Tax & Accounting Blog

The Accidental Accountant

Accounting Firms, Business Strategy & Development, CS Professional Suite, Our Customers June 5, 2014

Hank LevyAccounting wasn’t Hank Levy’s first love, or even his first career. He admits he “backed into it” while studying for a Master of Business Administration degree. But it’s certainly his passion now, and his unique approach and at times unconventional viewpoint are serving him well.

Founder of The Henry Levy Group in Oakland, Calif., Hank Levy, CPA/ABV, CFE/CFF, firmly believes that his background as a political activist and independent thinker – with a liberal arts focus formed while he earned his bachelor’s degree in history – have shaped the work he does now. And ever since he first opened his own firm in 1991, he’s been bucking the system.

“Among left-leaning political activists, going into business was kind of seen as verboten,” he says. “But when I started studying for my MBA I had to take a lot of economics and accounting classes, and it really interested me.”

His affinity for healthcare and pension benefits made him attractive to accounting firms, but it didn’t take long for him to figure out that his independent streak wasn’t a good fit with their more traditional culture.

Firm Facts

Basics: Founded in 1991, The Henry Levy Group is based in Oakland, Calif. With four partners and a team of more than 20, including independent contractors, the firm’s offerings include tax services for small businesses, nonprofits, and individuals, bookkeeping services, political campaign services, litigation support, and valuation.

Website: The firm offers a wide range of services – including financial tools, reference materials, and secure client portals – at Designed to be user-friendly, the website features a series of educational videos for clients.

Software: The Henry Levy Group uses a variety of software tools to be as flexible as possible in meeting clients’ needs. Its suite of Thomson Reuters software includes Practice CS, Accounting CS, UltraTax CS, NetClient CS, FileCabinet CS, Workpapers CS, and Financial Analysis CS.

“I kept quitting or getting fired and my wife said to me, ‘Either you have to find another profession or start your own firm,'” he explains. “So that’s what happened.”

An Activist’s Approach to Accounting

When Levy started his firm, his skills were primarily focused on taxes. But he had a lot of relationships with labor unions and nonprofits from his activist days, and his practice took off quickly.

Over the years, the firm has grown substantially to include a staff of more than 20, including some independent contractors. Levy now has three partners, who will take over the business operation when he decides to retire. He’s 65 years old, but keeps finding new interests in his work that make it hard to walk away.

Although The Henry Levy Group offers many of the same services every accounting firm does (see Firm Facts), Levy has found niche industries that reflect his continued interest in activism. One in particular that’s proven to be a differentiator for the firm is serving the tax and accounting needs of medical marijuana providers.

Growing Like a Weed

The firm’s work with medical marijuana providers – which Levy says is “growing like a weed” – started back in 1996, when California first set up its medical marijuana program. Through a referral, medical marijuana providers began coming to Levy for advice. He immediately recognized that their retail operations needed to be treated just like any other retail business. Although selling marijuana is still technically a federal crime, Levy’s clients in this arena all want to pay their taxes properly and follow the regulations set up by the states they operate in, which have legalized marijuana for medicinal or recreational use.

The firm now also serves clients in Colorado, Washington, and other states that have legalized marijuana. In fact, Levy set up a new firm to handle this service line exclusively (see sidebar).

The Campaign Trail

Another significant portion of The Henry Levy Group’s business is political campaigns. In fact, it makes up about 25 percent of the firm’s business.

The High Road

Serving medical marijuana providers has become such a significant portion of The Henry Levy Group’s business that Hank Levy is expanding the firm’s operations in this arena.

In partnership with a Colorado-based CPA, Levy has created a new national accounting firm called Bridge West CPAs, LLC. The firm, which is just getting established, will specialize in clients who do business in states where recreational or medical marijuana is legal. Levy expects this market to grow beyond retail providers to include peripheral industries such as cultivation, extraction, manufacturing of edible marijuana products, and more.

The firm handles back-office tasks for about 150 clients, including state and federal candidates based in California, as well as campaigns related to ballot measures and organizations such as political action committees.

Levy says the firm is one of the largest providers of services to political campaigns in California, with its business centering mostly on regulatory compliance and working with data.

Data is already established as an essential component of any campaign strategy, yet it’s a field with plenty of growth potential. Campaigns use data to identify likely voters, target messaging efforts, track donations, and even to create the lists used to knock on doors and make phone calls in an effort to get out the vote.

“What makes us special is that we’re very focused on the data side of it, and we’re currently thinking through ways to expand what we do in that area,” Levy says.

The firm’s interest in data isn’t strictly limited to political campaigns, though. Levy is working on ways to bring better data analysis to every client who is interested in that kind of value-added service.

A Forward-Thinking Mindset

Educating clients on new approaches and technology solutions is an ongoing focus at The Henry Levy Group, which is always looking for innovative tools to get the job done.

“We’re aggressive with new technology, and that includes communicating with our clients so they understand the efficiencies that could be created and how to save money through it,” Levy says. “I think, in those ways, they’re going to appreciate us more.”

The firm has a top-notch website, designed to reinforce the practice’s brand identity and entice users, particularly to the client portals. Having added NetClient CS portals and FileCabinet CS to the firm’s mix of Thomson Reuters tools, Levy says the response from clients indicates that their experience has been good.

Hank Levy

He’s a big fan of Practice CS – the software that brought Levy to Thomson Reuters in the first place. “We have a lot of custom fields and it’s super-powerful,” he says.

firm also recognized the value of Accounting CS after using it to populate four years of back tax returns for a client. According to Levy, it took three or four hours to set up the first one, but just 45 minutes each to handle the rest.

“It proved what I always thought about the software, and our intention is to map out the books of our other business clients to do the same,” Levy says. “Another goal is to use Thomson Reuters’ mobile offerings better.”

Levy shows no signs of slowing down just yet, even as he considers how the firm will carry on once he finally decides to retire. He holds on to the “liberal arts” view he’s had of the world since his days as a young political activist, and he wants that legacy to be part of the firm’s future.

“I think my background has made me a better accountant, and it’s something I’ve looked for in the people I’ve hired,” Levy says. “Our clients expect us to be really smart, and our perspective gives us a broader view so we can understand everything that might be going on with a client – not just the numbers.”

An All-American Pastime

When he’s not at work, one of Hank Levy’s favorite places to be is on the baseball field.

For years, he’s been an umpire for teams of all ages, at the high school and college level and beyond. He’s umpired in Cooperstown, NY, home of the National Baseball Hall of Fame, and for a tournament at San Quentin State Prison where a visiting team played the prisoners. Recently, he umpired for a league that plays under 1886 rules, which are significantly different than those used today.

Levy kept his hobby a secret at first. “I’d leave work during the day and not tell anyone where I was going – I’m sure people thought I was having an affair,” he says with a chuckle. “After a year, I finally admitted what I was doing.”

Now, Levy says, he tries to be a role model for having interests outside of work, even during tax season.

“It’s a stress reliever and I think it’s important to do these things because I enjoy them,” he explains. “I encourage other people to do the same.”