109 8 Things Accounting Firms Should Stop Doing

You want to impress me? Tell me what I don't need to do anymore. Give me some stuff that I can whack off the old to do list that I never have to touch again. It's easy, honestly, to throw out another idea of here's yet another thing that you should do. But I can tell you, for most people, the answer is probably not more yet. I think we're constantly inundated with new ideas of additional things that we ought to be doing. So today we're just going to run down a whole giant list of stuff that I think we can just stop doing. And if by the end of this, you're going to successfully be doing le less, leave a comment. Give somebody else a little inspiration to cut themselves some slack and quit trying to do too much. It's just the human condition these days, isn't it? Come on in, let's get lazy together and find some stuff to not do. Okay, I got eight things that I don't want you to do anymore. We are like, man, I've got this disease big time. We are so much a victim of setting ourselves up to be at full capacity all the time that there's like no space for exploration and so many things fall off the table when you are perpetually living on the ragged edge as accountants like to do. You know, I think this is actually especially bad if you are living online, if you're going to conferences, if you're connected with a bunch of software people, because software people, coaches, so many of those business models is built on top of people doing another thing. Not all of them, but a lot of them are. And when we take our advice from people that have something to sell you, that's problematic, right? That's, that's actually I super grapple with that for myself and what this job is and my place in the universe. I did that digital product episode last week and I was like, it'd be fun to do a digital product myself for like, content creation and how to make that as easy as possible for people and like, set up ways to generate just tons of ideas and have an abundance of things to talk about because, like, that's my secret sauce. Like, I've got those systems figured out. But then I'm like, man, as soon as I put that out, are people going to think I, like, have a thing to sell them? And then they question everything that you put out there because it's got this like, underlying motive. So, like, that's kind of the hard thing with, with software and coaches is it is a Lot of really smart, really well meaning people. But oftentimes they're just being incentivized to sell when that doesn't necessarily mean the best thing for you to, for yourself is that additional thing, pick up that software, sell that additional service, that sort of thing. So let's run through these eight things I got down here. Number one man, taking clients to 100% capacity. It's pretty funny. I think most of the people that have actually gone through the exercise of doing capacity planning, that's literally what you do. I know that's what I always did, except for the last couple of times I did it, I think. But you're like, okay, we have X number of hours, so we shall fill this cup to the brim. But you know what happens when a cup gets filled to the brim? You make a big mess on the way to your mouth. Honestly, I think that is a great analogy that I just made. Unless it's a metaphor. But the problem is like, we never account for the stuff that will be added in the meantime. Like, I think, I don't know. The way I think about this is I can never get to the end of a day having gotten done all of the things that I had hoped to get done. And so we are kind of perpetually disappointing ourselves. And we have to give ourselves a lot of grace there because we're just bad at estimating that stuff. We don't take into account unexpected downtime. We don't take into account new stuff that will come up that will be added, like new clients or additional work for existing clients. And we don't leave any room for like serendipitous stuff that comes up. Like, all my kids were out eating like frozen gogurts on the deck earlier and I was like, first of all, where's my invitation? Second of all, I hope we got some gogurts left. And I went out and joined them. And when I planned my day this morning, that wasn't on the list, but I'm still glad I did the thing. So we can never capacity plan within the scope of a day. So what makes you think that over the course of six months or a month or some other longer time horizon, you're going to get that right? Like, we have to build in, honestly, a really big buffer for a number of things for yourself and the fact that nobody operates best at 100% capacity. This like shipping a digital product like we talked about last week. When are you making the time for higher leverage stuff to start investing in that a little bit? So as it stands, you should already be well under 100% capacity. You personally. But also, we're probably going to add clients. Really sneaky source of additional work. Probably going to add a pile of work within existing clients. That was always like, I mean, one of our biggest, if not, if not the biggest revenue growth source for us was we had clients growing leaps and bounds. But then we would just assume that the scope of work would be the same next year when that's. That's never the case. And then something always goes sideways. You have a yogurt allergy and it takes you out of work for a week. Somebody at work gets sick, somebody has to leave. That stuff happens. So you have to build a bunch of wiggle room in. But just as a rule, even