The Advisor Advantage: Turning Financial Insight into Action

In this episode of BeansTalk, Brandon Smith sits down with Partner Wendi Berthelot to discuss why CPAs should be more than year-end compliance providers. From business growth and cash flow planning to financing, succession planning, and strategic decision-making, Wendi shares how business leaders can leverage their CPA relationships to navigate challenges, uncover opportunities, and make smarter decisions for long-term success.

About our Guest:
A leader in the Baton Rouge office, Wendi has been with the firm since beginning her professional career in 2003. She takes a hands-on approach to all phases of her engagements to promote client success. Wendi has provided services such as financial and audit reviews, agreed-upon procedures, and various consulting projects. She has worked with privately held companies, real estate clients, nonprofit organizations, and for-profit companies with complex structures and multi-level consolidations.

About our Host:
Brandon Smith, CPA, is a Partner based in the Atlanta office and the Advisory Practice Leader.

Transcript

Intro 0:02

Welcome to Beanstalk, M&J's podcast where we are sharing and showcasing our areas of expertise through conversations with practice leaders on their knowledge and experience.

Speaker 1 0:14

As business leaders, most of us have relationships with financial experts and CPAs. But are we just contacting them after year end to discuss compliance, like our annual audit or our tax filings? If that's the case, we might be leaving a lot of expertise and value on the table. In today's episode, we're going to unpack that and think about how we can use our existing relationships to find some additional value. And for this episode, I'm very excited to be joined by Wendi Berthelot, a partner in our Baton Rouge office. Hey, Wendi.

Speaker 2 0:55

Hey Brandon, how are you?

Speaker 1 0:57

I'm doing great. Thank you so much for joining me today, Wendi. And will you do me a favor and a favor for our audience and just kind of discuss your background and your role at Mauldin & Jenkins?

Speaker 2 1:08

Well, I was with our um previous firm, Laporte CPAs. We joined you guys in December of 25, and we're excited about that. But essentially, I've been in public accounting all with the same firm for about 23 years. Um started off in a New Orleans office and eventually made my way to Baton Rouge. And I've been in Baton Rouge now for about 17 years.

Speaker 1 1:33

And Wendi, the types of clients that you work with, I know you work with a range of different types of entities and businesses, but we just kind of give some context around the typical kind of client that you're helping out.

Speaker 2 1:45

Most of them are closely held for-profit companies. Um, you know, a little usually in the growth stage, a little bit more complex than your typical QuickBooks type of deal. Um, but they've usually got some struggles and some pain points with scaling up and what that looks like for them. Um so it's a little bit more complicated. Um, whether it be complicated because of financing or because of structure, um, it's a little bit more than just cookie cutter typically.

Speaker 1 2:13

Well, and and why I'm so excited for you to be joining me to have a microphone is because a lot of times when you know businesses or you know, just corporate leaders kind of look at a CPA firm, they'll see them as just folks who can help us check off a compliance box. And and I know like somebody like you, you have a tremendous amount of experience in compliance and in especially like when it comes to a financial statement audit and different kinds of a test and AUP type of arrangements, but you really work with your clients to kind of get to that next level to really help them think about their business and look forward. So, kind of from that frame of mind, I'm just curious on your thoughts on like when's the right time to contact your CPA? You know, when when should business leaders be picking up the phone and dialing their CPA to kind of navigate their business challenges?

Speaker 2 3:00

Well, ideally, I would say all year long. Um, but anytime that there's something big happening, there's a big thought, like, hey, maybe I'm interested in this, but what really does that mean? But definitely before you take action on anything big, and if you know it makes it so much easier in the planning phase, because we can help you say, you know, doing this causes X, Y, and Z from whether it be from a compliance or a tax standpoint, there's implications to everything. And what this is gonna make, you know, recording transactions harder, or this is gonna throw you into another set of issues that maybe you didn't consider, but it sounded like a really good idea at the time. And we just want you to have all the information available.

Speaker 1 3:45

So it's not just right after your end when they're thinking about their audit, like, hey, Wendi, I need to start thinking about my audit, right?

