Tired of endless 80-hour weeks? Chris Vanover, President and Chief Auditor at AuditClub, talks to John Randolph about AuditClub’s subscription model which aims to give firms flexible access to audit experts on demand. Listen in to learn how AuditClub’s transparent bonus system and sustainable four-day workweek attracts top talent while prioritizing work-life balance. Chris also reveals how AuditClub is designed to meet the audit needs of sole practitioners and top ten firms alike.
Thank you for joining us today for another episode of the CPA Life Podcast where we spend time talking to firm leaders and industry insiders who have really had enough of the old school CPA firm mindset, and they’re doing everything that they can to build a more modern-minded, future-focused firm for today’s accounting professionals.
And we’ve spent a lot of time over the last year talking to firm leaders who are predominantly on the tax and the client accounting services, outsourced CFO services side of the house. But today, we’re going to mix things up a little bit, and we are going to spend some time digging into what Chris Vanover and the rest of his leadership team at AuditClub have been doing within their firm to bring value to a piece of that business, just like every other segment of the industry that’s hurting for exceptional talent. So Chris, welcome to the show.
John, thanks for the invite, happy to be here.
We’re gonna dig into a lot of what AuditClub is about and some of the unique ways that you guys are not only building a solutions-oriented business—where people can not only build a great career, but have a life outside of the office and not have to dedicate 80 hours a week into their career—but one of the things that we typically do when we kind of kick off the show is is spend some time talking about where you’ve come from, because I’m always intrigued to hear people’s stories. So you know, how folks got from point A to point B in their career. And in your case, running AuditClub addressing some of the major gaps that you guys are attacking. But tell me a little bit about where you came from and how you have ended up where you are today.
Yeah, so I actually started my career about 20 plus years ago with PwC, in their audit practice, worked my way up the ranks between, up to senior associate and then manager. And then as a manager actually had an opportunity to do what they call a “distinctive experience” and relocated up to San Jose and helped PwC actually design at the time, there was a proprietary internal software platform that they were using for their audits. That then spawned some other national opportunities with PwC. But I always maintained a footprint and client service.
And then I took another opportunity to work at the regulator, the public company, Accounting Oversight Board for a few years. Rebounded back into PwC, into their Chief Auditor network, which is primarily a localized version of the national office, helping engagement teams, you know, sort through methodology questions, just audit support, questions, training, transformation, and audit quality initiatives. Then actually was an audit partner overseeing quality control for a pretty large regional firm. So all of that paved the way for me, and we launched AuditClub a few years ago with the real intent to help make accounting and auditing better across the US, knowing full well that there were a lot of firms at the local and regional level that didn’t necessarily have access to talent that I had, and/or my partners and employees have, and nor do they necessarily need on a full time basis. So we’ve just fractionalized the concept and what became of that was AuditClub.
So how long now, has it been a full time business endeavor, stepping away from the other parts of your career that you were involved with?
Yeah, it’s been a couple years full time and full throttle. We went through a little bit of a rebrand about a year and a half or so ago, and rebranded as AuditClub. And that’s when we really presented the unique subscription offering out to the market for CPA firms to ultimately subscribe to. So it hasn’t been that long, but we’ve had a lot of great success and a lot of innovations along the way already.
Well, as we talked about, you know, the first time that you and I connected, I stumbled across you guys, and then started doing a little research, and you guys have got a pretty strong name in the marketplace and built in a really short period of time, a pretty good reputation. So tell everybody, if you can kind of your elevator pitch—tell us what is AuditClub?
Yeah, so AuditClub is unique in that we are actually backed by a licensed accountancy corporation. But unlike most CPA firms, we actually serve as an onshore audit service center for CPA firms. So CPA firms basically come to us as an onshore talent solution. They become a member of AuditClub, and then they basically subscribe to our access passes. That gives them fractional flexibility basically week to week, and helps them whether it’s with audit or paper preparation, audit work paper review, all the way down from associate level work all the way up to partner level work. And that could be things like serving as an engagement quality control reviewer. It could be something like actually helping them remediate a PCAOB inspection, or maybe they’re actually coming out of a peer review, and they have a corrective action plan to deal with. So it’s all that strategic thinking as well as the general blocking and tackling that AuditClub is trying to solve for. Because as you know, a lot of these firms just don’t have access to the talent these days, given the talent war.
Absolutely. So when you look at the client base today of AuditClub, and kind of where you guys want to take things in the future, what does a stereotypical client look like, that kind of fits into, you know, hey, this is our avatar, this is what fits with who we are, and where we were we hit homeruns?
Yeah, I’ll go back to our mission is to make accounting and auditing better. So we intentionally didn’t want to price ourselves out of the market. We wanted to make ourselves available to any CPA firm, whether it’s a sole prop or a top 10 firm, because our skills are transferable across the industry. So as an example, we may very well be supporting a top 10 firm for a number of weeks throughout the year. But on the flip side, we actually just about a month or so ago, we’re helping a sole proprietor who didn’t necessarily have that audit and assurance expertise, but their client had some needs. So how do we help elevate them to be able to deliver more assurance related services? And that’s where, theoretically, she just engaged with us for a couple of weeks a week subscription passes, and was able to get that solution she was looking for. So it spans the gamut, and that’s, again, going back to the mission.
