it-help-atlanta-episode-3

Episode #3:
Warren McClellan, McClellan & Associates CPAs

IT Help Atlanta Presented by TeamLogic

The following is a transcript of Episode 3 of the IT Help Atlanta presented by TeamLogic IT podcast. The episode first appeared on Business Radio X

Announcer: Broadcasting from the Business RadioX studios in Atlanta, it’s time for “IT Help Atlanta,” brought to you by TeamLogic IT, your technology advisor. Now, here’s your host, Rick Higgins.

Rick: Welcome everyone to the “IT Help Atlanta” radio show, the show that profiles small, and mid-market businesses and highlights how those companies use technology to succeed. “IT Help Atlanta” is brought to you by TeamLogic IT, your managed services technology advisor. Specializing in cybersecurity, cloud, and business continuity solutions, TeamLogic leverages cutting-edge technology to solve all types of business problems. Go to ithelpatlanta.com for audio archives of this radio show and to learn more about our sponsor, TeamLogic IT. I’m your host Rick Higgins. And today’s honored guests is Warren McClellan, the owner and founder of McClellan & Associates CPAs, located in Duluth and Johns Creek, Georgia. Welcome, Warren. How are you?

Warren: I’m great, Rick. Thank you so much for having me today.

Rick: We’re really glad you’re here. And we really appreciate you making time to come spend some time with us on the show. Warren, tell us who you are and what do you do?

Warren: Well, I’m Warren McClellan, I’m a CPA and have a practice that’s located in Duluth and Johns Creek. And it’s really a small business firm that’s focused on consulting in tax for individuals that own the businesses and individuals with complicated tax situations.

Rick: That’s great. Warren, give us a success story, maybe something that would be interesting of how you solved a tricky problem or how you helped someone. It doesn’t have to be anything recent or something that comes to mind that you’re really proud of.

Warren: Yeah, Rick, thank you. I mean, one of the things that we do is we work with a lot of nonprofit organizations as well as businesses and individuals. And we work with school systems around the state. And they hire us to speak to their booster clubs, and help the parents and it’s one of the things I’m very proud of what we do is that we help the parents to…well, along with a partner of mine help the parents to provide the extra stuff that the school systems can’t provide. And nonprofits are very complicated, and we try to break that down and help them establish and maintain those booster clubs. And we’ve had a lot of success in that area. And one of the things that I like is how it affects the children in their sports and in their extracurricular activities. So we do a lot of that and I feel like, because we do it so much around the state, we’ve made quite an impact on these children. Of course, right now with COVID this year, there’s not been a lot of activity in the spring, but I’m sure that as life gets back to normal, that will crank back up as well.

Rick: Warren, definitely I wanna circle back around and, you know, dive deeper on talking about COVID and how that’s affected your business. But can we unpack a little bit more about this new thing that you’re doing with nonprofits, because that’s not your main line of business, right? This is something that you’re dealing with another partner, in addition to your main CPA firm, correct?

Warren: Yeah, Rick, it really is. And basically what happened was my partner, Steve Kosmala and I, we’re parents. And we had kids and a new school didn’t have a booster club. And we looked around as to how to establish this thing right for their activity. And we started looking around, and we realized that a lot of people weren’t doing it right. And so we set it up properly, organized the parents, and developed a really good booster club and got that started and got the attention of Gwinnett County public schools and they started getting us to help them speak with their booster parents and help them work with that. And now it’s kind of gotten attention of a lot of people around the state.

We also help people with other nonprofits. And it’s kind of expanded and morphed to that, and we do a good bit of speaking as well, on governance, on how to be a board member. What you need to know before you go on to a board, and what you should really expect if you’re on a board, and in many ways is to give back to the team. [inaudible 00:05:32] obviously, we get paid in most situations, but really, we feel like it’s a huge impact for the community and it’s had an impact on the tax practice as well because a lot of these nonprofits come back to the tax practice and a lot of CPA firms don’t really operate that much in the nonprofit arena. They do it because they have to. They have a kid on the booster club as we did and they dabble in it, but my staff has kind of embraced it. And we do a lot of nonprofit accounting as well as significant corporate and individual accounting and tax.

Rick: I see why you’re proud of it, man. I understand it. And by the way, for the listening audience, full disclosure, Warren and McClellan & Associates is a client of ours at TeamLogic IT. I wanted to disclose that. So I do know a little bit about this line of work and this area of expertise, and it’s really a specialty. I don’t know anybody else that’s doing what you guys are doing in that area, Warren, do you?

