2010 – Why AI Can’t Replace Your Financial Partner in Business with TeKoda Accounting’s Tevia Hoalst

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1:05With us right now, it is Tevye Holst. Tevye, you are the founder of Takoda Accounting. You are found on the web at takodaaccounting.com. Now, Takoda is spelled T-E-K-O-D-A, accounting. Well, Tevye, it's great to have you. Thank you so much for having me. All right. Give us an overview of the work that you do with Takoda. And by the way, where does the word Takoda come from? It's actually kind of our own made-up word. uh uh coda was our original name couldn't own it i didn't know what we wanted to do so we got creative and we put my name with it so te comes from my name and then coda was the prior prior so just getting creative yeah well little advantages from uh you know search results uh someone's searching for you they're gonna find you yes yeah we got told by a lawyer for um owning it that you know, making up our own word is a good idea.

2:03So that's where that came from. So, but overview of the company, um, our base is obliterating the status quo. So what that means for me is I focus on, uh, obliterating for our employees. We just won an Inc 500 award for culture and it is all about their experience. And my expectation then is that they spend that and make it all about our customers experience. So we are trying to be different in our industry. We, you know, actually want to know our clients. We talk to our clients. We provide bookkeeping, payroll, bills, invoicing, you know, the whole gamut of accounting. The only thing we don't do is tax.

2:43And that's because we have really good partners in the tax world. So we do everything that runs the internals of the company. And then we partner with the CPAs to finish the taxes. Yeah. Well, this is an area, obviously, I love asking this question. This is what you do and what you obsess over and have been for many years. For those of us who are just busy running our companies, what are some of the bigger headlines that you've seen in your world over the past six months and which may also lead into what to be paying attention to over the next six months or so? Yeah, for sure. There's a couple of things.

3:24One, obviously, we can't ignore AI. I mean, that's big. That's coming into everybody's world. How do we manage that? How does that affect us? You know, everybody's answer is different. We believe in our world that will there be some replacement? Sure. But generally, the reason that people have financial vendors and partners is because they either don't have the experience or background to translate finance or they just don't have the time. So AI is not going to translate it for you. It's not going to make it actionable. So we think that we can actually team with AI and we can still bring really good value.

4:06The other headline I would talk about is it's been a conversation for a long time that our industry is shrinking. You know, people aren't going into bookkeeping, people aren't going into tax. I don't know if anybody knew this, but you know, it's not a sexy industry to be in. so you know we're we're shrinking that means the offerings are less it means when businesses want to hire you know it is a good idea to look for outsourcing because you're fighting for that same employee that the firms are fighting to hire so there's a lot of competition for the best of the best in this industry and you know we work really hard to have a really awesome team to help provide that to our clients.

4:49You know, I have heard that, that there is a bit of, there's not enough folks going into it. Why do you think that is? Just because it's not sexy? Is that it? Yeah. I mean, we get a bad rap and, and honestly, that's why we have a different voice in the industry. You know, generally financial minds are not typically super social minds. So they're not going to necessarily make relationships with you, they might get a really good job done, but it doesn't attract a lot of excitement. You know, the number one job out there for young kids that if you ask them what they want to be as an influencer right now.

5:29So that is worlds away from accounting. So we're out here trying to bridge that gap. And we come in with a lot of personality. We come in with a lot of personal connection and say, you know, we're here to actually partner with you. We care about your value and give you a really good product.

5:49Tevye, for someone that is listening and maybe they're in between bookkeepers or accountants or just someone to help on that front, what are some really great questions to ask when hiring? And what might be some red flags that if you ever see this run from this financial solutions provider? Absolutely. So these are fantastic questions to be asking because if you are going to hire internally or even hire a vendor, you have to know what questions to ask to know that they're not going to come in and mess up your financials. So a couple of things that I always point to is we do side-by-side screen sharing interviews and we make them walk us through the balance sheet.

6:37How do you populate this? What does it mean? We purposely will give them a balance sheet that has some issues in it. And we, of course, know what they are. And we expect them to be able to point those out to us. A couple of things that are really easy the owners can do is take your balance sheet for, say, June 30 of this year and take the same matching bank statements and the ending balance of your cash accounts, your checking, your savings, also your credit cards should match on your balance sheet. Things as simple as that will let you know if you have some issues going on or if who is doing your finance is on the right path.

7:21You know, those are really quick, easy flags. There's a lot of other things to look at, but that'll give you some ease one way or another to keep looking or it's going okay. Yeah. How did you get into this space, by the way? Yeah, actually, for me, it all comes from culture. So my background, my initial background in school was international business. So I am an entrepreneur and a business owner at heart, first and foremost. I had a corporate experience, like many other people that I did not enjoy. And the culture was incredibly poor in my specific department. And I told my husband, I have to create something better from a culture perspective.

8:03Didn't even know what the product was going to be. And I just said, I have to have the very best place for people to be where they feel valued and not like a cog in a wheel and replaceable. And so I set out to do that. And I had to say, what is my skillset? What can I do before I have that team? And luckily I have a really good network. And within a month or two of being out on my own, I had work and had enough work within about a quarter to start hiring. And I just make sure I hire better than me and I go and find the best and I let them do their thing. And the company runs from my mindset, which I am not an accountant.

