Post-audit firm’s president finds relaxation divine in numbers world

Rows of books on divinity and theology line the shelves in the Bentonville office of Harvest Revenue Group President Boyd Evert.

These books and their theories, Evert explains, often serve as a break from the numbers that demand his attention during working hours. Harvest Revenue Group was founded in 2010 to assist retail suppliers audit their financial arrangements with retailers.

“Theology is my escape hatch,” Evert said. “Every once in a while when you get swamped with work you pull down some Aquinas or a commentary. Some people go to the gym, I read these. I joke I have three masters in my hobby and none in my profession.”

Evert’s company launched an answer to a decades-long practice of retailers hiring third-party firms to help identify where they could recoup fees and billing errors from vendors. Post-audit generates an estimated $1 billion per year or more for retailers.

Harvest Revenue Group operates in Northwest Arkansas, home to Wal-Mart and somewhere in the neighborhood of 1,500 supplier offices. Evert began working part-time on retail audits with his father in the 1990s and previously worked for third-party audit companies on behalf of retailers.

Evert, who estimates his firm has helped save suppliers more than $250 million since 2010, has 21 employees today. We recently sat down to discuss the growth of Harvest Revenue Group and his work auditing supplier agreements with Amazon, Best Buy, Costco, Dollar General, Kroger, Sam’s Club, Target, Walgreens and Wal-Mart.

Portions of the transcript have been edited for space and clarity.

You grew up around retail in Minneapolis. How does Northwest Arkansas and its heavy concentration of vendors compare with other retail hubs?

It’s very unique in the number of suppliers who are here and the size of the community. There are certain pockets, certain buildings in downtown near Target or the suburbs close to Best Buy, where you look at the directory and half the tenants are vendors or suppliers to those retailers. But you could go to the grocery store and talk about Target or Best Buy or Super Value and not feel as if your buyer could overhear. When I got to North-

west Arkansas, I was told not to talk [publicly] about anything you’re working on. Just say ‘my client’ or ‘my customer.’ I had to learn to be much more careful about what I was saying on the phone. If you look at other areas of the country, you’ll have a few vendors in a few buildings. Here you have this whole area. I challenge you to find one building without at least one supplier in it.

How is the auditing process different per retailer?

Wal-Mart, from a data perspective, is the most transparent of any retailer. They expose a lot of information to supplier community. It gives you great visibility and understanding, but on the other hand, they’ll also hold you accountable. They’re giving you this data, so there is some give and take. Target doesn’t have as much data, they don’t expose as much, but with every deduction, they work to give the data behind it. I would say one of the more difficult retailers, not just from my perspective, but my clients’, is Best Buy. They don’t share the data of record. Companies like that make it very difficult for suppliers.

There is a perception that

post-audit is used to generate additional revenue for retailers. Or that buyers could use it as a way to create leverage.

There are bad actors in every industry. We have our fair share. Let me give you one example of abuse. Right before K-Mart announced Chapter 11 bankruptcy protection, some of the auditors I knew on that account said “K-mart has asked us for new claim ideas. They’re eager for us to expand the scope of the audit.” I knew before that, that K-Mart was struggling, but this ended up being a leading indicator that the retailer was in trouble. In those cases retailers can rely on the third-party firms to make up losses.

I would say that the clients we deal with, some hire us and want us in the background, they want us to see how they’re being treated.

Are you viewed as an adversary by auditors and retailers?

I would say that, probably during the first two years, retailers were trying to figure us out, and I was trying to figure out how to make this business work in a way that wasn’t confrontational. I felt third-party auditors were forcing me down a path where the only way we would get results is if I threatened

to file an ethics complaint. … There are some auditors that can, let me be careful here, they can, they can look at an email and interpret it in a way that doesn’t necessarily misrepresent it, but it’s a different reading. Having studied commentaries and reading, I understand there are different views on different passages in the Bible and I’ve come to understand that there are different views on email.

Vendors often seem fearful of going against the grain, upsetting retailers who are often their biggest customers. That had to make starting the business difficult.

It took us about a year and a half to land our first client. Everybody wanted a reference. Then within the next six months we signed four or five. We were able to prove the process would work without damaging the relationship with the retailer. Now our client list is over 20, most of them are in the Fortune 100. They have legal teams bigger than our whole operation. It took some convincing that we’re there to be an advocate.