So talk to me a little bit about the subscription model, the pricing that you guys, not necessarily the numbers, but you know, just what does that look like? Because when most people start talking about subscription model, you’re talking about a year-to-year or ongoing, kind of subscription-based mindset, because that’s, that’s what most, you know, tax outsource accounting CFO advisory firms are doing with their clients. But you just said something that I caught, and that was the sole proprietor you’re talking about, she purchased a couple of weeks of a pass to be able to work with you guys to get that stuff taken care of. So how do you guys go about pricing your business to support the needs of those different clients?
Yeah, so it’s a good question. At the end of the day, we are basically allowing CPA firms to subscribe to have access to our knowledge, okay? And that knowledge comes in the form of either what we call our chiefs passes, which is traditionally that manager and or above level resource partner level resource. And we have crew passes, which are more of that traditional associate and senior associate level resource. So we’re giving, them, ‘cause what we found with CPA firms, and they’re great at solving problems for their clients, they are not necessarily equipped to understand when and how much they need somebody during the year. And so we said, alright, well, we’re gonna make this super easy for you guys, and just go with a weekly subscription model, where they basically make that decision every week to actually subscribe or not subscribe.
So they can, as an example, one week, they may say, look, I need some support with financial statement reviews. And so they say, Okay, let me get a chiefs pass for that particular week. The next week, they may say, You know what, there’s nearly nothing in my queue right now, my client’s not quite ready. So I’m gonna pause my subscription. And then the week after, they may say, you know, what I need an associate to come in here and actually help prepare some of these work papers. And I’d really love it, if actually one of your chiefs can help them provide supervision review for that environment that week. So they have the flexibility to adapt the passes to their needs on a week-to-week basis, which again, is huge, because at the end of the day, they can control the spend. And because it’s a flat fee investment each week based on the resources that they’re engaging with, and they actually have talent and incredible resources, that historically, they may have to wait three to six months to find if they can even find it in their local marketplace these days.
So again, just trying to hit it on a bunch of different angles, and make it super simple for them.
And it sounds like the value to them also is—and not knocking, you know, outsource firms that are overseas—but being able to manage the quality of what’s being done because it’s being done wherever that person is sitting that’s handling that project for them, correct?
Yeah, it’s all onshore. And that’s again, an unintentional play that we had that we think separates us from other outsourcing arrangements, we are very much a concierge type approach. So we want to develop a long lasting relationship with all of our members, aka the CPA firms. All of our people here are onshore, licensed CPAs. They’re coming out of the Big Four and or even top 10 firms that have a breadth of experience that these folks can tap into in any given week to get solutions. And unlike most even CPA firms, and even the outsourcing firms, it is not a billable hour concept. For us. It’s strictly you have access to our people, we contractually say that access is between the hours of generally nine to five. And during that period, we’re going to do our part to make sure that we’re giving you the solutions you’re looking for. Now, we can’t guarantee it because we never know exactly what the requests might be. But again, we’re going to let them decide whether there was value because at the end of the day, if they don’t like what we’re doing, they can turn off the subscription and cancel it next week and there’s no harm no foul.
Right. Which is, you know, as you said, it allows them a lot of freedom to not have to commit dollars long term without understanding what their needs are going to be on a consistent basis.
That’s right. So we have I mean, there’s variability in our passes to where they want to be a different level member tier, so we have an A-list concept, which is, provide some additional privileges. Think about it akin to getting on a United flight. Where do you sit in terms of priority boarding?Where are you sitting on the plane? Are your bags being charged for, or are they not? Are you sitting by the lavatory? Are you in first class? It’s that same kind of concept and just saying, look, you subscribe to us, you choose what level membership you’re comfortable with. And then ultimately, that’s going to afford you certain privileges. But at the end of the day, we hope that you’re getting out of this peace of mind, convenience and the quality you’re looking for.
That’s a great point. That’s I kind of chuckle when you’re using that analogy, because I posted something on on LinkedIn earlier this week talking about some things in our business on the recruiting and talent acquisition side that the analogy I use, which probably is a little bit more nerve wracking to people is Spirit Airlines, not United Airlines. There’s a lot of things that we deal with in business that as a business owner, you just take lock, stock and barrel, everything that’s there. But the ability to pick and choose, like you say, where do you want to sit, how do you want to be serviced? How do you want it to be delivered to you, is a nice piece of flexibility when someone’s trying to figure out, hey, what work do we have coming down the pipeline?
You know, you made a comment earlier. Sometimes CPA firm owners aren’t the best at planning their work. How do you guys manage resources? If this is going week to week? And understanding what is the capacity? And what is the work coming into your people?
