The Young CPA Success Show: Episode 24

In this episode of the Young CPA Success Show, Joey and Hannah sit down with Karl Baker, owner of Baker CFO Advisory, LLC, as they share their career experiences, including the concept of "do overs" and the challenges of balancing personal life with professional growth. Karl discusses his transition from public accounting to consulting, emphasizing the importance of industry understanding. The conversation highlights the value of mentorship, the impact of organizational culture, and the benefits of embracing challenges for personal and professional development.

Intro (00:00:00) - Welcome to the Young CPA Success Show. If you're a young accounting professional, this podcast is your ultimate guide to navigating your early career. Join us as we share valuable insights, expert advice, and practical tips to help you kickstart your path to success and excel in the accounting industry. Let's embark on this exciting accounting journey together.

Joey (00:00:23) - Hannah, I try not to spend too much time looking in the rearview mirror because as one of my friends used to tell me, we're not going that way, we're going that way. So, we should be looking forward to it.

Hannah (00:00:32) - But it's true.

Joey (00:00:34) - One of the things that sometimes I find myself thinking about is, is there anything in life that you could do or like if you could just have like a no questions asked, 100% do over on something like, what would it be? And I know that's like a dangerous way to think about things because you don't obviously, we don't get those, but it fits in with today's show. So, I thought we would kind of play around with this idea of, of, is there a do over that you wish you had that you could do?

Hannah (00:01:00) - Oh, gosh.

Hannah (00:01:01) - I mean, I feel like there's so many. But as it applies to the context of this show and in our careers and things of that nature. Right. I would say so I, I got married young, still married. So, that worked out for me. Not going to say that that's my do over at all. Don't tell my husband I said that. But I would.

Joey (00:01:26) - Say that's canon. Now this is in the show.

Hannah (00:01:32) - So, I would say, though, that I did put my career on hold while we really focused on his. And even by that, like I, I really and granted, I wouldn't change having like spent the time with my kids and raising my kids, but it did. I feel like it makes me feel almost as if like I had to like, play catch up after my kids, after I'd raised him. Like after they had really started to get into school. Like, I felt like I was like really having to, like, hustle in that way because I had just really had to shift my focus and granted, like, I really wish that I had tried to find more of a balance in that because I feel like it does exist, and it exists even more so today than it than it ever has.

Hannah (00:02:12) - My oldest is 13, so it exists more today than it did 13 years ago, for sure. So, I would say that that would be one of my do-overs I thought of. Another one is a do over is I left a job, when I was in my 20s because it was at a commercial finance office, and I learned so much there like, it was it was a great experience for me, but my boss and I really struggled like we clashed in. It was an extremely hard job for that reason. I wish, looking back, that I would have found a way to persevere through that, like to work with her more to overcome that, to really put in more work versus feeling uncomfortable and looking for something else. Yeah. I think you've probably experienced something, you know, similar because, you know, I've had these conversations like I got I got a little latency and it didn't feel good and, you know, decided that, you know, changes what was needed, when realistically, I probably should have just leaned in a little bit more, dug my heels in and figured that out.

Hannah (00:03:27) - So, tell me I'm not alone here. Joey, what about you? 

Joey (00:03:31) - Well I would say to yours, I would say, maybe. I would say, maybe you could have done some more. But also, if that person wasn't willing to work with you, that, you know, that's true. You know, there's that maybe, it's funny, I was doing the math here as a 13-year-old and thinking back to what I would assume was 21 or 22. You know, still firmly in my Peter Pan stage, I don't want to grow up. You know, I had a little bit of a. It's not a failure to launch. We can blame it on the 2008 recession in terms of slowing things down. But like, I was not really in a hurry to do things. But when I left college, I like knew kind of where I was going and what I wanted to do.

Joey (00:04:21) - And it's funny because I was, I was on a flight with a guy to the.

Hannah (00:04:25) - You were on a; you were on a flight you flew.

Joey (00:04:28) - Yeah. No, this was, this was before all that stuff happened. like, there was a time in my life where I could jet set all over the world. Producer Rob rolling his eyes like, I don't believe it. I'm not going to believe it till I see it. Shaking his head in the waiting room right now. I can see him doing it. the. Anyways, I was on a flight from Kansas City to San Francisco, and I was going to the 2012 US open with my dad. So, that was in like June of 2012. I had just finished up my internship and was going back to finish up my undergrad. I had like nine credits left to finish up undergrad. So, I was like, all right, I'm just going to get this done. And I was on a flight with a guy, and he was, you know, in his late 50s, early 60s.

Joey (00:05:14) - And he was a lawyer, and he said, son, let me give you the best advice I can give you. He spoke. Figure out something that you're okay doing for the rest of your life. Pick a small Ish town, not too small, but just right for you. Be the local person who does that. He's like, I guarantee you, you will have the kind of life that you want based upon this conversation that we've had, because we talked for the whole flight, it's like a two-hour flight. And that's what I was in the process of setting up. Like Manhattan has about 50,000 people in it. It's not a huge town. It's a college town. It's a great town. most underrated college town in America, in my opinion. You know, maybe not to the same level as Oxford, Mississippi. We're not going to talk about that right now. But, you know, a wonderful place to be. And I had the setup. I had a situation.

