You stare at your financial statements. You’ve cut costs, delayed major projects, your Accounting software badly needs an upgrade, and yet that “net income” line still isn’t where you need it to be.

You might be a drilling company where day rates haven’t risen at the same rate oil has.

Maybe you’re a manufacturing company that has seen fuel prices drop but your delivery costs haven’t.

When the term “Consultant” comes to mind you immediately think of the expense related to temporary or project-based help. Maybe it’s time to take another look at your internal audit and/or internal controls team as a solution to reduce some expenses. Think I’m crazy? Let’s look at the facts.

According to a recent update (this page updated 3/15/2022)from Indeed, the average salary for an “internal auditor” in the state of Texas is $74,144. Now, this salary can fluctuate depending on experience, location, travel, and level within the department (Staff, Senior, Manager, Director, etc). Another report by Glassdoor states the average salary in Houston for an Internal Audit Manager is $115,352.

Those numbers are misleading though. They don’t include your “hidden” costs of benefits and taxes. Not to mention providing computers, desk phones, office space, software, and “continuing professional education”. Two recent studies found the average cost of benefits and taxes is approximately 30% of the total base salary.

If you increase both of the above salaries by 30%, you come out with $96,387 and $149,957 respectively. You forget, we haven’t included the Director/VP of Internal Audit yet. Using information from Payscale, the average salary of an “Internal Audit Director” is $149,269 in Houston. Using the same formula, we’re at $194,050.

For a three-person department, your total annual cost is $440,394. Almost half a million dollars for a three-person department. Add two more “staff” levels and you’re over $633,000 (or a little below if you bring in entry-level staff).

Now let’s look at the alternative of using a smaller-sized firm to outsource this department for you. I say “smaller” for several reasons. 1) Better stability and a greater chance of the Owner/Partner working directly on your account 2) Smaller firms typically have lower rates than the big boys 3) Smaller firms don’t hire people with little-to-no experience, which means you aren’t paying them to train their people for them! (See this post about why mid and large firms are failing themselves and their clients.)

$440,394 divided by an hourly rate of $125 per hour equals 3,523 hours per year. If you have three consultants (with strong experience and knowledge to add value to your company) work 6 weeks a quarter (half the quarter) that comes out to 720 hours a quarter or 2,880 hours a year. Multiply that by our example rate of $125 per hour and you are saving $80,394 per year. Not to mention if you have an annual audit plan scheduled just right, you can probably reduce that even further.

That extra money can go directly to the bottom line, or be used to add headcount in other areas where you need it. You suddenly have some flexibility while potentially strengthening your internal audit department.

One last note before you e-mail us for more information at info@r-vmc.com I used the hourly rate of $125 per hour as an example for easy math. Our rates in 2022 are a MAXIMUM of $125/hr and are often below this rate for longer-term or projects with multiple consultant needs. Go with Re-Vision Management Consulting and get better rates (even fixed cost proposals) and get higher quality performance.

Don’t just take our word for it, here are some quotes from clients and other friends of the firm who have worked along side us.

Have you had a customer ask if you have a “SOC” report they could review? Or perhaps your sales team lost potential new contracts because you didn’t have a SOC report or couldn’t answer if you were “SOC compliant”. Here are 4 tips for understanding if you need a SOC report and how to have a successful start.

1) Understand the “why”.

Talk directly with your current customers who have inquired about it. Understand why they are asking and how it impacts them. You might find out they want to increase business with you or they might be shopping at your competitors due to a lack of SOC report.

Talk with your sales team. Are contracts being lost due to a lack of SOC report? How often to customers or potential customers ask about it?

Try to financially understand the impact if you go down the SOC road.

2) Never leave your team in the dark.

Once you’ve quantified the “why”, ensure everyone from sales, IT, HR, accounting, operations and leadership are fully aware of what you’re considering. Their buy-in is critical to the success of a clean SOC report.

3) Talk to regional and smaller audit firms who specialize in SOC.

Request references from their clients who are in the same industry.

I also never recommend utilizing the Big 4 or even the larger 8-10 national firms. The higher costs of those firms will minimize the benefits of the future report.