Yeah, I wish we were at Netflix and could just put it out there to everybody. But unfortunately, like every other organization we’re capacity constrained by the people we have. So what we do is actually, you know, tweak week subscriptions, but we have a membership tier model. So obviously, our A-list members have first priority on all passes. And then we just go down the rank. And obviously, we say when you’re making your subscription selection, just know that it’s a subscription request. Now, most of the time, we’re going to be able to honor that request, but we do consciously limit the number of passes that we actually will sell to any subscriber in a given week, because we don’t want to get overextended. And at the end of the day, that’s going to be reflected in our membership satisfaction score. Right now we’re sitting at a 9.7 out of 10, we’ve got five out of five on Google, because inherently we put pressure on ourselves—if we’re not delivering solutions, that again, they can cancel the subscription. So again, it’s just that peace of mind and convenience and making sure that their experience is an A+ experience in their mind.
So what is the makeup of staff right now with you guys? Number one, and number two, when you look at your FTEs, those W-2 resources, or contract resources? How do you guys go about building out your organization?
Yeah, so we’ve been very cautious and strategic in our growth strategy. And I think, again, that’s just me being the leader of the firm at the end of the day—I wanted to make sure we don’t get out over our skis. We hire people based on vertical expertise, and they are all W-2 employees of AuditClub
And part of the reason that we’re able to identify and attract talent is because of our access based model, another unique nuance to us is that it’s not always it’s not just about the member experience, it’s also about our internal people’s experience. And so because of our access base model, we were able to pivot to a four day year round workweek, well, that resonates pretty well, with a lot of the talent out there looking to get out of the 80 hour workweeks that you mentioned earlier. So you know, basically, we hire vertical expertise, and if we can’t necessarily fulfill a particular request that a firm has, well, our contracts are all-encompassing, so we’re going to try to find some way to deliver your value and solutions.
Now, if you come to us and say, hey, look, I have this very unique, specific area can you help with, we may just be honest, and say, look, we are not the right provider for you at this point in time, maybe a year from now, maybe two years from now we will be but we can’t guarantee that we know everything. And that’s just the dangerous world we live in, if you assume that.
Let me say something just real quick for those that are listening, that heard you say four day workweek that are sitting there going, “Okay, number one, there’s no way. No, that doesn’t happen. Or two, yeah, that’s a great sales pitch, but does it really honestly happen?” To give some validity to that, I sent you an email on Friday, and I was out of the office when I sent the email. I was working kind of like we all do. We look at emails and something came up and I put together an email. I sent it to you on Friday, and literally within 30 seconds, I get a response, but it’s an auto response. I want to read that because I thought it was pretty cool. And it lends itself to a lot of credibility to what you and I talked about and what you’re saying now.
It said, “Automatic reply” in the subject line, and then, “Thank you for your email. I’m currently out of the office. I’ll respond to your message when I returned during our standard business hours. AuditClub concurrently serves multiple CPA firms and organizations across the United States. We provide shared or private access solutions for members during our standard business hours, that generally occur between 9am to 5pm, in applicable time zones of the requested AuditClub person, Monday through Thursday.” So this isn’t just Chris saying, “Hey, I’m gonna say this stuff, it’s gonna sound cool. And no one will really know if we do it or not.” No, it’s in your email that clients get, which I think is huge, as a service provider, and also as someone that purchases services, and I think so many times we just assume, hey, this person is available to me nine to five, Monday to Friday, or whatever hours we have a need.
We’ve evolved into a society where we expect an answer immediately. But I think if you begin to manage expectations, I think one of two things happens—maybe three. One is the client says, okay, not a problem. I’ll deal with it next week, when he gets back to me. Or they look at it like I did and go, “You know what? That is really cool. I like that.” Or maybe three, they get upset that they can’t reach you. I think that third one is a very small percentage of the population today. What’s been the feedback from that simple little step that you guys do from your clients?
Yeah, John, it’s about establishing boundaries, right? Again, anybody that’s out there trying to lead a different firm, I think what we’ve grown accustomed to is just the fact that we don’t set boundaries. And we, as professional service providers have really kind of dug our own grave and set the expectation that we’re always on call and on demand. And I think what we’re just trying to say is, look, we want to work a certain way in AuditClub—if that doesn’t work for you, then you’re not the right member for us. And that’s okay, right? That’s that concierge approach to where we don’t always feel beholden to service every single member every single day, nor should we.
It’s been a, for the most part a non-issue with most of our members, they don’t necessarily care. And they generally are supportive of it. And we haven’t had any, like a crisis moment where we actually had to be responsive. Now, that being said, we do have a concept article that we refer to as emergency access, that members can pull periodically, where we may end up actually providing a response and or a solution on the day when we’re contractually not obligated to. And that’s just simply as a matter of goodwill. But we always preface even those emails saying, It is not our normal practice to respond this particular day, but given your relationship with you, we value the membership, we obviously wanted to be responsive because you had a critical need. And so at least we’ll give them a heads up saying this is why we’re not responding.
Yeah, I just think that again, we live in a society where we’ve become trained—I guess we’ve trained ourselves—for lack of better way to put it, we send a text message, you want an immediate response, we send an email, we get an immediate response. And when those things don’t happen, we feel like something’s wrong. Something’s either I’ve done something wrong, they’ve done something wrong, why haven’t they gotten back to me? And I think that managing processes like this makes it very clear that, hey, our people have a life away from here. And we’re going to protect that and take care of that. And I think that that’s huge, because that’s not stereotypically what’s going to happen at firms down the street.
