566 A Masterclass In Accounting Firm Proposals

Okay. Today on the podcast, we've rounded up some of the best questions from my 13 city tour last year around proposals. Like the real nitty gritty issues that accounting firms run into, pushing proposals out to their clients. What do I do if the clients don't respond? Are three tier proposals really worth it? How do I send them proposals? If I do their bookkeeping and their tax return and they have four different companies, doesn't that just create a mess? What you're about to see is questions from real accounting firm owners that we dug through live. Turned out really good. If you've ever considered sending once a year proposals to your clients, or if it's a thing that you already do, this one is gonna be super, super relevant to you. These clips are from our events in Portland and in Nashville. Can I let you in on a secret? Can we spoil something right now between you and me? About to announce 20 more cities that we're coming to in May and June. But either way, enjoy this conversation around building better prop. All right, the question that I have is if we're already offering what we would call silver or gold level service to clients and we're offering it at bronze level pricing, is that where you implement just immediately the hire, or are you still offering them the option listing out those three different services we're currently offering you, but this is the new price or do you offer them or I guess, how do you broach that topic? It can go one of two directions. You can start clawing that stuff back. And I do think it's worth talking about the way we serve clients more through the lens of here's what we've agreed to for 2026, you know, and 2027 might be different. This is a 12 month contract. This is what we're ultimately agreeing to. Sometimes we talk about things through this lens of a forever relationship and it's always gonna be this way. But then you kind of corner yourself. Reality is, their needs are gonna change. That's a great opportunity to be like, here's the new scope we recommend for you and how you serve them will change. So we do still 100% have permission to claw some of that stuff back. And I was talking with a gal last night who's like, everybody needs me. And my calendar is completely full because my team keeps putting all these meetings on my calendar because my clients, they want to see me and it's great. And I've never felt this before and I feel very important, but the reality is we're falling behind because too many people need me. And I'm afraid of what it looks like to change the expectation with clients. Like, how do I somehow reel that availability back in? And I think if you think through that, who are the people that are going to be bent out of shape about it? The good clients or the bad clients? Like, if we flip the script and we're coaching a client and they tell you they have that problem, what are you going to tell them? Awesome. Like, you're a badass, you're crushing it. Like, yes, you should be more scarce. And so let's figure out a way to protect your time a little bit more. It's harder for us to do that for ourselves than, you know, another client that we coach. But know that it's 100% up to you to, to find a way to reel that back in. Also know the delivery of this can be systematized. So, for example, if we're going to extend the availability of sms, being able to text people, if we are going to say, you can email me, there's a lot of ways we can get help with texting, we can get help with sms that shouldn't just go through to your phone. There's other people that can step in and help with the responses and drafting responses and all that. I mean, I gave my phone number out on social media, right? Like, the plan was never for me to sit there and respond to people all day long. It's how do we build a system for this and have the team help me triage that? So devil's in the details. Also how we implement it now, that's like clawing stuff back the other end of the spectrum. We're already delivering gold, right? Here's what I'd say. In fact, a gentleman last week asked me, he's like, we're a CFO practice, we have very few clients. We're so hands on. I don't know how to be any hands on. Er, there's always a gold or gold. And it may mean that we've never done that before, but if we want to go that direction and be more hands on with fewer people, which I think for a lot of us actually sounds pretty attractive. Like, what if I served half as many a tenth as many people and I was just really hands on with them. Like, some of that sounds kind of nice, right? There are people who will only work with companies that they take equity in. Like, that is way more gold than most of us have ever even thought of doing, right? The CFO guy, I'm like, what would it look like for you to do like, you know, a two or three day off site with five or six clients at a cool location, you have them out, you do hands on, super intensive stuff. That's pretty gold. Do that once a year, do that twice a year. He's like, yeah, actually that's super cool. So what we think of as gold right now, I actually think then how far that can go. So when we think I'm gold right now, it's because we are the goldest we can be with all the things we've committed ourselves to. But if you remove the constraint of serving too many people and we're accepting the fact that we're only going to go more premium, if we get way more money to go more premium, then there's actually like a more gold version that you could find. So combination of those two things, maybe one or the other we can clot back, but we can also still go more gold. My question is about when you send.

Out these three tiered proposals to renew for your clients, how do you communicate.

About that they have to respond or what happens if they don't respond?

Because you don't want to just fire clients for no reason because they're lazy.

And don't respond to emails. Yes. Thank you, Elizabeth. Great point of clarification that we talked about. Three tier proposals are not just for when you first propose a new client, it's for every year's renewal. You're saying this is the contract we're agreeing to for the next 12 months. So they don't respond. That is a super, super common thing. When people first roll this out, they're like, all my clients are just ghosting me. What do I do? I think that's usually a symptom of the proposal being overwhelming and too much. Like we're putting all this stuff in front of them and they're like, geez Louise, I don't even know how to make a decision. It's also a symptom of not giving them a hard deadline. So the devil's in the details of how we send this out. We need to pre communicate and then lead up to the proposal. Here's what's happening, here's what's going to be different. Even show them an example. That's like not a real proposal but like here's what it's going to look like. Bronze will be kind of what we did last year for you. And then we send that off to them in like if we're communicating enough, it will feel like over communicating to us because we're very fixated on what we do in a way that our clients are not. And it's easier for them to miss an email. And like most people are not glued to email like we are. So they need to have a hard deadline for that proposal. Here's the thing, we got room for this number of people on the bus and I'm sending this to this bigger number of people, probably part of the pre communication process so that they take that more seriously when it comes over the threshold. And then the reality is, especially when you're starting out like it's just gonna be some work to get people to engage with that and the next time you do it it will be much easier. But like we're showing them a new thing. So it's gonna take some calling, some follow up emails to say like, hey, you got two days left here, just wanna make sure you don't miss this. So you kinda gotta build that into our planning. Whether it's you calling, whether it's admins calling. I'd say it's a combination of all those things. Cause when they ghost, the reality is like there's a whole bunch of details that can lead to that and the more we can dial those things in, the greater the likelihood that they won't.

