072 How Accounting Firms Sell App Advisory

Do you like tech? Of course you do, you big nerd. You would have stopped listening to this show 20 episodes ago. Somewhere between the third and the fifth time I said the word embeddings, you're like, I'm outta here, man. I love tech accounting. Just doing this stuff efficiently is so tech dependent these days. In my experience working with SMBs, man, accountants are like doing 200 IQ stuff that is like so beyond the level of what our SMB clients are doing. But we give away so much of this tech expertise for free. So let's talk through a framework for how you can actually get paid, actually get paid to do this stuff. I know you don't want to be a tech consultant, you just want to do the accounting stuff. But I think there's some easy ways to kind of bolt on some new revenue for the work that we already do for clients. So I'm going to show you my favorite framework for doing this. Come on in. Let's make some hecking money. Now. Let's just acknowledge we are accountants. We are tax professionals. We don't identify as tech consultants. Right. Nobody went into the business of doing this stuff. But let me tell you, just like out of necessity for survival, that is where the accounting profession has gone and it is going to continue going that way. I'm sorry, I don't make the rules. I just make podcasts about the rules to try to keep us all relevant. Right. It is wild to think in the last couple of decades how cloud, really cloud accounting has accelerated all of this stuff and we've had to kind of become the experts. And I don't. Maybe it's all. Maybe it's always been that way because small businesses, like your first, you know, CRM, it's your accounting system. Like the accounting system at some point became way more than debits and credits. It became invoicing and how you manage ap. And you see our, like all these other things. Your point of sale, goodness sakes, is it QuickBooks fault? It's probably QuickBooks desktops fault when they started bolting on like your point of sale and inventory and all these things. And for whatever reason, as soon as something gets added to an accounting software, the expectation is that the accountant then has to be the expert on it. Right. I kind of poked fun at this, went into it bot mailchimp and we kind of saw the writing on the wall there that, you know, mailchimp was moving into E commerce and they were gonna bolt mailchimp into qbo. So now we have, you know, much More like in depth sort of E commerce capabilities built into QuickBooks. And it was like, well, crap, now we're gonna be expected to all be ecom experts and help people set up how to sell things online and all that stuff just because somebody added a button for it in QuickBooks. Right? That's just the way these things work, I think. And now with, remember the so like early days QBO, you had like apps.com and it was very early on in sort of the app ecosystem days, you had just like a little, a cute little handful sort of collection of apps just on a single list. And now those app marketplaces are outrageous. But even those marketplaces with thousands of apps are only a subset of what we should actually be using. And our clients should actually be using those, you know, like the 0 Marketplace page and whatever QuickBooks calls their version of the same thing. There's now like a, an increasingly high set of hurdles you have to jump over just to be listed on those platforms because those companies have realized, oh, this is a really valuable discovery platform for those companies. You know, it's a prerequisite to be able to come, I think generally be a sponsor and show up at those companies events, that sort of thing. But who the hey is going to make sense of what is the right app for you, for your client when there's so gosh darn many out there? Well, it's part of the accounting ledger, so. So that'll be us, right? That'll just have to be us. And this has gotten a lot harder in the last decade and as is the case with all things app overwhelm, it's just gonna keep getting more harder. You see the number of AI apps that have come out in the last year, like clear back to when I was doing the weekly, you know, launch for Accountants newsletter. The whole premise of that was good. Golly, there are so many new things coming out every single week. Let me cut through a bunch of that noise for you and just show you a few of the things I thought was cool and the few things that kind of mattered and honestly that's still like a huge just aspect of the service I try to provide is there's so much stuff coming out. But like if you're on my weekly newsletter, if you listen to this show, like I can confidently say nothing will take you by surprise if you're plugged into this stuff. And I'm sorry, it's a high price to pay to have to listen to me that much, but we're going to get through this all Together. So selling app advisory, I think it was Will Lopez that first turned me on to this guide. Specifically that Zero put together and Zero, like from the early days, has been really good about being like an ecosystem partner and highlighting the folks that integrate with Xero and specifically how they're becoming this really, like, essential aspect of running our practices. Not just the central ledger, but all of