123 Managing Org Charts in Accounting Firms

Okay. I had a fun conversation with my.

Buddy Chad Davis about org charts. He grew a firm from two people to I think there were almost like 150 people at one point. But like all of the variations that their org charts went through, some really interesting lessons there. I shared my experience and how it kept evolving almost like with every hire and how really isn't probably like an ultimate correct answer for the org charts, but tried to share a bunch of practical stuff about things that we got.

Wrong and things to consider even if.

You'Re like a solo person and thinking about making your very first hire.

So this was a fun chat I had with my buddy Chad. We were posting these on the accountant support channel.

It was like a totally different channel. We're just gonna post this stuff on the Jason Daily feed as I'm starting to have more conversations with folks that I love and respect within the profession, talking with them about things that I think they are uniquely positioned to share insights on. So hope you enjoy that.

Without further ado, Chad DAV of Live Ca.

What are we talking about today?

Today we're talking org charts. Org charts, they're good, but they're bad. Sometimes they can help and they can hinder.

Yeah, I had like 100 different flavors of org chart. And as much as I like would stride for the holy grail of org charts, that was like the right answer. Like, it was. It seemed like it was always just kind of this moving target. Right.

I feel like every flavor of your firm, no matter what size, no matter what you're heading towards, you're going to have some version of a different org chart, whether it's formal or informal, and you have to be prepared for that.

So the format we're kind of going to follow today is like, start with itty bitty firm. Start with like your very first hire to. I mean, background. You run a cloud accounting firm in Canada. You were over a hundred people at one point. So from who's your first hire? To what does it look like to manage a big team? And kind of all the versions in between. But let's start with itty bitty. I'm curious, what was your. Like you started with a partner, I guess, but like, what was Yalls first, very first hire?

Very first hire was someone to help us do the work. So we just needed some work to get done. And when we met, we were lucky enough to put our names out there and got some clients, but we needed people to help do the work. So it was a bookkeeper. We just needed somebody to help. How about you. You started a cast practice when you came in and you need to make a first hire. What was your first hire there?

I did. It was also a bookkeeper. But it was a pretty like it was a pretty senior bookkeeper. So my, my hope was my initial hires could be the folks that would be suited to be managers longer term. Were you thinking about that at that point? Maybe that was a different dynamic for you because you had a partner.

Yeah. We're starting from zero. Right. So the two of us knew that we wanted to have some semblance of work done and we knew that we needed help with bookkeeping but we didn't know what it was, what it was going to look like after that. So that's why we were completely open minded. Didn't really think about org charts for a while and just needed to get the work done. I feel like a lot of people are in that position.

Yeah. And you know, really like, I guess you don't really think about org charts when you're little. Like org chart seems like a very big professional, large firm thing to manage. But I think you do wrangle with it in your own way in a itty bitty firm because it was interesting. So let's look at this. So a while back we put on Twitter, you're a solo tax firm operator looking to grow. You'll be at capacity soon. Who's your first hire? And I don't know that this is any different for tax like US tax versus if you were just running an accounting practice. But interestingly so the options were junior tax, senior tax, onshore admin or offshore admin. And onshore admin went out at 36% which kind of surprised me that like an admin hire would be the first hire.

Yeah. I think it follows that same semblance of you need to get work done. What can you unlock from what's on your current plate so that you can get the work done? And an onshore admin helps you unlock that time. And maybe that's where they were coming from. You just need to get more work done and I need to be focused on some of the things that I know best.

Yeah. Cause you think about like what are the, especially if you're solo, what are the annoyances of being solo and the disruptions and all that. Like it's phone calls, it's having to do tedious admin things that's particularly annoying. But I guess you didn't start there. So like you would have had that TDM still had you hired a bookkeeper first, huh?

Yeah. All hands on deck. And I think that's what you see with, with early stage companies, that it's more flat. Right. You might not think about an org chart because there aren't people to put in it. And all of the roles fall within a few people. So there's more important things to do than to get out your crayon and put on an org chart. But I like the sentiment of this, which is freeing up people, people's time. And like, for us, the time was we needed a bookkeeper. We called it a cloud accountant. At the time. It was like 2013, in the beginning of 2013. And that resonated. It resonated with us because we needed to hit to get the work done. But it also resonated with the market. They kind of a novel. Novel term. Didn't get too many applicants, but the ones we did kind of worked out in the beginning and pretty happy with that when you had to hire that senior bookkeeper. Tell me a little bit more about why senior versus not senior.

I was thinking like, so this is the first hire, but what are the next two or three look like? And the sooner I could get those initial hires to train and in some ways manage the future hires, the better. So I wanted to bring somebody in senior early who could already be thinking about process and just more than just like the person that was just going to get all of the work done. My cast practice, the accounting practice may be a bad example because it was. It lived within another firm. So we already had some admin resources that we could rely on. What did your partner, Was he an accountant? Like, could he do the books?

Think of us as tax and everything, but tax. So we had a pretty good split of responsibilities in the beginning. So I kind of wore the tech, operations, sales kind of hat. And he and I shared duties with sales, but he was really the tax and the delivery person.

So why didn't you hire an admin? Why wasn't that your first hire if you could both do the work?

We were more focused on testing to see if we could work from home, if we could run a firm that didn't have an office. If people really wanted to work for a company like this.

Yeah.

And it was more testing.

Okay.

So I think when you have that testing mindset, it's a good mindset to have throughout your entire journey as a firm owner, because you'll always be testing.

Yeah. And so that was. You said it's 2013.

Yeah.

And you're hiring people virtually.

Yeah.

And for Most of these people at that stage, maybe their first at home job.

Yes, absolutely. I would say for wow years we were people's first at home job. Probably pretty easy to say from, from 2013 through 2017 or 19. 2017 or 18, probably. That was a pretty novel thing for accountants who were working in a tax practice or at a company that wanted to go into public accounting to try this out. So there was a lot of pressure for us during that to get it quote unquote right. I think when they found out that this essentially was a test for years and it was a, a rolling target, people were more intrigued and had bought into the idea of trying to build something versus trying to fit into something.