With our proposals. One of the things I've struggled with is how do I want to manage proposing to a multi entity group. But I don't want to present three tiers for all of them. They choose gold for one of them and then bronze for the rest of them because it's cheaper. And then how do I deliver on that level of service and maintain those boundaries? Do we just do one big proposal for everything and then have to do engagement letters separately? I guess because I still need engagement letters for all of them or what, what are your thoughts on that in general?

I think we, we want to think of it as like pricing the entire relationship because even if they've got these like LLCs for the rental, they're going to call you with two questions about the big business and one question about the little business. Logistically, the tools involved in the process don't always accommodate this stuff. Right. And I've heard a lot of folks who, what they will present to clients will just be whatever works best for their own billing on the back end. So sometimes what I would do is totally sidestep the three tier proposal tool and just visualize for them in a not very impressive way. Just be like hey here, here are the options like and we're talking about doing everything and then I would send them through a series of agreeing to, you know, whatever proposals associated with whatever payment methods made sense. And we're like, okay, if you're agreeing to this, then you can click through these four links and sign up. If that makes the, the ops on the back end a little easier, there's probably a version of that where you could like do the granddaddy proposal in there that ultimately doesn't associate back to invoicing and then fix that. I come to it first and foremost from a client relationship standpoint. And if you struggle with like, well, normally I do a proposal for tax and I do a proposal for bookkeeping and all these other things. A signal of like, man, are we just trying to serve too many people too many different ways. So as much as possible, I kind of smoosh that into, here's the scope that I recommend that we do, not just for one entity, but for all of your entities present that in as simplified a way as possible, because that's kind of how they think about it. And then on the back end, from an ops standpoint, like, whatever makes the most sense, even if it means they've got to run through accepting a few different things.

Okay, so my question goes back to the tiered pricing, which we don't do at all. We've presented it, we've had confusion around it. It's never been fully adopted by our clients in the past. In our system, we approach it from, you pay for a consult, you pay for a review. Here's the best pricing you get from us in one quote. If you don't want something, we take it off. If you want more, okay, we'll go in and reprice. We charge weekly, by the way. So anytime we have gone back to this pricing model of the three tier, it's constantly this, like, what are you offering me? I'm confused. They're exactly the same, just a little bit of service delivery changes, but they can't understand it. So I'm trying to figure out how you offer that.

There's definitely a risk to the sort of menu based, choose your own adventure, build a thing. I suspect the devil's in the details of how are we communicating the three tier proposals? What do they look like? Are we speaking our language or are we speaking their language? I think you had shared that it was Ignition as well.

Yes. Yeah, I'm sorry, it is Ignition that we offered this in.

And Ignition has kind of a way of like unfurling, revealing greater complexity the further into it you get. Like, you get the first summary view and then it gives you the service details. I would say take a patient client and just have them super hold your hand through. What is confusing about this and what would the more clear version of it be? Because as it stands, this feels more like taking the price they're willing to pay and then backing into the scope they can have for that price. Right. Rather than being like, how many of these people do you work with? Because I actually work with a whole bunch of them and I can tell you what's probably going to work best for you. Now tell me, do you want to be able to call me during an accounting conference or do you just want to be able to email my team and not even have Sarah access?

Which I will say we preface it, you don't get access to us unless you buy X. So you know that going in at the discovery call.

Okay.

Basically I don't even ask. I just say this is what you're going to get just so you kind of get a general sense. What you're not going to get is these two women sitting right here unless you pay for that.

So reserve availability of you to kind of the more premium end of the spectrum scope I think is kind of set independent of that. What makes the most sense for them. I'm curious what people say about like, do they want access to you? Do they ever opt into not having access to you?

It's almost like they don't even need it. I mean, I'm grateful for our team and the only time we have to step in is on certain sticky moments for the most part. But that's on the back end.

Does your client think they need it though? Are they like, oh no, we. You onboarded me. I have, I need to still have.

There is a. There is at least two or three premium clients that they do pay for it and they do want it. And they. And that's a higher tier pricing.

Oftentimes us thinking they may need it or not stands in the way of are they a VIP buyer where they would pay just to have access even though they'll never use it? You know they're doing some version of 3 tier already. If they're either opting into that or not opting into it. With that type of person, it may literally make more sense to be like, we just have to look at this on a call together or we have to verbally talk through it. I'm going to give you three options. Here's, here's the prices if they're just talkers and that's Easier for them to process that way. That seems weird to me. Most like, normally my recommendation is put the proposal in front of them. Don't do it live. Because if you do it live, you're just watching them process, wasting both your times. Usually I put it in front of them and then I say, let's hop on a call once you've had time to process. Maybe for these types of people, a different version of that lands better. But if you could get somebody on the horn with you to be like, tell me what's confusing here? Is it our vernacular? Is it we're not speaking attorney speak? Is there too much here? I suspect the devil's in the details.

I guess I've moved away from the three tier because it's just. I just could never get it right is way I looked at it. But also maybe it's me, maybe I just don't want to offer that.

You just explained three tier though, or at least two tiers. There's access.

Two tier.

Two of you.

I did two tier, yeah.

So I would say all it is if you're trying to move to three tier is what are the other constraints of the business? Is it senior people on the team? Is it some people like text access versus email access or live calls versus email only, stuff like that. Like there's probably a third version there. You could. The value of doing that to me is it unlocks some opportunities around decoy pricing and more variability rather than the binary thing. If we go back to the popcorn buckets, where you've got a small popcorn bucket, that's four dollars and a large popcorn bucket, that's seven bucks, that's all we're selling right now. And there might be a way to optimize that more.

Okay.