the apps that we build around it and how those apps are customized for client specific situations. And I did not always dig into this stuff or position myself as an expert or an advisor for the client to help them choose apps. Honestly, for the first decade of my career, like, I was doing tax stuff and people would just turn up with what they turned up with. And that was the way I preferred it to be. Because I can only be an expert in so many things and there are so many bloody apps out there. I didn't really want to like put myself out there and be on the hook for implementation and all these things. And what if it's not the right tool, you know? But over time I saw so many apps, awful versions of this, where the client was left to their own devices to go out and source a set of tools, and then they come to you and it is like, good God, what have you done, you monster. Let me clear off the next six months of my calendar to unwind this terrible, terrible mess that you have made. And the more those things that I ran into, the more I realized, okay, if we can actually get out in front of this a little bit and even just be slightly involved in the process, we can probably cut an outrageous amount of time off of the client's process for finding the right tools, making sure that those tools will talk to each other, best case scenario. If not, then at least, like, have a plan for how a human being will kind of bridge the gap there and quasi integrate them. And even though I'm never going to know everything about every single app I was selling short, the fact that I knew a whole lot more than my client did about all the wrong ways to do it, like, we have a much higher bar for ourselves and how to do this perfectly than your client could ever even comprehend. Because we've seen hundreds of clients and we have this position of being able to see the backend of the systems for a whole bunch of SMBs. And your clients don't have that perspective. So even if you're not the wizard of Oz and able to create this, this perfect thing for them, you're a whole lot more informed than your clients are. And the way zero frames App Advisory is the best one that I've seen, the least scary one that I've seen. For someone like myself who never identified as like even being a tech nerd, tech enthusiast, I never identified as the type of person that would do this for clients because I was an accountant and I did month end closes and tax work. Right? That's what we're supposed to do. That's what an accounting firm does. But I learned going through this that, oh, I'm already doing all of this stuff. I'm just giving it away and not getting paid for it because this is the way when you're an accountant and probably any professional services, you end up giving a bunch of stuff away. So I'll put a link to this page in the show notes. If you're on the video version of the pod, I've got it pulled up here. They've got this whole thing started as just an app advisory playbook and that's all I'm really gonna dig into today. But there's a bunch of other things they've got here, from a cash flow playbook to even industry specific playbooks. So trade and construction App Playbook, professional services App Playbook, Retail and E Comm App Playbook and hospitality playbook. So many playbooks. But I'm just going to look at their vanilla app advisory playbook that they have had for a While. It's a 24 page PDF. Really good stuff. Probably half of it is just like single pager, giant copy or pictures of attractive hypothetical business owners. But the real meat of it, my favorite bits, is the three levels of App Advisory that they outline. And this is like such a practical document that you can literally swipe these three levels and like plug it straight into your service offerings or your your proposal proposal software. Hey. This episode is sponsored in part by Canopy, the practice management system. Canopy unlocks the firm that you always wanted. Think about it. Close your eyes. Lean back in that chair. What is the firm that you always wanted? Oh wait, Canopy unlocks it. And they do this by unclunking accounting firms with an end to end solution that makes your tech stack feel a little less stacky because it's end to end. Putting our customers first with world class user experience, support, education and innovation rooted in customer feedback. Working and working well anywhere and for any size or type of firm. Wherever you are now and wherever you're going, multiplying your efforts so your practice requires less proverbial midnight oil. You know, I Sidebar if you go to the conferences, Canopy's got like, they always do some like really good little like sorta, you know, the stuff that they use to like trick you into coming to the booth. Well, this year they've had like Legos out there, maybe, maybe a double down on the midnight oil thing, you know, maybe like, I know, give away a little, little, you know, little actual midnight oil. I guess it would need to burn too, but that one's free. I think it's a good idea delighting your clients with a modern, easy to use portal that helps you get the info you need when you need it. That is Canopy. Check out the link in the show Notes to learn more. This episode is sponsored in part by Client Hub. This week on Tales from the Hub, let's