The Come-Up of CAS with Deneen Dias

This week's episode of the Big 4 Transparency podcast is sponsored by Forwardly. Huge thank you to Forwardly for sponsoring the podcast, but also a huge thank you for what they do in terms of helping firms improve your operating margins. So if you are in firm operations, I would encourage you to take a look at how much your payment processing fees might be costing you currently. It may just be a couple percent here and there, but once your firm scales, we may be talking many tens or even maybe hundreds of thousands of dollars that are not going to your firm's bottom line and are not available for reinvestment in your firm. Forwardly helps you not only smooth all of these processes out with seamless AP and AR, but they also do so using ACH payments in an automated fashion, helping you save on payment processing fees. So make sure you check out forwardly.com for your business payment solution. Hello and welcome to the Big 4 Transparency podcast. I'm joined today by Danine Dias, the co-founder and CEO of Infinite Ties, a purpose-built membership with training for CAS professionals at firms. Welcome to the pod, Danine. Thank you so much. Quick correction. I am CRO. Oh, sorry. That's okay. But we are a female-based business and there's three co-founders. And so I have two other co-founders. Christine Chantos is the CEO. She's a practitioner. And Michelle Welsh, I would say, is like the CIO and I'm the CRO. But regardless, co-founder of Infinite Ties, thank you for inviting me to the podcast today. Yeah, my pleasure. And sorry about the early blender there, but CRO, there we go. And that makes a lot of sense with your kind of career path. Which before we dig into that, can you talk us a little bit more about the vision for Infinite Ties? Yeah, sure. Well, so my history, I've spent the last 17 years helping firms build a CAS practice. So very early on, I was at cpa.com for almost 13 years. They'd have a CAS workshop that has all the pieces of the puzzle for building a CAS practice. So very early on, I was helping firms build CAS. Where Infinite Ties has come about is, you know, CAS, I would say, I saw a shift happening in like 2017, 2018, where it was really taking off. And firms were like doubling down, realizing that CAS is the fastest growing new revenue source for firms. And that that shift was starting to happen where it was really taking off. And there's not a lot of places for existing CAS practices to go to get the tools they need to take their CAS practice to the next level. So since myself and my co-founders have been building CAS for over 15 years together, we wanted to go into the existing CAS practices and give them the tools they needed to get to that next level. Okay. And, and like, what do you think caused that takeoff, right? Like you talk about this pivot point in 2017, 2018, and I've gotten a couple opinions from people about it, but I think you probably had a unique perspective, not from being kind of internal to a firm about it. And so I'm curious from your vantage point, like what you saw, like bringing about that pivot, because it doesn't seem like the models necessarily like completely changed. It just now seems to get the respect it deserves, whereas before, maybe not. Yeah. Well, so technology is my answer, you know, and we talked about this a little bit, but I came in at cp.com running the Intact Accountants Program and the Build.com Accountants Program. Those were two cloud tools that I started working with firms in 2010. And they thought they resisted the cloud because it was just a very different way of doing the work. We moved into a space of vision selling, like imagine a world where you could have your client's data real time and you don't have to go to your client's site. And now you can gather the data and look at the data and be more advisory. And I think that that technology made it easier for firms to not be drowning, gathering the data and more like looking at the data. So the data is what's really changed. I think we're still stuck, though, in a mindset that tax and audit is the moneymakers of the firm and Cass is sort of like still seen as that, you know, little brother of bookkeeping. But Cass, we define as client advisory services. It's not the after the fact work. It's going in and talking to the client about their numbers on a daily, weekly, monthly basis, which is why it's more profitable, because you're not just talking to the client once a year or doing an audit for a couple of months. You're literally helping that business every single day, move their business forward. And it's the data that's allowing those advisory discussions. And so now we've got AI. And so technology, I mean, I don't think technology should be a threat, because when QuickBooks was introduced, firms thought they were a competitor, right? Cloud was introduced, firms thought it was a competitor. AI now is being introduced, firms think it's a competitor. It's just a tool that, like all the others have been, it's technology is a tool allowing the firm to change the way they do the work and change the conversation. And so the firms, I think, that are having successes over the last 10 years, like now we're in the 2020s, they're having success with advising the client on a daily, weekly, monthly basis. And