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Notes One of the things you said earlier was about going lean initially when you're doing your like three tier proposal to just solve the problem they have right now as opposed to like having this laundry list of things in the proposal. One of the things I've always tried to do is like not nickel and dime. So like going through the year, if I say like, hey, here's your proposal for 2026, then I think I would expect that like everything I'm going to need for 2026 would be in there. But it sounded like it was like solve the problem now and then like three months in when they run into that second problem to now introduce it with a new price. How would you go about like I guess, proposing a new proposal midway through the engagement without like causing a bunch of stress of like, well, I thought I was only going to have to pay this or that.

If you go back to the downselling example, this is part of the value of showing them all the things you're not selling them. That's a great reason to call out the thing you're not selling them that you know they'll need in three months. Right. So that person that's just coming for the bookkeeping as I'm showing, like, here's what we're not including in that is going to be like monthly calls. Like just so you know, like we're not hopping on a call every month or anything like that. And then when that need arises and you're like, you want to understand this better, like let's do a 60 minute call every month and let's have an updated scope conversation. Hopefully that plants the seed of them understanding the boundaries a little bit more so that when you come and have that conversation it is less of a surprise. Honest, like kind of sucky answer here is like, we just have to be more okay and more comfortable with doing this even though it does suck. And there's a threshold there where is how rough is this? But like if we're going from just a bookkeeping engagement to you're going to get on a call with me every month, like that's a pretty big step jump in what the fiat to be like we're talking about another, I don't know, 50% or something like that. Come back to the graphic that you originally showed them and like, hey, let's talk about this because this isn't included in the scope right now, but you need it and I want to help you. So let's have this conversation. So there's tactics that can make that easier. I'd say that's 50% of it. The other 50% of it is you valuing yourself and your time and like us having the confidence to be like, yeah man, I want to help you with this. Let's talk about what it will take because I can only do this for so many people.

Is there ever a time that you like with the three tiered pricing, say something pops up and is there ever a time that you're like, oh, I'll do this for X amount of dollars or do you get go back and say like here's your tiers. Choose a new tier. Like if they get like a tax notice and that's not in their like basic level or they want to do a call or something like that. Are you like, oh well I'll do it for X amount of dollars or do you say here's the new tiers.

I would say it depends on if it's a one off thing or if it's like an ongoing thing. Like if it's a change in a bookkeeping agreement where we're going to do bill pay now versus if it's a tax notice, it's a one off thing. I probably treat that differently. I do think we need to put the three tiers in front of them every year at a minimum, so that they can understand, like, here's the way we're helping you and here's the other ways that we can help you. Not in terms of scope, but in terms of how premium it is. If they've already gone through that exercise, like if they did this this December and then in June, like there's some scope change, you could just say, like, here's kind of what we did before and here's what we're going to do now, and here's what it includes and that's it. And baked into that is the same level of service that they decided on previously. You could do that or you could put the full three tiers in front of them.

Again, my question was more centered around the practical application of the tiers within the firm. Because once you onboard, how do I communicate with my staff? What level of service a client has signed up for? Because they're not going to know or remember.

Have you seen any of my service library stuff? So you've got how you set expectations on scope and how you set expectations on service delivery. GOPE is tough, it's messy. Most people are doing a ton of folks and we kind of have to somehow corral all that around like a common set of internally agreeing upon what does this mean? So the high level version of this, which is kind of a hard thing to do, a high level version of, is internally. You have to have a language for what are we going to do for this client? And you kind of have to define what those things mean and then try to service clients according to that. When you're first starting, it's a mess because it's everything. It's not actually until you have a language for that though, that those things start trending to be more similar. And so you have to kind of have that internal infrastructure, that language around. Here's what we do for people. Otherwise everything gets more different over time. That's just the natural state of these engagements because the client's asking for random things and they all get more different and making scope more turnkey. That's my recommendation. We got several videos on it and like a big old giveaway resource of the 16 most common services and how you do it with those on service delivery, it's the same sort of thing. I think you just create a understood language internally for what each of those things are. And they don't have to match what's presented on the proposals. The title of like the bronze tier. In fact, they probably shouldn't because it's a bigger spectrum than maybe just three options. And when I make the proposal, I'm naming those options to steer them in a direction. And the direction for one client may be different than direction for another client. So maybe in your firm, in the grand scheme of things, you've got maybe like five levels of how much we support folks. That could just be level one, level two, level three, level four, level five. Internally, the team understands what do these different things mean. And then in your practice management system, either at the project level or at the client level, we're going to define right now, they are level one, level two, something like that. But the more you can batch what, what all rolls up into that expectation from email and text and response times and all that, the more you can batch that into service level one or something like that, and a way your team understands, the easier that is.

I think my question is more around the three tier as well. So I'm just starting out on cast services. I have zero clients, but I'm trying to put tiers together. So I liked your idea of saying that you kind of keep the services work the same, but you increase the services. So I'm curious how that would work in like a cast practice. Because some people may not need all those services and so I don't want them to feel like, okay, you're going to go for my controller package, but you don't need all this stuff, but still provide that value to me.

That's the importance of like having a deep enough discovery conversation to be able to recommend a specific scope. So you're like, here's the stuff that I think you want. Like, I think it would make sense for you to have bookkeeping apparel or something like that. And it's not until you've got an understanding of like, here's how best we think we can help you, that you, you then present the proposal with different levels of service delivery. There's kind of a lazy version of this that we can do sometimes where we have sort of a half baked conversation and you're like, ah, here's books, here's books and payroll, here's books and payroll and coaching or something like that. Right. I think we want to get to exactly the scope of what we're going to do before we send the proposal. Because honestly, that scope conversation, like, I kind of don't really want to leave up to the client. In most cases, like, I can see what you need. Like, here's my recommendation of what you need and what will happen if they don't agree and they really, really push back is you'll send them that proposal and they'll be like, I don't want you to do payroll, or I really want you to do payroll. Great. If we'll agree to do that, we'll send them another proposal. But I think that's a better way of approaching it than three very different scopes on a proposal.