Joey (00:06:04) - I had a great mentor at this job. You'll hear me talk about it in the episode. I had this great setup. Like I kind of knew where I was going. I had a great rapport with the professors. And a year later I quit because the girl I was dating was like, we needed to go move to Kansas City. And so, I quit that job and went on down, and it seemed like I was doing the right thing and all those different types of things. But it turns out she's not the woman I married. And, you know, obviously, like all the things that led me to my wife and all those things like it's great. It worked out the way it was supposed to. which is why I struggle with the mulligan idea of, like, what would I do differently? But yeah, it is kind of one of those things where when I think about it and I'm like, man, I really wonder. How much? Because I struggled a lot in my mid 20s.

Joey (00:06:57) - Like trying to figure that out. And I wonder how much of that struggle with self-inflicted because I was having to play catchup from this decision that I made from the best intentions. but not really looking out for my best interests and what I needed from that scenario. It was more trying to be. You know. An agreeable partner or that type of situation with the person who at the time was not ready for that level of commitment there. So, it was a real that's the one that I think about the most about, like, man, that is the big what if in my life about like, man, what if I had just kind of been like, no, this is long term the place for me. This is where I'm going to grow my career. This is where I'm going to. This is the community that I'm going to invest myself and my time in. I just wonder how different my life would be there. I don't have any regrets about it, but that's the one.

Hannah (00:07:52) - There's the what if.

Joey (00:07:53) - Yeah, that's the one that I'm always like, man, that's probably the biggest career mistake that I've ever made in terms of like. Just how hard it was to come back from that.

Hannah (00:08:06) - Well if you're listening to This morning, Joey's stories are cautionary tale and I feel like.

Joey (00:08:11) - And I think.

Joey (00:08:12) - The learning point of that is, is to do a little bit about what our guest, our guest today talks about. His name is Karl Baker. And he's you know, it's an interesting conversation. I really loved talking to him, about sort of his journey in public accounting and some thoughts about mentorship and some things to maybe do and don't do the thing that I wish I had that he mentioned there was I did not have that really strong personal kind of advisor to help me be like, man, I know you think it's important for you to support this person in your life, but maybe just make sure that this person is also supporting you in the same way.

Hannah (00:08:53) - That was such a digital age too, that I feel like that can be a struggle sometimes now, especially if you're remote like us. You must be intentional to seek someone out.So, I think Joey and I can speak for Joey here in saying, we encourage you to seek someone out if you do not already have somebody that you can identify as, like, yep, that's my person, find a person because it is going to help you. I mean, your skill, obviously, that's great. You should be building on that now in your career, but this will also help you throughout your career. Every single step. even more so sometimes than that skill can bring.

Joey (00:09:34) - You, you don't you don't have to know it all at 25. And if you think you know it all at 25, you know, I thought I knew it all at 25, I didn't I didn't know anything.

Joey (00:09:44) - Exactly, I.

Joey (00:09:45) - Know nothing Jon Snow.

Joey (00:09:46) - Anyways, onto the show. You know, we work with a lot of digital agencies, and we work with a lot of, you know, small business owners who are trying to get things out. And the goal for, for us is, and Hannah and I are always thinking about this is like, what can we glean from other people who are maybe doing it right? That needs to shift with the accounting industry and how we're working with it. You know, young people, younger people, folks who are just getting started in their career and maybe, you know, aren't as enamored with where the accounting profession is going and, and sort of how that kind of plays into decisions that people are making. And I don't know about you. Have you ever had someone come in and be like, I want to go be an accountant? And your answers like, why?

Hannah (00:10:38) - I mean, I'd be lying if I said no. I would.

Joey (00:10:42) - Also be.

Joey (00:10:42) - Lying because I, I, I had that happen on Friday when I was working, I did some work with the school that I went to high school out here in town, and they had like a trustee day at the school.

Joey (00:10:52) - So, we were talking to students. And there are these, these two young ladies who were running the kind of like the coffee bar at the high school, and they're like, hey, so we're wanting to go to the University of Mexico, we're going to study business. And I'm like, just be careful. Be careful in that accounting class. Take it. But, you know, don't lose your dream because. You might not find it in accounting.

Karl (00:11:17) - There's a the, the public accounting space, which is where I got my training and background in being in public accounting for 25 years. It's an it's a fantastic career. If you go into your eyes wide open and you understand what it is, what it is and what it is not. And I owe all my expertise to the training that I got from public accounting, the financial analysis, the numbers analysis, understanding the financial story, the communication, being able to articulate boring things in a way that people understand and might continue listening to.

Karl (00:12:01) - But it's also a lot of compliance. That's what caused me to do something different and get into consulting and other things.

Hannah (00:12:11) - So, did you go into it eyes wide open, or did you kind of figure that once you were in there?

Joey (00:12:16) - Yeah. Well, I can tell you. Right.

Karl (00:12:19) - Right. I, I, I jokingly say I'm blonde. It took me 25 years to realize that I did not want to be in public accounting. It just took me a while. So, when I how does how to not throw the whole industry under the bus when I, when I left public accounting. And really, I knew I was going to go on my own trying to earn my own living, be a consultant, be a CFO, consultant, business office consultant, etc. When I did that, I was at a firm, and I was telling people that I was. I wasn't quite ready to announce my new business, so I kept that close to the vest.

