272 Standardizing Services - Turnkey Pricing?

The fifth and final day of the Jason Daily road trip. Hey, thanks for coming along with me this week. If this is the first one you've tuned into this week, where the heck have you been? Go back, do not pass go. Move back four spaces. And start with Monday's episode. We've been talking about building service libraries in your accounting firm and how that is the path to systematizing what you do and simplifying the sales process. But today we're just talking qs, nas, some questions we're going to cover today, but both. Man, this feels hard and like a lot of work, but also the opposite end of the spectrum. How can I capture like, everything? What level of detail do I need to go to? I'm excited about this. Should I present packages on my website? Should I build a menu now that I finally have this structure for the first time, should we build like a McDonald's drive thru menu with it? How could I standardize pricing around my service library now? So many possibilities, right? Is this a good idea or a bad idea? Come on in, man. Buckle up. Let's talk about it. Okay, first and most common question, which comes from opposite ends of the spectrum. On one end of the spectrum, this is too much work to be worthwhile for me. On the other end of the spectrum, how do I capture like, more, more detail? I. I feel like I can't get this system to capture every little unique thing that I do from my clients. I'll. I'll cover the, the previous one first. This feels like too much work to be worthwhile figuring all this stuff out for my clients and adding this structure to what we do or, or to adding the structure to how we talk about what we do for our clients. Like, why can't I just call it bookkeeping? Like, why do I need greater detail? This exercise, going through it and mapping this out for your firm. All that it is serving to do is capture the work that you already do for your clients. And if you think of all the different situations in which there's confusion around expectations both internally and externally, if you think of all the training that has to go into defining exactly what bookkeeping is for client A versus what bookkeeping is for client B, that's one of those things that is creating a lot of work every single day. And in my opinion, this process of building a library of the things that you do and digging into the, the service items of what makes a service different, what are the variables, like the properties of the delivery of bookkeeping from client A to client B and Codifying it, like actually getting explicit about here's what's different and here are the sops for how to do it this way and that way. I think doing that eliminates a ton of friction in how you get your work done, also in the, in the client relationship side of it, and is eliminating a bunch of complexity that we're often blind to, that we're not thinking about because we don't have this structure. So is this work? Man? It like it totally is. And I don't even know that everybody needs to go to the same level of detail that, that I did for mine. It's definitely worth thinking about and exploring to see if there is like detail here that maybe you're blind to or maybe things that your team's doing differently for each client that you, you may not even be aware of. I think it's a helpful exercise. The depth to which you go through it. It's gonna be case by case what makes the most sense for you. But the reality is we are all doing some version of this complexity and day to day, we're throwing away time by not having a more standardized approach. Now the other end of the spectrum, how do I capture every little detail? Let's say that you did the exercise with your team that we discussed two days ago where you, you throw all of your top level services on a whiteboard and everybody, either physically or in a digital whiteboard puts post it notes under each of those services. Bookkeeping, bill pay, payroll, tax prep, tax consulting, advisory, receipt management. Everybody puts receipts, not receipts. What everybody puts post it notes under each of those services, identifying all the stupid little fiddly one off things that we do for people. Oh, Jim faxes his bills to us. We've been meeting Charles at his house to do in person delivery of his tax return for the last decade. Track all those things. How do I build all those into a system? The reality is that you just can't. Right. What we're trying to do is capture like the x percent that is most common across all of our clients as a starting point. But in my experience, what this helped with was getting the whole team on board for simplification and like marching towards actually having less variability over time. If you don't have a structure at all, variability will just happen as a product of having conversations with clients and they will all get more different over time. If you're not intentionally trying to like corral at all. But is there a version of this system that can capture every fiddly little nuance imaginable no, there isn't. So it is a balancing act between getting to the service Items that cover 90, 95% of how the work gets done. Right. And then having like a text field that's like hopefully in many cases there's nothing in that text field. But then occasionally you've got like a line or two about what's different about this one. You know, it's cash basis except we just, we plug the month end inventory balance to cogs like so it's actually kind of modified or hybrid or whatever you want to call it, stuff like that. We've got that, that one off thing. What was the other example? You know, maybe a health insurance bill is on autopay on the credit card. So they don't send you a copy of the bill. Well, we still have to