So on your podcast I've heard you mention, I think both in how you deliver for like the higher tiers, but also in solving for your clients. Actual, like what they're saying is their main pain point, when that pain point is something that isn't technically accounting or something like that. So more of like an operational kind of team member. Is this a part of like client service? Is it on the the team and kind of like what work are they doing or how do they integrate with those that are doing advisory and accounting for that client? Like, how do we keep them in sync and are we removing that financial team from the client facing stuff? I just kind of would like some understanding of how that all works.

Yeah, I mean, it looks like in most cases having a team of folks who are almost advocating for the client within your team, like, they may be technical people. In fact, Chad Davis once told me, he's like, we put out a role that was like, you're going to be a client concierge and we want you to have accounting background. And I'm like, good luck finding those people. He's like, it's the easiest role we have to hire for accountants who just want to do client service now and like not have to do the technical stuff in a team beyond a few people, I think it probably looks like having some high touch concierge type folks. And if they have any expertise, that's amazing. At the end of the day, it's not going to be their expertise though, that you're relying on. It's going to be the accounting manager, it's going to be the tax manager. So we all have a version of this problem if you're doing more than one thing, is they will call and have a tax question and a bookkeeping question and a payroll question and all these different things. And you're like, you're a company of seven people and you're like, let me transfer you to the payroll department. Like, nobody wants to do that. Right. And so we already have the problem of who should be leading the engagement. And as much as I hate the answer being one more person and a lot of firms, I think it probably is at the end of the day this grinds our gears oftentimes more than it does the clients. Because we want them to be able to have an answer immediately when they call. Because we're probably capable of giving all the answers. Reality is, most of our team is probably not. I think what the client usually wants is to feel heard and to feel understood and to know when they'll get an answer. And a high touch person that can dazzle them and, like, deliver a level of, like, personality and all of that that they just fundamentally wouldn't expect from an accounting firm. While adding one more person comes with some downsides because they're not going to give the direct answers. And my thought right now is the upsides of that person and being high touch. And like, they're. They're kind of the liaison for the client between the client and the technical people. And them literally being able to tell the client, like, here's the thing, I'm your advocate within the firm. Like, I'm making sure you're taking care of your herd and all of that stuff. I think the upside of that, where most people are used to being neglected and struggling to get in touch with anybody, I think that's the best way to do it. I also like it because those people are easier to find than one more tax manager. Like, there's a world where those are not even technical accounting people. Like, where you can pull in somebody with hospitality experience, somebody very high touch.

And.

And those folks for me are much easier to find than the technical folks. If you can find a technical person that just wants to do that, great. But I think that then is kind of a high touch ops person that's coming in and taking the lead on all of that. You know, if we're thinking about our proposals and we're like, scope. Scope is the same on all of these. It is the service delivery that looks different. I kind of like the notion of having a customer support team that is like, they're on top of that. Like, right now we may not have the systems and the information to know are we responding within 24 hours? 48. 72. So, like, that kind of has to be somebody's job. And so I think that's probably another layer of the team that is its own challenge to build, but is worthwhile when the profitability of the product as a whole is much better. It's kind of. But we're like learning a new skill of like, how do you build that customer support sort of thing, which I would say clients are clamoring for. I think this Also solves to a degree the problem of turnover in your technical team. If they get brought in to like this really senior tax person or accounting person or something like that, and then that person ends up growing out of that role like you do and growing, growing into bigger clients, that concierge. I think that helps to a degree. I think there might be less mobility in that person than there may be in some of your technical team members. So I've tried to pull them in right away in onboarding. And like they are, they are their friend. Like they are the buddy, they're the person that's looking out for the meeting. If they're meeting with the technical onboarding people or the concierge is also there and like they're kind of facilitating and it's like they're hyper available in a way that is really hard for your technical people to be more of a human. Question on pricing. When it comes to creating a pricing model, updating your pricing model, or just increasing prices, how do you deal with or process through imposter syndrome? It's a great question. What is the solution to imposter syndrome? I think everybody deals with that like at every stage of their life. I heard somebody say that your internal identity generally lags two years behind your external reality. It's why a lot of times people will see things that you're capable of before you can even see them, before you can even believe them. I don't know that I have a great solution. I mean, I have imposter syndrome in everything that I do. But I will say the fastest way to prove it to yourself is to, is to give other people the opportunity to prove it to you. And like three tier pricing, like that kind of is a version of that, right? Where I wouldn't even believe that I'm worth this until a bunch of people start telling me that I am. And it takes me time to grow into that and be like, okay, okay, I actually can do that. And then comes the really hard decisions of like, well, what does that mean that I can no longer do? Because I can't keep going down this path if I'm still doing this other stuff. I would say, like, as much as there is an answer, it's probably just like being willing to do scary stuff, the stuff that's pushing your boundaries. One of the things that really excited me about these events is this is the first time I've been super scared to do something in my business for probably two years to like put together this run of events and put up like hundreds of thousands of dollars and be like, I hope people come. I hope people sponsor it. Like, honestly, like, there was no safety net. And on the other side of this, while this is. This is super cool and an amazing experience, I'm very excited for who I will be on the other side of it, you know, like, I'm going to be a better speaker. I'm going to have an entirely different level of confidence in hosting events and building event teams and everything that goes into this stuff. And I'm excited about that. So I would say think about, like, for yourself, what are you trying to get to? And don't be afraid to do the scary stuff that gets you there, because, I mean, you're absolutely gonna fail. Like, we all will. And if we live our life in a way where we never will, then we're also not growing. So if there is a solution to imposter syndrome, I would say, like, create the opportunities where you can kind of prove to yourself, like, oh, I actually can do this. I am worth this.

So how would you approach going into a niche industry where there's race or thin margins, and what you're selling is either forecasting general business advisory that you know will increase those margins or will help them in the long term, but they don't see that value beforehand and they're just looking for price. And, you know, what's the cheapest? How would you approach selling to those type of clients and industries?

