068 What’s A Modern Accounting Firm In 2023?

What's a modern accounting firm and why does it even matter? I'll tell you why. What a modern accounting firm is the definition why it matters because everybody's striving to be it. And people go out on their own and they're like, I'm going to do this different, I'm going to make a change. And we all strive to be a modern accounting firm, but that's kind of vague and oftentimes just means the opposite of that crappy situation that you were just in. So let's paint a little picture for, for folks who are coming up, folks who are trying to develop towards something better what a modern accounting firm is. I asked a whole bunch of people and I'll share my thoughts today on Jason Taylor. So scaling New heights was last week Scaling new heights of all of the big accounting conferences in the US Today has the most desktop content of any of those conferences and it makes a lot of people mad. And they, they look at that stuff and they say, wow, how are you're progressive enough to come to a conference and try to learn, but you're not willing to give up the old desktop. And so this like this question of what is progressive for the sake of being progressive and what is interesting and ultimately comes back to like the value you're delivering to a specific client. So like if I were to go out, you know, 10 years in the past, if I were to go out and start my own firm and everybody wants to be a modern accounting firm, right? Everybody wants to do it right and in an impressive way and in a way that will feel novel to clients, most of whom have probably used very old timey firms. But is there a North Star here for what we should be shooting for? So let's cruise through what that conversation looked like online, what practitioners say about that today and I'll kind of refine that to kind of where I'm at right now. So posted this on both Twitter and LinkedIn. What is a modern accounting firm in 2023? How do you know it when you see it? Hours are manageable, Pay matches job standards. Innovation is valued. Ashley the CPA for me, a modern accounting firm has affirmed that walks prospects and clients through what the onboarding, engagement and wrap up process looks like. Make sure everyone is on board and comfortable with the expectations, communications, collaboration channels and the language the firm uses. Prioritize staff and owner health and wellness. Communicates early and often collaborates with clients to help them succeed as well as moving toward a more community model. Said in the end it feels like Technology and services are secondary and will figure itself out if the above items are front and center. I'd agree with that Matt Matt McMichin sorry 1. Everything is cloud based 2. Remote teams 3. Subscription pricing Shirel Martin Policies, processes and procedures for everything Automations out the wazoo Everything streamlined and efficient Team culture Virtual tech forward Chris Hervishon Combination of employees average 40 hours or less, largely digital. Vast majority of revenues and billed by the hour Beer they have a website. Tyler Clark no hourly billing. Produces authentic content every week. Niche industry trend analysis every quarter. Doesn't communicate by phone or email Onboarding is an educational experience for the client, not just partial form collecting decentralized team MO they make a lot of money and work part time. Sounds good to me. Aaron Corbin they do more than just deliver the year on financials and tax return. Actually looks out for the health of client's business when it empowers you. Instead of ticking off a box they have an app online portal Percentage of processes that are automated. Are you overwhelmed yet? Chris Smith they cracked the code on delivering the most value through the most efficient means. I think we're getting warmer there. Casey Chung affirmed that prioritizes the balance between client and team. Needs a great place to work. Clients feel empowered to work with you. Right service to the right client for the right price, the right people, the right structure with the right motivation. Okay Joe, I tell you what, and I had a feeling it would go this way. Everybody has wildly different definitions of it and that was kind of why I put that out there in the first place is for folks who are trying to do the right thing. What is like a more tangible North Star they can aspire to like, what's the guiding light here? Besides, you got to have a portal, you got a value bill. You got to like all of these things. This laundry list of 100 things that make you quote unquote modern. I just think that's a noisy space. And I'd even argue that the fact that it means different things to account different accountants is probably going to mean that it means different things to different clients and different staff as well. Because if you're going after a certain type of person, that person, like that person is generally going to have a preference that your firm ought to align with. But it is not as if that style of work is an absolute so what is the more abstract version of what a modern firm is? I think there's two sides to it. You gotta think about the client side, the external side and the staff side, the