404 Production Pay for an Accounting Team Of 5

Production pay. This week we're talking to Trevor Myers. Guy runs a five person accounting firm which is on the smaller end of.

The spectrum for all the production pay firms we've talked with.

If you thought that production pay was just a big firm thing, well, let me just blow right through that assumption.

For you with, with this conversation today. This was a good one.

I think you like it. Come on in. So without further ado, let's talk with Trevor Myers. Okay, let's get into. We got Trevor Myers here. Trevor, for people that have not bumped into you, into the wild on social, whatever.

What's, what's the 32nd Trevor Myers intro?

Well, CPA, bean counter. We like to focus primarily on tax advisory and planning. We obviously have, you know, a core list of clients that we'd like to try to do more with. I always try to say we try to be a, an inch wide and a mile deep. So we really focus on tax advisory. Growing out our team locally here. And within this particular kind of industry, we really focus on construction and within the medical field, within optometry and ophthalmology kind of separate little worlds. But a lot of the tax planning strategies seem to go hand in hand with a lot of those client groups.

That's interesting. How did you stumble into those specializations?

Well, the construction specialization came from just like referral groups that we have just colleagues and people across the industry knowing that really they came to us for tax planning within ophthalmology. It really came from kind of a top line godfather. I like to kind of refer to them internally. We had one client that we've been working with forever. He actually was a prior client of, of our, our, my previous firm. And he was just always really generous with his referrals. We did a lot of good tax planning for him across those years and then it just kind of trickled down, snowball effect from there and then we're got out. So we have eyeballs in construction for whatever reason, but we seem to like it and do it pretty well.

Yeah, those go hand in hand.

Yeah, right.

How big did you say the, the squad was?

The team got a team of five and then we got a couple of seasonal folks as well when we need to tap on those shoulders.

Okay, cool. That, that's like a whole bunch of people listening to this are going to be like, oh, that, that feels like me. So this week talking production pay, I put out, I put out the call and several people pointed to you.

Interesting. To me, you're running about a five person shop.

We've Heard from a number of other people this week who are like running maybe slightly bigger shops and folks with.

A smaller team may be like, I don't know if this is me, if this is for me or not for you. I guess. Let's go back to the beginning of contextualizing. Why did you start doing this? What were, what were you trying to.

Achieve with kind of the v1?

Well, v1 originally started with me, so all my pay was production based for the most part. But, but really what it was was I wanted to try to find as we grew out, the team, I wanted to do something that I would have wanted as a staff person. So, you know, certain people, you know, that are either rainmakers or want to hustle or that kind of thing, you know, they're going to get rewarded accordingly. But my was I wanted to reward the right type of behavior. I wanted to reward production output because in my, you know, overall the client doesn't care how long something takes to get done. They just care about the deliverable. So I want to reward on the deliverable. And then if we design our practice around efficiency and doing, you know, our SOPs properly, where we can have good projects and good margins, I don't care how long it takes. So it eliminates timesheet manipulation, it eliminates the fear of eating time and eliminates the fear of our production ratios and all of those things like that. And so if someone wants to go out there and crush it, they're going to get paid really well. And then it's our job as a firm to hopefully feed them work that's going to help them do that. So really kind of have this entrepreneur mindset and they have, I mean, they have a piece of all the action really in everything they touch here in the firm. So it rewards efficiency and it rewards output.

What was the very beginnings of that calculation when you brought your first couple hires in? What did that look like?

Yeah, so we've, we've ranged for the most part between 35 and 40% of gross billables. So, you know, and then we're factoring in. So we, we value, we value bill everything that we've always done, but we still track time kind of old fashioned way. And I do that just because of this metric. So that factors in write ups and write downs. It factors in, you know, all of the above. So if something takes an hour, we get to bill $1,000 for it. Then our effective rates. A thousand bucks, pretty simple. And if I'm $50 an hour in normal pay, you're going to get a massive write up and you're going to ultimately get 40% of that. So the 40% seem to land pretty good. I flirted with 35 to 40% overall. I'd rather overpay than underpay if I'm being honest. I think if it all works out, I'd rather take over, you know, extra third of my employees than, you know, and if, and if that somehow if our margins get cut down as a firm level software costs go up, things like that, we might have to reevaluate that. But so far it's worked out really well for, for, for my, I've been pretty happy with it as well.

Like the notion of your compensation being tied closer to your outputs. Definitely attracted to a certain type of person and like you and I were probably both that where we're like outperforming the people around us and hours in a chair just feel super arbitrary. So you can definitely see how that setup is appealing to a specific type of person. You said like the Rainmaker or the real kind of go getter.

