422 8 Ways To Enable Accountability in your Firm

Common trend. A really tricky thing if you're running an accounting firm is holding people accountable, holding your team accountable. That feeling when things are like, man, does really need to take this long, or they said they would be done by this time and it's just slipped a little bit. And that's just kind of how it normally is with this person. How do we manage that? Because we as accountants, oftentimes that does not come naturally. It's a very uncomfortable thing. But before you know it, you feel like you're like being taken advantage of and that can be really frustrating. Like, uh, why, why is this so hard? Why can my team not deliver? Why can I not trust other human beings to just get their stuff done like I do? I know, I know. If only everybody was just like you, you know, everything would be fine. But they aren't. So today we're talking about some ideas to enable accountability in your team, to try to like systematize accountability. That's ultimately the goal, is to make what that looks like as clear as possible. So it's like institutionalized into the way that people work so that when somebody crosses a line, it's a very clear line and not this murky thing where when you eventually have to make this hard decision, maybe let somebody go, they're like, well, I never even saw that coming. Got some ideas I'm going to share with you. Come on in. We are in Auckland, New Zealand today for the AI and Accounting Summit. New Zealand is wild, man. Like, pretty cool, very low key. Okay, here's what, what got me to talking about accountability, a couple of things. One, just the conversations I've been having with furmonies lately, like a lot of it has been coming back to getting the most out of your team. Marginally good enough team members. Like where you've got those people on your, on the fence, you just don't know what to do with them. But what like put me over was this thing from Reddit and Logan Graff actually shared it a little while back. I'll read you part of this Reddit post. People who work at small firms, how do you slack off? They say, I've really only worked at big firms and in government and generally I'm a good employee, productive, not dumb. But I have off days and in these environments I have the luxury of just being able to juggle my mouse and basically take a few hours off. I'm just a moody person and some days I just find it hard to be productive. I'm considering moving over to a small firm later this Year. But I'm kind of concerned that you can never hide in those environments. I don't know that I'd be good as I'm. I don't know that I would be good at always being a consistent worker. Maybe I'm just lazy again. I feel like my output is always good. But I'm not going to lie, I'm on my phone at least an hour per day. Typically I just picture myself in a small office with five or 10 other people, including Bob, the owner slash partner. And I don't feel like I could get away with not being locked in all day in that environment if you are. I mean, there's a number of things in here where like people do. There are, there are very real things that people have that make it nigh on impossible to have that level of focus. So there's like a part of me that. There's a part of me where when I read that, it's like infuriating because I. You can see those people that you worked with back in the day and when you were high output, it felt like you paid the price to like have to cover for other people. And that, that could be really frustrating when everyone around you doesn't see. Seem to put in the same level of effort as you. But then on the other, on, on the flip side of things, it's just kind of a dumb conversation to begin with because it is solely focused on like, I understand that I just have to look like I'm working. How do I look like I'm working? Or somehow go undetected and not looking like I'm working. And this just comes back to like the, the hard, messy aspect of, of employing people is how like dumb of a game it is just the optics of how much are you working and are you trying your best. Like the fact that you just kind of shoot from the hip and you're like, I think what they're, I think they're being honest here. Seems like they're working as much as everybody else. They're the last car out of the office. Just stuff like that. When ultimately at the end of the day, like what matters, what we employ people to do is, is to get stuff done gsd and there's people who can screw around for half a day and get more done than any than anyone else. And if you, if you went on to be a firm owner, like, you're probably more on that end of the spectrum. You can be very high output. But traditional salary structure, like, if anything it penalizes you for that because you get stuck with more work and then the folks around you who maybe it's a little harder for or aren't, I don't know, trying as hard as you. It's like they may have the exact same role, exact same position as you and you find yourself getting sucked into their work to bail them out oftentimes. So. 8 thoughts on how to enable accountability in your firm Number one, measure the output of people like get better about having a yardstick for what does it mean to get stuff done. And most of us, we actually don't measure this at all. We, we either measure hours or we just, we assign people to projects. But until we ultimately have a yardstick for what getting stuff done even looks like and being able to, to measure that, then it's almost impossible to hold somebody accountable to something that's like standardized across your team. And that's, that's the goal is to, to kind of depersonalize this. And there's going to be folks that you hire who are just not capable of doing the job for any one of a number of reasons. And it doesn't mean we can't help them and we can't try to try to help them get there. But I want that bar to, to be as, as non negotiable and as crystal clear to everybody as possible. Not only to help get really explicit with underperformers, but to reward over performers too. Like it's, it's a