JustPaid Podcasts: Stephen Estes on Success Startups and Accounting

Stephen's journey in the accounting field began at an early age, influenced by his family's background in the industry. With his parents and uncle working as CPAs, Stephen grew up in an environment that nurtured his interest in numbers and finance. During college, he discovered his passion for mathematics and considered a career in physics. However, due to his familiarity with the world of public accounting and his natural aptitude for numbers, Stephen decided to pursue a career as a CPA.

As Stephen delved deeper into his accounting courses, he realized that being a CPA requires both technical expertise and the ability to develop meaningful relationships with clients. He found that many accountants lacked the combination of technical and interpersonal skills needed to succeed in the field. This realization solidified his decision to pursue a career in public accounting.

The Role of a CPA: Beyond Numbers and Compliance

Contrary to popular belief, being a CPA involves more than just crunching numbers and filling out tax forms. Stephen emphasizes that successful CPAs must possess a holistic skill set that goes beyond technical proficiency. While technical knowledge is essential, CPAs also need to understand how to apply their expertise to help businesses thrive.

One key aspect of a CPA's role is business development. As CPAs progress in their careers, they take on more business development responsibilities and become crucial partners in helping clients achieve their goals. Understanding a client's business, identifying areas for improvement, and building strong relationships are vital to maintaining long-term partnerships.

Another aspect that sets CPAs apart is their ability to guide and mentor their colleagues. Stephen highlights the importance of cultivating soft skills, such as leadership, communication, and mentorship, to inspire and support the growth of fellow team members. This internal development aspect of the job contributes to the overall success of the firm and its employees.

The Advantages of Working with a CPA in Startups

Stephen's expertise lies in working with venture-backed startups, primarily in the technology sector. Startups face unique challenges and complexities that require specialized knowledge and guidance. CPAs with experience in this space can provide valuable insights and assistance throughout a startup's growth journey.

One significant advantage of working with a CPA in the startup world is their ability to navigate equity-based compensation. Startups often offer equity to key employees and need assistance in structuring these compensation packages. CPAs can provide guidance on the various equity structures available, such as stock options, restricted stock units, and safe agreements, to ensure that the company and employees benefit from these arrangements.

Furthermore, CPAs can help startups optimize their financial strategies. They assist in identifying tax incentives and credits, such as research and development credits, that startups may be eligible for. By maximizing tax benefits and implementing efficient financial practices, CPAs contribute to a startup's financial success.

The Impact of Technology on the Accounting Profession

Stephen acknowledges that technology, particularly Artificial Intelligence (AI), is rapidly transforming the accounting profession. While some fear that AI will replace accountants, Stephen believes that it will revolutionize the way accountants work, rather than eliminate their roles entirely.

He highlights the potential of AI to automate routine tasks, such as tax return preparation, data entry, and document organization. This automation allows accountants to shift their focus towards higher-value activities, such as consulting, strategic planning, and analyzing complex financial data.

Despite the benefits of AI, Stephen acknowledges that there will be a transition period where the integration of technology may pose challenges. The accuracy and reliability of AI systems will need to be continuously monitored and improved. Additionally, as the accounting profession evolves, accountants must adapt their skill sets to leverage technology effectively.

Advice for Aspiring CPAs and Startup Founders

When asked about advice for aspiring CPAs and startup founders, Stephen suggests focusing on industries that align with their interests and strengths. For accounting professionals, specializing in an industry and developing in-depth knowledge can lead to more impactful and fulfilling careers. Understanding the complexities and nuances of an industry allows CPAs to provide tailored solutions and become trusted advisors.

For startup founders, Stephen emphasizes the importance of building a strong financial foundation. Having a solid understanding of financial principles and practices, such as cash management, budgeting, and tax planning, is crucial for long-term success. Founders should also consider partnering with experienced CPAs who can provide guidance in navigating financial challenges and optimizing tax strategies.

Stephen's insights shed light on the integral role of CPAs in startups and the evolving landscape of the accounting profession. As technology continues to shape the industry, CPAs must adapt to leverage AI's potential while providing value-added services to their clients. The ability to combine technical expertise, business acumen, and interpersonal skills will be key to thriving in the modern accounting world.

If you're looking for expert accounting and financial guidance for your startup, consider reaching out to CLA, a firm that specializes in working with venture-backed companies. Their team of experienced CPAs can help you navigate the complexities of growth, optimize your financial strategies, and ensure long-term success.