160 The 9 Ways to Prep Your Accounting Firm for 2024

New Year's just around the corner. Bob, you know how you like you come into the end of the year with the best of intentions and you're like, oh geez, we're going to start doing renewal. We're going to start doing all this stuff way earlier than we did last year because you end up in January and then you're in a panic and you're like, oh my gosh, we haven't done all that. You might be just around the corner from that right now. That might have felt like a personal attack. Today we're going to run through a list of things you can be doing to get ready because busy season is going to be here before you know it. Whether you do tax and that's the spring, whether you do accounting. And that is the crush of getting year end accounting put together. How can we do some pre work, get some time back in our busiest season. I got nine ideas for you. Come on in, let's talk about it. Let's make this year end the best year end ever. If you're a consumer of the video podcast, pretty moody today. Very dramatic lighting. This week we've been shooting the Jaycees, which is what I am calling now the end of year video that I do. Awarding my best new stuff, giving my awards for the best new stuff of the year. This year we're giving away first, second and third prizes. Gold, silver and bronze jcs. That video is going to be out this next Sunday. It's going to be a Fun 1. Okay, nine ways to start preparing for for the crunch. I know your mind's starting to slip into holiday mode. Let's just, let's just crank that blood pressure right on up now, shall we? Number one, send this to a team member. Okay. Stop putting the weight of all this stuff on your back. When you are the only one going out, learning and finding new stuff and working out best practices. It can simultaneously be invigorating, rejuvenating while also being crushing because it feels like even more of an obligation for you to implement all this change and drive all this stuff through gang. One of the things I was most proud of, bringing team members to accounting conferences and stuff like that. Getting thought leadership beyond the boundaries of my cranium and extending that to the craniums of the folks that I employed. So if you're overwhelmed with year end stuff right now, I know you are. First trade off the top, send this to a team member and be like, I'm pretty sure we probably need to do some of these things. Can you help. And then the big benefit down the road is when you have something that someone has helped you implement, it's not on you to maintain it long term. You didn't build that thing from scratch, so you're the only one with the context about how it works. You actually built that thing with a colleague or they built it making the ongoing maintenance way easier. That's number one is don't try to do all this stuff yourself. And if you are a solo practice runner, think about could an EA help me here? Or could even a peer who is a fellow solo firm runner be like an accountability bud or a second set of eyes on how you're approaching things? If you don't have that friend yet, make it either. In the comments of this video on social media, maybe there's like some sort of accounting firm bumble out there I don't know about. Okay, number two, renewals. This is the obvious one. Folks do this surprisingly at very different times. Some people don't start this until like February. Other people do it in November, December. Other people actually do it mid year to get renewals off the year end crunch cycle. And I actually did a video a while back making the argument that you ought to set up your renewals for the point in time in which clients most want that thing from you. So they are most incentivized to do that. And oftentimes that's actually not the end of the year. So for example, I use the example of a tax firm who's trying to get more clients into tax planning throughout the year. What I would do honestly is renewals in like the fall or mid year whenever you really want to make your push to do a bunch of tax planning. Communicate the upsides of doing all that stuff now in a way that they're going to be like man, I don't want to miss out on this. So now you've both re upped them, you're going to file their tax return. That's that is what it is. But you have onboarded them to like this opportunity and that is when the re engagement happens. For accounting firms, if you just are doing month end closes, I do think there's ways to manufacture in that urgency throughout the year. So one thing we've talked about is like tech audits, like kind of an annual tech check in where you give them recommendations on your understanding of their tool stack and where they can make improvements. And oftentimes these are improvements especially within mid sized companies that will yield like entire headcount time savings because you don't have people manually keen in bills or receipts or just a lot of things that businesses do because they don't know there's a better way to do it. So what's something that you could get somebody, get your clients excited about that's outside of the normal cycle of how you renew clients and be like, okay, we got this opportunity now. The folks who come and renew and pick this package, we're gonna jump on this for you, and they're gonna be like, sweet, like jazz to renew. Something to consider maybe for next year if, like, there's a more optimal