Warren: I really don’t. Thank you, Rick. And a comment on being a client of yours, we have been a very happy client now for several years and that’s made a big impact on our firm. We’ve actually gone paperless under your assistance and it’s made a big impact on our being able to continue to operate this spring through what we all went through with COVID-19. So thank you very much.

Rick: Thanks Warren, for saying that one, appreciate it. So yeah, so here we are. It’s May 27th of 2020. We’re some 12 odd weeks into the, I guess the forced shut down or shelter in place rules and laws and whatnot. And strangely enough, these 12 weeks of…actually, maybe more, like, 14 or 15 weeks has been right in the height of the CPA busy season and busy time of the year. So I think more than anybody else, I’m hoping and I believe you’ve got a really interesting story to tell us about how COVID has affected your business. Did it really hit you at the most awkward time of all, didn’t it?

Warren: Oh, it really did. It was kind of a bizarre timing, not only for us, but for everyone. But our story with it is in mid-March was about where it hit, our firm as far as the corporate deadline had basically passed on March 15th. And so now we were looking full speed ahead at April 15th. And we have a deadline of about the end of the third week of March for our clients to get their information and it’s just not possible to adequately staff to do all the returns in the first two weeks of April. So we asked that our clients and through years we’ve helped them organize, get us everything that’s possible by about the third Friday in March. And that was about the time all of this hit. So we had everything in place that we were going to get done for the season.

Some of our employees went home and worked from home. Thanks to Rick and his team being able to make that possible and jumped through the hoops for us. But there were some of us working here. We didn’t allow clients in the office and we just worked away and finished our tax season pretty close to normal. Now what was really different was two things that happened. One was normally, the second week in April we would spend trying to get extensions for people. Well, that sounds pretty easy. You know, you just file the extension and you’re done. But for most of our clients, it’s a lot more complicated than that because the extension extends the time to file but not the time to pay. So you have to spend a good bit of time helping people organize and come up with a reasonable estimate of what they need to pay, communicate back and forth to get that information. Obviously, during that time, we don’t have the information. And so we’re working back and forth to do the best we can, communicate back to the client, help them figure out what they can pay and how they can pay. And that actually went away this year, and we’re working on it now. And a lot of those returns I think will be filed by the July 15th. So that was really the first thing that was the big change, was that second week in April not being so horrendous, jumping the hoops to get the extensions done.

Rick: Got you.

Warren: The second thing that had such a big impact on that was all the new legislation. And in particularly the PPP loans, and that’s really ongoing now. So first of all, we had to help our clients or we were asked to help our clients, many of them gathered the information to file for the PPP loans. We were kind of a central focus of information on this bank’s doing this, the bank’s doing that, how do we do it? You know, who got what and when? And then came down the, “Oh, do you really need it?” You know, if you don’t need it, you shouldn’t have got it. Maybe you should pay it back. Well, most of our clients, ultimately that came out and that if your loan was under $2 million, you have a safe harbor on that. Of course, you needed it. If your loan was over $2 million, then you’re going to have to do some serious justification and perhaps you should consider giving the loan back. So that made it very complex. So then we know there’s forgiveness of these loans if they’re spent right.

Well, they were required to give us the regulations from the SBA and the Treasury, within a month of when that loan was signed, which would have made that due about April 26th. So we got that information, very timely on about May 15th or so. So there were a lot of people that had eight weeks to spend the money and then it was really unclear as to how to spend that money in order to effectively get it forgiven.

And so now many of our clients are in certainly the second half of that eight-week period, I think most of them are. And so are there things that they need to do to appropriately spend that money so they can ensure forgiveness? And what are the calculations of the forgiveness? Which, again, we just really got last week. So we’re going through our clients and helping them do preliminary calculations based on what they’re spending and what they’re doing to make sure that they get that forgiven. So that along with all the new retirement rules that are out there, and all the other things, as well as the stimulus checks, where’s my stimulus check? All of those things, we were taking a million calls. So that actually made it very exciting. And while we didn’t always have the answer, we tried to maintain the latest information, so that when people called, we could help them and help them get on top of that. And so it certainly made it a very exciting year for us and hopefully, business gets back to normal and we’re all back to living our normal lives.

Rick: Well, everything that you just said, the thing that I just can’t get my mind wrapped around is how much of a moving target everything was that you were involved in, in your area of expertise and service to your clients. I mean, you were fielding calls non stop yet the answers were, again, a moving target almost constantly, right?

