitting at the front lines of the data. They're on top of the treasure trove of data and they have a visibility into it and a regularity – I'm putting it in my own words – a regularity of visibility that the CPA's who do more cyclical work simply don't have.
If we could do what you're describing and connect the people on the ground who are looking at the data every day and have an extremely deep granular understanding of that data, with the CPA's who are going to – and some of the outsourced CFO types and the MBA's who can do more strategic consulting and can do more business development consulting – then we are going to make a big difference in the way that businesses operate. Up to this point there's been largely a disconnect.
You can comment and see if you agree with me or if you have some different flavor to it, but I think the disconnect is twofold. You touched on one of them, that bookkeepers and CPAs tend to be in silos, and we need to break those silos. Then the other is, if it's not a public bookkeeper there may not be a silo.
The private bookkeeper sitting in the back of Joe's Lawnmower may want to deal with their CPA, but their CPA may not be reaching out proactively and the bookkeeper may be under-qualified or overwhelmed and not getting accurate data to the CPA and it creates a tenuous relationship – kind of a love/hate thing going on, because the CPA feels like all they’re getting is garbage at the end of the year. Private bookkeeper and public bookkeeper, huge disconnects.
Would you agree?
Jan: I do. I think that is a lot of what's going on in our industry. Again, you've heard me talk about how the bookkeeper feels like they've been the one that's been pushed in the back. They've been kind of quietly held down to just provide the information. Not necessarily the educated people in the room. It’s not “us versus them”, it's a team effort. The bookkeepers are the people on the ground, as you say and as my founder Gary Carter says. It is definitely the private versus the public bookkeepers.
There's a lot of changes going on and I think it scares a lot of the bookkeepers out there. I think it scares a lot of the CPA's because it's shifting. It's a positioning of the industry. It's a race for the data and who is going to be the first to get it. The thing about who is really positioning to get that data since everyone wants it, but the funny thing is the bookkeepers are the ones that have it.
Exactly, like Gary said, we have the treasure trove, we just don't know about it. Trying to get the bookkeepers educated so that they can go out and eloquently give the CPA's the information they want has been difficult because they don't want to come out and say, "Here, I have this information," because they have been held down so long. They're timid about it. They're embarrassed and it's tough.
I think, personally for me, as the leader of ICB, I'm asking them to come forward, step forward, and let's change that level of communication within our industry. Reach out to your peers, reach out to other bookkeepers, and start to elevate your voice. Likewise, when you have a CPA who has a bookkeeper internally reach out to that bookkeeper and say, "Hey, let's work as a team and use the common goal as the client to get this work done.
Let's get you some education. Let's get you into communities like ICB to help with your education or help with lifting that knowledge, of not only the technology, but the financials so that we can get the common ground lifted and in a place where it should be."
You're exactly right. The silos are definitely in need of breaking.
Joe: They are, and if we can break them, it's not just that we can run our practices more efficiently, get tax returns out faster, and have a little better support for the bookkeepers. All of that is true, but it's everything you've been mentioning here, Jan. It's the impact it will have on the client. The treasure trove is about being in service of the client, exercising knowledge to transform the client, and making a real difference in business.
In my opinion – and you and I have had a lot of conversations about this – this is the critical missing link. It's not like if we solve this, we've got five more things to solve to get to transformation of small business. If we can solve this, we're there. Instantly.
You've taught at Scaling New Heights for many years and you're going to teach again. As we said, we are going to be running a lot of training for your ICB members at Scaling New Heights. We're very excited to have your community there with us this year. Plus, you're teaching a couple of courses in the main tracks as well. In the past, you've taught classes to bookkeepers on cash flow and analysis to try to get them to become this "accountant lite." Are they receptive?
Jan: They've been somewhat receptive. I think falsely they think that they can just plug the numbers into a dashboard, right? Software is great, isn't it, Joe? I just love it.
Joe: It’s good, yes? It’s a tool.
Jan: It's a tool and that's the thing. They think they can just plug it together and they get some pretty pictures that they can give to their clients. "Wow, it's great! It's ready to go." But the thing that I think has been lacking and that needs to happen, is that we need to be able to communicate those pretty pictures to our clients. What's been happening in the past and what's been sold, and I'm not saying the software companies are at fault, but, “Here plug this together and then give this to your clients, and that's going to be great.”
We need to have that talk with our clients. We need to have that communication with our clients. We need to have that explanation. We need to tell our clients what is happening with their books. What we have been teaching at ICB is to use that relationship to tell that story of that financial, that picture, so that you can use that relationship and build on it to then carry your client forward.
That is starting to seep into the bookkeeping professional, to say "Yes, now I get it. I'm starting to understand this. I'm getting a deeper knowledge, a deeper level of relationship with my clients that is now really building. Then I'm starting to add value. I'm starting to be able to charge more." This is like cracking the egg and they're really starting to see the value now.
Joe: It looks like we've got the pieces, if we're going to lay them out from today's conversation. The first piece is extreme confidence and proficiency in the actual work that you're doing, which I know ICB does a fantastic job. That's your core training - mastering and maintaining a mastery of the bookkeeping process.