4) This isn’t a one-time process

This will not be a one-time, stand-alone instance. Customers will want to see bridge letters and future reports which show you have continued to address their reason for asking for a SOC report past the first reporting date. Creating internal processes that are repeatable in the long-term will greatly benefit your organization.

Bonus tip

You know your business. You’re an expert at what you do. We know SOC. Let us be the support you need between your team and the auditors. Training, mock audits, organization of critical files, and direct support during the SOC attestation process. thomas@r-vmc.com

Whether it’s due to the current health concern or your company is just giving you the option to work remotely, it’s not always easy accomplish. Here are some tips from someone who frequently works remotely. We’ll use “home” as the term for where ever you chose to remote work from.

Scheduling

Your home schedule has multiple variables to consider. What does your boss require/prefer? What does the official company policy require? Do you have kids, spouse and/or pet at home which could be a distraction?

First, identify what is required from your boss and overall company. It might be specific hours in a day (8am to 5pm), total hours in a day or total hours in the week. If it’s total hours in a week, don’t do like you did in school and wait until the last minute to get all of your hours in for that project. It didn’t work then and it won’t work now.

Next consider the home distractions that you can anticipate. The days I take my kids to school, I know I’ll be “out of office” from 725 to about 815. If I go to the gym, that’s an additional hour I’m away from my desk. How do I make up those hours? Do I need to?

Literally look at each day of the week and plan our your “working” hours. Communicate that to whomever else is at home so they understand your schedule.

Location

When I first started my business I worked from the kitchen table, then moved to the dining room table. Both of these locations are near where the rest of my family is active during the day. Terrible idea. Pick a spot like a guest room and use it as your “home office”. If this is a temporary situation, just set up a folding table and chair. It doesn’t have to be fancy, just away from normal life to minimize distractions.

Two other great options are to either work with a coworker at their home to make it feel more “official” and to identify a few options locally you can work at. Coffee shops, cafes and restaurants which do NOT have waiters are great options. Think about the availability of a power outlet and avoid places like Starbucks which can noisy. Also learn how to use your smartphone as a hotspot to avoid open public networks.

Create To-Do Lists

It never fails. You get comfortable then think about laundry you could fold, Amazon shopping, social media…and it’s 3 hours later and you haven’t done anything yet. Keeping focus away from the office can be difficult. Create a “to-do” list which includes some built in time for non-work related things. This way you keep your productivity up while also getting things done during the day that you typically wait for nights or weekends to complete.

Enjoy the flexibility but also be careful of the risks

Do you have tasks you can do while mindlessly watching Netflix at night? You can do that. Prefer to work at 6am instead of 6pm? You can do that. Take a long lunch, try a spin class, take your kids/pets to the park, mow the lawn, you have a lot more flexibility when you’re not stuck in an office all day. Be mindful, however, of added risks. Want to work from Starbucks? Not only is the wifi not secure, neither is your screen from people sitting behind you. Thinking about e-mailing files to other employees? Contact your IT department to see if there are more secure ways to do so.

If you have people who report to you, talk to them about their plans and overall goals while working from home. Don’t micromanage, but keep in touch to ensure everyone understands expectations and responsibilities.

It’s never a fun experience. Knowing you’re about to lose your job. Wondering how much you have in your savings account (if anything). What to tell your spouse, kids, family.

• I went through a merger, survived that job scare.
• Lost a job due to a “perfect storm” hitting just as an Executive known to fire for anything walked in
• Had a consulting firm close its doors
• The department I went to after the consulting firm closed…outsourced a year later
• Lost clients due to IPOs being canceled, fearing a lack of work would result in a pink slip

Facing job uncertainty is always stressful. It can be lonely. Isolating.

It’s easy to panic, and understandable. But don’t. In fact, don’t…

1. Go complaining on social media
2. Complain to your boss (he/she might be in the same boat as you)
3. Go fire off an old resume to 50 different headhunters/HR people

Here’s what you should do though.