What are there any risks to that?

Like the fact that you're designing a system that is so explicitly tied to output to where maybe some of the other stuff gets forgotten or some of the softer things are pushed by the wayside if it creates this sort of entirely production obsessed culture?

Yeah, no, that's been a fear. It hasn't. We haven't run across it yet just because I think as long as we're, we're distributing work out in a, in a, in a meaningful way with capacity planning and things like that, obviously some people are going to get better projects, some people are going to get worse. Sometimes we don't know especially with new clients. So we really try to take into account, especially as the staff goes into evaluating those relationships and we kind of have our, our annual evaluation on where are we at with our clients? Should we, are we, are we priced fairly? Should we let them go? You know having our, our, our, our, you know, our PETA award or whatever you refer to them as. But inevitably it's possible. I can't, I can't doubt it. You know, if we had a team of 20 and it came super cutthroat we, most of the administrative tasks to our operational team. So that way we can really keep our professional staff within a focus kind of group all day. Inevitably though, I think with advisory sometimes it just the work takes what the works takes. So even though we have kind of a planned scope, sometimes our projects are going to take Longer. I do believe the law of averages is going to ultimately take care of itself. And so we kind of have to have a little bit of like grace and discretion where hey, you know, team number one really got a home run on that deal. This is the easiest K client of all time as far as like, you know, as far as a need and a lift. Yet team person two, you know, really got a headache on this one. And so we try to distribute it out where we can and then we'll evaluate it all. So like the advisory team tries to really, it seems like, hey, if I had to write down on this case, we might try to write up on those cases. So the idea of write up and write down is really where we try to make things a little more level. So inevitably there, that, there it's, it's kind of discretionary based on me. So I'll admit there. But it hasn't created a, it hasn't created an environment of like cutthroatness or anything like that as of now. So every, we try to hire based on that too. Right. We try to, we, we want entrepreneurs, we want really outgoing, we want people who are active. But at the same time, you know, we, we try to make sure we're, we're, we're cultivating a good culture where it's more of a team approach across the board so we can all lift each other up.

Yeah.

What members of the team are, are production pay? Because I, I assume 100% of them aren't like what's the divide there?

There's one that's not and then so the rest of the team is production pay.

Is there any complication if it's like.

You know, 80% of a person's role being production, 20% being something else? Does that push more of the non.

Production stuff to you?

Potentially?

It has, yeah. No, it's absolutely true. It has. I end up doing a lot more operations and a lot more administration as the team has grown. I've stepped way more out of production and I'm much more and more of a management role. So that's something that we're definitely evaluating right now and trying to improve upon. Possibly hiring in like a sales coordinator, sales slash operational person, a CEO. That's definitely kind of our thought process moving forward. Just because I can't do all things perfectly or I can't do all things efficiently. I either have to let the operations go or have to continue, you know, trying to cultivate the team so that, that has happened, you know, and so. But part of it too is, I think as the team becomes more stepping in, as their team grows and they're managing lower level staff, you know, it'll, they'll start to have some of that ownership and realize it's just part of kind of what we have to do in terms of managing the client relationships. But right now it's falling on me.

Is that a positive or bad thing?

Because a lot of people, I mean the age old thing is getting out of the client work and in some ways that like barges you out because everybody maybe hoarding production is too extreme a phrase, but there's a degree of that, right?

Yeah, I think it's looking at the bigger picture. So being able, you know, near term for us, as we grew, we grew quite quickly and so we were definitely understaffed, heavily understaffed where I, we were working crazy hours. Me as a, you know, as the firm runner was working crazy hours. So we grew out and then some of it's just because of like, like learning, you know, kind of, they're still, they still got the training wheels on in some cases. So our, our most senior staff are kind of our manager, you know, she's handling, you know, more of the, the training with the other staff and doing all of those other things. But yeah, no, it, there's, there's always that sunk time. But again, I think of if we're pricing our engage, understand that there's going to be a level of administration that goes along with, especially on our tax planning engagements, you know, kind of hand, you know, walking alongside the client, making sure they understand the processes and the steps. It's kind of a coaching exercise for the most part. And we still bill it, we still bill it out, we still track our time on that. And again, I think because we're pricing our engagement so well and because I think we are doing that, you know, work that, that clients see value in. Inevitably some of that, I'll call it that sunk time really doesn't seem out within the calculation because it's pretty nominal. And then our operational team's really trying to handle more of our, you know, day to day with all the administrative tasks. So really our staff is almost entirely production during the day now. They'll have a few, I guess normally what an administrator could handle, but they're doing it because they're, they're kind of the team lead on that particular project. So the client wants them to go through it. So. And then I've been able to kind of get more out of the way as, as the team has Continued to mature. So at first it was all fell on me. So I got out of production, went into a lot more operations, administration. But then as the team has matured it's, it's been backed over to them. So I think part of it's just that tech take a step back so you can take two steps forward.

