163 Should Accounting Firms Offer Discounts?

Should accounting firms ever give discounts? Is that a thing they should do? Or even the opposite, like surcharge for certain things? What if you're starting to invest in putting out content, you put out something that's wrong. I'm going to share some thoughts on the death of QuickBooks Desktop in the US and accountants are generally bad at building systems, as most like technical subject matter experts are. How do we combat this to build killer systems in your firm? Come on in. It is Q and A Friday. Let's ride this baby into the holiday. Okay, I'm taking the next two weeks off. There will be no pods the next two weeks, no main channel vids the next two weeks because you got better things to do than to be worrying about your accounting firm over the holiday. Unless you haven't listened to the full back library of the podcast in which the better thing to do is just to go back and listen to the episodes you haven't heard yet. See how quickly and easily I sold out there. Okay, up first on the subject of discounts, this is a great question. It was over on the main YouTube channel from Lark and this was specifically around how to like smooth out busy season and US Tax practices, but it applies to non tax practices as well said how about giving a small discount for filing between April and August and charge a premium for filing August to October? Basically how about using money to flex capacity between our busy and slow periods. And this is through the lens of US tax, but it applies for people doing month end closes like it applies for anything. And I don't want to give like a 100% blanket answer here. That's going to be the right solution in every scenario because I'm sure there's exceptions to the rule. Here's some big things to look out for though that I have heard from practitioners who have done some form of this or another. Discounting your service and ever framing it as a discount I think is probably something you want to avoid because it opens a Pandora's box to the entire notion that what you do can be discounted and that it's like somehow negotiable. I don't think you ever want to do that when you are doing discovery and sending proposals to clients and stuff like that. You never want there to be an element of negotiation because as soon as you open that door you will never close it. Giving them a deal once there becomes this implicit assumption that they have a deal or are going to be able to get deals in perpetuity. Now the reality is you can set your Price wherever you want to. It's more about the messaging and what's communicated to the client. I generally think discounts are just a bad idea because then people will come to you looking for more discounts on different things. So if you don't start that, you never have to stop it. But even the flip side, surcharges. A lot of folks have said, like, well, what if I just make people pay extra to get their work done faster or to get their work done in our busiest season? And the risk there is, you have now this obligation of something that's really tricky to do. And oftentimes when clients pay more for something like this. I first, I first heard this from Adam Shea and it's made sense. As I've heard other people share their experiences around this stuff. When people pay extra for something, it often comes with a level of entitlement. That said, well, I now pay extra, thus, like, I have more privilege and can make certain demands that maybe I wouldn't have otherwise been able to make. And that's a pretty sticky spot to put your team in and to put yourself in. It's like this vip, fast pass, fast lane sort of thing where now they're going to be entitled to things that folks otherwise wouldn't be entitled to just because they paid more money. And that, you know, you can see how that can be problematic now, how to, like, the best way to effectively manage those cyclical. The cyclical nature of our busy times versus our slow times ultimately, I think gets pretty specific down to, like, the type of work that we're talking about to quickly cruise through what this looks like for us Tax. What I would tell people was there are very rarely reasons why you need to file before April. It's extremely rare that there are benefits to doing so much more often. There are benefits to filing in the fall, which, when you have more information about what your next year looks like, when you can make certain, like, different tax decisions based on having a better snapshot of the following year, we would go as far as putting returns together and actually tell clients we're not going to file this until we need to file it. Like, here's the tax to pay, but we're not actually going to file it yet. And for them, this, like, gave them the peace of mind that we were considering what was happening in the current year before, like, locking in their tax filing for last year. And certain clients, like certain tax situations, don't merit this complexity. And there's really not that much you can play with. So maybe it's not a big deal, but if you run a small business like this is everyone that runs a small business, you're generally better off waiting, even if it's ready to go. And I think this actually helped in getting clients heads around this was telling them, I'm actually not even going to file this until we have to at the deadline because I want to reserve the ability to change it. And then they were like, oh, this is something that I just fundamentally didn't understand. Like, you're actually going to analyze what's happening during