time than year end. But the big thing I think a lot of folks are doing right now is going down that list and deciding who am I going to renew and who am I not going to renew in the state of things right now. You know, if. Unless you're. This probably doesn't apply to folks who are still building very new firms, and maybe they haven't reached that capacity where they want to be operating yet. But for everybody else who has, and new firms seem to hit this really quick. The renewals you're sending out, honestly, those got to be like, hell yeah, renewals. Like, not, oh boy, I'm not looking forward to talking to Steve again. Like, those renewals ought to be something that you are pumped for. You are absolutely within your rights to be selective about who gets to be on that list. Talked about this a lot in last Sunday's video. Think of yourself as the curator of that client list. You're gonna let the people on who value you most and perpetually remove the folks who value you least. And that is how it all gets better a year at a time. And I can't stress enough how much your quality of life can go up just by making some of those hard annual decisions. It gets so much better when you are just turning up to work with the people that you most enjoy. You can probably pick out three people you work with that really stress you out. Sometimes those are people that just aren't super kind. Sometimes those are people who need things from you that are maybe a little bit outside of your realm of expertise. And it's kind of like risky stuff to advise around. Sometimes those people are really big clients. They're like a large source of revenue, maybe disproportionate to the rest of your client base. And so that client relationship is stressful for you. None of those are really good situations to find yourself in. And even just going through a couple cycles of removing the worst stuff, adding the best stuff, can make such a Huge quality of life difference for you and the rest of your team. And this is the path to making this all sustainable for you, for it to continue getting more profitable year over year. But where most firms get stuck is just a lack of willingness to make those hard decisions to selectively let certain people down. Cause that's a lot of what this is about, is tactfully disappointing the right people and being willing to do so even when it's uncomfortable. One other thought on renewals, like the. The best way to do that, I always stress, is to depersonalize all this stuff. If your clients come in the door with the understanding that every year basically you're under, you're going to decide who's on the list and who's not on the list. And that's not a personal thing. That is just for your business, for the people that you have that year, for the direction that you're trying to go. You have to reassess that every single year, as the client should when they re engage. If you make that clear that it's not a foregone conclusion that we're going to work with you until the end of time and you can communicate like here's the direction that we're going and whether their business may or may not be a fit for that. You can approach all this stuff in a way that doesn't feel personal and doesn't feel like a surprise when you do have to let someone go. Because the hard thing about letting someone go is the ta da the unexpected surprise aspect of it. But when there's an annual cadence and you're going to go through that list and it is about the alignment of that client with your business and not about Jim, it gets a lot easier. Because the very best thing you can do in a situation like that is part ways and still maintain a relationship with that person. What I hear oftentimes is folks are afraid to fire a specific client because that client has other connections in their client network. Network maybe because they're, you know, a key member in the community or send them referrals and stuff like that. If you're firing clients in a way that will jeopardize that relationship, I would argue maybe we're not think enough about like how can we fire a client while simultaneously stressing the importance of maintaining a relationship with that person. Not just because they're like a key person to your network, but because that's the right thing to do as a human being. Right. Like we can build relationships with people and whether we decide to engage with them through our business or not. We should still be good people. We can still maintain relationships with them. We can still bump into them at a Christmas party and it not have to be awkward. You can still ask them about the jet Skis. The decision of whether or not to re engage somebody doesn't have to be personal. This episode is sponsored in part by the fine folks at Cloud Accountant Staffing. Do you hire accountants? Bless your little heart. Not the best part of the job in my opinion. Not something I ever enjoyed. Well listen, you can build your accounting dream team with talented offshore accountants in the Philippines that work 100% full time for your firm. Their accountants aren't freelancing or contracting for multiple firms. They're all yours. They work exclusively for you and are incentivized to stay with you and your team long term. They're not gonna get swiped. Cloud account staffing is 100 dedicated to the accounting industry and founded by a former accounting firm owner that understands your business, knows