No, and I again, it’s anybody that’s out there starting a firm, you basically get to start with a blank slate. You don’t have to be wedded to the past practices of your prior firms that perhaps you worked with, right? This is your chance to create what you value. And I think that’s what we’ve done is yes, we’re trying to support our members the best we know how, but we also believe we have to support our people the best we know how. And part of that is our commitment to that four day, year round workweek, where we know that it’s in their best interest to be able to be, you know, refreshed and recharged, and that the value to them of that Friday is so critically important. And it gets them set up for another week.
It’s very similar to like in software development, where they run sprints, right, in a given month. Well, in my mind, we run a sprint Monday through Thursday with our employees, and now they need to go recharge so that they come back re-energized to start a brand new sprint on the following Monday.
Absolutely. I think that there’s a point of capacity mentally that we all deal with, that you just can’t give anymore. You know, to me that that begs a question: coming out of coming out of a big four firm where you spent a large part of your career, you know, the preponderance of your career, and then, you know, the last few years in a traditional firm, you were in again, a large regional firm, at what point in that process did it kind of clicked for you that man, this is, forget me—it’s not sustainable for the people?
Yeah, I think, I mean, I think I always knew that inherently about public accounting and an experience in it was, you know, I remember literally sleeping at a client site until 4:30 in the morning, going out to my pickup truck and sleeping in the bed of the pickup truck for an hour. And then my senior at the time said, hey, he’s out there in the parking lot. Let’s go to IHOP and get breakfast in the morning and then go back down after a half hour. And I was wearing the exact same clothes. I didn’t go home. And I was like, this is not right.
And luckily I had different opportunities to experience different aspects of, you know, Big Four culture, outside of client service, which I think helped maybe elongate my career at PwC when I was there. But you know, even for me at the regional firm, as the partner and director of quality control, everybody came to me with just literally request after request after request. And the funny thing is, is this is where it dawned on me. They all thought they were priority number one, right? And it’s kind of like the post office, you go there, you take a ticket, well, what number are you, right? I know that’s a bad example. But that’s the reality of like, how we should operate it. People should know where they are in line in the day.
And my own family, like we love going to Disneyland. And that actually gives me some inspiration when I go to these theme parks, or even just understand how a consumer buys things these days. Like, it has to be easy, and it has to be simple, but you can let your customers decide, do they want to pay a premium for additional privileges. If I want to get a fast pass and spend $100, so that I can guarantee myself a spot in line, front of the line or near close to print a line without having to necessarily wait for two hours to get on a ride? I make that decision whether that’s important enough to me as a customer, and I’ll do it because I enjoy the experience of not having to wait in line. It’s the same concept here is where do you want to be at from a membership perspective, and you decide the privileges that you think are important that you value? And if you think those are valuable, you’re going to pay the premium for those.
If you don’t, if you decide not to opt into those, don’t complain to us, when now again, you’re sitting in the laboratory and wondering, why am I sitting where the plane smells?
Right! There’s so much truth to that. And I had a long discussion this past week with a potential new client on our talent acquisition side of things. And we’ve got a couple of different pricing models. And one of our pricing models is a stereotypical contingency recruiting arrangement. Now, our pricing is in reverse—that model costs you more money, but there’s no skin in the game for you either, until we fill the job. But as I was explaining to that client, the way we work, our contingency jobs, is they kind of all go in a pile. And if we stumble across a candidate, while we’re working on stuff, where clients have committed to us that they’re going to work with us, through, you know, investment of dollars up front, if we stumble across candidates that don’t fit those jobs, that we will gladly put them on this role. And they didn’t understand the concept of, you know, like you’re talking about: Do you want to wait in line, or do you want to get to the front of the line where you get immediate service? And there’s sometimes a premium to that. And there are people that are willing to pay that there are people that are willing to say, you know, what, I want to be able to have access immediately, I want to get this problem solved. And there are other people who will say, you know what, it’s okay, I don’t need it to be today.
Putting that on their plate and giving them that option, I think is a significant switch in the way that we’ve always operated businesses, especially in the accounting space.
Yeah, at the end of the day, I think, and this reflects my PwC days, even though you had marquee clients for 9 times out of 10, they were all treated the same. And they all thought they were client number one, when the reality was they weren’t client number one, it’s just that no one actually told them where they stood in line and what type of premium they were paying for the privileges they were or weren’t getting. So now we just, we put the power in our members’ hands to make that decision for themselves of what they value. They’re still gonna get the same access to the services, and the solutions will still be top notch and high quality. But they just decide again, where do they prioritize in terms of that membership experience?
Yep. And that’s, I think, a significant change versus what the model has been year over year over year over year.
When you look at the deployment of your people, and you’re sitting in California, correct?
But your team members, your associates, are deployed all over the country, correct?
How have you guys been able to build the environment, the culture, the, what I refer to as connective tissue, that exists within an organization? Have you been able to do that in a remote environment? Because there are those out there still that whether it’s hybrid or fully in the office, there are people out there that sit there and still say, it can’t be done.
What are your thoughts on that? And how have you guys done that?