the year before filing that, that I can understand. And at that point, it's like they're kind of getting out of the way and saying, you know, it's, this is what I'm paying you to do and paying you to figure this out, figure out for me, which is really what this should come back to. And I think oftentimes in all areas of accounting firm running and client services in general, if you don't project a clear process for here is the best way to do this and get this done and how we're going to do it for you, then the client's going to come in with the limited knowledge that they have and kind of fill in the blanks and make up the answers and ask you to do certain things. Most of us, we take a client on and we kind of give them a very broad description of like, how that ongoing cycle looks. And it's not exactly going to feel like you are taking control of the process and like managing that for. For them. And, you know, this is evidenced by them sending you emails saying, like, what about this? What about that? It's like, no, you want them to feel like they're in a place where you are proactively actually doing the opposite. Like, you are reaching out to them, being like, have you thought about this? Have you thought about that? And once they have that confidence in you, they're not going to tell you when to file their tax return. They're not going to tell you when to do this. And that this literally what they are engaging you to do is, is to make the most of this, to do this, like in the very best way that it can be done. And there are some returns in the US where like 1040s, where there's not that much stuff that is gonna get flexed one way or another, where it's a lot harder to make the argument that it can't just be filed during tax season. And this is one of the reasons why, like, we moved away from doing a lot of that. Type of tax work is we couldn't justify smoothing it out throughout the year. Now the equivalent in an accounting firm where you're just managing month end closes is you've always got that crush around like oh, we deliver financials by the 10th or the 15th or something like that. And this is actually something that I did in the past was one of our service level items was expected delivery date and folks that wanted it super fast would pay more. And that was kind of the relief valve for the cheapskates who like, they were fine, wait until the 25th. And the people who were like, oh, it's very important I get it early in the month. I was like, okay, then will you pay for it? And I don't know if that was the best way to manage that or not. Something I've come around to now that, that I'm more in favor of is actually getting folks, and we've talked about this a bit, getting folks off the financial statements as what they are looking forward to for their month end deliverable. Most of our clients don't understand the monthly financial statements. What they do is they pull it up and they go look at like the two or three things they actually care about, if that. And what I think is more interesting is actually giving them a more real time snapshot of just the things they actually want to see, which oftentimes aren't the financial statements. And considering how we can deliver a very simplified version of what they actually want on a more real time basis either week over week or you know, quickly after the end of the month. And that's usually stuff around spend management and like that sort of the thing, the stuff that they're actually watching day to day with the goal of taking the pressure off of the month end financial statement delivery timeframe. And that stuff has to be done. But it's almost like not unlike a tax return where a tax return for somebody itself doesn't have a ton of value. It's just something that has to be done. And in my experience, financial statements for many entrepreneurs, and this is like sacrilege to say for accountants, are kind of the same thing. They have to be done because they have to be able to present them to bankers and stuff like that. But the ways that they make decisions are on KPIs and some stuff that is built on top of those financials, but it is not the financial statements themselves generally that they're getting a ton of value from. So actually taking the focus of the monthly reporting cycle of off of the financial statements, I feel like that's a good solution to depressurize those delivery timelines. So these days I probably think of pricing as like a last resort, charging more, charging less for something, because I think it sets sort of a dangerous precedent. Agree, Disagree. If you had experience in doing either of those things, drop in the comments. This episode is sponsored in part by the fine folks at Cloud Accountant Staffing. Do you hire accountants? 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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 you know, people often ask me, Jason, who is this episode sponsored in part by? Well today this episode sponsored in part by Live Flow. Did you Hear the news? LiveFlow just launched a consolidation product. You actually might have seen it on the main channel recently. We did a whole demo day of it. LifeFlow's automated multi entity consolidations. It's beyond simple to use. You can easily map multiple unmatching chart of accounts from multiple QuickBooks Online companies into one standardized report. And once it's set up, Lightflow's gonna get to work updating the consolidations automatically in real time, the realest of time. So you can focus on analysis using instantly updating data across entities. 