Yeah. So some things have changed since then that if I were to do it again and if I were say I were in the shoes of a person that had a solo practice and they didn't have a partner, my original thought was hire a doer, somebody that could help me to do the work. I'm probably split 50, 50 between somebody like that. And the folks in the poll said onshore admin. I think I would probably start with a VA these days because VAs are, I mean that's a really easy thing to spin up and then stop if you didn't want it. I like the less the kind of the fact that you don't need complete commitment with a va, whereas you would with like a full time employee.

Also, the first time you do anything.

Like you're still figuring out what exactly you want from that thing. And even just going through the exercise of having a contract VA seems like a way to maybe refine your model of like what tasks exactly is this person going to tackle for me? So if I were starting a tax practice tomorrow or an accounting practice from scratch, solo tomorrow, I think I would probably start with a fractional va, not like a full time admin, because that would seem like overkill for the amount of work that I was doing. But I feel like I would probably start with a fractional VA and then I would probably go to find the doer.

Next, tell me about situations where VA has worked really well for you. Because I'm coming from a place of not having great experiences over the years, I think it'd be helpful to hear how did it work, when it worked well, what are some, what are some tips that you could share that would help someone else who's thinking about either the fractional or the full time VA hire?

I've had a couple, I've had a few different flavors of It. So I've had a full time employee that was effectively just solely my admin when we were a firm of 40 or so and we only had really like two managing partners. So there was just, there was a lot of stuff that they could help with. My email inbox being the big thing, but also just like the ability to see that stuff come in and then just take care of it and give you a summary at the end of the day, that was gold. But that person was a full time employee who had been with us a couple of years, knew everybody in the company, company knew most of the clients. So they were very empowered to be able to tackle things themselves. I also did a spell with getting an offshore person up to speed to be able to run support on that. And that was a very different thing. And they were helpful when it came to managing stuff in our systems and info requests and that sort of thing, but not to the same degree when it came to like giving a client a call to track something down or not quite to the same level with coordinating other things within the team. Which actually as it turned out was a lot of the stuff that I needed help with was just like putting together stuff with other people in the firm or that thing that came into you that it's like, I don't need to be the one to do that, like, but this person knows who the right person is to go wrangle that. That was a little bit bigger of a lift from someone that felt more external to the firm. And there's definitely a spectrum of how well that that can work depending on how clearly mapped all that stuff is. Like if it, if you've got all that stuff mapped out in a helpful way, that person will be much more helpful. But the ultimate version, the version of it that I loved the most, which was a very privileged thing to have, was in the end it was like a very, very capable operations person that just like did, I mean, kind of came in and took like so much work off of my plate. I don't think that would have been possible from the beginning though.

There you go. So Was that about 40 people? Yeah, with that head. So to recap, it was. There's operational elements that involved your team and when they did involve your team, it was a bit of a heavy lift because they felt a little external.

Right.

And it took a while for any VA to be able to interact with the team because you had to figure out what you actually needed to do.

Yeah.

So I, I kind of can see where the, how many people voted that almost 500 people. Yeah, almost 500 people said. Well, 36% of 500 said onshored men. I kind of can see where they're saying this because you might need to know a lot about what's happening in the company in order to have an impact on that side. And it does free up that time. So what's cool is that there's no right answer. There's versions of a worse answer.

What would your right answer be? If you didn't have a partner say you were spinning up a bookkeeping practice, where do you think you would start?

I think knowing what. Knowing what I went through now, I would put less emphasis on the admin side and more. More emphasis on customer service.

Okay.

Only because I think I've seen lots of ebbs and flows where availability of accountants plays into how excited some customers are to work with you.

Yeah.

Certain things are novel at certain parts of the decade, and some things aren't. Like the working remote or working with a cloud system. You brought that into your systems. Couldn't have been easy, right? Bringing it all in from scratch. So anything that has to do with being able to talk to a customer and give them confidence, that is really important to me. So if we put it back to a role, a bookkeeper. You mentioned bookkeeping practice, but if it was a bookkeeper who wasn't afraid to pick up the phone and work through an issue, great. If it was an accountant who is going to be doing some tax work, I think I would hold off on that for the first hire for a bit. Because if I was by myself and didn't have all of the procedures in place, I'd probably want to think a little bit about what I was bringing somebody into, because I've had conversations with people over the years where the role that you're bringing them into isn't quite defined. And it takes a special person to get excited, to be able to be like, yes, I'm going to give up this cushy job for this. Call it a startup.

Yeah.

And help develop from scratch.

Yeah.

And we've been lucky to have a lot of those people. But at one point, when we had looked through our applicant tracking system, There was about 24,000 applicants and we'd only hired a couple hundred over the years.

Wow. You think that. You think the remote work was an attractor there for.

For half a decade? It was, for sure.

Okay.

I mean, it still is to a certain point.

Interesting.

But I think the more you have defined the role and you leave a little bit of Room for someone to put their stamp on it. I feel like that has a greater multiplier than saying, Here's 20% of a role that we know now, go do 80% and we'll support you.

Okay.

They really have to trust you if that's the percentage breakdown.

So that flexibility was an attractor, you.

Think, for some it was all we could offer.

Right. Because you didn't have the machine.

I think the problem we had, and probably a problem a lot of accountants are having these days, is who should I work with? I can pretty much select my clientele these days. What types of roles should I have to support those types of customers? And then having the courage to focus on those types versus all the other ones you took over the years.

Yeah. Okay, so in this fantasy draft we did on Twitter, second day, most folks, 58% went out and hired a senior technical person, senior bookkeeper, senior tax person. I guess that's pretty much what I, I guess that's kind of where I landed. Like a fractional VA and then kind of a senior person that can grow longer term.

Yeah.

What, what was, what did that look like for you as a partner?

We wanted to focus on growth and customer support. So we ended up putting together, I'll never forget this person. But we had hired our first sort of tax CPA only a couple months after starting, and the goal was to have the tax prep off of my partner. And you know, I think today, with, with, with hindsight and looking back, we could make that process a lot, a lot smoother, but it was not. And you know, we tried our best, but at the same time, that's, that's what you do. You, you figure out what works and what doesn't work. So if we figure out like what worked really well, it was that, okay, we've decided to make this choice to grow a company. We haven't decided to be just a two person firm and they will eventually take over everything. So what infrastructure is needed? Well, that person needs a lot of support. There needs to be some guide rails around or guardrails around. What part of tax work are they working on? Are they filing things? Are they having customer conversations? Are they prepping? Are they finalizing? Are they support for the other business partner putting in the procedures to allow for that person to flourish within a prep environment and get it to 95%. That was the move that worked well for us.