Speaker 2 3:51

No, that typically is not a good time. Um it makes things harder when we have to go back and we have to undo something that wasn't done correctly, or when you're surprised that it did have the effects that it had and now your audit has increased, or you know, you are out of compliance with some type of covenant because you weren't prepared for what the outcome was gonna be.

Speaker 1 4:15

I like that. Just kind of having you on call just to unpack different financial implications of strategic and operating decisions. You know, whether that's thinking about, okay, I want to be in a growth phase, what does that mean for me structurally? But also I just had a slightly unusual or complex transaction. How do I make sure I'm accounting for that correctly? Correct. So, Wendi, did you have any like good examples of kind of a client you were working with where kind of on either side of the consideration, maybe they they did get in touch with you uh and you you helped them navigate kind of the appropriate structure, or or maybe when they uh uh just tried to kind of go it alone or take the advice of maybe just an attorney or something like that, and you kind of had to help them unpack it after the fact.

Speaker 2 4:59

Sure. Years ago, um we were successful in obtaining a client relationship. Um the company or series of companies had were in the middle of several different things. They had a shipbuilding company, they had a shrimping company, they had a little bit of a biofuels company, they had some real estate in all these companies. Um and they were transitioning from a generation standpoint. The dad was trying to pass down the companies to his children, and they were trying to manage all this and minimize taxes as they did so. In doing that, they reached out to attorneys who were able to make it all happen without any tax implications to the grandparents or to the parents. Um but in doing that, they really created a complex structure that was a little bit more than their small town CPA was able to handle. And it was a little bit more than they were ready for, and what that meant for them internally and where the assets ended up in which entity, who owned those entities, and what that looked like going forward. So we were able to come in. They brought us in, of course, on the compliance side, you know, they needed an audit, and of course, they needed it in no time. But what we really had to do was go back to the agreements that were written by attorneys to say, what does this look like? You know, where which trial balance does this go on? Do you even have a trial balance for this entity? Because it these real estate assets had previously existed on operating companies. And so we really worked with them to establish what these what the structure looked like and I think what the end result was gonna be, um, which I think was extremely valuable to them, you know, moving forward and what that was gonna look like and who needed to record what transactions and how that was gonna look, even from the perspective of moving money from one company to the other, and who was paying the bills on these things, and what, you know, did I need lease agreements? What was all of this gonna look like at your end? So it was impactful. It was impactful for us. It was a huge learning experience. Um, but you know, some of the messiest things you learn the most.

Speaker 1 7:25

That's exactly right. And I think that's a perfect illustration of where, you know, just us as business leaders, we have all sorts of different advisors who we look to to help us kind of attain and achieve our objectives. And like in this case, it was a nice time for restructuring when it came to a generational transfer and also just figuring out going forward if we scale this business, how do we do it differently? But you know, we always have to take a step back and say, this new structure wasn't just for a one-time tax transaction. This actually has real-world operating implications to us. What are those implications?

Speaker 2 8:00

Right, because we live by them. Yeah. And you have to carry out, you know, existing transactions in these companies as you outlined us in a legal document. You know, did you talk to anybody about this before? Did you talk to the people who were working in this business before you did these things?

Speaker 1 8:18

Exactly, exactly. So I think that's a beautiful example of just kind of, you know, pulling in the CPA, maybe not just after the fact, but maybe for planning going into it. But even after the fact, you know, having us on your speed dial to help you think through the real implications. Because I imagine too, a value is that you've probably seen similar structures in your career to be helped help them navigate what it means to have an operating entity or multiple separate operating entities, having a real estate entity, having the intercompany transactions among them, and also navigating the implications of okay, how do we realistically come into agreements between these and transfer assets and liquid resources between them and the like, right?

Speaker 2 8:56

Yes.

Speaker 1 8:57

So with that, now maybe when it comes to that idea, you know, we're talking about maturing businesses and you know, and requiring a higher level of maturity from expertise. You know, what other kind of uh um challenges have you helped companies navigate? Do you ever kind of encounter the need for scaling when it comes to maybe trying to raise capital, whether that's trying to find outside investors or even just do a capital call with the invest the existing uh ownership team, or maybe looking at things like debt financing, obtaining maybe a line of credit? Is that the kind of thing that maybe that you you you help your clients navigate?

