anshul agrawal: gain a competitive edge through direct ownership offshoring | gear up for growth

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gear up for growth
with jean caragher
for 卡塔尔世界杯常规比赛时间

in this episode of gear up for growth, powered by 卡塔尔世界杯常规比赛时间, anshul agrawal, founder of june15 consulting, shares how direct ownership offshoring is helping cpa firms unlock long-term value and sharpen their competitive edge. 

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“direct ownership offshoring is no longer just for the top 100 firms,” agrawal explains. “whether you’re a solo practitioner or a mid-sized firm, the model gives you full control of your offshore team without the middlemen – and that changes everything.” 

according to agrawal, direct ownership offshoring – where firms directly employ and manage offshore staff – offers a more strategic and cost-effective alternative to traditional outsourcing. it enables firms to maintain independence, expand capacity, and deliver year-round support while improving margins.

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“it’s not just about saving money. it’s about freeing up capacity to innovate, add services, and compete with firms backed by private equity,” he said. 

agrawal also emphasized that firms embracing this model often enjoy improved client service, faster turnaround times, and a stronger market position. “one of the most overlooked benefits is how it elevates a firm’s brand,” he noted. “when you build a global team and make it work, peers and clients take notice. you become known as a firm that’s thinking ahead.” 

as more accounting firms confront ongoing talent shortages and rising operating costs, agrawal believes direct ownership offshoring will become the preferred model for firms looking to grow smartly and sustainably. “this isn’t just a staffing solution. it’s a strategy for the future,” he added. 

7 key takeaways

agrawal
  1. offshoring in some form has grown from 6% of firms pre-covid to nearly 50% today, and is expected to reach 75-80% by 2030.
  2. offshoring doesn’t have to mean india. the philippines and latin america (especially argentina) are viable alternatives. 
  3. firms that build offshore teams tend to increase their firm valuation and attractiveness to potential buyers or investors. 
  4. offshoring enables independent firms to compete with pe-backed firms by reducing costs and expanding services. 
  5. direct ownership allows for more confident client conversations than outsourcing through unknown third parties. 
  6. secure practices (vpns, no local data storage, biometric access, u.s.-based monitoring) protect client data. 
  7. firm leaders need to educate themselves, consult with peers, explore case studies, and seek expert advice before deciding whether offshoring is right for their firms. 

more about anshul agrawal
anshul agrawal founded june15 consulting in 2012. agrawal was born in india and moved to the us at the age of seventeen. he completed his undergraduate studies at the state university of new york at oswego and his mba from the university of north carolina at chapel hill. as the founder of his consulting firm, agrawal advised several global firms, including, but not limited to, google, ibm, pepsico, kellogg, unilever, cvs health, caterpillar, pfizer, jetblue, and general electric.

transcript
(produced by automation. not edited for spelling or grammar.)

jean: hello, thank you for joining “gear up for growth” powered by 卡塔尔世界杯常规比赛时间. i’m jean caragher, president of capstone marketing and your host. our guest is anshul agrawal, founder of june15 consulting, where he specializes in direct ownership offshoring for cpa firms. anshul is also the host of the accounting trailblazers podcast. anshul, welcome to “gear up for growth.”

anshul: thank you so much for having me, jean. it’s a pleasure and i’m looking forward to our conversation.

jean: me too. and i know that i’m going to learn some things from this conversation. i always learn something, but i think i’m going to learn a lot on this one. so, let’s start with a definition. so, how do you define direct ownership offshoring and how is that different from traditional outsourcing?

anshul: yeah. so, there’s two ways to engage global talent, right? you can either work with an agency that’s based in india, philippines, latin america, and you can ask them to give you resources. so, they’ll provide you with some talent. that talent could be exclusive to you, or they could be shared across multiple firms. that talent can work for you part-time or full-time. so, that’s called outsourcing because you’re outsourcing your work to a third party. you give them the work and they get it done. you can train them if you want. there are some options available, but at the end of the day, it’s outsourcing.

what direct ownership means is instead of working with a third party, you go and hire your own employees in these offshore locations. the idea is that they work with you directly. there is no agency in the mix. now, that doesn’t mean that you can’t hire consultants to help you hire people or help you manage that team, but in the end, they’re your employees. you’re responsible for them, just like you’re responsible for your u.s. employees. so, that’s direct ownership offshoring and that’s how it differs from outsourcing.