internal side. You and if you choose to build a team, your team. Let's start external. So what is a modern external client experience? In my opinion, I think you can pair a whole lot of that back to meeting that very specific type of person where they want to be met. And that's not like the bad version of that is helping every type of person under the sun and meeting every type of person under the sun where they want to be met. That is the bad version of that. The good version is helping a very specific type of person in the way that's going to be most helpful for them. And oftentimes the way in which you will support that person will fundamentally not be a modern channel. So, for example, there's a lot of really cool firms that could be built that maybe by traditional interpretations, like, are not modern firms. Like, if I want to run a tax practice and support, you know, the elderly folks who are in retirement homes, I'm not going to move to this practice management system that then mandates everyone log into this thing and like, has this high technical hurdle and asks a lot of your clients. I'm gonna pop on down to the retirement home and I'm gonna meet people, I'm gonna meet with my clients, I'm gonna talk with their friends, I'm gonna hang out, maybe turn up for cribbage night, and I'm gonna go do all those in person meetings that I know millennials and zoomers despise. That's a generalization. But in my mind, if I'm going to run a practice that's like, yeah, like we help elderly folks and their families by being the hands on solution. The people that will like go in and have those conversations with them and maybe even, you know, coordinate things with their family because that's probably going to be necessary. And then maybe you get into trust and estate planning, that sort of thing. Is that not a modern firm? I would argue that is a modern firm because they know exactly who they want to help and they're helping that firm. They're helping those clients in the way that is going to work best for them. I love firms like that. Anytime I hear about a super specific firm where I'm like, oh yeah, of course those people need help in a fundamentally different way than I would want help. I get really excited about that. I just think that's really cool. This episode is sponsored sponsored in part by client Hub. Hey. Tales from the Hub is Back Season two Episode one Buckle up. Recently on Tales from the Hub, you'll remember super smart accounting firm. Well, they adopted Client Hub to manage their work and collaborate with clients. Right after busy season they sent out a client feedback survey. They are super smart after all. And the results are in. Of course. Clients love working with Client Hub. They're eating it up. When is the last time you heard a client clamoring for a client portal? Right, the clients love the client tasks feature. Super efficient and intuitive. No more emails flying back and forth. Clients love to have access to the super smart firm staff via messaging and Client Hub. Clients are the firm is a modern tech forward and client service oriented firm. You already knew you were but now the survey proves it and Client Hub playing a big role. Great job Client Hub. That's it for this week on Tales from the Hub. Learn more over at ClientHub app or click the link in the show Notes. This episode is sponsored in part by the fine folks at Cloud Accountant Staffing. Do you hire accountants? Bless your little heart. Not the best part of the job in my opinion. Not something I ever enjoyed. Well listen, you can build your accounting dream team with talented offshore accountants in the Philippines that work 100% on full time for your firm. Their accountants aren't freelancing or contracting for multiple firms. They're all yours. They work exclusively for you and are incentivized to stay with you and your team long term. They're not going to get swiped. Cloud account staffing is 100% dedicated to the accounting industry and founded by a former accounting firm owner that understands your business, knows your pain points. They had to hire some accountants and they said you know what, we're going to build our own pipeline in the Philippines, going to pull in some super talented people and then open that up to other firms. Basically that's the story. I've been talking about a lot about staffing, building more resilient staffing pipelines for your firms. I had staff in the Philippines like totally red pilled me to like oh geez. Like we need to globalize the way that we get our work done. Check these folks out Link in the show description Cloud accountantstaffing.com so like, you know, farmers, like what are the special needs of of farmers? Let's say you're gonna run an accounting practice for production studios for people that make movies who have, you know, insane logistical challenges shooting stuff all over the world and needing certain things on location. I was thinking about this at Scaling as, you know, as they're running sessions about QuickBooks Desktop and how, you know, there's just, there's a good number of people there who will take desktop to the grave. And there's good reasons for that, and there's bad reasons for that. And today there's a lot