440 The Only 8 Ways To Deliver Financials to a Client

If you run an accounting firm, you have an understanding of financial statements that your clients do not. You put a balance sheet or a profit and loss in front of most normal human beings and they're like, that's cool. I guess it means you got the work done. But I don't really know what to do with that. And if all we ever do is just ship off these stale financial statements to our clients, they're never going to actually be able to do anything with that information. And so accountants, they do all sorts of different sort of creative ways of delivering that information to their clients. Today we're running through eight ways you can do this. Frankly, the only eight that I recommend from a spectrum of very easy. What I did in the beginning, this may be not a good idea, but there's situations where it's okay to the eighth, which is like the ultimate goal, what we should all be striving for. But it's a whole roadmap. By the end of this, you're going to be like, I see it now, Jason. The North Star, the thing that we should be striving for. Finally. Hey, if you're new here, welcome to the podcast where we talk about running small accounting firms. Because it's not a bad way, not a bad way to make a living. Okay, number one, the 1th way to deliver financials to a client. Don't. What? There's a scenario where you shouldn't send financials to your clients. And it is a scenario that I found myself in pretty regularly, especially early on when we were running. We like launched a bookkeeping practice inside of a tax practice. And you know what we did in the beginning? We, we overestimated our capacity. Ever been there? And we took on some of these engagements that were like kind of ambiguous. Where this was like before we were nailing down the scope or anything, we were kind of making all the mistakes. It was basically like, oh yeah, we'll do your accounting on a month end basis, on a monthly basis. But these companies had never really had accounting throughout the year, so they didn't even really care to see the financials. And when we were months behind, we didn't volunteer to show them because what am I going to do in August? Send them like, hey, look, uh, we, we got your February financials done. Like, no, that's just gonna make me look dumb. So if you are in a situation where you are got some big time capacity issues, there's a world where for folks that maybe just want compliance books and only really want to see it at the End of the year, we don't need to go out of our way to cram down their throat these monthly books that they've never even looked at in the past when we like can't even get them done on a timely basis. Is that good? I don't know if this really qualifies as good advice, but I think it applies in the very specific situation where you are really hecking underwater and it could potentially buy you a little bit of time to get out from under it. Number two, second way to deliver financial statements, monthly PDF attachments. And that is just printing out the balance sheet. Print out the profit and loss is probably what most people do and it's fine. But that's why it's. Number two is I'm going to show you some better options. But I did say monthly. Why monthly? I can tell you the mistake that I made in our firm was one of the kind of different variables in service delivery was do you want your financials monthly or quarterly or annually? And the less frequent it was, the cheaper we made it. And this is just from the very shooting from the hip accountant perception that it's like, oh, it takes less time to do it on a quarterly basis than it would take to do it every single month. And that's true to a degree, but at the end of the day, your accounting firm is only as efficient as it can be at its peak workflow periods. So you want to hazard a guess for how those like year end and quarterly delivery time frames went. Not great, because we had all the monthly obligations in addition to the quarterly obligations and, and then January, like, forget about it. And so where we got to was, ultimately we're going to do your books on a monthly basis no matter what, because I can't really build like a smooth workflow any other way. I'm actually going to show you an even better way to do it than monthly, I think. But what I learned was not the move was doing it quarterly or only doing it once a year because that ends up being a mess. That takes a ton of time. Now at the end of the day, number two, this is still just PDF attachments. Recognize, your clients will not understand these. Just because you do doesn't mean that they do. All this really does is tick the box of service delivery. In my opinion, unless this person has some sort of finance background, recognize the only thing you achieve by sending those financial statements is like signing off that, hey, we did our work. And interestingly, sending them stuff that they don't understand is the leading cause of My clients, they won't pay attention to anything that I send them. Oftentimes the argument for why you shouldn't do anything more than send PDF statements is that the clients, they don't open the email to begin with. Yeah, I wonder why. Because you're sending them hieroglyphics on a stone tablet. And in my case, they're Americans, so they only know one language. And many of them, like, they kind of barely even have their handle on that one language. That's a pretty lame joke. There's no way to cleanly edit that out. So just forgive me that. That lame joke. So don't get blocked at. Well, I'm never going to do anything other than send my clients PDF financials because they won't look at them. The reason they don't look at them is because they don't understand them. The reason why we would move beyond them is to deliver something they do understand. Okay, version number three, the old monthly PDF attachment, plus a call. We're going to talk about it. Maybe I can decipher this mystical document for you and try to get to, like some actionable insights worth acknowledging in this day and age. This is a premium service. The default expectation for most is not having a call with you every single month. This is a form of advisory or controllership or something that we probably need to be charging extra for. Unless you're coming to these engagements with the expectation that, like, advisory is very core to what we do, and it's