your pain points. They had to hire some accountants and they said, you know what, we're going to build our own pipeline in the Philippines, going to pull in some super talented people and then open that up to other firms. Basically that's the story. I've been talking about a lot about staffing, building more resilient staffing pipelines for your firms. I had staff in the Philippines like totally red pilled me to like oh geez. Like we need to globalize the way that we get our work done. Check these folks out link in the show description Cloud accountantstaffing.com gang this episode is sponsored in part by Live Flow. Live Flow is the easiest way to sync that QuickBooks data back and forth to your spreadsheets. You may have seen this actually had a big announcement lately. So this fall G2 gave them the top spot in their fall 2023 report as the leader in the financial analysis category. That's right. They won number one. Nice work. If you've been around my channels for a while, you've seen Live Flow kindly they have sponsored quite a bit of stuff. And I'm not, I mean I'm not saying I'm taking credit for it, but that was probably why I'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 stuff for the first time as easy as possible for you. Stuff for managing cache AP KPIs like everything you can imagine Sync that data into your existing sheets to make them smarter. Get it to auto sync or build your like custom new sheets that talk with QuickBooks totally from scratch. Pretty cool tool. Check that one out at LifeFlow IO. Number three start building out reusable resources. So what are the actions that you want clients to take from making a payment on an IRS website, to sending you a specific set of things, to going through your renewal workflow? How can you create resources that will cut down on the repeat questions that you get from people where they get stuck on how to log into a portal or upload a file to a thing? Start building that library. And that is such a high leverage use of your time to be able to say here is a blog post. That is a nine step text and image guide to what I need you to do. Here's a video that will walk you through the entire process, whatever format you consume best in here's your option and then come to me with a question if this doesn't answer your question, but stuff like how to make an IRS payment, how do I make a Q4 payment? The common things that folks are doing, please don't email them how to do that over and over again, like point them to a resource. And the more you can develop those reusable resources that your entire team can use, the more you're sort of getting out ahead of those questions. Right? Number four over communicate to your clients what is about to happen through the process of renewals, through your expectations of them through the end of the year, through the systems that maybe they're going to have to interface with along the way. Around year end we see 100% of the things that we put out there, but they do not. And in my experience you always have to. You'll have the folks who are super on the ball and giving you the things in a timely basis. And it only takes one email. But a lot of folks are not going to be that. And you can catch a lot more of them by being consistent and how you're communicating. So it's not as simple as okay, I need everybody to do a thing. I'm going to send an email so they do this thing. You really ought to work backwards from that and say like hey, here's the plan, here's the upcoming key dates to be aware of and even how you can start preparing now. Tell them what that's going to look like ahead of time. Still shoot them a message when it's time when you need them to do a thing. But in my experience I usually under communicated what I need from clients out of fear of not wanting to clog up the inbox and not wanting them to not pay attention. Whenever I sent stuff through, it was like, no, I want it to be super mission critical. The only time I send them messages. The reality is people just miss stuff and in the lead up to needing them to do that thing, they didn't have it on their mind at all. Like they didn't really like. I think they're fixated on me and they just think about what I need them all day, what I need from them all day. Turns out they aren't, especially not around the holiday season. So getting out ahead of that by communicating the timelines and what you need from them, probably communicating more than you think you need to, is usually the best play there. Number five, Tune up those workflow templates. What happens the moment somebody accepts your renewal? As soon as they sign that contract, I can tell you what should happen is based on, you know, if you gave them several service options based on the options they selected, what needs to happen next ought to be populating into your practice management system. That workflow template ought to generate in the next steps if they're not kicking off automatically, at least need to be staged in your practice management system. And this is generally done by pairing the service items you know, that's in a re engagement with with a workflow template in your practice management system. So everybody that is signed up for tax prep 3 or month end close 4. Whatever your service items are, when that's accepted inside your practice management system, there's a explicit set of tasks associated with each of those service items. It's