 And welcome to Business in Hawaii with Reg Baker. We broadcast live every Thursday from 2 to 2.30 from the downtown studios of Think Tech, Hawaii and the Pioneer Plaza. This is the first show after Thanksgiving. We had a little, or at least I had a little hiatus last week. I had a great Thanksgiving holiday. Back to work this week and we're broadcasting the show today, which is a little bit of a sad day. Jim Neighbors, who has been a very active community resident here in Hawaii for many, many years, involved in a lot of nonprofit organizations and events. And he was a friend of mine and my wife. We've had dinner with him. We've known Mr. Neighbors, Jim, for a long time. And it's so sad to see him go. He passed away this morning. A very delightful guy, big heart, somebody that we like spending time with. Aloha, Jim. We miss you. I also wanted to announce next week, December 7th, the Chamber of Commerce is going to be having a focus on series for taxation. It's that time of the year. I'm sorry to announce that, but it's the end of the year. We got to start thinking about taxes and doing some tax strategy. The Chamber of Commerce is going to be having a conference on that next Thursday from 8 to 10 at the Chamber offices. So please go to the Chamber website and sign up for that. We'd love to see you there. And then on December 13th, the Small Business Regulatory Review Board for the State of Hawaii is going to be having their board meeting over the D-bed building on the third floor. Please join us for that as well. And you can see how new rules and regulations at the state and city county level are reviewed, analyzed, and then recommendations made to the Governor. So I'd love to see you there for that. Now talking about taxes, naturally this is a good time of the year to have two CPAs on the show at the same time. So I've got Carl Williams here joining me today. Carl, welcome to the show. Thank you. What could be more boring than having two CPAs at the same time? We're going to try to change that. You know, one of the acronyms for CPA is a constant party animal. So, you know, some of us live up to that. Some of us don't. We try. We try. But Carl, you've been in practice for a long time and you founded one of the larger CPA firms here in town, right? I founded CW Associates CPAs. We are the eighth largest CPA firm in Hawaii and threw a lot of good fortune over the years. It's a great profession. I was very fortunate to be hired by what is now Deloitte and Touche in the 70s, late 70s, and have enjoyed that profession ever since. Yeah. Deloitte's a great firm just as a little sidebar. My second son is a CPA with Deloitte and Touche in San Francisco. So he's doing very well over there. And he's happy, although he complains about how expensive it is. I think that's a request for money occasionally. But you come from, Deloitte was one of the big eight, I guess. Now it's big four. It's one of the blue chip firms. It was one of the big eight, yeah. Now the big four. Sure. So that's good. And so you were in the Hollywood office and then you decided to go out on your own or how did that? Yes. After graduating from the University of Hawaii, and I had started my MBA. There was no Masters of Accountancy program. I'd started my MBA but was having been an alternative student, did some travel, got drafted in the first lottery. I was a little older as anxious to go to work. I did continue the MBA and eventually got that while I was working. But I did start with Deloitte here in Honolulu. Deloitte asked me to transfer to the Hilo office. They had offices in Hilo and Kahului in those days. And I did that. And it was probably the best thing that ever happened to me. I asked for and got the opportunity to manage that office very early in my career soon after moving there. And I learned the business of public accounting. Now I love, I'm an auditor and business consultant. I just love the profession, love public accounting. But I learned the business of public accounting. And we hire and fire. We have to develop the practice, marketing. We have websites and offices. It's just like any other business. It's like any other business. And that really got me excited. I did return here to the Honolulu office. It was with that firm for 11 years. And was a partner candidate. But when it became clear that my future, if any, with the firm was going to be probably somewhere in the Midwest, they were looking at Arkansas. I have a fourth generation Japanese-American wife and three hapahole boys. It just didn't... No, and I really had no intention of ever leaving Hawaii anyplace. This was where I was meant to be. So that's my story. I'm glad it worked out. And I guess at some point, did you go straight from Deloitte and right into your own practice? Or was there something else? Another fall and I started a practice of our own. We made it almost 20 years. And then just decided we had different objectives. So I restructured the firm. We now have five partners, a principal, a director. Wow. So nearly 50 people, I think we're at 47, 48 as of today. Very good, respectable-sized firm. You're doing well. It is. Yeah. We're having fun. And it's always a challenge. I had my firm for a while and it was always a challenge for me to find good people to bring them on board and get them ramped up. Are we still having those challenges? Hiring is very difficult regardless of what profession you're in. I don't think we have any clients who don't have hiring as an issue or maybe even the number one issue that they have to deal with. CPA firms are really no different. I think one thing that maybe is a little bit different, as you know, is that accounting, certified public accounting, it's one of the most portable professions or skills that you can have. You can really go anywhere in the world and work as an accountant. We as have