537 The Reason Accounting Firms Get STUCK

Here's the thing, gang. Whether or not you prescribe to the notion of, well, I need to work on the business instead of in the business or not, the principles that will get you to the next level, regardless of what you're doing today and what you want to get to, they boil down to, like, how effectively we can move the things that are on our plate today to the next person. And there's a lot of things that go into that from, like, is my work profitable enough to be able to find the right next person to do that? Am I effectively handing that stuff off in a way where that person can be successful? I'm going to run through today five traps that can keep us stuck in what today's task list looks like 12 months from now. The things that filled your day, but I don't want them to be the same as what they are today because you're growing, you're becoming more capable by the day. How do you become the Teflon accountant? You know, where those things just slide right off you. They go to a team member and we can more quickly move through how work gets pushed through the team. So it's off your plate and you're moving on to, to something bigger and better and more exciting. That's what we're talking about today. Let's do it.

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Okay? All the principles we're talking about today are equally relevant to members of your team as you. The speed at which we can push tasks down the skill spectrum will be reflective of how quickly your team grows. And too often in accounting firms, task tasks and responsibilities stagnate with the same people for year after year after year. How many accountants do you know who have lived the same year on repeat for the last decade? Think about that. I know a lot of those people where they're literally just always doing the same things. If you're like me, you don't want that to be you. And even if you found the thing that you love and you're like, buddy, I want to work on non profit tax returns until the day I die, this lights me up in the very best possible way. Even if you found that thing, within that thing, there are more and less valuable versions of that thing, right? And we need to always be finding what is that next thing that can challenge me. How do I move into that next thing where my skill set is even more scarce and I'm in, I'm more in demand. Many of us have ambitions for what we want to get to. And you listen to people like me and speakers at conferences and they're like, you need to do this, you need to do all these other things. You need to think about three tier proposals, about marketing, all these different things. You're like, bro, I am already over capacity right now. I'm just, I'm just trying to survive. The solution is, is on the back end. It's on how are the things that you're managing right now going to get pushed to somebody else. And this isn't a one time thing. This is a mindset thing. This is how we like go through sort of our entrepreneurial journey. If you're a staff person, it is how much you value your time and how vocal you are about needing somewhere for that work to go so that you can do the better work. The example here starts at the top. It may be a bit of a chicken and the egg sort of problem, but I would hazard a guess that if this is a really hard thing for you to let go of the stuff that you got and push it off to somebody else to move on to something new, then if you look around at your team and their behavior, they're probably going to look the exact same. The behaviors that we are demonstrating, the team's going to mimic because they think that's the right answer. They think what you're doing is what they ought to be doing. And so if we are not helpable, like if we won't raise our hand and pull somebody else in, if you are building a business on the back of your own sacrifice and willing to do whatever it takesness, then you're going to have a bunch of people on your team who will cling to the work that they have and not effectively delegate and consider like, hmm, I'm a very expensive senior person. Is it worth my time to go through this 60 page document that the client just gave me, go through and like bookmark this PDF, right? No, of course not. But if we, if we can't ourselves lead by example and show how actually distributing that type of work is an opportunity for the junior folks, then that the rest of our team, they're not going to do that either, right? This, these points kind of came from a conversation. I had an event in Toronto recently chatting with someone who was, was struggling. They were at like about 3 million in size. And this happens at a whole range of sizes and even on like more micro scales. But they just were struggling to fully get out of the work. They kept getting sucked back into a set of tasks that they told themselves they needed to kind of escape from. In their case, it's like fully getting out of production and their firm. I know a lot of folks are trying to do that right now. That's something that I actually feel like I did pretty successfully in my firm. Like the firm I ended up buying, I came in as a junior. Decade later I bought out a couple partners and then became really the first person in the history of that firm to. To not be client Facing ended up being amazing for our business. Like it was the very best thing in hindsight happened as we were going through Covid. And so I was able to sort of navigate us through that, but also rip off a lot of really hard band aids around repricing projects and thinking about the bigger strategy of the firm as a whole. Bringing in talented people. We did an acquisition and I couldn't have done any of that stuff had I still been serving clients. So if you want to get there, man, these points are so important. But. But even on a smaller scale, if you're like, I want to hire somebody to do the bookkeeping for the first time. But that's scary for me because I've never trained anybody. I've never done that. Even on a micro scale, these things are just as relevant. Five points here that should help you be a little more slippery when it comes to tasks and ensuring that those things don't stick with you. Number one, we have to make sure that the clients that we're working with can be served effectively by the people who we want to to serve them. So just to give you a really basic example, at the end of my firm running journey, I'd kind of gotten into working with software agencies, which was frankly a blast for me. Cause I have a bit of a software background. There's another timeline that's very near to this one where I just ended up being a software guy running an agency instead of running an accounting firm. And I. I just super enjoy this. I could geek out with these people. I