Before You Automate: 3-Step Framework for Accounting Firms to Simplify

Hello everybody, how's everyone doing? Uh, Isaac here with another webinar for you to present today. I mean, we're gonna talk about what to do before you automate because of course I think automations is the thing that we've been sort of known for in the accounting firm space. But the more we do it, the more we realize that there's some prerequisites that are helpful to look into, and that's what we're going— we're going to dive into, uh, today. All right, so let me get this presentation going and we will start straight away. All right, so before you automate, a proven 3-step framework for accounting firms to simplify the process, and I promise it's going to be a practical presentation because I know there's a lot of, you know, when we talk about process, it can get very theoretical, but we're going to see a lot of examples and practical applications throughout. Who am I? I am Isaac. If you don't know me, my name is Isaac Perdomo, and I co-founded an agency that helps accounting firms streamline their systems and optimize their processes. We work exclusively with accounting, tax, bookkeeping firms. And after working with about 80 different firms and optimizing literally thousands of processes, we've developed a good framework and a good way of thinking on how to create scalable and standardized workflows. And the way we think about it is if the ultimate goal is for the firm to, you know, be able to support more revenue, to free up some of their capacity, we need to implement and integrate some other systems. So the way we think about implementing these changes internally in their firm is sort of through a 3-phase process of auditing, streamlining, and integrating, right? Auditing meaning we need to know what it is that we can improve in the first place. We need to actually implement it and then we need to put it together. And we do this sort of through both through the lens of the people, the process, and the technology. So you can imagine sort of like a 3 by 3 grid now of what are the steps required to kind of systematize and automate an accounting firm. I'm going to walk you through quickly sort of like what are some of those steps. So like surveying your— the capacity of your people, what are people actually currently doing? That's where you will collect a lot of your ideas for potential automations in the future. Clarifying the process if it's not documented, if You have videos that you could share for your provider or for yourself to understand what's currently going on, evaluating the technology that you're currently using, measuring success and performance, simplifying the process, which is what we're gonna be diving into today, modernizing your technology, which is often a function of potentially implementing new tools that came from the evaluation phase or potentially better setting up the tools you currently have, And then in the integration phase, making sure your team knows and learns those new tools and those new processes, and that you have documentations and automations that can make it easier for them. So today we're going to be diving specifically into the simplify step and breaking it down so you can understand in actionable terms what you can do to make that happen. Now, what's at stake? I just want to explain like what, what happens because we've seen it a lot. Of like what happens if we don't simplify before we dive into automation documentation. Typically you'll have like less return on your investment on anything around SOPs, around automations, because you'll be trying to account for too many scenarios. You'll have little or few things that apply across your firm or through multiple clients. You, you won't really be getting a real and significant ROI from your efforts. Of course, your team might struggle to do things your way if there's not a way that's been defined. If you don't have a standardized approach, it might be challenging to deliver quality and reliable work for your clients. And ultimately, you'll have a firm that it's harder to scale, at least not easily scalable without a lot of operational drag and inefficiency. On the other side, of course, if you take this step seriously and clarify your processes, you have more repeatable systems internally. It will take you less time to transition a new team member into a role when everything's defined, and you'll have less client fires and more reliable service, ultimately having a firm that's more scalable and that can grow without you. Now I'll tell you how I learned about this initial idea of simplifying and what, what it takes, what you should do before you automate. I learned it from this guy, which you might know, of course, is Elon Musk. And he has a video, I think it's just like 2 minutes. If you look for it on YouTube, you'll find it of like the 5-step improvement process. And he says that he has Learned over time. He has tried to automate too quickly, and he has learned what steps to take before getting there. And the steps he outlines are making your requirements list dumb, deleting a part or process, optimizing, accelerating cycle time, and automating. And the thing he says in that video is that he made the mistake of going backwards on all 5 steps. He automated, then accelerated, then optimized, and then deleted. And we've made this mistake too, as we started as a pure automation agency primarily, and that's what we primarily are. And we want to dive straight into the automation because that's kind of what we're good at. But what we've learned over time is that there are certain steps that might be necessary or very helpful or strongly suggested that's going to make everything else easier. And you might ask, Isaac, what the heck does this have to do with my accounting firm? I'll tell you. The first 3 steps that we just talked about, um, Elon suggests, it's what we call internally simplify. So simplify, it's a process of standardizing, deleting, and optimizing. And I'll explain what each one of those terms mean throughout the presentation so you have like clear actionable items that you can implement this in your firm. So that's the topic of today, and again, I'll translate these steps with examples and practical application. Let's start with the first