more bad reasons for that than there are good reasons for that. But there's still a few good reasons for that. But it just kind of got me thinking about, like, there are. I think there are. We assign this value to just the coolest, newest way to do a thing. Probably because we. It probably comes from a place of us thinking it's interesting and new age, but we talk about this a lot. There's just. There's more nuance in the world than any of us can comprehend. And you don't find that nuance until you go deep into a specific type of profession or, or type of person with a very specific problem. And cooler to me than like, having the sleekest, newest, fanciest way of doing that thing is having a really, really deep understanding of exactly what that person needs and what the most useful version of that is going to be for them. Because as we talked about, was it last week or the week before, I used to approach change in a firm through the lens of what's going to make me productive. And then will the clients be okay with it? It was basically like, I can see that this firm will help us produce X more tax returns a year or close the books X days faster. And then as kind of a final check, I would make sure, like, is this going to piss off the client? If not, cool, let's do it. And this, I think, came from being a staff accountant and that being the way that a staff accountant can contribute. Because I wasn't pricing engagements, I wasn't making big strategic decisions. I wasn't the guy bringing in the work when I was early in my career. So the way that I could help and make a big difference is, was in kind of like the productive output of a firm. But ultimately the firm's profitability, while it's impacted by that, it's impacted much more by pricing and by specificity of who you work with. A 10% efficiency gain on, you know, the direct costs or the labor or whatever it is associated with getting the work done. We're talking about a percentage of a percentage as opposed to price increases. And finding a client who values you more, that price increase goes straight to the bottom line. So where my old framework was make the firm more productive, is it okay with the client? The way that I think about it now is will this fundamentally improve, like, the relevance of what we do for that client? Will it make their life easier and Then secondarily, will it make our lives easier internally? Now, the filter over all of that is, is it sustainable for me? Is it something that I can actually do long term, or am I going to drive myself nuts approaching work that way? And yes, in a perfect world, a change does both. It makes you more productive and your clients like it more. But that fundamentally, like, those two things are very often at odds. So if I'm working with elderly folks in a retirement home, if I could get all them on a zoom call, sure, that would be great. You know, like, if my business is built around going there in person and I'm going to care facilities that are a long ways away, sure. Barbara, I'm gonna need you to put a zoom meeting on my calendly because that's better for me. Like, what's best for you? What is best for your client? Those things are just often going to be at odds. And I think it's lazy to, like, dismiss that discussion and just say, oh, you need the thing that's gonna be both. Ultimately, when it comes to a modern client experience, I think it is the one that is making your clients successful is the firm that has the specificity in the problems that they solve nailed down so well that they know exactly how best to solve those problems for clients in a really frictionless way for them. And as a result, they could charge more because they're perfect for that very specific person and like that, to me, ultimately, is the path to freedom within running your own firm, being able to charge top dollar for a very specific problem that you solve. Now, that is my external take on what a modern firm is and what working with clients in a modern way looks like internally. So many of the same things apply in terms of how we build a team and the type of staff that we're great for. This episode is sponsored in part by Firm360, the practice management tool that gives you a 360 degree view of your product practice. Talked about this in the past. Project management, documents, time and billing, all that stuff's in there. Manage all that stuff in a single place. Story time, though. Let me tell you about Lee Lee's team. They were looking for a solution to modernize their firm's processes. They'd grown 30% year over year for the past five years. Holy mama. And their processes were no longer able to keep up with the amount of staff and projects they had going on. Real talk, your systems, like, yeah, no, that changes with the size of your firm. They still had some of their documents and paper copies and they were going around the office to hand off projects to team members. Yuck. Once they were on firm360, they were able to get all their digital, all their, all their, all the goods, all the stuff in a digital format and save a ton of time because they had it all in a single system. Got visibility into project process. Everybody's on the same page about what they're supposed