could understand what they're talking about because I was close enough to it to just kind of get it in a way that most people don't. I also had some really good connections there that blossomed into a lot of referrals. And we could go in and be the back office for these very successful software agencies that were doing 5 to 10 million a year. The last thing they wanted to handle was kind of the admin or the back office stuff. And it proved to be a really lucrative thing. The problem was I didn't have anybody else on my team that could speak that language. It was great for me it wasn't great for anybody else, so. So I could get that work in the door, and these would be, like, some of the most profitable projects that we had. But at the end of the day, they wanted to talk to me. And that's like, if you're taking somebody through the sales and onboarding process, that that's just how it will be. You're the only relationship they built in the firm. Right? But in my case, I didn't have anybody that could speak the language that could, like, vibe with those people. And so I got sucked a little bit down this path of, like, man, this is really good. This is really lucrative. I can. I can make the exception here, because this work pays really well. But then very quickly, it was like, I immediately became the bottleneck. And everybody goes through a version, some version of this at some point. If you have built your own firm, because you build it around yourself and what you're able to do and what you're capable of doing, and that will inevitably look different than what your team is capable of doing, right? And there's so many stages in accounting firm running where you just have to basically hit pause and be like, what is the entirely different business that I'm now going to build next? I get so many people who will ask me. I'm thinking ahead to the future. I want to scale to 10 million. I want to do X, Y, Z. What are the best systems? And all that stuff that I can set up now that will scale with me. And I'm like, where are you at right now? And they're like, I just started doing my cousin's veterinary clinic. And I'm like, that's it. And they're like, yeah, but. But I want to set something up that'll scale. The reality of running an accounting firm is. Is like reinventing your business over and over again. There's the business that you build until you get to your own personal capacity. Say that's, you know, 300 grand in revenue. There's the business that you build until you get to, basically, you running a single pod, being your first pod leader, and that. That's usually around a million in revenue. Like, you can. You can still be the boss and still working with clients. You get past a million in revenue, and you're like, okay, somehow I got to remove myself from all of these projects, and so I need to hire managers for the first time. And so you then oversee, say, three pods, three pod managers, and that may get you to, say, 3 million. You get past 3 million, and you're like, oh, man. I mean, I might need, like, more of an executive team where these folks report directly to me. We're also doing more, like, formalized stuff. Like, we need a sales and marketing team. We need, like, a more sophisticated HR that's making sure that, like, we've got the people that we need and we're taking care of the people that we have. It's building into a more kind of complete org chart. And at all these different thresholds, you will plateau, because there's a new skill that you need to learn to get over that plateau. That might mean, like, building a sales team for the first time. It might mean building a quality assurance team for the first time. You don't know how to do that stuff until you've done it. And so you will inevitably hit those plateaus, and it will change the makeup of the business and what the business demands of you. But that will never happen if your days are filled with serving clients, doing the same stuff you did last year, right? That's like. That's entrepreneurship. That's growth, even for a staff person. Same thing with them. Like, they will hit plateaus where they can't overcome that stuff until they're able to somehow, at the bottom end, drop a bunch of the tasks that they have that are holding them back, hand them off to someone else. That other person, by the way. It's an opportunity for them. Those tasks will upskill them. And now you finally got the bandwidth to lean into whatever it's going to take to get you to the next level. There is no such thing as a structure that scales all that long. In an accounting firm, some scale longer than others, right? Like the step from one to three, that's a bigger step than, you know, you going from solo to making your first hire bigger. In terms of revenue, I actually don't know that in terms of, like, mental bandwidth that it's any bigger. But each step along the way, like, we are truly reinventing our businesses. And so you quote winning clients and then serving them. That will inevitably be what gets you to some sort of threshold until you're like, okay, I'm ready for my next challenge. Now I got to figure out how to build the machine that can keep the client happy, where it's not me picking up the phone to bail everybody out. The machine keeps people happy. And that's a really fun, entirely different challenge where, like, you won't know how to do that until you commit yourself to, okay, I'm going to do this. Who do I got to talk to? Where do I got to learn. What new sources of inspiration do I need for me to be capable of this? I think oftentimes people think they either have these capabilities or they don't. The reality is nobody knows how to do any of this stuff until you invest the time, sometimes you know the money to get you there and be willing to close the door on the stuff that got you here, which is hard. It's like a big mental thing, right? The notion that, well, I know how to build a business up to what I have today, but that's all I know, that that is all you'll ever know. And so, like, that next thing, it will always be scary. It will always be an unknown. This is where, man, like, pulling in peers and meeting other people who have done this stuff is just makes this unbelievably easier. So many people have launched accounting firms from listening to this podcast because the more you learn, the more you absorb it, the more you learn the language and hear the stories, just the easier it feels. So submersing yourself into a group of people where they've done this, that is. I mean, that's the single best shortcut. Make those friends on social media, going out to live events, whatever it looks like. This is what my online community realize does. However you need to find those peers, do it because it's the ultimate shortcut.

