Inside View

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This article was originally intended to be another installment in our Outsourced CFO series.  After speaking with Bill Gerber, Co-Founder, I realized that these articles may not be addressing the right topic.  A more encompassing theme of "outsourced accounting services" may be a better topic based on the profile of our average reader.  I also realized that the previous articles gave a pretty good overview of what outsourced accounting is, so I decided that it might be interesting to take an inside look at AccountingDepartment.com since they seem to have established a pretty strong foothold in the market.

What is AccountingDepartment.com?  AccountingDepartment.com is a virtual accounting service that recently celebrated it's 10 year anniversary.  The company was founded March 4, 2004 by Dennis Najjir, a CPA, and Bill Gerber, entreprenuer, as a virtual business   The "home office" is located in New Jersey, but it only houses 3 of their 61 employees, the remaining employees are all remote.   Even though they are 10 years into business, the founders have stuck to their original vision of building a virtual firm.  Bill Gerber said " Our vision and goals are still the same (from when we founded the business), but the underlying processes and methods have evolved as technology and the industry have allowed.  We've aligned with some of the best new start ups, franchises, thought leaders and industry-makers in the business."  As mentioned, the company has stayed true to it's original vision in which the plan was to serve the $1MM to $25MM dollar business.  However, within the past 2 years they have broadened their customer base to include smaller businesses, including start ups, and they have become part of The UPS Store's Small Business Solutions Program. 

So how do you grow from 2 guys to 61 people in 10 years?  Strategically!

I asked Mr. Gerber what makes AccountingDepartment.com unique and what has made the company successful?   He replied that the fact they have been a virtual business from the outset made them unique from the start; "starting a 100% virtual company from scratch didn't have much precedent in 2004".   As for the company's success, he attributes it to "a series of carefully calculated decisions, an understanding of the unique leadership roles that launching a business required and extremely meticulous attention to all moving parts on a daily basis".  He also credited much of their success to "tirelessly working on the infrastructure and procedures, and only adding clients as we had room and capabilities".

AccountingDepartment.com has been very strategic in their sales and marketing efforts.   They have tested, tweaked and adjusted their marketing efforts to determine what works best.  According to Gerber, the company only had 1 salesperson as of January 1 of this year.  Currently the company is leveraging a combination of paid and organic search engine marketing, social media marketing and targeted trade show sponsorships and exhibits.  Additionally, a strong client referral program and a growing affiliate/partner program have supported the company's growth tremendously. 

Top 3 Differentiators - Professionalism, Privacy and Technology.

According to Gerber, the company promotes these three corporate characteristics as their unique selling advantages in the marketplace.  

"Professionalism:  The people working on client accounts are certified, highly trained experts.

Privacy - No one is looking at  personal information and disseminating it to anyone

Technology - We live and breath cutting edge technology and are constantly researching new integrations"

How about integration and onboarding?  What happens when a new client is brought on board?

For starters, everything is done virtually.  Technology is a core corporate characteristics, so the company drinks it's own "kool aid" by leveraging GoTo Meeting with video and Skype.  The company is 100% virtual, so they strive (and must) deliver a seamless user experience from implementation to client work.  According to Gerber, the steps for onboarding a new client include:

"1.  Getting Started:  We schedule a getting started conference call with a dedicated Implementation Team and the key personnel at the client’s company and begin documenting the current processes and accounting workflow.

2.  We gather existing documents, supporting schedules, and systems reports currently used to manage and track the financial data for the client. We then develop a checklist of open items and information needed from the client.

3.  We create a formal conference call schedule for our Implementation Team and the client’s key personnel to begin creating the Client Procedures Manual, and to document changes in workflow and responsibilities. We also gain online access to: Bank Statements, Credit Card Statements, Payroll Reports and Vendor Bills.  A typical schedule would be Monday, Wednesday, and Friday of each week, with ½ hour calls for the 6 weeks."

Once implementation is completed, there is a transition from implementation team to permanent bookkeeper and controller when books are formally closed.  Once the client transitions to their full time team, which consists of a dedicated bookkeeper and controller, the client receives the team members direct phone numbers, Skype address and a dedicated email address. Additionally, there are back up team members for each bookkeeper/controller team.  If that is not enough, every client has direct access to the company leaders as well.

In addition to a well planned and executed business model, Mr. Gerber is especially proud that the company is creating jobs in the United States.  Everyone of the 61 people mentioned earlier is a W-2 employee.  He was very clear that this is core part of what the company is all about.  They have a goal of 250 employees and several thousand clients, which would make the company a $40 to $60 million business.   Part of the strategy to get to that point includes the recent launch of a different division to handle the under $1 million clients and start up partnerships.  The plans are in place to create additional divisions as they expand into specific verticals.

Ten years ago the company was founded because of the huge opportunities in the outsourced accounting segment of the market.  When asked about the current and future prospects for outsourced accounting, Gerber said "We see the growth potential as virtually unlimited.  Smart business owners are increasingly recognizing the benefits of outsourcing all non-core competencies - of which accounting services is usually one of the easiest to outsource, yet one of the most important to monitor closely".

In order to capitalize on the huge opportunities in outsourced accounting, there are certain core competencies a company/person needs.  Instead of giving a listing of these competencies, Mr. Gerber shared a reading list that he believes will help and guide any organization in developing these competencies for future growth:

1.  Predictable Success by Les McKeown

2.  The Original E-Myth by Michael Gerber (no relation)

3.  The Purple Cow by Seth Godin

Based on what I was able to garner from my discussion with Mr. Gerber and the apparent success of AccountingDepartment.com, it looks like I have 3 new books to add to my reading list.  How about you?