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Are you holding yourself out as an expert or are you telling a story, or are you sharing your journey? I think those things are much more compelling. You may have things that you can be an expert on, and maybe that's bookkeeping, maybe that's qbo, maybe that is tax. There's things you can speak about through the lens of being an expert, but there's a lot of other things that your clients and folks are very interested to hear from you that are well beyond the bounds of what you're an expert on, because you have access to a lot of relationships that those people don't. You think about like a cfo. A CFO goes to be a CFO for a single company and does that for years. We have this amazingly privileged position where we get to do this stuff for tons of different companies and have a window into a very different perspective than many other folks get exposed to. And so when you stumble into common things that clients are getting wrong, stories, you know, turnaround stories, stories of how stuff can blow up if you're not on top of it. Like, success stories of, you know, what it looks like to, like, have a better financial understanding of your numbers when you run your business and how that can drive decision making. How to stories of taking the stress out of finances and managing tax compliance and stuff like that, that's the stuff that people. I mean, that's the stuff, honestly, that is much more engaging than I'm going to teach you this technical thing. So the degree to which we expose ourselves to being wrong I think is correlated with, like, how much we are saying, I'm an expert. And here is the answer about X, Y, Z. I do that, like, virtually never these days. Usually I'm. I'm framing what I say through the lens of, like, here's my personal experience and the experience I've seen from a bunch of other folks. There's definitely a big spectrum there of how convinced I am of. Of this or that. You know, yesterday we had an episode about, you know, value billing and, sorry, value pricing. And I've shared my experience about how that was largely what we did. But I'm not, I'm far from like a die hard enthusiast on, you know, building your entire practice around that. So I, I don't see the getting it wrong being an issue. As long as we're not insisting that, like, I am the expert on this thing and here is truth, I think much of our content can instead be focused on, on storytelling and actually sharing experiences in the US we just got an announcement recently from Intuit about how they're going to start shutting down QuickBooks Desktop over the next couple of years. I think it was basically like after 20, after next year, you can't get new, new subscriptions of QuickBooks Desktop or something. And it's a big deal. Like there's still a ton, a massive. I still don't know that small businesses in the US have reached 50% cloud adoption. But in the United States, accounting, like the word QuickBooks, has been synonymous with accounting. Like, those things are interchangeable. And the default for decades was you run a business, you're doing it on QuickBooks Desktop. And there's still a lot of accounting pros that just want to use desktop. A lot of small businesses that are not in the cloud yet, either due to trust issues or they don't like how those apps work as much as the desktop apps or, you know, a myriad of reasons. Now I saw that direct deposits for the QuickBooks Desktop Payroll product, you now have to pay $4 per direct deposit payment if you're processing payroll out of that. So they've set the sunset date down the road, but they're already making it like very cost prohibitive to keep using that stuff in the meantime. Honestly, it leaves a massive void. Like, regardless of your opinion of whether everybody should be using desktop software or cloud software, it leaves a huge void of folks that still just want to use desktop software. And there are very small specific use cases where maybe you're off the grid or like there are situations where desktop software makes sense. Not anywhere near as many as like the cases where people are still using it. But to me, it kind of shines a light on the fact that there is some risk in choosing your platform. We talked, I think it was last week, about folks feeling like trapped, buy into it, you got into it sort of turning into a done for you company where they're going out and selling bookkeeping services and tax services, where in the past They've been a software company for advisors and that's put advisors in a tough spot. Like, do I keep buying software from Intuit then? And some folks feel trapped. They don't see a way around that. But it is a good reminder to me that there genuinely is risk in choosing your platform. Somebody shared on Twitter they built a niche around doing government accounting for certain groups and due to some nuance around how that government accounting works, you can't do it in QuickBooks Online. QuickBooks Desktop works really well for it. So they basically built a niche accounting practice around QuickBooks Desktop and that's no longer a tool they're gonna be able to use going forward. I should say you can still use it. I mean, it's desktop app. You can use it in theory until the end of time or even go get an old version of QuickBooks Desktop. But connecting that to, you know, bank fees or running payroll or any stuff like that's gonna become impossible. And it's rare, at least in the US I don't have a window into this outside the US but it's rare that we've seen situations where