Hard to sell to people that don't have money. I think it's hormozy that says rich people problems pay better than poor people problems, which is kind of a crappy thing to say, but it's also pretty true. It is really hard to niche into a space where there isn't money. I mean, there are bad niches. There just are. Like, there are industries that are shrinking, that are getting smaller and all of that. Like, that is a tough place to set up camp. So it is, for sure hard. I would say, in a situation like that, it's virtually impossible to jump in with an offer of, like, advisory and coaching and all these very pretty premium things that you have to be able to charge a lot for. To throw it back to what we were talking about earlier and solving one problem at a time. What's that person's first problem? So you're excited about working with, like, hobby shops, like, card shops, that sort of thing. Super cool. Aligns with a passion. And it's one of those things that is like, I love doing this stuff, and I can find a way to, like, Roll work into it. Amazing. That's like the best case scenario. When they hear that there's an accountant that works with just. These types of folks are going to be stoked. They're going to be so jacked. They're gonna be like, I've been working with a generalist for 15 years, doesn't understand what I do. Amazing. The first thing they will want from you is what that generalist is doing for them. And in all likelihood, that's compliance books and tax prep, not even tax planning. Right. So you have to start there. I know the ambition is the bigger, headier stuff, but it has to start with the basics. Otherwise it's a no from day one. I think realistically, I think when you get into a niche like this, I love that you're starting with a niche. The big fear with niching oftentimes is you're closing all these doors and you'll never be able to go back and do these other things. The more likely thing that happens when you niche down is you actually find a ton of other adjacent industries and you can now support. I was in Phoenix, I was talking with a guy and he's like, we just did an entire rebrand about just working with law firms. But now we see like six sub niches within law firms and want to just pick one of them because they will pay twice as well and it will be easier to find clients. So they didn't find that next level until they committed to the first level. I would say as long as it can put food on the table, as long as it can cross that threshold, just start. In all likelihood it will open the door to a bunch of other similar niches in that domain and there may be others that pay better. Almost. In all likelihood there is. And there may be a path there. To like this still feels like kind of my mission, like the thing that I'm passionate about, but it's also easier to build a business around. Do you have an episode on discovery calls and scoping? Good question. Because I've listened to every single one. Yeah.

Yeah. Where is it?

I mean, I have two, but I still don't remember. I don't know that I do. But what would a good version of that be? What are the questions? Well, I mean, you're talking about doing an in depth enough discovery call to accurately determine scope. And I think probably, probably in here we all do our version of a discovery call. So I'm curious on your take a wise one of what constitutes an in depth discovery call. Man, I think for a Lot of us, it is the pain of having been burned all these different ways. And you're like, gotta remember to ask for this. Gotta remember to ask for that. You see the red flag. Cause he got burned by it in the past. And it's what makes pulling someone else into that process really hard. As we're shooting from the hip, so what is a more systematized version of that? Honestly, one way to jumpstart this list is AI meeting note takers. Imagine if you had a recording of the last 50 discovery calls that you did. You do. Whew. Yeah. It's finally paying off, dude. This is why. Yeah, this is why I've been saying, capture, capture, capture. Every day you don't capture is a lost opportunity. Let's go back to those discovery calls and be like, what are the questions that I need to be making sure that I ask every single time? And that's our version one. And then the next time there's a surprise with a new client, or you get burned with something that gets added to the list, that's not a real, like, big brain complex way to do it, but that's what makes the most sense to me. What are the questions we need to make sure we always have an answer for? And we may find that it's easier to move some of those, maybe to a form that happens earlier that may immediately disqualify them, versus what are the things we actually want to talk about live when we're chatting? But your transcripts, that'd be a great way to start.

What makes you say that organic growth.

Is easy right now?

Because even with a niche and the.

System set up to take on work, I'm struggling. The devil's in the details of that one. I would say there's a lot of folks who are just not happy with their current accountant. Right. And so there's a lot of folks looking for, like, we were talking about, you know, an accountant for a very specific type of person. My experience, I moved to New York, got a new barber and asked me what I did, and he starts telling me about his accountant. And I'm like, you know, these accountants are like, just work with barbers. Like, that's all they do. Like, they can give you very specialized advice. And he's talking about the new bill, and I'm like, yeah, they'll tell you, like, what aspects of the new bill are relevant to you. And that guy, it just blew his mind. He's like, I've had a generalist for like, 22 years, and you're Telling me there's accountants that will just work with people like me, like, that's so exciting. I would say organic growth right now is as easy as it has been. It doesn't mean that it's easy. If you go out and you acquire a firm, you still have the issue of needing to be able to generate organic. So like, it doesn't really solve that issue. I will say, like, when you're getting started and you need that cash Runway and you gotta put food on the table, sometimes that's a reason to do an acquisition. Not a big acquisition, but one to like get you started. And those clients pay the bills initially and they don't need to be forever clients. But like, sometimes that makes sense. I know a lot of people that have done that, like just to get the cash Runway there. And I think that makes sense. But there's a hundred kind of ways you could look at, like, I'm struggling to build this niche client base. What are the reasons? Does it have to do with the industry itself? Does it have to do with the tactics that we're employing? But yeah, a lot of firms, like, they are just growing very quickly via organic. And so it's hard to make the argument of like, why am I going to pay this person, you know, 80% of revenue for another million dollars of work when like I grew a million dollars last few years. That sort of thing. Like that's the math that that's tilting a little bit, I think more in favor of organic. Hey, real quick, are you tired of having to like duct tape a whole bunch of apps together to run your accounting firm? Of course you are. Wouldn't it be nice if you had you had what you needed all in one place? Gang, listen up. This is where today's sponsored Financial Sense can make your life a whole lot easier. It's everything you need to run your firm all in one place. But they recently started shipping some really cool workflow flow stuff. It has a deep integration into the accounting ledger. It will actually pull all the transactions in so you can do more of your month end review from inside a Financial Sense. And it'll even auto flag a bunch of stuff like big transactions, inconsistent transactions. It's got kind of a whole month end review flow that you now go through from inside of Financial Sense. Then you make those changes to the transactions. They all get pushed back to the ledger like magic, bro. So one of the headaches right now in picking accounting tech is you have practice management systems that oversee the work. Then you have workflow tools that do The Work Financial center. Doing a bit of both. Now they've been a practice management system historically. Now they're getting more into the bookkeeping workflow, which is great news if you're the type of person that doesn't like juggling a whole bunch of tools. Now financial sense, they'll actually give you a 14 day trial if you use the link down in the show notes. That is the most generous free trial I've actually seen in our space.