jean: okay. of course, i have a whole bunch of questions for you, but let’s just… i’m going to just throw in that i hadn’t planned. when you think about those two options, which is easier or harder to implement?

anshul: so, they can both be easy and hard, right? it really depends on what your needs are and what you want to do in the long term. so, if you’re only looking for help that’s during busy season or just for a few months of the year, then it’s so much easier to just work with a reputed outsourcing agency, right? going through the hassle of hiring your own employees, trying to figure out how to keep them busy, it’s just not going to be worth your time.

now, if you are looking for help all year-round, right, it doesn’t matter if you’re a solo practitioner or an ipa top 500 firm, if you’re looking for help year-round and you’re looking for more of a long-term solution, then it’s better to go direct. it’s always more effort if you are doing something yourselves or outsourcing it. but in the long term, it’s cheaper. it’s just so much easier to have a team that’s your team.

jean: mm-hmm, right. and i’m glad you made that distinction about size of firms, because lots of folks who listen and watch this show are from smaller firms, although it does vary. and it’s always important to point out or emphasize that what we’re talking about today, you don’t need to be, like you said, a top 500 firm. you could be a solo practitioner or a smaller firm. so, this is an opportunity for a firm of every size.

anshul: absolutely. i think post-covid, especially with tools like zoom, right? you’re in new york, i’m in toronto, but we’re talking. we’re recording a podcast. i think with the technology becoming available, becoming cheap and becoming accessible to everyone, it has become so much cheaper for anyone to offshore and have their own team. and it can be one employee, it can be two employees. so, i think with that, even smaller firms are now taking notice, and that’s one of my crusades. i tell everyone that, “hey, offering is broken right now, especially for smaller firms, right? but there are some ways to fix it and here’s how you can do it.”

jean: right. so, you already mentioned or gave us a distinction between if you’re looking for talent for a short period of time or a longer period of time. when is direct ownership offshoring a smart choice for cpa firms? they’ve identified a need. what other factors come into play?

anshul: so, you need to take a look at why you’re looking at offshoring right now, right? now we know talent is scarce, right? but if it’s just about talent, right, then you could look at outsourcing as well. because in both models, you get the talent you need, right? but then you need to look at, are you also looking to increase margins? are you under that pressure to increase profitability? if yes, then you need to look at direct ownership because with outsourcing, the agency is taking responsibility for the outcome, right? if they don’t perform, you’ll fire them. and there’s not much you can do, right?

so, they take a big margin because of that. but with direct ownership, you’re responsible for the outcome. you can work with an expert to help you navigate that situation. but in the end, like it’s your… i mean, it stops with you. so, you get to keep all of those savings to yourself because there’s no one in the middle taking a big chunk, right? so, that’s one way to look at it.

the other way to look at it is everybody’s talking about private equity, right? so, if you want to stay independent, right, but your competitors are taking private equity money. so, how do you best compete with them, right? so, that’s one other way to…another lever or another filter. if you are in that position where you’re looking to stay independent, consider direct ownership because again, it’s a long-term solution and it saves you a lot more money. so, now you have the cash to compete with your competitors who may have taken private equity money.

jean: right. yeah, i mean, and that’s a great point, because i’ve talked to several people, you know, for the show about private equity and how firms can compete against firms who are taking the pe money. and these firms may not be great candidates for getting capital. so, being able to be more efficient with their staff and also because clearly, you know, they’re working at a lower rate than they would here in the united states, that that’s another way to look at being able to compete with those firms who are getting the pe funding.

anshul: absolutely. i mean, you get to launch new services, right? nobody really wants to do bookkeeping. a lot of firms that are u.s. only can offer bookkeeping profitably, right? so, for example, a bookkeeper in india would be $500 a month, like a decent one. now with that resource, you can offer bookkeeping to your clients, increase the stickiness and actually make money off of that service. so, it’s about that, right? it’s about not just increasing profitability by decreasing your cost but also adding new services that were previously not feasible financially.

jean: right. now you mentioned covid just a little bit earlier. what type of increase in interest or implementation have you seen in direct ownership offshoring since covid?

