150 Using Admins for Technical Reviews in Accounting Firms

I'm the boss and nobody can do this technical thing but me. That's what you sound like when you don't make a process for quality assurance. You're the wizard of Oz that has to do it all itself. And that is where, that is where output goes to die. And this might be you, you might be the big brain technical person in your firm. It might be your review function kind of more in general. Like we rely too much on this sort of built in expertise or experience that this sort of review level holds within accounting firms rather than building processes and standardizing that quality assurance process so that you can pull more people in on it so that you aren't limited by like your peak technical people and their bandwidth. It's a thing. We can do it. I love challenging assumptions. Today we are challenging the assumption that an admin can't help with technical review. Oh, buckle up, come on in. Okay, so most scarce resource in accountingdom, the very experienced, very technical people that got to do the biggest brain signing off on the output, making sure that everything is correct. Right? Those people are, are a dime a dozen. Oftentimes in small firms when you start a firm from scratch, you are that person. And the notion of ever not being that person and outgrowing that and the notion of delegating final sign off for many people, that's unthinkable. We talked about that in the Patrick Dichter episode where he's a non accountant that acquired accounting firms and so he's not doing the technical sign offs himself. He's built a process for how that happens. So for many of us that is unconscionable. The notion of building a process around quality assurance and doing anything besides just kind of trusting the mystique and the experience and wisdom of your technical people. But buddy, it can be done. In fact, I would argue there is no greater hallmark of a great really beyond accounting firm service business, definitely professional services. There is no greater hallmark of a killer practice than a killer quality assurance process. Or that quality control being top, top notch. Because ultimately that is like from a technical standpoint at least how these professional services firms are kind of benchmarked, right? Like you want to technically be really, really good. Now that's oftentimes a completely separate debate and completely separate yardstick than is this a good business and making money and do I have flexibility and all that. But the one thing that most of us can get get behind is the notion that you want to have a really high bar for quality of anything that comes out of your firm. And it is one thing for that to be 100% you and for you to cling to the reins and be like the quality is only ever going to be as me because I literally review every single thing that goes out the door myself. It's another thing to scale that for sure. But even to even if you're a solo practitioner, to augment your process with a virtual assistant, with standardization, with tech that can actually knock out a lot of what we consider quality assurance in an automated way. So I honestly think like besides the notion of, you know, running a, the accounting firm as a business and the various ways that you can do that, when I look at firms, if there's one like bit of IP or like things, something that is specific to the firm, I would say the single greatest thing you could take pride in is that quality assurance process and what it looks like. And if it's just chucking a thing at a human that you pay a lot of money to and has X years of experience and trusting that what comes out on the other side will be good, I don't know. That passes mustard as a. Mustard passes muster as a really a quality assurance process. And I get it. How in the world do you proceduralize something as big and complex and abstract as I don't know, reviewing a tax return or a month end close or something like that. How could you ever standardize that? And this is just the assumption that I want to challenge today and push back on. And I don't know that there is a hundred percent solution to this. I know that there isn't. But what I would argue is a partial solution is better. Better than no solution. And I'll give you an example and of like kind of the really positive benefits of starting to lean into this and pour more, pull more people into technical review. A couple weeks back we talked about building a pre accounting process within your accounting firm that is a really explicit process for how all the information gets gathered before it's ever touched by a technical team member. So that rather than fist fighting banking logins, they're just jumping straight into a file and being productive from day one. Super important concept, especially if you're running a cast practice and trying to do month end closes. Really important, honestly actually very central to like running a profitable tax practice as well. But one of the things we learned developing that explicit pre accounting process is okay, not a big brain move to think that I can get an admin to log in and fetch this thing that has to be fetched every single month. But once you got that nailed down and the process is super explicit and they're able to do that just the way that the technical person wants them to do it. Then what's next? What's next is actually how would the technical person name the file? Maybe the admin could do that. Where does the actual work paper go in the end for the month end close? Well, why don't we just have the admin person put it there? What are the markups that they would put on that bank statement, the technical person would put on that bank statement? Maybe the admin person could do that. And you find as you start pulling admin and non technical people into the process, more and more you can actually keep pushing the envelope of how much stuff they can do for you. And spoiler alert, that stuff is all really helpful. Yes, they are genuinely chipping away at technical work for you. But those people also in a really like quicker than you would expect, actually