611 The Most Important Software in your Accounting Firm [And the cost of getting it wrong]

Listen up, did you hear? That Jason on FIRMS is going on tour. Buckle up, it's the show you love now with snacks and an open bar. The tour is halfway through, but we still need you. For tickets and more, head to JasononFIRMS.com. JasononFIRMS.com. Now it's time we end the song. Your practice management system, it is the most important software you pick inside of your accounting firm. It's the highest stakes decision that, man, I can tell you I got wrong. But there are so many traps in getting your practice management system right, not only in selecting the right one, but setting it up correct. We're going to run today through these 6 most common traps when it comes to setting up your PM, kind of the operating system of your accounting firm. Also, we're going to speedrun a bunch of listener questions today. Should we be pricing our work differently if a human does it versus AI? Does AI increase the risk of niching down your accounting firm? Got a growing number of people that are talking about using AI to automate things in their client's back office. How do we charge for this? Goodness, goodness gracious. You guys ask a lot of AI questions. Am I afraid of AI replacing me? And a new surprise segment. First time. I think you are going to love it, gang. Let's have some fun. Let's talk accounting firm stuff. My firm's on fire, I'm all burned out. Clients are calling, I'm pulling my hair out. Welcome to the Dirty Dozen. How do you do, fellow accountants? My name is Jason Staats. Welcome to Jason on Firms, where we talk accounting firm things. That transition you just saw, we're in the middle of a series called the Dirty Dozen. These are the 12 biggest headaches for accounting firms today, as sourced from the 1,000+ accountants that came out to my live events last year. These are the real things that, that firms are stuck on today. Uh, practice management system. I mean, it is like, it is the backbone, the spine of an accounting firm, and there are umpteen different ways where this can all go awry. And the, the system that is supposed to keep everything organized actually becomes a monster and a, and a job just to manage this thing when it's supposed to be helping us. So let's dive right into the 6 most common issues that firms run into with their practice management systems. Number 1 is simply paralysis around selection. This could be picking one for the first time, but it is even more common looking at all the other ones when you've already got one. Doesn't that grass look ever so green over there? Here's what this sounds like in the wild. Currently, our practice management system is not great. It's the biggest struggle in our firm. We're highly considering switching. It is the biggest decision facing us right now. Another one: biggest thing for us right now is finding a practice management system. Another one: I've looked at all the practice management systems out there. They don't do what I need them to do, and I'm stuck on where to go next. Maybe this goes without saying, but it is worth acknowledging that there will never be a practice management system that is completely perfect for us, right? It's amazing, even though we're all in the business of doing the same thing, how differently we get work done from firm to firm. It's one of the really big values of seeing into other people's firms is you realize how you just kind of backed into a way of doing things. Oftentimes, like for no good reason. But because we all work in wildly different ways, there's not a software platform that works for everything. And it's why I wish it was as simple as me being able to tell you this is the best platform. But there is no such thing because people approach work in such different ways. It's the reason why two people can look at the same platform and be like, oh my gosh, amazing. Where's this been all my life? And then the next person is like, how does anybody use this? I don't understand. Two people doing the same type of work can have those wildly different reactions. If I can give you some kind of some best practices here when it comes to the FOMO, kind of the feeling like you're missing out on a better platform, but also like getting down to sort of ground truths and understanding, is this actually better or not? Number 1, don't be influenced by demos. Like software demos from a sales rep are probably among the worst ways you can learn about a platform because I don't really think they bring you any closer to the ground truth of what is it like living with a platform. This is where we need to leverage our peers as much as possible. And so if you're considering switching from System A to System B, do you know people who are using System B who will let you pick their brain and show you like how they use the platform and also what are its limitations? It's very easy to see that other tool that may have one thing that we think we really want and jump to it only to find that maybe their implementation of that thing is actually not what we need, or there's 5 other shortcomings with the platform. Sussing that information out from a sales rep, that's not the way to do it. I've spent a lot of time with sales reps. You would be shocked just how little they know about accounting firms and what actually happens inside of them. These are not the people we need to be bringing technical questions to. But if you can bring that to a firm owner who uses the platform, you'll get much higher quality information. Once you are on a platform, like, we really have to find a way to sort of limit the amount of