Is accounting quality at risk?

Is your business falling behind on finance automation? A new survey shows only half of companies are making progress, despite automation being key to growth. How does your company compare? 

In Today's Newsletter:
⚫ From family restaurants to fintech, a payroll startup story
⚫ Accounting quality at risk due to staff shortages
⚫ PKF O'Connor Davies receives investment
⚫ Discover delays Q3 due to accounting dispute with SEC

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From family restaurants to fintech: How a payroll solution was born

Helping out in his parents’ Mexican restaurants while growing up in Denver, Arthur Garcia experienced the struggles of small business ownership firsthand — especially the headaches of accounting and payroll. Those early lessons stuck with him, sparking a mission to empower Latino entrepreneurs who are often underserved by traditional business services. Together with Gustavo Suarez he co-founded Trez, a software startup that has been shaking up payroll and benefits since 2022 by creating solutions that actually get what small businesses need. Here, Garcia explains how his experience in both family restaurants and leadership roles at Paychex and Xero helped shape the vision for Trez, and how the company is making a difference for small businesses today. —Brent LeBlanc

 What inspired you to create Trez, and what problem were you aiming to solve in the payroll and benefits industry?

Trez was inspired by my co-founder’s and my experiences working with small businesses. Growing up in Denver, I saw my parents struggle with accounting and payroll at their Mexican restaurants. Later, at Paychex and Xero, I realized how underserved the U.S. Latino market was, especially with limited Spanish-language support. In October 2021, my co-founder proposed starting a payroll company. After researching, we found a strong demand. Latino-owned businesses accounted for 36% of new launches in 2023, and with one in five U.S. workers identifying as Latino, the need was clear. Trez’s mission is to deliver simple, valuable payroll and benefits services tailored for this community, with plans to expand into financial services.

What are some of the biggest challenges and lessons you've learned while building Trez?

Our biggest challenge has been accessing capital for growth. Fundraising has been tough, and we’ve operated lean to extend our runway. Many investors see the market potential but are waiting for a lead investor. A key lesson has been to “fail fast” and trust our instincts, especially with personnel decisions. Early delays caused costly setbacks, and I learned the importance of asking for help. Founders should lead sales initially, but I became a bottleneck by staying involved too long. Delegating onboarding has allowed us to streamline operations and grow faster.

How do you see the payroll and benefits industry evolving in the next few years, and what trends are you most excited about?

Payroll and benefits have traditionally served large enterprises. About a decade ago, new players introduced tech-driven, DIY solutions for startups. At Trez, we focus on U.S. Latino-owned businesses, where cultural understanding is key. I foresee more specialized payroll solutions for specific industries, like "Payroll for Entertainment" or "Payroll for Construction." I’m also excited about earned wage access, which could replace predatory payday loans, and the growth of international payroll as U.S. businesses engage global talent.

 This interview has been edited for length and clarity. Head to The Net Gains for more.

Above: Arthur Garcia. (Courtesy of Garcia)

Half of organizations lag in finance automation

Tax and finance pros know transformation is key, but most companies are still playing catch-up. Vertex Inc.’s 2024 Global Tax Transformation Report surveyed more than 600 industry professionals, and while 80% agree automation and digital transformation are essential for growth, only half of organizations have made significant progress. The biggest hurdles? Limited IT support (34%), budget challenges (31%) and a lack of skilled talent (28%). (CPA Practice Advisor)

Service packages 101: A guide for modern accounting firms

Struggling to streamline your services and boost client satisfaction? In the latest episode of the Modern CPA Success Show podcast, Tom Wadelton and Adam Hale reveal how smart service packaging can improve your accounting firm. From crafting CFO and client accounting tiers to mastering transparent pricing, they share actionable strategies to save time, improve efficiency, and strengthen client relationships. Can one of these tips help your firm get to the next level? (🎧 Summit Virtual CFO by Anders)

 What we're watching: "Will AI take our finance jobs??" Despite advancements in AI, there are specific roles and tasks that it just can't do. Check out 5 finance jobs AI won't replace to ease your mind.

What we're learning from: This Tiktok creator who gives bite-sized accounting lessons that serve as a great intro to those new to the accounting industry, and a nice refresher for the pros. 

 What's in the news: An article by NBC News takes a look at the financial and fundraising situation of the Kamala Harris 2024 presidential campaign.

 What we're reading about: In this opinion piece about COP29, a two-week climate summit, the writer explores why the world's finance leaders were noticeably absent.

80%

of small businesses are operated solely by the owner without any employees. (Forbes)

• AI Accounting: Automating 90% of tasks for streamlined operations
• Crypto Cash Flow: Bitcoin to power 25% of revenue by 2025
• Staffing Crisis: Accounting quality threatened by workforce shortages
• Sustainable Impact: How green accounting drives social change
• Major Acquisition: Investcorp, PSP buy PKF O'Connor Davies

SEC accounting dispute delays Discover's quarterly filing

Discover Financial Services announced it will delay filing its Q3 quarterly report with the SEC due to an ongoing dispute over how to account for a credit card misclassification issue. The company revealed in a Nov. 13 filing that SEC staff disagreed with aspects of its proposed accounting treatment for the matter. (Yahoo Finance)

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The Net Gains is curated and written by Paul McCormack and edited by Bianca Prieto.