Karl (00:13:06) - Didn't want to lie to anybody. They'll never lie. And so, I just. I told them I'm not exactly sure what I'm going to do, but what I'm not doing is I'm not going to another firm to be another, to be an auditor. I promise you that. I'm not going. I'm not going to a competitor. and 100% of the people that I said this to, and I was, a 25-year person talking with senior partners in these firms, and nearly 100% of them all said things like, oh, I don't blame you auditing. It's horrible, I hate it. It's there are a lot of miserable people in public accounting because it has and I hate to say that and be negative, but it is a very compliance oriented, job, especially when right now, it's a known thing that there's, that there is an understaffing issue in the industry. And so, people are not working at their proper level. I was a partner in a firm reviewing bank reconciliation, audit work papers and checking cross-references and things like that.

Karl (00:14:16) - Well, that's not something that a 25-year person should be doing. There are other people that can do that. But because we didn't have the right leverage, and I think most people are in in that situation, they were doing things that they had mastered a long time ago and somebody else should be doing, and it just makes the job very hard. and, you know, I thought being a partner in a firm, I would be spending my entire life, doing value added consultative conversation strategy, business advice, and as an audit partner, that's just not what you're doing.

Hannah (00:14:52) - And I think probably a lot of our audience thinks, especially being younger CPAs, maybe newer to their career, probably they have those aspirations, too, in terms of at this point in where they're at. So, like, I guess I would ask, like, how do we start to shift that? Like how do we improve upon that? Like, or do we just say, hey, like, you need to know what this is, and this is not that, and if that's what you want, then you need to reconsider something else.

Karl (00:15:17) -  Well, I think if for any of you auditors do, do either of you to have an audit background where you learn audit standards, if you remember, in some of the audit, training materials, they talk when you're evaluating your clients, they talk about, tone at the top in, in conjunction with audit planning and applying professional skepticism and evaluating management and the processes. One of the things that's in the boilerplate training is tone at the top. When I got out of public accounting and really began as a CFO, I learned the real, true practical application of that and how much it truly impacts the culture of an organization. And I think there can be improvement in the public accounting setting with that tone at the top and making sure that people are doing what they should be doing, and nothing's going to be perfect. But I think that's a that's a big part of it.

Joey (00:16:31) - Well, and to answer your question, I've done one audit. I will never do a second audit. That is just not that is.

Joey (00:16:37) - Not I'm in the.

Hannah (00:16:38) - Same exact.

Joey (00:16:39) - Boat. Everyone's very quick. 

Karl (00:16:42) - Yeah.

Joey (00:16:43) - Okay. But you.

Joey (00:16:43) - Know, I found myself on the compliance side more on the tax compliance side and then the tax planning side. And I'll tell the audience; I don't know if I've told this story here. I still remember the one engagement that made me realize I don't want to do tax planning anymore. So, I had a lady who did a transaction. She sold a, an appreciated real estate property that she had inherited from someone years ago, like five, ten, 15 years before. So, we ran the numbers at the end of the year. She had some appreciated stock that she was going to sell it, a loss to offset the capital gain portion of it. There was the recapture piece that was never going to be taxed planned away from. I said, hey, I have a feeling you're going to oh, I think I still remember the numbers, about $6,000 in tax.

Joey (00:17:30) - So, we get to April. That was in like December that we worked that up. So, I said, sell this amount of stock, you'll get everything back. It's all going to work out. You'll probably owe about 6000 in tax that we were never going to get away from. So. Fast forward to April. It's like April 11th. She gets her stuff in; I work it up. She owes $5,942. I was like, could not have planned this any better. We're right where she said she was going to be, but a little better, a little bit less than what she thought. So, I worked it up and I sent her the thing and said, hey, this has been reviewed. Everything's good to go. Here's what you owe. It's right where we thought you were going to be. I'm thinking, slam dunk, home run. Nope. Clients mad. Is it the end of the day? She didn't want to pay taxes. She didn't think she should have to pay taxes on this transaction.

Joey (00:18:21) - And that's when I was like, yeah, you are even in this game when you do your job well and you do your job accurately. There's still the chance someone's just going to be mad because they don't like structurally what you're telling them. And that's when I was like, yeah, I need to go get out of this. And that's when I kind of started moving away from the public accounting sphere and into the controller ship, financial controller, ships, CFO, kind of consultant route from that perspective. But it was a harsh lesson. I mean, I was 29 at the time. that stung. That stung a little bit.

Karl (00:18:54) - Yeah. She shot the messenger. Instead of accepted personal responsibility.

Joey (00:18:59) - And it's, you know, and it comes down to I had this is not the title for this project that we need to need to talk about, but Hannah, down the road, I want to have a podcast called taxes Get taxes. I need a new PR person because I think there's some things that we just can change in that.

Joey (00:19:13) - But you know, it's a challenge because again, even, you know, it's hard, especially younger like when you're getting started in your career to understand like what's all this for. Like what's the value, what's my purpose? Why am I doing this? And it wasn't until I got away from the traditional CPA firm and moved into that CFO consultancy type role that I've been in for the last couple of years, that I was like, okay, I see it. I see. I see the value here. But it took a while and I do think that's an important journey, I think. Hannah, we've talked about this. I think it's important for people to kind of go through those, like there's a natural progression in your career that your kind of must go down to. And I think part of it is if you're someone who is at the top, you must be thinking about the people below you. And if you're ignorant of that or blind to the challenges that they have, you're going to be an effective leader.

Joey (00:20:08) - But also, you just must know the skills. I think the skills are important to have. But, you know, educating on that career path and saying it can look different than just your tradition. I moved from an audit staff to audit senior to audit manager to audit partner. Seeing that there's a different way to do what I think is important.