start looking a little more like technical people. And before you know it, you've got non accountants making huge technical contributions for you. So let's challenge this assumption, the notion that you need super high level people to handle the entirety of of your review process. Six ideas to push back on this assumption. One, and this is the most obvious one, Define the process. What is the process? And this is hard. How do I define 100% of all the things that I do when what I do is the product of decades of this and that? Right, here's the thing to accept with this quote unquote process, it won't be perfect like you are. And let's just acknowledge that we all think that we are perfect. We make mistakes. Yes, but your notion of someone else doing it perfectly isn't actually this like absolute bar of perfection. It's actually would they do what you would do? And it's funny, as we're wading into like AI and language models and what they will, you know, return back to us, oftentimes it's actually not so much is it correct? It's, it's, it's is what they're giving me back what I would expect and what I would do. And we're really grappling with AI in many of the same ways that we grapple with staff and making hires and training them when you expect them to do something and then it comes back to you in a way that you didn't anticipate and you realize, oh yeah, I guess I actually didn't really tell them X, Y or Z. I didn't instruct them on any of this stuff. And I think we give a little more grace to humans right now than we maybe do to AI when we don't provide those instructions. And so without instructions, somebody's not going to do it just like you. And there probably is no hundred percent replacement for that big brand experience eyeball on the project. In fact, I'll say right now there isn't. Like there's just nobody's going to handle 100% of that. But you know what's better than 0% of that? 1% of that. 2% of that. 50% of that. 80% of that. We can take some big old chunks out of the process, 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 see 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 Lifeloat 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'm not familiar 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 KPI is 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 liflow IO. This episode is sponsored in part by the lovely folks at Copilot who know that the way that we present ourselves online is truly a reflection of our essence as super cool, modern forward looking accountants. And I can tell you most of the tools that we use and the ways that for example, tax software vendors want us to present ourselves to our clients. It is. It is nothing remotely cool. Nothing remotely modern. And this is where Copilot comes in. It is everything you need from a client portal all in one place. Supes Modern. Super impressive. They got a lot of cool little things like what if your client doesn't want to message you in the portal? Well, you send them a message in the portal. Clients getting an email they can literally just reply to that Email and that message will come back up, show up in the portal and just from them sending an email and they're not going to tell you what that ought to look like. Like the name of the game here, Copilot is customization. The notion that you can actually customize what your clients see. All the little nav options on the left, fully customizable, what shows up on the right. They got some cool built in stuff but you can also extend it with external like third party things like Airtable or notion. Embed the stuff that you want to directly into there. Even on a client by client or client group basis. You can change what people see because your needs today, buddy, listen, they may not be the same as your needs tomorrow. Now do you want to be locked into a, a super rigid system that isn't going to adapt and, and nicely fit around the contours of your accounting firm? No, we want, we want flexibility, right? Is that too much to ask for if you're into that kind of thing? Check out the link to Copilot in the show notes. I first encountered this basically in the wild maybe a decade ago when I was doing some work with a larger firm and I grew up in very small firm universe where you basically had prepare, you had a reviewer and then you had the partner review, which wasn't really a review, they just signed it when it went out the door. I was doing some work with a larger firm and they had prep, they had detail review, they had technical review and then they had the partner review. And I was like, you guys are knuckleheads. That seems like an astronomical amount of effort. Why would the reviewer not just do all of that? Or in fact why would the partner just not handle all three of those steps of review themselves and then send it out? And the reality is like the higher up the food chain and technical expertise you get, the more scarce those people's time are. And so the thinking was this initial detail review can carve as much stuff off the plate of the reviewer as possible so that the actual technical review is only really them. Like looking at that project with the essence of the decades of experience they have and all these things and the things that are to capture the things that are really hard to capture in a standardized process. Looking at number in box and comparing to number in computer box, that's not hard, that's not a technical thing, right? Anybody can do that. And so the goal is how far can we push that envelope to whittle away at the big brain, perceived big brain technical tasks to Save time from our most scarce people. And the starting point is to define the process. And I think in most small firms, you don't have a defined quality assurance process. In my experience, because everybody does it different and because it's really hard to get consensus on a way to do it. And you will find, if you're running a team, that. That it's a lot like delivering a service to clients without any sort of expectation. If you don't define the expectation, they will all kind of bring their own, like, project on the