two sided thing. And until you have a, a metric that is representative of output, then there really is no way to design a system without a, A, a more important metric to measure than time. And for most people the answer for that is production is revenue that's tied to the work that they're doing. Now as we talked about in the production pay week, it gets a little more messy if you run things in pods. It just means that you have to allocate some of that revenue across kind of the different roles within a pod. But it is a whole lot better than nothing. Even at that point. You can even measure things like in aggregate at a pod level. Like even that is better than nothing. Say you have three person pods and each pod has kind of a general expectation for, for the total work output. Then at least you've got something concrete that you can point to and be like hey gang, how do we get, how do we get from A to B? So that's step one, which most firms aren't really doing. They may have like realization reports or something like that, but I'm less interested in what you're doing per hour versus what's the total expectation of a member of the team in this role? And are they meeting that or not? And yes, like what they get done per hour obviously factors into that. But if I have somebody in a, and I say a staff production role, what's the expectation? Can we go deeper than 40 hour weeks? Like, we gotta measure it better than that. Second thought on accountability is just finding more ways to align incentives to your own. And production pay, like we talked about a couple weeks ago on the podcast, certainly helps with that. The idea of production pay being folks get an allocation of the revenue from those projects somewhere from 30 to 40% usually. The idea being that if I'm ultimately motivated by is the firm making money than if how my team is compensated is something closer to that, then it's easier, easier for us to stay in alignment. But there's a lot of other things that go beyond that that you can also incentivize. And so in any environment, even if you do production pay, that production pay probably shouldn't be the only KPI for that person's employment. Right? Because you could definitely see a world where someone is a, a savant in the production pay environment and that whole setup. But they could just, they could be a total jerk or they could still not be someone that you wanted on your team. So the next time you're, you're like feeling a pain point of like this is so obvious. Why is this team member not getting on board? This or this is so frustrating that we keep running into this problem. Like kind of those, like why is it so hard for everybody to understand sort of, sort of situations like zoom out and consider the incentives. What is, what is damaging about that to you? Is it a financial thing? Is it a I don't want to have to respond to so many emails thing? Is it a I don't want to work on the weekends thing? Like the volume, the hours that you're putting in could be just a very specific task at work that you're trying to get out of. At this conference here, someone mentioned yesterday that their KPI for their assistant is how many emails they have to respond to and her goal is to get it to zero by the end of the year because she just despises email. If you think about that frustration that you're feeling, what is the underlying driver of it? And it may be as simple as profitability of the company, it may be something else, maybe something that you despise doing. How do we get that to a KPI, that's actually somebody's job where they're incentivized to, or their behavior is incentivized to mitigate that thing that you're trying to avoid, or whatever that issue is. The more closely we can align how we're incentivizing our team with the state of things as we want them to be, the more folks will naturally behave in a way that's going to get you to that place. And part of the problem there is most folks probably just they haven't really defined that place that they want to be. It may be as abstract as, well, I want the company to keep making money, but along the way, the things you actually struggle with are like, man, I'm feeling like I have to work too much. I'm. I'm behind on projects. I'm not getting back to emails. Those are all things that, when viewed through a more tactical lens, we can plug people into. And while the profitability of the firm for sure matters, oftentimes like our remote, our emotional response to things are not necessarily tied to profit. They can come from other things as well that we just, we just expect to happen, but they won't until it's, like, somebody's job. This episode is sponsored in part by Cloud Accountant Staffing, who helps you find super talented accountants in the Philippines. Boy, is 2025 gonna be the year of the Philippines. Like, it's not even just an accounting thing. I have talked to, like, so many people in other industries lately where they're like, yeah, no, we've started picking up people in the Philippines. Just the whole trend of, like, folks in the Philippines, the Philippines working for Western companies that, like, has become so normalized now. I was talking with a listener of podcast the other day, completely unprompted. They're like, yeah, I know, I. This was a good idea. I changed this and that. And I kind of finally got off my butt and started hiring people in the Philippines. And I hired, like, three people with cloud accountant staffing just last month. Holy smoke. First of all, chill out, guy. Second of all, what took you so long? Third of all, what's taking you so long? Okay, it's the same thing. Thing I did, I made one hire and I'm like, okay, this is actually working really well. I'm gonna make some more hires. This is not me just shilling wares for people that do placements. Actually, I guess that's technically exactly what this is, but it's also exactly what I did. It worked really well. A lot of listeners who have started doing this. I've heard super, super positive things from they're still human beings. It's still managing people. So it still sucks in many