Warren: Absolutely. It really was. And my staff did great too. We would sit, and we would meet, we would talk things through. We watched videos from lots of law firms. We studied this thing. And again, it was very much a moving target and we were working during tax season. And some people were at home and some people were here. And so the good thing about it was, there really wasn’t much else to do during that time but work. So we all just buckled down and worked. And all the people talking about being bored, we just didn’t have that problem.

Rick: Well, good for you. And I guess the million dollar question then is do you think that the target’s done moving at this point? Is there going to be more guidance coming out with respect…I guess I’m focused on the PPP with respect to that question. Do you think that we’ve settled down on…?

Warren: No. I think we’re close on what we have on the PPP loans, but Congress is now considering making some changes that hopefully are just good changes and helpful changes, like considering changing the length of time to spend it from 8 weeks to 16 weeks. Again, that’s only a consideration. It is not a fact yet, but I think there will be some more things happening and, you know, I wouldn’t be surprised if there were more loans. I think that would be very helpful to small business. I think it was a very good law, at least for PPP loans because the clients that I’ve been involved with, were able to keep people employed during a very difficult time. Medical practices, for instance, have really struggled because, okay, they could do video appointments and people were putting things off. And I think overall, most people really their revenue was down, and the PPP loans enabled them to pay the rent, pay their utilities and most importantly pay their employees. So I’m a big fan of what was done there.

Rick: Okay, great. Switching gears with you a little bit, you had mentioned about going paperless. And I’m not sure if you mentioned cloud or not. I would like to dive a little bit into that because the, you know…part of our focus on the show is to talk about how small businesses use technology to succeed. Can you talk about, say life before the cloud solution and then life now with the cloud solution? What that means to you and what it’s been able to facilitate for you, whether it’s, you know, working from home or whatever?

Warren: Oh, absolutely. Rick, I appreciate the question. I honestly admit that has meant and means so much more to us than being able to work from home. Obviously, that’s a big deal, but being a CPA firm, we’ve just been all about the paper. And to say that we’re 100% paperless today is not really true. We’re certainly still paperless-ish and we may never be 100% paperless. But it certainly…

Rick: I like that one.

Warren: Thank you.

Warren: It’s certainly been a big boon to our business. So we’ve had a huge file room that’s actually a double office, but the room, the wall between was taken out and that the huge file were in here, and it has just been absolutely full, and we can keep about four years’ worth of information. And we had also offsite storage, dramatic offsite storage, some of it going back 25 years. And so ultimately, we were able to scan all of that into the cloud and appropriately shred, dispose of it. And now we get rid of the offsite storage. And we get rid of the file room, although we’re still scanning a little bit in there, but it’s going away, freeing up two more office spaces in our office, which is nice. But the movement of information, the being able to wake up on Saturday morning and say, “You know what, I’d really like to work and I don’t wanna drive into the office,” I can go in there, you can pull up everything, being able to work on a client site. We go to a lot of corporate clients, and we have to take a big box of physical files and sit there to be able to open up everything. I go in now, with my laptop, get on the cloud, and I’ve got everything, I’ve got my desk there. So I can look at everything and work with the client. It’s so much easier to have this tiny, little laptop that I take everywhere and I can just go and get what I want. I do not have to worry about somebody packing my bag, and, “Oh, they forgot this tax return or they forgot to pack this for me.” If it’s all there, I can just go and get it.

I think the step up here has made us much more efficient. Obviously there have been inefficiencies through the years of getting there, but now that we’re there, our automation is so much better. And I think that we’re exploring the possibility of going to even further automation where when somebody brings us a 1099, there’s software and sometimes 1099s are 50 pages because they have brokerage statements, and so to be able to automate that and actually pull the information off the 1099 and put it directly to the tax return. And we were exploring that. And obviously, even when that’s done automatically, all that we will take out of it is the data process, the professional effort will still be there, but they won’t be spending their time [inaudible 00:21:25] 50 pages worth of data into a tax return. And so the efficiencies that we’re gaining allow us to be so much more consultative and less data crunches for people. And so we can help get the returns prepared and help our clients understand it and have the information to make good decisions.

Rick: More strategic and less tactical, I guess.

Warren: Exactly.

Rick: That’s great. Warren, thanks for that. That was a deep dive. That was just really a great answer to an interesting question. I have a couple more questions for you. We’ve got a little bit of a time limit, but we’ve got plenty of time if you’re willing to go into a couple more questions here. One that I always like to ask…

Warren: Absolutely, Rick, thank you.

Rick: Okay, thank you. Thank you. One that I always like to ask on every show is a special question is, what is an aspect about your business that people don’t tend to think about, that you wish people would ask you about?