Absolutely.

Worth kicking the tires on. To learn more, check out that link. Hey, do you enjoy managing your it? Trick question. Of course you don't. That's awful. You got better things to do than to be playing it. Night Janitor K. That's where this episode's sponsor, Verido. They can help. They will be your entire IT department. Because you know what? They do it for hundreds of other accounting firms. In fact, they only do it for accounting firms. Compare that to hiring the IT guy down the street. Oh, I am speaking from experience here. Hire the IT guy down the street. And he comes in and we're like, yeah, here's the problem. And he's like, what on God's green earth is this app, man? And I say, well, this CCH engagement. And he says, okay, give me a week to figure out how this app works and then I will fix your small problem. That's what you're paying for working with IT Groups that don't just support accounting firms, Barretto, they know their stuff, man. This is all they do. This is their lives. They'll migrate you over a weekend. And I actually recently learned they have. They've had like this five minute sort of support guarantee or something like that. They said average response time from support, like 24,7, you can call. Average response time was less than five minutes. They actually told me recently average response time is now less than 60 seconds. 24 days a week, 7 hours a day. 24, 7. That's a bad joke to make. That's not clear. 24 hours a day, 7 days a week. Verdo. They will also do your wisp 500 bucks flat fee. They'll do the required security thing that you have to have as a tax firm in the US and they'll do all your hosting. Stop paying Thompson. Stop paying Drake. Don't pay the provider of the software for hosting. You can get it from Verito way faster, way cheaper. I know a ton of firms that are weirdly like raving fans of Barado. Honestly, like, it's a weird thing to be so excited about, but if you're getting that it sorted out for 2026 man. Like now is the time to do it. Learn more about Verdo down at the link in the show Notes hey, real quick. If you use Microsoft Outlook or Gmail in your accounting firm, pay real close attention to what I'm going to tell you next. This podcast sponsor Missive it is email like you have always wanted. It is a team first approach to managing email. Would you believe me if I told you Microsoft Outlook which came out. I think we worked it out. It was pre middle school for me. Microsoft Outlook it is not the best like email platform for accounting firms. That may come as a shock to you. And when we're spending a huge percentage of our time on email. Accountants on average in my polling spend one to two hours a day just managing email. It means the tool you use for email is incredibly important. Missive over 500 accounting firms have moved their email to Missive. We did a demo of missive on my YouTube channel a few months back. People freaking flipped. In fact I made a social post, a sponsored social post. A couple days later over 50 people opted to hop in on a demo like a little show and tell that we were doing the next week from an accounting firm that's been running all their email on Mista for the last few years. Some practice management systems will manage your email inbox, but most of them all they do is connect to it which is great. So I can see the emails associated with my client records. But it is not a like productive place to be composing and managing email by any stretch of the imagination. Missive it is the inbox tool for teams built from the ground up to make you more productive with this stuff and give you a path to like delegating email work for the first time too. I'm a big fan of the tool. To learn more about Missive, check out that Demo on my YouTube channel. Then head on down to the show notes to learn more. So I'm just about to ask you about what is your comment on PE funds is buying lot of CPA firms. So what is our future? Whether we will become employee of the all large firms? What do you think about this P threat? What do you Can I ask you what you think first? Like Walmart is becoming all pop up Sean gone so same thing is happen may be happening to this. That's a I love that analogy. We don't think of it that way. What if TurboTax is the Walmart and we're like the mom pop shop right? That's interesting or the big PE roll ups are the Walmart pe. It's solving a problem and creating other problems. There's a tremendous amount of capital that has to go somewhere. There's a whole bunch of people that want to get bought out. They're solving those problems. Accounting firms are great, cash flowing businesses, great, we'll allocate capital there. People want to get bought out, great, here's the money to get bought out. But then what? And nobody's cracked that yet. Like that doesn't mean that what happens next is good for anybody really. In fact, in most cases it isn't. Like I worked with dentists and the worst thing happening in dentistry was PE rolling up all these firms. Level of service goes off a cliff, staff leave. Most of the dentists I knew came to regret doing that all in the name of like, oh, once we hit this threshold, then the EBITDA multiple goes to this and then we're all really gonna cash out. Because that should be the goal I guess is to burn everybody and everything that you built to cash out. Ironically, PE's model for running accounting firms is more similar to my model for running accounting firms than the traditional partner model for running accounting firms. So I haven't seen anybody nail it yet and it doesn't mean that they won't. But if we think about this through the lens of like what does it mean for small accounting firms? Someone would have to nail it to a degree that we have not even seen for there to be a Walmart of accounting. I think the closest thing to the Walmart of accounting is productized solutions like TurboTax and all that coming up market. And that is happening and will continue to happen. I mean TurboTax, the full service small business tax service now starts at 1750 federal only. No book cleanup, no state tax return, 1750 federal only. There's