Karl (00:20:28) - Yeah, I, I feel like I kicked this off by talking about how horrible the public accounting industry is, and that's just. That's not true. I just think it's good to understand what that path is and that it's not all, flying to Los Angeles and spending weeks working at, you know, I don't know, some fortune 500 company. There's a lot of there's a lot of, real roll up your sleeves work involved. But that's also where you gain experience. I work with many small businesses where their books were bad, and you had to become a problem solver, and I attribute a lot of my expertise to the skills I learned in that exercise.

Karl (00:21:20) - In fact, I felt like I was better at that sort of problem-solving skill set than some of my colleagues who were working with clients that we call tick and tie audits, where all the numbers just matched, all the reconciliations worked. They would hand you in those days, they would hand you a paper book of all the work papers, and it just everything just worked. And you didn't have to really think about it because you were told, here's a number on this work paper. And when you go to this work paper, it should have that same number. And it does. And you don't have to think where in my world when I did that, I would go to this other work paper, and it didn't it wasn't there. And you had to figure out why. So, there it is. I just want to state there is a lot of value to public accounting in terms of building financial analysis skills. and like I said, I attribute my expertise to the skills that I learned. And, and so there's, there's value to that in, in, in the accounting world.

Karl (00:22:25) - But it is different than consulting.

Joey (00:22:28) - Yeah. I used to joke, I used to get all we used to call those train wreck clients. Right where, you know, it's like, you know, you get in there and you're never going to be able to get a tax return because the underlying financials have a balance sheet that doesn't balance right. I had one of those before. And it's like that's right I enjoy that more than like I said, if it was just a tick and tie type audit, I think I would struggle. I'd get bored because I'd be like, what's the point? Like, someone's already done the audit work. The internal team already did it.

Hannah (00:22:55) - I struggle with monotony anyway. Like so like I really love having a challenge. I love troubleshooting things; I love digging in and I love investigating things. But I would say one thing about that there is value in those situations. And one thing that I have found at every point in my career, especially now, like being an elder millennial and looking back at the journey up to this point, is that there I've learned over the years, and someone told me this really early on to embrace the suck like, and it sounds kind of a little bit harsh, but I in that though, I really looked back and been like, you know, that.

Hannah (00:23:30) - Did going through that like really did suck. But I learned so much in that situation that I'm now able to apply at this point in my life. Like, would you say that's true for you too, in terms of your journey to get where you're at now?

Karl (00:23:44) - Oh, absolutely. The pain produces strength and that could be a cliche. but it's, it's true. when you're going through that again, you're going to come away from it going that that sucked. But I learned so much from it. I learned some technical skills. I learned I got a little better at my technical skill, at my technical skill set. And frankly, for your first ten years in accounting, I personally think it's all about building that accounting theory and reality-based application of accounting. Anyway, and so you're going to learn more when you're working in the challenges, in the challenges of accounting than you are easy projects, because you will learn the debits and credits. You'll understand some. I mean, just to get a just thinking of boring examples, accrued payroll withholdings.

Karl (00:24:44) - I mean, nobody really understands that unless you're really diving into it and understanding how the numbers flow through the general ledger to get to those, those numbers. and you only do that when you have a set of books that you're working on that are problematic. so, absolutely. Then the cool thing about that is learn that skill set, then get out of public accounting and be a become a consultant where you can apply those standards and articulate it. I just have a quick story. I had a client five years ago. I was serving as the interim CFO in Florida. And, and they thought they were having a bang-up year, the best year they'd ever had. And they were a health care organization. And, and as I began looking at the books, I realized there were some problems with their accounts receivable. So much so. And I figured it out through my own years of experience and general ledgers and financial analysis and understanding what goes in and out of accounts receivable accounts. And I realized not only were they not having their best year, but they were also having probably one of the worst years they'd ever had.

Karl (00:26:03) - And it was my job. Oh, joy, to get to explain that to the senior leadership team and to the board of directors. But at least I had the skill set to figure it out. I had the confidence to know I was right, and I articulated it in front of the group. And at one point, the CEO, I was talking, we were in a big room. The CEO was across the room from me, and as I'm explaining things and explaining the situation, I look over at the CEO and she's sitting there doing this, eyes closed, shaking her head, and I went, oh, what'd I do? So, I said, what? What did I say? And she goes, we've just never had anybody that can help us with any of this. We've never had the expertise that can help us navigate through these and understand the issues and explain them to the board of directors. And I'm just stunned. And I just at that moment, I realized, this is why I do what I do.

Karl (00:27:06) - And all those years of training got me to that point. and so, I appreciated my career that purpose.

Hannah (00:27:17) - We live in it.

Hannah (00:27:19) - Oh go ahead Joey.

Joey (00:27:19) - No, no.

Joey (00:27:20) - No, go for it.

Hannah (00:27:21) - I was going to say we live in such an instant gratification world. Like, I feel like the generation of kids that are coming up, like, out of college and, like, starting their career. Like they are the instant gratification society in terms of. We have everything at our fingertips. We live in an Amazon Prime type world, and sometimes we forget that there is some delayed gratification in our careers, especially as you're just in the weeds, you're learning in those first few years of your career, like you said, like you're getting in the weeds, like you're really gaining that accounting foundation to then, you know, years later, be able to, like, truly reap the reward. Sometimes you just don't realize that. And it's hard sometimes, like, it's hard in the thick of that to be able to see that, you know, one day this is going to pay off.