they're seeing real revenue and growing, like it's the fastest growing revenue source for firms. So firms are following the money, the decline, tax on the decline, cash is on the rise. So everyone's running to this new shiny thing where all the new revenue is coming from. So they're all running towards it. But I think the challenge they continue to have is the mindset shift still needs to happen. And it's different. You price differently, you staff differently. And I think there's this thinking of, you know, hey, we'll give you a headcount where you can hire more people. But in cash, you can also grow at the rate of technology. You don't have to grow with humans. And so having a budget for tech, yes, you still need to bring in different talent, which is where you come in, right? And it might be more expensive talent because CFOs and controllers are expensive, but they're bringing in more revenue. So it's the technology is my answer. Yeah, yeah. And I mean, from my vantage point to where we talk about bringing in talent, like it still feels like that's being figured out by a lot of firms, too. Like I will see drastically different approaches to talent via different conversations I have with firm leaders where some are like, you know, we want to bring in non-designated bookkeeper level peoples. And that's kind of it. And I think that's maybe what has used to be viewed at, whereas now there are some firms who are like, we want to bring in highly specialized, maybe FP&A professionals from industry, controllers like who have actual controller experience running firms. And so I've seen some firms trying to benchmark that kind of more or less in line with audit and tax salaries, which are the firms I've ended up sort of helping with that. But then some other firms are trying to price the talent of CAS much, much lower. So at quite a discount. And I think that that might be maybe some of that legacy previous thinking that was going on. Right. So, well, it feels like it's still in flux quite significantly. Yeah, it is. And I think we're getting there. But to your point, bringing in those FP&A experts, those controllers, those CFOs that are seasoned, especially in certain industries and setting them loose on your client base is where the margins are. It's where the value is. It's where the profitability is for the firm. So they have to invest in bringing in different talent. Now the challenge is everybody wants a CFO and CFOs don't necessarily want to work at the same firm because they're seen as less than. But when they're working with a business, you know, the CFO of a business, they want a seat at the leadership table. So why would they want to leave that to come to a firm where they don't have a seat at the leadership table? They're not seen as tax and audit. It's a real challenge. And so bringing in that talent to the firm, I think is a game changer. But valuing the work that they do, giving them the salary that they're used to having. I can give you another example. I'm always telling cast leaders to hire data analysts because who sits on the data? The person who's doing the work, the people that are talking to the client every single day, every single week, every single month are sitting on top of that data. And so higher in, and some of the larger firms have hired in data analysts and set that person loose on the data. And now they can start looking at trends in the data, trends in the client data. The challenge I've seen for firms is they bring in that data analyst. They don't know what work to give that person. Plus that person doesn't want to track hours. I've never worked at a firm. I've never had to track hours. I have salary. I'm salary based. I would never want to have to go track my hours. That's why CAS is so different. How you build it from the talent that you hire, the tech that you use, it's something new and different than a traditional firm. And so to your point, they're still figuring it all out because it's not easy. It's just a business. It's not a partnership model and it's just really, it's a, it's just a different muscle. I call it like working out. It's a muscle they haven't built yet. They're still building it. Yeah. No. And I find that interesting. And I, and I do kind of from a firsthand experience, see the value in that type of offering as well. So prior to Big Four Transparency full time, I had been at a tech company working in the FPNA department and it was a, it was a really good job. Like I really enjoyed it and it was very interesting, but there were little things that I would pick up on from, you know, either podcasts I would listen to in the space or just like issues that we managed to solve that were very, very transferable once figured out to other businesses. Right. And that's what I find so interesting about this, where it's, it's a little bit of a less defined role. And so if you find a way to go in and add value, you can kind of relentlessly sort of chase that and, and push that to the next firm and put her to the next client and to the next client. Right. So like being in a tech company, I had realized like a lot of the money we raised wasn't in treasuries. Right. And, and by setting up like a very simple, right, there's some very complex treasury departments and stuff like that, but by setting up something super