Yeah. And I think I’d be lying if I said every firm and company was perfect. And we’re obviously, we have our shortcomings without a doubt. But it’s also the inherent drive to want to improve the experience for our people. From a remote perspective, it actually works to our advantage to have people in multiple time zones because we support CPA firms across the country that are in different time zones. But we have made a deliberate commitment to our people that we gather at least semiannually for a week long of meetings, wherever that may be, whether it’s in California, or some other state. And part of that meeting aspect is just the bonding and the culture, you know, that’s experiencing the culture side of it and ultimately getting together and getting to know one another
But the other thing we did is we actually recently reimagined our bonus compensation strategy and pivoted to more of these concepts of monthly achievements that each of our employees basically signs up for. Now, if they do what we ask them to do, and we provide kind of some scripts in terms of what we expect, but one of those is a health and happiness captain, one of those is a social and community captain. And their job in that given month is to go identify a social and or community activity that our team can do in a given month, okay? And it’s a bonusable activity for them. So they put their heart and soul into that they have a vested interest in it, we’ll have one early October for our entire team to contribute and partake in, even though it’s remote culture.
So I think you have to ultimately, you know, you can have the idea at the top level, but you have to empower your people to help make the culture for you as well. And that’s a little bit different, too, because too often it becomes what does the company want, what does the CEO and the president want, and not what the employees want? Now, there’s a give and take there, but your people should have a say in terms of how the direction and strategy the firm goes. And that’s what we’re trying to do is give our people the power to ultimately contribute to things that are impactful for AuditClub as an organization, even outside just the membership experience.
So give me give me an example of kind of what you’re talking about with, you know, the bonusable activity or event—give me give me an example of kind of what you’re talking about and how that would be dealt with or managed?
Yeah. Everything, I think—John, you haven’t known me too long—but everything we do has an intentionality to it. And it’s definitely meant to go against the grain, right? Whether it’s a—we only use Apple products in AuditClub, and that again, goes against the grain and it goes against anything any other CPA firm probably does. But we do it because we want to, we dare to be different at the end of the day. Now, what I always irked me when this goes back to PwC was like, alright, the bonus is basically up to 10% of your base compensation. And then you have no idea exactly how your bonus is calculated, nor how you earned it, or what amount you’re getting. It’s just kind of like, here it is, okay, fine, it falls within this range. What it didn’t do was it didn’t drive performance out of people, right, no one really necessarily said, oh, I’ve got to do this to get to this bonus level, because they didn’t understand the connection.
There was no management through the pocket book.
Exactly. So we’ve said, look, you have your core compensation, which is your base compensation. We’ve given complete transparency around that to help people understand exactly how that’s calculated, and where they can go from here. The other part of it is, is kind of this AuditClub Plus compensation, which has all these monthly achievements. And they basically pick three monthly achievements. So it could be things like, hey, I want somebody to be our technical captain and look for some new technological innovations that our firm can develop and introduce. Go research that and go present it to us, and at the end of the day, at the end of the month, if we find that you’ve done a really good job on this, and you’ve delivered a solution to us internally, we will give you an immediate cash payout through a partnership we have with another software provider that goes onto a card that they can then take and go spend. And every time they spend it, they go, wow, I earned this for doing this particular task at AuditClub.
Now on top of that, at the end of the year, we look at our company overall, and we say that immediate payout, whatever that dollar amount was, we then apply a multiplier to it based on our company’s performance and achievement of our company goals. So there’s an inherent individual aspect to it, but also a connection to the broader company as well. So they’re constantly trying to make these achievements because they know, if we collectively fire off on all these achievements each month, our company results should speak for themselves. And they should have ultimately a bigger multiplier applied to these individual payments. So again, just totally doing it differently. But giving them a clearer understanding of how they’re actually going to be compensated from that perspective. And if they want to leave money on the table, because they didn’t do it. That’s their choice again.
Yeah, it’s again, you’re putting the onus, if you will, on them, like you do with your club members. I think that, you know, consistently when I when I talk to clients about issues they’re having with retention or attraction, turnover, when we start talking about compensation, and we start talking about bonus, the number one issue that I see, it’s not that maybe they don’t have a bonus, the issue is, either one, it’s not quantifiable at all, or it is so stinking hard to understand in either of those circumstances, there’s no motivation as you’re talking about for people to perform any particular way.
Yeah. And so we, I mean, the other part of it, yeah, we’ve got monthly achievements, which are the bigger part of it. But we also have three weekly achievements that are paying out a smaller dollar amount that they can do. Again, they’re deliberately connected back to what we’re trying to achieve. So as an example, one is, hey, just engage with our social media post on LinkedIn. If you actually invite five people a week to your network on LinkedIn, invite them to follow AuditClub and you like and repost our posts, we’ll give you X dollars on your card.
If you say I completed the achievement, you showed it, and we awarded the money right then and there, okay? If you go to a member and get them to review you and leave a Google review and/or an actual internal review for your performance, we’ll give you money for that. Because all these things will help us be a better provider to our customers and our members. So again, very strategic goals that are aligned to the company, but give them an understanding of exactly how they can achieve these things and how they get compensated more.
