Business Innovators Radio - Interview with Lee Knoll Managing Partner of Knoll & Company -Next Generation CPA Firm Discussing Bookkeeping Strategy

Episode Date: July 5, 2024

An experienced CPA, Lee has worked in the accounting profession for over 30 years advising clients in small businesses, estates, and trusts as well as being an Advanced QuickBooks Certified ProAdvisor, QuickBooks Online Certified, and Bill.com guru. He has advanced expertise in working with businesses in the real estate, transportation, legal industry, and professional services industries.Learn More: https://www.knollcpa.com/License#16945Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-lee-knoll-managing-partner-of-knoll-company-next-generation-cpa-firm-discussing-bookkeeping-strategy

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Lee Knoll, who's the managing partner of Nolan Company, your next generation CPA firm. Lee, welcome to the program. Hi, Mike. Hey, so I'm excited to talk to you because I always love to hear, you know, when CPAs have some nice, you know, glitzy sounding next generation.

I want to hear all about the next generation CPA firm. But before we dive into that, give us a little bit of your story and your background and how did you get into the CPA accounting industry? Well, I started, I kind of fell into it. My dad originally started the practice back in 79, so we've been around 45 years. But after college, I went to college for actually exercise and sports science. So I needed a job after college. So I came to work for him and really liked it. So I went back to school and got all my accounting classes.

and took my CPA license and fast, and I really love what I do. And, you know, not many people can say that they love numbers, and that's quite a change from exercise science to numbers. So what was the trigger there for you? Well, my first year of college, I was actually a accounting major, but I had some really bad instructors. And so I switched majors, second year of college and so that's really what happened on that so i did start out in accounting

but then switched to exercise in sports science um and then really went back to it um yeah no i really like seeing where people make their money and how businesses run and all that that's and no single day is really the same in our field in public accounting it's so much different than corporate accounting. Yeah. Yeah, that's a good point. And the whole bottom line is, you know, it's almost like the old saying from Henry Ford, if you, you know, if you don't, if you love what you do, then you don't really have a job. So it sounds like if you had gone down the path of exercise science, you probably would not have been fulfilled. And now with numbers and diving into helping business owners, this is a fulfilling career. So let's, let's kind of talk about

this first topic that we want to hit here is a bookkeeping strategy. You know, it's almost like a business owner before you start getting into high level strategies. The first thing is what's coming in and going out, you know, what's the cash flow in and how do you log it? So that's the bookkeeping side of things. So talk a little bit about what a bookkeeping strategy actually is. Well, whenever a new business comes in and wants to get started, the first thing is that

they got to get some sort of accounting system in place. Instead of, and if they start at the beginning, it's much easier to implement down the road because they're smaller at the beginning and they can then build it up and build it out. So it increases over time, add components later.

And it's much easier at the start if you have an accounting system in place. from the very beginning instead of trying to download just into Excel every year, thousands of transactions. That kind of gets overwhelming, right? I mean, you think about, you know,

a mistake that can happen two quarters down the road is way harder to fix than something that happens two weeks down the road that's discovered. Exactly. And so, yeah, so that's always the first thing I ask clients is if they've started some sort of accounting system, whether it's QuickBooks Online or anything.

And most of the time, the answer is no. It's getting a little bit better with the popularity of QuickBooks Online. Almost all clients have, when they come in, they do have QuickBooks Online now, but not all of them. Some of them are still small and they're just, they're not keeping any accounting records when they come in. So let's talk about those two aspects, which is not keeping any accounting records and then using something like the tool quickbooks online. Because I know that there's a big move these days with the software companies that are not just saying, here's the download, put it on your computer. Oh, quarterly, we need to update it. But online then becomes real time updates.

And then you as the bookkeeper and accountant can access that so that everything is full. fluid in real time. But talk a little bit about how having the online access to a tool like QuickBooks helps that business owner. Yeah. If you're using a tool like QuickBooks online, you really have real time data to your profit and loss. And also anytime you know where you're at in the bank account and you know where you stand profit-wise, which is a, you know, you, you know whether you're making money or not. And that's really the bottom line. If you don't know what you're doing,

then that's where they get in trouble. They have no clue until the end of the year that they made any money or how much they made. So, yeah, so using a tool like QuickBooks Online just helps simplify that. And it eliminates a lot of the, a double entry. Because most clients nowadays do not write a lot of checks.