Speaker 2 9:31

We talk a lot about it. We talk about what their needs are and you know, funding and what this is gonna look like going forward. And sometimes it's trying to understand what are you trying to accomplish with this and what do you need this money for? And I think sometimes backing walking that backwards a little bit can either it can yield something several different things, right? Are things going well in the way you're currently operating, or where's the shortfall coming, you know, because you are showing a profit? What's not happening? You know, where really taking a look at I guess what where the money that you're looking for, where's it gonna go? What are you gonna do with it? And why is there a need if you've been operating for a while? You know, are we looking to make investments? Because that's one thing. But if we're just looking to fund existing operations, then maybe we need to walk back a little bit and see what's not working.

Speaker 1 10:29

That's a great call out. You know, the the why. Why are we trying to seek out capital? Is this purely for a strategic play to maybe grow, maybe open another location in a neighboring geography or add on a new business process or a new activity? Like you were talking about, even your early example when it came to kind of have their core activity of maybe shipbuilding, but also doing some type of, you know, I think it was a shrimping or something on the side of that. You know, are we looking to add a new activity? But I think that's a really good call out, too, of are we just trying to shore up cash flow challenges? You know, do we just need working capital for existing, you know, activities? So really first tier of understanding the why.

Speaker 2 11:15

Yeah.

Speaker 1 11:16

That's a that's a really good insight. Now, when it comes to trying to kind of navigate that practically, I imagine, you know, when it comes to you and your partner group at Mauldin & Jenkins and also your existing relationships, do you find that oftentimes you're kind of pulling in other experts to be kind of part of a services team to help your clients as well?

Speaker 2 11:34

Absolutely. I'm not a tax person by any means. But you know, those are the first thing people want to talk about, right? When they know that you're a CPA, it's like, hey, I got this problem. Um I'm like, great, it's not one I can help you with. But I know people, right? And so, you know, it's definitely a team approach in everything we do. And so having people in speed dial, having the resources available, whether it's locally in our office or one of our other 19 offices are always helpful, but outside people as well. You know, I know lots of bankers, I know lots of payroll companies, I know a lot, you know, we can make the connections because that's part of what I do. How can I help you? What do you need? It's more than just the audit.

Speaker 1 12:23

And I think that's something that you know business leaders should always keep top of mind too is that you know, our CPA is not only a direct financial expert to have at the table for big discussions, but also a window into a lot of other experts and kind of relationships that can assist, you know, uh attorneys, wealth managers, bankers, even when it comes to investment banks and private equity and all sorts of different things to kind of help bring together that service team for services team and obviously a lot of the capabilities within a firm, like you mentioned, we have our compliance experts, our advisors, our tax, and a lot of us who can do a lot of many of those things, but just kind of having that window into a full services team to help us navigate whatever challenge we're we're navigating.

Speaker 2 13:05

Absolutely. And, you know, I find that some of the biggest ways we help are just helping them, you know, think through the decisions. When is it time to, you know, bring something in-house? When is it better to outsource? You know, what are my needs? Like, let's walk around that and see what you're really using this function for. You know, do you really need to do payroll? Or should we send that to somebody else? Do you really need an in-house CFO? Or can you rely on some of our experts to help you in support? Because what you really need is just a bookkeeper. Um, so it helps to have the conversations and you that they trust you to say, okay, you know, you looked at what we do, you've looked at the amount of time we're spending in this. Let's, you know, when do we need to make changes? That sort of thing.