ways. But cloud account staffing is going to make it as easy, easy as possible for you. You can explore that. Check out the link to learn more about Cast down in the Show Notes. Okay, gang. This podcast is sponsored in part by Team up, the folks that help you find super talented accountants in the Philippines and hire them directly. Team up just launched a. What do they call it? A salary guide. A salary guide for hiring accountants in the Philippines. But it's so much more than a salary guide. You know all the embarrassing, ignorant questions we're afraid to ask about hiring people in the Philippines. How much does it cost to get this type of person? Can I even get, I don't know, a tax pro, an accounting manager, an executive assistant? Is that a thing? This guide. And it's going to be linked down in the show notes. It'll show you not just how to like get each of those different types of people, but what they'll cost, how to build out a job description. All of the questions that you have been too embarrassed to ask to find folks at Teamup, they put them into a guide that you can pin swipe. Get that one down at the link in the show notes. Number three. Don't let anybody on the team be exempt. And this is, we've all seen this happen in the wild before where you have a policy and maybe somebody just straight up doesn't follow the policy or the, the person that's been around forever that's allowed to do things their own way. If you're going to make the rule for that rule to mean anything. Nobody can be exempt. And sometimes that means ripping off some really hard band aids. Uh, having frank conversations with folks who have been allowed to slide in the past. I mean, I, I bought an 80 year old firm. You better believe there was a whole bunch of this. And as soon as that person doesn't go along with the change or, or thinks that they're exempt from it, it just kind of undermines the entire initiative. And nope, either, either nobody else then pays attention or you end up with this super unfair situation where you're holding folks to something that you're not holding, you know, the old guard or, or some member of the team to, because they don't want to do it. And I can tell you, as somebody who's been on both sides of that, your life is so much easier when you make the hard decision to either Let that person go or get them to commit to doing it the right way. Because oftentimes these things can like just go on for years and years and years. And this is like a cancer to the rest of the team and what you're trying to do to improve the company. So number four, this one's pretty savage. Make an example out of everyone. Nobody gets to be exempt from the rules. And you know, we don't need to like, we need to have somebody like walk the plank in this super dramatic way. But also like, until you do something, it like, I don't know that people will take it seriously. So if that person just kind of refuses to go along with things and they think that they can be exempt, you have to actually do something. And that sucks. And that's unfortunate. But it definitely changes the tone. Like it really does. And like sometimes, unfortunately, that is what's required. And we all want to be friends and want to not have to be hard on the folks that we work with. But there's also a lot of work environments where folks just aren't taking things as seriously as you need them to. And you're paying the price for that. And someone's not playing by the rules. You know, making an example of them isn't. It's kind of a harsh framing, but it's, it is, it is like serving as a reminder of like, no, like this is actually how serious I am about this. These rules and people can work here as long as they're willing to exist within those rules. Number five, have crystal clear expectations. You never want to get to the end of an employment relationship and someone be surprised or not realize how serious you were. This usually means having a, a formal process for how you write people up, you know, a couple times before you let them go. Maybe having a, a plan in place for, for how you help them improve before you have to get to a, to a decision like that. But the prerequisite to being able to do anything like that is to have a crystal clear expectation of where they need to be delivering. So if we just take production for a very, very basic example for a given role, what's the expected output of production, taking into account the fact that maybe they're sometimes pulled into things that aren't production related and all that. But if that's the metric, then the team member needs to have access to that metric. They need to understand how it works, they need to see the reporting on it on a regular basis, and they need to know what the norm is or what the expectation is. For that role. So, so that they have kind of the capacity to self govern and hopefully raise their hand before something comes in, I guess outside of the range of what's okay. And this for my team, I think was probably the main reason why they opted to still track time is they appreciated that transparency of, of understanding how long something should take versus how long it was taking them. Because if something's out of whack, like they, they wanted to know about it. Number six, invest more in planning. This is something that small firms like. Historically we just, we don't do this very much. We don't put very much work into the managing of the work because it feels like waste and oftentimes it's frustrating. You're like, well, if, if everybody would just do it the way that I wanted them to do it, the way they're supposed to, we would need all of this planning. But it's when that stuff goes off the tracks, the bit, a bit, that everything starts going sideways because then the other projects stack up. You don't know how to prioritize things. You, you don't know where any gaps are in other people's schedule where they could potentially help come in and help out. And when we're running a firm like kind of at the ragged edge, where we're, we're at capacity, you, you kind of did the mental math of here's all the