It's either electronic ACH or debit card transactions or it's on the credit card. And so you can match those all and easily record those all in QuickBooks online and just categorize them fairly easy if you're keeping up on it on either a weekly basis or depending on the level of transactions, you can really do it daily if you got a lot of transactions, but you should really be on real-time accounting. And that's really the advantage of having a system like QuickBooks online is the real-time data that you can get out of it. Yeah, real-time is huge. I like what you talked about just a second ago is you don't, if you, if there's a mistake, you want to know it sooner rather than later. And having QuickBooks as a tool,

I know that if you Googled QuickBooks, you're going to see a lot of competitors out there. So what are some of the benefits of using QuickBooks online versus another tool? Probably the biggest benefit is the apps that you can, like if you're using, for instance, if you're using some of these third party, if you're doing inventory or something else, you can get apps to almost integrate with anything you're doing inside QuickBooks online. And they've been around long enough that you can get almost anything so you're not double entry into QuickBooks online. So it's saving a lot of time, basically. That's really the key.

and they keep improving it. Like you can pay your bills electronic through QuickBooks online now. And they don't even charge you if you do like five, if you pay five bills by ACH, it's free per month. So they only charge you a fee for that if they're ACH payments. Yeah, that's really powerful. You mentioned having some of those things that integrate. I would also think that you can find some of these external sources that create invoices for you.

But if you create that invoice in QuickBooks, send it out to a client and it gets paid. Now it's just an automatic entry into the software, right? Yeah, exactly. And so then you're done. And then there's not another entry point that you need to make. It's all in one. And that's what's really nice. But if there's some industries that they need certain things tracked outside of QuickBooks,

but most of them you can get app that will integrate with QuickBooks. So there's no double entry. It will pull the transaction in. PayPal does that. If you have a PayPal account, you can pull all the PayPal transactions into QuickBooks online, for example. So that's a good point because I do know that I'm one of these people of who I'm about to say, like you get used to one thing, you don't want to change. So what if you used this external invoicing, you know, service and you just don't want to change?

Yes, you can do it in QuickBooks, but you're just used to your process. You've got template set up. But what you just mentioned was, okay, keep using that external tool. But now we're just going to make them talk together so that when the invoice is paid, it dives right into your QuickBooks. And you can enter that entry to. make it convenient. Exactly, Mike. That's the beauty of QuickBooks Online, really, is the whole picture. And it's all in one place. So let's talk a little bit about payroll, because we've been talking about bookkeeping. What about companies that have to pay employees,

even if it's a company of one? You know, if you're the owner, you may be set up with a structure where you need to pay yourself, you know, a paycheck or distribute funds. What about outsourcing payroll so that that's not handled internally into company? What does that look like? Well, we like to outsource the payroll to like ADP because they handle all the payroll reports, the tax filings, the W2s, and it all integrates. It ends up automatically back into your back into QuickBooks. online, no, you don't have to do anything.

It just automatically flows back in the QuickBooks Online once it's set up. And all the payroll reports are filed for you and they take the hassle out of filing the quarterly payroll reports. You don't even have to think about it. Once it's set up and it's, that's basically the easiest part of it. You know, you say easiness and automatic. Those are words that I think a lot of people love to hear because you might be sitting here thinking, yeah, but having a bookkeeper costs a penny or two or having ADP cost a penny or two. And there are costs for that.

But having that peace of mind knowing that is being done without you having to do it as the business owner, but also knowing it's being done right. is huge. So talk a little bit about that aspect of being able to have that done. And even, you know, from a, I can ask you this question because you're a CPA, you know, a lot of people might have to answer it and say, check with your CPA. But these expenses of QuickBooks and having ADP as a payroll, those fees that are involved, those become business expenses and tax deductible, right? Yeah, all the fees that you pay for, um, your accountant. the QuickBooks Online, ADP, those are all tax deductible. But like you said, yeah, you can do it all yourself, but at some point, your time's worth

something. How much are you going to get paid for what you're really an expert at? That's really what you've got to look at. Even in my business, if I'm not an expert at it, I hire someone else to do it. I don't want to spend the time because my time is worth something. But also to get it done right. And again, if you got a lot of, it just takes a lot of time and learning to learn all the accounting. And if you don't have a background in that, you don't necessarily know what you don't know.

It takes a lot of, I guess, training and time on your part to learn the system if you want to do all the accounting. And now, that being said, we do have clients that they understand accounting and they can handle some of that, but they like us to come in and review it every month or reconcile the bank account. But they understand it. And we have other clients that they have a total hands off and they don't want anything to do with it. They want us to handle 100% of the accounting needs and do all the transactions. That's really a huge point right there. And I think that's the big thing to keep in mind here when we've been talking about bookkeeping. But that's the foundation to be able to see where your money is coming from and going out to.

and to be able to have someone that is qualified to do that, to free up your time. So, Lee, this has been really, really helpful. If a business owner is interested in learning more about what you guys do as the next generation CPA firm, what's the best way they can learn more and then also reach out and connect with you? Well, they can go to our website at nullcpa.com, and they can also reach us at our phone [phone]. or they can email us at nullcpa at nolcpa.com. Excellent. Well, Lee, thank you so much for coming on.

It's been a real pleasure talking with you today. Appreciate it, Mike. Thank you. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www. com.