anshul: i think it has gone through the roof, right? so, just looking at offshoring, right? now, that includes outsourcing and direct ownership. i saw a statistic that before covid only 6% of accounting firms were offshoring in some capacity. that number now is almost half, and they expect to go into like 75%, 80% by 2030. so, that’s just staggering. and what’s happening in the last two or three years, more and more firms are going direct simply because it’s gotten cheaper and easier to do that.

so, it’s hard to say that, all right, there were three firms going direct. now, there’s 300. but pre-covid it was really the top 10 or top 20 firms that had gone direct, right? the big four had done that in the ’80s, ’90s, and then the other firms followed. but now, i speak to solo practitioners and they have a team of two or three in india or philippines. so, there’s no data yet on the exact number of firms. i’m actually working on a survey to collect that data. but in terms of just interest in offshoring and direct ownership, it’s just gone through the roof. i get requests every day that, “hey, we want to learn about this. we want to learn about this.”

so, we’ve gone from small firms thinking, “oh, offshoring or direct ownership only works for larger firms.” to now so many of them are reaching out and learning about, “hey, what is this? i didn’t know i could work with… how could this work for me?” so, i think in the next two or three years, we’re going to see that this will become the model of choice for anyone who’s looking for year-round help.

jean: that’s amazing because i remember offshoring services, i want to say in the early 2000s, there were firms who promoted the fact that their services were conducted… and i’ll speak for the u.s. the services were conducted in the united states. there was no offshoring. they were more patriotic. they were supporting, you know, u.s. businesses. what are your thoughts about that now, especially with percentages you just quoted of firms outsourcing in some capacity?

anshul: so, i think the biggest change that has happened between in the last 20 years, early 2000s, right? when we talked about offshoring, right, or outsourcing, we thought in terms of manufacturing. if an auto company has a factory in the u.s. and they have an offshore factory in mexico or china, and the offshore factory starts to do well, you would shut down or drastically reduce the size of the u.s. factory. so, offshoring started being associated with jobs going overseas, right? and anybody who was not doing it was seen as patriotic and supporting u.s. jobs.

now in the last 20 years, offshoring has evolved, and especially for accounting. i mean, there aren’t enough accountants, so no one’s looking to replace accountants, right? there’s a shortage. how do you replace something that’s in short supply? so, that’s not how accounting firms are using offshoring. and 90% of accounting firms are small firms, less than 25 employees. it’s not in their best interest to replace the few employees you have there. that’s just not how it works.

so, what has happened is people have started to realize that this is different, right? this is not the same. i am actually improving the lives of my employees here because they’re burnt out. my clients can’t reach me. i can’t talk to them because i’m so busy doing all the work. but if i have offshore employees, it allows me to talk to my clients. so, a lot of firms are now looking at those benefits and they’re like, “well, it actually helps me support my u.s. clients. it helps me make my team’s lives easier. so, why not?” and with direct ownership in all of this, there’s further integration, right? there’s less of a feeling where they’re somebody else’s people. they’re my people. they just happen to sit in a different part of the world. so, i think that has changed. people have educated themselves more. there’s a lot more case studies of offshoring being done right in the accounting space. that’s helping. and then obviously the costs have gone down considerably to have your own stuff, have your own operations. that is what’s changed.

jean: right. now, do you also feel that the direct ownership option is also helpful when the cpas are talking to their clients? because i imagine these firms are revealing that their work is being done in another country. so, they’re being transparent about it or are they? do you get any feeling about that?

anshul: so, i do meet firms who don’t disclose that their work is done offshore. i tell them that if you’re having tax work done offshore, that’s illegal. you need to get disclosure signed. you need to get the 7216 disclosure signed by clients if you’re having their tax work done offshore. the penalties are… i mean, there’s jail time involved, right? so, you don’t want to mess with that. yes, it has not been enforced so far, but you don’t want to be the first one.

but then on the other side, majority of the firms that i talked to, they don’t hide the fact that their work is done offshore. and direct ownership helps with that because when you tell somebody, “hey, we’re going to process your tax returns in india,” the first thing is like, “wait, what? wait, who are those people, right? where in india? who’s doing all of this?” at this point, if you say, “oh, well, it’s just our employees, right? we’ve hired five employees in india. i mean, there are people there, so they’ll be working with the u.s. team to do your work.” “oh, okay. yeah, that’s fine.” the other thing would be, “well, there’s this company we found online. they do tax returns and we’re engaging with them.”