not even an option like you have to have that conversation with us each month. But most firms and most clients, when they come to you, they will not have that expectation of needing to get on a call every single month. So if this is still new for you, if you're like just getting started with your bookkeeping firm, if you're a tax firm doing bookkeeping work for the first time, I wouldn't say that this is the expectation that you hop on a call every single month. It doesn't mean that it. That it shouldn't be. Maybe it. Maybe it should be. But I can tell you, when I rolled out bookkeeping in my firm, I just had the assumption that we were going to talk every single month. And in many cases, it was unnecessary. In many cases, clients didn't actually want to. But on simple bookkeeping projects, that call, which could go on upwards of an hour, may have taken as long as doing the actual bookkeeping work that month. So think about whether that call, you really want to be built into every package or not that now this is an improvement because you can kind of walk them through the things that you see on the financial statements. And when you do that in a setting where they can also see the financials, when you go through them, they're going to learn a little bit. And so this is better than nothing. But to be worthwhile, you also have to be able to interpret that in a way that's helpful for them. Like, do they actually get good, actionable advice from that call? If not, then like, what was the point of the call? The call shouldn't be just to like show your work. The call should be, let's do something with with this information now. Delivery method number four, a monthly PDF attachment with an asynchronous video. So version three is synchronous delivery. That is, we have to hop on a call. We got to do this thing live with the client. We'll do it live. Version number four, here is asynchronous delivery. We're going to record a video and send that explainer to the client. And this is what my firm did for most of our clients is we would send the client a three minute video with the PDF financials. That three minute video, a member of our team would walk through everything they saw in the financials. And then in that delivery email, they would include a booking link if the client did want to chat. And this for us, we found, was a good balance between not wasting a bunch of time in the meeting while still showing up and like the client seeing our face and giving them some value. And it was really nice because it was asynchronous. So we could record the video anytime, the client could watch that video anytime. And if we go back to delivery method number two, which is just PDF statements without a video or call or anything like that, the biggest counter argument to delivering with a video that people come back to is, well, nobody opens my emails anyways, or they're already not looking at the financial statements. It's because they don't understand them. It's because they looked at it three times and they're like, I don't know what the heck's going on here. And so on the fourth time they're just not going to open it. This is a great argument for delivering it with a video. It's very low lift from a time commitment standpoint. It may take take five minutes to put together this little video, but the client gets a lot of value from it. It's way better than just sending them PDF financials and oftentimes leads to more meaningful conversation One thing I try to always avoid is getting on a call with a client and watching them try to understand something. Like usually I will deliver the information to a client and tell them, review this and then let's chat. I don't ever want to have a meeting where I show them something for the first time or introduce an idea for the first time while we're meeting. Cause they're just sitting there processing it and I'm like watching them do that, that's not a good use of either of our times. Okay, delivery method number five. By the way, this video idea came from a great discussion I had with some super talented firm owners in my community. Realize I do a weekly coaching call and the question that came up was like, I kind of gotta find a better way to deliver financial statements. Like, hadn't, hadn't quite stuck. The landing of what made sense for their clients yet led to a really good discussion of like what different people in the group were doing, what worked, what didn't work. That's where a lot of these ideas came from. I always link that community down in the show notes www.rlz.IO Today's episode is sponsored in part by the folks at Cloud Accountant Staffing who help you find talented accountants in the Philippines. We get a tremendous amount of inbound from anyone and everyone that's got like offshore staff and wants to come and work for us. Right. So how do you cut through the noise and know who's legit? Well, for one, I'm gonna let two offshoring groups sponsor my content. And I now know tens, tens of firms that have used each of them to great success. Anytime I hear about them using them, I always ask, how did it go? How was the experience? Have heard nothing but positives. That's why we've, we've stuck with them. So how's that for a filter? Because I have talked with a lot of them that ought to put them ahead of most. But the other thing to look out for in any of your vendors is are these folks turning up at accounting conferences and having real conversations with real accountants to understand what we need? I take Cloud Accountant Staffing like they are making the rounds this year. If you are out on the circuit at all like I am, you're going to see them. And that is a great signal that they care that they're not some like random offshoring group that are just throwing work at people with all sorts of various skill sets. Like they are very focused on the accounting firm and exactly what your needs are. They're actually run by folks that used to run an accounting firm. Fancy that. Let's call it account staffing. To learn more about them, check out the link down in the show notes. Hey, real quick. This episode is sponsored in part by clienthub. Who's ready to turn your busy season into you ready for it? Into your wow. Wow season. Actually, your whole year into your wow season. How are they gonna do that? Jason? I'm glad you asked. Three bullet points. First, it's all about the client experience. Make it easy for your clients to communicate with you and half the battle is already won. 2. Simplicity. Client Hub. It is not any harder than it needs to be in a lot of practice management systems these days. Let's just say it's getting a little sweaty. You step into Client Hub, you try it and you're like, oh, this. This actually feels like a nice place to be. And number three, AI stands for artificial. What was it stands for? Artificial intelligence. You know, I like that. Client up. It'll help you draft emails with AI. They got a new like automated book review thing that pulls in some AI. Say goodbye to busy season, man. Make the commitment. We're not doing it again. They got a promo. 