300 Pros & Cons of Relationship Managers in Firms

Today Relationship managers Is that a thing that your accounting firm ought to have or does it just further fragment the client relationship? I collected a whole bunch of info from folks who have explored this pros and cons of it. Also, couple thoughts on on making like itty bitty steps into social media marketing. What we should be focusing on A couple of workflow tips on managing tax resolution work and should we be thinking about revenue levels when it comes to when to make hires? I'll give you my thoughts. Come on in buddy. Scooch on up that chair. It's Jason Daly. All right, Age old prominent accounting firms, especially if you do tax and accounting work. Do you have a unicorn that does all of the tax and accounting work or do you have an accounting person and have a tax person that kind of fragments that? Or do you shoot the moon and pull in a relationship manager so that we have yet another person that is like, I don't know, the kind of advocate for that client or managing the relationship while the big brains in the back of the office do the work. I mean that ingest not the actual big brains. Chad Davis when he recently on our podcast drafted the first 20 members of his firm and our accounting firm 15 fantasy draft, he shared that one of the things he'd be picking up, I think it was like Hire7 was a client services manager. He called it a CSM and this is a version of a relationship manager. And he hired this after hiring a number of technical people. And I said give me the the external job description for this role, Chad. And and so this is like one example of what a relationship manager could look like. Here it is. As a client service manager, you'll be responsible for delivering a great client experience that results in strong and lasting client relationships. To succeed in this role, you'll be responsible for, but not limited to the following Staying current on client deliverables to consistently meet deadlines and commitments. Managing client expectations, including adapting expectations or related jobs accordingly. Review work prepared by the team including but not limited to year end compilation engagements, management, investor and board reports, corporate tax returns, federal and provincial sales tax returns, T4, T5s and other Canadian things Outgoing email communications as required. Collaborate with our tax team on the completion of CRA audits, T1s, other tax stuff Confidently lead routine client calls, including year end and monthly or quarterly review meetings. Contribute to innovation which may include initiating process improvement, documenting new or updated procedures, developing standard templates, and collaborating with a larger team on such initiatives. So this person has both a client facing and a technical role. They're actually signing off on the output of, of the folks doing the work while managing the client relationship and kind of being that client advocate. And so the big upside of this role is just kind of the framing that if you don't have this role and you just have the people doing the work, they're so fixated on the work that because they spend all their time on that, it's really hard to switch your brain to a completely different mode. That is, what is the client need from me today and how can I be helpful to them? And an analogy that I think most of us can relate to is you go back to the early days when you're doing this stuff and maybe, maybe you're still here, you're doing write up, you're doing the prep work and you may sink 20 hours into a project and then you hand it off to a reviewer and the stuff they come back with is just like, oh my gosh, you, you dummy. How did you not find that stuff? And the reviewers are like, did you review your work at all? Because this is so obvious, but your head is so into the doing of the thing that it's extremely hard to zoom out and stop and then review your work. And you're so happy to be like through it that you're like, I don't want to put it on a shelf for a day or two to then come back to it with a clear mind. Like I just want to get it out the door. But as a result, it's just extremely hard for you to wear those two different hats. And this is an argument, kind of reframing that this is an argument for a relationship manager because the folks doing the work are so heads down trying to make all that stuff happen and meet all their targets and get everything out by the deadline that to then context switch when you are in the middle of trying to get something done, to tactfully respond to that email while you got stuff on fire and people need things from you and you're trying to get this work finished up. That's a really hard thing to bounce back and forth between. As opposed to having someone who, who rather than spending 80% of their time on technical and 20% on relational, spends 70% of their time on relational and 30% of their time on technical. That's kind of the thinking here. And some people will go as far as the relationship manager actually not being technical at all. And if you look at like a creative agency, they will have kind of that client relationship manager who oftentimes is, is not A creative at all themselves, but like an interface for the client to the team that gets information back and forth, gets the client client kind of updates as things are progressing. So that in the, in the universe of that creative agency, the creatives, the technical folks can just be heads down on getting that stuff out the door. Now the non technical relationship manager in an accounting firm, that's always been a really tough one for me because if you think about how you triage client conversations and the questions that they give you, they are very frequently technical in nature. I guess not always. You get like the basic document requests and stuff like that. And hopefully if you run a team you've got like admin folks that can, that can handle that stuff and are sort of gatekeepers for your more technical people. So that they're not just fetching documents for clients, but the non technical relationship manager I've always had a, had a really hard time with because I don't know yet that I've seen a compelling example in somebody's firm of them