Playing off of a famous late-night campaign that opened for 10 o’clock news programs in the ‘80s, Monty Montgomery shared a satirized slogan that floats around his accounting offices.
“It’s the 15th of the month — do you know where your financial statements are?”
All jokes aside, if they’re not done by then, he warns, the information starts losing its value. Falling behind with bookkeeping sets a business back by weeks in the time it takes to receive a report, during which time the ability to act on this information is obviously delayed.
“In a perfect world, you’re routinely receiving weekly or even daily reporting and monthly financial statements with analysis and commentary,” the CEO of the Montgomery Pacific Corporation told California Business Journal. “And the combination of all these things, given to smart people who are thoughtful, they’ll make the right business decisions.”
The Montgomery Pacific Corporation, shorthanded as MontPac, is a full-service, outsourced accounting firm fit for small to medium-sized businesses of any industry. Its services encompass what internal accounting teams do: transaction processing, payroll, bank reconciliations, monthly close and financial reporting and dashboards of metrics and KPIs.
But it’s not just about how to crunch the numbers. What MontPac actually offers is a revolutionary approach to managing companies’ accounting functions.
Since inheriting the helm in 2017, Montgomery has grown the Granite Bay-based family business fivefold. Today, it’s a multinational company with a 300+ member team; that is largely to do with his service-first modus operandi he applies to the accounting practice; but there is more to it. Businesses are facing a tough labor market for accounting talent. Students majoring in accounting are decreasing and accounting graduates are often choosing to apply their skills outside of traditional accounting. That combined with boomer accountants retiring has put a squeeze on the talent pool. AI and automation tools will help overtime and that is exciting but there is likely to be a human component forever.
“We’ve found that our clients were looking for a solution that was high quality but also scalable and cost effective; and that’s what MontPac brings to the table. That has fueled our growth in recent years as much as anything” says Montgomery. Great value and great service is always welcome and not a new concept but perhaps it is the accounting department.
The MontPac approach is based on well-trained small teams for each client to avoid a single point of failure that single person departments can experience and to be proactively looking for improvements.
For example, just by recommending a new invoicing workflow, a MontPac accounting team shortened a client’s process by several days, accumulating labor savings each month and accelerating cash flow.
“That’s what I’m looking for: I want more than just someone to do the job. I want their expertise!” Montgomery says. “When you have a company culture that promotes service and continuous training, you really stand out.”
Most companies today, however, still recruit employees, train them and then deal with turnover of the accounting staff when things don’t work out. Of course, there’s always the option to pivot to a sure-shot, alternate route that bypasses an agonizing HR campaign — outsourcing accounting services completely.
How it works: a team of MontPac accountants, all of whom are accounting graduates and often CPAs, are assigned to a company’s case. Team members of different experience levels stay the same for purposes of redundancy and proper review. Following an onboarding process, the team upkeeps daily transactions, provides interim reports to clients and closes the books by the 10th business day or sooner, depending on a company’s needs, which comes with a full report, complete with metrics and key performance indicators.
MontPac’s client pool includes startups to property management companies and almost everything in between and are often referred to MontPac by venture capitalists, tax accountants, bankers and attorneys.
What may have once been a dirty word just a decade ago, “outsourcing,” is now a common business practice. In a 2019 report, independent platform Clutch found that 37 percent of small businesses outsourced their accounting services in order to increase efficiency and access expertise otherwise unavailable in-house, topping the list alongside IT services.
Outsourcing allows businesses to return focus to their core functions — and even save some money while they’re at it. Nearly three quarters of financial executives report outsourcing at least one service, while 89 percent consider most of the work to be highly automatable, according to Auxis, a management consulting and outsourcing firm.
“Being cost effective is an advantage, of course, but I would say the main advantage is quality,” Montgomery says. “Without a proper set of books, any low-cost solution would definitely not be worth it.”
And while outsourcing accounting services is nothing new to large enterprises, widespread adoption of cloud-based systems, web-based banking and software-as-a-service applications with low-cost barriers to entry have empowered small businesses to join in. Accounting platforms, like QuickBooks or TurboTax, have fast-tracked accessibility to DIY levels, increasing affordability of certain services.
As a small business, access to knowledgeable and trained staff alone is a huge benefit, Montgomery says. Also, not having to worry about the timesuck and cost of turnover is an often overlooked, added bonus to outsourced services.
For companies on the up-and-up, scalability at MontPac results in just an increase in hours, not a whole headcount. So instead of having to expend the management time and resources to recruit additional manpower, MontPac clients simply add to their open tab.
“We absorb the increased work,” Montgomery concludes, noting that they have stuck with startups from Series A to Unicorn status and even stayed on after their IPO. “Your accounting department is always the right size [and] you never have to worry about the day-to-day accounting being done right.”