you are committed to a platform that, that your business runs on and you can kind of get burned by that platform. But it is a good reminder that who we choose to partner with, and this isn't really going after Intuit specifically, it's a good reminder that any of the platforms that we're putting our clients on, like, we do have a degree of exposure to those businesses and, you know, the continuity of those businesses. We've seen some software companies surprisingly shut down in like unexpected ways, where one week you see me in an accounting conference and the next week they're like, yeah, no, we're killing this. Sorry, we've seen some stuff like that. I think the bigger problem for many accountants is the tool or the product that they're using is now a legacy product that that software company is no longer really investing in. It's not a priority for them anymore. I also see this with some legacy practice management systems where you have software companies that have these old desktop based systems and they've now made new cloud versions and are kind of looking forward at that stuff. But you have a lot of people that have still sworn by those desktop systems and want to use them until the end of time. And over time you see stuff like support just degrade. The product doesn't get any updates anymore. So it's worth even considering what is the excitement level for the software company around this tooling that I'm using because if they don't love it, it doesn't matter how much you love it. And so while I think it's easy to be like, oh, if you're using QuickBooks Desktop, you're living in the past. Like this is gonna be a hard period of change for a lot of folks and there's probably an opportunity there for other desktop software providers to come in and eat up some of that. I know Intuit's goal is ultimately to get those folks into the QuickBooks Online product, but it is definitely worth keeping in mind. Platform risk is a real thing like hitching your wagon to the wrong tools that you're gonna build your firm on. Like that's a real concern. And especially with as quickly as tech is changing now, we need to be asking of our tech partners, like we need to ensure that we understand where they are investing and that they're continuing to build on the product. Oftentimes you'll get a software company that builds a killer core product and then they get into this like other thing that's sort of an adjacent thing that isn't necessarily building on the core product, but they're super into it and all their engineering and investment and attention goes into that. And that can be really frustrating when you're like, no, I just want your core product and I wanted to do this and that better. But their attention is very obviously going elsewhere. It's stuff you got to pay attention to when you are choosing who you're going to hit your wagon with. Because the bigger the system is like the harder it is going to be to change down the road and the more you're going to, you know, potentially immediately start falling behind as soon as you start using this product. It is just as much about what that product does today as what it will do in three years time. So are they investing in AI and working better with the other tools that they that you use? That stuff matters beyond just do I like the look of this tool? And then does it do what I need it to do today? Right. This podcast is brought to you in part by Teamup 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 zero QBO and dexterity. 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 payroll and compliance. Right now you can save a thousand 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 and 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 cheddar even if you won't be ready to hire for a few months. Last There's a comment that from Courtney I'm going to say charay on the YouTube main channel. She said, I'm an operations manager for an accounting firm and and it's been an exhilarating experience to help my boss with his day to day operations and overseeing client deliverables. But I've noticed that accountants I've worked with have been disorganized when it comes to systems management. I assume that accountants would be highly detailed and organized considering they work with numbers all day. Lol. Is this something you've encountered as well? I think accountants would probably argue that they are extremely detailed when it comes to the technical stuff. And there's like an unbelievable amount of nuance in many aspects of accounting that are really hairy and really high stakes if you get them wrong. And I think accountants pride themselves in getting that stuff right and ensuring the best outcome for the client. Now the hard thing about that is at the end of the day, the client in most cases has absolutely no idea if the technical output is good or not because it's very hard to benchmark any of this stuff. If you go to an accounting firm across the street and they give you a different answer, there isn't even an absolute benchmark for was that a better answer or a worse answer. And so accountants kind of pride themselves in technical accuracy and doing things correct. We sit around other other accountants all day long and the way that we are measured up is can we do things correctly for you know, the senior reviewer when they go through to not have to give you any notes like that is the reality that accountants are living in as they're surrounded by other technical subject matter experts. And that is that's the bubble they exist within. And nowhere