process, like, the things that they want from it, and it's all going to look a little bit different for everybody. And if you ever. If you ever put your foot down and you say, this is the way that we're doing it for everybody, your clients are going to be like, oh, come on, man, that doesn't work for me because of this and that and this and that. And if you've ever tried to build an explicit review process within a firm, this is exactly what happens in a team. You say, this is exactly the way that we're going to do it. And then 20 people are like, well, this doesn't work for me because of this. And this doesn't capture that. And it's like a lack of process means that you end up having all these people doing things in wildly different ways, and it's really hard to get them on the same page. As opposed to the day that staff person comes in the door, you say, this is how we do this, and this is the process that you will follow. That's just how it is. Like, this is what our firm is based on. Doesn't mean this process won't continue to evolve and improve, but this is how the stuff gets done. And then you have everybody working in the same direction, just the same as if you bring a client in the door. The best thing you can do is say, here is how we do this work, and here is what you should expect. And then they're like, okay, cool. That's a whole lot easier than three years down the road being like, hard left turn. We're actually gonna do it this way. And quality assurance is too important of a thing for you to not be opinionated about. If you are a decision maker, an owner of this practice, genuinely, everything that goes out the door is impacted by your quality assurance process. Like, this needs to be a thing that you have pride in and that you take control in. If you run a team, there's gonna be a lot of voices in, like, what is the right way to do this. Quality assurance more than just about anything else is something that you need to be really opinionated on because it is so core to the quality of the work that goes out the door. And that is something that like, as a practitioner, like we ought to have a lot of pride in. Another example of where you're gonna see this in the wild in change management is accountants, like fundamentally won't trust the work of other accountants. And where you may have seen this in the wild is like, hey, we found this great OCR solution. It'll pull in and do like this part of the process and then you pull actual human beings in and they will just go back in and they will verify and like basically redo the entire thing from scratch each time. So you're like, well, what the point? What was the point of like this technology if nobody will trust the output and they'll just redo all the work? This is the downside of everybody having their own process. Because if you have a hundred step process that is explicit and you say we're going to plug in this technology and it's going to handle these 20 things, you have to know that it actually does that stuff correctly. But then when everybody's agreed that here are the a hundred steps of the process and we just knocked out this 20, they don't have to hop in and redo the same 20. When everybody's doing their own process and everybody's doing it differently. And admittedly nobody wants to be the goat that like gets the thing wrong. So they're all doing it from a place of like, I want to ensure the output is correct, but you end up with a tremendous amount of wasted time because you're duplicating efforts as opposed to, here's an explicit set of steps, we're all going to agree to this anytime we plug tech in. Like, it's got to knock out some of these steps, at least at one of the review levels. It doesn't mean it still won't get like over the top reviewed in the end. But if you ever tried to like work through change management in an accounting firm, you've probably experienced that. The whole notion of people not trusting the output of something and redoing that work. The solution is having a process. Okay, so second idea to help you push through this. Don't jump straight to the hardest possible scenario. Our mind goes. It's actually the same thing you do with AI. The first time you get your hands on ChatGPT or something, you throw at it like the biggest brain, like super Technical thing that you just figured out that you're proud of. We immediately jump to the hardest case scenario when the reality of how we spend most of our days is we still do a shocking amount of small brain, really simple things. And entering stuff into a tax program, like entering stuff into accounting software, organizing files and annotating them the same way every single month. These are not hard tasks. I would argue if you're an accounting pro, it's actually a really, really, really small percentage of the time that you are pushing that noodle to the max. Like it just isn't. So much of what we do is still routine. So if you're thinking about how to build a process around something, don't immediately jump to the hardest scenario, like income tax preparation or something like that. If you're a tax firm, think it's about something similar or something simpler like 1099 or maybe you file some W2s, W3s for clients at the end of the year. If you're building procedures, start with something much more simple. If you're an accounting practice, do a month on close. Think about how you could build a procedure for reviewing part of the balance sheet or reviewing, reviewing the P and L or reviewing, you know, payroll expense and the payroll liabilities on the balance sheet or something like that. Like start with something that is not somebody blessing the entire project, but like what is a part of that project that you can start whittling away at. And the low hanging fruit here is the stuff that is more detail oriented than it is like technical in nature. So in my practice we had very detailed SOPs for how the files needed to be structured in a month and close file and the way that those files need to be named and what was good supporting documentation, what was not good supporting documentation, the way that the