talk about, let's talk about partnership. Okay. Last week, super smart accounting firm, they were at scaling new heights. And while they were there, they got to meet Judy and Sarah from the Klein Hub team. They had a booth and let me tell you how good it was to connect, learn that there's a real team behind the tech that you use actual squishy human beings. And you know what else? They felt that there was a real partnership there, a real bond between their firm and the folks at Klein Hub. They realized client help was about three things. Being great listeners, being forward thinkers, and third, being community builders. By listening, they could be genuinely interested in what the firm told them about their clients needs. By being forward thinkers, they were blown away with their vision of your firm on GPT. What? And all the magic features Client Hub is working on. Okay. What a tease. And finally, by being community builders, Client Hub could connect them who other with others who were happy Client Hub users. They had a great time at the conference, hanging with the Client Hub folks and told everybody about it. Told everybody to get on Client Hub because partnerships, what it's all about the end of the day, you know, you know, just bringing people together. That's it for this week of Tales from the Hub. Check out Client Hub at clienthub App or the link in the show notes. So three levels. First level, level one is App recommendation. Level two is app implementation. And level three is full app advisory. And if you're gonna start somewhere, you just start with level one. Like you don't need to complicate it any further than that. Start with level one. So App recommendation, all you do, profile your client's business, recommend apps based on their needs, and the client and the app partner are responsible for implementation and app support. So all you're doing is talking about it up front. You're not having to do the heavy lifting yourself. That is ultimately up to the client and the team behind that app. So in a more kind of detailed, granular way, you're going to just have a conversation with the client about exactly what their needs are, go out and do some basic analysis of the stuff that's out there. And then I think important here is there needs to be some sort of like actual deliverable at the end of the project, some sort of report. And so you can absolutely templatize what this looks like. But basically what are the apps that you looked into? Why did you highlight some apps and not others specifically around what the needs for that client were? And this can be a one off project. But interestingly, I think the best version of this is actually some sort of recurring, they call it health check to review progress and identify further opportunities. The needs of your clients will change over time. The apps that are out there and which apps are developing and which apps aren't developing, that stuff all changes over time. So like a great version of this to me is you just have a standing like once per year meeting to do an initial conversation about kind of an app review followed by like eventually a little report that you issue based on the follow on work that you do after that meeting. So if you work for small businesses, especially if you do back office, especially if you do accounting cas, all that stuff, you really need to be doing this. There's value in having a standing meeting to revisit this stuff at least once a year. I found in our cast business so much of the profitability of the work that we did boil down to the tools that the client used, that there was a tremendous cost to us not getting involved in that process. And eventually we actually went as far as saying, you really need to help us drive the tool decision making in your back office or we're just not going to work with you. Because we ended up having clients that were super opinionated on what tools they should use. When it's like, like we are the experts here, like we are the ones doing this behind the scenes. And so like I would have a dental clinic come and tell me, no, these are the tools that I need to use for my back office. And I'm like, do you know who I am? I didn't say that. I couldn't say that. But like that's the same thing that you think on the inside, right? You're like, do you have any idea how many of these things that I've done? And you're going to Tell me the right way to set it up. Get out of here. I didn't start there, but eventually we got there when we just got more opinionated about the right and the wrong ways to do it because we'd just seen all the ways that it had gone sideways, right? So level one, super, super basic. And honestly, I think almost all of us should be plugged into this for things as simple as your ledger tool, your payroll software where you manage receipts. I don't care if you're an accounting practice or if you're a tax practice. You know the ways to do this right and you know the ways to do this wrong right now. So if you're looking for. I won't even say that. I won't even say if you're looking for that next thing to do or more revenue, because honestly, I don't think we are looking for any of that. Like, we aren't. We just aren't. We've got plenty of work to do most of the time, but this really ought to be a part of