so, it’s just an easier conversation. now there’s a lot of outsourcing companies that are really good. they have a good reputation. so, you won’t face a problem with that if you work with them. but generally speaking, it’s us, like the partners are more confident when talking to clients, when it’s their own setup. and i know i keep using the word setup and office and team, but again, it could be just one person. so, it definitely helps.

jean: mm-hmm. so, what are the most common misconceptions that cpas have about building an offshore team that you may not have already talked about?

anshul: so, there’s quite a few. first misconception cpas often have is it has to be india, right? it doesn’t, right? 80% of offshoring happens in india. i mean, that’s where most of the talent is. they have the most robust support system, but philippines is doing really well. i’m very bullish on latin america, especially argentina. i think they can work the same time zone. culturally, they’re more similar to how we do things here in u.s. and canada. so, more and more firms are going to go to latin american countries.

aprio just opened their office in colombia. i’m talking to private equity firms right now to have their offices in argentina. so, that’s one misconception that a lot of cpa firms have is, “oh, it has to be india.” india doesn’t work for you, there’s quite a few options. then there’s other things as well. there’s a lot of confusion about data. how do we keep my clients data secure, right? this is social security numbers. it’s tax information. so, there’s often misinformation around what happens with the data, but i can tell that the amount of things, the things you do offshore to protect the data, they’re not done in the u.s.

so, for example, some firms are doing this. i mean, most firms would have biometric entry to the office. so, no one who’s not authorized can’t enter. there’s cameras everywhere. the camera feed can only be accessed from the u.s. so, a lot of times people ask me that, “hey, what if somebody takes a photo of the client data, right?” and i’m like, “well, they could do that in the u.s. too, but there’s cameras everywhere. so, if they do do that, i mean, they’ll likely get caught.” and then the laptops, no data is ever downloaded or transferred to offshore locations. data always stays on your u.s. servers. people offshore will log into vpn, and they’ll do all the work on your servers here. they can download anything. they can print anything. some firms have laptop monitoring software. i think it’s a good idea to have that but within reason. i know one of the big four, what they do is they take screenshots of offshore employees every few seconds. so, that software would take screenshots. and if something’s sketchy, they get a notification. i don’t recommend you do that. i mean, if that’s the level of distrust, maybe wait till you offshore, but there’s so much stuff you can do to protect your data and keep it secure. that anxiety is okay, but once you educate yourself, you’ll be like, “all right, i think that’s really all one can do.” so, that’s another misconception people have. so, i think those are the two big ones. and there’s quite a few smaller ones but…

jean: right. yeah. no, you hit two big ones there because the concern about data is every place, right? we don’t have to go to a foreign country to worry about somebody stealing our data. so, you’ve talked about quite a few competitive advantages of firms when they move to outsourcing or direct ownership offshore. any other competitive advantages that are there that we haven’t covered?

anshul: let’s see. so, we talked about the cost advantage. we talked about the talent pipeline. then you’re able to launch new services. one byproduct of this success is your brand goodwill just gets stronger. so, this thing i’ve seen with some accounting firms, especially smaller ones who took the bold step of going direct, suddenly they’re like superheroes amongst their peers where they’re like, “wait, you? you’re a small firm. you have your own team in india now?” it doesn’t matter if it’s two or five, but that just unlocks something where people are like, “well, i thought that was really difficult to do. how did you do it?” so, you’ll start getting calls to talk at conferences. you will become sort of a mini celebrity. your clients will also appreciate your bold move because they’ll see improvements in how often you can communicate with them. they’ll see faster turnaround times. so, there’s that byproduct of the brand getting stronger, which most people don’t think about.

jean: right. no, i didn’t think about that at all and also what i was thinking about this, but what you just described, it’s really a firm showing that they’re innovative and they’re looking for different types of solutions to take care of their clients.

anshul: yeah. and the other significant competitive advantages, you become more private equity ready. we talked about whether or not… if you want to stay independent, we talked about how it helps you stay independent. but what if you want to stay independent and acquire more companies, right? now with this offshore setup, you have a platform. you become a platform firm. what that means is when you buy companies, you’re not worried who’s going to do that work, right? you can look at companies that are struggling to find people. you can look at companies where the owners are retiring and just looking to close up shop. you can take that and have your offer team do a lot of that work, or you could split that work between your u.s. and offer team. but now you have the capacity to actually take on a lot more work than you really ever had.