if you had the old crystal ball and you knew exactly how much time everything should take, you should not book yourself to 100%. Right. Like, you just shouldn't. So can we just stop? Like, who is putting pressure on you to do this? It's not me. Whoever is. Stop listening to them. Number B. Taking referrals from anyone but AAA clients. I don't know if you have this experience, but in my firm running days, we had our Steves, we had our cheapskates, the ones that we just couldn't let free. And they're paying us the legacy rates of our legacy rates. And the very worst version of this that I experienced was we used to do this for ministers, and we would help them out, and it was like, hey, we're doing our part. We're helping out these people. And then the ministers would refer their ministers and then they would refer more people. And this was at one of the firms I worked at. And they went as far as calling it a niche. And I don't know who gets to set the rules for what's a niche and what isn't a niche, but I got to think one of the qualifiers is that you can make money on it because this was not a profitable venture. But those people who are paying your legacy rates, oftentimes, they're the ones most tickled with your services. And all things being equal, if I didn't screen any of the referrals that we got, it seemed like we got just as many, if not more referrals at the bottom end of the spectrum as we did at the top end of the spectrum. Now, there were people at the top end of the spectrum that adored us and would tell all their friends about us. But the problem was we also got a lot of referrals at the other end of the spectrum. And it can be hard to say no if you don't know how to say no. I think the way to say no is to stress the scarcity in the clients that you serve and just say sorry, like, we're not taking any, we don't have any room for clients of this type right now. Or basically just that you're at capacity. Unless it is a triple A client where they are paying you top dollar, they're the client that you want 10 more of, then I don't think we have any business taking those referrals. Especially if it's just because you're flattered that the person made the referral. So you feel like you have to say yes. Try to avoid like that situation. And there's a very kind way to do that, to say like, hey, I'm super flattered and I really appreciate this. Unfortunately, I could put you on a wait list, but unfortunately we are, we're at capacity right now. 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% 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 gonna 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 gonna 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. We talked 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 Theme Let Me tell you, this episode is sponsored in part by Copilot, the portal that makes all of your wildest, wildest, wildest dreams come true within the business context. Name of the game with Copilot is flexibility. The notion that you can build that client portal to do any old thing you want it to do because your Needs, they're unique. You know us accountants. We are absolute snowflakes. Nobody understands the problems that our clients have quite like we do. Which makes nobody more equipped to know what they need than me. Tell me how to work with my client, how to collaborate with them on a website. You're lucky I don't know how to make the software because I'd make just what my client needed and they would love it. Well, gang, bad day is here because Copilot gives you the ultimate flexible platform to put any old thing you want in that portal. Totally customize each section. Customize what? Different clients and different client groups. See, because your clients aren't just a bunch of drones that are all the exact same and need the exact same thing. And if you really wanted to be that locked down and serve everybody the exact same way, then you'd be off running some sort of software startup that's just going to serve up this vanilla, lame, boring version that's the same for everybody. Doesn't take into account their actual needs. That's not you, though. You better than that. Okay, and get a client portal that will lean into the snowflake that you are and the specific needs your clients have. Is that a bad thing to say? Does Snowflake have like too many negative connotations? You know what I mean? Nobody understands the nuance like you do. And Copilot's the portal that'll meet you in the middle. Learn more about this one at the link in the show notes number C. Setting the expectation that everyone is going to be renewed in perpetuity. We talked about this a bit before, but I think what makes cutting loose clients so dramatic is that there's this expectation that they're going to be on your client list forever. And if you can not set that expectation in day one and make clear that, hey, every year, every fall, every spring, whenever it's going to be, we go through the client list and we send out renewals to the folks we're going to renew with. But the reality is that stuff changes over time. Our capacity changes over time. Even like the type of clients that we're best able to support, that changes every time. And so just like you, the client needs to make that decision every single year about who you want to move forward with, we're going to do the same. And by making that an annual conversation that is not personal, it's totally a business thing. Am I right for you and are you right for me? Then there isn't this surprise, ta