Hannah (00:28:04) - Like one day. Being so frustrated, trying to figure out the stupid payroll accrual is going to pay off one day, because I'm going to understand how things flow through the balance sheet. Like, that's hard to see that whenever you're young in your career.

Karl (00:28:18) - Yeah, it takes a big picture. A big picture approach. To understand that you're just learning and gaining that expertise. And I know we had talked in advance about mentoring. Yep. You're being mentored, to climb the ladder, so to speak. You're being pulled up and building that expertise, but you're also pulling people with you. So, there's. During that whole time, it doesn't mean that you're you don't know anything. You're able to pay, pay forward the expertise that you have. You might be a four-year person in accounting. and I know we're talking about public accounting, and it doesn't have to be. It's just what I know. It's the context that I, That's my frame of reference. But you might be a four-year person.

Karl (00:29:13) - You have many years' worth of experience to learn, but you also are four years ahead of a 22-year-old that's just getting out of college. And trust me, that 22-year-old is going to think the person with four years' experience is an amazing genius when all it is just four year's worth of experience that's built up and can provide tons of value to the college entry level grad.

Joey (00:29:39) - And that's and that's our job to as leaders is to is to remember that, like, I owe my entire accounting career to a guy named Tom Martin. Shout out to you, Tom, at Sink Gordon Associates in Manhattan, Kansas, who for the first two years of my career basically sat there and whenever I had a question, he would literally stop what he was doing, answer my question, and then get back to it, which, looking back on it now, I didn't fully appreciate the sacrifice that he was doing there. And it's like, yeah, I had a guy who, you know, he is now since, you know, I say grown up.

Joey (00:30:13) - I mean, he was he was that guy. He was four years ahead of me. He's now a partner of that firm running one of their offices in the northern part of Kansas and crushing it. And it's because of who he was and where I missed out on that opportunity. Younger in my career was to lean into that mentorship. But, you know, also, it's something that I've tried to emulate a lot with our younger CFOs or folks who are coming up in the organization where it's like, hey, if you're willing to listen to me, just, you know, yap at you about what I think you need to do and go out there and do it, it's going to work out for you.

Hannah (00:30:49) - And Joey.

Hannah (00:30:50) - Like he is so true. I cannot tell you about times that I just, like, call Joey or put time on his calendar. I'm like, Joey, like, I just need to talk this out. Like, look at this, like, challenge me, see where I'm at, like, hear me out, like.

Hannah (00:31:02) - And then like, I've learned so much from you, Joey. So, this is me, like, taking time to tell you how much that truly means to me. That you hear me out like your pause. And I know you're busy and you don't have to do that, but you really are paying that forward for that.

Joey (00:31:18) - But I owe all of that to Tommy Martin. Like he was the one who was that dude for me who really sat there and was like, this is, you know, I hate to use the Star Wars reference, but this is the way, right? This is the way that we can do this. And if you don't have that mentorship, you don't have that leadership. And, you know, it's funny, I was having a conversation with someone on Friday whose daughter is in school, and she was like, yeah, we're looking for like a summer internship. And I was like, man, I'd love to get her set up with a remote opportunity. because I think that's kind of the way of the future.

Joey (00:31:51) - Like, we love being remote. We believe in remote. One of the challenges for those is, you know, remote really works well for me because I spent ten, 15 years in an office. I don't need that for the first 10 to 15 years. Like I don't need that anymore. But I did at the beginning of my career. Like I needed someone to say, hey, here's how you show up to a meeting. Here's how you handle yourself with a client. Here's how you do your body language. You pick up on those things.

Karl (00:32:21) - Oh, absolutely. Then, the level of training that you need at that, at that entry level, is astounding. I was stunned, you know, to think about the average college student, which we all were at some point. We came out of college where we thought we understood accounting. We had books that were at the upper level, classes that had the answers in the back of the books or in a separate workbook or somewhere.

Karl (00:32:53) - We were able to just figure it all out and spend as much time as we can to figure out a case study. Then you come in, in my case, to public accounting where you're learning the time is time is money concept. And, and you want to you want to figure these work papers out and audit challenges and you've never seen it before, and you have no idea. And, and you're just completely stuck. And you're the, the in-charge is telling you just use same as last year and you don't know what that even means. And it's a hard thing, but you must learn to be comfortable asking questions so that your kind of must humble yourself to ask questions so that you can get the answers. I was a horrible staff accountant. I was horrible because to me, asking those questions was a sign of weakness. And I'm a college grad. I just finished college. I did well in my classes, I was in a great accounting school, blah, blah, blah.

Karl (00:34:01) - I finished the CPA exam. So, I must know what I'm doing, and I don't want to ask a question and admit I don't know what I'm doing. And I was a horrible accountant because they would say, you have three hours to get this done. I'll have it done no sooner than six hours, no problem. Even though they told me to get it done in six hours, three hours, I doubled every budget. And finally, they said to me, you need to learn how to do this job, but you're not going to without asking questions. So, they gave me a rule that I've given to staff accountants for 30 years, the ten-minute rule. Try to figure it out. Figure out how to articulate what your problem is and what your question is. But if you can't figure it out in ten minutes, ask because you're not going to be able to figure it out. If you can't figure it out in ten minutes, then you're just going to sit there and spend your wheels.