one, standardize. This is what kind of like Elon called like make your requirements list dumb, because of course he's talking about it in the— from the perspective of building a product, building a car in this case. But we don't build cars, we provide services. And what is a quote-unquote requirement in a service? Fundamentally, it's a client need. So, and this can be seen at different levels, but the way I like to state what standardizing actually means in practical terms, it's simply reducing options. And this can be done both at the client level, which we're probably the one that has the most impact down the line, at the service level, and it can also be done at the workflow level. And we'll see an example of each one. Starting with the client level, I think a lot has been talked about in the accounting community around the benefits specifically for sales or for your sales and your marketing when you niche down. But from an operational standpoint, I think a lot is earned as well by you limiting the number of clients you take. Because if you think about it, you are reducing your requirements, you're reducing the client needs you have to fill the moment you quote unquote niche down. I'm not necessarily here to suggest that every firm should niche down, but one of the things we sometimes talk about with clients— I was literally talking with a firm owners this last week and we were revisiting their lead qualification process and I just asked him like, is there a specific industry that you don't really do well with? And he was like, oh yeah, like we don't like restaurants because we have to do these 7 things differently. We also don't like medical because there are all these requirements and also we don't do well like with inventory-based businesses. And we were like, okay, let's put those as options in your lead qualification form and let's just not take those lines anymore. Because again, this idea of like what you do to standardize what you do, you have to look at what are— who's expecting, which is the client. And that's why I'm sort of like here suggesting that you could potentially niche out. Meaning not necessarily pick one industry, but think about what are the industries that when you work with those types of clients, your workflows have to change too much from what you're used to. Going down now into the service level, if you are familiar with Jason Stats, he is an accounting content creator, very popular in the space, and he recently had a video. If you look for service framework Jason Stats, you'll probably find it. Of like how he standardized the services in his firm by— not surprisingly, you'll start to see the pattern here— by listing out all the services they provide and going into the details of, okay, if we do bookkeeping and bill pay and approval and sales tax and invoicing and this and that, let's actually double-click. And if we do bookkeeping, let's try to think about what are the different platforms we support. Do we support QuickBooks and QuickBooks Online and the desktop version and Xero and NetSuite and on and on and on and simply try to remove an option, which is again my definition of standardizing. So you can probably look for this online. I'll see if I can link the document in the description below for people that are interested in checking that out. But it's a really good framework to really try to start standardizing what you offer at the service level. And as I said, there's also the workflow level, and I want to share an example of that. This is something we see a lot, which is communication channels. The more clients you get, it becomes increasingly challenging to manage all the communications coming in, especially if you have not standardized how you communicate with clients. Because if you have email, if you have a portal, if you have text messages, calls, meetings, that communications will be missed, context will be lost. And sometimes you just say, hey guys, we are just gonna use the portal moving forward, or potentially say, hey, we're not gonna do text message anymore because that's, you know, not something we're willing to give client support through. Maybe that's something you give on your higher tier prices. Or packages. In any case, hopefully you start to see a pattern here that although this word of standardizing is thrown around a lot, what it really means is you taking inventory and listing in how many ways you do a thing and then removing one or more ways. And ta-da, that's it. You've standardized, right? So if today you have Uh, you serve 17 different industries and offer 12 different services in 5— communicate with clients in 5 different channels, and I don't know, and support 5 different accounting software. The moment you start to limit or reduce some of those options, you are on your way to a more standardized process. All right, let's keep going. And again, you can do it at a client level. At the service level, and most often in the context of what we do, at the process level as well. All right, let's talk about the second step in the 3-step framework to simplify, which is deleting. And when we are thinking about deleting, which is self-explanatory and doesn't need, uh, you know, further explanation, but I do like to think like the most of the most common types of things or steps that we can look into deleting or potentially reducing their, um, deleting essentially. Let me keep going here. And the 3 most common ones: bottlenecks, non-value adds, and duplication. And I'll give a couple of examples so you can, uh, so this becomes a little bit more concrete. Okay. Approvals. Approvals are probably the most common type of bottleneck in a firm where a senior person has to approve a return, or a client has to approve a particular thing, or you have to approve a bill, or maybe your marketing department, you have to approve the marketing material that's going on that needs to go out. And what a silent approval essentially is, it's having a rule for yourself that says, hey, this is gonna be approved automatically after X days. And this is something that can really help either create some urgency so that the person that has to approve it actually does, or potentially in their absence, they know, hey, we will communicate and let you know that, hey, this is a bottleneck, this