So the aspects of that hire that didn't work, was it a lack of systems? Was it just not being the right person?

Yeah, I think that's what it is. I mean, lack of. When something doesn't work, what does it look like? It looks like more people supporting that person to get the work out the door. Yeah, right. So say it was a base 10 hour job. Maybe it's a base 18 hour job after you've had your first few hires. I met a lot of people over the years that have done a really good job of putting in procedures for people before they start. We really didn't do that. We were just trying to figure out if we could, you know, how we would work together.

So is that a harder thing to do in the beginning where when you may not even have that self awareness of why you work the way that you work? Like I feel like in my experience oftentimes you see somebody do something and you're like, why in the world would the person have done that? And it's like, oh, because I didn't tell them otherwise.

Oh, that's a can of worms. Oh, it's a can of worms. Because. Have you ever hired someone who came with, I won't say blinders, but they had their way of doing things. Yeah. And I think my like my fear, but also excitement is that in the beginning you hire somebody with enough experience to be able to help you guide what is getting built. But boy, is that ever a slippery slope if they take you in the wrong direction.

Yeah.

Make mistakes. The same mistakes they were making in the last place. They were overly aggressive. Right. Tax strategies. The way that work is being done. Maybe that in cringes. Infringes on your cringes was the word. Yeah, we'll make up a whole bunch of words during these. That is like your ideal firm. And because they're so senior, do you listen or do you push?

Yeah.

Have you ever dealt with anything like that?

I don't know that we ever. That we've had that many people that came in with like a. Well, we. Yeah. Now some of the more experienced tax folks we hired like they had, they had a lot of experience and so they just had that element of routine of well, this is the way I've always done it and I have X amount of years experience. So that then is the right way to do it, I think is kind of the perception there. But I think the more one of the things that made that even worse for us was a just the lack of a system. And so like they're kind of coming into a vacuum and because they're coming into a vacuum there isn't I think as much of a Clear cut, like, no, here is our way of doing it. And unless you can like set that expectation from the beginning and be able to show, like, here is the expectation for everybody in the firm. I think, I think if the, the more, I guess the less of a void there is and the more of a system you have, the greater the likelihood that person's going to come in and adopt it. But if everybody's kind of doing their own thing, which is really how our tax practice was and us tax, it's like, it's just a hard thing to systematize. But because there was just a total void of expectation, they came in and they're like, great, I'm just gonna do it my way. And when that became problematic, it was like, well, what do we tell them? Like, what alternative do we give them? Because there isn't really a clear system. We just know that it's not working right now.

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There are good things to come out of hiring people that are really really talented. Right? We can't. We don't want to doom and gloom on it. But at the same time, if I think back to every single year, 18 months, the company went through massive transformations. The org charts look very different at one and two persons, people versus 10 versus whatever and to bring this all home. Yes, it is going to be the. I won't say the most critical, but a very critical part in your journey is like who are your early employees? Who are the team members that are going to shape how you create procedures, create culture, hire people that are also coming into the firm. And looking back that influence that that early group of employees had, that was the fundamental driver of who we became as a company. But at the same time there was always my business partner and I there to make sure that our opinions were part of any major discussion that went through. And it's. I would be very careful there because it is important to say opinions and not like directive or authoritative like Hammer per se, but it is important for that like firm owner who's hiring their first senior tax person to just remember like this is you created this firm because of something that happened probably prior that you didn't like. So. Yeah, don't let that happen to you as well.

Don't be the same thing. Yeah, yeah. And you, you, what appeals to you about doing your own thing is that freedom that you never had. And so like, are you creating a space that's going to be equally problematic for the people that you hire then? Yeah. Or are you going to give them that freedom?

That's right. So what's up next?

Okay, so the old fantasy draft after that folks made a junior technical hire and then fourth, a quote unquote, accounting manager.

Wait, we're just skipping over the junior technical hire?

Yeah. Why don't you take us through what did you do up to five and were there any stop starts there and like course corrections? Like, did this, did that second hire, that tax person not work out? Ultimately.

Ultimately, yeah. But it could have been from us. It could have been from them.

Right.

It's, you know, it's left to be, to be decided. There's a couple bookkeepers.

Okay.

Couple CPAs.

Okay. So just a whole bunch of people to get stuff.

To get stuff done.

Okay.

That's right. And then hire number seven or so was our first onboarding person.

Do you think the fact that you're virtual from the beginning may have reduced the amount of admin work? Yes, the firm had.

That's a good point. Everything was digital, Everything was organized electronically. How about you, when you came into that, was there a component of switching something off of paper and files versus starting from scratch or did you get to start from scratch too?

The accounting practice started from scratch. We kind of make that what it was. But I mean, that was. So my background is I bought into a firm that I had been with for a while and at the time that was about 30 people. And it was a traditional tax practice in the US and. But that was, I mean, that had all the trappings of a traditional accounting firm. Like it was a full time job to keep the building from falling over. So you had like somebody had to be at the front desk, somebody had to be there answering the phone, somebody had to run the mail, somebody had to fix the toilet. Like there, like there was just all of those things that I. Some of many of those things like exist in some different form in a virtual practice. But there was just a lot of inherent overhead that I imagine that you may not have had. But I suspect it came with a different set of challenges.

I'm sure I was still on the toilet comment.

The toilet thing.

Yeah, yeah. Okay.

You want some toilet stories?

Yes.

Yes. Okay. So this Property. It had its own tank that had to like for whatever reason we were not on the right grade to be able to use the city septic or something like that. And it had like this, its own tank. And sometimes there were issues with bumps. At one point there was like a fly hatch inside the tank. It got stuck and then these flies ended up all over in the office.

Oh.

And like 24 hours later we all learned where they had come from. I absolutely despise having a commercial building. I think there's some people that enjoy that. But like nothing made me more annoyed than not being able to do work because of fiddly things you had to do on the building or because I've got to go run off a homeless person or like just the myriad of different things or feces flies. Had some of those feces flies. Just general feces problems in general the last few years there. But anyways, back to org charts. Yeah, back to the org charts. So that got you up to five or so. And it's really just a bunch of technical people. Not admin. But when did you hire anything besides just somebody to do books?