The next piece is technology. You guys also train on technology, which we touched on, and then you made the very, very important note that the technology by itself is a tool unused, meaning un-deployed. It's like a drill sitting in a drawer, if I could use an analogy. It's not going to make the hole, right? You've got to use the tools in a way that will transform business, which means you have to understand all of the principles behind what's happening in the tool, not just rely on it as a technological one-off answer.
Then I've got a third one that I see as a huge challenge on the part of bookkeepers. It's the courage challenge. We have this whole theme going for Scaling New Heights, which has raised a lot of eyebrows: Face the Yeti. They're like, "What in the world? First, you're in southern Florida in the summer, it's not going to snow. It's flat, one of the flattest places on the entire planet. Why are we talking about Yetis and mountains and snow?”
It has nothing to do with where we are. We happen to be in Florida because it's a really great hotel at a really good rate, but it's a blank canvass when it comes to theme. The theme is so much more important than the fact that we're in Orlando, Florida. It's the fact that bookkeepers – sitting on the treasure trove of data, now empowered with the tools to interpret the data, having resources like ICB and Woodard Institute to help them interpret the data and share meaningful transformative information with clients, and then through the efforts of Woodard and ICB and organizations like us, we're facilitating stronger collaboration between them and CPA's – but still there’s a missing piece.
It's the courage factor, not with all bookkeepers, but with a lot of bookkeepers. They have been told for so long to stay in their place. That they don't belong in the boardroom. That they don't belong in the decision-making process. That they're not to be advisors. That they are overhead. I get fired up just thinking about it. Part of the reason bookkeepers sit on the treasure trove is they've been told by the entire profession and sometimes by their clients that's exactly what they're supposed to do. Get all the data ready and if I don't hear anything from you it's a good situation. It means you don't need anything and my books are clean.
What I want to challenge all the bookkeepers listening to do ... I want to challenge you to be bold, to be courageous, to step out of that back office, physically or figuratively, and walk up to the business owner when you know you have a valuable piece of information and say, "I see something I think you need to look at. I see something that I believe is going to have an impact on your business.” Then pause and wait for them to say, "Go on." They will. They're not going to look at you like you think they might look at you, like, "What are you doing here, this isn't your job."
They're running a business, they know you're looking at the financial information, they're hungry for pro-action on your part. Just be courageous, Face the Yeti, climb the mountain. Don't worry about the little fear that's stirring up in your heart. Walk right in there boldly, provide that valuable information, and I can tell you when you begin doing more of that and you do it at the right time, when that business owner is ready to receive it, he or she is going to call you back in, if you don't keep doing it. They're going to start knocking on your door, or picking up their phone and saying, "Do you have any information for me?" They're hungry for it.
Jan: It's so true. Literally, you took the words right out of my mouth. You are speaking my language. You are just honestly speaking what ICB is about. It's about bringing that confidence to the bookkeeping professional, because they've got to step up. The time is now. The time is currently in the bookkeepers’ hands. ICB would not be in 110 countries with over 160,000 members globally if it wasn't the time for the bookkeeper.
I add to that challenge. I say to you, as a bookkeeper or a bookkeeping professional, because not everyone is a bookkeeper, we have CPA's that are doing bookkeeping work, right? I say to you, look at the software companies, I am so honestly tired of that message coming to accountants.
I want to see bookkeepers ... And I'm so proud this year when I see the likes of Intuit and Sage and Xero, and even you Joe ... When I see up on your keynotes and the words, "bookkeeping professionals" and "bookkeepers," and when you talk to them because it pulls them out of that room. It makes them and it helps give them the courage to say, "They're talking to me, they're speaking to me."
For so many years we've been hearing CPA-CPA-CPA and I love that. I love that we acknowledge the CPA's, but there's more than one in this accounting profession. I encourage the bookkeeping professionals to say, "Acknowledge me as well."
That's the only way as a community that we're going to raise our voice – to do it as a team. We need to stand up to that challenge because, as you bring it up, the confidence is what we need. We need to get our certification in line. I hear this all the time, "Well, my client doesn't ask me for it."
Joe: Well they're not going to. They're not going to. You have to be assertive. You have to be proactive and they will thank you for it. If they don't, they have just declared, "I'm not a good client for you." It is time for you to move along. Either way, you have a good outcome.
Jan: Absolutely. I want to ask you Joe, the last time you went to the doctor, did you walk into the doctor's office and ask to see his certificate or his diploma?
Joe: No.
Jan: I know, because you knew that he had it, right?
Joe: Yep, but I'll even go beyond that. Every time I have ever gone to the doctor, whether it's a hospital or a doctor's visit, it is the nurses that get the job done. I mean, don't get me wrong, the doctor comes in and he makes a diagnosis, but by the time he gets there ... I'm not trying to understate the role of CPA here. It is unbelievably valuable, but what we're trying to do on this podcast is counter the understatement of the bookkeeping role. We're trying to balance the scales a bit. Could you imagine taking all the nurses out of a major medical practice, or all the nurses out of a hospital? The place would fall apart, right?