I’ve got a client that we work with here in the Dallas area that has, kind of like you guys, they have a monthly bonus for their employees that are driven by some specific activities. They have quarterly bonuses. On the tax side of their business, they have a bonus that’s paid out at the end of the April 15 and October 15 deadline. They have bonuses that are paid out semiannually. Then they have an annual bonus. But all of those are tied together—easily manageable, quantifiable, can see, touch feel, people know what they are, they have very little issue with turnover, very little issue with retention.
And the bonus, I mean, it’s not huge dollars. There’s some opportunity for some pretty significant bonus, you know, on some different things that they do. But in the grand scheme of things, it’s probably somewhere in the neighborhood of about 7 to 9% of base compensation across the board—across the board. But if you start looking at somebody making, you know, let’s just say, easy math, $100,000 You’re looking at $7 to $9,000 in additional comp this year, that’s not chump change. It’s just not. That’s gonna motivate people to give a little bit more, do a little bit more, if they can touch it, feel it, see it and understand how it’s calculated.
And we can see it and we see it real time every single day through the software platform. So we know exactly where people are on these weekly and monthly achievements.
So when you look at the employee side of things, how are you guys addressing, just like everybody else, the issue of not enough people, not enough resources, attraction, retention? What are you guys doing to bring people on and show them, h ey, there’s, there’s an opportunity here that’s unique, that’s different, versus PwC, Deloitte, Moss Adams, Baker Tilly?
Yeah, I mean, I think we lay it all out there, right? We’re pretty transparent in our interview process in terms of what we offer, and we hope it’s differentiated in terms of our comparisons to other offers out there. You know, we tell them upfront, at the end of the day, we are not a PwC, we’re not an EY, we’re not a Baker Tilly, and you have to have an entrepreneurial spirit to want to be a part of AuditClub. And that’s critically important. And you have to be connected to the mission. So those are kind of, you know, just bare bones starters for us.
We haven’t necessarily had a problem attracting talent, because a lot of them obviously, they’re going what’s AuditClub? What’s this four day workweek? Is this really, is this really true? I mean, I’ve seen some of the Reddit threads that say “Anybody know about AuditClub? What’s the deal with it? Is it too good to be true?” Well, just come talk to us, and you’ll find out for yourself, right? We have people that are living and breathing this every single day.
And one person I think said it best to me he’s like, if you can get enough critical mass with this concept, you may eventually become basically you’re an insurance policy for these associates, seniors, and managers that have historically been for lack of a better term abused by a Big Four or top 10 firm, right?
I mean, we’re saying four day workweek. And we honestly, we don’t put an hours number out there because again, we’re solutions-focused. So just like we don’t report billable hours to clients, we don’t do billable hours. We want our people to think the same way. If you think you’ve done enough this week, and we have weekly performance reports that they fill out and we rate them on. Every week, they know exactly where they’re at. If you think you’ve done a good job this week, I don’t care if you’ve worked 20 hours, if you worked 40 hours, or maybe heaven forbid you put in a 45 hour workweek, okay? It’s still nothing in comparison to the Big Four and top 10 firms. So I think on its own, we can stand the test. And ultimately, we speak for ourselves in terms of what we’ve been able to do for our employees. But I mean, thus far, we’ve had 0% voluntary turnover. We’ve had a 100% acceptance rate on all offers we put out there. So we’re doing something right, maybe in spite of how small we may be at this point.
Is there a target that you guys are looking at over the next 12, 24, 36 months from a growth standpoint of headcount, or people?
Yeah, absolutely. Yeah, absolutely. I would say we have already surpassed probably 75% of the CPA firms that are out there and been doing it for 10 or more years based on the management accounting practice survey. And we’ve done it in a year, basically.
So we are already outperforming those firms. So if we continue at this trajectory, again, we’re cautiously, in terms of, you know, how we’re approaching growth and stuff, we have some exciting things in the hopper in terms of opportunities to expand what we’re doing, but it is all strategically calculated and very deliberate. And it will never, ever put the member experience in a bad position, and nor will it put the employee experience in a bad position. Those things always have to center us and ground us, and that overarching mission of trying to make accounting and auditing better. If we are deviating from any of those, then we’re doing the growth the wrong way.
I like that, because the focus isn’t on numbers, the focus isn’t on revenue, the focus is on delivering an exceptional product and exceptional experience. And I agree with you, if you continue to do that everything else will fall into place and take care of itself.
Absolutely. And we’ve actually strategically said, we’re going to take a haircut on revenue trajectory this year, because we feel like we need to support our lower level employees more so on a day to day basis. And so we need to equip them with the coaching and the guidance and stuff like that. Well, that naturally takes time, away from my ability and employees’ ability to service members. And that’s okay, at the end of the day, because we want to be able to make sure our people at the lower levels can excel in their performance. So we take an intentional haircut on the revenue, but that’s in the best interest of the company, as well as the members at the end of the day.
You touched on some of the intangible mindset pieces that that you look for in people—entrepreneurial spirit, you know, somebody that they can buy into the mission—but when you look at the technical aspect of, you know, hey, we’re going to grow, we’re going to add butts and seats over the next 6, 12, 18 months. What does the technical background look like, if there’s someone out there that’s listening to this thinking, hey, this might be a place for me? What does the technical aspect of that person’s background stereotypically look like for you guys?
