Navigating the New Landscape of Accounting: An Interview with Matthew Lescault

There’s a difference between fixing what’s broken and improving what already works.
Matthew Lescault doesn’t talk about finance transformation in buzzwords. He talks about timing, fit, and process. Whether it’s choosing to go deep in a single vertical, refining a system that isn’t technically broken, or bringing in the right kind of CFO at the right moment. It all comes down to knowing your business and acting accordingly.

In this Q&A, the TydeCo™ CEO offers a practical view on specialization, process design, leadership roles, and the future of finance. The thread running through it all: clarity over complexity, and decisions shaped by context.

Specialization vs. Diversification in Advisory Practices

When building a strong advisory practice, what are the pros and cons of going deep in one vertical versus spreading across multiple industries?

Matthew Lescault: I don’t think there’s necessarily a con in going into a deep vertical when it comes to any kind of consulting solution or service, whether it’s in accounting or other professional service organizations. The reality is that when we talk about industry focus and specialization, you can get really deep within the knowledge and therefore the solutioning that you do for your clients.

Every industry, especially in accounting, has nuances around what key performance indicators are important to them, what drives revenue, what are target profit margins, and what the industry in general looks at and assesses themselves on. If you’re broad across multiple industries, you may not have that expertise. What will end up happening is that you’ll lose clients to firms that can show a deep understanding of those solutions.

I think the one perceived con that a lot of firms have, or at least historically have had, is that they feel they’re turning down potential opportunities when an industry they don’t focus on comes looking for services. But the real concern is whether you’re providing services to organizations you don’t know enough about and therefore not delivering really good services, which could affect your reputation or brand.

The reality is that when we talk about industry focus and specialization, you can get really deep within the knowledge and therefore the solutioning that you do for your clients.

Spotting and Addressing Process Friction in Finance

When it comes to process friction in finance, how do you spot issues early, before they hit reports or KPIs? And how do you deal with teams that get stuck trying to perfect the process instead of fixing the problem?

Matthew Lescault: When we talk about processes, it’s an ever-evolving approach for businesses. The process that works today may work, but is it as optimized as it could be? Internally, for our own organization, we’re always reviewing, revamping, and assessing the processes that we’re deploying. We want to make sure that we are being as efficient as possible.

The question talked about fixing the problem, but what if your process friction isn’t broken? It’s not that you’re fixing a problem, but you’re enhancing it. For me, that’s a different conversation. Yes, you can have a bad process that needs fixing, but you may have a good process that could be even better.

I really like to have team members challenge what they’re doing, ask the why, and ask how it could be better. That’s how we go from worrying about perfection to worrying about effectiveness. For me, that’s the important part. I don’t believe in perfection. I think perfection gets in the way of great. Perfection tends to slow us down. I don’t think anybody’s perfect, and I don’t want us to try to strive for perfection. I just want us to strive to learn and get better every day at what we do.

I don’t believe in perfection. I think perfection gets in the way of great.

Understanding the Role of a CFO at Different Stages

What’s the difference between an early-stage CFO and a growth-stage CFO? How can you tell when a CFO is no longer the right fit, and when does it make more sense to bring in a fractional CFO instead?

Matthew Lescault: I like to shift the question a bit. Let’s remove CFO from the conversation and put any position. There are different stages of business in general. You have startups, organizations that have been in the marketplace for a long time and are set in their ways, organizations that go into growth mode because they have other ambitions, and organizations that are going into an exit phase. In each of these phases, you look for specific types of individuals to be in leadership positions, whether it’s a CFO, CEO, COO, and so on.

Specifically, for a CFO, an early-stage CFO needs to be defined. Are we early stage and going for an IPO? That’s a different early-stage CFO than an early-stage organization that is still privately held. Is my CFO a “build it” kind of CFO? By that, I mean someone who can get in, create the process, and do everything else, but they’re not the best at maintaining what’s there.

That’s when I look at the concept of when fractional CFO or fractional support makes sense. Fractional support or employment makes the most sense in those build moments within organizations because there are people who are really good at that. They come into organizations with a specific goal on how they’re going to get the organization from where they are today to where they need to be tomorrow and then hand the reins to someone who can continue maintaining what that is, tweak, and make it more effective.

That person who makes that change is a change agent, and that’s what they love to do. They want to finish here and then get to the next place and do the same kind of thing. That’s where I find fractional work to be really valuable for organizations. In each stage, I could see a fractional component come in. For example, in startup mode, we have fractional support to bring in someone to integrate finance and tech components, and then they hand it off to someone who will maintain it.

Later, if we want to engage a new market, go IPO, or have investment capital, we may want to bring in another fractional CFO that specializes in that and structures organizations to be attractive to that type of transaction. Once they’re done with their job, the next person who has lived in that maintenance world of reporting to boards, shareholders, and outside investors comes in, and so on.

I don’t think there’s any one moment where it works. It’s really inflection points within an organization that dictate the value of that type of support.