By extension of the analogy, bookkeepers are the nurses and there are gradations of nurse. Everybody, everywhere, from LPN to Nurse Practitioner ... There are gradations of bookkeeper. What Jan is challenging you to do with ICB and every bookkeeper listening should go check this out at ICBUSA.com, but what she's challenging you to do is move up in those gradations, to the point where maybe you are a nurse practitioner and you're prescribing a little medicine like they do. You're very tightly collaborating with the doctors. That's the summit of our mountain and the Yetis are what you must walk past courageously, fearlessly to get there.
Jan: Absolutely. Again, it's never doubted when you walk in that hospital that the person doesn't have some level of experience. You've got to be able to have some level of experience to be in that hospital working.
Otherwise you wouldn't be there. I mean, do you just put on a uniform and walk in? You're exactly right, Joe. The hospital would fall down if you didn't have someone there to keep it running. That's what the bookkeeper is, it's that person that keeps that small business running and keeps the wheels turning in order for the doctor then to do his job. It's a team effort, it's not an us versus them, it's a communication factor.
Joe: Correct.
Jan: Again, the different levels. I learned so much working with my CPA's in practice and I'm very grateful to them. I know they're grateful to me for giving them great financials and making sure that my small businesses have the proper tools and the proper software implemented in order to keep those wheels turning. They made more money as CPA's, I made more money as bookkeeper. Again, it's the wheels turning that kept my client going so that they made more money to put their kids through college. It's a beautiful, beautiful system that we have, but we have to learn how to work together, but the treasure trove is the data. We've got to communicate and we've got to let the tools, the software, do the work. We can't sit there and enter bills. It's a waste of our time.
Joe: Agreed.
Jan: We've got to be efficient, we've got to be functional, and we've got to move forward.
Joe: Which means we have to fully leverage - bookkeepers have to fully leverage technology so that we can, and I say "we" because I've done so much bookkeeping in my career – so bookkeepers can scale their practice so that they can get to the data faster and focus more of their attention on interpretation and transformative behaviors. It's also the client's budget involved, right? When their budget is freed up and your time is freed up, you can focus on the proactive elements.
Leveraging technology is the last piece. I'm just going to quickly recap what we've covered here today, then I'm going to throw a little flavor of how, because the bookkeeping and the accounting community as a whole hears a lot of what, when, where, and why. They don't hear a lot of how. I'm going to tell you where you can go to start doing some of this.
To recap our conversation, we talked about the core competency. We talked about the fact that bookkeepers need to not sit on the treasure trove of data, but need to collaborate more with the CPA's and equip themselves to play a lot of this “lite accountant” role, kind of a nurse practitioner role. And bookkeepers need to fully leverage technology, both in interpretation and automation, which was our final point on the technology piece. In terms of how, there are a couple of places where you can go to get the how. One is of course ICB USA and the other one is Woodard.com. This podcast series is not the only place you can get information. We have other kinds of free resources available. We have an entire institute that will walk you ...
Once you've gone through ICB and a lot of their training and you've got all of your core competencies down - many of you will just walk in with that done - once you've networked with them and joined with other bookkeepers, because there is strength in numbers, join Woodard Institute where you can develop your professional skills, write up a marketing plan, develop a business plan, and come up with a technology and automation plan.
That's the reason Woodard and ICB partnered together. With both organizations at your disposal you'll be able to transform small business. You'll be able to get there. I wish I could give you how in 1-2-3, and when you stop listening to this podcast, you can go do it in an hour and suddenly you're there. Life doesn't work that way. What I have pointed you to is two paths you can simultaneously walk down: the ICB path and the Woodard path. Over that journey our two organizations will get you to everything that Jan and I have been talking about here on the podcast.
Jan, it has been so wonderful having you. I think the world of ICB. I know you guys are doing great work throughout the world. You're having fantastic success here in the US already. Keep doing what you're doing. Let's keep empowering those bookkeepers together and let's transform some small business!
Jan: Thank you Joe. Honestly, I just want everyone to know that we couldn't do what we're doing, again we're a nonprofit, we couldn't do it without the Woodward Institute. We appreciate you and everything you've done to help us out as well.
Joe: You guys are a fantastic partner. We have a lot of synergy and it's our pleasure to work with you. Thanks Jan!
Thank you for tuning into today's podcast and our interview with Jan. I'd like to thank our final podcast partner, Entryless, which is another tool that empowers you to transform small business. Jan talked a lot today about the automation of the bookkeeping process and how important it is for bookkeepers to embrace this fully so that we can save time and save our client's budget to focus on the interpretation of the financial information.
Entryless is just that kind of tool. It is automated bill pay, seamlessly integrated with QuickBooks and a wide range of other Cloud solutions that automates the entry as well as the payment of the bills on behalf of all of your clients. Entryless is offering our podcast audience 2,000 automated bills for free. You can learn more about that offer at Woodard.com/Podcast.
For more information about today's episode, to explore other episodes in this podcast series, or to learn more about our annual conference, visit Woodard.com.
As always, we encourage you to stay tuned, stay connected, never stop learning, and scale new heights.