"Serve your clients in a better way" | Smoker Smith & Associates

Hi Jori, tell us a bit about your firm?

So we’re Smoker Smith & Associates P.C., located in Hershey, Pennsylvania, and I'm one of the partners. We're a small to mid-sized regional firm. We have about 15 to 20 staff depending on our busy season and have maintained that size throughout but we continue to grow and serve markets that are expanding well outside of Pennsylvania and even the United States. Like many INPACT members our firm is a full service accounting firm. We will work on tax returns, financial statement needs, planning, projections, evaluations, consulting, any kind of accounting service that our client would need, we can focus in on that area and help the client. So we don't necessarily differentiate or diversify and limit our market.

How did you get involved with INPACT originally?

One of the founding Partners, Brian Smoker, was heavily involved with INPACT for many years prior to me starting with the firm which was in 2000. In 2005 we had a client that was looking at setting up affiliate entities in Germany, in the UK and another country in Europe. It was a client that I was taking the lead on, so we actually came to Munich in 2005 to one of the INPACT conferences to meet with the group of INPACT firms from those different regions to see how we could help the client. The client came along as well, so we piggy backed that off that conference. So Brian because of his involvement in INPACT and then my involvement in this client, I started attending a lot of the conferences with him and was pretty heavily involved.

We set up an affiliate branch of INPACT called INPACT Audit and what we did then is we tried to really focus on training. The International Financial Reporting Standards (IFRS) were just coming out around this time. So I had developed training material on the IFRS and spoke to the group on those, and actually developed a guideline book and a summary of each of the IFRS that was then distributed to the INPACT members. Due to regulatory issues and other constraints INPACT Audit no longer exists, but they are developing in other ways to focus on audits vs tax, the audit community, tax committee and so on and so forth. So I've been pretty heavily involved since 2005.

“The last thing you want to do is say: ‘I know you want to set up a company in the UK. That's great. I really wouldn't advise it because I don't know anything about it.’ You lose the client. So the opportunity to serve your clients in a better way has been one of the biggest advantages because I can say to a client: ‘No matter what you do, and wherever it is, I can support you through my resources.’”

Solving international problems

Could you tell us about a time that you had a client that had a problem and how INPACT was able to help serve them?

Sure, so, I mean there's actually been several. I mean the one I mentioned was actually a prime example where we had a client who was looking at setting up branches similar to how they had in the US and needed guidance. I'm not going to promote myself to a client saying that I know German Financial standards, tax standards, and corporation standards. To be able to come together as a group with individuals that we know, that offers a lot of trust for the client, because the client says, “I'm not going into this blind. I am trusting you Jori too and if you trust these advisors I will too”, so that made a big difference.

Another example I've seen multiple times is where we have a foreign company that has a US subsidiary. And the foreign company obviously needs an audit that would entail their subsidiary. What's been able to happen is we've been able to go in and do that subsidiary audit and this goes both ways, right? So you have a US company that's a foreign subsidiary. Rather than again trying to hire a KPMG or a PWC in that other country, we've been able to say “Look we have a resource. They'll do the audit.” The nice thing about that is we work the same way. We know each other. We can have those conversations behind the scenes and get this done efficiently for you without having to bring in a third party that we've not dealt with before. For the past several years we've been working with the client in that regard where we're actually able to get financial support for subsidiaries that are then assisting us on our end. So we don't have to tell the client that they need to go find a third party to do work.

There's also been instances from the other way where I'm helping other INPACT clients. There are a lot of US expats that are living abroad. And unfortunately when you're a US citizen and maintain your US citizenship regardless of where you're living in the world, you have a US filing requirement. So I do have a lot of times where I'm being reached by other INPACT firms who have a client who's living there as a US citizen and needs tax assistance. And so that's been a pretty strong practice of mine.

“The conferences are like having Christmas with your friends. It's a friend gathering and I look forward to going and seeing everyone again…the content is always fantastic."

INPACT training and conferences

What's your experience of the INPACT gatherings and conferences?

I love them. I mean it's two-fold. I mean obviously I like exploring new places, which is always a plus but because for almost 20 years now, I've been going to the conferences and developing relationships. So to me it's like having Christmas with your friends. It's a friend gathering and I look forward to going and seeing everyone again, whether it's once or twice a year. Additionally, the conference content is always fantastic. The INPACT group is really a like-minded group of firms. And so what I find is the content that's provided is always relevant not only to me, but I think to all the firms, and that's pretty important when you have a really diverse membership that don't have a lot of the same needs and wants.