da aspect of firing someone. I mean, that's why people don't get in the way. There's. I guess there's a number of reasons. There's this scarcity mindset that how will we ever fill that bucket back up if we let that person go? But honestly, I think people hide behind that. And for most accountants, it's just scary because it's an uncomfortable thing that they don't want to do. But in my mind, firing is only this surprise, out of the blue, big, dramatic thing, because we've told people we will support you until the end of time, until one day you don't. Right? This is you going out for a pack of smokes one day and never coming back. When instead we need to be saying, like, we're going to review this every single year. That's just how it is. And then when you get to the end of the year, I think you can actually review that list in a much more logical way to say who's the best to move forward with. And not setting the expectation that everyone is renewed in perpetuity upfront makes that a much easier thing to do. Now, it's a balancing act there. I don't know. Like, you don't want them to feel super uncomfortable about it, but I think it deserves more acknowledgement than we get it. Because when we let people in the door right now, the assumption is just, we're going to be together forever until there's a messy breakup. And I think there's just a better version of that conversation to have a better way to set that expectation up front and then in how they get renewed each year. Number four, needing to have your fingers in everything. If you run a team, especially. But actually, even if you don't run a team, how can you get yourself out of having to be the guy or the gal or the person for absolutely everything? Because when you run a business, you're inevitably. And you're the big boss, you're inevitably the bottom of this filter. Of here's all the things that we thought would happen today. And this is what Julie does and this is what Steve does. And anything that doesn't fall into those buckets falls to you. Like, unless you've got a GM or like somebody else who's basically tasked with running the business, you're collecting all the stuff at the bottom of this filter every single day, and you can't plan for it and inevitably sidelines you and takes up a bunch of time and becomes a source of frustration. You gotta keep really pushing the envelope of what are the things that you need to have your fingers in and what are the things that somebody else can handle. And I know oftentimes this goes sideways when we don't bring in high level enough people. My early firm running days were in were in traditional environments where you had partners that wanted to control all the client communications. And as a result they brought in a team of doers, people who are terrified of sitting in, in a meeting or calling a client or something like that. And that worked fine because the partners wanted to control a hundred percent of the communications. But when those, when specifically the firm I'm thinking about evolved and you needed to ask more of the team and expect more of them, that team that wasn't the team for it, like they were not the people that were suited to be able to do that stuff. So oftentimes I see the most common reasons for not getting out of stuff is either you're not pulling in high level enough people, but also that you're not systematized enough. If you don't systematize what you do, you develop an over reliance on expertise. And so there's kind of a sliding spectrum there where the ultimate, ultimate systems people can build a system for anything and plug a low skill person into it and have successful outputs. Right. So it's not enough to just say I'm going to hire away all these problems. That's a really expensive solution. In a perfect world you're able to build systems that can ensure quality on the output that require a less qualified person to do the inputs. Because the whole, you've probably seen it too. If you've worked in firms the whole man, if I could just find somebody with some common sense and why don't they get this and that when like what they're actually talking about is the things you just know after 30 years experience, the whole relying up on that and the cut of someone's job to do things exactly the way that you would do them. That's not realistic in my experience. So is there a way that you can develop systems that you can pull in the right people to get your fingers out of the stuff that you don't need to manage? It's funny, people are like fundamentally wired on different ends of the spectrum in this regard. I like one of the, I mean probably the biggest thing that let's gives me the flexibility to do a bunch of things is that I'm just really quick to identify the stuff that I don't need to be doing to a fault. Like it's a problem, like it makes it made running an accounting firm really hard. The upside of that approach is it lets me do different things. It keeps me out of the weeds. But there's also a lot of people on the other end of the spectrum where that's a really, really hard thing. It's something you, you have to keep pushing back on yourself. You develop this mental framework of the things that you need to do and you need to keep challenging that or get a third party to challenge that which leads into number E. Quit making decisions in a vacuum like just yourself. There's so much value in having a coach. It can even be a peer, just somebody on the outside to help you to make decision. Because let me tell you what happens inside