a lot of people in this room that are not charging 1750 for an S Corp federal only tax return. That's way above the national average. So we got to be mindful of the productized solutions coming up market and make sure we're not serving the same part of the market. I mean that landing page, which you can still go to, is your best friend. Anybody that doesn't want to pay you two grand for an S Corp tax return. Cool. Let me send you over to my partners at TurboTax. We have to have a clear language for what I do versus what they do. What they do is you go into a pooled service model and you'll call and you'll get somebody. But like, you're not building a relationship with anybody. They're not learning about your business. They're also not fixing your accounting or anything else. As opposed to what we do where you have a persistent relationship with someone and we grow with you. So those will continue to come up market. We'll have to make sure that we're not serving the same parts of the market. But honestly, the whole PE thing, like, I see it more as just an opportunity for everyone. Like if you are trying to build to an exit, like there's, there's an abundance of capital to build to an exit. It feels a long ways off for firms to be threatened by big PE roll ups. Because what most of us experience every time there's a PE roll up is we get some staff out of it and we get some clients out of it and it's great. I got most of the best staff I ever hired from regionals acquiring smaller firms and people bounce and then they come to work for my firm. So honestly, all of the signals to me make it great for small firms. That's kind of my take on it. Right now I am interested in what is a version of a roll up that works. That's cool. I think right now the bar for a roll up being justified is are they making money and do we have the money to buy them? Great. We pull them into the roll up. Like, the filters are not very complex and you know enough about working with accountants to know you throw a bunch of them into a room and say, here's what we're all going to do and expect them all to like, ch, change and like whip into this new way of doing things efficiently. That's just not reality. Right. And that is what most people miss when they're doing. This is just how hard that is to get folks doing things the same way. I can tell you what excites me is the world of small accounting firms is getting smaller. We're more connected than we've ever been before. And I'm not normally an M and A guy because I think organic growth is so easy right now. It's not usually worth it. And if you go to see what a broker has to offer, it's like, here's a tax firm, the guy's two years from retirement. They're doing things on paper. Here's a bookkeeping firm and it's like not even like recurring revenue. They're doing stuff on QuickBooks, desktop. Like, to me that is a lot of the market that you see. But what I'm Seeing increasingly is I've got this buddy that runs a firm pretty much the same way I run mine. Literally the same practice management system, I'm going to acquire his firm. That's a way cooler roll up. That's a way cooler acquisition to me than going to some sort of broker. And this sort of stuff is happening like it's literally happening inside of realize and it's because we have more access to each other than we've ever have before. You come into Realize, you get put into a mastermind group of people with the exact same service mix as you, almost the identical revenue as you, and oftentimes the same practice management system as you. And there's never been a time where we had as much access to each other because of these communities, because of events like this, as we do right now. So on the small firm side, all the PE money, like I think that's all just opportunity for us because it either comes to us eventually or, or we get the disgruntled clients and people that fall out of those transactions. But then down at the small firm size, the mergers and the acquisitions between very similar progressive firms, like that's a whole new opportunity that I'm actually very, very excited about. That's happening in a way that I think we've never seen before. Question about accounting firm websites. I see a lot in my day to day at double. You've got a great one, by the way. I actually really liked yours and that's, that's why I was going to ask for the praise. No, I'm kidding. But I was curious, like what's essential for an accounting firm website in your mind, what is unnecessary, what makes a good one? I think the website has to be. And then I want to get Geraldine's take too. I think the website really has to quickly get to the point of here is your problem and how I'll solve it. And oftentimes they end up being like a laundry list of here's all the services that we do. And it's like, well that's what everybody's website looks like. Like when instead we need to think about like what is the problem people have at the point that we want to find them and that's where we start. And usually that's some sort of compelling offer that solves that problem for a specific type of person. It doesn't mean that we won't go on to solve six other problems down the road, but we're trying to find the person like at a point where they have this really painful, expensive problem. And so we can build a cool offer around that to say like, hey, come and work with us. And it will feel like a no brainer, like we can solve this. We've done it for a bunch of other people and that's how we get them in the door. So sometimes we can dress it up to be too many things and that message gets lost. My take here, I think about this always with my content is I will just assume that people are selfish people and they're only interested in my video and my social media posts. And what I'm saying, if it somehow helps them, like they're scrolling through that social media feed and they're like, there has to be something in this for me, otherwise why am I gonna stop? And so I try to get like really ruthless with my website to just very quickly get to like, here's what's in it for you? Do you want to answer that? Yeah.