what makes it super explicit how you build out. You know, the stuff that you stand up in front of your clients and the expectations that they ought to have and how that's communicated in a proposal. That's how you make it super explicit, clear down to how the work gets done task by task. And most firms I think don't have that level of connection right now. There's a few different ways to get there. There is a growing number of practice management systems that have built in proposals. It can do a bit of that for you if you use tools like Ignition Go Proposal. There's some native integrations there where depending on the practice management system you use, when a proposal is accepted in that system, it could create a work item in the other one. Those native integrations are great when you have them, but I don't, I don't think they rise to the level of importance to Dictate choosing tool A or choosing tool B. I think integrations are actually massively overblown on the the impact they have on our decision making. If you're a bit of a nerd, use stuff like Zapier or make most. Most of these proposal systems have triggers that will trigger on each service item that is in an accepted proposal. And then the action would be for each service item go and spawn that workflow template for the client inside the practice management system. Now, in a perfect world, all that stuff happens automatically, right? It doesn't necessarily have to though. And oftentimes when we can't automate the last mile of something, we fail to make a process for it at all. But the reality is, as long as you have that understanding of what the mapping ought to be of service items that are accepted versus like work items in your practice management system, as long as there's an understanding of what those associations are, that's not a hard thing for a human to also create for you. Now, in a perfect world, yes, that would happen automatically, but it doesn't for a lot of reasons. And if that's you at least have a human process for how that stuff gets done every single time. The option shouldn't be either automated process or no process. The option ought to be automated process or clear human process. Now, if that feels out of reach for you right now, then number six, my friend, number six is just for you. Think about productizing your accounting firm. We talked about this a few weeks back. A lot of firms now are not yet explicit enough about the different things that they offer. And this oftentimes comes from a fear of it being hard to imagine doing the same thing for every client because clients have different types of needs. And how do I encompass the diversity of things that I do into like a finite set of things? And I can tell you it's doable. I ran through how I did that for, you know, an 80 year old firm who's doing a ton of different stuff for a ton of different people. So even in a firm that's doing a lot of different things that is doable to get to a point where it's like, okay, for this client, I'm doing monthly bookkeeping four, I'm doing monthly book payroll service two, we're doing tax planning service level three and tax preparation service level two, you can get to that point, that level of explicit expectation, which is really valuable when it comes to clearly communicating how the work needs to get done and setting rock solid expectations up front with the client. So in that last one, if the notion of like automatically spawning templates for how to get the work done feels out of reach because maybe things aren't explicit enough, then the issue is probably thinking more about how you get explicit about the services in your firm. And some people call this productizing. I don't know. It's got a bunch of different levels. Basically what you want to get to is if a new client comes in the door and they have a set of needs in your sort of internal library of things that you do for folks, you've got things there that can solve those problems. You choose the collection of those things and the frequencies and all that that makes sense to solve those problems. And then as soon as the client accepts, your team can understand just from the collection of services exactly what needs to be done. And if you haven't gone down this path yet, I think that usually feels really hard, maybe unattainable to get that explicit about it. And it's hard in a lot of ways and you're going to run into some blockers. But the fact that it's hard doesn't mean that we shouldn't be pushing that way. Because maybe there's one service you do where it's like, I can't imagine how you would ever do it with that service. Great, then do it with 80% of the other services and get yourself like off the hook for having to do all that yourself. Like it's one of those things where it is hard, but we still got to do it and take it as far as we possibly can. This podcast is brought to you in part by Team up who helps you find super talented Filipino accountants. Hire them yourself without any sort of ongoing monthly fees. They can source accountants with experience working at US or Australian accounting firms familiar with tools you use like 0qbo indexed. They can also recruit specialist roles like bookkeeping team leads who have leadership experience or US tax specialists. What Team up recruits these people for you for a flat one time fee. They are headhunters, not the typical outsourcers. And they can connect you with