Karl (00:34:51) - So, apply the ten-minute rule and just ask questions. And it's been my experience, those early entry level staff accountants that didn't care about that. They didn't have that sense of pride and they just asked all the questions. They advanced faster because they didn't, they weren't in their own way, and they just asked a ton of questions and they were kind of like, clueless, ignorant and happy about just asking all these dumb questions, so to speak. And they were advancing way faster because they spent their time bombarding the in-charge with questions. And they learned from it and were the ones that were doing better.

Joey (00:35:31) - Yeah, I will be the first to admit I probably have never finished anything under budget from a time perspective. I just it's just never happening. But it's because, yeah, there was there was a little bit of pride there, but also just, you know, thoroughness and those types of things. And my materiality thresholds may be a little bit more refined than, than others. I still remember the first tax return I had to make where I think it was a farmer who gave us all his expenses, just shot it out on loose leaf paper, and I was like, what am I supposed to do with this? But we used to call it knocking the college off people, like we had to get someone in there.

Joey (00:36:03) - It's like, look, we know you can think, but we didn't hire you for your grades. We hired you for the fact that we think you can think and learn. So, let go of that stuff and let us teach you how it needs to be done.

Joey (00:36:16) - So, I want to ask a consultancy question here, because I have this come up from, sometimes. And I'm curious your thought about it with mentorship and, and those types of things. One of the number one thing that I hear from them, the group that I work with, all the folks that I work with and clients and stuff across the industries and country. They always want their employees to have what they call that owner mentality. Right? Which I think is as important thing, putting on your consultant hat and putting on your business owner hat. Is that something that. That's where I'm going with this, how important that is to you when you're determining.

Joey (00:37:00) - Staff and mentoring and figuring out who to mentor and how to mentor them. Is that something that you're looking for at all, and if so, how are you adjusting your expectations as an owner to, you know, work with those people to make sure that they, you know, you are giving them that kind of path to ownership if they're going to have that ownership mentality. Do you have a path for them in the future? How are you handling those types of issues?

Karl (00:37:24) - And you're meaning staff, right? The, the, the staff that have a, an ownership mentality.

Joey (00:37:32) - I guess I.

Joey (00:37:33) - Was kind of doing.

Joey (00:37:34) - Some of the yeah, I was doing something that an old, old professor used to call hiding the cookies. So, like, I have this theory that sometimes, you know, people are like, man, I just want my staff to have an ownership mentality, and they always leave. And my response to that is like, well, yeah, but did you give them a path, or did you just want them to have that ownership mentality and then not ever want to give them an opportunity to do that? So, I'm curious structurally how you're thinking about that, how you're working with that, with your clients or with your team to, you know, think about mentorship from that perspective?

Karl (00:38:05) - Yeah, I, I think, I think it is, I go back to that phrase, a tone at the top.

Karl (00:38:13) - It's my responsibility to make sure that they understand all the things that we've been talking about today, which is it's not going to be your life to be working on, auditing cash the rest of your life. You're doing this to build on a skill set so that you can eventually be in front of a client talking about their strategic merger and acquisition transaction that they're doing. You can't get out of college and do that on day one. You must build a set of steps to get to that point. And it's all about experience. So, if they understand that what you're doing today will be the building block for the future. and you're articulating that and then every once in a while, giving them a glimpse of what that might look like, I think will help them. When I was an again now 30 years ago, I was a senior in public accounting here in this town where I am in Springfield, Missouri, and I was going to my very first-class presentation of a of a of an audit presentation.

Karl (00:39:27) - Helped me see the future. in fact, it was kind of funny because it was my first time going to a client presentation. We were delivering the audit results, and I thought I was just going to kick back and learn and watch. My boss, who was the managing partner of the firm, did his presentation. And I was just going to soak it all up. And we're sitting in the in the car on the way to the meeting, and I had about an hour to go there, and again, I'm barely awake. And what I mean by that is I was not engaged because it wasn't my job. He was the one that was going to do all the talking. I'm two years out of college. I wasn't expecting to do any talking. And as we're driving up, there he goes. Carl, pull out those. Pull out that document. I have a question for you. And so, I pulled out the audited statements in the car we had a management letter.

Karl (00:40:18) - And he goes, now that that second recommendation there with your management letter, what exactly where you planning to say there in your set of recommendations? And what I had to keep my composure because I was in my mind, I was thinking I hadn't planned to say a damn thing you were going to do all the talking. And so, of course, I didn't want to say that I had to. I had to just fake it and work through it. But what it was he was actually demonstrating some leadership by giving me the opportunity to see what this path really is about. It's not just about doing work papers; it ultimately is about client facing engagement. And he was giving me the experience, but he didn't tell me that in advance. but it was also a lesson for me to be prepared and. Yeah. and so, we ended up working through it. But I remember to this day sitting in the car going, oh my goodness, I had no idea that I would be talking in this meeting today.

Karl (00:41:22) -  And there were other times when I would in, in the future, I would be sitting in client presentations, listening to my boss give presentations from our reports, and he would talk for an hour, basically adlibbing, about his experience and about what they needed to be doing and what the results were. And I was sitting there at this point, now, 3 or 4 years later, a five, six-year experience person, maybe probably 4 or 5 years, and I'm going, there is no way I could be as good as him. And there is no way I'm going to absorb all this. But over time, from listening to him, my mentor listening, being thrown in the fire, having the experience from all the problem solving that I had been doing as I was doing work papers, all of those things having, on the fly meetings with the client, building rapport, all of that built into an ability. To have and lead those discussions eventually. And being just as comfortable as John was when I was a 4- or 5-year person, and it just slowly evolves into that from the experience.