is getting our work stuck. So if you don't approve by this time, we'll assume that it is approved. Of course, this is applicable when it is just like a check that they have to give. If something they— if there's an input they have to provide, like a document they have to share, it wouldn't really be applicable. But this can be very useful for a lot of forms. An example of duplication that we see a lot as well, it's client data integration. For instance, maybe you sign up a client and a team member has to potentially enter their information on your tax software, on your accounting software, on your proposal software, on your practice management software, and on and on and on. And then what happens is if that information changes, you have to change it everywhere else, and it becomes a lot of administrative work an administrative burden to actually keep that client data, um, up to date if you're doing it manually. So this is an example of where by implementing integrations and automations, you can eliminate the, the need to duplicate that particular entry across your different applications internally. So again, delete impractical actions. Look at the steps in a process and try to remove bottlenecks, non-value adds, and duplication by asking yourself what's causing delays and how can we minimize those. You saw the silent approval there as an example. Really think about the steps on your processes and think, would client pay for this? Is this actually adding value? And also think about, is this being done already potentially in this same department, in this same workflow, or potentially somewhere else. All right, the 3rd step here in the 3-step framework to simplify is optimize. Of course, after you have standardized, which is— I see really as macro deletion— and then you delete at a more micro level, uh, certain steps within the workflow itself, uh, you're still left with a lot of steps and and you can look into optimizing some of those. Optimize, the way I like to, uh, just to make it easy for myself, is just finding sweet spots. It means that there's a spectrum of things, and we're gonna see 5 different dimensions we can optimize for, and picking what's the, what's the sweet spot for a firm. Now, what are those 5 different dimensions? I'll explain them in detail, but they are synchronous, versus asynchronous work, the amount of handoffs, having more or fewer handoffs, the access to the information for your team, how much information you provide and how accessible is it, the timing of your resources, meaning do you schedule a year in advance, 3 months in advance, or do you just are available on demand, and the processing of the work, whether it can happen in parallel 2 things, 2 items being progressed on at the same time, or if they happen linearly and they have to do one, they have to get done one after the other. Example for the synchronous part specifically, we're working with a firm, it's a Canadian firm, I think about 30 employees or so, and this coming year they've decided that they are no longer going to give their client the option to book a call, uh, straight away to review their tax return. Instead, they're gonna provide a Loom video for every client, and after they watch the video, there's gonna be a little link at the bottom so that if they have more questions, they can go in and request a meeting and book a meeting. And this is sort of like an asynchronous-first approach of using meetings only when necessary so that you reduce the amount of work and the amount of time required to execute. Not only that, you also make it a lot more convenient both for your team members but for the client to review the video, uh, whenever they want to. So this is an example of going not all the way to async, but so like finding sweet spots in the middle when you send the Loom video first and And then if they want, they can have a meeting. An example of access to information, which is the third one we talked about, the third dimension, because of course there's a lot of information you could provide for someone to do the work, source for one of your team members. And you don't always want to have all the information, for example, in the task itself. So there's spectrums here. An extreme could be, hey, we're gonna have this 3-ring binder locked in a closet very far away that has everything they need, but people will rarely read because they have to, you know, search for exactly what it is that they want. And on the other extreme, you might have like, hey, right there in the task that we have for them on our practice management software, we'll have a checklist for the things that they need to do and an easy click an easy link for them to click through if they want more details. So that, again, here is also finding a balance of how much of how or how little information do you provide for you and you delegate, and how close, closely accessible, or how far you have it for them to access. All right, the other example I want to share with you is example of scheduling work in advance. And this goes to the resource timing dimension we talked about earlier. The idea of, do we— are we available on demand or are we scheduling all of our work or are we somewhere in between? And actually, I want to share a case study from someone in the accounting community that has been admired for the work she's done in eliminating busy season. By scheduling all work in advance. And actually, I'll read you what she said because we're part of a community. Um, and let me see if I can find it real quick. Yep. So again, at a highlight, in a nutshell, essentially all her tax prep work, it's scheduled throughout the year. No peaks and valleys on March or April. It's just literally spread out throughout the year. I would assume she doesn't need temporary workers like many accounting firms or tax firms specifically do. And here's what she said. Hey, Isaac, here's what we did last year and then this year. Last year, we figured out how long it takes us on average to complete a tax return. We added some cushion for unforeseen circumstances, and we left Fridays open for other non-tax work. So he has some buffers there to be able to execute. Our clients picked a date on a calendar link. It's in Calendly. There are only so many spots available each day, and that's