Speaker 1 13:57

Exactly. Because you're seeing that definitely more and more of a trend. It's been a trend, but it continues to be a growing trend in terms of, you know, outsourcing particular administrative functions. You know, you kind of mentioned payroll as an example of that. Do we really need to maintain internally a full 365 days out of the year payroll team to help navigate that? Or is that kind of something we can carve out from our existing administrative structure and kind of pull that over to a payroll expert organization and even maybe more comprehensive bookkeeping? You know, and I think especially in the areas of finance accounting and also information technology, we're seeing a lot more and more that companies are finding part of their growth strategy and scaling strategy is to find a scalable outsourced function to kind of take over that activity for them, whether that's outsourcing, that's onshore, offshore. There's a lot of different opportunities on that, but just finding kind of the right partner to help navigate that. And then even when it comes to that higher level strategy too, you know, the fractional CFO, right? Not only having Wendi on call just for whenever I'm navigating a complex transaction or a strategic uh financial initiative, but also just having somebody to maybe month to month, quarter to quarter, or periodically throughout the year kind of help me from that kind of navigational lens, think about financial strategy. Now, now, Wendi, I guess when it comes to you know, the clients that you work with as they're navigating different scaling challenges, and we've talked a little bit about structure and we've talked a little bit about the finance and capital, but maybe how about from like, I don't know, an infrastructure lens or just an executives lens, kind of our leadership team. You know, is that something that you're oftentimes having conversations with your clients just around like how do they really scale up their enterprises?

Speaker 2 15:40

We have conversations about, you know, I guess we often talk about what their pain points are, what their concerns are, and that often leads to do I have the right people? Um are these are they fulfilling your expectations? Do you feel like they're you're missing something? And then I think that goes back to owners who often think that they have to do it all and that they're the only person who can do it all. And on the flip side of that is when do you know, where how do I go find the right people with the right skill set and what is the right skill set? So I've had discussions helping them kind of hone in on what they're looking for in somebody, and what do they feel like the value is gonna be and at what's the right time to add somebody at that level? Which all of those can be tough conversations or tough thoughts for somebody who's afraid to make a leap into something that's gonna is it too early? Is it too late? Am I, you know, what's how is this gonna impact the things that I need to get done versus at the end of the day, my bottom line.

Speaker 1 16:53

Exactly. Because you can just be a sounding board for leadership. You know, obviously you have a tremendous amount of financial expertise, but you've also worked with a lot of different clients. Well, a lot of different companies. You've seen clients at different levels of maturity on what their challenges of pain points were, how they successfully overcame those to now when this business leader gives you a call and says, Wendi, I'm just feeling like I'm kind of pushing up against my limits here. You know, help me think through some challenges. So obviously, primarily having that financial lens, but also just kind of being a peer business leader to help them through think through some things. Uh, but you also mentioned the bottom line, you know, so also kind of grounding them on potential ROI.

Speaker 2 17:35

Right. Yeah. Is it going to do what you want it to do? And what do you want these people to do for you? You know, if you're looking for somebody from a marketing perspective, then you need to really understand what that looks like and what the implications of that's gonna be. And how long are you gonna give them? How much runway are you willing to provide in order for you to start seeing some return?

Speaker 1 18:00

And I think a lot of our conversation has just been kind of focused here on this idea of almost planning, of just of just being intentional with our businesses, of looking forward, of when we're talking about capital in terms of, well, really, what are we planning that capital for? What are we trying to achieve when it came to scaling? Just okay, what are the pain points we're experiencing and what are we really trying to get to to where maybe those pain points are are keeping it hard uh difficult to kind of achieve those objectives? And even maybe just the ROI, you know, really what what are we trying to get out of whatever maneuvers we're making? So just kind of talk me through the values of planning. What why is it important to kind of be intentional with our businesses and kind of think forward about what are we really trying to do here?

Speaker 2 18:47

Well, I think that knowing where you want to go and what you want to get to helps you measure along the way. And I think getting outside of are too excited about the measuring along the way because you think all this is gonna play out a certain way can be a real pitfall with regards to cash flow. You know, we talk about scaling and how the cash kind of runs out before the growth happens, or the growth happens, but the cash runs out, or how, you know, the chicken and the egg type of scenario. Um but I think it's it's it's very important to kind of look forward and say, this is what I want to happen and this is how I'm gonna make it happen, and to forecast what that's gonna look like. You know, what is the investment I'm making and at what points are I'm seeing the return and what that looks like from a bottom line number, what that looks like from a cash number, because at the end of the day, the cash is what matters a little bit more than the bottom line that you're looking at for you know for most people. So I think planning and knowing what your what your goal is and how to measure that along the way is critical. If you don't have the right people to help you, if you don't understand the costs that get are involved and you don't understand what's fixed versus what's variable and what's changing along the way, then you end up a little bit lost.