Yeah, usually, if somebody with, you know, a manager and or a senior associate coming out of the Big Four and or top 10 firms that has both a mix of public and private company auditing and assurance experience, most of the skills are transferable, but we definitely don’t necessarily at that level, wants someone to be so specialized, like let’s say all they know is financial services, or all they know is, hey, construction contractors. Our loca, and regional firms have a breadth of services that they’re providing to their clients, whether it’s 401(k) audits, not-for-profit audits, construction audits, even public company audits, so we need to have a little bit more breadth to the people that are coming into AuditClub. That’s probably, you know, number one. And then I would say, again, that entrepreneurial spirit and willingness to kind of roll up their sleeves, and really leave a mark in terms of where AuditClub ends up being five years or ten years from now— they can help us in that transformation to help us grow from where we are today, to where we want to be or five or ten years from now.
So it is not for everybody. Because again, any sort of startup has its, you know, issues in terms of how do you work within a startup culture and stuff like that. But hopefully, it excites enough people out there to go where they can take their technical skills and say, hey, look, let me build, be a part and help building a business and something that truly is helping to transform the profession. That’s what we’re looking for in people. We’re not just looking for a person to come in here and basically support our members. There’s more to it than that.
Chris, what about the the person that you know, was at your level, around your level, maybe, you know, let’s say ten plus years experience, they were a heavy manager, they were a senior manager, spent a lot of their time in public accounting with a Big Four firm, top 50 firm. Somewhere along the way, they just realized that I can’t do this, it’s not sustainable. You know, I’m 35, 36, 37 years old, I got four kids under the age of 13 years old, I’m working 80 hours a week, enough is never enough. They leave, they go start their own firm. Maybe they have an employee, maybe they don’t, but they’re pulling their hair out starting to realize, hey, there’s a little bit more to this animal than I thought there was. Not only do I have to sell, I got to build people, I got to collect my money, I got to deal with problematic clients, all of the things that go into running a business, does that person fit into your organization at all, if they’re just throwing their hands up going, there’s got to be a better way than what I was doing, and what I am doing?
There is, again, see, everything we do an AuditClub, there’s a mission to it. And it’s because it’s a problem in our accounting and auditing profession. So most people are able to take their tech skills and actually go out there and hang up their own shingle and support individual income taxes or business tax returns with very little overhead and can typically be a one stop shop, right? You know, one single spot. Audit is a little bit different because it does require a little bit more of a leverage model. It requires a lot more infrastructure, it requires a lot more expertise, in terms of the support, the audit engagements that are out there.
So we did actually launch a concept called AuditClub One back in March, actually, 3-2-1 was the date we launched it because it’s a launch date. So 3-2-1, March 21st. And AuditClub One is actually designed specifically for that individual you just mentioned where they can ultimately come into AuditClub and use AuditClub as an infrastructure to help them facilitate basically their own book of business. So whether it’s a licensed model, whether it’s a solopreneur concept, whether it’s a part time arrangement, all of that is possible within the confines of AuditClub One. They are the face-to-face relationship with the actual member and or end client that needs audit services. But just like any other CPA firm right now leveraging our infrastructure, that individual also leverages AuditClub to help facilitate their own book of business. So we definitely have a spot for those, we’re actively looking to build that pace in the practice as well.
So in a situation like that, do they have the ability to lean on the resources that are within AuditClub for staff, senior level associates to roll the sleeves up and do some of the work while they’re dealing with oversight of that or managing the project?
Exactly. They’re the face with the end-to-end client. And then they tap into our resources, whether it’s our crew chiefs, they subscribe to our passes, they are basically in effect an A-list member. So they’re always getting priority with any passes they want. So they know that they’re guarded. And also, from a technical perspective, they’re getting our chief auditors, who are ultimately providing either an engagement quality control review or a financial statement review, before it goes out the door to give them peace of mind knowing that they’re not at this alone, right? There’s just too much in audit where people go, I have no idea whether it actually does something right, I need to tap into others. And that’s the beauty of the network here is that they actually are insulated from both the professional risk as well as the financial risk.
That’s a nice setup. So you guys literally deal with end to end audit, anything that somebody needs, like you’re mentioning, it could be support of a big four top 10 firm with a major public client, all the way down to whether it’s a firm with an audit practice or not an audit practice, they need a 401(k) audit, they need a benefit plan audit, whatever the case may be. It’s one week to week project, anything in the realm of that you guys could support?
Absolutely, yeah, it just comes down to prioritizing the past requests and where they are from a membership perspective. So whether again, its sole prop all the way to top 10, whether it’s a 401(k) audit to a public company audit, we have a team assembled that can help these firms in a number of ways. And again, our contracts, the way they’re written, they’re all encompassing. So if it’s in our wheelhouse, and we can support you, we will do it for you. And that’s just the nature of a concierge approach. So there’s no scope creep, there’s no this is out of scope, all that sort of stuff, we throw it out the window, just make it super simple for a firm to get access to the knowledge that they need to help deliver solutions.