Hannah (00:42:35) - I wish earlier in my career I'd have had more gumption to just have more conversations around my career path. Like I think I was just too nervous to do it. So, I started trying to forge my own and set my own expectations. And oftentimes that ended up letting me down. It was not that anybody else let me down. It's just I didn't live up to the expectation of what I thought versus if I had more of those conversations early on, then, you know, maybe I could have gone to you and said, you know, like, hey, here's what I really want. Can you tell me, like what that's going to look like for me to get there? And somebody could have been like, you know, hey, here's what I'm going to do. Like, maybe you'll have more opportunity to present in this client meeting. Listen here, do this and like, give me that advice along the way. Now, now, I'm certainly not afraid to have those conversations like right, I don't.

Joey (00:43:24) - I've learned it's.

Karl (00:43:25) - Experience.

Joey (00:43:26) - Right. It really.

Hannah (00:43:27) - Is experience. But I guess speaking to our listeners who maybe like, know that they want more from their career than where they are right now. I would just really encourage you, listener, to have that conversation. Don't be afraid. Like I think I think all of us sitting here like if anybody were to come to us, Carl, it sounds like if anybody were to come to you and say like, hey, here's what I want, can we talk about how I'm going to get there? You'd be totally open to that conversation.

Karl (00:43:52) - It would be way better than looking at work papers. So of course I would. I would love to be talking to them about that and how to pull them up. Because also, if I have a person in front of me that is enthusiastic and wants to learn and grow, and they trust what I say, then when I give them an assignment, they can know that that assignment is one.

Karl (00:44:16) - Yes, it's a thing to do. Somebody needs to do it. But also, it's being done in conjunction with a need to grow. You need to learn how to do this so that you can get to where I am. And so those, those sorts of conversations are legit questions. They should be had more often if, if the leadership isn't encouraging and advocating for those questions, then I think it's a perfectly legitimate thing to be asking for. Now, one of the flip sides to that, where people get a bad rap is where people are always asking to advance, perhaps faster than what they should be. And there is trust, the process component as well. Accounting leaders have every incentive to pull people along as much as they can because there's always more work to be done. And so, it is to everybody's advantage to pull somebody up, so to speak, and get them more tasks and more assignments than higher levels. It's to their advantage to do that, but to do it at the right pace is also important so that the work gets done appropriately.

Joey (00:45:34) - Well, I think that I think the big challenge there too is, is kind of being open to sharing the why behind maybe why this year isn't the right year for this. Maybe this year is your growing year. And here's why. It's one of the things I admire the most about our team is they're completely transparent about not just where the staffing sits and where the work sits, but like, and here's the numbers behind why we maybe aren't going to be doing this this year because we need to solve this problem and this problem and this problem to set ourselves up for the next ten years. And because of that, that means that maybe this year is not going to look like what you want it to. But if you are again, I think trust is great, that's you know, the thing that all this hinges upon. If you trust us as both leaders and people. Trust us to get through these next couple of years and we'll start getting you where you need to go. Those types of conversations lend themselves to not just a culture that I think most of us would, would want to, to live and work in, but also mutually beneficial for everybody.

Joey (00:46:36) -  Because I know that's the number one challenge that I hear when talking about, you know, when talking to kids who are in college or getting ready to go to college, they're like, man, I just I don't know if I want to be an employee all the time. I want to have this and this and this, and I want to have some freedom. And it's like, okay, I totally get that. But work with us on how to work with us, on how to get that instead of not.

Karl (00:46:59) - Yeah, well, I think, I think there's a time and a place for that. And the offset to that. What I just said and what we're talking about is where we said you should trust the leadership, but the offset to that is you must be your own self-advocate. And I learned that when I left one of the firms I worked at, after a while, I felt guilty. I felt like I had betrayed the client, the firm.

Karl (00:47:30) - I felt like I had, you know, wasn't loyal enough. And guess what? I left the next day. The firm moved on and filled my place, and they went on. But I had to do what was in my best interest. And I did learn that lesson. I think a person needs to understand. You do need to do what's in your best interest, but that doesn't necessarily mean that you're advancing beyond your skill set, and it doesn't mean that you can't trust firm leadership if there's a good rapport there, then they're incentive to pull you up, in the as fast as you're capable of being of advancing. So, there is it really is trust. But understand that you have your self-interest. The firm has its interest but can work well. And again, all those years, I think, I've always thought that in accounting and I'm sure in, in all industries. But it's what I know. It just takes time to build that expertise. And doing that in an accounting firm will build your expertise like no other way.

Karl (00:48:40) - And, and then there's a right time to then expand your entrepreneurial wings and, and, and use that expertise for your own self-interests.

Joey (00:48:49) - Yeah. I've, I've yet to see a shortcut for accounting, even with even with AI and stuff like that. You still must know. What does it all mean, right? You must know. You maybe get AI to put that work paper together, but you got to know what it means. If you don't know what it means, you must go back to the drawing board.

Karl (00:49:07) - Absolutely, absolutely. I use that silly, payroll, payroll withholdings account. Oh, my, trust existence. Totally. But trust me, no 22-23-year-old college student is going to really understand that. And that's not an insult to them. It's because they don't, they haven't had the experience. And, and I've taught many people, frankly, that's an area in a typical audit that's usually ignored. And yet when we're working with clients that don't have a good set of books, I would, on the day days when I did auditing, I would ask the staff I was working with, do you even understand what these are? Because you need to understand this.