So keep it short. Keep the accounting jargon off as much as you can. And the essentials are who you work with, what you sell, what problems they have, what the solution is, what results can they get from working with you and what's the process to get started, what's the next thing they do, the call to action. Nowhere in there is a laundry list of accounting deliverables because it's too much for where they are on their head. But I'm going to stretch you one step further for the people in the room who are ready for this, because here's what I think. Writing a website is a wonderful exercise in forcing you to distill your business. And it forces you to think through who you're targeting and what you want to sell to them and who you don't want to sell to. But the next level of that is you don't need a website. What you need is a landing page that you drive traffic to. So that's the next level when you get there.

Yeah, with the technology stuff, with like all the softwares like the Tax Lizard and Ultra Tax, I don't see them embracing AI much. Do you think they're going to embrace it more or will we always be having to rely on these third party softwares to kind of somehow integrate, you know, I mean, just wondering, why are these software, you know, LISRT and you know, cc, why are they so slow to get with it? Or you think that's gonna change soon?

Have you ever seen the meme? I can't remember what it is. There's this like poking it with a stick and they're like do something. Sometimes I feel like that about tax software vendors. Part of the problem is the tax calculation engines are built on these unbelievably legacy code bases and they have no intention of ever transitioning off of that because it's a monumental undertaking from a practical standpoint. These are all like on premise systems that like don't have APIs and like, it's not a, it's not something that in many ways can even be built if they wanted to. The flip side of it is these are just humongous companies and these tax offers are just huge cash cows. Right? So they're in all likelihood they're the last people who are going to do the cool new version of it. There's at, there's at least three companies that are making an honest effort of building a new from scratch tax calculation engine right now. Can't come soon enough. Imagine an ecosystem. First tax platform. You think about the advent of cloud accounting and the notion that now we can have our ledger in the cloud and it can connect to all the other tools that we need for doing all these special jobs. Right? That was the dream. And all the data would go back and forth just right. Never really came to be right. Turns out native integrations are big business and some folks don't want that data to go from A to B. But think about the entire ecosystem of tools that have been built around the accounting ledger that did not exist 15 years ago. Imagine that for tax, you have a cloud based tax system that can connect with other tools in the ecosystem. You now have an entire category of tax tech similar to what we see around the ledger. This feels like an inevitability tax tech. My take here is this is every big, every bit as big of an opportunity as the tech on the accounting side because tax has an element of found money. So as soon as you have something like this, it's really exciting. But it's also a total mess because an entrepreneur can connect an account or upload, upload a tax return or something like that to this service and the service can be like, hey, just real quick, upload your return and I'll go and double check that you got the, you know, the reduced pass through rate. Is that still thing. Yeah. So out of state prepare. They don't know about that. Right. They don't put that you have any employees in there. So it doesn't give you the reduced rate. You stand up a landing page of, you know, whatever Oregon tax optimizer.com the person uploads their return and it Checks to see if they have the reduced rate. Hey, you didn't have the reduced rate. We can save you $12,000. Click here and we'll file your amendment for three grand and you'll get the difference. Like as soon as you have a more integrated ecosystem, we'll get way cooler tech. It also creates a big time mess in a lot of other ways. Right? Because now your clients are like running out to all these productized services going like, oh, did I get this? Did I get that? So it's a bummer. I would say at least right now, for the first time ever in my career, we have cool developments happening around tax people building cool stuff. Not in a way that integrates at all, unfortunately with the tax software. But man, the AI stuff, who's using a tool for intake like a Stanford Tax, a Soroban Safe Send, gather, that sort of thing. That stuff's really exciting to me. Even though it doesn't integrate in an intelligent way to the tax software, there's people that are working on that piece. The reality is behind the scenes, with the exception of Access CCH Access has a more automated way to do this, but they don't give everybody access to it. Every other tax platform on the back end, there's literally bots navigating the tax software and it has to be in your IT environment where that tax software is. So obviously that's really hard to build and a total mess to maintain and it breaks all the time, right? So it is a very hard problem to solve. My hope is in five years we have a cloud native tax prep software. But I would have said the same thing five years ago. So there is no hope now. Honestly, this is why I launched a cast practice at my tax firm because I'm a real tech nerd and I'm like, I feel so boxed in by the lack of cool tools. Like I can't do anything to automate any of this stuff and I look like a dummy to my client because I'm forced to use these super archaic tools. So it's a frustrating spot to be in. It's why I do think it is important to support folks like the Stanfords and the Sorbands and you know, the folks that are building new stuff because man, do tax pros need better tech.

So my idea to get around all that was make a cloud based AI agent because I could have her in my infrastructure, in my, my VDI and using ChatGPT for enterprise. So that was my only solution to get around that. Have you seen anybody already built that so I don't have to finish building it?

No, but it does totally change this. The day that we have an agent that's good enough to navigate our tax software for us. I know, that's exciting, right? Trouble is it's not cloud based because our software isn't cloud based unless you use Pro Connect.

All my. Yeah, all our software is cloud based.

So right now we have some browser based AI agents. Soon we'll also have desktop based AI agents.

But that's what she can do, supposedly. Well, I call her she, but chatgpt. She. Yeah, my little agent that can be on my vdi.

Yeah, yeah.

So I was wondering if anybody else is doing that so I don't have to reinvent.

There's people testing it. There's not like a cool reliable version of it.

Okay.

You may have seen the story I shared of a guy, a tax pro, that had a chat GPT agent mode complete a tax return and TurboTax.

Okay, yeah, I saw that too.

Did the whole thing. Output was the exact same as when he ran it through his Drake or whatever it is that he used. Honestly, right now it's good enough to actually do some pretty meaningful work.

I wanted her for Scope too. Like I wanted. So she sells and I wanted to be like, can you push their tax return and their books so I can get a scope idea for her to develop those?

When you say her, are we talking.

About Claire of my age? Okay, her, Marisa. So she sells. I'm the techie. So that's what I was trying to do. I want to see if anybody else was doing that. So.

No. Probably the coolest things I've seen so far are folks that will take like the XML file that is the E file and run that through like Gemini or ChatGPT or something and do a review of that compared to the source docs. Okay, so a problem here is like the tax return and all that, we can't get structured data out in a way that AI can understand. Like a stack of PDF tax forms doesn't know how to make sense of that. Some tax softwares will give you the XML as if it were to go to the irs. Because what gets an E file is an XML file. Some tax softwares will give you that, which is a structured data file that AI can really do a good job going through and comparing it to your source docs. That's cool. Not really an agent per se, but the cool thing that I do feel like is really close is agents. Like ChatGPT's agent mode that are desktop based, that can use any of our legacy tools, and we can say, go through this PDF page by page, enter it into the tax software. If you've seen the example I did where I took that Excel 1040 workbook, that's like 60 tabs and I gave it like 10 tax source docs, brokerage statements, W2s, 1099, Social Security statements, all that stuff. And it can, in the spreadsheet, figure out the tab to put it in and pull all every data item off of the W2 and like do all that correctly. You can totally see that working in our tax software too, right? So that feels like it's like next 12 to 24 months. Here's the rub though, is we're like going headlong into a decade of grappling with what can I trust an agent to do without my supervision? In fact, we're already there because you have a good agent and ChatGPT for business. But I don't feel great cutting it loose in my QuickBooks file without babysitting it. Right? Get ready for the next decade of grappling with this because it's not going to be good enough until it is. In the same way that my team is like not good enough to do that unsupervised until they are. It's going to be such a messy transition. It's going to be weird and hard to know what's right. But I would argue accounting firms are very well suited to handle the imperfections of AI because we already have a quality assurance process. Like we already have a review process to make sure everything goes out the door at the same standard. You think AI is dumb? Boy, have I worked with some interns. So, like, I feel like we have already kind of built a machine that ought to be able to handle that well. And so hopefully, even with an imperfect AI, we can still make use of it. I am stoked to hang with you all tonight. Thank you so much for being here. We're coming back here in Q2. We're going to do this again May or June after tax season. I know, I know, I know, I know. And thank you so much for coming.