Well, here's the thing. My the very first hire and myself very kind of technically oriented so we took upon all a lot of the admin, whether it's putting in Dropbox or setting up the email infrastructure or the file management systems or the help desks or the whatever it was like that was done by the team members that were currently there in the first four or five. Could you do that now? I mean absolutely. The tools that you have available now to set up can absolutely be done by the person starting it.

You mean like the bookkeeper or somebody that's technically oriented?

Imagine you're an owner. That's not right. Could you bring in somebody to help you with this stuff? Is it a full time person? Is it one of the part time vas you can get help and can get set up relatively quickly? I think.

So how far did you get until you actually hired somebody that wasn't a bookkeeper or a tax CPA or something?

I don't know. I don't remember. But it was.

And was that like an account manager? Was it an onboarding person? Like what was it?

I think everybody wore a part of the administrative hat for a while and I don't know if we would have broken it out if it would have had a massive impact on productivity or not because we learned a lot from each one of the roles as part of their feedback. What's a good way to do this. What's a bad way to do this? What should that first admin hire do? So that's where I kind of come back to customer service and the things that bring money in the door for you to be able to invest in the things that are important to you. And you know, an accounting firm that is not limited to tax only, that has bookkeeping, accounts payable tax, tax prep, sales tax account, you know, did I say payroll, whatever. There's. There's a lot of admin that goes into that. And you want the people that have the experience to say, you may want them to say, here are the things that I'm really good at and here's the things I could use some support with. And we were at a point, call it 12 to 20, somewhere in there where we're like, okay, it would be nice to have someone to help with these elements that now we have a job description for. We know the impact that it will have and we can focus more on the customer service and getting revenue in the door in those early days. So it's like a weird take. No, it feels like it's different than what's happening there.

No, I, like, at a certain point there's a threshold where you make that higher, where the person's going to be like a force multiplier for everybody else and doing that thing that nobody wants them to do. But until you got to that point, are all these people just cloud accountants? Like, do they have job titles? Like, are they all just kind of this homogenized pool of people?

Yeah, let's get into that sort of second stage. Then you're right. Of like, what does your first mini org chart look like outside of maybe the owners of the firm? And I think in those early days it's quite flat. Right. Everybody has a lot of hats, but you have responsibilities. So it was more around, hey, this is, this is our tax person who will help with tax and scoping issues. Here's the bookkeeping team. That bookkeeping team is doing everything. Accounts payable, bookkeeping, payroll. They're doing everything that's not tax, essentially. And then there's maybe a sales department, right, where it's the owners maybe having those calls. Maybe you know, it's somebody else because you know that you want to be a growing company. So you hire a salesperson. But so it was very flat.

At what size are you when you're like starting to think about these different departments?

I think you're always starting on, like, you're always thinking about them, but it's.

Like Half of this person as the sales department versus.

Yeah, you do what you need to do in a sort of flat environment. Okay. I think there's, there's a school of thought that says, like you, you build this properly from the beginning and things will just work out. I think if I've learned anything, it's that no matter how hard you try or plan, nothing really works out the way that you think it will work out. So if you focus on those north stars that fill the void that existed when you started your firm, everything else is sort of peripheral and everything is not like the biggest fire that you think it is.

So what was that? What were those north stars for your practice? That everything built around for us?

It was the. And looking back, I don't know if I would do this again, but it definitely was sales. It was. If the market is yearning for an online accountant, give them an online accounting experience. And then the force multiplier of the work that you're doing, the word of mouth, the tech that's advancing. It was a whole other time. It was, it was really nice to be able to say yes to so many things. And I know now.

Yeah. What's the North Star? When the novelty of that wears off.

It has worn off, right?

Yeah.

Like, you don't want to be that anymore. Like the, the world has changed and, and the axis is now pointed towards, well, being. It might be a generational thing, it might just be everyone waking up.

You don't think this is where you pivot to, like being the Metaverse accounting.

Firm or something like that? You have a Metaverse account, don't you? You have a VR goggle here somewhere? Yeah.

So when you're at like 10 to 15 people, do people actually start having different job titles? Are they all still cloud accountants? Do you have like, this is payroll guru. This is.

Yeah, of course. Okay. Yeah. Did you have the same thing?

Yeah. So we had, we had it on a couple different dimensions. So around eight people or so in the accounting practice we started. So, like, there's the dimension of how client relationships are managed and then the dimension of how the work gets done. And we started, we kind of started separating the production line of how all the work got done, because there were people that were super suited at that stuff that could turn out work faster than anybody else that didn't enjoy the client facing stuff as much. So like, for accounts payable and for monthly closes and for payroll, we started separating those more into functional lines and people that just got all of that stuff done and then we had client facing pods where we had a senior and a junior. So unlike the client management dimension we had, we started moving towards where folks managed a set of clients. Those, those client facing pods, the folks in there would review, like have the final sign off on the work that the production folks did. And it wasn't as if one day a switch flipped and they completely stopped doing one thing and started doing the other. Like it was kind of blurred. But the idea was pull them out of the production of doing the work and have them begin focusing on relationship management more. And oftentimes those were the folks that were kind of doing some mentorship and some process development too. So maybe around 8 to 10 folks we started like putting people in charge of the bookkeeping team and when do we need to hire another person to that production team and the bill pay folks? Um, and then we started thinking about in the client facing pods, like who are the team leaders right now? They all have an expectation for how much revenue they're supposed to manage within their pod and then at the same time they're developing that other person in their pod to eventually start their own pod and take some of those clients out of there. So we started separating some of the functional how the work gets done from how the clients get managed at that point.

How long did that last for?

We did that up until I sold up to the end of the year when I got out.

You just never stop.