So just on a, like a very practical example, a thousand dollar tax return goes through the firm. What are the ways that that gets split up? Are there, are there levels to the allocations to multiple people? Is it pinned to and how does that work?

Yeah, because the team being five, we don't have like a hierarchy where we have staff one staff two manager senior, like so on and so forth. So it's pretty much I'm going to be review. This will be the first year where we'll have our manager reviewing returns more, more than just myself. But really it's only one or two touch points. So you know we've, we've, we've invested in some of the systems like Sorban in order to you know, help with the intake process to low to lower our touch point from an administrative standpoint. So really we should be able to k start the engagement. You know, whoever's in charge of that client will, will take a step, it will start working on the tax return. There'll be a serious level of review either by me or my manager and then ultimately the delivery process, the last mile of the return is pretty quick so the touch points pretty low. So our administrator will bill her time on there. We do have a rate of applicable for her obviously the staff who's working on the return and then whatever my review is and then depending on if the thousand dollar example, if we have you know, $500 of WA WIP then we've got a 500 potential write up and then I prorate that based on overall lip. So if someone worked on it, if I touched it for five minutes, I'm not writing myself up very much. If a staff, you know, did 98 of the work, they're going to get 98% of the write up. So that's kind of typically how we handle it and so it typically works well. And there are some cases frankly where we have to write down. There's some cases where the write up's nominal. But again I think that law of average is really, is what I mean, I'm banking on that. But it hasn't failed me yet because if we're looking at a school put 2,000 hours over the course of a year, you're always going to have a little bit of give and take. But if we're pricing our engagements properly, we should win way more times than we'll ever come out. You know, even we've never lost. But at worst we'll come out square on on a particular project and then we'll reevaluate that going forward. If it ends up being a bigger engagement, then we'll reevaluate it, reprice it, and re engage moving forward on a renewal.

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So is it simply allocated according to time input by various team members? Because I'm thinking of like a scenario where maybe you reviewed it last year and then a manager reviews it the next year. Like whatever allocation was going to you previously, presumably then would be going to the manager.

Yeah, yeah, pretty much. Yeah. That's, that's kind of the plan so far. So when we've been able to kind of test case that so far, that's how it's gone. And so I'll end up having a touch point on it pretty, pretty minimally. But I try to reward who's working on the engagement and now. But there are higher level engagements that I'm able to focus on more and when we're doing more advisory, more consulting and those kinds of things. So kind of my time is spent working on those engagements where more of our compliance only engagements. The write up is going to go kind of to the manager and the staff. In those cases you talked about the.

Write up going to it, do they have like a base pay and then it's just net write ups that get paid out out.

It's right ups and write downs. It's, it's, it's, it's both. It's both. So yeah, we have a salary, it's base pay salary, you know, normal 80 hours a week. You know, we do unlimited vacation. We don't track time off in that way. You know, we kind of just do. Because again, if it's based on production, that's kind of how it goes. So that's kind of how we treat just time off. And so whenever we do, whenever we do biannual reviews, so we'll do a review in like January, late December and then we'll do another one post tax season. So typically the bonuses are going to be much larger post tax season. And I do that because some of the work obviously in the first second quarter, highly productive, highly, you know, way better margins, tax compliance, all that kind of stuff. Then our, our work that we're doing in the second half of the fall is primarily advisory or a little bit of accounting services or something like that. Higher touch, lower margin, still good work. But typically our bonuses are going to be really, really good in the mid year. And so we do that just so we're not trying to, we don't punish people for like the whole year kind of evaluation because we know they're going to hit home runs the first and second quarter, the second or third and fourth quarter, we should be doing really well as well. But those bonuses may be smaller in nature and we kind of evaluate that way. But it's, it's, it's net, it's net write ups and write downs. So so far we don't have a lot of write ups. And then when we have new staff too, we have like a 90 day period because there takes a, there takes some time to kind of get in, get in the flow and understand this change. We've had a lot of like people where we, you know, some of the new staff have come in with this change of mindset and it's kind of confusing for them because it's like, wait, so I don't have to put my, I put my time on it and I don't have to eat it or I don't. You, hey, you put four hours on this project. Did it really take you four? No, it just, that's what the budget allocation was. I was like, I don't care what the budget allocation was. I care how long it took you. If it took you five, tell me it took you five. So that way we can understand and grow from there. Yeah, there'll be a little bit of a write down, but if it took you one, tell me it took you one. Because I don't care about the timesheet, I care about ultimately what it's taking to actually get the job done. So. But yeah, we do both net write up and write down. But if we're, hopefully if I'm doing my job correctly, we don't have A lot of those right down. Sometimes we'll have to take a bath on a client or on a particular project. But again we'll try to make up for that. And I, and I sit, I sit staff down. I'll say hey, we had to write this one off bad. I, I underquoted it or I under, I underpriced this. You know, that's on me. We'll re evaluate that, but I'll make it up for you on this project here where we're going to get that, those write up. So I kind of keep it, I kind of keep, keep a working kind of living document where we're, we're, we're tracking those things. I'm trying to be fair because I think in, in the past some people can, if the only way, if I just write myself up and I don't give them the credit for it, then they're never going to continue evolving up. So whoever has the pin kind of controls the destiny. And so I've seen partners do that at the staff's detriment. And I just never wanted to be that person. So I wanted to make this what I would have wanted to see whenever I was a staff. Knowing that I was trying to crush it or I was trying to work harder, trying to get better projects, trying to get higher level projects. So I tried to take that into consideration. So far that's what we're doing.