what you do for clients. And I'm a big advocate of going deeper with a smaller number of clients. I think that is the general trend in the industry right now. Whether you are a, you know, the big trend right now for tax practices is to go from just doing the tax work for that SMB to doing the tax work and the back office, the accounting department for that SMB. And then eventually your business is just the clients for whom you do all of that stuff. Like, that's just kind of how things are trending. I think that is a very profitable version of an accounting firm or where you don't have a huge number of clients. Not everybody wants to do that, and that's fine. But that's kind of where we're trending in the accounting practice world. I think we're trending out of bookkeeping to what more can we do? Because bookkeeping's becoming increasingly commoditized. And AI is just going to take us one step further towards that transactional work being totally automated. And that's why, that's why people seem to be allergic these days if calling it, quote, unquote, a bookkeeping practice. And, you know, that's why the AICPA is calling it cas and we're coming up with all these other things that we do around the bookkeeping work. And this is what I did in my accounting practice. Like, I couldn't do, quote, unquote, bookkeeping profitably, but I could run like your whole back office profitably. And that's why we called it, you know, in the client facing context, we called it managed accounting, kind of akin to managed it. I want to do that whole, I want to be that whole accounting department. I don't want to do bookkeeping because what I'm doing is not, it's much more than that. It's the kind of collective experience that we have of running the back office for 100 other companies like yours. That's very different than reconciling your bank account. This episode is sponsored in part by Xero. Because you know what the roadshow is? Gosh darn. The zero roadshow. Accelerate. Do that zero roadshow accelerate. 2023. That is a freight train that is barreling right into your town. Specifically if your town is Atlanta, Georgia. So they did. Austin, July 27, Atlanta, August 3, Los Angeles, August 17. The Atlanta one is at the Georgia Aquarium. Whoa. Like this stuff. If you've never been to a Xero party, folks from Xero, they know how to throw a party. Roadshow is a great chance to meet other forward thinking accounting practice runners. Other folks run using Xero, learn more about recent Xero product updates, even meet some folks from the app ecosystem. But if you've ever been to a Xero party, you know these people know how to put on an event. Okay, case in point. How many accounting things have you been at at an aquarium? Sounds promising. I'll put a link in the show Notes to go out and register. August 3, Atlanta, GA at the Georgia Aquarium. Be there or be square. 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 in the Philippines that work 100% 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, gonna 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 cloudaccountantstaffing.com and as we are kind of trending towards doing more for the people that we have on those kind of curated client lists, this once a year, once a quarter, whatever it is kind of revisiting of the tech stack. Really valuable even if you don't hold yourself out as an app wizard. And this is probably tax folks that I'm that I'm talking to now. I get that you don't think that you're like an app wizard, but you can have a conversation with a client about how do I manage my receipts, like how do I manage my accounting on an ongoing basis, how do we get payroll done? You have invaluable insights into how to make all three of those things better, either with the tools they're already using or with different tools. Don't sell yourself short on that and charge for it. So like, if you're looking to build, to move to maybe a fixed fee around the year model, great, build this in now like this should be a package that you really push on clients like just speaking in at a high level to their app decisions year over year. So if you don't do this now, like just hear that, that is level one. Start with level one. Just be part of that conversation with clients. You don't have to be a total wizard on all of it. That's fine for me. The blocker was I didn't identify as like a wizard on all of this, but I was selling short the fact that I knew way more than my clients did because I've just seen all the ways to do it wrong. Level two App implementation. So level one was app recommendation. Level two is app implementation. The big difference here is you're going to train the client and their team on how to use the app and you're going to support them during implementation, but not until the end of time. So you're going to help them get set up. Now one area where we give this away right now, a ton payroll you get. You set up a first time S Corp or a client just needs to pay employees for the first time and you set up their accounting system. Sorry, their, their payroll system. Oftentimes like we kind of give away the farm on this and don't recognize that like we're actually taking into account some pretty technical things. To say like, hey, here's the payroll platform to put yourself on. Here's maybe