Funny thing happened recently when I was at a conference with one of this episode's sponsors, Makers Hub. So Makers Hub, they're like an AI accounts payable platform. The party trick is they're using, like, AI vision models to do extraction at a level that was kind of never before possible with OCR technology. But I was doing something at their booth. Some of the customers came by like, it is one of those tools where the customers are kind of raving fans. But a funny thing kept happening. Like, people kept throwing out these ridiculous document situations they have where they're like, I got this client, I have X, Y and Z problem. It's a total mess. We spend so much time on it and they just start riffing on it, like with the Maker Sub team, and they're like, oh, yeah, now I can see, like, you can do this potentially. Like, our product doesn't really do that, but actually, if we change this or that, this could potentially work. The team is just like, they're just a bunch of, like, document processing geeks who are also AI nerds. And the product very much is like, the marriage of those two things. And so what Maker Sub does best right now, like, the biggest ugliest accounts payable stuff that you got. Man, I had some gnarly clients where maker Sub would have saved us so much time. But if you got any ugly bill pay stuff, cloud glass tracking projects, inventory manufacturing, stuff like that, definitely worth giving Makers Hub a look. To learn more, check out the link down in the show notes. If your firm still runs on spreadsheets, sticky notes, or a half a dozen different apps to manage work, there is a better way. Enter this episode's sponsor, Financial Sense. It is the all in one platform for accounting firms to manage everything. Workflows, client requests, capacity, billing and team collabs all in one place. Automate recurring work, track deadlines and get visibility into what your team's working on. Built specifically for firm owners who want less chaos and more control. That's, that's actually an important detail if you're the type of firm owner that wants more chaos or if you want less control. This one, this one's actually not for you. Now this December 12th to 13th, Financial Sense is hosting WorkflowCon, a free virtual conference built around the theme Clear the chaos, find your calm. And me, I'll be joining for a live Q and A on the subject of smarter client comms. But comms of all common using AI alongside a bunch of other firm leaders. It's pretty like rockstar. List of speakers they got. Register for Workflow Con via the link below. Start your free 14 day trial of financial cents using the link below with coupon code Jason 10. Grab all that stuff down in the show notes. So first thing that holds people back, the clients can only be served by you. That applies to the big boss. It also applies to staff. Because the next problem you'll have once you pass that client off for from yourself to a staff member is well, now I need more staff members that can handle clients. And so like that next level of staff, like they need to be upskilled into people that can manage clients. Second thing that gets accounting firms stuck is when everything in the firm doesn't yet have an owner that isn't you. So the list of things that need an owner, every client needs an owner that's not you. Until there's an account manager that is not you, then where should those things go? Like what becomes the default? Every single client, they need a person or a pod, like a team. That is like the first sort of line of defense for all things related to that client. This feels like the most obvious one. Second thing you need is an owner for every tool, every piece of software they get used inside of Your accounting firm, the moment something goes sideways, your hosting provider, like whatever it is, the moment that goes sideways, it can't come to you, has to go to somebody else. So every tool you use needs an owner. Third, every process in your firm needs an owner. If the processes in your firm are a product of like something you just made up and shot from the hip and said, let's do it this way, then as soon as something breaks or there's some sort of issue comes back to you, you gotta be the hero, you gotta be the one to fix it. It also means it's up to you to do the upkeep and the improvements of the processes. Is a great argument for involving your team on day one is if you always have limited bandwidth, then the improvement of any of these things that you stood up, it's gonna be the last thing on your mind. So your processes need owners. Number four, your pods need owners. Maybe at this point you've elevated yourself to like you basically run one pod. Eventually if you're trying to get out of that, then it's like, okay, who's the boss? Like there has to be a boss that is not you managing that pod. The number five, your functional teams need their own owners as well. The way I talk about functional teams is like a functional team is basically a team of folks that will just crank on one service, be it bill pay or payroll or something like that. In my case, the pods were more the client facing role. Once we got to 20 or 30 people, rather than the pods doing both all of the work and the client relations, my pods became just client facing. And behind them were functional teams that just like cranked 247 on the work product. So have we effectively assigned an owner that is not you to each of these things? Every