Yeah, we start we the nice. So some problems that it solved was like always having a plan. If somebody left like there, it made it, it made it a little easier to have a clear plan. If somebody left tomorrow who, what combination of people and resources gets pulled in to support them. And so we kind of set that up in a way there where there was kind of some inherent redundancies so that we could cover for folks. But it also made it easier to capacity plan for us within the scope of those production teams. At that point, we were for every onshore hire, we were making at least one offshore hire in the Philippines. And those folks would come in and start with us in the production teams. Everybody actually started in the production teams and they would develop that core expertise and then some of them would go on to manage client relationships. And some people just didn't want to do that. But yeah, up until the end that was how we were managing things. And we were, over time we started skewing heavier towards offshore hiring. And it really just being the client facing pods that were the onshore team. And from a profitability standpoint that made it much more manageable. And like, the folks we were hiring in the Philippines were phenomenal at getting that work done. And so our accounting practice was remote. First, our tax business was largely on site and eventually went sort of hybrid during COVID But, like, the accounting practice from day one was virtual, so pulling in offshore team members for pretty much everything, but the direct client management was, like, phenomenal for us, and we were leaning into that pretty hard.

When you started thinking about your first sort of org charts, were there any frameworks you were using that, whether they're popular or not, that you might. You might have followed during any meetings or any things like that?

Not really. Like, there were some conceptual things that we tried to be mindful of. Of like what sort of, like, personality profile stuff where folks would kind of naturally be drawn to one thing more than another. So, like the E Myth framework of the. Was it entrepreneur? Manager? What's the. Who's the pie maker? Operator?

Technician.

Technician. So we would have conversations like that just to, like, be mindful of what people were drawn to and maybe what the team was lacking. Like, I think we would especially try to look out for situations where.

Folks.

Were managing work that was maybe not the type of work that they enjoyed. And so, like, one example is we hired this lady who just absolutely was like a firefighter and thrived on that. And she started, like, hustling the front desk in the office, and her favorite day of the year was a tax deadline. And I was like, we can use this because, like, most people, like, that's the sweatier it gets, the more it stressed them out and all that. And so having people like that. We also had a lady that loved calling clients to get them to make payments. She took great satisfaction out of that. And I'm like, knock yourself out, weirdo.

Just needed a friend. Yeah, she just needed to talk to somebody.

So it was like. It was like we. We try to be really mindful of when the makeup of our team was maybe missing a type of person, where if we had that type of person and they could thrive in that role, it would make what the other people were doing more enjoyable and kind of mitigate the most stressful aspects of their jobs.

Gave them a purpose, too, because they knew that they would be working towards something, whether it be opening up room for themselves or, like, there's just something out there else. I think it's a good point that regardless, if you bring this back to, okay, the stages, we discussed the Twitter favor, the first five people or so. But after that, like, this is where you become your own person. Like you decide at this point, this is your inflection point of what type of company are you. Are you going to keep growing? Do you want to optimize for the 5 person team? Want to get smaller? It doesn't matter. But the org chart will follow your direction and it'll keep changing. And I think back to some of the things that I really, really enjoyed about those first few years. And it was getting together once a year at a retreat. And the first one was like seven to nine people went camping and Camping. Camping.

What kind of camping?

We rented, we rented a white van. We went camping in Lake Algonquin in Ontario, Canada. When you say it like that, it does not sound cool.

I didn't say it.

You said, why did that?

Were there like cabins there already or like yurts or how did that.

We hiked in and we camped in tents, which was, which was really fun.

You made all these people camp intense.

Let's say we decided as a group. Wow, it's 2013. So anyway, before this goes off the rails, it was really fun. We ended up having tents and we had sessions around planning and procedures. We did the Simon Sinek y exercise.

And so two o' clock at the green tent, we're going to talk about.

Bring the fish that you caught. And I just think back to like it was a collaborative process to figure out procedures, standard operating procedures, how we want to deal with clients. What does the org chart look like? And we started developing these roles. I think that's where it clicked where, okay, we're in building mode. Building mode means opportunities. Opportunities mean new positions. To get to those new positions, what do you need to do? And it allowed us to create targets both from the sales perspective and from a quality perspective to be able to have conversations with people that led to the development of their progress in the company. And like that was really fun. And then you fast forward 12 to 18 months. Don't make a joke about a van. We didn't go camping next. We rented a house and we did it all over again. And there's the whiteboards and there's the, the collaborative exercises. And I just keep remembering that year over year over year it was everyone in the group getting together to plan out these org charts in such a way that made them really, really invested.

So is everybody involved in that process?

Yeah. And, and you know that there's, you know, I don't want to avoid the elephant in the room right there. There are systems out there that work for a lot of companies. Like eos and following things like the E myth and the success formulas that exist out there. But like, you do you like for us, we did we. Does that make sense? And ended up realizing that building together worked for what we all wanted to accomplish and be a part of. Eventually that breaks. And you do need more formalized processes. You do need a leadership team. You do need to have built in accountability. You need to separate hierarchy from roles and responsibilities.

When did that Kumbaya everybody come together? Very Canadian get together in the wilderness sort of approach breakdown. Like, at how many people did that?

I would argue that it breaks every.

Year or two, but so that the org chart, once you land on breaks. But at what point did you have to say, okay, we can't just put everybody in a room now and decide this together?

A long time. I think. I think using the term like breaks is not fair for that circumstance. But more like too many cooks in the kitchen exists at a certain point for every company, group of friends, whatever. Like, they just. Sometimes you just have to, you know, start having a core group of people that you do that. So it's less about being authoritative and it's more about having a core group that builds this. I think that's why I liked eos. We ended up moving to EOS a couple years ago or a year ago. And I really like the clarity that that provided. And I think if we would have used it at five people, it wouldn't have worked. And I even think, correct me if I'm wrong, but like us is not built for companies under 10 people.

No, it's for not even 25, really.

I don't maybe like, call it 2 to 250 or just like a couple hundred employees. And you really do have to have an infrastructure of roles and responsibilities so that as you're creating those, you can have people in multiple seats. But you probably shouldn't. Right? And this whole idea of, like, what is an EOS framework? You know, it's the entrepreneurial operating system. There's a book called Traction. There's all kinds of accountants that talk about it online and have implemented it and done it well and done it poorly, done it halfway. I think that was the point where we said, okay, there's a core leadership team, and that core leadership team is working on all of these accountability charts and things. But maybe at like somewhere between 70.

And 80 people, probably the democracy didn't die until you had 70 people. At some point, everybody's sitting around the campfire and you're all elbowing each other to get close enough to be warm and you think, okay, we can't all actually make this decision right now.