a way to get like that 401k set up or benefits, stuff like that. App implementation is a great way to start going deeper with a specific type of, of client. And it is a actually huge driver of success within a specific client vertical. A huge part of them having a positive experience coming to. You can come from the tech transition from where they were to where they are now because ultimately if you work with 100 taxidermists, you are more informed as to a good tech stack to use than almost anybody out there. Then maybe you know consultants that work with this type of client and you didn't make any of these tools, but you're the one that brought them to the dance and if you can get them to a better tool set, they will love those tools, but they will assign a lot of that value in their mind to you. You were the one that got them there and they wouldn't have found them if not for their relationship with you. And so level two here is not a forever commitment. It is a, it is ensuring a successful transition, which is honestly where a lot of change management goes to die. Right? Like they're getting over the hump and having to learn to do things a new way and having to like you have kind of the inertia of the whole team going another direction. And now you have to get everybody on board on this new system if you, if you have a kind of common system set of apps. And so let's just take Gusto. Like if you're trying to put all of your, all of your payroll work on Gusto, for example, you've done this a lot. Like you have set up a lot of those. This is a great opportunity to set up kind of some reusable resources for the business owner, for the person in the team that will be processing the payroll, which may or may not be the business owner, and for the employees to understand how to log in, access their pay stubs, how to read their pay stubs and all that stuff. This is a great opportunity to set up some reusable resources that you build once and deploy to every one of these client engagements. And this, this becomes actually a really high leverage asset because the value of what you then deliver to the client is we're going to get it set up for you. But like also, here's all the training resources that you can use and maybe those are live. Maybe that's a talk that you give to the team every single time like the Aflac guy that comes in the office or the, you know, the retirement advisor that comes, you know, Whoever manages the 401k that comes and talks to the team once a year. Like, maybe it's just something like that. Maybe it's like a library they have access to of like demo videos or help articles or something like that. That's something that you can build once. And then every time that you do that app implementation with that client, you're charging them not just for the work that you're gonna do, but you're charging them for access to those assets that you've created. And you can sell those assets ultimately any number of times. Any number of times. And I can tell you like the way I reacted to this stuff was I'm not building a business around apps, around all this stuff. The reality was I was already doing all of this. I just hadn't systematized it and I honestly wasn't charging enough for it. Like, we do Apple app implementation all the time. You put your client on a better system for managing receipts, for managing payroll. This stuff happens all the time. We just don't hold it out as this valuable thing that you offer that is informed by the fact that you do it for hundreds of other people. Because who else, like and, and this is where we sell our value short. Take a payroll system for example. Who else in your client's circle would you happily turn that over to for them to do correctly, to put them on the right platform to set it up correctly? Virtually nobody. Right? And like that is an example of how we massively undersell our value. The fact that nobody will do that as well as you. Yet it's almost this kind of throwaway thing that we just tack on and we do for people. Level 3 is full app advisory and that is ongoing support. So it's, it's recommendation on, on what to its implementation, but it's also ongoing support. And so like an example of how we did this in my practice was we had some clients that we would put on Gusto and did Gusto's kind of built in benefits stuff, which when it worked really well, was amazing. And it meant that the, the staff could manage all their benefits within the Gusto platform, even if they have, you know, basically Gusto is the broker of records. So it would, it had all the insurance information in there and they can manage it all from a single place. But people are still going to have questions. They're still going to be like, what was this thing that was on the pay stub and for us, advisory here meant we actually had a user in the company, Slack that was just called payroll and benefits. And we sat on the other side of that and anytime the staff had questions they could chat with that Slack user and a member of our team would track down the answer and get back to them. And that was like one way of doing advisory that we thought was pretty novel and we were able to charge really well for. But that could just be like, that could still. That could just be like jim@your firm.com and them having