client, every tool, every process, every pod and every functional team. If you have those third trap, here is a big one. This one might, this one might hit you in the oof bone. You got to stop swooping in to be the hero. So much of like delegation and people stopping sending you things is habitual. Like was there a time in the past where we needed a solution to this thing and you came in and you're like, no, no, no, guys, I got it. Like here's how we do it. I'll know, I'll call the client because I hear that they're mad as soon as you do that. The expectation, the default going forward for most people that you work with, not everybody, but most people you work with will be next time. That same thing comes Up. We'll, we'll send that back to Jeff. Last time, Jeff smoothed it over like he's, this is what he does. He's great at this. But at a certain point, you got to start pushing back on this because otherwise you will just keep collecting things. And to be clear, if we keep swooping in like it's our fault, like we're enabling this. But what I ultimately got to in my 40 person firm was somebody would come to me and I'd be like, I employ 340 people to work here. And you mean to tell me that I'm literally the only person that could figure this out? That was almost never the answer. What the answer really was, was the easiest path was to just send it to me. That's how it got to me, was that was easier than them having to figure it out. And if you're going through this transition, like, you have to have frank conversations with the team to say like, gang, like here is the deal is, is what this business needs from me is not tech support, is not being the hero on these sort of client things. The client. What the business needs from me now is something different. And this represents an opportunity for everybody because my job's up for grabs and it's basically going to get distributed across the rest of the team. It means y' all can move into more senior, more valuable stuff. It also means we can help you to drop the least valuable aspects of what you do right now to the youths, to the, the, the next level and that then becomes an opportunity for them. And so if there's a need right now, something that I used to do, and there's now a void, we got two ways that this is going to go. Either you're going to find a way to grow into this, and I hope that's the case because that's awesome for you. That's a great new opportunity. If you don't, we will go out and find somebody who can do that job. Like those are the two options because the person that's not going to do that job anymore is you. And we can communicate this in a, in a compassionate way. And it's not like an overnight immediate sort of thing. Right. But we have to communicate to our team that this is happening so they know the expectation is changing. When I bought my practice, it was historically a very traditional partner led practice where the staff wasn't even allowed to talk with clients. And so when I came in and bought out a number of the partners and all of a sudden we had basically two partners at the top of a 40 person team, buddy. I couldn't have 40 direct reports or 20 direct reports. And so there's a frank conversation there saying like, hey, like the last regime, like you are very much expected to like stay in the back of the office and work and let us do the talking to the clients. That's all changing. And there's going to be people that step up to the plate and want to lean into that new opportunity and people who won't and that's fine. Can't really blame them, honestly. They've been hired into a situation where that was the expectation. But when we lay that out, there were some people that were excited about it, some people were spooked by it. And some of those folks evolved into what we needed if we kind of gave them permission. And, and like we're realistic about like, it's not going to be perfect, like you're going to make mistakes, but we are growing and we want you to grow too. Okay? Trap number four here where you get stuck is you aren't yet ready for the 80% solution. That is, I'm going to hand this thing off even though I know in all likelihood they're not going to do it as good as me. And there's a number of ways to dress that up as good as me. That's oftentimes what we think. In reality, what we're saying is the same way I would do it. Sometimes it is just as good. Also very worth remembering. There is absolutely nothing in this world that you are the best at. Like we, we hosted this event in Toronto. There's 110 people there, accounts that are all dealing with some version of this. If only I could find the person that would do X, it would unlock me to do Y. But we, we almost assume that like that person doesn't exist because we've never hired someone like that before. Meanwhile, you look around in the room like every single person is an example of that, right? Like we can, we can stand in a room full of other accounting firm owners with this sort of baked in assumption that I'm the only person capable of doing this. Like, we wouldn't say that explicitly, but it's kind of implied in our behavior the notion that we couldn't go out and find that person to do that thing even better than we can. And there's even this sort of toxic trap where you will hire folks that are not as good as you and then go around and be like, why do I have to do all this stuff? Like, why do it? Like, why Is it that, that I'm, you know, the