time we spend thinking about this and working on this. My opinion here is if you, if you're in the in the US and you touch tax work, the 60 days after the April deadline is really the only time we ought to be considering any changes to our practice management system. And even if you do change, you really shouldn't be doing that on more than like a 2 to 3 year cycle. It's just such a tremendously huge undertaking, and it really takes years to master a system and get it set up as well as it can be set up for you. But unless we somehow time gate the, the period of the year that we're willing to be thinking about this, it drags on and it just distracts us 365 days a year. Usually the cause of this is a whole bunch of shiny object like, oh, this company just launched this feature or that feature and you think it's amazing because in your head you just project onto it everything that you want that thing to be. In reality, it's not that. I mean, especially new features in practice management systems are historically very half-baked. And honestly, I don't— I don't want to be the guinea pig. Like, I don't want to be the accounting firm that has built on all these brand new things. What I want to use is the stuff that already works. And so sometimes what keeps us from pulling the trigger on that tech decision is a company or a sales rep will be like, oh, we're going to ship this, we're going to ship that in Q3, Q4. It's coming, it's coming, it's coming. And you're always making tech decisions on something that is not yet real. And then it comes out, if it ever does come out, when it comes out, more than likely it's disappointing. It's not the full version that you actually needed. And even worse, oftentimes those things don't really get developed any further. They ship in this sort of half-baked state and then don't really get much attention. And so then you're like, what was I waiting for? Why did I wait all this time? Time for them to bring the version of this thing to market when it isn't actually what I needed. I mean, there's so many examples of this. Pick what is the best time of the year for you to lock that decision in, make it happen. But then the rest of the year, we got to be focused. Go as deep as you need to go to know that you're making the right decision. And these days, because we can network with other firm owners, you can truly get to the right answer, even if it's not a perfect answer, and have total confidence in that decision. Do that work so that you can have focus the rest of the year. Second headache around PMs here is the migration crunch. The fear around what a move will entail and the very real headache that is getting everything from system A to system B. There's another argument for having a specific time of the year where you're able to or willing to tackle this project and other times of the year when you won't. This also goes a long ways with your team who may be, uh, exhausted from change. If we can kind of block this to a certain time of the year, Everybody understands if we're going to do something like this, it's going to happen within these months. Now, really practical tips here. It is so helpful to bring in a third-party implementer if you're doing a big transition like this. Not someone who works with that software company, but a third party who's done this with tens or hundreds of other accounting firms. You get all the wisdom of them having done all these other transitions with none of the noise from the software company that might not be realistic. And so many people get burned in the onboarding process when the salesperson makes all these promises and then it comes to the actual execution of that implementation, you're like, wow, this was not— is not what I expected. Either they're just not super on the ball or the promises that were made, they're not able to deliver on. This is why pulling in a third party, maybe even before you sign that contract, is totally worth doing because they can tell you what will actually work and what won't. And then you could even have this person on retainer longer term to pull in to help with ongoing setup things. But they have a window into other firms and they can see best practices and the way that we don't. Like, I've got people that I send to, uh, for, for pretty much every practice management platform that I'm pretty sure almost all of them now have done over 100 firm setups. That's incredibly valuable for you just from a tactical standpoint, but also from a change management standpoint. Because if you run a team, you will bump into situations where the team is like, I don't want to do XYZ, or what about this or that? And for you to be the bad guy and disagree and that all come down on you, that can be a lot to carry. It was in my experience very helpful to be able to flex some of this to a third party to say like, you be the mediator here. What do you think makes sense? And then it's them sometimes having the hard words or, or drawing the line in the sand and doesn't have to be you. Just that extra voice in the room when you're navigating that stuff can be tremendously useful. Last thought here on migration. There's, there's oftentimes a lot of excitement around like, oh, we got it. We just got to rip the Band-Aid off and do all these things all at once and put the new portal in front of the client and do all this stuff. I don't recommend that. That. In fact, specifically the client experience side of a platform, in my opinion, that's the last thing to roll out because it is the stickiest thing. It's the hardest thing to change. A common thing I find when folks are trying to roll out a PM too quickly