the other firms, larger firms, probably firms of all sizes, really have spent more and more time over the years. We participate in many student functions for most of the schools here that have accounting programs. We do office visits. We do office visits. They come to our office. It's part of what they have to do as their club experience. Two of our partners, Rodney Horano, our managing partner and Terry Fujie, our audit partner, do an etiquette dinner at a Oahu Country Club. I think every semester, if I'm not mistaken, for the students, you know, so they learn how, which fork to use, which is bread, which is drink, and which fork to use and all of that. So that has worked for us. But a lot of participation by our associates at campus events as well. So we're always looking for good people. And that's particularly in this market. I mean, when we're running with a 2% unemployment rate, you know, you've got to be always looking for good people. And if somebody was interested in talking to you, somebody that's going to be graduating soon or, you know, maybe graduating and looking for another option, how would they find out more about your firm? Best thing to do is visit the website. I think any student who wants to talk to us has already done that maybe several times before they come into the office, which is www.cwssocietscpas.com. And once there, there's an info, or they can send an email to me or call and talk to any of our partners or directors or principals. And you go out to the campus fairly often too, right? We do. Yeah, so they could always find you out there at some point. There's always the old-fashioned campus interview, right? So that still works, by the way. Well, some things don't change. No, some things don't change. Well, as far as the type of person you're looking for, do they have to be an accounting major? Yes. Okay. But they can do that in more than one way. I mean, it's interesting. I think this has been true throughout my career. You might have the same experience that a lot of us started out in a different area. I thought I wanted to be an engineering major, but we have engineers, teachers, biology majors, music majors who decide that they want to get a job when they graduate. So they take some accounting classes and find out that they really love it. Interesting little side note. One of my wife has a good friend. Not one of my wife. My wife. One of your wife? My wife. One of her friends is a school teacher. I was a school teacher for many, many years. She was an accounting major and got a master's degree but went into teaching. And so she was teaching. And then she found out just recently what my son started at, right about a fresh out of school, with his master's in accountancy, with Deloitte, which was more than she had been making as a teacher after 25 years. Wow. And it's amazing that there's such a disparity. I mean, accounting graduates, if they're close to the top of their class, can get a really decent job and start out fairly well paid pretty quick. They can. More so in the San Francisco area, I think there's one here. Yeah, that's another. It's much more the cost of living, I believe, is considerably higher. But yes, we do start at a good reasonable. It's a good career to have. It's a great career. I know we're going to go on a break shortly in about a minute or so. But one of the things I wanted to get into, since we're talking about a good career and all, this is how the career has changed over the years. You and I have been in the career for a long time. And I think we've seen a lot of evolution take place in how things are done. Not what necessarily, but how. It's been an interesting journey that I've had going through this. And I thought maybe we could share some more stories on that. Sure. But before we go on a break, tell me again, if somebody was out there and they were hearing about your company and what makes your company different? What are some of the things that would attract somebody to go to your website and find out more about your firm? Well, we have some of the back of our business cards. It's our tagline focusing on businesses and their owners. So we have a very limited tax preparation business relative to other firms. We tend to work with, I would say, higher net worth individuals or individuals who own businesses. So we typically work with the business and with the owner like that. And I think we've focused on that and that helps us a lot. And I think one of the most fun things about this profession is the business advisory part. Regardless if you're an auditor such as myself or a tax person, there's this area in between of overlap, which is considerable, which is just general business consulting. And the most wonderful thing about this profession is you can really make a difference. Plans tell us. You really make a difference in people's lives. And we can get more into that in the second half of the show. But it's that complete picture and that complete understanding of what a business is and how it works rather than just having it compartmentalized. And that's what's so fascinating. But we're going to go on a break. We'll be back in about one minute. This is Business in Hawaii with Reg Baker. We're here today talking with Carl Williams who has the eighth largest CPA firm. And it's unique in some respects and we'll talk about that more when we come back. So we'll see you in about a minute. We're drinking today because I'm the designated driver and that's okay. It's nice to be the guy that keeps his friends in line, keeps them from drinking too much so we can have a great time. A little responsibility can go a long way because it's all about having fun on game day. And welcome back to Business in Hawaii with Reg Baker. We're here this week talking with Carl Williams who is the founder of one of the larger CPA firms in