the day where they promise they're going to give us 100% of their tax documents. We told our clients their tax return will be completed by the end of the week, 3 weeks later, and we created the systems internally in the tables with a list of returns that need to be completed each week. And split them up by preparer. If one tax preparer is further along, they would take the load off of the other preparers. And our goal was to get the returns completed by the end of the week, 3 weeks after the client's drop-off date. And we were able to stay on schedule. This week we took the number of clients and increased it and basically spread the tax return project evenly throughout the year until the last calendar drop-off date of the 20th of August, and it has worked so well. We have been using Calendly, Make, and Airtable. Those are tools that you are probably familiar with if you follow us because we're big fans and we're often helping clients implement those. Um, there were some issues with that setup and we are making some improvements. In any case, this person has said, actually, I'm going to schedule all my work And that has been extremely useful, especially for such a seasonal business like it is, the business of tax preparation. So again, I do have a little acronym for you to make it easy for you to remember. I want to recap those 5 dimensions. But after you've standardized and you've optimized— sorry, after you've standardized and you've deleted, I want you to think about optimizing the rest. of the system, the rest of the steps in your workflow. And what optimize means in my view is finding a good balance or sweet spot and finding it through 5 different dimensions. And I like to call them SHARP just to make it easier for myself to remember. And SHARP stands for synchronous versus asynchronous work. We didn't— we saw an example there of like a particular tax firm doing Zoom videos. First only. Handoffs, how much or how little handoffs you have in a process. For example, we've worked with financial planning firms where one person does everything. They do their business development, they do the selling, they do the sometimes even like the billing and the supporting the clients and delivering to the clients. So in that case, there's like no handoffs at all versus like the other extreme, which would be like one person for each job. Typically accounting firms are somewhere in between where you have, you know, preparers, reviewers, or potentially bookkeepers, controllers, etc. A, which stands for access to information. We talked about the spectrum, so how much or how little information we provide to our teams and how closely accessible or how far we have it. We talked about resource timing, whether we are available on demand or how far in advance we schedule work. And we didn't see an example for this, but I'll share one now, which is processing, uh, which really talks about do we do things in parallel or do we do things linearly, like we have to do this and only when this is done the next step can be done. An example for this that we see a lot in Tax Prep workflows, it's saying, hey, actually we realize that once we have this 60 or 70% of tax documents from the client, we can get started on, on the return. So we don't need to wait until they have 100%, because otherwise then the, the, the bottlenecks, the crunch time is going to be crazy. But once there's 60, 70%, we can get started and start to effectively have those 2 steps happening in parallel, one gathering the information and the other one starting to prepare. Was that helpful? I hope so. If so, I do want to ask you a couple of questions. How standardized and simplified are your processes? Is this framework giving you ideas on things you could potentially implement in your firm? How much time is currently potentially being wasted because your processes are too complex? How would those costs compound if you double and triple in size, right? If you continue to grow and you say, We're not gonna systematize or standardize anything. Will your system be able to handle it? Is this something that you're gonna be able to keep growing without more demands on your time? Maybe, maybe not. If this was useful, I do wanna invite you to visit our website at opsio.co, and we have room in my and my team's calendar to see if we can help you out. And if you have opportunities for optimization and automation within your firm, we'll be more than happy to see and present a proposal of what it would look like to help you implement them. If you go to option.co, let me actually just pop up the website here. You'll see a button at the top that says Start Automating. If you click on that, you'll see just a little form. I guess we practice what we preach, and so we have some of these systems simplified as well. And you'll just answer a series of questions in terms of what services you provide, revenue ranges, what exactly you're looking for, how you heard from us. Here, if you found us through YouTube or LinkedIn, you would select that, and you would request the analysis to see if you qualify for us to look deeper into, um, your workflows and see if we can help you out. So I hope that was useful. That's the simplify, um, so let me go back to the presentation. That was the breakdown of the simplified steps in this, uh, efficient firm automation roadmap that we've been putting together and developing over years of doing this work. There are other things. And actually, if anyone's here live or watching the replay, if there's any other steps in this map, in this roadmap that you want me to dive and do like a deep dive into, please comment below and let me know. I'm not sure we have people on. Oh, looks like we have 5 people showing live right now. So if you guys have any questions, I'll be more than happy to take a couple of minutes to answer them. Otherwise, it's been a pleasure to share this material with you today. And again, if you think we can help you out, we'll be happy to offer a free consultation and see what it might look like to help you simplify your processes as well. I don't see any comments coming through, so I will assume you guys understood the topic and liked it. Give me a like, and with that, I'll leave you to enjoy the rest of your day. All right, have a nice one. Take care.