simple, I think it was like $700,000 a year that we had been missing out on that I was able to fix. And it was a, like a three day project. Right. And so it was like, Oh, like I think I now understand like the value of this like consultative approach where you can kind of just go in, check your database of all tech companies, ask, are you doing this? Yes or no. And then you could have this project that you could charge. I don't know what, maybe $10,000 for, for, you know, three, four days of work. And it makes sense for them because you're, you're going to make them half a million dollars or more a year, depending on how much money they raised and whatnot. Right. So I, that was kind of eyeopening to me of like, Oh, like, and, and at the time I was juggling, you know, the job and big for transparency, but I was like, man, you could, you could make a killing going around, going around town. And everyone who did fundraising just say like, here's a cautionary tale, like let's, let's set you up for success. Right. So exactly right. And I can give you an example, like in the traditional, after the fact, you know, back office work firms tend to be generalist because the tax partner is saying, I want to do your tax returns. So I'm going to have, I'm going to have somebody on my bookkeeping team, keep, you know, books help you with the books so we can get the tax return done. That's a shift. That's like no longer the case. It's not to get the tax work done. Right. So in cash, what we're recommending is that the talent, the niche focused, right? So that they understand this certain vertical really, really well, because they need to go deep. They can't be a generalist. They need to go deep and be able to do something like that, that you just described. And the example I like to use is one of the cast, one of my best cast leaders that I've worked with for the years, who's, I always say I have her in my brain. Her stories are always in my brain. She focused on restaurants. That was her vertical. She was able to go really, really deep because she was looking at, you know, the trends of 50 to a hundred restaurants. And when Uber Eats came about, I don't know how long has Uber Eats been around, 15 years, 20 years, but when Uber Eats launched, right, all of her restaurants were doing Uber Eats and she saw a trend in all of her restaurants that started doing Uber Eats declining in revenue. So she dug into the numbers, like, why is it not increasing revenue? Why is the revenue declining? And what she found is, guess who is packaging up all of that food for the driver? The bartender. So, and guess who the most profitable person in a restaurant is? The bartender. Oh, interesting. So you're taking your moneymaker away from making money to package up the food for the Uber drivers. The other thing she found is that Uber wasn't reimbursing the restaurants for months. So they weren't getting reimbursed for those, that food for months. So she called all of her restaurants and said, stop with Uber Eats, stop. This isn't a moneymaker for you. And then she worked with them to kind of revisit, to put a plan in place for who packaged it, tracking the revenue. Right? And so this is an example of, to what you just said, it's just a different example of being able to go really deep and understand that vertical so that you are forward thinking for this customer. Right? You are the expert in this space where you can bring all of this knowledge to lots of clients in one vertical. It's very hard to do that if you're a generalist. And so with the training that you're doing at Infinite Ties, what is the area that you find people are most often lacking training on? Or what are you doing that's kind of driving the highest ROI? Because I do feel like there's a lot of soft skills that go into this and opportunity identification and things like that. So when I was at cpa.com, helping firms build the CAST practice, we started hearing things, there are terminologies like CAST 2.0 and how do we get to this CAST 2.0, which is the analytical and advisory space. The CAST 1.0 is gathering the data and reporting on the data, doing the bill pay, doing the payroll, doing the expenses. That's the CAST 1.0, right? So we continue to hear firms being stuck there. They're drowning in that work and they can't get to the analytical advisory because they're still busy cleaning up the data, right? And so that 2.0 space is where we're focusing. How can we help upskill the current talent? How can we help them bring in the technology to automate the lower level work, bringing up, creating capacity so that they can then train and upskill or have room to bring in the new talent and start talking to about current clients about all the more they can do, which is around analyzing and advising. And so that's kind of what we're zoning in. We're hearing from CAST leaders that they need help upskilling talent. And so we have training for staff and seniors. We have training for CAST managers and we're launching in Q4 training on exactly that, how to be advisory, budgeting, forecasting. They're still like, they're trying to get there, but they need help going to that next level. And that's where we're kind of trying to, there's a gap there and the talent that they have and where they're trying to go, we're trying to go in and