And I think Daniel would probably agree that it’s very hard to develop content that would be applicable for everyone. So the international conferences are always great because they really do focus and factor in what the members need. It's not repetitive content. So we're not going to the conference and hearing the same thing that we heard last year. It's always new, it's always focused on what the current struggles are or what the current industry is that we're looking at. So there's several reasons why I love to go as much as I can and make it work.

What are the benefits of the accredited training INPACT provides?

So the training obviously is important in our industry. We need to have so many continuing education credits periodically, every state in the US is different. Getting that training that is diverse, and again that you're not repeating the same classes year after year just to get the credits, is sometimes a struggle. So our industry, the PICPA – Pennsylvania Institute Certified Public Accountants puts out content. It's very generic, very broad and they're fine. I mean when you need 80 hours in Pennsylvania, for instance, you need some way to be able to push those out pretty frequently. But the INPACT training, by providing the technical training with INPACT and then also management insight as well, the technical training that can be provided by INPACT is unique. You're not getting training that is going to be offered by the PICPA or AICPA, you're getting unique training. Secondly, you're also getting specific training on a firm that is a member size, for instance one of the things that we look at, so we have SEC or public accounting in the US. There are very few firms that do SEC work, we’re one of them. To provide the right technical training, INPACT is not going to provide SEC training if they don't have firms that need it, right, so you're not getting these broad level training courses, you're getting unique courses that are specific to our industry, the changing environment the concerns that we might come up with or need help and assistance with.

The core benefits of membership

If you were to meet for example, another firm in North America, how would you describe the benefits of joining INPACT?

The benefits we find to our firm are twofold. The first is from a client approach. As the world basically, I mean, I'm sure all the firms in the US are seeing this. The cliche ‘the world is getting smaller’, we've heard that for years but what's happening is companies are constantly looking for ways to become more productive and what that's turned into is that's turned into considering business, conducting business outside of the US and there are a lot of advantages to doing so. By doing that obviously your client base is now looking at those opportunities and when they come to us as their trusted advisor they want somebody that's going to be able to support them and back them and give them advice. If they want to look internationally, I'm not going to sit at a table across from them and say “I know everything about worldwide taxation and financial reporting”, so you need a team and you need a group so that you are able to maintain your trust with your client. But still offer them value, and meet their needs as they look at expanding. The last thing you want to do is say: “I know you want to set up a company in the UK. That's great. I really wouldn't advise it because I don't know anything about it.” You lose the client. So the opportunity to serve your clients in a better way has been one of the biggest advantages because I can say to a client: “No matter what you do, and wherever it is, I can support you through my resources.”

And these resources are people that I trust. I'm not giving you an 0800 number to call and deal with them on your own. And it's been very beneficial for the clients. The second benefit is internally for the firm. So for instance when Covid started and everybody went remote, and then we started seeing staffing shortages. The most comforting thing you can do is reach out to another firm and say “is this just me or you having the same situation and what are you doing about it?”

And kicking ideas around and calling and saying “hey, you've seen this before, what are you doing?” And what I found to be amazing is every struggle that we came up with during Covid all the other firms no matter where they were, were having the same exact struggles and it's really really beneficial to have that second voice outside your firm to give ideas. There's firms that maybe handled something better than we did or vice versa, and being able to share that knowledge and share those ideas I think is able to help all INPACT firms continue to grow and face challenges in the most efficient way possible.

What are the big challenges for US firms right now?

The biggest struggle that we're facing with US firms right now is number one, the mergers and acquisitions. So the baby boomer group, the guys that started their firms that are now in their 70s, 60s. They're getting ready to retire. And a lot of them didn't have succession plans in place. And so what we're finding is there's just mergers of these smaller firms happening all over the US which is restricting the number of accounting firms. So the number of accounting firms is shrinking and in addition to that, staffing is also shrinking. If firms across the US are going to be diminishing, obviously the resource base diminishes as well. So opening that resource base up to other like-minded firms that you may not otherwise have contact with I think is going to be really beneficial. Also, going back to the staffing, in the example that I mentioned about. Okay, we might do a subsidiary audit there. There's also instances where we're going to a facility and just counting the inventory because from a staffing standpoint somebody can't fly somebody in to count the inventory. So they contact our firm and we go in and just count it for them. So that helps with their staffing needs as well. So by having those internal resources, I think INPACT would be really beneficial for any US firm because of those restraints that we're seeing right now.

How are you feeling about the year to come? Is there anything particularly you're looking forward to doing with INPACT?

Yes, so I am planning on going to Malta for the English-speaking conference. And I know it's not detailed yet, but I believe you're doing Milan in November. I plan on going to both of those conferences and work throughout the year with the INPACT group, especially now with tax season. So there's a lot of contact and things going on in that regard. It's like a big family party. I always look forward to getting together with everybody and exploring places and it's fun.