within that bubble usually are things like, you know, systems and client experience and many of those things being discussed and you will have exceptional People who can do both systems management along with like the detailed actual technical work. But I would argue those people are unicorns and there's not that many of them. And that's not an accounting thing, that's an engineering thing. That's like every technical thing under the sun. And it is why it's super valuable to have different brains attacking like problems from different angles. Like this is the value of diversity of all sorts of kinds in building processes and like making something better than the sum of its parts. In fact, the person leaving this comment sounds like they're non accountant that's coming in as an operations manager. So they're probably coming in suited for like being the person that can build those systems. And the value of that person is, is just what you're saying here in this comment is I'm not seeing a lot of attention paid to this or that. And admittedly that's probably a blind spot for all the people doing that work or the people doing that work are like, my job is just to produce tax returns or month end closes. Like my job is not to come in and build systems. Now the hard thing is ultimately the quality of the system impacts that person more than anybody else. So then when you have an external kind of process manager come in, all the technical folks are gonna be like, what the heck do you think you're doing? Touching where my add in is in my Adobe Acrobat. So there can be a lot of friction there. But yes, I would agree, most accountants, like most technical subject matter experts are not systems people. Like they're systems people through the lens of doing their technical craft to kind of the best of their ability. But beyond that, that's not really how most of us are wired. Like that is not a benchmark on which we are often rewarded. And this is where, you know, traditional incentives for accountants kind of break down the notion that value is this, you know, value like scales linearly with time as if you know, all 10 hours of time are the same. And so maybe some of this problem is improved by incentivizing folks, you know, more on, on output and what you're able to bill clients and that at least being pulled in as a factor based on either how they're compensated or how they are reviewed by their seniors. But it is admittedly a tough thing to project onto technical people who are expected to crank out, you know, your job is to crank out tax returns. And then another person comes in and is like, why don't, why are you thinking about this or that, about the process and they're like, buddy, I'm just trying to keep up with this stupid city of Portland preschool, tax, whatever ridiculous thing my client just walked in the door with in Ohio sort of situation. And so it is like a totally different job. And to me that is the value of pulling in a different brain to look at it. I absolutely loved hiring non accountants because they could come in without any of the biases that accountants inherently have when they come of age working in accounting firms. Like we are creatures that are fundamentally limited by like our lived experience. That's, that is the only reference we have is the things that we've done and things that we've seen. To me, that's the value of, you know, making friends in the profession and, and making friends friends with other firm owners so that you can learn from their experiences. Because you can hardly expect somebody to have perspective of something that they've never even encountered before. So for me, when we would pull in non accountants, it was like this really helpful diversity of perspective that we wouldn't have otherwise had. And they would come in with, with some ideas as any, you know, new person does. And then once they kind of get settled in, they see which of those ideas stick and make sense with the additional context they've learned and which don't. But the result in my mind is fundamentally better. You've got like a more comprehensive approach to thinking through a problem and how the work gets done. That may be the, what would be the most bummer thing for me about being a solo practice owner is that maybe lack of diversity and perspective into what you're building. But I think you could also get there by making other friends who run firms and asking for their opinion and having like a trusted relationship there where you can show them your stuff and they'll show you their stuff and give you feedback and, you know, a non judgmental way and both of you get better, kind of get better along the way. That is it for Q and A Friday. Thanks for coming and hanging this week. I'm actually in Orlando next week for the new money Summit if you're going to be there. Will be fun to see you then doing holiday stuff that next week we'll be back, I think on New Year's Day to start another year of this silly little podcast. We're like up past 160 episodes. Bless all your little hearts for coming and hanging on this man. It'll be interesting to see what this evolves into in 2024. I'm thinking about kind of different recurring formats and how structure something that continues to give people value every day and feel like you've got a spot to come and hang and just talk shop about this stuff in a way that's 80% of the time going to be encouraging and hopefully send you into your day with a couple new ideas. So thanks to all of you for coming and hanging this year and I will see you next year. Right, bye.