really help there. Yeah. And I think there is like a level two of confidence. Like once you've been trained on something specifically, even though you maybe had the skill sets for it, I think maybe you're kind of like missing the, you know, the like connections between everything to actually make it happen. Right. Where like, you know, and I'm going through that right now, like with what I'm doing with Big Four Transparency, where, you know, it was always kind of just, just the data and we'll, you know, we'll plug into your team. And then now I've started getting some inbound for like consulting engagements on, you know, organizational structure and things like that. And I was like, I had to like take a pause of like, do I know how to do this? And I, right. And because there's no training on that, but I was like, I have every single piece of the puzzle. I've just never actually done the puzzle. And so I think like, even, even though some of the time people might kind of look at the training and they're like, I know how to do that and not feel like they need the training. I think sometimes being able to, in an instruct, you know, instructed safe environment, go through building that puzzle of like all the things you know how to do. I think that that in and of itself can be very valuable because you actually like, you just learn the muscle memory of like, this is now what the client deliverable can look like. And now I've done it. And now I can sell that as a piece of work. Right. So in the firm, you have the traditional person who's used to gathering the data and reporting on the data. And they're very happy to do that forever. And so that person, I think should stay on the tech side, stay on the after that side, should stay on the right up side. You got to look at your talent and say, that person is happy where they're at. Let's leave them there. But then there's other people on the team. They're raising their hands saying, I love the tech. I want to help the customer. I want to talk to the business owner about their data, right? Or hiring those people, right? Bring those people in. You're building something new. So bring in those people that are controllers and CFOs. Those people can help the hand raisers, right? Bring them into calls, bring them into meetings, listening to the types of different discussions that they're having. Because I think there are people like, listen, people on the cast side, the client accounting side, they love their small business owners. All they really want is help, right? They have a passion for helping the business owner. I think there's fear in giving bad advice because they're just used to giving reports. They're not used to giving advice. And so we always say, don't give advice then. Look at the data and talk about the numbers and tell a story. I see a trend happening in your data. Tell a story about your AP is different this month. What'd you do differently? Or your AR is different. What'd you do differently? The business owner knows the answer. You're not telling them advice. You're just telling them what you're seeing in the data and then you're talking to them about it in a way they're like, whoa, I didn't, I know what to do. I know why the AP is different. I know what I need to do. Once they start practicing those conversations, they're going to a place they love because this is what the business owner is hungry for. They're not hungry for a financial report, right? They're hungry to understand their cashflow. And so I just think it's practice. It's getting past that fear. It's role-playing with other people, the firm that are doing these. I mean, it's going to be a place that they're going to love. It's just, there's fear. Yeah. Yeah. No, I find that really interesting. So, and we've spoken a lot about people, you know, getting industry experience and then doing CAS, where are you finding like successful CAS practitioners are coming from? Because I actually had a firm recently that I was trying to, you know, I was trying to help source some talent. They were, they were looking to hire someone who would help kind of run CAS or, or, you know, be like the, the right hand person to them in terms of scaling CAS. And it felt like they didn't have a great definition of who they were looking for per se. Right. And I think maybe it's happening a little bit more now, but like in my experience, like I'm not seeing a lot of people like going directly into that out of school. And maybe that is the case, but, and, and I'm sure it will become the case a little bit more so, but you know, who's your ideal person? Like, is it someone who's gone to audit and then did a stint in industry and now they have the broader context or like, what does that background look like? That's a great background. So, you know, what I'm initially was seeing is the audit partner was going over to build CAS. The tax partner was going over to build CAS and that was for them because CAS is so different than what they know. So I see bringing in like where I've seen a lot of, that's it's bringing a CFO in to build CAS and run it like a business, right. Bringing in someone from the outside to build CAS. That person looks at it very differently and the talent they bring in is also very different. I've seen firms bring in FP&A people. They struggle