so, that better positions you to acquire more companies. the other thing is let’s say you want to exit, right, either to a private equity firm or to another accounting firm. having your own offer setup increases valuations because that shows that you’re innovative but that also shows that the firm is less overdependent. that shows that you have robust processes in place and you have a remote team that’s working well. so, those things increase the valuation, especially if a firm that doesn’t have an offer setup, they’re looking to do that and they look at you and somebody else, right? they say, “ah, this firm already has that thing. it gives us a leg up.” so, those are some benefits that people don’t often think about, but they end up being the bigger ones.

jean: right. so, if a firm managing partner or sole practitioner or whatever size firm we’re talking about is thinking about offshoring and taking a look at this direct ownership option and they decide, “okay, this direct ownership is really for me, you know, for our firm,” how long does it take for making that decision, “okay, this is something we want to do,” to having that staff or that person that’s offshore working?

anshul: it depends on how ready you are, because deciding that, “i want to do it,” is different than, “i’m ready to do it,” right, or the firm’s ready to do it, right? you may not have the right processes in place. a lot of times people don’t even know who they want to hire, right? so, that discovery takes time. i’ve worked with clients where they were like, “yeah, we want to bring somebody on who can be a tax preparer, has two years of u.s. tax experience.” but once we start interviewing, people are like, “yeah, that’s not going to work. i think i need somebody with five years of experience.” so, that stuff… it depends on how well you know what you want, but let’s assume you do. it can take… depends on what country you go with. if you go to the philippines or argentina, that could happen in a month, right? a month, month and a half, because if you’re ready to go, we start interviewing people. it takes about three weeks to go through interviews, find someone, and then a two-week notice period. so, somewhere between one, one and a half months, or two months if you want to be extremely conservative, you can have that team member onboarded.

in india, that time would be about two to three months, and the only difference is the notice period. in the u.s., we have a two-week notice period, right? if you hire somebody, they give a two-week notice, they join you. in india, that notice period is two months. so, we could do everything right from our side, but we still have to wait two months. and there’s a challenge with talent in india. because so many firms are going to india because there’s so much competition for talent, a lot of times people won’t show up, right? they will shop. the moment you give them an offer, they’ll shop around, they’ll find a better offer from a competing american firm, and they’ll be like, “sorry, i got a better offer.” for india, i always tell people, have three months in mind. for argentina or the philippines, somewhere between one to two months is more reasonable.

jean: mm-hmm. okay. so, some of those folks in india are using that as an opportunity to make more money themselves, because they could say, “hey, i’ve got this offer. how much more are you going to give me to stay or to go to a different firm?”

anshul: that’s exactly right. and culturally, that’s acceptable. they don’t look down upon that. they’re like, “well, this employee is a smart employee. they’re just shopping around.” here in the u.s., we’re more like, “well, once you’ve accepted, you shouldn’t really do that.” so, that’s where the cultures collide. and the american side doesn’t quite get it, and the indian side is like… they don’t get why you’re mad or upset. so, it’s fun and challenging at the same time.

jean: right. well, see, this is different parts of the world, right? we just have different norms just how we do business, right? so, we cover from time wise. so, how about startup costs? do you have kind of an average amount that a firm would need to invest to get this up and going?

anshul: so, the investment amounts are really low, right, depending on the size of the team. i don’t recommend anybody set up their own private office right away. always rent an office from a co-working space like wework. you could get a fully furnished office. so, if you’re building a team of one person, that’s like $100 a month, right? that’s not much. in terms of compliance-related costs, don’t register your company in any offshore location right away. you don’t need that. if you’re a small firm, you never need to do that because it just increases your time, effort, and your exposure. it’s best to use an employer of record. an employer of record will basically onboard that person. they’ll take care of the payroll, the taxes, all local compliances, not just the responsibilities but also the liabilities. and that basically just makes it so much easier for you.