pulling that non technical person in and not just fragmenting that client relationship a little bit more. Now the other end of the spectrum, having a unicorn that will do tax, that will do accounting, that will do all of those things, the impracticality of that is oftentimes what leads people to thinking, oh, relationship managers are the solution. As I read through actually what Chad provided here, I think this is probably my favorite version of this because the individual is still a technical person, but they're removed from the heavy lifting, from the grunt work, having to do a whole bunch of this. But they are in charge of like overseeing the output. And just to be clear, that doesn't mean that you couldn't still have reviewers in those functional teams reviewing the output before it comes to the relationship manager. But the relationship manager has an understanding of everything in the output and is going to take a look and make sure there isn't anything obviously incorrect or at odds with conversations that they've had with the client. So that this person now rather than having to be the preparer who has to switch their brain into review mode, this person now lives in client management mode. And that's where they are naturally thinking of the needs of the client and taking breaks to like dig into the work for that specific client to ensure that the deliverables are what they need to be. Now if you remember, if you, if you got that draft episode, the first question I chucked at him, cause he was like, he kind of outlined the type of people they look for for this. And he's like, oh, it's accountants that love communications and client services and they're a cpa. And he kind of ran through all these qualifications and I'm like, I had no idea that such a person existed. He said they've had a much easier time finding that type of person who is jazzed about client service and just focusing on that. He said they've had an easier time finding that type of person than yet one more technical person. And part of that might actually be the supply and demand curve that everybody wants, the technical people. But there's not all that many firms leaning into the relationship role. And because I don't know, pick a number. One in every 40 accounting firm might be hiring for that. Did that just 40x the likelihood that you're going to be able to find a more qualified person for that than you will be able to find for that next technical hire. And if that's the case, if that talent availability truly is greater on that side, does that tip the scales of whether that's a good thing to do? I think it actually might. Like, if we're looking at the entire ecosystem and what's possible, I think the fact that you can more easily find people who could be jazzed about that role might make this whole thing make more sense because it also solves for the problem of the client not wanting to come and talk to a different person about tax and a different person about accounting. You've got that person now overseeing the projects that can do all of that. But we're not putting 100% of the work on that unicorn so that they can't serve very many clients at a time. Today's episode is sponsored in part by Live Flow, the company that helps you put a jetpack on your spreadsheets, connect any old QuickBooks file to your Excel, to your Google Sheets, sync data in one time, sync it in on an ongoing basis. One thing I really like is when I pull those reports in From QuickBooks to the Excel spreadsheet or Google Sheets, I can move all those individual cells all around and they will continue updating. So if you think about all of the values, all of the things that you can get with a QuickBooks report, pulling all of that into a single place and then having the power to rearrange those things however you want into a. A single view for a specific company, even a single view across a bunch of companies, like, I don't know, maybe in a single sheet. I wanted every transaction and ask my accountant across all my QuickBooks files or something like that. You have complete flexibility to pull that stuff wherever you need it, rearrange it and and it won't break. It'll continue updating. Pretty cool. So start getting crazy with your sheets with Live Flow Link in the Show Notes this episode is brought to you in part by Teamup Helps you find talented accountants in the Philippines Pop Quiz how much do you pay an accountant in the Philippines anyway? Do you know? I'll give you a minute. I'm just gonna tell you. Here's the answer. It depends, but I'll give you some ranges. Monthly salaries for full time accountants in the Philippines for bookkeepers and accountants are going to range from 900 bucks a month to $2,000 a month. Tax accountants generally $1,100 to $2,700 a month senior accountants managers $1,800 to $3,200 a month and executive assistants $800 to $1,800 per month. For context, a three year accountant in Manila not working for an international firm usually around 400 to $500. My mental framework was usually in India you're gonna pay about half as much as in the Philippines. But another big cost factor is whether you're hiring through a bpo, which we recently learned about. BPO handles some of the logistics of managing and employing that person on the ground in another country, but you're usually gonna pay them another 40 to 70% for that service. Team up their approach, hire folks directly so you eliminate the cost of that BPO and they just help you find cool people. You pay a recruiting fee and no ongoing fees after that. Wanna learn more about Teamup? Check out the link down in the show notes. Super interesting. What got me started down this path pash initially before kind of rabbit holing even deeper was a question a couple weeks back from Sam Neill. I think this was on a podcast episode. Wanted to share their 2 cents. In my experience, when you have a group of people that only have the responsibility of the client relationship, a disconnect grows between the staff doing the work and and the ones focused on the client relationship. How do you make sure that the relationship manager isn't committing to work that the staff doesn't have the capacity to complete? The staff doing the work is incentivized by efficiency while the