though, too, because they don't understand how to necessarily utilize them. But I think that's great talent to bring in somebody that has FP&A background because I really see the current team in CAS struggling with FP&A, juggling with FP&A technology because they don't have the practice. So certainly I see a lot of success with someone that was at a firm, left the firm to be in business and coming back to the firm. That's huge for CAS. But one thing that you said that I wanted to just touch on is, I agree, listen, people don't come out of college saying, I want to do bookkeeping, right? People traditionally come out of college saying, I'm going to go to a big four, I'm going to do audit, I'm going to do tax, I'm going to get my three, four years experience because that's where like the interesting work is. However, CAS leaders are successfully recruiting account at college because what they're saying is you don't have to sell your soul. You don't have to work with crazy audit hours, right? You don't have to sell your soul and give up your life for a couple of years in CAS. In CAS, you are on point from nine to five, five days out of the week. When your client calls, you have to answer. They have a question. They need your advice. You have to answer. But you get your evenings and you get your weekends because you're on point 12 months out of the year. You don't have taxes, right? So they're going in saying there's this other way that isn't as stressful. The other thing they're going in and saying is you're helping business owners with their data and the people coming out of college are very good with the technology and their traditional tax and audit side of the house, they have integrated technology. They're not even in the cloud, they're handicapped, right? But CAS is all about tech and so you've got these people coming out being like, oh my gosh, I can use the cloud technology, I can use the AI technology, I can look at the data, I can advise clients. And so there are some cutting edge CAS leaders that are going to the colleges and they're getting that talent to come in and get really excited about the work that they're doing that's advisory. Yeah, and I do think that makes a lot of sense. And I think as we start to shine more spotlight on it, I think like there will probably be more of like a pipeline through college for sure. I do know like a couple of young accountants who are like all in on CAS, like I don't know if you know Chetan Farley, but he's like, he's like, yeah, he's an accountant just with like absolutely boundless enthusiasm. You two will meet at Bridging the Gap. He's actually speaking there as well. Yeah, he's about to graduate and just has boundless enthusiasm for like the industry and CAS and he's like a big like preacher for it and stuff. So there are students out there, but I do still think that like some of them will meet that with like an eye roll and they're like, yeah, like whatever, dude, you know, I'm going to go, I'm going to go do my tax job and you know, the real one. And I think that that's unfortunate for some people. But I have to say like the push to advisory is across the board. How do you get more advisory in audit? How do you get more advisory in tax? How do you get more advisory in accounting? That push to advisory because the AI, I mean, listen, what used to take maybe three weeks to get through an audit, now it's taking 30 minutes with AI, right? And so they have to move into advisory because their work is, that's why there's this decline in audit, like they have to shift. And so. I do think that shift of going to those college students and saying, Hey, you're very tech savvy, right? Bring that to advisory. If it's advisory and tax audit, client accounting, it's really that advisory discussion across the board. That excites, I think, the people coming out of college. That excites them. Yeah. Well, so, and I also find, okay, so one question for you, you've probably been asked a lot, but Kaz, some people call it client advisory services, some people call it client accounting services, and some people will see AAS, client accounting and advisory services, right? Like, I do feel like that might be part of like the branding issue and like complication with it as well, where it feels like there's not like a super clear definition of it. And so you've just been calling it advisory, but like again, to me, advisory like is often like transaction advisory, like, you know, MNA, financial due diligence, things like that. Whereas Kaz, like I'm now kind of developing the understanding of its kind of, you know, consultation to the in-house accounting department or replacing the function of an in-house accounting and finance department at like a small practice, right? So I do feel like that's part of the struggle with it as well, where if I'm on LinkedIn and I'm, you know, looking for a new job, I'm scrolling around and I see Kaz manager, it feels like that could be five different things, right? Totally. Like what I'm saying is very purposeful. So when we started off with in 2010 and helping firms, it was client accounting services. Then I would say around 2018, you started seeing CAAS, client accounting and advisory services. And now in the 2020s, it's client advisory services. And so it's very purposeful because I want people