best person we have for, for X, Y and Z and I can't get any help on all this. It's like with it doesn't it all kind of stop with you? Who else is there to blame but you? Getting out from under that man, like being willing to hire domain experts that are better than you at specific things, that is extremely exciting. It's hard to do. You got to go hiring through different channels. You got to use recruiters for the first time. You just got to kind of broaden the approach for how you get that done. But it's very rewarding when you don't have to be the best at everything, because when you're the best at everything, the entire business relies on you, right? So first place people get stuck, clients can only be served by you. Second, everything in the firm doesn't have an alternative owner yet. Third, you're swooping in to be the hero. I still do this in my team now. It's hard to not do this. Fourth, you aren't yet ready for the 80% solution. That is being able to hand something off knowing it won't be done the exact same way that you will do it, but the only way that will get better is by. Is by learning and you sometimes getting out of the way. Fifth place that we get stuck is when the work isn't yet profitable enough to hire someone to do it, right? The, oh, I don't have the money yet to hire the person for that thing. And especially true in small firms where it's like, your time is free, right? And we'll be like, I got a 70% margin firm. And it's like, well, you're not paying yourself anything. There's a lot of small firms where the replacement cost of going out to hire somebody who can do what you would do would make the whole business lose money. And that's to be clear, that's where we all start, right? We start from scratch. But somebody that can run a firm like to go out and find that talent on the market, like you're paying a quarter million a year at least. So if you're running a, you know, $300,000 firm and you've got maybe one person working for you, then, yeah, like you're not going to have a ton of wiggle room to be able to hire folks in to support you, which is where your time going into finding better paying work and being more intentional about proposals and doing a bit of marketing and specialization and all that, that's where that becomes crucial because then the projects become profitable enough for you to pull in the right person. So this whole notion of being stuck and in a certain place because you don't have the money to hire the people that can get you out of that place, the solution is to divert some of that time from the doing of the work to the attracting better work and getting paid better for the work that we already have. Because when you're, when your projects are profitable. In fact, I had this conversation with someone as well, like, how do I do that without margins going backwards? It's like, well, on the one hand, you probably don't. On the other hand, how do we make margins go up? It's probably a combination of those two things, like recognizing, yeah, you might go backwards, but also we have to find a way to make these projects more profitable so that we can afford to change how we get the work done and pull in better people. Right? Whether. Whether you, like, really want to get out of the work or not. There's a version of this, even on a micro scale, when it comes to specific things that we're considering delegating for the first time, where if we can just get out of our own way and trust other humans, it can take us to a radically different place. And in my experience, this was also a very inspiring thing because I could see amazing other humans doing amazing things and realize I was part of that process. I enabled that and it was tremendously rewarding. You can do it. I know you can. You got any advice for folks struggling with the same? Drop that stuff down in the comments. And gang, this, this was fun. This was nice. Let's do this again. I'll catch you in the next.

Hey, real quick, for my podcast friends, we just announced 21 live events we're running between now and the end of the year, starting with dinners in Denver, Chicago and New York City this week. Get the whole team out. If you do tax work, celebrate getting past the deadline. Right from there, we're headed into it. Connect in Vegas. After that, events in Toronto, Orlando, Austin, Oklahoma City, Phoenix, Seattle, Portland, San Francisco, L.A. atlanta, Nashville, Chicago, Washington, D.C. philadelphia. We're back in New York City again. And then Boston. And 13 of these events. They are what we're calling Jason on Firms Live, a half day workshop experience that rolls into a dinner that I am so excited about. We've built these ones from scratch. These are events where I want you to bring your entire team to get everybody rowing in the same direction headed into 2026. If you're an accounting formulator that has ever struggled to with change management, with having all this enthusiasm but not being able to like, get the team to commit to your vision. It's the entire reason we built these events. If I've ever inspired you on this podcast, the idea, the idea with these events is that we can now inspire your entire team to get everybody working in the same direction. So you're not putting the whole thing on your own back. We'd love to see you out in the wild. Head out to jasononfirms.com events. You'll find up to date information about everything that's coming up and I'd love to see you there.