post it to get it in an ap like fiddly stuff like that where it's like something that isn't going to be captured by your service library and is specific to the client. But now that's the exception rather than the rule before you build SOPs based on the client, which means every single engagement looks different. Now we're only carving out the aspects of that engagement that are unique and everything else is standardized. So we know how to get that work done. If you're stuck on, man, we're still doing all these unique things for clients. Good. Like you're acknowledging that and you're capturing that for the first time. That's, that's a great first step. And if, if the volume of stuff that's going into that, those text boxes is embarrassing right now, then I still think that's a worthwhile exercise because you're being realistic about where you're at. And having this structure gives you a path towards standardization. When we did this exercise, the worst it ever was was day one. We now had a framework where we could kind of start migrating people to something more clear. Right. And that's, that's what we're trying to do here. Today's episode is sponsored in part by Live Flow. Live Flows, the tool that puts a little Louis button up in your spreadsheet app. Whether you use Excel, whether you're into Google Sheets, puts a wee little button up there that lets you pull any QuickBooks online data that you have from clients into a spread spreadsheet. Imagine your spreadsheets now with access to all your client QuickBooks data. How can you use that? Tell you one useful way, getting people information who you don't want to be in QuickBooks internal members of a company's team. Let's say you got a marketing manager and they're in charge of the marketing budget and need to be overseeing spend or something like that. You want that person in the QuickBooks file? You sure don't. But you know what I do want them to see marketing spend. It's a great example of like all these barriers and siloed pieces of information that are with help from team members just because we maybe didn't have a good way to give them access to it. If the business owner is responsible for a set of KPIs, all of those KPIs need to be tied back to team members. Where team members are like okay, they have to do this, this and this or collection of team members have to meet their goals in order for the business owners KPIs to get to where they need to be. Well, how do we get really clear information to those team members, access to the data that they need and as you're advising clients, Liffel is a great way to carve up all of the data that lives inside of QuickBooks. Either pull out one time snapshots or reports that will continue syncing live on an ongoing basis and then all I'm doing is I'm giving that person access to a spreadsheet, not the keys to the entire kingdom. Right? Besides, QuickBooks got all sorts of like user limits and I'm consuming those every time I add a person. Anyways, LifeLow does a whole bunch of stuff consolidations as well. That's one cool use case you want to learn more, check out the link in the show notes. Today's episode is sponsored in part by the folks at Team up who help you find talented accountants in the Philippines. Join your team Education Break Common vernacular you hear when you're hiring offshore bpo. What is a bpo? BPO is a business process outsourcing company. Basically a company that employs a bunch of folks offshore and then you hire the company to get part or all of those people's time. The appeal of a BPO is for folks that haven't done offshoring before. Sometimes this can feel like maybe. Maybe a more comfy place to start can help you navigate kind of cultural misunderstandings. Usually the BPO will do the actual recruiting and bring a bunch of folks to you. Some BPOs also sell you more like the product, the deliverable, not the time. So like buying tax returns or month end closes instead of just having a person that works for you around the clock. But there's some downsides to BPOs as well, namely high ongoing fees. It's not uncommon for half of what you pay to the BPO to actually go to the BPO and the other half to go to the person. The BPO is usually gonna set the person's schedule as well who's working for you. So you lose a little bit of control. And if you ever wanted to leave the bpo, getting those staff to come with you and like getting them out of the BPO in my experience is virtually impossible. So you're kind of stuck with that BPO if you love the people that you have at the BPO. So upsides and downsides to BPOs. But if you wanna do direct hiring, that's what today's sponsor team up does. They've got recruiters that'll find you awesome folks to join your team. You pay a one time recruiting fee, they don't pay anything after that. Those folks just work for you directly. There you go. Now you're a BPO expert. If you're looking to hire folks directly in the Philippines, check out team up link down in the show notes. Should I present packages on my site? So the top level package packages a collection of service levels that you put in front of a client on a proposal or something like that. Say it's, you know, for tax firms that's oftentimes tax prep and bookkeeping cleanup. You know, if you're doing SMB books, we're virtually never taking the accounting at face value and just plugging it in. So a package is usually several services for bookkeeping firm that may be bookkeeping and receipt management, maybe payroll, maybe bill pay. Should you put packages on your site? I recently did a video on the main channel on YouTube around whether you should put pricing on your site. And I think there's a lot of, a lot of methods of putting pricing on your site that can be a trap, namely