50 bucks off your first three months. They've got a limited time promo right now. 50 bucks off your first three Months. They give you a personalized demo because you want it to go better next year, right? I want that for you. Make this the last stressful busy season you'll ever have with Client Hub. Link down in the show notes. Okay, Delivery method number five. Monthly KPIs and asynchronous video. We've now abandoned the financial statements. And it's not to say that you can't also send the financial statements, but KPIs boiling it down to important profit drivers. This makes this stuff much more real for most business owners. So if you look at an entire financial statement, like there's just a lot of things happening there. What I want to do for the business owner is can I reduce all this to like what are the three biggest profit levers? The three biggest things where if the client is nailing this, the company is growing, or the company is getting to whatever they're trying to get to. Maybe that's not growth, but. But I always look at three financial or non financial drivers. Because oftentimes like number of leads or the combination of a non financial driver like that with a financial metric like hybrid metrics that are both non financial and financial, oftentimes Those are great KPIs but I set up three KPIs like that, that makes sense for the client. And then two like woo woo KPIs. Because if they're working 20 hours a day just to boost those KPIs, that's not healthy. Right? So, so like what are some more like balance and lifestyle KPIs that we can build in there as well so that the business is having success, but not at this ridiculous price. Now how do you put that together? There's all sorts of fancy reporting platforms that will do crazy complex stuff. But you don't need to overthink this. Like KPIs, it can literally be a spreadsheet. It can literally be in the body of the email. Don't overthink the KPIs. In my experience, clients love the KPIs because they're much more focused. And the KPIs themselves often evolve over time. Delivery method number six, doing the same thing monthly KPIs, but also doing it with a call. And this is probably worth doing, especially in the beginning when you're still figuring out what these KPIs ought to be. Like the ultimate set of KPIs, it's, it's very short. Like nobody has too many KPIs they have to answer to. But there's also multiple levels to KPIs. So for you know, a KPI for the business owner, what are the drivers that ensure that that KPI hits its target KPI? Key performance indicator. I don't know if I said that out loud. If you don't know that KPI is basically just like a fancy name for goals for a KPI for the business owner, what are the things that the rest of their team, if they do have a team, like what are the inputs from the rest of their team that will ensure that the business owner's KPI is on target? Oftentimes the very next conversation you have with the client after that is then what should the KPIs be for your team? You can make your team members accountable to those. And as long as your team members are on track, then your KPI, it's automatically on track. This can be a really important discussion to ensure that the team is incentivized to work on the most important things that will lead to success for the business owner. And the reality is getting to what these KPIs are like. It's work. It's going to take some conversations. Probably not something that you can do asynchronously, but maybe one of the Most valuable things that you can do your client. Two more to go. Delivery method number seven, weekly KPIs and asynchronous video. Here's the thing, the most progressive, like, successful bookkeeping practices I know these days, they do bookkeeping on a weekly basis. They're not doing monthly for the exact same reason that we talked about earlier. Where you're trying to manage, like, what are the bottlenecks in my year? Like, when is capacity at its peak? Not capacity, when is, when are there like these spikes in workflow requirements where we end up bottlenecked? Well, if you do quarterly financials, it's going to be every quarter, right? Year end always sucks. Not a great way around that, besides trying to be as caught up as possible before you hit 1231. But the best solution to this, it's updating every single company's books on a weekly basis, getting any questions out to the client on a weekly basis so that when you tick over to the new month, 90% of the work's already done. And I started at the opposite end of the spectrum for the rationale that we talked about. Well, the less frequently you can do it, then you can batch the work and it doesn't take as long. But the reality is, your constraint when you're running the business of running an accounting firm is everybody wants their month end close on the 5th. Well, we can't do everybody on the 5th, so maybe some people pay more for earlier in the month and then the last people don't get it until the 25th. You're still like managing these, these bottlenecks, these constraints. And the business can only ever handle as much volume as the bottleneck can handle. And so while, yes, it will take more time in total to do this stuff on a weekly basis, it is the most optimized for the bottleneck approach. And so if you think about Delivery method number seven, if you're delivering KPIs on a weekly basis with an asynchronous video, because maybe meeting every single week at this point feels like a lot, then does the client even care about the month end close? Probably not, because they're probably not looking at the financials that much. They're watching the KPIs and many of these KPIs, this, like, this level of reporting can be done nearly