is you'll be introducing the client to the client portal experience before you've even kind of got your sea legs under you with how the whole platform works. And so you are trying to convince them to lean into a thing that you may not even really believe in yourself. Yet. And so be thoughtful about like, what are the phases and how this thing is rolled out? We really need to have confidence in what we're doing before we then put it in front of the client, because if the client can just smell a whiff of that uncertainty from you, they're going to be like, I don't know how I feel about all this. Third trap when it comes to PMs, it's not a good time, man. I don't have time right now. I've got X deadline, this or that coming up. A number of these quotes that I have from people here are like, I bought this thing and I— it's been over a year now and I still haven't implemented it. I just haven't found a good time. This is one of those things. It's like burying a child. There's never a good time. You just do it and then you figure it out. Doesn't mean you can't plan for it. Doesn't mean you can't prepare a room for it and get the crib ready and all that stuff. Goodness sakes, though, don't wait to find out the gender. This is a thing that I have never understood. In a world where you're trying to plan as much as possible about what, what is going to happen next with this human that you're bringing into the world, to not know the gender. Oh my gosh. That's not a project that I want to save until the baby comes out. Now, your PM, while there's never a good time, it is one of one of those things that we kind of have to make the time for, right? And I will say the— maybe the biggest mistake most firms make is they will do this change right before the end of the year. For some reason, we have this, this, uh, thing with calendar year cutoffs where certain big cyclical changes we will only do around calendar end. I don't know if everybody works this way or if accountants are especially this way, but for any type of accounting firm, whether you're a bookkeeping firm, tax firm, your first 90 days, first 4 months are the sweatiest time of the year. And it's the worst time to be riding into battle on tech that you're not super comfortable with. So that's why my argument here is the best time for tax or bookkeeping firms to make big changes to their tech stack is once you are over that Q1 hump, kind of the rush of all the year-end work. Now, to be clear, if you are coming up on the end of the year and you need to make a change, I still think that it is better than waiting until the next, you know, Q2. Because if you can squeeze that change in before the end of the year, it means in Q2 you will be working on higher quality problems, higher quality decisions, rather than get to Q2 and be like, oh, this is this thing we've already known that we need to do for the last 6 months. We're just starting it now. It will be not fun going through a busy season on new stuff, but it is still better than not doing it. But the best time to do it, honestly, as this podcast is coming out, is right now. As I read this ad, I am feasting my eyes upon talented accountants that you could literally, literally book an interview with right now. Like Ruru, a CPA, a tax pro, $3,500 a month. He's got experience with CCH Access, bless your heart, CCH Engagement, QuickBooks Online. Gang, he is one of many accounting pros that you can peruse at the Cloud Accountant Staffing portal. We'll link it down in the show notes. It is a veritable smorgasbord of accounting talent, folks that they have pre-vetted where you can go in, you can see, see their experience. You can literally see an intro video that they've recorded and you can book an interview with them without ever even having to hop on a call with Cloud Accountant Staffing. Amazing. We got tax pros, bookkeepers, auditors, executive assistants. Oh my gosh. I got a lot of people in here right now. 45 candidates because I know you need that next dream hire. You really do. What do you got to lose? Okay, go check out the portal, book an interview. Feels like a win-win, right? You're only going to move forward if you find somebody you love. Cloud Accountant Staffing, run by folks that used to run an accounting firm, they make it as easy as possible for you. To learn more, check out the link down in the show notes. Hey, if you're done licking your wounds from tax season, if you run more than a few hundred 1040s a year, you got to look at this episode sponsor, Sorban. One of my leaders in tax workflow automation can save you a a tremendous amount of time right now specifically on the intake part of 1040 workflows, but they're also working on connecting to your tax software automatically, like pushing data in there. They're working on automating the delivery of the tax return. But this is like the fastest growing category in tax tech. If you're a U.S. tax firm, you absolutely need to have a good tax workflow solution nailed down. We did about 1,800 1040s a year in my accounting firm. This would have saved this so much chasing clients for documents and just tedious organizing of all these PDFs. Oh my gosh, can't say enough about Sortman. We actually did a full demo of their platform on my YouTube channel not so long ago if you want to see it. But to learn more about Sortman, check out the link down in the show notes. Headache number 4 with PMs is getting the setup wrong. And practice management systems these days are so gosh darn complex that if you are coming into a system and learning it for the first time, you almost certainly will not just like back into what is the