specific files need to be needed to be annotated to highlight the stuff that you need or run a calculation or something like that. And what I found actually hiring non accountants was I had some really good non accountant operators who could go through that SOP and like immediately understand, like, okay, this is straightforward, I get it. I understand what's inbounds and what's out of bounds. And they can follow that stuff really well. And these are like admin level people, really sharp folks who like ended up doing a ton of stuff in our firm. Like I am like, I'm so high on hiring non accountants who are just really good hustlers. But I found that like I may build an SOP around an accounting or a tax thing, but as long as I've got an SOP and it's not really technical in nature like non accountants. Non technical people are very good at following this and just because it's related to tax or accounting or something like that. Oftentimes we project this notion that it is technical in nature when the reality is like we're doing a lot of file hustling organization like annotating PDFs, all these things that are not technical in nature at all. And you can totally get non technical people to help you with them gang. This episode sponsored in part by Team up who helps you recruit top Filipino accountants without any zero ongoing monthly fees. They can source accountants with experience working at US or Australian firms, people who are familiar with stuff like Xero, qbo Dex. They can find them for you. They can also recruit specialist roles like a team lead, people with leadership experience, even US tax specialists. Wow. We, the most talented and ambitious accountants in the Philippines wanna work with you directly, not through an outsourcing company for two main reasons. One, they don't wanna give a big chunk of their salary to a middleman, oftentimes upwards of 50% and they wanna build a long lasting relationship with their employer. Aww. These are the people Teamup can recruit for you for a flat one time fee and then connect you with an affordable employer of record as well. If you need help with payroll and compliance, learn more at their site hireteamup.com and get on their newsletter for quick tips on managing overseas teams. Stuff like cultural miscommunications, best practices, everything you need to know to get started hiring offshore. You already know I'm down with offshore hiring. Learn more@hireteamup.com 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 going to get swiped. Cloud account staffing is 100% dedicated to the accounting industry and founded by a former accounting firm owner that understands your business, knows your pain points. They had to hire some accountants and they said, you know what, we're going to build our own pipeline in the Philippines, going to pull in some super talented people and Then open that up to other firms. Basically that's the story. I've been talking about a lot about staffing, building more resilient staffing pipelines for your firms. I had staff in the Philippines at 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 Third thought, pushing back on this assumption. How do you build that process and how do you find the time to do it and all that record and narrate yourself going through that process and have someone else draft the steps. So again we're not going to the hardest, biggest, most challenging scenario straight out of the gate. Think about something small and concise where you can just start a loom recording or a screen recording and in five to 20 minutes record yourself going through those steps just as you normally do. Like you've got that muscle memory and then send it off to someone else to draft those, the initial version of those steps for you to review. Now if you're in a, in a situation where you have people doing different processes and you're trying to bring this together into one cohesive thing that eliminates like double work, have several people do this recording and try to unify it into a single set of steps. If you are the big boss, this is where projects usually go to dies when they're on your plate. So I'd super encourage you to pull someone else in this. It also gives that other person like buy in in the process itself because they were involved in it. And then the next steps, the follow on steps, the revisions aren't just up to you to take point on. You have someone else who can help from day one. Now when they put this together, you're still going to need to review it. There's going to be stuff that you forget nuance that you missed, but this is a whole lot better than nothing. And this is the point. And so if you start with something reasonably sized that's not astronomically complex, going back to the pre accounting example, you will find there's a lot of stuff that people can help with that is not like fundamentally technical in nature. Number four, start when you have that process, start thinking about how you can augment that process with quality assurance tech. Growing number of tools out there who will connect to an accounting ledger and automate aspects of quality assurance. And while none of them are today quite as good as somebody that's really experienced and has done this stuff a lot, the really Nice thing about quality assurance tech is you can literally just plug it straight into a ledger and you at least know that all the files are done up to X standard. And X standard may not be the same as Y standard, which is you going through every single file. But in an inter, it introduced kind of a, an interesting bit of nuance around how you do technical reviews. So for example, if you're an accounting practice that does monthly closes, we hold ourselves to an extremely high standard where at any given point in time, with the drop of that, you have to have something that is like totally perfect and can go off to a banker or whatever, when the reality is bankers have absolutely no idea what they're looking at and it probably doesn't make a difference. But if you look at like audits, you know, interim financial statements, I.e. quarterly financial statements are