to understand it is new. Client advisory services is a new part of the practice. It is not the bookkeeping side. Listen, a lot of CAAS firms, you know, leads are saying, I don't want to do the book anymore. I'm going to let the client do the books and I'm going to do, I'm going to analyze and advise. I'm just going to do the CFO services. And I push back and say, I think that's a mistake because getting the data accurate is part of what CAAS is. You can't advise on bad data. So I say to those firms that are in CAAS are just doing the, you know, the CFO services. I'm like, how much of your time are you spending cleaning up the mess? And they're like, oh my God, all the time. I'm like, so you can't get to the CFO services, right? And probably not charging for that cleanup work because it's not in scope, right? So they're not charging for all the time they're spending cleaning it up just to be able to get to the CFO services. So I think that's where the thing is. It's like part of it, but that's where you put it on your people, your processes and your technology. If you're going to take this client, you can't take on their mess. You can't take on their tools. You have to transform it into, I'm going to keep your data accurate. I'm going to keep your data clean. We're going to automate the heck out of it. So every single month your data is clean so that I can get to the stuff you really want to pay for and the conversations you really want to have, which is advisory. And so that's also that mindset shift of yes, it's part of it, but that's maybe where you start. That's not what we're going to add. We're going to end with getting it accurate so that we can start really having these meaningful conversations with the business owner. Yeah, this is such a well-timed episode too, by the way, because the example that you gave is basically word for word what Michael Lee just shared. So his episode as we're recording actually got published yesterday and he said like what he's doing with Reconciled. It started off as a virtual CFO in the traditional sense of yeah, give us your stuff and we'll figure it out. And he's like, I can't I can't keep working like this because I'm building on shaky foundation or sometimes like quasi non-existent foundation. And so he like dug deeper to the root of the problem and that's where he like found real fit as well as the ability to actually get done what he wanted to get done because they were actually now solving the root issue of the firm versus like just sort of like adding on, you know, what would then not be of high quality product because of the underlying bad quality product, right? So this is very well-timed because your description of this like is just spot on how people find themselves doing this. Yeah. I like companies like Reconciled because Michael's a business owner. He's building a scalable profitable business, right? And to me that is firms biggest competition because the traditional firm, but does he do audit? No, I don't think so. They have picked up some like auxiliary services just via like acquisitions and stuff, but they're not like what they lead with necessarily, right? So I do a little bit of tax, but it's the tax work to support their cast clients. And so to me, Reconciled is a firm's biggest competitor because they're off the races and they're getting to those challenges deeper and putting a new process around it faster than the traditional business. So I love that you interviewed him. I can't wait to hear that interview and I'm glad it's aligned with, you know, what I've been seeing as well. Yeah. Yeah. No, this is all very well-timed. This feels like we're doing like, you know, a CAS month or maybe month and a half over at Big Four Transparency, which is good because I really enjoy learning about this. So thank you so much for coming on and sharing, Deneen. I'm going to make sure to link Infinite Ties in the podcast show notes, but for anyone listening who should go and click that link, right? Who's the specific person who should go and click that link? I would say if you're a cast leader that already built and established cast practice and you are really trying to take it to the next level, we got you. You are who we're trying to swoop in and support. You don't have to be off on an island building it all by yourself. And then the other thing is if you are on a cast team and you want to up, you're raising your hand saying, I love this, I get this, and I want to upskill myself. That's the other person that should be looking, but I want to thank you for the work that you're doing. And I really want to bring you into my membership and have a conversation with my cast membership about the data that you bring because I know you're starting to get, you know, more information on cast and salaries and job descriptions and such. And I'm very happy also to like bring you into the membership to get some of that data, right? To help you. Yeah, absolutely. I think that firms are hungry for this information specific to firms. And so I just think there's so much more we can do together. Absolutely. Stay tuned for some, you know, collaborative logos on some projects, hopefully launching in the future. But yeah, thank you so much, Anita. I really appreciate it. And I really like what you're building. Thank you so much.