your own head when you're just thinking in circles and circles. That's not a sane place. Like that is. That is a place where like there are just so many contradictions and you rethink yourself time and time again. And like this is the value of counseling and stuff like that is having to say it out loud and having to get more explicit about exactly what it is you think, what it is you feel in order to find the contradictions there, to get to something that's more grounded. Because what happens up in your head most of the time doesn't make sense. I can tell you, for me, I get past 7pm and it gets real weird up there. Nothing makes any sort of sense. And I think myself into just all sorts of calamities, man, I think coaches are absolutely worth their weight in gold. I think we get hung up on the cost, but we lose track of the cost of the passage of time. The fact that it will take us years to not make hard decisions and go years down the wrong path where somebody could have said like, hey, I do this with a bunch of people and I can tell you from other people's experience this probably isn't going to work. But having that external person as a forcing function to help you make higher quality decisions, man, super, super valuable. Even if those decisions are no. So much of the internal noise and decision fatigue and all of that that we have comes from overwhelm from all of the different things that you can do. And sometimes the best thing that you can do is just arbitrarily say, no, I'm not going to touch that until X future date. Or just know we're not going to do that and just be okay with that decision in my life right now. Like, man, we've been talking about moving for years now and it's this big thing that is always looming over us. And we're always like poking around Zillow and having this conversation, having that conversation. And it's just like this passive thing that creates anxiety and sometimes friction and you're kind of thinking about it. And I can tell you the best thing we did was just to be, nope, we are not, absolutely not going to do this until the end of the school year. We're not even going to think about it. And then we're going to jump into it in a meaningful way. And that freed up so much headspace. It gave us so much freedom to, I don't know, not stress about it and just be more present in what we're trying to do. And I think in business there's a ton of examples of that, especially around software Team this episode is sponsored in part by the fine folks at Client Hub, where AI isn't the future, it's now. It's here. I guess it's both the future and now, but it is happening in the present. They're shipping cool stuff every day. Not just talking about it, they're doing it. They got a new landing page, your firm on GPT where they kind of outline their vision for the stuff they've already shipped and the stuff that they're working on. Starting to get firms in on like early access to provide feedback on this stuff. Leveraging AI everywhere in client hub and yielding. How's this sound? 90 plus percent time savings in many aspects of the work in your firm. The three core concepts they're building this around 1. Generate it using AI to generate stuff that normally you would have to do yourself. Think emails, tasks, that sort of thing. Answer it. Don't just search by text. A more intelligent version of text that sees into your meetings, your emails, all that stuff. A lot of the stuff we've been talking about on the show and third up level it summarize meeting notes tell you what's inside a file without having to open it. So sentiment analysis, whole bunch of cool stuff. In the coming weeks we're gonna be talking about like the actual stuff that they've shipped so far and the stuff that's coming soon. That is Client Hub. To learn more about that and what they're working on, check out the link in the show Notes gang. This episode is sponsored in part by Live Flow. Live Flow is the easiest way to sync that QuickBooks data back and forth to your spreadsheets. You may have seen this actually had a big announcement lately. So this fall G2 gave them the top spot in their fall 2023 report as the Leader in the financial analysis category. That's right. They won number one. Nice work. If you've been around my channels for a while, you've seen Live Flow kindly. They have sponsored quite a bit of stuff. And I'm not, I mean I'm not saying I'm taking credit for it, but that was probably why I have not familiar light with Live Flow. Super easy way to sync that stuff. Sync your QuickBooks data back and forth with Google sheets. They got a whole pile of templates too to make the process of building that stuff for the first time as easy as possible for you. Stuff for managing cache, AP KPIs, like everything you can imagine. Sync that data into your existing sheets to make them smarter, get it to auto sync or build your like custom new sheets that talk with QuickBooks totally from scratch. Pretty cool tool. Check that one out at Lifflo IO. So if you have the grass is greener on the other practice management system syndrome, you just gotta put boundaries around that stuff. You gotta say we're not gonna touch this until X timeframe. And that doesn't mean we're gonna change it then, but we'll do like we're gonna spend 60 days, we're gonna do a deep dive on is this still the right thing? Great. Otherwise you have all of these open loops constantly that are taking up space in your brain and then you have all these kind of conflicting things that you're really struggling