to be working on. They even implemented the secure client portal, allowing them to deliver documents and collect payments digitally. You know what took them? Two months. Two months. Not bad. Not switching PMs, not fun. But knocking that out in two months, that's pretty darn good. Hey, let's be a little more likely, huh? You hustle on spreadsheets to manage that stuff. Knock it off. Shuffling papers around the office. Modernize your practice. Learn more about this one@my firm,360.com this episode is sponsored in part by Zero. Hey, listen up, Zero Roadshow. You ever been to a Zero Road Show? It is like a. It's like a big family band that drives all around the country getting people to come out and hang and talk about Zero and learn stuff. It's not like an actually fan actual family band. Like there isn't a bus or a van or anything like that. I think most of them fly. But it's coming to specifically Austin, Atlanta and LA. So first up, we got Austin coming July 27th. At quote unquote, the line looks like a fancy hotel. If you have ever been at a Zero event, you know those people know how to throw a party. Am I right? If you haven't, think about it. So Zero Roadshow, chance to come and hang with a bunch of folks into kind of like the progressive approach to building an accounting practice. Meet some folks that are using Xero in their firm. Six hours of CPE per event. Whoa. Learn about the latest Zero product updates and even hang with some of the Xero like community app ecosystem folks. So July 27th, check that one out in Austin, Texas. I'll put a link in the show notes to register and if you go, send me some pics. Send some pics over, maybe post some pics in the comments. I've been to some Zero Roadshows before. They're a good time. We, I think we oftentimes we fixate on what that like external client profile looks like. Meanwhile, you have no idea like what type of person will enjoy working for your firm. And so you're, you've got like staff shortages. You can't find. You can't find the Right, people to solve the problems that you have within your firm. And it's because I think oftentimes we don't pay the same level of attention to working out who we're going to be a great place to work for in the same way that we work on who will be who. What type of client will we be a great firm for? Because the people that work for you will have wildly different preferences in the same way that your clients will. But we don't always acknowledge that we create this sort of amorphous, generic way of working internally within the firm that's usually just a reflection of the owner and their preferences, which isn't going to be the preferences of everyone else. We don't like, acknowledge really what, what is different about working with you. You know, if your careers page on your website is your landing page for your next grade hire, then I would say that careers page suffers from all the same problems that most accounting firm website landing pages suffer from. Where they, you know, support their clients. And they have been in the San Bernardino Valley for the last 20 years and they started around a kitchen table. Nobody gives a hoot about that crap. Like, who are you really good for? And why are you better at solving their problems than somebody else? All those maxims apply to your careers page too. But when's the last time that you saw a careers page that was like, oh, wow, like this is gonna resonate with that specific person? I would argue the whole, like maybe misplaced maxims of what a modern place to work is. Like a lot of the maxims of like what a external modern firm looks like hold up when we think about how we hire folks. So like, if you think a modern firm is the one that will give clients a portal to submit documents, there's some analogies there to like, you know, a modern firm being, well, we work with staff remotely. Cool. Nicely done. I guess that's better than nothing, but it's still a long ways from like specifically being great for a, for a certain type of person. It's better than nothing. But like, what's the super rad firm for, like man working moms? For the tech nerds that like really love like making little automations to make their lives better for the like super sweaty, try hard people that like take a ton of joy in working really long hours and all that. But the folks that love change, the folks that are super change averse, like there's so many people out there that all prefer different things and oftentimes we try to like filter for those things. During the hiring process, when there's a better version of your careers page that will speak to that specific individual in the same way that there's a better version of your landing page that will filter clients before anyone and everyone you know, fills out your lead form. And, you know, only 1% of those people qualify. So, like, is there an ultimate. Like, what are the ultimate kind of maxims of what a modern place to work is? Like? I don't know that there are any, because you could build a super cool practice for a very specific type of person that may not lean into the modern things. Like, you know, people ask me kind of how I'm doing this year. Like, the hardest thing for me has probably been I