optimal setup for you. And I get being the tinkerer and priding yourself and like, no, I need to understand this system to its full depth and kind of be the one in the weeds setting it all up myself. And this is the main pushback I get on bringing in a third-party implementer is they're like, I don't want to delegate my understanding of this platform. The trouble is these systems are so big and so complex that you can't just wade into it and start setting it up in a way that will make the most sense for your firm. Or at least you can't do it as well as somebody that has also done that same thing 100 other times. Like, is there a way that we can marry both, like, still go deep on the platform and learn how it works, but pull in an expert that can be a coach to say like, hey, here's what I've seen in other situations, because very commonly it will take firms like 3, 4, or 5 years to actually have something dialed in. A very common thing I hear with TaxDome, which has a lot of customization in how you set up like the work pipelines, is people will say they start using it, but they will always say, we don't feel like we're getting the most out of it. We don't feel like we're using it to its fullest extent. That is a benefit of pulling in a third party is you get to like your year 2, 3, or 4 setup in year 1 because that person can tell you all the shortcuts and get it further straight out of the gate. There's another situation where the more visibility you have into other— how other firms use it, the faster you will learn and develop. Imagine being able to sit down in a room with 10 other people who use your practice management system and see their live setups and you're like, oh my gosh, I never would have thought of using this for that, or I see you're doing this, but doesn't that create an issue over here? Like, it just kind of blows your mind how many different ways people do the same things, even when it comes to our PM setup. So the more visibility you can have into that stuff, the more likely it is you're really going to have it dialed as well as it can be dialed. Trap number 5 is throwing too much at your team all at once. You may have heard me say this on the podcast before when, like, people will raise the question of like, yeah, we're going to change this and that and this other thing. We're going to change our tax software and our practice management system. And I'm like, like, whoa, pump the brakes, brother. I— have you started this yet? Because that is a whole lot to bite off. Not everybody's team is the same. Some folks' teams will be, uh, more open to, uh, taking on a big volume of change management at a time than others. But know that there's like this sort of exponential hairiness to trying to change multiple things at the same time. In fact, last podcast episode we were talking— we're digging into this $700,000 a year bookkeeping firm, and they made this sort of org chart change where they put people into different roles. And they said in hindsight, they wouldn't have moved everyone into different roles all at the same time. It was messier than they thought it would be, and it took longer to get that all to sort of settle than they thought it would take. And I mean, that is kind of the core of almost all change is when we think about what will go into it, we are skimming over so many details and you're— as you get into it, you start kind of paying down this ignorance debt of like, oh geez, I didn't know about this and this and this. And so it always balloons. Into a much bigger thing than you think it will be. And as is the case with all things, in order to do it really well, it takes more time and more money than probably you expected heading into it. And so to tackle 2 or 3 things at a time and have 2 or 3 different things sort of exploding and becoming these bigger projects, that's very, very hard. So this is a situation where I think we have to give ourselves some grace. It may be really hard and may feel risky to not make just rip off all these Band-Aids at the same time. But you run into a bigger risk that is like, what if I just torch my team in the process of doing this? When I was running my firm, like, by the end of running my firm, I was hiring people off of, off of Twitter who were like bought into my vision for running the accounting firm. And before they would come in, I would tell them, you're probably expecting to be like stepping on board the bridge of the USS Enterprise. This firm, it ain't that, buddy. It's an 80-year-old firm. And I, when I bought it, it all the trappings you would expect from an 80-year-old firm. And I had this one lady I worked with who has worked in office with me, and she was so good and so sharp. And there would be all these situations where she would come in and she'd be like, oh, we don't need to do this. We should change X, Y, Z. And I'm like, you are so right. And she's like, what do we do next? And I'm like, well, how should we slot this in alongside this, this, and this other things that we're changing? And she's like, oh yeah, we should probably do those things first. And every day it was like a new thing, a new idea. To improve the firm, but it had to ultimately get slotted into that list of priorities. And that's so hard if you're a person that excels at finding those opportunities. If you are very good at seeing what can be improved— this, this might be my wife's favorite, favorite character trait about me is my ability to see the things that can be improved. If you have that gift that I have, it can be so frustrating to then not do it because there's other stuff in motion, other things happening. You