an affordable employer of record if you need help with with payroll and compliance. Right now you can save 1000 bucks on end to end recruiting. Current price is 3000 bucks to find you a great accountant. But it is going up to 4,000 in January. That's right, act now. Remember, other outsourcing companies often mark up salaries by 50% or more. What? So you'll save a ton by hiring directly to get to build your own team for the long term, just go to hireteamup.com to start building your Philippines team and sign up before January to save a beta chatter even if you won't be ready to hire for a few months. This episode is sponsored in part by Forwardly. Are you tired of waiting for payments that seem to operate on their schedule, not yours? What the heck. Say goodbye to slowed ACH transfers and rising credit card fees. Welcome to Forwardly, where you can receive payments instantly in 22 seconds. What? Okay, sidebar thought experiment. I just initiated a payment to you. Put a pin in that. Receive payments instantly 22 seconds for 80% less and no monthly fees. I like that. With automatic payment options and automatic reconciliation with QBO and Xero, Forwardly streamlines the whole payment process. Same day Ach man, I don't know why this hasn't been normalized like everywhere. Why are we not doing more? Same to ach. By the way, your payment that I just started, it just arrived. It's been 22 seconds. How fast was that? Legal has informed me. I need to say I have not in fact paid you just to clear that up. Just a mental exercise. The future of business payments is here. It's here and waiting for you@forwardly.com. check out the link in the show notes to learn more. Number seven Start staging those requests for last year. What for next year. You know how into pre staging requests I am. So to give you a few examples, what does this look like in an accounting firm? Well, you're going to get to January and after and when you're working on the December month end close, you know there's going to be a certain set of things that you have to get from them. Maybe those are certain documents. Maybe that's like narrative information. Maybe it's even non quantitative information like employee headcounts or whatever it is. Think through what all of those things are. And if your normal process is to send an email asking for all those things, my friends in accounting, there is a better way. And that better way is using a system to stage those requests one by one, all 10 of those things that you need. And use either your practice management system or a dedicated request app to set those things to automatically go out on January 1st or January 10th whenever you want them to go out. It'll remind your clients until the client has provided answers for every single one of those requests. And the value is you are heading into your busiest season where you're going to have to send those emails to every single client. But it's not that simple. You have to Figure out what has to go into every single email. You have to send that email out. You then have to follow up when they don't respond. You then have to figure out what you have and what you don't have a month later when you realize you have to follow up again. And it's all this work and rework around managing requests when we need to be letting the machines do the requesting and the humans do all the other stuff. So the work of staging all these requests upfront, it is work. And you know, look at a tax firm or something like that, like this is probably the biggest unlock for tax firms that I can recommend is literally going down those client lists and for each client being like, here's all the explicit details in the documents we're going to need based on the prior year return. Will that change a bit in the current year? Probably. But getting 80% of the way there is pretty darn good. And the notion of building out those request lists for every single client may feel like a ton of work. But I would argue you're doing all of that work already in your busiest season, and oftentimes redoing that work every time you have to follow up with a client and be like, you still haven't sent me this or that, and all of that is happening in your busiest time. Like, anecdotally, I would easily say in a traditional tax practice, you can burn 20 to 40% of your staff's time doing the hokey pokey with clients to get the stuff that you need from them, as opposed to pre staging your requests and being able to get 80% of the information that you need from those clients without a human having to lift a finger after January 1st. If you don't have a great system for managing requests right now, grab one off the shelf. There's a few that like just do requests, communicate that expectation with clients. The fact that we're using a system for you to upload this stuff to us securely, so we're not doing it over email so that we don't have to send you follow up reminders. But it all starts with setting up those requests ahead of time, building those lists now, and the first time you do it is always the worst. Next year, when you go to set up those request lists for the same clients, you're already 80% of the way there. You're just updating it. This is a huge busy season. Unlock number eight, Schedule your workload. Hot take. But firms could still do this a lot more than they do right now. It's Just worth remembering and pushing back on the assumption that you don't