Verity CPAs

A Bookkeeping Firm Acquisition Changed Verity CPAs’ Growth Strategy

Verity CPAs is a full-service certified public accounting firm led by Dustin Verity. They specialize in both assurance and attest services and provide high-quality accounting, audit, tax, and business consulting services to privately held businesses and organizations throughout the states of Hawaii and California. They pride themselves on providing the highest levels of quality, partner management involvement, and responsiveness to their clients. The firm is based in Honolulu and was founded in 2012. 

“For our tax clients, we have started to use Botkeeper’s Rapid Write-Up solution,” Alicia said. “It has significantly taken away the manual input time, saving us 40 hours on just one client’s write-up work. With 220 tax clients and only 5 on Botkeeper so far, there’s a ton of potential here.”

Since 2012, Verity CPAs has grown from a practice of 1 to a staff of 20 across two offices. Part of the firm's internal and external growth can be attributed to an acquisition in 2018 that brought a specialized bookkeeping and tax firm under the Verity name. This acquisition helped to broaden their service offering to their existing audit clients and bring in a full roster of bookkeeping businesses that the acquired firm was already servicing.

“The pace of growth was slower when we were just focusing on the audit side of things,” Dustin said. “We decided to add the accounting services and tax work through the acquisition. That’s when things really started taking off for Verity. There started to become more synergies because a client who we may have only been servicing for audit, we could now offer them bookkeeping and tax work. It was huge and started to propel our growth.”

While the acquisition was starting to turn the wheel on Verity CPAs’ growth for its existing clients, there was also a collection of bookkeeping clients that Verity took on with the acquisition. The firm decided it would be best to keep business running as usual for the first year for these acquired clients.

“When we first acquired the other firm, four of their staff who were already very involved in the acquired clients’ bookkeeping came with them,'' Alicia Spencer, Tax Director at Verity explained. “We decided that for the first year, we were just going to follow what the predecessors were doing, letting them work autonomously. We didn't want to rock the boat too much since they already had their processes in place and were regularly checking in with their bookkeeping clients.”

Manual Bookkeeping Was Holding Verity CPAs Back

With business functioning as normal for the newly acquired clients, manual processes would soon put more work on Dustin and Alicia, who were already overworked.

“Our bookkeepers were just using an Excel checklist to ensure the month-end was completed for each client,” Alicia said. “When we decided to bring in less-experienced bookkeeping staff to help support bookkeeping clients, Dustin and I had to step in. We were spending so much time monitoring the work. It was taking away from our ability to do the advisory work we wanted to be doing.”

As Dustin and Alicia spent more time on the bookkeeping side of the house, they soon were looking for ways to streamline processes. They noticed that even with some already in place, having staff on both bookkeeping and taxes would not pan out; they needed a better solution.

"I think our staff has really enjoyed that Botkeeper has allowed them to move up in their roles. They aren’t so consumed in day-to-day reconciling because we handed that all over to Botkeeper, so now they can really look at their clients' books from a big picture standpoint. They can be more advisory than transactional.” Alicia said.

“In 2020, we were growing pretty quickly, and we didn't have the additional bandwidth to do both the taxes and the bookkeeping work at the same time, even with processes in place,” Dustin said. “We implemented Jetpack Pro and some additional procedures, but we were still struggling with our bookkeepers serving a dual purpose: bookkeeper and tax preparer. I would ask the staff about the status of the bookkeeping clients in June, July, and August, and they would tell me they were still closing out in November, and December of the previous year. It was becoming a big problem.”

With a backlog of bookkeeping, Dustin started to worry about how his team was delivering the service they had promised their clients.

“We really needed to find a solution to help backfill some of the spreadsheet work and the reconciliation work to free up our staff to do more value-added, higher-level work,” Dustin said. “We didn’t want to run into any service issues. We wanted to make sure we were providing the quality service we were promoting to our clients.”

Verity Discovers That Not All Outsourced Solutions Are the Same

Upon being introduced to Botkeeper in 2019 at the ENGAGE conference, Alice was excited about the possibility of incorporating Botkeeper into their operational strategy. However, this reality would not come to fruition until after their acquisition in the summer of 2020.

“After meeting Botkeeper at the ENGAGE conference in 2019, Alice came back and told me about Botkeeper,” Dustin explained. “She was really excited about what Botkepeer could do for Verity, but initially when we met with the team, Botkeeper was too expensive a solution for us.”

So they looked for another solution and ended up going with an outsourced bookkeeping solution overseas.

“We visited an outsourcing firm in the Philippines,” Dustin said. “We had originally looked at this firm to see how they could help out with audit services because we had been looking to improve margins. We had moved forward with them on servicing our audit clients, so we were already pretty familiar with their products. Upon using them for bookkeeping, there were inconsistencies with how they coded and recorded transactions each month. They loved booking things to retained earnings, and as an auditor, this was a pet peeve of mine. There were a lot of questions that seemed to be common sense to me. It didn’t seem like the staff was learning the books. I would get the same questions on how to code a certain transaction month after month.”

Outsourcing was not the right solution for Verity CPAs, so they came back to Botkeeper to see if they could make the terms work.

“At Verity, we're always on the lookout to improve process animation and make sure our ROI will justify it,” Dustin explains. “We had eliminated outsourcing, and we knew we wanted to make Botkeeper work. In the summer of 2020, I reached back out to Botkeeper, and we were able to negotiate terms that worked for both of us! We were long overdue.”