not completed at the same standard as annual financial statements. And this is something to consider within our firms. The notion that there's probably a bit of a balancing act here of like, what is the level of effort you go to for every single period. And that will sound like sacrilege to some, but all of this thinking is getting you more tech, like into the weeds. Technical about what does my actual quality assurance process look like? So let's go back to the example of say it's a hundred steps and the hundredth step is just like the big brain coming through and being like, does this seem right? Is there anything that we've missed? Well, if a quality assurance tool will knock out the first 20 steps for me, awesome. We just saved some human time, right? And we can, at the snap of our fingers know that that's like brought all of our clients up to this standard. Now maybe an admin can knock out 50 steps and so you've got 30 to go. Well, every single month. Are we gonna do the a hundred step version of the close? Are we gonna do the 20 step version of the close? Are we gonna do the 50 step version of the close? Maybe you're only comfortable doing the a hundred step version of the close every single month, that's fine. But where we're at today is a fundamentally better place than that big brain technical person doing all 100 steps. Right? So number four here, interesting to think about and be plugged into what QA tech will do for you today. Because if it can wipe out those steps at scale, like that's a huge time saver for you. Number five idea, keep pushing the envelope of what admin folks can do. So there's going to be A version of this that you start with, but over time it will progress. And the more you can actually involve the people in the process that actually do this and offering feedback, the better because they will find as they talk with the technical people, oh, I learned the technical person always goes and does this. Like that's really easy for me to just do this one more step. And over time, like the more you can push that envelope, the more you pull non technical people into those technical steps. So build some sort of feedback loop into the process so that you can keep refining those steps, maybe building on those steps, but then challenging. Is this truly a technical thing or is it something that an admin person can do as well? Sixth and last idea for how to push back on this stuff. Centralize your review notes. Centralize the notes that go to the person who prepares it for corrections. Because this is really, really valuable data. I mean this is like, I don't like analogies because they take away from first principles thinking. So but spare me this analogy. Toyota is making a whole bunch of cars. If Toyota pumps out a bunch of cars that all have the same issue, like they want to know that, right? You're pumping out a whole bunch of month end closes, whole bunch of tax returns. If they all have the same issue or the same blind spot, I want to know that. And so over the course of like all the review notes that get written for your, your team that's putting information and like doing the production throughout the year, if there's common threads across all that stuff, that means we need to improve our process. This is the beauty of processes. You can continue to iterate on it, improve on it, pull more tech into it to automate it, but if we don't capture all that stuff in one place, we don't actually have a meaningful database of what's needed. Now on the personal level, this is also a really helpful resource for guiding like personal development for your team. But the big thing to look out for like is trends across all of these reviews. Is there something we're very obviously missing when it comes to this part of our process? If so, it ought to show up in those technical reviews, right? And that is where you or your biggest brain people doing that last step, kind of over the top. Does everything look right here? This is where that essence is codified. And this is a hard thing for us to do. Like we are not engineers. Like we honestly, the way our brains work, like it is on pattern recognition, where it's like, oh man, I saw this thing once seven years ago. My client got hosed. And just because of that, I see that now. And like, having that feedback loop and a process to build on rather than nothing to build on is how we codify that expertise into something that becomes an asset for your firm. It becomes genuine ip, rather than all of your IP just being tied to humans who come and go. And so when you hire that human that's going to be gone in three years and they make a bunch of meaningful contributions for you, this is a great way to capture the essence and like the experience of that person into something that is sticky, that stays with your firm and is an asset forever. Now, this is a fairly deep dive. Like, a lot of nuance here, but still a lot of questions. Then on like, how do I fractionally roll out something like this just for one project? And like, what does that look like from a nuts and bolts standpoint? We have our task templates and we're like, how do I set this up in my practice management system? There's a whole layer of depth past this to working through that. But I can say it's absolutely worth working through that either yourself or with your team, because this is such a valuable component of building a practice that's not overly reliant upon your most technical people. If you got those really fiddly nuanced questions, pop them in the comments. If you're listening on the podcast, click through the link to the video. Drop a YouTube comment. We can go a little deeper in the Q and A that we'll do on Friday. That is what this podcast is all about. It's getting deep and getting nuanced. We've all got enough, like, high level content from our vendors and on social media and all that stuff. This is where we get nerdy. So not afraid to do that. If you want to go deeper on anything specific, just drop a comment. We'll do that on Friday. That's all I got today. Thanks for coming and hanging. I'll see you in the next one. SA.