It’s really inflection points within an organization that dictate the value of that type of support.

The Evolving Role of the Modern CFO

In your view, what role does the modern CFO play in shaping how a business learns, not just how it earns, and what tips can you offer CFOs wanting to communicate their insights and impact more effectively to their relevant stakeholders?

Matthew Lescault: I think the modern CFO is taking a strategic approach on how they turn data into stories or storytelling, and how they allow that storytelling to impact the way organizations operate or react to financial information. This is essentially learning to take something like accounting or finance, which may not be the core competency of some other leadership, and turn that into data that can be consumed by those individuals because they operate from a different set of skill sets, knowledge, and experience.

Can we take finance data and teach the organization what that means to us? Why is it important? What are leading indicators and trailing indicators of what success looks like? Can we put this into definitions that are easily consumable? Consumable not only from a leadership perspective but downline into the entire organization as a whole so that the “why” to each individual is apparent.

If we only talk about what we’re earning and not what we’re learning, we’re not going to get people to really buy into what we’re trying to do as an organization. All you’re going to hear is they want to make more money and profit on our backs, as opposed to taking a step back and saying, “Hey, we’re doing this because we’re trying to achieve this goal. This goal is going to impact you in this way. The way we think is the best way to handle it are X, Y, and Z.” Now I’m making the important information relevant to the audience. We have to really understand at every moment who that audience is.

If we only talk about what we’re earning and not what we’re learning, we’re not going to get people to really buy into what we’re trying to do as an organization.

The Crucial Role of Internal Accounting Systems in M&A

The internal accounting systems of an M&A target matter a great deal. Can you elaborate a little on why these systems are so important, especially when evaluating a new M&A prospect?

Matthew Lescault: It’s an interesting question because in some ways it matters a lot, and in some ways, it matters very little. When you have a firm targeting acquisitions, they already have a set of systems in place. If your systems don’t match theirs, you’re going to get incorporated into their systems. Whether that’s on day one or day three sixty-five, there’s going to be a migration of systems. The firm being acquired is going to come into it.

What’s really important from the purchasers or the acquiring party is the sophistication of the organization. Even if they’re not using the same systems, if they have sophisticated systems and are using them well, it’s a good indicator that the organization will slide into the operations of the acquiring firm in a less disruptive way because there’s less learning to happen. It also speaks to the success rate of that acquisition.

One of the number one things we look at from an M&A perspective is client retention, staff retention, and whether different skill sets come together in a strong manner. Do they mesh well together? The systems being used and the sophistication of the organization tell a lot about that story. It means it’ll be less disruptive when they come over if they’re similar.

For example, if we’re a Sage Intacct shop and there’s NetSuite, if I’m acquiring a firm that’s using NetSuite internally and I’m using Sage Intacct, I like that there’s a lot of similarity between the two systems and the skill set needed to operate them. I feel comfortable bringing that over. However, if their finance was being operated on spreadsheets, it would be very risky for me to bring those people into the organization from a retention perspective to try to get them from using Excel up to a Sage Intacct or ERP level software. It would be far more challenging.

M&A firms look at these things as how to incorporate this organization as seamlessly as possible into our organization and what are key indicators that this will be successful. Internal systems are one of those indicators.

Even if the systems don’t match, sophistication does. A well-run finance function signals smoother integration and stronger long-term success.

The Future of Continuous Close in Accounting

From your perspective as a partner and outsourced accounting leader, what does the concept of Continuous Close truly mean for clients and what does it not mean? Fast forwarding three years from now, what do you imagine a mature Continuous Close environment looking like inside an outsourced accounting firm?

Matthew Lescault: When we talk about continuous close, I think this is a concept that’s really been pushed from Sage’s perspective and the development of how Intacct operates as an accounting product, a finance product, and so forth. Let’s talk about what continuous close is and isn’t for a quick second.

The first thing I’ll say is that your true monthly close never goes away, but it’s almost incorporated into your process. The idea of a continuous close, at least from my perspective, is one in which in real time, we’re always closing our transactions. So we’re always up to date. By closing transactions, I mean we’re posting it, reconciling it, but more from a soft reconciliation perspective. There’s still the fact that we go in at the month-end when we get our bank statement and do our process of reconciling the bank account.

From a continuous close perspective, if every day I’m essentially reconciling, when I hit the last day of the month and get that statement, I should just be able to hit a button and actually close it. So there is a reality that you still have that traditional close that happens, but it happens in the process of continually maintaining your books.

What does this all mean for organizations? It’s pretty obvious that data is there. What’s happening in real time, what’s happening today, is reflected in the reports I get today. The decisions I make based on that are in real time to what is operating as an organization. If I get a set of information today that was really impacted by data, if I’m told by one of my internal stakeholders that we have an issue, our revenue projections are down, but the reason that information was presented was because of data that three days ago was available but not actually dealt with, then I’m thirty days behind in being able to react to that. It may take me another thirty days to actually make an adjustment, where now I’m a month outside of that situation.

