In this pre-episode, we introduce our speakers and what topics we will be covering over the next several months and explain how Clayton & McKervey got involved in Industrial Automation in the first place. The program’s host is Bryan Powrozek, Senior Manager in the firm’s Industrial Automation practice. He is joined by Shareholder and Industrial Automation Practice Leader Tim Finerty.
Transcript:
Announcer:
Welcome to the Sound of Automation, brought to you by Clayton & McKervey, CPAs for growth-driven businesses.
Bryan Powrozek, Senior Mgr., Industrial Automation:
Hello, and welcome to the first episode of the Sound of Automation podcast. My name is Bryan Powrozek. I’m a CPA with the firm Clayton & McKervey (C&M), and I’m here today with my colleague, Tim Finerty. Tim is the shareholder responsible for our industrial automation practice. And so before we got into the main episodes for this podcast, we just kind of wanted to go over, give a little background, and why a CPA firm would want to host a podcast focusing on industrial automation. So, Tim, I guess, since this is our first episode and some folks listening might not be overly familiar with C&M, can you give me a little bit of background on the firm?
Tim Finerty, Shareholder, Industrial Automation:
Sure, Brian. When I started with Clayton McKervey about 20 years ago as a manager, we were about 35 people providing really general tax and accounting services, mostly supporting the automotive supply industry. Now we’re over 70 people, still focused on entrepreneurs and closely held companies, but really looking to be first, a business advisor helping our clients, and now specifically in that industrial automation focused segment.
Bryan Powrozek, Senior Mgr., Industrial Automation:
And that’s something that people may be kind of scratching their heads. So a CPA firm, industrial automation, how did you end up stumbling across this industry?
Tim Finerty, Shareholder, Industrial Automation:
Being involved in the business community, I’ve had the pleasure of working with an organization called Automation Alley for almost 20 years, basically when I started at the firm. It was an organization that we, as a firm, were involved in, and so I got involved in that. And then about five years ago, while I attended my fourth trade mission to Mexico, I met an individual named Bob Doyle, who was in charge of the RIA division for A3, and RIA is the Robotics Industry Association, and A3 is the Association for Advancing Automation. As we got to talking and different things, I really got interested in understanding a little bit more about the industry. So Bob had invited me to attend a conference, which they have annually. And this year, it’s canceled because of the COVID and different things, but it’s in January. And so I attended in January, 2016, my first one, and at that conference, I found that there were a lot of companies that were growing and needed help with that growth.
Tim Finerty, Shareholder, Industrial Automation:
And really around that same time, Tom Kelly was announced as the new Executive Director for Automation Alley in late 2016. And Tom quickly changed the direction of Automation Alley as well to one focused on Industry 4.0. And so with the Industry 4.0 focus of Automation Alley, and then also with Bob on A3 … Bob recently, too, which is very interesting, just took the CEO position at the Michigan chapter of the Certified Public Accountants. So he’s the CEO of the MICPA now. So him also getting into accounting from automation is going to put a focus probably on understanding how that automation works. And so it’s really a great time to be involved in that and really trying to help become a big advisor to that area.
Bryan Powrozek, Senior Mgr., Industrial Automation:
And it’s interesting, you mentioned there being a big advisor to it. I think there’s a big push in public accounting to be this trusted advisor and have that role with your clients. What is it about this specific industry that really kind of drew you in and attracted you to working with these clients?
Tim Finerty, Shareholder, Industrial Automation:
Well, there was one really big thing that, I think, drew us in right off the start, and that was the research and development credits. These companies that are in this automation space are building something new. And the research credit is a tax credit that most of the time has always been done by specialty firms, and these specialty firms, basically that’s all they do is research credits. And a lot of times they’re doing them for Fortune 500 companies, different things like that. And what we found in this industrial automation segment is you got a lot of small to mid-sized businesses, businesses that are in that two to $10 million and really getting the service that you need from a CPA firm that understands both what your normal tax and accounting stuff is as well as R&D credit is a huge benefit.