relationship manager is incentivized by quality and making sure the client is happy. It's a great question that specific specifically was the question that I put out to social media and the responses were so all over the board and what I and one Takeaway I had, there was. People's opinions are largely dictated by their lived experiences and whether what they saw worked or not. Because you had people so like convicted on both ends of the spectrum, oftentimes saying very similar things. And I'm really interested in. And that like the comments didn't really get into adequate nuance here to, to really suss this out. But I'm super curious, like ultimately, what are the, the details that go into the execution of that that will make it work or not work? I mean, I think we've, we've teased out some here today where there's a version of this that it just kind of fragments everything more. And to Sam's point, there's a version of this. Absolutely. Where incentives aren't aligned between the people doing the work and the people managing the relationship and they end up being at odds. A downside of creating a new role like that is further fragmenting how things happen in your firm with which can make kind of shared incentivization harder when they're doing very different jobs. But if you go to the opposite end of the spectrum and you're like, how do I do like, you know, say production based pay in the most simple way? There's not pods or anything like that. There's one person that does all the work for that client from end to end and we're just gonna give them X percent of production. By the way, doing some work on pulling some people to the podcast who can share their experiences on production based pay. A lot of people asking about that. So what's the most simple version of that? Okay, one, one staff person does everything end to end. We just give them a percentage of production. Well, what are the metrics that you're going to use there beyond production that also matter? Probably how happy is the client? It's not just going to be production, there's going to be some other factors there. I think whatever those factors are that build a more holistic snapshot of am I properly incentivizing that person to do the right thing? Because while hourly billing and salary and just paying people to work hours, while that is a game that can be abused for sure and is problematic when it comes to incentives and being more efficient and all those things. Production based payer or incentive based pay, all you're doing at the end of the day is trading one game for a different game. But the goal is it's a better game, it's a game that's more aligned with my interests as the owner. And generally production based pay that will be a better game, not without its downsides, but however we build that more holistic incentive model, we probably want to project that on a group of people, on a. On a team, on a pod. I don't probably want to come to my relationship manager, and they have a completely different set of incentives and success metrics than my production team. And if they do, I think that's where you end up with the problem Sam's talking about here. That they're like, okay, I got to kind of optimize for the relationship. Or just like that next happiness rating. Like, they're. They're gaming the heck out of it on their very narrow set of. Of success metrics. Meanwhile, the production team, like, they're just about output, they're about efficiency. Right. Those metrics just fundamentally, at the end of the day, have to be blended. Otherwise, I do think you have this problem where everybody's playing a different game and not necessarily pulling us all in the same direction. There were also a lot of comments on Social that were like, it is as simple as. As communication, as holding people accountable. But I do think you can peel it back to what is the game that you are incentivizing your team to play. There's. I mean, almost everything boils down to that. And oftentimes when we're frustrated at the behaviors that. That they're exhibiting, it is because we haven't created a game that will lead them to act in a way that aligns with whatever I need from them. I'll be honest, I was cooler as in not as into the relationship manager sort of approach until I read that job description from Chad. I actually really like that. That guy Chad is just a wellspring of wisdom. What a guy. Quick sidebar. As we're closing in on 300 episodes, we might actually be there right now. I don't even know at the time that I'm recording this. Wowee, wow, wow. 300 episodes. When I started this, I thought it would just be daily for a week or two. We are still chugging along, and it's because y' all interact and ask smart questions, and we dig more and more into the nuance. Somehow we still uncover helpful things. And that's really exciting. Thank you for being here. I don't think I've ever asked for this before. If you've gotten value from this podcast, pop out to Apple Podcasts, leave a little review. You don't even have to write any text this podcast. And the reason I haven't asked in the past is I'm like, I just want people to find it who, like, their friend likes it and so they'll, you know, recommend it to them or something like that. I don't need it on charts. The podcast has reached a critical mass where people actually are finding it via charts now, which is pretty cool. And, and so if that is an actual way for people to find this podcast and get help, then that stuff actually starts mattering. Mattering more than it did before, at least. So if you want to take a minute to do that, super appreciate it. Also, maybe even better if there's a colleague or something like that and you're like, this episode was super helpful, send it to them, especially the ones that aren't online. I think if you're on social media, I'm pretty hard to avoid. But I mean, the vast majority of accountants are not online. Like, if there's a service I can provide to you, hopefully it is evolving your thinking. But also a big part of this and how I would use my content is helping other people to evolve their thinking. Because you can consume something and be super convicted as a result of all that consumption. And then you go to somebody else and you're jacked and