Honolulu and has had a very good and successful career as a CPA. I'm also a CPA, as most of you probably know. And we're going to talk a little bit now in the second half of the show about how the CPA profession has evolved over the years. And it's quite a bit different now than it was maybe 30 years ago when Carl and I first got started. Is 30 years about right? For me it's closer to 40, but... 40. Well, obviously I'm a younger guy than you. Yeah, it'll be 40 years for me in January actually. And I got mine I think back in 80 something so I don't know, maybe that's 40 years still. But it's been a long time. It's been a long time. As a matter of fact, back in the mid-80s isn't that when they really came out with the personal computers? That would be about right. Yeah, I remember Microsoft was out and until then, do you remember the original laptops, the compact? Sure, it was a suitcase size. Yeah, it was huge. And you had to sign a... If you took it to the neighbor islands with you you had to sign a waiver to get on the airplane because the airlines would not be responsible for any damages. Now that you mentioned that, I was on the mainland and I did a lot of traveling with the old compact and you had to take the screws and open it up and there was a little green screen in there and the keyboard was somewhat separate with a little cable to it. And I checked that one time and as we were standing there waiting for the bags to come out we started seeing the keyboard keys coming out. And then the computer came out with the thing open and it was all stretched out and it was a ruin guess. I didn't experience that. It wasn't quite as compact or transportable as you might think. But we started when the technology was just beginning to evolve. Again. And it's been a while but we used to use VisiCalc. We used to use Lotus. Do you remember VisiCalc? I do actually. The software is different but even with some of that we still had those little spreadsheets the seven column forms. Big paper. Did you have a dress code? Probably. I don't recall what it was. I remember having a dress code and the dress code was for both in the office as well as out of the office. There was certain clothing and I worked for Andersen. When I first started my career I worked for author Andersen. Deloitte was the younger group. Deloitte was younger but I was fortunate enough to begin my career right after they stopped wearing ties. Really? And hats. In Hilo there are pictures of the older fellows just a few years before us they wore short sleeve white shirts ties and hats. That was the dress code. And the briefcases, no backpacks it was all briefcases. Those were the fun times but the basic business has evolved a little bit too. Before it was pretty clean as far as audit or tax. Some firms might offer consulting but it wasn't really that big in those days, is it? No, it was very it was I think very much so it was audit and tax. There really wasn't much overlap. We didn't have some of these other forms of reporting either than reviews or compilations. That came in the late 70s. We really didn't gain much acceptance until maybe a decade after that before they were more widely used. It was predominantly larger companies that were the clients. Now it seems that a lot of the larger CPA firms can actually have a small and mid-sized business component to their practice and that's what makes things a whole lot more interesting at least from my perspective. And the business needs of a small and mid-sized business is going to be a little bit different than say the Bank of Hawaii or First World Bank or some of the other big companies. I've always thought to be successful as a local practitioner is first of all to have a niche or niche and then to offer a lot of hands-on experience and I think there are a lot of men and women in this town like myself who were with big firms who like the hands-on part of enjoy working directly with their clients and so our leverage if you will our ratio of our associates or staff as you may call them to partners is about half maybe a little less than half of a big firm. Now what I was at the large firm and was doing very large audits I would be supervising up to maybe a dozen or more auditors you know now there we have two or three on each engagement so it's quite different. In some of the technology that two or three can do almost as much work as the six or seven used to be able to do. Is that a fair statement? For sure, I think because of the amount of money we spend on computers it's like there's another person sitting in the room almost like that but it's having both of us having come up through the paper and pencil stage it's just the most wonderful thing to be able to do all of that processing. It is and you're allowed to develop more completely as a professional too because I enjoy being able to get into a client and be able to handle some of the accounting issues, some of the tax issues and then also advisory and how they can maybe increase productivity or efficiency or do things a little bit differently to increase the environment to security about some of the data. It's having a complete picture. I guess part of this, if we were to extrapolate that out, is that's one of the reasons why CFOs and companies are becoming the more common background for the CEO position. It's because they do have that complete understanding of the entire company. I think you had either mentioned it or alluded to it a little bit earlier about seeing so many different types of businesses and business situations. I think that's one of the things I really love about this profession particularly as an auditor every day is an adventure but you learn something almost every day and then you take that to the next engagement and you just simply discuss with people what you have seen over the past year or in my case