Tim Finerty, Shareholder, Industrial Automation:
And that’s one of the things that we found in this industry is trying to get into being a one-stop shop. Even though we’re only 80 people, we can offer a lot of different things. We’re not just doing compliance tax and accounting, right? We’re able to offer now the R&D stuff. We’re able to do transaction services to help companies looking to buy or sell parts of their business or expand. Succession planning, we’re seeing a lot of companies in this industrial automation where you had engineers that started their company 20, 30 years ago, and now either are trying to do move it to a second generation, or they got to find an out to where they need to go. So it’s really, there’s a lot of nice opportunities in this industry.
Bryan Powrozek, Senior Mgr., Industrial Automation:
Excellent. Well yeah, and I kind of view, I think when you came to me with this idea of starting a podcast six, eight months ago, whatever it was, I kind of viewed this as just another avenue where we can get that information out there, right? You talk about second generation business owners and hopefully in a future podcast, we’re going to try and bring in some of our clients who are transitioning from the first to second generation of ownership to talk about some of their challenges.
But this is really something I see is a logical move for us, right? We go from publishing articles and blog posts and things like that. And everybody’s so busy now that you can just download the podcast to your phone, you can listen to it while you’re driving out to a client or something else. And I think one of my personal goals for this is I’m kind of approaching this the same way I’ve always approached any kind of training I’ve gone through, right? If I can take one useful piece away from it, then it was worth my time investing in it, and some that I can apply going forward. So just to give people out there, listening an idea, what are some of the things that you want us to cover going forward in future episodes so people will have a reason to tune back in?
Tim Finerty, Shareholder, Industrial Automation:
Well, I think there’s quite a bit of different things. Internally, I think we want to talk about how can we help companies with transactions? What is it that you need to be thinking about when you go through this? And it can be anywhere from, “I’m thinking about bringing on a partner” or “I’m looking to sell, and maybe I need to bring in an investment banker to help me with that process.” We’re also looking at data analytics, how to use that better, both internally and externally. So we want to be able to showcase some of the things that you can do with data, right? And that’s where industry 4.0 comes into play, that you’re starting to see artificial intelligence, big data, cloud computing, all those things, right? We want to talk about those and focus them in on this segment.
We’re also looking at how do we bring in maybe fraud or internal audit, digital transformation. We’ve got a lot of clients that are focusing on that. So we have some experts that we’d like to bring in to talk about those things as well. And then really looking at what is industrial automation mean in Metro Detroit? How has it been changing the dynamic? I mean, one of the things that we’ve talked with and learned about, right, was when we talked to the Detroit Regional Partnership, right, and they were looking at how do we expand different types of industries? And one of those industries was really the garment industry, right? And during those discussions, we found out that really most of the garment industry is all manual labor, right? There’s no automation involved. How do we take the expertise that we have here in Metro Detroit, or across the country, and really get people excited about how do I change the dynamic?
Yeah. People think about that automation is going to take away jobs, but it’s just going to change the way we do jobs, right? It’s not going to … It’s going to open up ideas for different things. I think I was reading something, and it might’ve been even on the Automation Alley website, 65% of the people that are getting an education now are going to go into something different than we did, right, into this automation type space, data analytics, big data, some of those types of things. So it’s really exciting. And if we can try to generate both from a financial, engineering, and just business sense some momentum in this space and learning and different things that people want to do, that’s what we’re trying to promote.
Bryan Powrozek, Senior Mgr., Industrial Automation:
Well, excellent. Well, Tim, I appreciate you coming in today and taking a few minutes to kind of lay this down and hopefully for those listening, this gives them a good idea of what we’re hoping to do in the future, and a reason to turn back in. So thanks again for your time.
Tim Finerty, Shareholder, Industrial Automation:
No problem. Thanks for having me.
Announcer:
Thank you for tuning in. Don’t forget to like us, subscribe, and share on social. To learn more about Clayton & McKervey, visit us claytonmckervey.com. That’s C-L-A-Y-T-O-N-M-C-K-E-R-V-E-Y.com.
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