clients that we think we have and how long we think it's going to take, and just the fact that that always underestimates how it actually takes, how long it actually takes, and assumes the best case scenario and how it will go when in reality people get sick, people leave. I mean, all sorts of other things happen. You add new clients. Capacity planning makes this better, makes it easier. It's not perfect, but you can't do good capacity planning until you do bad capacity planning. And we don't have to like complicate this any more than we need to. Maybe your practice management system has a good version of this. If it doesn't get out the spreadsheet, like start planning the next couple of months, even if it's at a high high level, kind of in aggregate, get your team involved in that process too. This is one of those things where you may feel the need to go out and do it all by yourself, but as soon as you do that, nobody else knows how to modify it or how to improve it. And so the only way that it gets updated or continues to be improved over time as if like you stop what you're doing and then you go work on it as opposed to communicating the value of this to the team and you all sort of working on this, work on developing this together. How do we ensure that everything gets out the door by X date that we need out the door? Involve the team in the process of developing that and then they're going to have more buy in not only on executing to it, but in how you manage that capacity planning process going forward. And this means number, what are we on number seven? This means number seven is investing in people to manage to a, to maybe a different level than you have in the past. You like the idea of having the capacity planning, but capacity planning is another job and you don't need another job. You already have enough jobs. But if you can help like work with the team on the design of kind of the air traffic controlling of how everything comes through the firm like this is one of those machines that you can then build and then hire somebody to operate for for you. And building the machine is always, always the move rather than doing that thing yourself until, until the end of time. And capacity planning at the end of the day, it's actually not that complicated. It really isn't. The issue with capacity planning is, is accountability is getting somebody to maintain that plan but then also like being able to adapt it if something goes off the rails. The setting up of it, the managing of how the system works like that takes some, some real thinking that you should do with your team. But the ongoing maintenance of it and the, the kind of reporting against that cap, that's not, that's not a hard thing. That's where you can pull somebody in to help. And if you have felt yourself having a lot of frustrations with being surprised maybe by where something was at or not at getting a month down the road and being like how in the world did we get here? Like how did this other stuff not get out the door? This is where like pulling somebody in to help manage that stuff is really helpful. This could be like an actual proper manager. It can also be someone that's more like a sort of project admin where they understand how the system works and they're checking in with people throughout. Like you would, you'd see this online a lot of, and older firms and taxis and you'd have, you know, an admin that goes around and checks in with everybody on their projects. It's a version of that. Okay, last one. And this may actually be the most important one for you. And what has led to a lot of trade offs is if you can, try to find a way to be less dependent upon the people that you have, because this is what leads to letting people break the rules and all these different things. And as long as you're like a thousand percent beholden to folks that aren't delivering and aren't doing what you need them to do, kind of hosed, right? Like you've committed yourself to work that you can't get done if you then have to make that hard decision. So the biggest things that I did that helped with this, number one, honestly, it was, it was offshore hiring. I've shared this before. It was the only type of hiring where I could snap my fingers. And in 30 days, I knew I would have a person that could come in and do that work. Doesn't mean that every single hire is always going to work out. Maybe I got lucky, but, you know, I can't just magic up a tax person or an accounting manager that can, that can manage clients really well. If I need that 30 days from now, like, I, I can try, but like, the odds aren't good that I'll have exactly what I need. So for me, offshore hiring really helped here. But also the, the other thing was just simply being visible. Everything got easier the more visible I was. People learned about what we were doing, became easier to find team members, the network grew. And that was, that's like the path to having more flexibility in who you pull into the team and, and access to more talent. And if all we're doing is just we've got something parked up on. Indeed. Or on our website or something like that, most of the world just doesn't know you exist. So can you get people that way? For sure. But the more visible and in the world you are, the easier that problem gets. And if you think about how many accounting firms are not visible, you're also like, putting yourself ahead of all of them when it comes to finding talent and access to talent. Like, it solves a lot of these hard decisions, right, gang? That's all we got today. Accountability. It is a, it's a hard thing. It's not a fun thing. A lot of like, emotional stress that comes from that, I think. But you got to look out for yourself first. Like, you don't want to end up in a situation where you are dragging something along for years and years that where like, one day you finally make that hard decision, you wake up the next day like, I wish I would have done this years ago. I think that happens very frequently. Don't find yourself in that spot, gang. Thanks for hanging. I'll see you in the next one.