necessarily have to do stuff when it comes in. Like that's kind of the default is people bring us stuff to do and then we just do the stuff in the order it comes in and then it gets done when it gets done. But that's fundamentally broken because we don't have control over the volume at which it comes in and when it comes in. And so ultimately we really can't promise any sort of turnaround. What we do is just this gut check of how it has been in the past. And that's a hard thing to manage because it's ultimately something you don't have control over when people bring their stuff in as opposed to going out and literally scheduling work throughout the entire year. And so that could be the special projects you do around month end closes. It could be the delivery of tax returns. We've got a growing number of tax firms who are getting on this wagon, putting clients into cohorts or weeks or months and setting the expectation at the time that they renew that your return is going to go out in this window in May, or this window September, or this window in February. Working backwards from there to say, you have to have all of your information into us by this date with some accommodations and situations where you may need it on an accelerated timeline. And if you think about the quality of life difference there, you aren't handling this giant immeasurable ball of work that just kind of comes in the door and you're like, okay, everybody just kind of keep working and we'll just hope that it all works out okay. Instead you're like, okay, here's what we got next week, here's what we got the week after that. We are two weeks out from that. Are we looking like we're on target? You're just knocking stuff out a week at a time. And you're totally within your rights to like set those up as 40 hour weeks, as 60 hour weeks, as 20 hour weeks. That is the beauty of this, is you have total control over how all this stuff gets scheduled out. And we think about that. And there, you know, you think of 100 reasons why that that just won't work for you and just won't work for your firm. But there's a part of you that's like, oh, that would be nice. Like, I wouldn't mind that. Like, I could schedule in a couple of weeks off here, a couple weeks off there. Like, I could actually smooth stuff out throughout the year. And the biggest blocker is usually, well, how am I ever going to explain to Steve how we're now doing this process instead of the process that they're used to? But if you think about new Steve, you think about a new client who's coming in with no expectations, you know what they're going to say when you tell them, this is how we do this work. 90% of them will be like, okay, cool, as long as you're on top of it. At the end of the day, you are the pro. Like, you are the one taking the lead on. Here's the best way to get this stuff done. Will there be a group of people who always want to get their tax return as soon as possible after the end of the year? Yes. Maybe you accommodate that and you get it done for them quickly. Maybe you're just like, sorry, we can't handle, like, any more of you who insist on having it in February. So you're going to have to go get your work done somewhere else. But on the subject of taxes, like in the US there's also a lot of upside to waiting as long as possible to file. So consider if you could take back control and it wouldn't even have to be 100% of your workflow. Consider if there is part of your work that you could take back control on by scheduling out when that stuff's going to get delivered. And you set that expectation at the time of renewal with the client. And then last number nine, and this is an important one, figure out how you're going to get that big hot body moving. Yep. I'm talking to you. You know, you need to do it. You got to find that version of being active that's going to work for you and for different people. That is different things. Maybe that is a desk treadmill. Maybe that is like the old. The old Pelly in the garage, because that's what you enjoy. Maybe that's like actually going outside and climbing up a rock or something like that. I am a completely different person on days that I exercise and days that I that I don't exercise. And we fixate on, like, the problems of the work and the people that we work with and all of that stuff. When the entire universe that, like, that whole universe is viewed through a wildly different lens depending on, did you get your sleep last night and did you exercise? It's not to me. Exercise to me is more about your mental health than it is about losing weight and stuff like that. And all that stuff matters, too. But everything that we're talking about and how you run your business, it ultimately comes down to the condition of of your noggin and turning up with that thing at peak performance every day. Like create some big time compounding advantages. Not to mention the fact that we should all be doing it and that's good for you and you only have one body and all that stuff. So remember, first tip here, send this to a team member. If there's anything specific in here that you're like, oh, we do need to start working on this. Don't put it all on your back. What the heck did you hire all these people for if you have to do everything yourself? Talking to myself thanks for coming to Hanging today. We got a fun one tomorrow around entrepreneurship planned and I'll see you there. Do.