Vertical integration describes management styles that bring large portions of the supply chain not only under a common ownership, but also into one corporation. For example, in the 1920s, the Ford Motor Company began making much of its own steel rather than buying it from suppliers; and, in current times, Apple controls the hardware, software, operating system, and cloud services for its product and services. Vertical integration is one method of avoiding delays or quality problems. When the entire supply chain can be controlled, it is referred to as a vertical monopoly. To ensure the highest quality and best service at the lowest cost, we are distinctly different than most firms as we are striving to be vertically integrated. While we are short of vertical monopoly, it is our desire philosphically to control the design, ownership, and management of critical business functions, as discussed further below.
Owner of Auditor Development
The CPA industry has long relied on an influx of talent and, like our largest counterparts, we rely on our university systems to provide new team members with their Master’s in Accountancy who are CPA testing eligible or those with degrees who are working on their remaining classes to obtain their Master’s and become CPA eligible. Where our vertical integration begins is with auditor development and our training programs. We have developed formal training programs to advance our new team members’ knowledge of governments from 10% coming out of college to 100% of real world knowledge specific to cities, school districts, counties, and other governments in Texas. While most new graduates leave school with 50% knowledge of auditing, we are taking that knowledge to the next level with precise knowledge of Government Auditing Standards, Single Audits, and Generally Accepted Government Auditing Standards in real world situations. Our initial training program and ongoing training throughout the year is what separates our auditors from those of other firms that will spread their staff between multiple services and industries. By training our own team members, we can ensure a consistent and thorough base level of knowledge.
Owner of a Nontraditional Office Building
Our partners own the building that houses our nontraditional corporate office. Outside of personnel, housing of facilities is the second largest expense. To provide audit services at the lowest possible cost, it’s essential to control facility costs. By having a nontraditional tilt-wall warehouse building in a nonprime real estate area, we have a competitive advantage over other firms that are renting Class A buildings in downtown areas. It takes a lot of high-priced audits to support the rent for those buildings. Ownership of our building, just like ownership of your home, reflects that we plan to be in business for the long-term and our financial commitment. In addition, unlike being limited by the floor or suite size of a traditional office building, we have the ability to punch out walls and build out at will.
Outsourced Employee Benefits
We don’t blindly seek out to take ownership of all business aspects of our firm but continually evaluate each element. While a person might automatically assume that a CPA firm would process its own payroll and handle its own benefits, that is not the case. We are the best at what we do — auditing governments in Texas and there are companies that are experts at payroll and benefits and have the process down to a science just as we do. By outsourcing this service, we are instantly on the same footing as the largest CPA firms in the world with high quality benefits at the lowest possible cost, again, consistent with our mission.
Owner of Process Standardization and Automation
Most firms lack the same dedication and sole focus so they either lack any standardization or adopt a ‘one size fits all’ approach which works great for a corporate audit, but doesn’t fit a government audit. Our sole focus and dedication make us responsive to the needs of our clients. We understand the agenda posting requirements, packet distribution timing, and need for management to review information in advance, on their timeline and not ours, all while monitoring statutory, GFOA, grantor, and regulatory deadlines. Accordingly, our entire process and system from interim work to ensuring final delivery of the final report revolved around your government’s process and have been developed over years of performing government audits.
Owner of Heads Up Electronic Display of Audit Projects
Unlike other firms that must rely on their guts, best guesses, or the limitation of only a time and billing program, our partners and managers have heads up displays on their Iphones, Ipads, and laptops of the status of all our projects using AuditBox360. AuditBox360 is our internally developed workflow management software. It is a complete workflow automation and information management system for our entire firm. By pushing work though streamlined, standardized processes, AuditBox360 empowers our entire staff to work more efficiently and effectively, resulting in high quality, timely, and cost efficient audits. AuditBox360 captures critical management data as work moves seamlessly through our office. With its powerful search and reporting capabilities, we have real-time access to high level data — like a holistic view of all work in progress — essential to managing our firm and, more importantly, your project. AuditBox360 empowers our team members to effectively manage due dates and capacity. With information at our fingertips, we can measure real-time information with our performance standards maintaining our finger on the pulse of our operations. Auditbox360 is the center of our digital firm. Working the way we did last year doesn’t cut it. With AuditBox360, we can address potential issues not only faster but better and can act on the information in real time. What may seem like the most trivial information can be captured and made available to the next person so that we act as one unified team. In addition, we can adjust and prioritize to ensure the best and most qualified resources are available to ensure our high quality work stays that way.
Ownership of Workpaper and Report Generation Templates
Most CPA firms are either using CCH Prosystem or Engagement CS for their paperless audit workpaper binder, trial balance, and report generation software. In addition, most CPA firms will have modified the templates provided by their software provider or developed their own. In that respect, our firm is no different than even the largest firms. What is different is our approach to developing these templates. Because we started from the ground up developing the best approach to GASB 34 conversions, GFOA award winning reports, and documents over 200 pages long, we have many timesaving links and error checking features, consistent with our mission of having the highest quality, best service, at the lowest possible cost.
Owner of Print Shop
You likely don’t think about your CPA firm being in the printing business, and many aren’t. Most CPA firms copy some tax returns and bind up some small corporate audits. However, the government audit business is much different. Government audit reports can be 200 pages, double sided. In addition, rather than just having a few copies for the owner and banker, the entire governing body, members of management, bond holders, citizens, etc., will likely request a copy, so up to 100 reports may need to be printed and bound. While the number of printed copies has decreased 30% in the last ten years, a hard bound copy still remains an essential element of the audit process. We own rather than lease our copier equipment so that we can replace it with no strings attached when we believe it is technically obsolete or print quality drops. Accordingly, we replace our copiers when they reach approximately 50% of their useful lives. All our copiers are less than one year old and print at 1200 dpi, which is high-end print shop quality. In addition, our copiers are equipped with automated GBC punching machines, so that reports can be pulled from the copier and combs instantly applied increasing the quality and speed (ensuring that reports are shipped in time) and reducing labor, consistent with our mission of having the highest quality, best service, at the lowest possible cost.
Many governments choose to set themselves apart by having custom designed financial statement covers. We have the ability to design, print full bleed (printing term used to indicating printing all the way to the edge of paper) oversized covers, and cut them in-house. In addition, we have designed full glossy Fortune 500-style graphic financial statements that have gone on to win national printing and media awards. Our design services also include promotional campaigns featured as billboards.
Most firms don’t have a team concept or name such as Team360 for the group supporting their operations, but rather have individual people performing administrative tasks. We believe in a team concept for our in-office team. Administrative, back-office and support staff are terms that don’t work in our organization, as our Team360 is on the front line handling key client contact from the first phone call, routing questions, and coordinating the audit, to ensuring reports are grammatically correct, and printed and shipped perfectly. It is a single coordinated effort focused solely on serving our clients.
We evaluate our printing needs for the entire year and order our supplies in bulk. We have paper delivered by the pallet, not box, to ensure it is on hand when needed, the best quality, and at the lowest price.
FedEx Shipping Center On Site
Our shipping volume is such that we have a Federal Express drop box located on our property to maximize the time available for getting documents shipped and reducing personnel time delivering.