many more years and they take that home and process. We just had a conversation this morning. They processed and applied to their business and credited us with part of their process and well what could be better than that? No, it doesn't. I think part of the evolution of the profession also is the evolution of the person. Every time you go through that you become a better and better professional and your breath of knowledge of all the different things that are going on and all the possibilities. It makes a CPA pretty invaluable and to bring them on board and to bring all of that knowledge can really benefit a company and that was part of the theme today for the show is why CPAs are critical for success is because they have all these different in some cases best practices that are available out there and they can bring that and see which one fits best to the circumstances in that company. Absolutely. And it's very rewarding to go through that process. Now another thing that we were kind of joking about this a little bit on break another thing that makes it so interesting for people to come to work for CW associates is it's true that you actually have work space for everybody to go to work for you. We do. We are not the typical CPA firm in that regard. Many firms have gone to I think they call it Hotelling where you get on the computer and find out where you'll be sitting that particular day. We've actually although we have reduced our footprint for everybody including our partners because we're now paperless, pretty much paperless because we're paperless there aren't stacks of papers everywhere so we've reduced the footprint considerably but everybody from the newest person to the oldest person which is me has a place to work but you can put the picture of the dog or your significant other on the wall you've got your stacks in the drawer and you know and some books and all of those things and your own computer monitor and decently personalize it we think that makes a big difference and you know we one of the things we say is we're downtown, we all work hard sometimes they're longer hours we spend more time together than we do with each other than we do with our family so we better want to come to work every day otherwise it'll be just another job. It's important for it to be a comfortable environment. Some firms and I've seen this particularly in law firms maybe it's to some degree in CPA firms but you know a lot of people they work from home and they only come into the office when they absolutely have to or there may be a certain period of time that they need to be there so they can do their meetings and whatever but they don't have their own workspace and like you said there's maybe a bank of places they can work and they all have these little things on carts with wheels that they can wheel the stuff out to and plug into whatever work area they have and it's hard to customize it's hard to feel connected you know when you're in that kind of environment. We've considered that but we decided to stick with what we do and that's got to make it a whole lot more comfortable for the people that are coming in. We hope so, we try. Very good. And now for those that are looking for that website what's the name of your website again? Again it's the firm's name www.cwassociatescpas with an s.com Very good. And then they can find out more about the firm and you know I guess if there's any positions open is that going to be on there too? There are positions open, we're looking our candidates are they have accounting I'm going to sort of say often though they'll get into accounting from another profession my wife was a good example started out as an economics major got a degree in that she came home back to Hawaii and got her MBA and studied accounting and that's how she got into accounting so you need to have accounting, you need to have a desire to become a CPA pass the CPA exam they start with this, the newer people need a couple years of experience to pass the exam along with the education to become licensed but our expectation is that they will do that within a couple years after they work and once you become a CPA, it's a life changing event, it's hard hard work the exam now is when you and I took it, it was a paper based exam it was about two and a half days now it's a computer based exam it is so difficult and these young people have to be so smart to get it done but it's really worth it's just, it's really worth it It is, it's a credential that is going to have value whatever you do going forward it's not only a credential of your accounting and auditing or tax skills, it's a credential of your ability to learn and to be able to comprehend and apply that knowledge and it's much more than just number crunching, it's the actual application and that's what that CPA stands for is to be able to use that in your entire career oh you are a CPA, that's how you know that very good Carl, we're wrapping up right now final words you want to just share before we sign off I guess it's a great career and no regrets absolutely no regrets I feel so fortunate that I discovered accounting after doing other things so for a while and was looking for a way to go back to school and what to study and I discovered accounting and it's just really been a blessing in our lives and we couldn't ask for anything more I would encourage anybody who's young and thinking about it to give it a try and if you like it, you may love it if you don't, there's all kinds of options that are available to you there certainly are this is Business in Hawaii with Reg Baker, we are broadcasting live every Thursday from 2 to 2.30 Carl Williams on the show, we're talking a little bit about how important it is to have a CPA on your team helping you in your business you guys have a great weekend and we'll see you next Thursday aloha