not having a price at all so you're not filtering out tire kickers. But also putting the minimum I actually think can be a trap. And the effect of that is that it actually anchors clients pricing expectations to, to just be your minimum. And over time, if everyone's coming in with that expectation, the distribution of client fees of what all your clients pay you across your firm I think will actually trend toward what the minimum. Because that's what everybody's expecting. And that's not what I want. I want it like trending upward, right? Not downward. That's on the subject of pricing. But our service libraries and putting packages on your site, that's actually more about Scope and like defining the ways that we serve our clients more so than price. I think I actually like the idea of putting packages out there as an example, not necessarily tying it to a price. And you don't even have to have like fixed packages. Like maybe all you're going to do for a client is bronze, silver and gold and that's the same for everybody. Um, that wasn't how I ran my firm. But even if you're not going to lock it down that way. And bronze looks different for every client, silver looks different for every client. Even then he could throw a package up on the website to like give you an idea of what it would look like to work with you. Now another question that came up in the course of doing this. Now that I've got this structure for the first time, does this mean I could like stand up a menu and like put a menu in front of my clients for all the things that they could, you know, you know, buy from me? Basically, even though we have this structure, it's not something that I necessarily put out in a client facing context. I don't know that I want my clients to know like how we detail this stuff out internally. And I, I don't think I would like present it to say like, you know, choose your cheeseburger and fries sort of thing because I, I want to reserve the right to do that kind of myself because I think that I actually know what they need better than I do or, or better than they do. I will give them options. People, people don't, I don't know, some people like being told what to do. Other people like to feel like they have a degree of control over the final decision. That's why I usually gave them a few different options. All options they would frankly be fine with and then they felt like they had some control in the process. But I wouldn't go as far as like standing up this whole like menu of everything that we do for everybody for them to just self choose from. Because if somebody goes through that process and they come back and you're like oh no, like this, this actually isn't going to tick the box for the things you actually need. Then do I even want to run that engagement if it's not what they need? Right. Some questions on, on pricing and how you, how if at all pricing figures into these service libraries, they could help you if you're trying to drive a more turnkey approach to pricing. So were I to try to boil my pricing down to something super clear cut that was tied to the Work that we do. Some of these service items that we've defined would probably impact that, but they're not going to be a complete snapshot of everything that I need to know to price it. So in addition to service items, and this is something we did in my firm as well, we had like drivers of price and that could be volume of transactions, number of bank accounts. We would use this not to necessarily set the price of what clients would need to pay for us to do that engagement, but we would use that to kind of define like more, more of a cost thing than a price thing. Actually. We would have kind of some metrics for identifying projects that were underperforming. This actually got even more useful when we had our service library because we could, we had a little more data when it came to like, what are the combinations or the packages that were profitable and what did they have in common? And that's where we learned that we're actually making really good money on, on bill pay and some of these other peripheral things that were solving a, a meaningful pain for someone. So you could develop like sort of metrics, like drivers. My approach was more almost to define a minimum of like what we had to charge for this, these types of projects to make it worthwhile rather than like build out this, this pricing calculator and making all that pricing totally turnkey. Turnkey pricing is, has definitely some benefits in that it's more transparent, that it's easier to delegate across your team. But the big downside is you're missing out on some aspects of value pricing where you could charge more because that's a particularly painful problem for a client. The main benefits of this, like what we're trying to capture is simplifying downstream workflows so that when we're doing bookkeeping too, the entire team knows what that means and we can build SOPs around it and to simplify the sales process as well, so that when we're onboarding a new client, it's super clear exactly what it is that we're going to do for them and what we're not going to do for them. When we are renewing a client and they have a need, it's clear how we could maybe upsell them on a different service or a higher level of the same service to solve some problem that they have. Today's episode is sponsored in part by Client Hub Time Machine. The year was 2017 ish 2018. I was running a cast practice and we had all of our task management stuff happening in ClickUp and it was fine for managing tasks. But the big headache, Every single month I had stuff that I needed my client to do so that I could do my work and we had our system all nailed down. But when it came to having to get