1. Examine the situation. When my department was outsourced I was given the option to move to another department. I was also given the option to interview with the Big 4 firm which was taking over the IA function (OK seriously, any Executive which automatically recommends a Big 4 for outsourced IA should be immediately terminated….but I digress).
   • Neither option was for me, but I had to stop and at least give those opportunities some consideration
2. Before you update your resume, update your LinkedIn profile.
   • Seriously. This is your public facing resume. Take some time, make it really look good.
3. Figure out what you want in your next roll.
   • What did you hate about your current/last job? Figure out what will make you happy. Identify several key aspects that really resonate with you, then keep them in your focus during your job search.
4. Go live on LinkedIn for a while.
   • First, reach out to everyone you’ve worked with in the past. If you’re not connected on LinkedIn, send those connection requests asap. Follow up with polite messages but DO NO immediately go into “I need a job please help me”.
   • Think about target businesses you’d like to work for in your area (or target location if you want to move). Then start connecting with the person you’d report to, their boss, and the HR people.
   • Connect with recruiters. All of them. LinkedIn’s search function is very good, use it. Also, you can mark your profile as a job seeker, that’ll help recruiters know you’re looking.

“And here comes the sales pitch”

Nope. Re-Vision Management Consulting is not a placement firm. We don’t do recruiting.

However.

We gladly help job seekers AND those looking to fill their own permanent positions…for free.

Seriously. no strings, no gimmicks. You see, I’ve been there. Needing a job, praying something will pop up. The last thing you want is a placement fee to get in the way of your next interview.

It’s simple. If you are looking for a new job, or if you are looking for someone to hire, people have to know about it. Post what you’re looking for on LinkedIn. If you see others posting about their job search, hit “like” or share it, or comment on it. Then your network will also see the post. If your search is in secret, send me an IM on LinkedIn or e-mail at thomas@r-vmc.com Discretion is completely understood and respected at all times.

Good luck, to anyone looking for work or looking to fill an open position.

About 9 years ago I had a client who had aspirations for a future IPO. Their core operations were top-notch but they had more of a “cowboy” culture which led to inefficiencies. Does this sound familiar to you?

After talking to numerous department heads it was clear Supply Chain (Silo A) didn’t talk to Accounts Payable (Silo B) who didn’t talk to Accounting (Silo C). Not only did this make the implementation of internal controls more difficult, it also led to a large amount of headaches throughout the organization. If AP didn’t know about expenses then Treasury couldn’t forecast cash needs. If Accounting didn’t know about inventory receipts in the proper period then their liability accruals would be inaccurate.

After some discussion it was clear, it wasn’t that these departments didn’t care, they didn’t KNOW what information was needed by various departments and WHY that information was needed.

Another client recognized they had communication issues and asked for assistance. Over the course of one day we had multiple departments in a conference room with a blank flow chart on the screen. As we went through the process of discussing what each group was responsible for the flow chart was created live on screen. Many times the conversation would stop in order to discuss ways one group could adjust a simple step which would make future steps by other departments easier.

At the same time we also helped them identify key internal controls to put into place to reduce the risk of potential fraud and errors. One productive day led to thousands of hours saved over the rest of the year (and every year thereafter).

Taking the time to understand the needs of other departments within your business can solve so many issues, save money, and potentially prevent great employees from leaving due to frustrations with other departments. Thing about the flow of information in your company and talk to those department leaders about how you can work together to strengthen your organization.

In 2017 I had met a potential client who provides a software as a service (SAAS) and had customers asking about an SOC report. This client was (and still is) great at what they do, however they were unfamiliar with the requirements of SOC reports, internal controls and the related requirements.

This company also recognized the value in having a good SOC report and the way their customers (and future customers) would respond to having this “feather in the cap”. Management immediately put a focus on ensuring everything related to the implementation and design of the related control processes was addressed properly and quickly.

We worked with them step-by-step to create the management portion of the SOC report, identify control evidence requirements and implement safe guards to ensure each control was in place throughout the reporting period. We worked with the external audit group to ensure both parties were on the same page with audit evidence requirements, population concerns, and any other potential “hiccups” which might occur during the audit. Working hand-in-hand with management and the audit group greatly improved communication and strengthened the overall control environment of the company.

Did this hard work pay off? The external auditors spent very little time onsite, audit requests were quickly and easily responded to, and the employees of the company barely knew an audit was even taking place. In the end the SOC 2 Type 1 (and later on, SOC 2 Type 2) was considered one of the smoothest audits the external auditors had that year.

Communication, focus and attention to detail resulted in an almost pain-free audit which provided a valuable SOC report for the company and its customers.