Is everybody's base pay is that market or is it something else? Because there's a commission element.

I think it's actually slightly above market just because we're a smaller firm, you know, we're definitely at market, maybe slightly above. I'm willing to overpay just because of the size. You know, we're not built for someone straight out of college intern staff. One level I need someone who knows how to work because we just don't have the same level of hierarchy that a larger firm would have. So we're typically looking for people who are at that senior level or slightly above. So typically I need people who know how to work, know how to learn, know how to figure things out and then ultimately kind of plug them into our system. So yeah, that's how we kind of have worked with that.

I think everybody's fear when they're considering something like this is the scenario where people have to go backwards or where you have to make a change to the calculation that that that hurts somebody. Do you have an expectation in the scenario where somebody gets is, you know, maybe it's Most likely in Q3 and Q4, somebody gets to the end of Q3 and Q4 and they've gotten that write downs. And is there an expectation there of what that means? Does that roll forward? I assume somebody's not cutting you a check. Like how do you handle something like that?

Yeah, I get my grass mode for free at that point. No, I. We haven't run across it yet in all honesty. So there is the expectation that we might. And so what I'm really upfront with staff, especially upon all of our new hires, is we'll have two, if we have two periods of net write downs and we really need to reevaluate either your base pays off, either I'm giving you bad projects. I'm not putting you in a position where you can win. You know, the real thing is I want to put in, in terms of baseball, I want to, I want to put people in positions where they're going to get on base. You know, and if we're not getting on base, then, then something's happening I think at the manager level to be me or whoever's ultimately managing that staff. So two periods in a row, two or two semi annual reviews in a row. But typically too is we can start to see on a month over month. If we're, if we're definitely seeing that trend, then I think we either need to evaluate either they're not fit. You know, maybe they came, maybe they were overpromised on the, on, maybe I, I mishired. I mishired. But obviously I don't want to have to go into that. So we try to do our hiring process. We're really looking for, you know, we're looking for people who are seasoned. We're really looking for personality types. So admittingly, you know, I'm not just taking any resume off the street that they have the right, the right, you know, check, you know, boxes checked off on the resume. We're looking for kind of personality types, people who are lifelong learners, people who are, you know, wanting to challenge themselves. So. But to answer the question, we haven't had two, two, two periods of a row of a net write down. Obviously I'm not lowering anybody's pay. We just don't go up. So if you get a bonus, like on the other side, if you get a bonus, we up your base pay, we reset. Reset. We, we up your base pay. Sorry, we didn't even talk about that. So we up your base pay, we kind of reset hourly billing rate. And then now we shoot for the, now we have another goal. To hit and then we go forward there. So in those cases, you know, if we, if you crush it one year then you're going to get a massive increase obviously in the bonus, but then then additionally on the net on the base pay and then your hourly rate probably increase. Then we're obviously then we keep going forward and keep going forward and keep going forward. So there's always. We're kind of moving the goal post to a certain degree or kind of keeping that carrot hang in front of you trying to chase after something so you don't get complacent. And then if we, and then we should be getting more and more, you know, projects and you should be coming into more roles where you're doing higher margin work.