went into an office every day for 15 years, my whole career, through Covid and all of that, I went into an office every day. And honestly, I really enjoy it. Like, I enjoy. Like, I enjoy working in an office. I've learned about myself for whatever reason, at least now, and maybe it's just because of the experience I've had. It is very hard for my brain to switch from work mode to home mode. Like, I can't fluidly, you know, switch those things back and forth as opposed to, like, you know, my friend Chad Davis, who runs a firm in Canada and works out of his RV with his wife and two kids. And, like, everything is integrated. Like, you know, kids are poking their head, and throughout the day he's going out doing stuff with the family, coming back in and working for whatever reason. Today, that's really hard for my brain. And I love the energy of just being around other folks that I'm working with. So, like, if I started a firm tomorrow, I still don't think I would do just like, on prem stuff, just because that makes it so much harder to find talent. But there's a lot of people that share that, that appreciation for, like, being shoulder to shoulder with people. And I don't look at those firms and think, fundamentally, you're doing something wrong. I think if you haven't addressed that and made explicit, here's who we're for, and you just say, like, nope, everybody's got to come into the office. Yeah, I think that's missing the point. But I don't think that there's a specific version of that that is right. There's absolutely wrong ways to do it. But I don't think there's a version of that that's like, this absolute right approach. Rather, we should be thinking in a more specific way about, like, who are the folks who are going to have an awesome experience working for you, who will love being there and be energized. Turning up to work the way that your team is optimized and your business is optimized to work, rather than never really defining that. And then you have a whole bunch of people with different preferences who work, like, better in different ways. Like, we are not all most productive in the same ways of working. And if it just ends up being this big kind of hodgepodge, you've got the issue of nobody really being at their best, but also no specificity in who you're great for. Which, as we've talked about with niching down, the more specific you are actually, the easier it becomes to find people, because then you don't look like everybody else. So, yeah, like, there's a. I think there's a really cool firm to be built around very specific types of folks who come to work for your firm. And there's like, tons of weird opportunity there in the same way that there is, you know, who you work with. Like, we talk about man, who. Who are some of the types of clients that ChatGPT generated for us a couple of weeks ago, like beekeepers and all these very specific things, like, man, build a. Build a firm that's a phenomenal place to work for veterans or gamers or, I don't know, people who, like just a specific type of person. You know, those are the firms that I think those are the firms, honestly, that I look up to the most. They know exactly who they are and what type of people will be successful coming to work in their firm, and they know exactly what type of client they're for and are forever on this journey of getting more specific in the problems that they solve. If there's a North Star for what a quote, unquote, modern firm is, I would argue it's that because a lot of the other details around how the work gets done and all that, it ought to be led by. By what's gonna be most frictionless for the people that you work with and what will ensure you are taking the best care of the people who work for you, ultimately, with the goal of attracting more of those clients who are a perfect fit for you and more really talented people who will, like, absolutely thrive in your environment. If remote work is like the portal equivalent of this arbitrarily modern thing for a firm, but you don't like remote work, or you're finding talented folks that, like, would prefer to work in an office, that's fine. Like, I think that's good that you know that about yourself and can communicate that for folks who want to come work for you. I wouldn't say that that's not modern, right? So I think it's to me, modern is more of an awareness of where you stand on those two things, like not shying away from it, knowing, like that's who we are, that's our identity. I think that's cool. Cool. I think that's modern. What do you think? Anything I missed there? Would you disagree with any of that? For as much as we talk about being a modern firm and people strive to be a modern firm rather than a like a technology checklist or like this, you know, one size fits all approach, I think that's as much as I can kind of like abstract it to a North Star of like, yeah, this is how to deliver like killer value to clients and be an awesome place to work. Like, that feels more true to me, but that's all I got today. Thanks for coming and hanging, as always, drop a comment if you want to share your thoughts. We got a holiday tomorrow, so I don't think I'll post tomorrow, but we'll be back on Wednesday. Doodoo.