the clients to do that stuff, just a bunch of freaking emailing and following up and so, so annoying. And I literally remember telling the team, can't we just like give our clients access to this ClickUp or just create a ClickUp that we can both use together? My clients know how task management systems work. They use them themselves, gang. If you have ever said that Client Hub was created around that idea. A two sided task management platform. Not some funky old nasty like portal that's been bolted on to a practice management system, but genuinely a task management system that actually looks pretty much the same on the client side. And on your side you got a bunch more firm tooling. But on the client side it looks like a beefed up task management system. Literally a spot where you can collaborate with clients and work through things together. Because unfortunately there's oftentimes still stuff I need clients to do. Questions come up, I want to push those out through their task management system and we could just manage this stuff like grown ups, okay? Not all this email and back and forth and having to remember and it's something the Client Hub does really, really well. Client Hub is a full practice management system. But if you've ever been looking for something that is gonna feel more premium to your clients, like a proper modern task management system could be the solution for you. I'll put more info about Client Hub down in the show notes. This episode is sponsored in part by Maker's Hub. I freaked some people out recently saying the biggest thing AI is set to change in the next six months is 1040 prep workflows. The reason? AI vision models. It's the same tech that Maker's Hub is built on that in my opinion could revolutionize how accounts payable happens. Recently did a demo day on my channel in the first 10 days actually the most watched video I've ever done about how AI is automating accounts payable. Maker's Hub is using AI vision models to pull information off of invoices and wildly decided detailed ways. So, so much better than anything OCR could have ever done before. Finally delivering on the promise that we can stop doing manual entry on this stuff, right? I mean it feels like for, for over a decade we've been having apps coming and telling us, you know, we've finally eliminated manual entry. It actually feels like we're pretty darn close to that. For the first time I had clients with super hairy AP workflows where this genuinely would have replaced like several FTEs, probably in my firm in like the, the very best way. Because for every single one of these people we had a hundred other things that we wanted them to do. Super cool app. You'll see them out and about at accounting conferences. I'll put a link to them in the show notes if you want to see a quick five minute demo, just search makers hub Jason Stats on YouTube. We've done two of them now and they're pretty cool. Last question is around. You know if your practice management system, or lack thereof, doesn't give you a great way to support this, and that's going to be the case, honestly, for a bunch of practice management systems, the fact that your PM won't support it doesn't make this an exercise that's not worth doing because capturing this, even in a very manual way is, is super worthwhile. So what does a, a manual version of this exercise look like? It can be as simple as a spreadsheet with your clients that identifies the services that you deliver to those clients. Like it can genuinely be that simple. And that's not the ideal place to store that thing, right? Like you would in a perfect world, store that contextually within the work so that as you're doing the work, you can see the scope that you're supposed to follow with that client and that sort of thing. But if you don't have that system right now, or maybe, maybe you don't have the level of control over your firm to be able to dictate and say like, oh, we need to use a system that can do this right? Like if you're not there, that is what it is. Even a manual version of this is better than nothing. The ongoing tasks is something that honestly, your PM could help you to templatize, or you can templatize other ways. I mean, people ran firms just fine out of three ring binders agreeing upon like, okay, here's how we're going to do tax prep and this and that, right? So while there are definitely ways that your practice management system, for example, can templatize all of the tasks that ought to go into a specific service, it by no means means that it's only worth doing if your PM gives you a great way great way to do it. There's also actually some, some risk in systematizing and automating too much around this stuff too quickly. Because as you wade into it, you find like, oh no, it would actually be good if we changed this little part of it and we did this bit slightly different. And if you try to build this like super locked down turnkey machine around something that's still changing, that can be frustrating and, and create, create a bunch of rework. That's all we got for this week. If you haven't yet, you probably have. Swipe that spreadsheet down in the show notes. We'd love to hear if this was helpful for you. What aspects of that template you iterated on and changed? Did you build on it more? Did you shrink it down? What were, what were some gaps either services that you do that weren't captured there, service items that you ended up adding. That'd be great stuff to see in the comments. And we can keep building on that template down there so that when folks come in later they can grab an even better version of that template. So that's all we got for this week. Talking service libraries next week back to more regular programming. I'll see you then.