Best in class. A benchmarking success story for DLC Technology Solutions.

 

We talked to owners Darren Crane and Rob Walsh from DLC Technology about delegating their responsibilities to an accounting firm that understands their industry and technology. This is their experience.

 

Read about:

• How offloading the accounting enabled them to grow (despite negative past experiences of outsourcing)
• Switching from QuickBooks Desktop to QuickBooks Online and how others have done it.
• Why benchmarking is the answer to the questions you’re asking about performance and success.
• How you can benchmark your business against successful MSPs worldwide.

 

In the dynamic world of MSPs, DLC Technology, led by Darren Crane and Rob Walsh, found themselves in a whirlwind of challenges—overwork, burnout, incorrect pricing. On top of that, an unresponsive, inaccurate accountant. Nervous about outsourcing due to past negative experiences, the DLC partners were cynical of outside expertise.

 

“No one could be trusted to look after the details.”

 

Until engaging with us in 2022, Rob had been performing most of the CFO functions for DLC. Between them, the partners had been managing tax filings and accounts, invoicing, sales tax and bookkeeping.

Rob and Darren had never found a bookkeeper they could fully rely on, but not for lack of trying. Three times they had attempted outsourcing to external bookkeepers and accountants. Each time had been a total failure.

“The number one issue with all of them is that they did not understand our business. They had no desire to learn it… We tried hiring internal people and that worked a little better in one instance, but not really. Rob still paid the bills because they really couldn’t be trusted with actually paying the bills. I would have to go in at the end of every calendar year and spend days cleaning up transactions before we could file taxes”

The DLC duo were in a Catch-22. More than most, they understood the power of reliable data. The trouble was, they wouldn’t get it unless they tried another accountant.

Referred by a trusted source at Wise-Sync, Darren and Rob decided to explore a strategic partnership with Red Earth CPA.

 

“With Red Earth it’s the complete opposite. It’s the first time we’ve ever let go of the reins. And now I’m very comfortable…We have regular check-ins with the Red Earth team. Things are just happening, they are.”

 

The first year of working together saw some great results for DLC.

• In the first 90 days we put them through our comprehensive onboarding process.

DLC Technology began a meticulous mapping of vendors and a chart of accounts. This process included the strategic allocation of wages, so Darren and Rob could understand and compare gross profit. We set up the AP platform and receipt management, training them on everything. This onboarding phase really sets the stage for a big-picture understanding of their financial landscape.

• We set up and optimized their QuickBooks Online (QBO) file to function properly.
• While Darren had already transitioned from QuickBooks Desktop, we established the correct systems within QBO to reduce the time spent on accounting admin.

To carry out accurate and timely bookkeeping, we recommend all MSP’s move from desktop-based accounting software to an online solution.

Most of the MSP owners we meet want an automated back office to support their ambitions for growth, but it can look like an overwhelming task to take on. Especially when you’re the person managing the day-to-day finances and you have little faith in outsourcing.

That’s why our conversion service exists. Instead of spending hours of valuable time working out what you need and how to move your data, we walk you through the process confidently and peacefully. As we go, we suggest the best apps and products for your MSP, tailored only to the things you need.

On our suggestion, Darren and Rob decided to transition from QuickBooks Desktop to QuickBooks Online (QBO). We integrated a sync to QBO with ConnectWise (via Wise-Sync) and automated their Accounts Receivable (via Wise-Pay).

• We had regular check-ins with the DLC partners to deliver insights from the bookkeeping, checking in daily to code and categorize transactions.

“We have regular check-ins with the Red Earth team. They’re really digging down into the nuts and bolts of the business and helping refine and further define where we have different service lines that need examination and reporting differently – so we can really understand profitability”.

 

“The bookkeeping is fantastic. Now I don’t have all that day to day stuff. I can concentrate on things that are bringing money into the company… but the biggest success is benchmarking”

 

A year into our work together, we recommended Darren and Rob engage in our benchmarking service to get a better understanding of their position in the industry.

At the time, they were making gut-feel decisions on things like:

• Pricing: were they pricing properly? too expensive or too cheap?
• Team: were they staffed correctly? enough people or too many?

Connecting their data to Service Leadership, we produced a benchmarking report every quarter. This report provided the DLC leaders with an abundance of best practice statistics from MSPs worldwide. The report benchmarked them against both the industry average and best in class.

To prepare for this level of detailed reporting, we had multiple meetings to understand DLC’s accounting codes within the PSA (ConnectWise). We needed to make sure the way they were billing was reflected in their chart of accounts.

The benefits of benchmarking became evident as DLC Technology validated their staffing levels and pricing accuracy. They learned:

• They were slightly overstaffed and paying their employees well but in the wrong way.
• Their gut instincts about pricing were correct – they were underpricing and it was costing them.

“We were fumbling through the dark making our best guess and hoping we’re right. But that very first report! What it put on paper is what Rob and I felt in our gut running the company. Now we have validation and a way to actually look at it compared with all these other companies like ours. We know where we’re doing things right and where there’s room for improvement. We know how we can move the company forward, grow and be more successful. We never had that before. It was our best guess or our gut feeling”.

With a significant increase in prices, substantial revenue growth, and Darren’s ability to step back from daily operations, they realized they were no longer just surviving but thriving.

 

Being able to benchmark your business against others worldwide requires a deep understanding of your accounting. Our support puts you in the game.

 

Armed with benchmarking data, DLC Technology could confidently drive their business forward, making informed decisions that positively impacted their bottom line.

But there’s a reason this step came second to building a reliable accounting process…

You need to have a detailed understanding of your accounting for benchmarking to work.

For Rob and Darren, it wasn’t an overnight success story. To be able to use their financial data to improve the health of their business, the DLC partners needed:

• To have the financial data in the first place
• To understand the financial data and what it meant for their progress
• To be given the time and bandwidth to focus on benchmarking and the strategic decisions that would inevitably come from it.

We specialize in the back office of MSPs and great accounting is our bare minimum.

By partnering with Red Earth CPA, DLC Technology not only transformed their operations but also laid the foundation for sustained growth. This case study serves as a testament to the transformative power of strategic partnerships and the invaluable benefits of benchmarking for a savvy MSP owner.

When asked what advice Darren and Rob would give to other MSP owners, they simply said:

“If you’re a MSP owner who is burnt out and ready to sell because you think there is no other option, try this instead.”

Want to be the next MSP to see success from a Red Earth partnership? Complete our financial performance scorecard to get some initial insights. It’s free, takes 10 minutes and we’ll send you a personalized report instantly.