I had a partner back in the day that would, that did all sorts of silly games on, on their write ups relative to like they'd come in inside the return for a tenth of an hour and they got the write up and the staff didn't going to production pay. I think what people get scared of is like, like it feels like a game. And you are, you're trading the game of ours for a different game. The question is, is it a better game? And ultimately the more agency that a person feels like they have over the projects they have and the way they're price and all that stuff, the more they're in control of their own fate. But if it's me, I could see being frustrated when it's like the hand of God is giving me projects that may or may not be good projects and I didn't price them myself. Like how do we give the people that are involved in that process as much agency as possible to feel like it truly it was them that either dictated that success and they're not just kind of beholden to whatever kind of projects they get past.

Yeah, so we, we kind of roundtable a lot of our projects together. I mean there's certain people I can already kind of point that I think they're going to be a good fit just kind of culturally with the client or just relationship with the client. Just like, you know, some people are a little more suit and tie buttoned up, some people are more casual and I can kind of feel out the team who might fit well with the client. But to your point is we kind of get the, get the team in and we try to evaluate like is this priced accordingly based on this, this, this. So it's not just me arbitrarily just assigning the price and then the team is involved with the pricing package. And then as we, as we move into year two, three and beyond, the team is going to do those renewals. And I think you've talked about those that all of a sudden the notes and all of the data and all of the ideas and all of the headaches and frustrations get really, really put under a microscope whenever the team that knows they're going to get paid on this project are ultimate re engaging on this project. In some cases we may not re engage. In some cases there may be a big price increase. But if we're delivering value, it shouldn't matter at the same time. So there will be agency for that in years two, three, four and beyond. And to another point is if client, if they want to bring in their own clients, it also gives agency on trying to build out their own book of business or their own client listing. And so we give a 10% bonus on any new client for first year billable fees. We give a 10, 10, 10% bonus. If someone comes in on 10,000 a year, they pay 10,000. They'll give another 10% bonus on top of the production if you worked on the client. So really, I mean, if you think about it from a 40%, my biggest fear is that it might be too high at a certain point. And that's my biggest fear is I may have to adjust that percentage down. I'm not as worried about net write ups and write downs. I'm more worried about making sure, you know, because, you know, if they were to go out and do their own thing, 40% margin at an accounting firm is not too bad. You know, a good accounting firm being 50% profit, 40% ain't shabby for not having any of the headache or heartache that goes along with running the thing. But you know, I really want people to have to treat this as if it's their own business within the business. So, you know, yeah, you know, where we have this, where, you know, this will ultimately foster partner relationships. This will foster people wanting to move up, this will foster people wanting to get clients and have these types of things on their own. And really what I want to try to do is I want to try to build out better professionals. And if I can be along the ride with them, then that's just great. And if they stay forever, that's fantastic, fantastic. But I know they'll be better equipped to go out into the marketplace by just kind of having do this rather than just being assigned work and just filling, you know, just putting hours down on a timesheet, doing Kind of, I don't know, hamster wheel type work. That's what, that's just the way I feel about it.

Do you think there's a version of.

This, you told me before you hit record, you, you spent time at regional firm in the past. Do you think there's a version of this that works, that plays nicely in, in like the larger firm sandbox that would have been appealing to a personality like, like use, like yours?

You know, I, I never, I never went to a large firm, so I've kind of always stayed regional and, and smaller. So it's hard to know. I have talked with friends, you know, and, and frankly we've, we've benefited from the larger firm burnout because they were doing work that didn't seem equitable, it didn't seem like they had any agency. So it's hard to know. And, and to be honest with you, I'd have to know more about like the staff relationship because the thing that we haven't tackled with this yet, that I'm, I'm still trying to navigate is what is offshoring, know, remote work come into play with this? You know, how do you treat them the same way or is it different? Because obviously the margins are significantly different in a big firm environment. I don't think, I'm not sure if it'll work, you know, if it's 20 people or less perhaps. But I think the partners, like you said, like the partner that you said did all sorts of quirky things with write ups. I have seen that happen as well. You know, you're kind of the fate is in the, whoever helds the pin and I'm just not sure ego or greed or certain things that go along with, with, you know, that, you know, doing the billable, doing the billing work and oh, I deserve this write up or, you know, it's my client, I get it. I'm not sure it'll ever work at a larger, larger firm level. I'd love to think it could if it were just transparent. So like, you know, my, my staff has, they can run all the reports. It's not hide, it's not hidden behind a, an iron gate. You know, they can run the reports to see where they got written up and written down. And frankly, if I have to write them down, I'll go tell them I had to write them down. So they knew. So it's not a surprise because I, that happened to me as a staff. Why did I get right down on this? There's no way, there's no way I got written down. Oh, it's just so that someone else can get written up. But why? You know, I've seen that. I've seen it happen. And so, you know, we're, we're kind of really, really an open book. They can run reports, they can see the data and, and we're trying to be fair with it across the board. I don't know. I'm not sure if it can happen at a bigger firm, but I'm not the right person to probably give a, a real answer for it. But I'd love to talk to somebody about it.