Considering an SOC report for your organization? We can help with that decision, recommend several great external audit groups and then provide hands-on guidance throughout the process. Contact us at SOC@r-vmc.com or 936-494-5135

I have had many people ask me who my Partners are at Re-Vision Management Consulting, LLC. The answer is simple, I have no business partners. And that’s on purpose.

It’s actually very simple. For every project I will put on the absolute best people available. The goal is to always staff projects with the strongest people in that area. Business Partners can often look more at profit margins and let that be their guide, I’m against that point of view. They let their own % of profits influence their decision making and that’s unfair to the clients.

I have a goal income I’d like to make and it’s nowhere near what a typical Owner/Partner of a consulting firm makes (probably a little lower than my wife’s preference…but that’s my problem). So what happens after I hit that mark? It’s simple, new projects will see slightly lower rates on the proposals. Likewise, existing projects will suddenly start seeing discounts on their invoices.

Also, more of the profit will go to those doing the work for me. Imagine being a consultant with a contractual agreement or an employee expecting a salary and certain bonus, then suddenly your checks start having more on them.

What if there’s a $30 per hour profit margin and suddenly $5 goes back to the client, $5 goes to the people working on the project, and $5 gets donated to a charity or additional training or helps pay for a client’s Thanksgiving feast at their office.

A recent proposal included a $10,000 incentive to start a bit earlier, another included incentives to sign a long-term agreement. There were no meetings or discussions regarding those decisions, I made those decisions for the benefit of my clients and my firm. It was an easy win/win that I could include in the proposals.

I have no office space rented out, and have no plans to do so. I’d love to build this practice to 50+ people, but I still wouldn’t have any office space. Why? Because my clients deserve the opportunity to save some money, not pay for me to have a nice shiny office. I’ll sit in my client’s corner offices and enjoy their views as we discuss whatever topic needs to be discussed.

When I say I run my firm different than my competitors, I mean it. When I say I bring only the best consultants to a project, I mean it. When I say my rates will beat anyone, I mean it. If I can’t provide top talent or can’t get the rates down to my target range…I’ll turn down the opportunity for the project or advise my client of the shortcoming.

You never have to worry about that changing with Re-Vision Management Consulting, can you say the same about other firms you’ve worked with?

Contact us today and let us show you what a great consulting firm can really do. thomas@r-vmc.com or 936-494-5135

Publicly traded companies are required to have internal controls, internal audit departments, Audit Committees and all of the related reporting and documentation in order to (among other things) reduce the risk of fraud within the organization. Private companies…it’s your company so you can do as you please. Now I’m a big proponent of keeping the government out of private business, however the lack of regulatory requirement doesn’t mean your risk of fraud, theft, etc. is any lower than your public counterparts. Note: links to data, if not linked within the article are listed at the end of the page.

The 2018 ACFE Report to the Nations noted business with less than 100 employees averaged $200,000 per fraud scheme.

“I run background checks on all of my new hires, none have prior legal issues.” That’s great, only 4% of convicted fraudsters have prior fraud convictions.

“All of my people have been here for over 10 years, I’d know something by now.” If an employee has been with the company less than 5 years the average loss is about $100,000. If they’ve been with the company more than 5 years…double that amount.

“I trust each person who works for me, I know them personally.” As they say in the Italian Job, Trust anyone, just don’t trust the Devil inside them. Take for example the Collin Street Bakery incidence. The Controller had worked for the company about 6 years before he decided to take a little money from Petty Cash. The Controller was responsible for accounting, accounts payable, treasury and various other functions. “Trust” in this one person led to about $16 million being embezzled over a 9 year period. He knew the business, figured out how to hide his theft through careful recording of fraudulent transactions. How did he get caught? A new hire in the accounting group was looking over a bank statement and almost immediately identified oddities. One person. A second set of eyes, a simple control that was ignored by a private company.

Examples can go on and on, the latest would be Theranos, who is currently being investigated by the SEC and the Department of Justice. Many experts are surprised by the SEC’s involvement, stating this is the first time they’ve ever heard of the SEC investigating a venture capital-backed company.

As with any risk, a company must evaluate the cost vs benefit aspects. Bringing in a “Big 4” firm or larger consulting shop might not make much sense from a cost perspective. Likewise, hiring full time staff to create an internal audit function also might not make economical sense.