Warren: Rick, what I’d really like people to ask me is how can I better understand my business or my personal situation? How can I…? What do I need to know, Warren, about the tax aspects, the accounting aspects that allow me to have better discernment and make better decisions? So for instance, when I got started maybe 25 years ago, I left a very large firm and started this firm. And so I started working with companies at that point. QuickBooks was brand new. And it was a new program and I embraced it very quickly and started helping clients get set up. And those days, most everybody had a computer, at least on a desk in their office, and they would use it to create invoices and do mailings. And I’m like, “Let’s upgrade this. If we’re gonna use QuickBooks, let’s have it at your site and have good real-time information,” because the environment that I come out of, which was Fortune 500, Fortune 100 companies I was working with in those days had real time information. So the idea was to help them get up-to-date data. And what was happening with a lot of them, they kept a check book with invoices, send it off to some bookkeeping practice who would send them back financial statements, they didn’t understand, they didn’t know how to read. They meant nothing to them, but they were done because they had to have them. And so it’s like, “Wait, let’s use this as a tool.” So I started working with several people and helping them to automate their accounting in house with support from me and from my staff. Then I started working with the owners and helping them to understand what they had, to be able to read the financial statements, and to be discerning about them, and to make management decisions out of that. So that’s really what I really like to do and what my staff likes to do is help our clients to understand the information. And many of those people that I work with so many years ago are still clients, and have been highly successful. And I would like to think and I think many of them would say that my firm contributed to that by helping them have a good foundation and helping them get the accounting system started right and helping the owners to understand and to be able to use the accounting information that they had.

Rick: You know, one thing that we say in our business at TeamLogic is that you can’t manage something unless you can measure it. And I know we didn’t come up with that. That’s probably something that one of your CPA predecessors or something back in time came up with. That’s the essence of what you’re talking about, right?

Warren: Right. Exactly.

Rick: You’ve got to be able to measure it to manage it. Great, great answer. Thank you. One more question, then we’re gonna give you a chance to talk a little bit about how folks can find you. But before we do that, it’s my favorite question of all time. And that is that, you know, 25 years in business as a founder and a small business owner, what do you like best about being a small business owner?

Warren: I really like and I’m most turned on about making a difference for people. I truly think that… And it’s a surprise. I set out to start a business and I didn’t really anticipate that. But now with so many clients, so many people through the years, I’ve been able to see and told of the impact that we make. And that is probably the biggest thing. And especially going back to even the booster clubs, the parents, being able to see people comfortably being able to do that. The school systems, understanding and having comfort that their parents have the information that they need. The small businesses, helping them to make good decisions, helping them to have a good base. And the individuals that we serve, with their accounting and financial planning, helping them to do that and to have good information and make good decisions and feel like that their accounting is a good base for them. So I think that’s the biggest thing. And again, it was not something I anticipated but it truly turns me on to help people and make a difference.

Rick: That’s great, Warren. I just really, really love asking that question and that may be the best answer that I’ve ever gotten from anybody on that. Thank you for that. Thank you for…

Warren: Thank you for that.

Rick: So, we’re gonna go ahead and wrap up but before we do, tell the audience how to find you. How do we get in touch with you? How do we find McClellan & Associates CPA?

Warren: Well, probably the easiest way, the first thing is the website. And the website is fairly easy, and that it’s just mcclellancpa.com. But there are about 100 different ways to spell McClellan. So if you’ll let me do that I’ll put that out there so that you can find me and it is, mcclellancpa.com. That’s certainly the first place is to go to the website. If you’ll allow me I’ll also add our main telephone number as well. And we do our best to still answer the telephone. I can’t say that 100% of the time and during COVID we may have struggled with that but we try to answer it. Rather than dial 387 for this person, we try to get you a person at least on business days between 9:00 and 5:00. And that main phone number and it is for both offices is 770-497-9525. Again, 770-497-9525.

Rick: Thank you, Warren. Thank you for your appearance and time with us today. Folks, that’s a wrap. “IT Help Atlanta” is brought to you by TeamLogic IT, your managed services technology advisor, specializing in cybersecurity, cloud, and business continuity solutions. TeamLogic leverages cutting-edge technology to solve all types of business problems. Go to ithelpatlanta.com for audio archives of this radio show and to learn more about our sponsor, TeamLogic IT. Go to mcclellancpa.com, mcclellancpa.com to learn more about Warren’s wonderful company, McClellan & Associates CPA. For my guest, Warren McClellan, I’m Rick Higgins and join us next time on “IT Help Atlanta.”