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You can't, you can't. It is pure waste. And we're bad at billing because it's, it's icky. You let things slide. You don't get paid. You waste time. Waste time chasing people for money. That's not what I did. I would just, I didn't want to waste time chasing them and so I.

Would just, I just eat it.

Don't do that. This is where Ignition comes in. The lead leading revenue generation platform for accountants and professional services. When I was running my firm, Ignition wiped out our ar, it's true. And significantly reduced the time spent billing clients, saving our partners over a thousand hours in the first year because they didn't have to bill all that stuff manually. Man. With Ignition, we won more business with impressive online proposals. No more hustle and hustle and PDFs and Word docs. We automatically pulled payment up front or at the end of a job when it was done. No more dial in for dollars. We transition our firm to more recurring revenue and better managed scope creep. No more leaving money on the table. Ignition is making thousands of firms more money and genuinely made us more profitable. Check out why over 7,000 of the smartest businesses run on ignition@ignitionapp.com. i'll put a link in the show notes, gang. This episode is sponsored in part by Carbon, the practice management system. I'll tell you one thing I like that Carbon does is they tell you what their business building. In fact, at the end of the year, they announced like, here's all the stuff we're really cranking off for 2025. Let me run you through some of them. One carbon for clients. A vastly upgraded portal experience. Thank you. That is so important. Custom branding, this is. There is such a long list here. Let's just Say a vastly better client portal experience, engagements, nice proposals, agreements, automatic billing, which they already have. Have. They already have some automatic billing, but I think they're just beefing up proposals and engagements. Google Drive integration. SharePoint integration. Quick replies, suggested short replies to emails. Oh, now in beta. Yeah, buddy, that's got to. I think that's AI email refiner. Okay, more AI email stuff. I like it. Client segments, E signature with KBA API.

Enhancements, new reporting dashboards.

Can I, can I pick what I'm most excited about? Probably the client. The upgraded client portal.

And there are improvements to the email experience.

Email so, so time consuming. If there's one thing that Carbon absolutely crushes, I think still does better than anybody else, it is the email experience. And we spend so much time on email, so that matters. Okay, there are more about Carbon. Check out the link down in the, in the old show notes. You know what they're called.

One element that's been hard, as we've talked to the other folks, is how you fairly shift stuff around when you bring somebody into the team. And that's got to be particular. I don't know if painful is the right word, but challenging the fewer team members you have because you don't have as many people to sort of shuffle people, shuffle projects across. So you hire a new person. How do you do that in a way that isn't like a bit of a rug pull if you're having to move projects from somebody else?

Well, luckily with a lot of our work, there's still multiple points. So even though there still might meet, you know, the existing staff may stay as kind of the client relationship manager there, there's still a lot of different levels of that Inc engagement. So, you know, with, with advisory work with us, there's, there's the scoping of the engagement, there's designing the tax planning, there's implementing the tax planning, and then there's monitoring the tax planning for us, you know, each one of us, to us that that's happening quarterly. We're doing all of that. So inevitably, if a new staff person comes in, that may mean that we're giving them to start off, we're giving them design work or we're giving them implementing work or we're giving them, you know, typically not monitoring right away. But, you know, if we're billing quarterly with our clients and we're doing work. Yeah, up front, you know, they're going to do some work that's going to take longer, but there's still a lot of work there. But then they're going to end up monitoring that engagement. We all know that the lift on the monitoring is typically a lot less overall. So they're going to get made up for it. But you've got to a point, you've got to start somewhere with it. So. But inevitably if someone came in 100% ready, could start everything. Day one was completely up to speed. You know, we'd be giving them client engagements to run full circle, but, but for those that kind of have to come in and kind of learn underneath, but there's multiple level levels so inevitably they're still going to get a lot of value out of getting that lower level work because it's going to help build upon the foundation to, to run the next engagement. And then we also were tracking our clients too, like in terms of like how we internally see them, you know, within like we kind of have categories, levels of difficulty, levels of complexity. You know, is this a one entity, two entity client or is this a multiple five company client with a big medical service organization? You know, so we take that into consideration too and we try to outline because we still have, based on our tax plan and based on the advisory work that we're doing, we still have a scope of work within a relatively reasonable hour range from a budget standpoint. So we're realizing if someone's always getting the 40 hour a year budgets, you know, and this person's only getting the tens, then that might not be, you know, really fair across the board. So we do try to divide and conquer that way. But new clients are coming in so much, you know, inevitably. So if you got kind of a raw deal, then honestly you're going to end up getting the next client and the next client the next client because the capacity is not there for somebody else. So there is a level of trust that kind of falls on me as kind of the person who's at least quarterbacking it for right now. But I'm really open with the staff. I'm really open with making sure they're feeling like they're not under overwhelmed, making sure they're not underwhelmed. You know, that's half my biggest problem right now is I'm making sure they're not bored and they're just like, no, are you kidding me? No, there's plenty of work to do. But that's, that's honestly my biggest fear is that there's nothing that like they're, they're not being challenged. And so luckily we, I've been fortunate with that. And so, you know, that's I think that comes into finding the right people to fit within the culture instead of just trying to put bodies in the seats.

