Matt Garrett, founder and chief executive of San Diego-based TGG Accounting, has an unusual wish: he’d like for there to be more companies like his in the accounting industry.
“I’d love to have competitors,” said Garrett, a San Diego native. “We need to educate the marketplace on the necessity for this kind of business. We need to prove to the marketplace that this is an important and viable option.”
TGG Accounting specializes in outsourced accounting services for small to mid-sized businesses, typically with $2 million to $25 million in annual revenues. These businesses need good financial reporting like any big business might, but don’t need a full-time accountant on staff or can’t afford the six-figure salary of an experienced chief financial officer, according to Garrett.
Garrett advises small businesses against hiring a full-time accountant until they need at least 30 hours a week in accounting services.
Still, Garrett’s firm doesn’t bill by the hour in the traditional sense. Hourly fees are instead based on the level of accounting work that needs to be done, ranging from bookkeeping to CFO-level expertise. He estimates his average client pays about $3,150 monthly for the service.
“We don’t really have any competitors because we created this space,” Garrett said.
TGG Accounting’s client roster has included Ranch and Coast Investments, La Vita Compounding Pharmacy, AC Energy Systems and Strategic Information Group.
TGG Accounting isn’t certified by the California Board of Accountancy, so it isn’t a CPA firm, and doesn’t place accountants in full-time staff positions, so isn’t a staffing firm, either. Garrett explains that while CPA firms do accounting for external sources like the Internal Revenue Service, TGG Accounting instead does internal, management-facing reports. That said, a number of TGG Accounting’s 70 employees are certified as CPAs.
Garrett founded TGG Accounting in January 2006 after his entrepreneurial endeavors — including the compensation and tax consulting firm The Garrett Group, which was sold to National Financial Partners (NYSE: NFP) in July 2005 — revealed a major problem at the root of many small businesses: inaccurate accounting and bookkeeping. Garrett said his goal is to deliver error-free financial information, while trimming administrative costs for businesses.
“Some people think accounting is the least important part of their business. We handle the accounting so they can focus on running their business,” Garrett said.