Yeah. Call it between 40 and 60 people.

You seriously had 40 people in a.

Room talking about an org chart?

No. It didn't have to change dramatically during that time.

Huh.

We did some switches between pods and functional teams that was directed by like a core group of leadership team members. But like, I remember up to like 20 to 40 people. Like, we were still having org chart discussions in a group and call it ridiculous, but like, and it might have been, but the feeling of building together and to have that camaraderie and to say, like, here's what we're doing and like, what are your. What are your thoughts and opinions in small groups? And then you bring them out. It was, it was kind of nice.

It might just be the politeness of a room full of Canadians probably letting each other speak.

Probably. Yeah. And like, this is why. To each their own.

Yeah.

We'd probably do it differently going forward.

Gang.

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When you think about size and break and org charts, when, when did you need to make drastic changes?

So we had two teams. We had a cast team that I grew to around 10 people and we had a tax team that went from maybe 20 to 30 people when I was there. And the cast team broke at like eight people. Like it was that flat. Like everybody's just kind of doing the same thing. And another factor there was just the passage of time where at a certain point I had to give people more opportunity. And so part of the function of like, of us, of people being excited to work on that org chart was what's the, what's the next version of what I'm doing? Right? I've been doing this for a couple of years. Like, what's my path to being able to do something more meaningful? And so that, that was another motivator for working on the org chart with that, that team. But I want to say when we got to eight people, we started thinking seriously about, I mean a big thing was we had a whole bunch of onshore people and at that threshold where we maybe had made our first offshore hire and kind of came to the realization that we need to lean into this much more than we are just for the profitability of that kind of cast business. And so it was, it kind of shifted to, there's probably a way to build this around an off an onshore team, but it might look different if you're building this around an offshore production team. And so that was where the pivot kind of stopped. And we made like four or five offshore hires in a row without adding any onshore people. And the Sort of growth trajectory we created for our onshore folks was to be able to just focus on that client management and get more out of the production and be mentors for the junior onshore folks and some of the production people. But then the responsibilities of the onshore team shifted more toward client management as the offshore team grew. And so that was. That was probably the reason that we felt the pressure to change at that point was probably two factors. It was having a really good luck with our initial offshore hires. I don't know.

Sounds like.

I don't know if it was luck or what, but like, they were phenomenal. And we're like, we really need to lean into this more. And it was easy in a virtual team. Like they were just kind of like an extension of the team. Like it was just like hiring another person, but then also to accelerate opportunity for the people in the team. Like, I love. I love everything about a flat organization and like the fairness and democracy and all the kind of good things that come with that. But what it won't always enable is a path for some of your team members to grow into, like, more meaningful things. And so for all of the. All of the great things about having a flat organization, the benefit of some structure there is to actually empower people to keep growing.

I think I'll remember to turn this back to the E myth. Like when we were seven people, they wanted that path. So they're developing the manager roles.

What's above the staff is they were wanting to. And that's too okay.

We're all collaboratively doing this. So flat doesn't mean kumbaya. Everybody's on the same.

Right?

You know, you're doing. You're doing all the same work. For us, it was early days creating that structure. And then between, let's call it 10 people to 30 people, filling in all of the management roles, all of the oversight, the functional teams that gave people that path. And I would argue that by following that E myth, technician, manager, entrepreneur type type situation, the managers were always thinking, well, not always. Some were not. But some eyed the entrepreneurial type of roles in the company and the tech. Some technicians eyed the manager role, some didn't. And that was okay. But it was nice for them to see what existed. And we also went the pod route. Mid company, call it 25 to 60 people, we did pods. And then eventually that didn't work right. We needed to go back to functional. And it's for all the reasons you would think that you learn in school about org charts. It's like There are reasons that teams that are like pods work really well. And it's for close communication and for, you know, getting work done well and for the client to have a great experience with the same people. But it's all. It also can be quite siloed, right. If you don't have some semblance of procedure or continuity between the different pods. And that's what happened to us. Some pods had amazing mentorship and lower bookkeeping quality. Some had amazing bookkeeping quality and payroll quality and managers who are more suited towards getting the work done versus building up their team. So you're asking your team members, when the pods get a little bit bigger to be something that they either don't want to be or that you haven't yourself provided enough training for. And that's what we learned, is that it's really a good idea. For us, it was to go to pods because we learned about what constitutes support from a coaching and a leadership perspective versus a technical leadership perspective. So, ergo, like you learn what works. And for us, it was to then split back out the bookkeeping, the payroll, the accounts payable into their own functional teams where they can now work together to create better continuity, incredibly multiplying the impact that they're going to have on our customers, and then just going back to really smaller teams.

So did you still have like smaller pods but then the functional teams doing the work?

Yeah. Lingo aside, like an accountant, like a CPA and another cpa, or whether it's a CPA student or a newly designated cpa, just those two or three working on a group of customers and then they could pull from there. I mean, vacation coverage is real. People leaving is real.

Yeah.

People getting promoted is real. And when it's smaller and flatter, you all kind of pick up the stuff. But when you're. You've got more work than you can have, people that have the capacity, that's where it also turns into how much am I going to invest in these roles that I've created in the org chart to create room for when these things do happen? Because there's a time that will come in your firm when you will not be able to keep up with the pace of change when it comes to people movements. You kind of have to. You kind of have a prep for that.

What was that threshold? Was that 50 people for you? Was that.

Yeah, call it 45 to 65, probably where you have to start thinking, like really hard about how much you want to invest. And I would argue that the role that we played in the investment in that was that we believed in a future where doing this would provide for a better working environment, a more calmer working environment, people that would have more room be able to come back from vacation when the work's already done. And like that was the thesis and that's what we went through.

When you say this investment, you mean like having people enrolls to have some excess capacity to account for that movement?

Yeah, I think at a certain point in time, I know we're like a little all over the place with org chart discussions, but like there's a, there's, there's a point in time when you will start looking at seriously vacation coverage. Because the economics of a firm at a certain size mean that you have to have a certain number of people to sales ratio, gross margin ratio. That just makes sense. And if you have to keep up with the sales in order to keep the number of people that you want to be able to keep investing in their salary increases and things. There's, there's a point where you're like, I actually think we might have to have a team that just does QA reviews of works, vacation coverages can pull in on an emergency. If someone had to go to a funeral for a week or something, it just happens. So whether you choose to create a separate team for that or you have it built into your business model, just really think about that. It's going to affect every firm at some time, but it multiplies really heavily at around 40 to 50 people.