real time. It doesn't require like the formality of totally doing the complete month end close. Like if KPI, a KPI, for example, is some sort of sales volume or new customers or something like that. There's all sorts of automated ways that we can get that data and deliver that KPI near real time to clients that are not reliant upon the full month end close happening. And this is I think the, the most scalable way to run a bookkeeping practice. You're updating this stuff every single week. And the reporting that the, that the business owner relies on is near real time because it's not dependent upon the entire month end close. Now I am still an accountant, so I still do believe in the value of that total month end close. But the goal here, like when accounting is your business and you're doing bookkeeping month end closes for hundreds of clients, the goal is to manage bottlenecks as effectively as we can. Now number eight, the eighth way to deliver financials is to do so on a weekly basis, but with your own like proprietary formula. And it's basically KPIs but opinionated KPIs. And this becomes possible when you're serving a more specific type of entrepreneur. And those KPIs become your secret sauce because you say, well, we work with 100 mental health experts and we work, we work with experts, you know, a hundred veterinary practices, we know a lot about this stuff because we see into a bunch of different versions of this business. Whereas the entrepreneur, the small business owner, they, their experience is like one of one. Maybe they have a couple friends that do this stuff. But when you work with a bunch of these people, a tremendous value that you can provide is what are the things that you're seeing in other people's practices or businesses and how can you distill that into a framework that is opinionated, that says here's the right way to tackle this. Then the service delivery you're doing, like you're unique, you're one of one. If they go to the accountant across the street, that's just a generalist, they're not going to know the stuff that you do when you are like in that pocket of serving that specific type of person. I worked with a guy once that said it was always important to name your process. If you got a process for something, name it. It looks more impressive from a marketing standpoint and I think there's some truth to that. But the goal here, like the way to do this in as scalable a way as possible is not to reinvent the KPIs on every single engagement because that is really time consuming. It's to get to where you're serving a specific enough client profile to where, you know, that vet clinic, maybe you've got a set of KPIs that they need to be plugged into until they reach a half million in revenue a year. And then maybe from a Half million to 3 million, there's a different set of KPIs you want them to watch. Maybe once they're running multi clinic, then those KPIs change again. But your firm then has an opinionated approach. They say, this is the framework that we recommend for how to do this stuff because we know it really well. And at that point you are like an incredibly valuable advisor. Like, this is the most valuable thing that you can do for the client who doesn't even know what those KPIs should be. But it's simultaneously the most scalable way that you can run that practice. When more of your team members are doing that advising and the KPIs are on rails. It doesn't require imagining that stuff from scratch because you already got the system and you can evolve the system and improve it over time. But like the tooling for how you get those KPIs every single week on an automated basis, you could build a little more of that stuff to make it even sweeter. But that's like number eight here. Weekly delivery of some like, you know, named branded, deliverable. That is like the peak alpha firm. Like if you're trying to squeeze everything that you can out of your firm from a scale and profitability standpoint, like that is the, the North Star. What do you think? What do you think? Drop a comment, agree, disagree, you deliver them a different way. Where was I on my firm running journey? Most of our clients, we were on method number four. By the time I had sold the firm, everybody was getting videos. So everybody was getting a minimum of monthly financials and a video with it. But then we had some folks on a more premium service where we were doing number six monthly KPIs on a call. And the big project for that next year that I had in my sites was moving from doing that work monthly to doing it weekly. And I've just gotten more convicted on weekly being the right answer in the couple years since I ran my firm. As the folks that I'm most impressed by that really have their stuff together and are running a really tight firm. Almost everyone I've talked to is doing it weekly. And sometimes, gang. It's as simple as stealing good ideas from folks that look smarter than you. And some people are capable of looking smart, right? I mean, that's the whole grift of me creating all this content. But Honestly, like, sometimes it's just making friends with the firms that you look up to, being able to smell the BS of, like, are they being real about what works and what doesn't work? And the reality is everybody has problems. And so if somebody's asking, like, acting like they don't have problems, then they may not be totally, like, transparent about things. But the folks you feel like you can trust, the shortcut here, man, it's. It's stealing the best of what's working for them and then combining all those ideas into something that you can feel really proud of running. And even though you are stealing those ideas, like, you're still making something that is your own because it's a unique combination of what you think the coolest ways to run an accounting firm are. And that's, like, that's super rewarding because you've made something truly unique at that point. There's no such thing as, like, a single template to be able to copy for an. For an entire accounting firm. For goodness sakes. We're past 400 episodes on this podcast about running small firms. There are thousands of little decisions you will make about how to do it. Don't be afraid to swipe what you see works really well for other people and make it your own gang. That's it for today. It's great to see you. You look well, and I'll see you in the next one. By.