with. Either do it right now or don't do it right now and decide we're going to revisit this at a future date ton of value and saying no or saying no until X date and pulling in an external like third party I think is really helpful there to help you to make higher quality decisions. Okay, number six, stop doing more if you aren't having a good time. It's funny that we just continually take on clients because that's just what you're supposed to do when oftentimes what those clients actually represent isn't something different, but rather more of the same. It's like this lateral movement extending more of what you already have. And in the beginning, when you're first building your firm, maybe that's what you need to fill up the hopper for the first time. But for most firms, what matters is change is progress, is this client is somehow better than the majority of the clients that we have right now. Like it is ahead of that normal distribution. But for most of us and where we're at in our firm running journey, the notion of like doing a copy paste and doing 2x that exact same type of client work. There's this kind of inherent pressure for us to do that sort of thing, to have something bigger and outwardly more impressive and all of that. But it's worth acknowledging that more of the same very rarely gets you to where you're actually trying to go. Because most of the time we're trying to figure out how to do stuff more profitably, more sustainably, to be able to go home sooner, to be able to work less, to be able to maintain a better relationship with my team. And doing more of the same generally won't get you. There's. It'll actually work against you in many ways because you have less bandwidth to invest time in the change that it takes to do that better thing. And like there's the adage of if you're not growing, you're dying, which I think is just like a super toxic thing, because I think it gives us this arbitrary focus on revenue and saying yes to things when oftentimes that's the worst thing that you can do. EOS frames it as. There's. There's periods of internal growth and external growth. And I think if you always have the external spigot on, it's really hard to also have the internal spigot on. So if you're saying yes externally, it's really hard to meaningfully say yes and grow internally. And most of our problems are internal. It is. We're not specific enough about our messaging, about who exactly we want to serve in order to enable a type of client that will pay us more for the work that we do. And so turning off the external, like dialing that back doesn't mean that you're no longer growing. It means that you are finding your way forward with a greater level of specificity. I mean, I worked in a firm where I had a partner that hung their hat on closing every single deal that they ever got involved in. Never sitting across from someone and not being able to close that. And that was like something that they hung their hat on. And there's a very, I don't know, there's kind of a like a good old boy machismo that I think is still around in many ways around that closing the deal and the excitement of that and the thrill of that. But all that meant was you're giving away the farm. Like if they go to firm A and firm B and you're going to give them more for less money than the other firm, who's the sucker? I would say we're the sucker. Yet for some reason, we're kind of pushed into doing more and to growing into having a bigger team. But I don't think that ultimately, unless it's a different kind of more, which could be paired with less. Like that's the best version of it was. What I most enjoyed in firmware running was adding phenomenal clients and being able to cut like three bad clients for every phenomenal client we added. Man, that was so much more fun than growth. But for whatever reason, we've got this sort of like kind of beating drum in us that makes us keep trying to grow. Number seven, letting coaches and software companies convince you to do more. I'll admit, if you're somebody that's super plugged into thought leadership, this is hard because there's a lot of good ideas and a lot of exciting things that are thrown out all the time. I, for one, love talking shop about this stuff. It doesn't mean that I do it all. Like, I love talking with other people about what they do because it kind of deepens the lived experience that I myself have not lived, but I can collect from other people. So when it comes time to make a decision, I've got all that stuff bouncing around in my head and I feel like I've got a more refined framework from which to make a good decision. So I think especially if you're plugged into thought leadership and all of that, it can be hard to not be overwhelmed by all of the good ideas out there. And not all good ideas are trying to tell you to do one more thing, to start offering payroll or accounts payable or whatever. But oftentimes they are, and they're really smart, really convincing people. You always need to be mindful of. Like, what are the motivations there behind it? I mean, we got hustled into like so many things just from software salespeople incentivizing us to buy this other package that would enable this new thing. And then we got there and we're like, our clients don't actually want this. And this is actually just more work. And it's taken the focus off, like the main pain points that we're solving for our clients. So I'd say be hesitant when folks are trying to pull you into doing more. And most of the time, if you really are going