That's interesting. So thinking beyond just the regular technical roles, I guess, of bookkeeper and tax pro and all that stuff, at what thresholds did you introduce different types of, of people? So like common examples like you know, customer success type of people or sales or onboarding, or like you said, a quality assurance team or a team of people that are covering for folks on vacation or that sort of thing for those special teams. Like when did those start coming around?

Oh, all at different, all at different points. If you think about the ones that had the most impact, it was the administrative team. They were able to take work off of the tax team members almost immediately. So when you went through those first couple exercises, we didn't know what to call them.

Yeah. What did your administrative team do? Because I think that's different for different people.

So the first person that was hired was called the office manager.

The office manager.

The office manager. And now they're still called office managers. So we might have four or five office managers, but they really do a lot of the administrative behind the scenes work to keep the data flowing, to keep the files going at the door for checking, formatting for all of that type of work. So really super important role and like we really, really need those roles. So I'm really happy with those. A lot of firms talk about onboarding and tech teams. I think our seventh, sixth or seventh person was an onboarder and that whole team was the, was the reason we were able to bring so many people into the system because none of the core tax technical accountants were onboarding.

Client onboarding.

Yeah.

Okay. At what threshold did he say that happened?

Six or seven people.

Six or seven, wow.

So remember, come back to like what kind of firm do you want to be? We optimized for sales and growth.

Yeah.

And for better or worse, it meant that we had to invest in onboarding.

Right.

So so be it. And that team turned into, you know, at its peak, probably four or five full time people. Right. In the beginning it was one, then two, then three. It kind of goes that way. But really cool roles because it means different things to different people in different companies. For us it was, hey, sales is done. Let's get these people all set up and ready to go. Now there's lots of firms that are leaning into automation and file creations and folders and emails and that kind of stuff. Great. But people still need to kind of be ushered along that a little bit. Right. So that's what they did. They ensured that all the bank feeds were set up, the Xero accounts were set up, the access to Dropbox was set up, the copies of all the old bank statements. Like that was really cool because they were a pivotal like one to three hour relationship with the customer before they came on board. And that turned into a smoother process for the people that were doing the work.

Did they do like the first monthly close or anything like that or just get everything?

No, but I've seen some firms do that. That's a really cool idea. Have you ever done something like that?

That was where we landed. By the time I was getting out of there was we'd had a dedicated person who we were going to put in charge of the most aspects of the sales process. But then they were also going to function as the onboarder to get them through at the very least the first month. So the person they built a relationship with throughout the sales process who was very good and super capable, they would get everything to the state that it needed to be so that it was going to demand less of the bookkeeping team to get everything in like a Good initial state and get good bank rules set up and all these different things that if you. It's much easier to pick up a really good file than to take a file from whatever state that it's in when we get that client to where it ought to be. Right. So the thinking was that onboarding person would ensure they had a good experience through that transition because that can be kind of tricky. And it's oftentimes a question of managing the client's expectations and what they're used to and our approach for doing it so that by the time they had kind of worked through all that sticky stuff, you had a really clean, tidy file for going forward. And then they go to the bookkeeping team with kind of a. They've kind of worked out some of those kinks already and got alignment on expectations.

That is the way like I love that and that's where we're at right now is building out that sort of first three month relationship and what it looks like. I, I can't wait to see more people do this. Yeah, I think it's just gonna make everyone's recurring work so much more enjoyable. It's totally cool. We had a fun role called the trainer. We still do. They did conversion work between like QuickBooks and Zero or desktop systems in Xero. They train employee like anytime a customer would have a question, maybe that's they. They do help desk triaging and answering but also maybe getting on the call. Getting on a call and doing a recorded session with them and putting a one pager out afterwards.

So is that an internal role or a client facing role?

No, it was internal. Really, really Good. We multiple CPAs doing these trainer roles. Imagine your CPA just doesn't want to do tax anymore. Yeah. You're like I want to sit there and teach people accounting education.

Yeah.

Tech education.

Yeah.

And that's what they did. It was really cool. Some other roles that kind of popped up over the years like sales assistant was one, Onboarding manager. We had product team and tech, that kind of stuff. How you approach tech and tech team is a whole other discussion. But yeah, they all just came at different, different times. But the common thread was that once, once the test was over and we knew the role was something that we needed, we immediately went for the backups and started hiring for them. Because if something's that important and heard you say this before, it's like you're one person away from it kind of going downhill. You can't take such like leeway and not having a support or a Backup for someone that's in a position that's quite, quite important.

Yeah.

Did you ever have.

Like exclusively client facing, like relationship manager types? I know, like a common point of friction, especially in the US where our taxes are so complicated you wouldn't even understand. Chad.

I heard it's just like they tell you how much you owe.

Yeah. No, it's just like that. No, our money's much more complicated than that. The whole like, managing of, like who's the person that's going to be my tax expert versus who's the person that's going to be my accounting expert. And is that a reason to then add a third person who's like the liaison for everyone, or is that just adding a third person? What did client relationships look like for you?

Do you know anybody that has this figured out?

No.

No. So let's not pretend any of us do. I think there's just different versions of where you're at on that with your firm. And I think what you said first is really important. There is going to be a time when your client base requires that tax expert. And they're always going to be, call it the liaison, call it the account manager, call it the accounting support, call it their main point of contact. And just like I've learned to be okay with that. And you just have to realize that like there are specialties and the best that you can do is communicate to your team what the expectations are in their roles with the customers and have a system that can track those conversations. And that's what's freaking exciting about all of the work that's happening in the world today around transcriptions and embeddings in context and AI and practice management work that is like, that is exciting to realize that a conversation that they might have had. Say you don't have a system that does email in your project management system. Now you might be able to at least have some of that context of what happened without it being a complete shot in the dark.

Yeah, I'm meeting with a single person that otherwise everybody else would have been blind to.

Yeah.