they're like, I don't get it, man. Because they didn't consume the same things that you did. So use this stuff to the degree that it is helpful for you and bending others to your will. Right? And if that means sending an episode to a friend along the way, that's amazing. If you think in terms of my business, and I'll get back to the point in terms of, like, what my business is now, this podcast is probably the. Not probably it is the least juicy part of my business relative to effort, relative to inputs like the money that it makes, relative to inputs by a mile compared to anything else. But I honestly think this is probably the highest impact part of my business because the folks that engage here, I don't want to say, I don't want to say super fans, but it's like it is your. Your most. Your most aligned members of your audience, right? Those are the people that'll, like, go into battle with you and other people that you learn from. Like, that's your community. Anyways. 300 episodes. Wow. Today's episode is sponsored in part by client. When it comes to choosing a pm, it comes down to the four C's Capabilities, client experience, clarity, and community. I already told you about capabilities and client experience. Today we are talking clarity. How approachable is that system? I tell you what, as these systems have matured, they have turned into monsters. Frankly, some of them, when you look at them now is like, it's just a lot. And there's a certain element of vibes to software. Like, you see a software and you're like, yeah, that's me. I can get into that. Like, when I first saw Notion, I was like, this is my vibe. There's other people when they see Notion, they like, like, I hate this Client Hub, man. It's the whole vibe. It's got a vibe. It's pretty clean now. There's usually a linear relationship between our first C capabilities and another C. You don't want complexity. The holy Grail is a platform with clarity. Lots of powerful features, but not complicated. Client Hub. It has the magic of clarity. Makes everything simple for a firm owner and their team and their clients. Clear layout, powerful features, yet simple to use. Makes it easier to onboard new team members. Spend less time supporting your team's questions. You don't have to run tech support for your clients because they can't figure out what the h is going on. Oh, that's the worst. That is clarity as delivered by Client Hub. Spend more time delivering value, not trying to figure out how your PM works. Okay, Learn more about Client Hub. Check out the link down in the show notes. Today's episode is sponsored in part by by Cloud Accountant staffing. And I got another resume for you to look at here, gang. I got a live one. This is an actual resume the cloud accountant staffing got for an accounting firm they were working with. How's this sound? Especially for you tax firms out there. Graduated with a bachelor's in accounting in 2017, spent two years in audit before going to tax. Good for them. So you know they got a good head on their shoulders. Spent their next two years with a Western firm just doing tax work. Two years after that with a top top 100 firm whose name if I uttered here, you would recognize there they were a senior tax associate, also in charge of training junior tax associates. All sorts of accolades here around like culture awards they've won. Sounds like a real addition to the vibe, to the vibes of your firm. Good vibe manager experience in the CCH access suite and everything else associated with business. Tax prep gang. Super talented folks out there just looking for happy home and that happy home could be yours. People like to talk about, like trying to hire big four talent and that sort of thing in the US and just how hard that is. Do you know how many big four and top 100 employees there are all around the world in the Philippines. The massive offices they have set up in the Philippines. Those people just like Stateside where they're like man, I don't want to go work for this giant machine. Those people are looking for cool, small progressive firms in the Philippines just like they are in the U.S. incredibly talented people. And cloud accountant staffing. They're going to help you track them down. Looking to build your team of accountants in the Philippines? Check out the link to cloud account staffing in the show notes. Okay, super interesting podcast interview I listened to recently that I wanted to reference. Thomas Frank. You may be familiar with him. He's a YouTuber, basically a productivity YouTuber essentially abandoned his 2 million sub channel to build a new channel from scratch. First of all, can you imagine doing that, building a YouTube channel for years, building it to 2 million subscribers, making a living on it, being a professional YouTuber, only to abandon that channel to instead build a tutorial channel for notion users. Notion, the software, it's all he does. And then he started selling some, some notion templates around that and that the channel at the time of this podcast was 1/14 of the size of his main YouTube channel that he had built before. 1/14. But as a business, it actually generates twice the revenue and for him is a higher impact business because it's hands on. It's not talking about it, it's showing people how to do it. I'll put a link to that, that podcast in the show notes because I thought it was a really interesting example of how mainstream social media super misses the point. What we're looking for is something specific and impactful for people. It's not about doing numbers like and in this case he abandoned numbers for, for what was a better business. But what was something that he identified was just being as something that was just more impactful. Even if it was gonna be a much smaller scale, it was still more impactful and that made it worth doing. When it comes to running our accounting firms, man, it is, it is totally about impact specific impact, not putting out more general content for small business. Question that I think many of us are probably dealing with some degree of this. Even if you don't run a tax practice, if you know in a bookkeeping business, oftentimes you're dealing with payroll notices, all sorts of stuff. Question was on tax notice