8:43I am not a CPA. I am all about the business. I am all about, let's figure out your profit. Let's get you where you need to go in your goals. And so we come with just a little bit different of a mindset from the entrepreneur first. I wonder if there's someone's listening to us and maybe they are kind of, like I said, in between, or maybe they've just been doing it themselves. Maybe they've had a family member who's been doing this and they're just okay. Um, but what I don't want them to do, um, and I don't know if you've encountered this, um, I don't want their fear of, oh, I have not been doing what I'm supposed to be doing.

9:26And I would be embarrassed to open up my books to a professional. I am certain, I'm assuming this, I am certain that you have seen everything and that it is okay. no matter what, you know, if you got everything in a shoebox and you've been even making horrible mistakes, like mingling personal and business together and your accounts, like you're not the only one out there, I suspect. Yes. And the other thing I would say too, is there is a lot of emotion and shame potentially that comes around people's financials, but remember your audience. This is what we do for a living. So your mess is like our excitement.

10:07And the way we're going to approach that is always make you feel confident and comfortable because trust me, you are the majority, you know, you are not alone. We have seen it all, but honestly, when you come in, it actually is easier for us if you have a mess or if you don't know what's going on, because it's so much easier for us to come in and show you value immediately because it is light years away from what we can show back to you quickly. Whereas if you come in and maybe you've had someone that has done a really good job and they're retiring or moving on and you just need replacement, we will of course keep that going, but it's much harder to step in and show you are incredible value, you know, because you've had it together and there's both scenarios where people need that.

10:59But, um, if you have that shoe box, if you're not sure I do free consults and I always send back the financials marked up and I can tell you, it's extremely rare that I get to send one back that doesn't have any issues and get, I get to say like, Hey, you're doing great. Keep it up. You know, normally it's, Hey, you should probably check this out. You've got this here. You got that there. And you do whatever you want with it. You don't have to work with us, but I'm happy to give that so you have the power and the information to know where your financials are at. And that's the way we can step in and say, hey, in six months, we'll have you turned around no problem.

11:37And that's a really good, easy home run for us. So we kind of love it. Yeah. So in terms of, let's think of some things that someone could do today. Let's say that they're a founder of a small agency. Maybe they've got a couple of serious team members. They have maybe a handful of EAs. They've got a handful of clients. What's something that they could do even before maybe engaging in an exploratory or discovery call with a professional? But maybe, again, they've been doing it themselves. They're just kind of following as best as they can, but probably making some mistakes by using QuickBooks or something like that.

12:20But what's maybe an actionable thing that someone could do today that, you know, maybe it's just looking at something that you would recommend that everybody should do? Yeah. And you mean, looking at the financials to know like if you're on track or not? Yeah. Or just like I said, best practice. Yeah. But yes, to your point, that would be a great one. Yeah. So there's a couple things. Business owners love to look at their P &L because the P &L is where your revenue and your expenses live and therefore your profit. So they, they do love to look there and you should look there. Uh, whatever industry you're in a couple of benchmarks to check out is every single industry has data out there about where should your profit be?

13:03How much should you be spending on payroll, on marketing, on all the big things? What should your gross profit be? So there are different benchmarks that you can kind of pair your own company against to know how you're performing on the average company. Flip over to the balance sheet. If you are not as an owner looking at your balance sheet, you got to add this to your repertoire or have a partner who will help you do it because your balance sheet is really the ultimate health of your company. The P &L is every year it turns over and it's new, fresh information. The balance sheet is the life of the company and it's really where your equity and your health sits.

13:42So there are some things in that I mentioned earlier, checking your ending balances on the month to your statements. You also want to be looking at if you hold accounts receivable or payables, any kind of liabilities on the balance sheet. You want to be looking at those balances and knowing that they're real and they're correct and you don't have any weird negatives where you should have positives and, you know, these quick red flags to know that you have good information. And the last thing I would say is leaning on your partners. You know, you probably already have a CPA. If you have a bookkeeper, whatever you have available to you of people that do understand the financials, lean on them for guidance.

14:24A big one at the end of the year, every company should have like a handful of adjustments after tax because they're moving things around appropriately. if you're getting a page full, if you're getting 10, 20, you know, 30 adjustments, you should be having a conversation with your CPA that there's probably problems in your books and they are manually fixing them at your end, which is not helping you throughout the year because you don't have good data to make decisions from. So if you're getting a long list of adjustments from your CPA, that is a major red flag that you need better financials throughout the year.

15:01Yeah. All right. So your website, takodaaccounting.com, when somebody goes there and maybe I think you've got some resources, by the way, I'd recommend following you on social media. You share some good stuff there. And you're so you're good follow there. But what would you recommend folks go from here? uh definitely you know reach out i mean we're like i said we're all about the conversation very low pressure we just want to find the right connections but we want every single business owner to have a fantastic partner if you already have that amazing value them if you don't if you're not uh happy with what you're getting from the provider that you have know that there are others out there that will raise the bar and do better.

15:50So I would just say, don't stick your head in the sand. You know, there are people out there that will partner with you that are really invested in your financials and your success and just look around and find them because they are there. Yeah. Again, your website, takodaaccounting.com. And again, Tavia Holst, you are the founder. Tavia, it's been a great conversation. Tavia, it's been a great conversation. Thank you so much for joining us. Thank you for having me, Josh. I appreciate it.

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