This is where the smaller “boutique” firm, such as Re-Vision Management Consulting, LLC, can play an important roll. We work with our clients to identify the high-risk areas of your business, create a reasonable audit plan to address these risks, and work along side these businesses to come up with simple, cost-effective solutions to minimize the potential for fraud, theft and similar risks. Our solutions are also easy to migrate into a permanent internal audit function if you choose to do so down the road.

We broke down the math in this article, next we invite you to contact us at thomas@r-vmc.com and we can go to lunch (who doesn’t like a free meal), and discuss how we can help identify any current fraud as well as reduce future fraud risks.

Data sources:

Click to access 2018-RTTN-Key-Findings.pdf

http://www.acfe.com/report-to-the-nations/2018/

https://www.wired.com/2016/04/theranos-investigated-fraud-weird-private-company/

https://features.texasmonthly.com/editorial/just-desserts/

Before I begin, I’d like to point out that this post does not have any specific consulting firms in mind. This is not an attack on any company I have worked for, along side of, or competed with during my 11+ years in this industry. If you take my article personally then it might be a good indicator of a need to look inward rather than outward.

Think about specific consulting firms you’ve interacted with over the years.

There are three different types of consulting firms you encounter. 1) The Big Dog – larger firms which you know a Partner or Senior-level person. You see this person a few times a year, you know the Manager assigned to your account pretty well but most of their team rotates for various reasons. 2) The Mid-Tier firm – almost identical to the Big Dog, but with slightly lower rates and less “prestigious” name. 3) The small and boutique firms – You probably know one or two of the Partners, most of their staff sticks around year to year but they always send in one or two that you aren’t happy with but put up with since the rate is considerably lower than the other two.

Every one of these firms are failing their clients and their employees. Every. Single. One.

Think about it, the Big Dogs charge you “Big Dog” rates but love to bring in people fresh out of college as a large percentage of their team. Which means you are paying higher rates to train their people for them. Don’t worry, the Partner over your account will “review” the final work, but considering all of the issues being reported in the news about those same firms… I sometimes question the quality of those reviews (or they’ll go over the top and blind side you with concerns when you’re moments away from critical deadlines). But don’t worry, they’ll charge you Partner rates for the reviews, just to make you feel better about it.

The mid and smaller firms rarely use the rookies and their Partners normally do a better job reviewing the work, but they have a major flaw in their business model. They focus on their name and the next big client rather than their employees. Professional growth, compensation for new business, etc. are severely lacking. They’ll have the nice office, spend money on “Business Development” people, be high profile sponsors at various conferences and events, but then cut it short on their real assets, their people.

Business Development at its finest

So now you’re paying more reasonable rates but every time they show up you notice half (or more) of the team has changed. You ask about latest trends and their response typically implies they have no clue but they’ll go Google it. Their company provides services you could probably use but they never bring it up so you don’t even think to ask but don’t worry, once or twice a year the main salesman, I mean Partner, will be sure to increase your rates at the annual project renewal proposal. You know the one, the proposal that was copy and pasted from last year’s that rarely provides anything new except for known buzz words like “Rev Rec” or “Leases”. Or you’ll hear from their Business Development person whom you don’t know, try to sell you something you don’t really need then when you ask their people sitting in your offices they roll their eyes and apologize “it’s the boss’ Sister-In-Law, I’m so sorry she bothered you”.

Now the people on your team are hesitant to bring up any potential projects which could be beneficial to your company because they either don’t want to come across as salespeople or then don’t want to mention anything to that Business Development person in fear of another bungled sales call.

The next time you consider a consulting firm ask them these important questions:

1. Who (specifically) will be on the project
2. How does the firm ensure employee retention is high
3. What other services do they do
4. What are ways to get discounts on the services (added services, longer-term deals, referrals, etc.)

What most consulting firms focus on

You’ll learn very quickly if the firm cares about their clients and employees, or just about that P&L. If they only care about the P&L, then they’ll negatively impact yours as much as you allow them to. If they focus on their clients and employees, everyone will come out ahead.

And yes, Re-Vision Management Consulting, LLC can answer every one of those questions and show why we’re the best choice for the services we provide. Contact us as info@r-vmc.com and let us give your company a new perspective.