I’m sure you guys have thought about this and looked at this just like everybody else does. When you look at the marketplace, Chris, is there anyone out there that’s doing anything close to what it is that you guys are stepping into? Because after we talked last week, and I did some research, I don’t see anybody out there stepping in and doing that.
We think we have a really unique position in the marketplace. And we think we’ve really done a nice job of differentiating ourselves and building a brand up in relatively short order. There are offshoring outfits out there that either it’s South Africa, or it’s you know, Buenos Aires, wherever it might be.
But most of them don’t operate the way we do, right? They’re more of a talent agency, where they’re looking, hey, here’s a few candidates to interview him and then slot them into your team for a few weeks, and then come back to us. We are all about building a relationship to where a CPA firm now has in their back pocket access to an entire team, from partners to associates that they can call on, on demand, with the flexibility they need to help drive solutions. Now, there is a little bit of a premium pricing to that concept, because again, it’s peace of mind and convenience. But again, they are the ones that decide whether that works for them or not.
So I think from a competitive landscape, I don’t necessarily think they fit what we’re doing in terms of the breadth, the expertise and the quality within which we’re able to deliver it.
Well, I think you’re right. There’s definitely offshore options. Those have some nuances that you have to work through and figure out. But I would I would think that there would be value to me as a firm owner, whether I’m a solopreneur or a 25 person firm, it seems to me there would be some value in the fact that right now, if those issues come up with my clients, stereotypically, I’m a tax advisory, CAS firm. If those issues come up with my clients, right now, I’m probably farming that out to another CPA firm that not only does audit work, but also does tax, client accounting, advisory work. Obviously, there’s probably some knowledge of who they’re referring that business to. There’s probably a relationship. But still, the ability to maintain the control of what’s being done with my customer, to me would have a significant level of value when I’m turning that over to you guys are bringing you in in to take care of that issue for my customer.
Absolutely. And again, this goes, our you know, recently we launched a concept called AuditClub Ally, which is designed to actually be a strategic relationship with certain tax and CAS type accounting firms. Think of it as the non-attest firms, that they actually can’t issue assurance and attach reports because they don’t have that CPA license designation. So their only option, like you said, is to throw it over the street to their friendly CPA neighbor. That now ultimately may come and say, well, actually, your tax clients look pretty attractive. Let me go ahead and steal those from you while you also give me this audit business, right?
So that’s the fear that a lot of these firms have. And so AuditClub Ally presents them an opportunity where they can feed things into the AuditClub network that can get service through AuditClub One, right? And ultimately, the client gets what they want, and they still able to maintain the relationship with their existing bookkeeping TAS type tax firm. So it’s a win-win for everybody at the end of the day, and there are some rewards built into that. But that’s just another way to give people options in terms of how they solve for the current problems that are out there.
And those problems aren’t going to go away anytime soon at all, so I would see that you guys have got a recurring opportunity to be able to build a business with current firm owners, with future firm owners, that are trying to figure out how do I do this, how do I provide solutions.
I want to thank you for spending some time with us here on CPA Life Podcast, Chris. As we wrap up, if there are firm leaders out there that are interested in learning more about how you can support their needs, or if there are audit professionals listening that are kind of intrigued going, hey, this, this may be an option that I had no idea about with AuditClub, what’s the best way for people to reach out and talk to you?
Yeah, go ahead at AuditClub.cpa is the website. We have a career page out there that you can peruse at your convenience. Obviously, there’s contact information on the website as well, where you can schedule a meeting to talk with any of us at AuditClub. And ultimately, we’d love to understand what you’re trying to do. And we’d love to see if we can be a part of helping you to solve for those things.
Well, again, I want to thank you for spending some time with us today. You’ve got a nice niche that you guys are continuing to build. And I wish you continued luck in what you’re doing.
Thank you, John. Appreciate the time and look forward to talking to you again soon.
Absolutely. I want to thank everybody for investing a little bit of your time with us here today. To learn more about what leaders like Chris Vanover and his team and AuditClub are doing to address many of the issues that are facing the public accounting industry today. To make sure that you don’t miss any future episodes, subscribe to our podcast on the platform of your choice, and that way you can join us next time as we explore a little bit more of what the world of CPA Life looks like. Until next time.
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Chris Vanover is a team-focused accounting and senior auditing executive with over 20 years of unique public accounting experience, including distinctive auditing, regulatory, and educational roles with Big Four and regional firms, the Public Company Accounting Oversight Board (PCAOB), and multiple universities.
Prior to AuditClub, Chris was an audit partner at a Top 40 firm with responsibility for overseeing the firm’s system of quality control for the audit practice across nine offices. Chris also spent a combined 13 years with a Big Four firm. In addition to his client-service responsibilities, Chris was also part of a Big Four firm’s Chief Auditor Network within its National Quality Organization. In this role, Chris provided both PCAOB and AICPA auditing and methodology advice to engagement teams, assisted both national and local leaders with various audit quality initiatives, and created and facilitated numerous technical trainings. From 2011-2013, Chris served as a technical advisor within the PCAOB’s Office of Research & Analysis, where he primarily performed technical consultations and assisted with various strategic projects, including audit quality indicators.