to go into a situation where you're doing more, it has to come at the trade off of doing less somewhere else. So, for example, going really deep on like technical, tax, advisory stuff, that's something in the US that you can charge Astronomically for much more than the cost to actually doing the tax preparation. If you're good at it, and if you can actually save people a pile of money and communicate that value effectively, that's a really hard thing. And so transitioning my client base into doing more high paying technical tax advisory for a specific type of client, that's probably a good thing. But is it realistic for me to layer that in on top of all the stuff I already do? Probably not. So you kind of have to make a deal with yourself that if I am going to close one of these new things, it's got to come with a trade off, which is really hard because you got that scarcity mindset of what if we could never get that work back. But one of the, one of the most helpful things I ever did with my partner was kind of having a developing a mutual agreement of how much money does this whole thing need to make. And every time we take on a new project or a new initiative that's going to increase that, it more than anything else gave us permission to then let something else go. And within any firm, usually there's a lot of really unprofitable stuff that is time consuming and there's such a massive like compounding benefit to adding someone that will pay you top dollar and then dropping like five people who not that's such a satisfying thing. It takes so much pressure off your team and you do that and you realize, oh yeah, this is actually just all about price. Like we were super fixated on systems and people and all of these things, but like freedom is actually price. So if you do get sucked into doing something more like putting together a digital product, posting on social media, leaning into higher leverage things, it's got to come with the trade off of what am I going to not do? Like, what's something that we can remove? And the last number eight is especially relevant right now for tax people. Reconsider whether you want to keep working with those clients who will just ghost you. So in the US we're at the extended tax deadlines and there's a lot of clients that come out of the woodwork right now when you asked for them, ask them for stuff back in March and they circle back and they're like, hey, what do you need for me to get this stuff done? And sometimes there's legitimate reasons for why they didn't see that stuff and maybe they actually never got it. But oftentimes there's an issue of there's a lot of clients out there that simply don't respect what you do where they expect when they message you, they're going to get a timely response but when you do the same, they won't. And so those people who kind of see you as like an order taker, those generally aren't going to be great people long term. I will say I'm not in the camp where I just full sail go down the list and say who are all the people I got rid of? Or who are all the people that weren't super responsive and I just throw them out the door. I think the better thing to do is lean into requests. Like I always rail on having a clear system for how information gets requested. Let machines do the requesting and the auto follow ups and the humans do the human communication. If you have those people that were dead beats last year, I genuinely believe there's a really good percentage of them where if they if explicitly what you need is plugged into a practice management system and it is reminding them every week of what they need to provide. I think that makes a huge, I know it's not a, I think thing. It is, I know it makes a huge difference and people's responsiveness and how early you can get the information in during the year. So be careful. Don't send all those out in February if you don't want all the stuff in February. But you will get a much better response from those people that can sometimes ghost you when this thing is persistently following up with them. If at that point they don't respond even though you've got the platform automatically reminding them of what you need, cool, then let them go. But I'm, I am willing to go further than like asking for this stuff, sending them a reminder email, sending them another reminder email a few months later. Like I'm willing to go a step further than just firing those people straight off the bat because I do think there's a fundamentally better way to gather information from someone and that is using the software to do it rather than the really awkward human. Like kind of dance back and forth of asking for stuff and then getting increasingly awkward and, and all that. So there you go, eight things that you can stop doing. I would love to come up with more of these. Maybe I can refine this into a main channel video at some point. But so much thought leadership and I, I try to be mindful of this for myself. Like if all I do is just throw crap out that people should do all the time, that's just exhausting. Like it really is. So equally important is what are the stuff that we can. What are the things we cannot do and what are the, I don't know, the stuff like this that can, that can give you a little more freedom and, and space to do the best things or the more important things. So if you got anything else, any other ideas, stuff we can drop and stop doing altogether, would love to see them in the comments. Thanks for coming and hanging. I'll see you in the next one.