You mentioned, you said in passing earlier the normal 80 hour weeks. Did you mean 40 hour weeks or is that a tax season?

Yeah, I meant, I meant 80 hour payroll. I meant 80 hour bi weekly. On this we were talking salary. I just meant by weekly payroll. Yeah. No, no, 40 hours a week. That's the extra expectation.

No, some somebody in the comments was going to set you on fire for that. Does everybody what I mean, not everybody turns up. I think there's actually an argument for production pay. Not everybody turns up with the same enthusiasm to work X number of hours. Like, I mean in my 20s I would have just been playing video games if I wasn't working. So I, I should have been working a lot and I had kids and you know, that calculation changes.

Are you, is there flexibility there or is the default still 40 hours?

Like for that person who is underwhelmed, can they work if they want to?

You know my expectations, 40 hours. I don't want to ask you to stay late and I don't want to ask you to work weekends. I think there's a little level of grace that sometimes if the project calls for it, we'll all rise to the occasion. But to your point, yeah, somebody wants more. If they're at a different station and they want to go out and they've got plenty of, hey, I don't mind this, I can stay awake and do more work. Hand it to me, I'll assign it to them 100%. That doesn't necessarily mean we'll take it away from somebody to give it to them, but that means I'll feed that person more work. There definitely is discretion on that. Up to them, they're. Everybody knows my direction is like what, what, what the base expectation is. I, I tell my staff, I never ever want this to come between your family. This will never, I'll never make you choose between work and family or work and life events or work and any, you know, thing like that. I've been there, done that. I've been burnt out and picked back up, caught on fire and, and risen back up, you know, so, so part of it's just us. Like we don't want to burn anybody out. But if somebody wants more, if they're underwhelmed and they want to go out and find, find more. Absolutely. And I'll foster the heck out of that as much as possible. If they want to go join networking groups, peer Groups. There's something that we can do as a firm to help kind of do that. I'm happy to do that. That, that just shows me that someone's trying and I'll 100 back that. So yeah, no, if someone wants to work overtime, someone wants to do that, then, you know, go for it. I'll. I'll have that person all day. And there is a level of that some people definitely know and. But I think with that comes the idea that like you kind of a lot more grace on the back end too. You know, you can go for a two week vacation. So our tax manager over Thanksgiving went to see the northern lights, was gone for two weeks in Norway. That same manager went to the Paris Olympics over the summer, was. I mean she's missed six, seven weeks in the past year on vacation and stuff like that. Does it matter? Nope. Do I care? Not really. I had to pick up a little bit extra slack on the, you know, in the meantime just because I'm like a little bit of making sure I'm monitoring a few communications, but that's not a big deal. I'm happy to do it because she's crushing it. And then likewise, you know, I did the same thing and I went to Disney World last week. So, you know, it's like, you know, my team will pick me up whenever I need to as well. So I think it's just like I've been a sports guy my whole life. I've been a team person my whole life. You know, to me it's the idea that you can go faster alone but further together. It's so cliche, but it means a lot to us. And so I just, I think if we have the right mentality as a group, I think we all kind of pick each other up. And I've seen it happen with staff too. I've seen staff get overwhelmed because they're, you know, they're slow log in through a project and someone else will come in there. Where can I pick you up? And so I think that's just that that can't happen everywhere. I've been fortunate. It's worked out really well thus far. But I hope to kind of keep cultivating that too where possible is, you know, as cliche as that sounds. But it does matter.