tracking. Thanks for all the content you publish. I've taken so many tips and tricks from the pod. One question we have run into is the best way to track notices. These are like tax notices for a firm of roughly 40 to 50 employees. In three locations. It can get a bit crazy at times. Do you have a best practice or recommendation for tracking these notices to ensure they're taken care of? We can't always give them to the staff accountant and the senior employees don't always have the time to stop and take care of them. A big super beneficial change I made in my firm of about 40 was centralizing tax resolution. The default was whoever prepared the tax return, they would do that tax resolution. Tax resolution, I learned, is one of those things where there is a right way and a wrong way to do it and an efficient and an inefficient way to do it. There's actually fantastic tools that can make tax resolution much more. Turnkey Canopy has a dedicated tax resolution tool. You can, you don't have to buy the practice management system, you can just buy that tax res tool. Still, I believe Pitbull is another provider where literally by the letter id, like by the type of the letter that you get, it walks you through step by step, the best way to respond to that letter, even pulling in all sorts of variables around that client's circumstances. And have they done this or have they done that? If so, use this template versus that template. Tax resolution can be much more systematized than we often think it can. And because it is a skill and like an art form, it's absolutely worth centralizing. And so when we pulled that stuff all into one person, it got done in. I mean I think you can genuinely get the same amount of work done in 20% of the time at a much higher quality. So like many things in, in your firm, until it's somebody's job, nobody's going to be pumped to do it. Especially if they think their job is to get tax returns out the door to keep clients happy. Like if they are a tax preparer, if they are a bookkeeper, in all likelihood they're focused on month end closes. So make it somebody's job, number one. But number two, seriously look at centralizing it because that actually makes the making it someone's job, that makes it much easier. Rather than across 40 people trying to hold all these folks accountable for these little one off things, funnel them all into a centralized place, they're going to get done much more efficiently that way. And then that's, you know, half of that person's job. At a firm of 40 to 50 people, maybe that's a quarter of a person's job. But centralizing that was a huge improvement for us. Last as I did that firm draft where I was kind of picking my employees, I got a lot of questions around what revenue levels I would make hires at. And we heard from Chad Davis when he did his draft that when he launched his actual firm, they actually took out a loan and hired a few people in the beginning because they wanted to get all those people started like at the same time and growing together, thinking that those people would kind of be the foundation long term of that firm. Interestingly, he said were you to do it again, he would bootstrap it and just hire a person at a time. A lot of variables go into how fast you're going to hire stuff like just things like that. Are you going to finance ahead of time? Are you going to do an acquisition for mature firms? A lot of firms try to get to that 250k in revenue per person target, which is a very profitable target. But that doesn't really mean anything when you're starting out and you're doing some work like that. Like that just clouds all these metrics. So I don't really think that there is a great kind of unifying metric here. It also depends on how aggressively you want to grow and how much you're going to reinvest into upskilling people to stay ahead of capacity decisions. Like, am I going to hire folks offshore? Am I just going to hire onshore? Am I going to leverage offshore, Sorry, not offshore. Outsourced service providers where they can be a helpful added source of capacity when you need it, but not always the most profitable way to get stuff done. All of these things can, like outsource providers, for example. They de risk a lot of things for you, but they're much less profitable than building your own team. To do this in a mature firm, like you need to be pushing to like 150 to 200 to 250 in revenue per head and more modern firm structures. That gets a little trickier to measure because we're trending towards building more of an org chart around technical people rather than your firm being 100% technical like they were in the past. Now we're talking about relationship managers, we're talking about admins doing more of what was considered technical work because we actually want to de skill whatever we can to be done by an admin. So all these like yardsticks and best practices, they get really tricky because it's not just about the technical people anymore. And even technical people takes so many different forms from onshore to offshore and all that. The better, the better thing to think about probably is the overall margin of the practice. Small practices unless you're really investing in growth and and hiring ahead and all that. If you are removing yourself from the work in a 2 million or under practice, if you're removing yourself from the work, that ought to be a 20 to 30% margin firm. And if you're doing a ton of the work, there's no reason that firm couldn't be a 35 to 55% margin firm. That's probably the better perspective to have rather than like kind of these arbitrary revenue thresholds to make that next hire. More important than revenue is real capacity, like having an understanding of where you're at on capacity, what types of projects are going to consume what types of people. Because oftentimes you can have some folks that are under capacity while others are over. That is probably the better way to plan when to hire than revenue. And that is my non answer to that question. Thanks for coming and hanging this week. I hope you heard my children screaming in the background for this one. I think that was just a doorbell too. You got any questions? Keep em coming down below. Let's do skin next week. I'll see you there.