Karl (00:49:52) - Even if you're ignoring them for audit purposes, you'll be a better accountant. If you understand what these accounts are. What is it that you're, they're even doing? and that's a silly granular example, but it's, it's an example that highlights the need for time and expertise. And you're only going to get it by working in space.

Joey (00:50:17) - I didn't learn anything about payroll until I had to calculate it by hand. I still remember it was my first client. It was it was a Chinese food restaurant in Manhattan, Kansas, and I had to calculate his payroll by hand and give it to a lady in the office who processed it. And so, I bet I, you know, and it's if you didn't see that liability clear off in the next 3 or 4 days on the next set of books, you did something wrong.

Karl (00:50:38) - Absolutely.

Hannah (00:50:40) - Well Karl, thank you so much for being with us. We we're at time it flew by like I could talk about mentorship and, and where we've been in our careers.

Hannah (00:50:48) - Oh my gosh. All day, every day. We do like to end on a little bit on a different note. I feel like all of us probably introduce ourselves whenever we're meeting somebody new as an accountant or an advisor CFO. Those are one of the first things that come out of our mouth. But I know this is true for all of us here, that that is not just who we are. So, you are an advisor. You're an accountant. And what? How else would you describe yourself?

Karl (00:51:15) - Well, these days, I've taken all that experience. And I'm a financing advisor, so I'm a commercial lender. professionally. So, I help people find money. and I'm not a bank, and that's a whole different thing. But basically, I'm helping real estate investors and business owners find the funding they need to advance their cause. So that's one of the ways that I evolved as I, as I got out of public accounting, I use the financial analysis skill sets to segue into that.

Karl (00:51:47) - So, that's how I spend my time.

Joey (00:51:50) - Anything outside of the office that you like to do for fun?

Karl (00:51:53) - Yeah, I, I, I thought I probably was a little more granular than what you were really meaning. Hannah. So, I do, I, I work a lot because running your own business is hard. and there's a there's a lesson there. I've had a few people say, hey, now that you've left public accounting. Do you work less? no, I work more. I work more. It's just. I don't hate it. and again, I didn't I don't mean to downgrade or denigrate public accounting because there's a space, but it was my time. So, I work a lot. the things I am a golfer in sabbatical. Meaning I don't ever make time for it. I'm a reader. I try to read a lot about history, about, Christianity, about leadership. So, I do a decent amount of reading. and I'm a coffee enthusiast, so I'm kind of a coffee snob.

Hannah (00:52:55) - Love that.

Karl (00:52:57) - Been experimenting with the moka pot and getting better using making espresso with a moka pot. If you do or don't know what that is.

Hannah (00:53:08) - Gonna have to Google it.

Joey (00:53:09) - It sounds like.

Joey (00:53:09) - I need to know what this is.

Joey (00:53:10) - Is. Yeah.

Karl (00:53:11) - It's that it's that little. You've seen it. Guaranteed. It's the little espresso pot that you put on the on the burner, on the on the stovetop, where the water is at the bottom and the coffees in the middle. And you stir this cap on, and the water boils up through the coffee and over the top into a, into a basket, guaranteed. You've seen it, but it's, it makes an interesting pot of coffee.

Joey (00:53:37) - I do feel, I do feel like the, the, the Venn diagram of accountants and people who love coffee is like very integrated. I didn't drink coffee till I started in public accounting. And now it's the. It's the number one habit that I can't kick. To the point where I had to agree with my doctor and wife that I would limit myself to two cups of caffeinated coffee per day.

Joey (00:53:59) - That is the, I like to call it, my union mandated amount of coffee that we sure fought hard for. So. Wow. We'll have to Google the mocha pot, because that sounds like something, too.

Joey (00:54:09) - Get the most out of the coffee.

Karl (00:54:12) - Yes it would. It's intense. Yes, it's very, it's a very thick coffee, but it's great. You've seen you've seen it. Guaranteed. So. Yeah.

Joey (00:54:23) - Well, Karl, thanks so much for joining us. As Hannah mentioned, the time flew by. So, where can if anybody is, you know, anybody in our audience or professionally in our networks who's wanting to learn more about you, what you do, how to get in touch with you. What's the best way for us to find you?

Karl (00:54:38) - Yeah, I a couple things. I'll just throw out my website. I have a couple websites which you can put on in your notes if you want, but I'm just going to use infinity. Com capital.com infinity.

Karl (00:54:51) - Com capital.com. You can email me at KBaker@infinity.Comcapital.com. I can give you a phone number, but it's all on the website. I've also started a real estate investing podcast. Just look up infinite return's colon commercial real estate investing. You'll see that we talked about taxes recently and rental property issues. So, we talked about that recently. So. Yep. You know, we'll leave it there. You can also find me on LinkedIn w Karl Baker.

Joey (00:55:26) - Beautiful. Well, thanks so much. This has been a pleasure.

Joey (00:55:29) - Thanks. Likewise.

Karl (00:55:30) - Thank you all. Bye bye.

Joey (00:55:33) - All right.

Hannah (00:55:34) - That's great.

Outro (00:55:36) - If you're a Young CPA looking to develop in their careers, we're always looking for great. Wow. Visit our website for remote work opportunities with Summit Virtual CFO or find all our open positions at Anders CPAs and advisors.