Speaker 1 20:20

Well, and and those come into themes, you know, like throughout this podcast series, you know, I've I've heard of a number of great statements and comments and even themes, and a lot of those tie into what you were just describing. You know, the first one that came to my mind is that concept of you can't manage what you can't measure. And so, as you're saying, while you're planning out these growth plans and whatever, just strategic initiatives generally, you know, devising them in a way to where you can appropriately measure them to then facilitate appropriate management. And another thing that I was thinking of when you were talking was this concept of uh I know Robert Stephens of our CFO navigator practice likes to joke that uh what is it, growth eats cash like a goat eats grass. And like you were just describing, though, when it comes to us growing our businesses, you know, that demands a lot of cash. And at the end of the day, it doesn't matter what our top line revenue is if we don't have the cash flow to make payroll. So that budgeting and forest forecasting really comes into play. Talk me through a little bit that a little bit more when it comes to kind of just forecasting and budgeting. What does that look like in kind of a mature enterprise to you? What do we really want to, what's a goal end state we can have when it comes to kind of our practices for forecasting and budgeting?

Speaker 2 21:34

Well, I think you need to understand where your revenues are coming from. First of all, you need to, you know, if it's multiple products or if it's one product or if it's segments or however you measure, you really need to understand where what the drivers are, and you need to understand the inputs on the cost to get there. Um and from there, you it's I guess easier to look at, you know, what are my expectations? Going forward. What am I capable of doing? Where do I want to stretch? And where am I willing to settle a little bit back? Because I need to make sure I've shored up all those things that you were talking about, that the cash is going to be there when it needs to be there. And I can't go above and beyond until I know that things are steady and that the foundation is there. But I help I think understanding what the top line goal is and then working backwards into, okay, that provides me this much money from an expense standpoint that I can allocate between the things that I need to do. What are the fixed costs? You know, what's my rent? What's my payroll? What are those go plugged in first? And then you can back into what you need, those other areas, also critical, but maybe less critical than the people who are showing up every day.

Speaker 1 22:52

Right. And I like that you kind of differentiate between that from the kind of the cost side, the expense side of our budgets, being mindful of the fixed versus the variable. Because a lot of the benefits of scaling up is trying to achieve a degree of economies of scale, of being able to maybe do more with less or at least more with the same. For example, you mentioned that rent. We are paying the rent rent regardless. Can we do more with that same rent? But we also have to be mindful of those variable costs. As we scale, there are grow costs that are going to scale with us as well.

Speaker 2 23:28

And I think that's one thing that we often forget because variable cost doesn't just mean, you know, X times the number of widgets we're producing. I think as we get more revenue and we, you know, tend to scale up, we become a little bit more loose with what those financial statement expense line items are, you know, because well, we're making more money, we're making more money, and before you know it, you know, things are a little bit out of whack.

Speaker 1 23:57

Exactly. Because that that uh that you know that revenue line can can can be very attractive and can be something we like to look at, but you know, at the end of the day, the margins is what really we we experience and feel as business leaders and business owners. And now now, Wendi, some of that kind of makes me stop and think about, you know, as a business leader, every now and then I I start to feel a little paralyzed, you know, like like I feel like status quo is going okay, but I do feel the call to maybe doing a little bit more, whether that's opening opening another office or expanding a facility or adding a product line or service line. I I guess are those times I can kind of give you a call and do you have conversations like that with your clients?