Any other questions I. I should have asked or gotchas?

For folks in a situation like yours thinking about doing this, they need to.

Look out for questions. We should have asked one. I think this works as long as you already have a very good operational front. So there's so many things with process improvement, making sure your billing structure is correct. You know, I'm on version 5 plus of how we build clients from upfront pay to retainer base to value based, whatever it is. I do think that matters. You got to have billing, you got to have your revenues, you got to have some of your processes in place, you got to have your tracking. You know, I've been, I've been, you know, I've shot PMs just because of their ability to track these types of things. So I'm a little, I'm a little, I'm a little unique in that standpoint because the workflows are important. But to me, the tracking and the data is also important. So I think, I think a firm has to have their revenue locked in. I think they have to have their, the way they build their clients and the way they work with their clients. It has to be locked in. Margins should be good because if they're already operating on a 30% margin or a 40% margin, this is not going to work very well for them or they're going to have to change their calculation in a different way. So I do think that's important. 1. I think the idea of if you do this and you try to keep it really close to the, the chest, I do think that could lead to some disgruntledness or it could lead to just a lack of transparency. So I do think someone has to be willing to be more transparent, maybe be vulnerable to a certain degree. Maybe that's hard at like a partner level or, you know, the boss level or whatever it is, you know, to pretend, you know all the answers and pretend that you have this thing completely right. I do think there's a level of vulnerability which I think is reciprocal, deprecated. Well, in some cases with clients or with, with staff. Excuse me. Just because, you know, it's, it's not, it's, it's so fluid. But no, I think those are a couple things that I've just tried to realize that, you know, just understand that there's grace on both sides. But, you know, really this wasn't possible until we kind of locked in on a certain, like, we really know what our core engagements need to look like. We know what our minimums need to be. We know the work that we do and the value that we're bringing and how we're able to provide it for the clients and how we do it kind of differently and client experience, you know, being kind of top notch. I feel like if you're catering to kind of the top of the market or that, that level, that boutique client that wants that level of service. This is what we're going to give you. And as long as we're pricing those right and then the client, then all the work seems to kind of take care of itself, kind of going backwards from that. And luckily I had, I, I saw the bad side of this at, at my previous firm, even at the partner level, I didn't love how it worked because at the end of the day, staffs were never getting bonuses. They were never getting, they were never getting increases in their base pay. Like, you know, they were never even getting cost of living adjustments because it was all based on this calculation. But the calculation was manipulated and it was, it was, unfortunately, it wasn't able, it wasn't uniformly assessed across the board. There was favoritism or there was, there was, there was greed or there was ego or there was something in there that kind of got in the way. So I do think there's a level of transparency vulnerability and just openness that you have to be willing to, willing to at least show the staff. And if you give them that, then I think they, they have agency and I think they have the ability to feel like this is part of them too, which helps them kind of grow within the firm. And so I'm really just trying to cultivate people who are kind of, we're all growing together and if we're moving up market together and getting better as professionals, then I think inevitably it's going to. So far it's taken, it has worked out. I'm just leaning into that at a certain point, but until I'm wrong, then I'll reevaluate it. I'll be honest.

Yeah, totally makes sense. I forgot to ask you beforehand. Anything, anything we should promote for you. Where should we point people if anywhere?

My CPA.com ultimately find me on LinkedIn, you know, so we really like reaching out. I really love talking with colleagues, really like talking with all this kind of stuff like that. Ultimately our website and across the board, you know, that's, I don't know. That's about it, man. You can find me online.

Yeah, I'll throw, I'll throw a to you at, I don't know, LinkedIn or your website. Whatever makes the most sense. Well, thanks for coming on. Anybody wants to, I don't know, pick a brain or connect or learn more about you. Where, where should we send them?

Yes, I'm pretty sarcastic on LinkedIn, so reach out to me. There most of the time. I think people don't realize how sarcastic I am. But no. Reach out to me on LinkedIn. I'd love to connect, find a way to chat offline. If we can see each other at conferences or whatever. Our website, myercpa.com you got to spell the name kind of funky my res if you want to spell it correctly. But no, you can find us online for clients that are, they're looking. But as far as, like, colleagues and other firm owners, reach out to me on LinkedIn, message me. We can, we can touch base offline. I'd love chatting. I love kind of picking each other's brains and seeing where we're all at.

Okay, we'll drop those down in the show notes, too. Thanks for doing this, man.

Cool, man. Appreciate you. Appreciate your time. Thank you.