permission to get in touch with you. I do think the more that you can make that feel like an internal extension of the company the better. Like depends on how big the client is. But like if you can manage an email on their domain like support, you know, some sort of internal support address where you can answer those questions for them. Like that was why I liked the Slack user approach to running support for the team. But that you become a really integrated part of their company then and like can actually be a tremendous resource for folks as those questions come up. Because you know what, the business owner doesn't want to deal with that stuff like and they're not as qualified as you to be able to deal with that stuff. So getting into level three is more like you're getting into some pretty novel like more in depth support for the team. Now I would argue everyone, whether you identify with this stuff or not, everyone is doing level one. If somebody asks you for your recommendation on a payroll software or on a lot of things like you've got that ready to go and depending on how extreme you are on that, oftentimes you will hear somebody went to this other tool and you just die inside. That is a sign that you have expertise that you could probably be more proactive with. And that being proactive can be as simple as we're going to have a meeting once a year just to talk about it. It doesn't need to be anything more than that app implementation. I would argue most of us are already doing this too. Even tax people who don't necessarily get into the back office. You're already doing this most commonly when it comes to payroll setups, but also tracking mileage, managing receipts. Like we do this quite a bit. We just haven't put a name to it and systemized it and systematized and we don't have like a reporting framework for what the final deliverable looks like which like arbitrarily I think makes the thing more valuable when you have sort of that here's the research that we did and, like, some reusable resources, like a one pager about gusto, like, and why you have positive experiences with it, and maybe a couple, like, quote, testimonials from other clients. I think those make the final deliverable a little more impactful. And then level three, if you want to go further on this stuff, there's definitely ways that you can do that. And this is like, level three was the sort of thing we built into our accounting practice that made it much more profitable than if we were just doing bookkeeping. And it was an extension of the expertise that the team already had. It was just kind of a reframing of that and giving the team access to that expertise. Because that expertise, the market value of it was way more than the value of the bookkeeping, which has kind of been commoditized. Right. So I'll put links to all this stuff in the show. Notes, like, Zero's framing of this was a big unlock for me because it just felt really simple. And it was like, oh, this is already a thing that I actually do a lot of. Let's just rethink how we communicate it to clients. Build those templates into our proposal software so that when somebody needs help, we're like, oh, yeah, this is something we totally do for people. Let's add this to your engagement. But then ultimately it was like, okay, the tools my clients use are. Have such an impact on the overall success of the whole relationship that we really pushed that. And it may have even been the kind of thing that ultimately we made mandatory, in fact, in our cast practice, because the tools that they used, like, so greatly impacted how efficiently we could do their accounting. That was something that we were probably on a path to just making a mandatory part of the process. And I know there's a lot of accounting practices out there where it's like, you're just going to use all the tools that we give you and that's it. Like, you don't have an option, and that's totally fine. Like, that's. That was probably the direction that my team was headed in. It makes sense in some situations. In other situations, it's a little harder to be that cookie cutter. But the reality is, accountants these days, we have a huge amount of app expertise. Especially the folks that tune into my stuff I know are more on kind of the techie end of the spectrum. And that stuff's like, just going up now with AI and how people are, how our clients, businesses are potentially being disrupted by AI. Just like we talk about our profession and how AI can impact those things for us. Ultimately, the only solution is learning it, getting out ahead of it, and it's something that can make you a super valuable advisor for your clients. If you have a client like Vertical that is concerned about AI that could be impacted by AI, what better opportunity than to be the one to unlock that stuff for them rather than them be disrupted by it. You are the advisor that unlocks it for them. Never been a better time to be into that stuff. But also, don't overthink it. You're already doing a bunch of this. We're probably just not charging for it. That's it. Check out that link. If you want to learn more, share it with your team. That can help them maybe get their minds around how to sell this rather than just give it away. Thanks for coming and hanging. See you tomorrow.