The thing that really brings value to me is how I can quickly adapt to changing times. Every day something new is thrown, especially to someone in my seat, a CEO of an organization that’s in multiple countries, a CEO of an organization that has multiple service lines. Every day there is something that I’m brought that I need action on. If I don’t have the data in front of me, how do I know if I’m making the right decision in that moment? I have a bunch of people that rely on my decision-making. The reason they are here with an organization and have trust in the organization is because they trust that I can do my job well. I can only do my job as well as the information is provided to me.

The thing that really brings value to me is how I can quickly adapt to changing times.

Implementing Continuous Close: Overcoming Challenges

How do you advise people who are implementing this model? Is it generally a smooth process, or do some roadblocks tend to come up?

Matthew Lescault: It’s all about process. If we go back to earlier in this conversation, we talked about process friction and things of that nature. Continuous close just means you have a really strong process and really strong systems that come together to create real-time efficiency.

Organizations that don’t have great processes or have legacy software or are doing a lot of manual work, it’s almost impossible to get to that goal. Organizations that have really great processes and strong financial systems but are still operating with an older mentality, it’s pretty easy and quick to make that change. But what you find is that if you really dig deep into it, it’s all about the process and the willingness to adapt. That really dictates the success or failure of trying to be in that kind of continuous close approach.

Continuous close just means you have a really strong process and really strong systems that come together to create real-time efficiency.

The Evolution of the Accountant

In order to manage finance, compliance, ESG, and digital transformation, firms are now hiring carbon analysts, sociologists, and tech leads that CPAs and CFOs often need to report on and collaborate with, so is the Accountant 3.0 really still an accountant or something else entirely? What defines the profession now, and where do we draw the line?

Matthew Lescault: It’s an interesting question. I think that what we have to understand is that the accounting profession is evolving in a lot of ways, evolving in which there are subsets to the accounting industry that have specializations within these types of things like digital transformation, carbon auditing, or green initiatives. But it’s not like one accountant can do all of the different components of what we’re talking about when it comes to some of these specialized services.

That’s why you have these subset departments, especially in large firms, that focus very tightly on that one component. If we compare it to an engineer, is an engineer that builds buildings the same as an engineer that specializes in highways and roads or bridges, or an engineer that focuses on building a submarine? I would say no. It’s a high-level classification of saying they’re all engineers, but when it comes down to it, each one of their knowledge bases is very specified into what they’re doing.

I think that’s really where the accounting industry has gone in a lot of ways over the last few decades. Maybe before we thought of accountants as generalists, but now as our economy has gotten more complex and there’s R&D tax credits or carbon tax credits, you have to have people that specialize in their specific lane.

I would say that the accountant 3.0 is still an accountant but an accountant with a very specific set of skills.

The accountant 3.0 is still an accountant but an accountant with a very specific set of skills.

ESG Infrastructure: A Growth Opportunity?

Everyone talks about ESG attest, but few are actually building the systems behind the reports. Why aren’t more firms betting bigger on ESG infrastructure, and as a result, are accountants actually missing out on their biggest potential growth play? (Evolution of the Accountant)

Matthew Lescault: I think that the ESG component of what accounting firms are doing is very much a newer aspect of service offerings. I don’t think that every firm can play in this realm. There’s a reason why there are very large firms that have very specialized practices within it. Your average firm either really focuses their boutique and this is what they do, or it’s not what they do and they partner with somebody that focuses on it.

Is it an opportunity for growth? Absolutely. Is it the biggest opportunity for growth? I’m not sure. We’ve seen a huge push in different initiatives within the business realm that have now sort of taken a backseat because there are different political components to what that means. I think what we have to understand as organizations is that there are some really valuable components of what these services can offer. We have to make sure that we really invest in the places that we think are going to impact our client base the most.

I don’t run into this very much with the client base that I service. Maybe I will in the longer term, but at this point, it hasn’t come up as much. I’m sure there are other firms that focus on specific industries that we don’t, and they see this far more. If we go back to the conversation we had in the beginning about why there’s value in having a really deep verticalization of service offerings, I think this really stands out in that concept going forward.

If I’m going to support an industry that has a need from an environmental initiative, especially from credits and things of that nature available, then I need to have that specialty. That is an opportunity for growth and an opportunity for creating a moat. When I say create a moat, I mean creating a barrier of entry for your competitors to come in. But if I’m not in those services or servicing those industries, then investing in this may not be the right move.

If I want to move into services industries, that’s a different conversation. Is it the biggest potential growth play? I wouldn’t say it’s the biggest. I think it is one of those really great opportunities that make sense for certain firms and don’t make sense for other firms. Each firm should probably find their unique capability, whether that’s ESG, R&D tax credits, or any one of these more specialty solutions, instead of being that generalist. That’s, I think, the crux of this conversation.

Each firm should probably find their unique capability, whether that’s ESG, R&D tax credits, or any one of these more specialty solutions, instead of being that generalist.