Speaker 2 24:41

Absolutely. And you should. You know, a lot of those things are gonna require investment. And that's another thing that we discussed before of, you know, what is my ROI? How do I measure that? And we can help you do that. I mean, sometimes the inability to make a decision also warrants a phone call. What does this mean for us? I'm struggling, you know, there's some competition in my market, and I feel like I really need to branch out. I need to get beyond the person who's, you know, my production person, or I need to do uh, you know, there's an opportunity for a joint venture, but I'm nervous, or well, let's take a step back. Let's see what the actual cost of this are. Um, let's see what that investment would look like for you. Can we do it? And what would be the return? Is it worth it? You know, how old are you? What do we want to do? What what's your end goal? And I'm not talking about, you know, I just want to make payroll next week. Maybe it's five years down along, how down the road, how long before you retire? So is that enough lead time to make such an investment? We can have all these conversations, connect you with the right people, and help you figure out a good path forward.

Speaker 1 25:53

I love that because it's it's kind of from from both perspectives is one is just a business leader of my activities, helping me think through how I'm navigating that and what my objectives are in that, but also take a step back and why am I in business? What am what are my real what are my life goals from this? What are my plans going forward? How long do I want to be in this game and kind of what comes next for me? And kind of from both perspectives, just kind of having you as a sounding board to talk that through, but then also kind of getting into the details where appropriate and kind of mapping out the numbers of it and the ROI of it.

Speaker 2 26:29

Absolutely. I think about um another client that was referred to as he had a separate tax preparer who kind of helped him with a little bit of bookkeeping things. But 30 years ago, he bought in to a company. I think he was working there and the owner wanted out. So he bought the stock of the company and became the business owner. He's been doing this for 25, 30 years now and was approached about selling his company. And so he was referred to us from a business valuation side. You know, what's this really worth? Are they giving me a fair price? He thought it was a fair price. He thought he had a number of what he was asking for. At the end of the day, we took, you know, all the numbers and we crunched them for them and said, Look, you're a C Corp. So these are the tax implications of you selling this company at this amount of money. You know, you've got a truck in here that you're saying you want to get out. And at the end of the day, the cash that they were offering him wasn't any more than him continuing to work. He thought it was a really great number. He had to go back to the drawing board. We helped him do that because what he thought was a good landing place and what he thought had been the best structure. But had he talked to us a little bit ahead of time about this was my plan, this is how I want out, this is what it's going to look like, maybe we could have done some things years ago that would have helped make a difference.

Speaker 1 27:55

Yeah, I think that's a beautiful takeaway from this conversation of just really thinking forward of what are our business goals and how can we achieve those goals? And like you were talking about, that can start with maybe business valuation, drilling into some financial due diligence, really looking at activities of what would remain, what would leave when it came to subtype of a transaction, a deal, uh, a transition, you know, and then seeing, okay, do current opportunities on the table or conversations that are kind of in progress and in flight, do they make sense for meeting our goals? Well, well, Wendi, I've really enjoyed this conversation, but before I let you go, I'd love to just kind of open it up to any additional last-minute thoughts you have for our listeners in terms of just general business advice you have.

Speaker 2 28:37

I think the only, you know, piece of advice is that you know I can't help you at all if I don't know. So if I don't if we don't have the conversation and you don't share what your thoughts and your plans are, then it's 100% guaranteed that we're not going to be able to help you.

Speaker 1 28:54

Yeah, you have a very extensive resume of experience and expertise, but I suppose mind reader isn't one of those. Isn't one of those. Yes. So I love that. Just kind of keep you in mind, keep you involved, and and and you know, just call you up to just discuss things and and include you into those conversations.

Speaker 2 29:10

Absolutely. Because this is the stuff I like to do. You know, I am an auditor. Um, but that can, you know, that's not always exciting. A lot of this is always exciting.

Speaker 1 29:20

That's right. It's moving beyond just the compliance to the strategy and advisory, like we kind of opened it up with. Well, Wendi, thank you so much for joining me on the microphone.

Speaker 2 29:28

Thanks for having me.

Speaker 1 29:29

And to our listeners, thank you so much for tuning in. If you have any additional questions about the financial discussions we had today, or any other financial challenges or business challenges you're navigating, please don't hesitate to contact us at www.mjcpa.com.