but they don’t take part in day-to-day management, right? that’s still your employee. they just process the paperwork. it’s like a peo. and their costs can range from $200, $300 a month to… that’s actually a reasonable amount, $200, $300. it could go up to $700, but you don’t have to use those expensive ones. so, when you look in terms of costs, that’s how you budget for it, $100 to $150 for rent, $300 to $400 per month for the eor, and then the rest is just the salary of the employee. so, when you look at this, think more in terms of your time investment as opposed to the money investment, because while you may be only investing a few hundred or let’s say a thousand bucks per month, it’s your time, right? you will need to learn how business is done in this new part of the world. you’ll need to sit in interviews. you’ll make some mistakes. you may have an employee, then spend some time on training. their training would look different than how you train your u.s. employees.

so, that is the biggest investment, your time and energy. the money part, yes. i mean, if you look at a year, you’re investing maybe $10,000 for a year. but i mean, for somebody you’re paying $100,000 here, you’ll get that for $30,000. you add the $10,000, that’s $40,000. let’s add $10,000 more for whatever, right? so, you’ll still save half. it’s not the money that’s going to break it for you. it’s really your time and energy investment.

jean: right. so, firm leadership or whoever is responsible for working most closely with the offshore team really needs to be in this fully committed for this to be successful, because we hear sometimes about how cpas are working remotely now due to covid and we’ve taught ourselves, “hey, we could really do this. i don’t have to be in the office all the time if i don’t need to be.” but this person is in another country. so, there are other issues related to that. so, they need to be all in when they make this decision.

anshul: they need to be committed, for sure, because this is something… regardless of whether you have direct ownership or you work with an outsourcing company, it’s going to change the dna of your firm. most small firms are local. they’re proud to be local. they hire locally, they serve locally. and now a firm in oklahoma has become global when they hire their first employee. so, that’s a mindset shift.

now, there’s a lot of education out there. there are a lot of experts out there who can handhold you through this process, but they’ll work with you like a personal trainer, right? in the end, you’re the one who’ll have to do the pushups, right? so, it’s going to take a year or two for you to see the results that you want. so, that’s why you have to be committed. the first year, i call it the “year of learning.” then you’re going to figure out that, “oh, all right, these things didn’t go as per plann. next year, i’m going to fix those.” second year, you optimize. you fix all the red flags. and you start to see glimpses of, “hey, this is working. this could work.” and it’s really starting in year 3 where you’ll start to see, “this is amazing. i give my team work when i sleep. when i get up, they’re done. i’m saving money. my profit’s gone up.” but it’s not going to happen in year 1 no matter what model you choose.

jean: mm-hmm. okay, so folks also need to be realistic when they’re considering this.

anshul: absolutely.

jean: okay, so i’ve got two more questions for you. if a managing partner is on the fence about offshoring and/or direct ownership offshoring, what is your best piece of advice for them?

anshul: educate yourself. there’s a ton of content online. educate yourself on the benefits. educate yourself on the challenges. there are case studies. look at those case studies. you most likely have peer firms that have done this. they’ve either succeeded or they’ve failed. talk to them. learn about their experience. and then get expert help, right? there’s a lot of consultants out there who can help you figure out whether or not this is a good fit. but, yeah, that’s the biggest piece of advice. educate yourself. don’t make assumptions of whether or not it’ll work for you. and it’ll take some time, but you’ll get the answers you need. and then you’ll be able to make a call on whether or not this makes sense for you.

jean: all right, wonderful. okay, so my last question is a bonus question. if you weren’t running june15 consulting, what do you think you would be doing right now?

anshul: i don’t know. i’d be running a different company, because i’m an entrepreneur at heart. i always wanted to be my own boss. and it’s not just about the money. sure, the money helps, but it’s also about the freedom, the flexibility. so, i’d be running a different company. i’m a global person. i was born in india, moved to the u.s., lived in new zealand, and now i’m in canada. so, i would have been doing something global, something around some kind of trade. not the best time to be in the trade business but something around that.

jean: yeah, that’s right. timing is everything, right? we’re hearing a lot about these trades. oh, these tariffs and trading. oh, and we won’t get any more into that today. so, i have been talking with anshul agrawal, founder of june15 consulting. anshul, thank you for sharing your knowledge about direct ownership, offshoring and offshoring in general. i know this is going to be really helpful for lots of practitioners out there.

anshul: i’m glad. thank you so much for having me as a guest. i sincerely appreciate the opportunity.

jean: you’re very welcome. and thank you for tuning in to “gear up for growth.” be sure to check us out next time when we focus on another topic crucial for accounting firms aiming for smart growth in today’s competitive landscape. i’ll see you then.