To bring this full circle. You decided from the offset that you wanted to build this big, super sweaty firm and be focused on growth and get out of the work, doing the work yourself much earlier. Earlier than most folks want to do. And there are a lot of people that go out and start their own firm and they're like the technician and that's a hard thing to give up. And maybe they don't even just ever want to stop doing the work. Like they just enjoy that. What, what I guess led you down that path to say, I want to. I'm really going to get myself out of the work pretty much right away and build the team to do the work rather than myself do it.

When you first. We didn't go out to make a bigger company. I think that was the result of the first few hires and their excitement for also building alongside of us.

So it's their fault.

Yeah. And then when you think about you may you mention, like, getting. You never get out of the work, but you get out of certain work because you're building this alongside of a bunch of people that want to build it with you. So you take this full circle. There's an element of you have started up a firm because of some void somewhere in your life that you're not getting.

Let's go there.

Let's go there. And now you have this thing, you have this idea of what you can do going forward. Who knows if it'll work or not. But the idea of filling that void, if you lose track of that, there's a good chance that you just might be on a hamster wheel for the rest of your life. And for me, I initially thought, there's a relationship here between technology and accounting that can be developed between, like, the average Canadian accountant and their relationship with their accounting clients. How can we use and lean into this as much as humanly possible? And then that turned into a remote conversation, and that turned into a career conversation, and that turned into what actually brings people value. And I realized really quickly that giving others the opportunity to fulfill those voids in their life, being part of this team was the. Was the goal. And if I could focus on the things that I really enjoyed, which was talking to customers and exploring that intersection of accounting and technology and operations in their company, I could do that all day long. And for 10 years I did.

That's interesting.

Still do.

Had you even been in public accounting before starting the firm?

No, I never did a tax return in my life.

So you hadn't been in, like, any sort of public accounting firm environment?

No, I was.

How dare you?

I was. Always worked in private companies and in university. You know how they do those, you know, dinners where they tell you all.

About life, tell you about, like, going into public accounting?

Yeah, going into public accounting. I. I didn't. I didn't quite like that.

The dinners.

So.

No, it seems like something.

Obviously. I love the dinner.

Okay.

Yeah. Didn't. Didn't really get into that. So I just went public or private company Accounting ever since that.

Yeah.

You went to a regional firm?

No, I never did regional. I went to a. I went to a four employee firm straight out of college when all my buddies were going to big four and I was like, audit sounds terrible. To be honest, accounting in general sounded terrible. And I had kind of like fallen into that. And I was like, I've got this internship, I'm just gonna stick this out for a couple years until I decide what I want to do. Yeah. And I. Yeah. So I guess I got out of it this last year, didn't I?

Right.

So I guess that was my.

But for as long as you were in it, would you say that you were filling some unmet need in the role that you were able to kind of develop?

I don't know. Like for me it was like exploring like curiosities that I hadn't had the opportunity to explore and like kind of exercising a new muscle of what would it look like to do this? And so like in the beginning for me it was the whole growth thing was super exciting and we grew a lot. And then I found a lot of things that I didn't like about that. And that happened like right when I was having my first kid too, which is always a big eye opener. So it was like the getting growth wrong and just having some really hard situations where that didn't go the way I wanted it to. That sort of smack in the face of having my first child and that sort of putting things into perspective. The last couple few years I was really just coming back from that and just getting more specific about what we did and really not growing anymore, but like totally rethinking the org chart and what does it mean to do this with an offshore team and like what's just the more interesting and more profitable way of doing the thing that we were already doing where clients would be more happy, it felt more sustainable. It didn't feel as fragile.

That's right.

That was where that was right. Ended up. So like in the beginning it was very much like a lot of growth. And then I kind of stopped. But even saying that like, you know, we, in that time of sort of regrouping, we kind of doubled down on the people that were a great fit for what we were doing, which left us in a position to probably then go out and grow again. So it probably would have been a cyclical thing where I then want to enable, like, what is it? What does the next version of this look like for the team? And they're now capable of much more than they were before and so can they. Rather than me going out and like, Obviously I did 100% of the sales and all that in the beginning. So clients were really buying into me and we got to the ceiling of that. And that next wave was what would it look like for clients to then build into this kind of senior team of five people that we have who are super capable. So I'm sure, I don't know, I'm sure in another year or two's time we probably would have gone back out and that would have been another challenge for them and we would have gone through that cycle again. But I, I think I came to building an accounting practice after really kind of getting sick of doing tax. And so there was. I feel like I was at a threshold where I was kind of burnt out on the doing of the work. And so it never appealed to me to build a team to do more of the work. What was appealing to me was like the science and the challenge of just building the practice and developing the people and all that. So I kind of started taking joy out of more of the development of the people and the creating of the system rather than the solving of the problem and the managing the client so much.

My favorite bosses that I've ever had were ones that would let me know exactly where I stood and like what was to come. And I'll just, I think, I think that's what you're kind of saying, like you're building this thing. You want to be, you know, you know, be more impactful than maybe what you experienced in the past. And it got to a point where like you, you, you know what is next and like you just make the decision at that point of what fork in the road you take. And like we are all forced or you know, we were all presented with these forks probably every 6 to 10 to 12 months. The rate of the way that people think that work in this industry and the way that the customers are thinking about their accountants, it just feels so multiplied over the last kind of two or three years and who knows where it's going. But I think that's the message for the org chart discussion is there will always be fluidity. You will always be changing. There's no right answer. Just kind of go for what works for you and your team for the next 12 to 18 months and have a process to revisit if it works or not.

Yeah, I think I started out, when I started out, org charts felt like this like three piece suit for this business that I wanted to be like yeah. Sweatpants. And by the end where I got with it was it was an opportunity to, like, help the team develop. And it was like. It was. It ultimately became the. The path to them doing more meaningful things and feeling more fulfilled and all of that. And that was like. That was to me the very best part of it. Like, that's what made it all worthwhile. And even though it all is ultimately arbitrary and this sort of thing, this, like, version of playing growing up that I didn't really like initially, that was ultimately probably like the best thing we did for the team.

Well, that's it.

Is that a nice, wholesome way to end it?

First episode of Accountant support in the bed.

We don't know that yet. This may not air first or not. I gotta go.

Bye. Over this way. There.