can only change so much stuff at a time, but that is like coexisting with other human beings. And that is kind of the core of change management. Honestly, in my life, you want to know what came out of that is YouTube. Why I started making YouTube videos was I was steering this big old ship of an accounting firm and frustrated at how long it took for these things to, to change. And I just had the zoomies and I needed some sort of outlet. And that's when I started making videos. And so maybe there's a hobby or a more constructive outlet than just getting angry at your team that they can't change faster. Maybe that's where knitting fits into the whole, the whole new paradigm for running an accounting firm. All roads lead back to knitting. Okay. PM headache number 6 is breakdown in adoption, rolling it out. But your team, they still got that secret little side spreadsheet that they don't tell you about. Ever had one of those? You got this whole new system, but they're like, okay, but I still got my system that I'm going to use on the side because I don't super trust it yet. Got a whole bunch of quotes from people to this end. Getting the team to use all the features of the tech stack we already have, sticking to and improving the systems and process processes that we have already put in place. Everyone still defaults to the manual way of working and communicating and not using the tools that we've already built. So frustrating. Like, I mean, this is like, if you've done change management in an accounting firm, you know what a headache this is. I do think incentives come into play a little bit here. If we are excited about this new system because it'll make us more productive, usually your angle as a leader or an owner is like, hey, we can get more projects out the door. Hey, the firm can be a little more profitable. If your team doesn't see any of that upside, if they're not on board for making more money when the company makes more money, then it might be unreasonable for us to project onto them that they should have the same level of excitement as you. And so what they do is something more along the lines of like, what's the most comfortable way to spend these 40 hours? And the most comfortable way is not like learning an entirely new tool and approach to getting, getting a job done. Even if we look at clients' adoption or lack thereof of a client portal, if you're rolling out a client portal, either a new one or rolling one out for the first time, I think the best thing to do is come into that that transition with the expectation that clients will not use it and they will fall back to the old ways because for them, that's the path of least resistance. That's what they've always done. It doesn't require them learning something new. And so when a lot of people roll portals out and they're like, well, nobody used them. Nobody, like nobody, nobody likes it. It is not so much that they don't like it as much as, well, they did their default. They did what they always do. And it will, for us to get them to change, We have to assume that we will have to continue reeducating and reminding them like, hey, thanks for sending this. By the way, here's how to submit that right through this portal. Here's a 20-second explainer and just plan on having to do that a few times before that wiring changes for a person where they will the next time do it the way that you actually want them to do it. Our teams are not too dissimilar to that, like especially folks that have been in this profession for decades and have their way of doing something. That's a lot of wiring that requires rerouting to do something a different way. And that is frustrating, but the reality is like, it will take time to get them thinking that different way and for that to become the new default. Now, ultimately, I'm willing to give some grace on people using their little side systems for a time. Uh, if it's coming from a place where the person wants to ensure that they're doing their job correctly and they've got some other way of tracking it, like, great. Like, that's not something where on day 3 I'm going to be like, Mordalena spreadsheet, you don't get to use it. I will allow a little grace for that as long as they are still complying with the new system, because if they aren't complying with the new system at all, then that gets in the way of other people doing their jobs usually. But if they want to also have their little side system, I will allow for that for a time. But if we are 3 months, 6 months down the road and you're still using that side system, what I want to know is what is that doing for you that our core system is not doing? And maybe there's an opportunity to make an improvement to the core system that will handle maybe something they're still tracking on the side so that we can once and for all make that commitment and have it work for everybody. But there is a risk of being too authoritarian, I think, in, in the throes of a change when people are still getting their head around what that new system even looks like. And they're probably not at the same place you are where you've spent a bunch of time and effort thinking about this. And so we got to give them some grace to kind of come to grips with it at their own velocity, which may not be the same as yours. We're getting down to our last few items in the Dirty Dozen, which means you are never going to get to see that little line dancing video again. The Dirty Dozen transition. I've had people on this live tour that I'm in literally come up and be like, I love the Dirty Dozen transition so much. It makes my children so happy every time it comes on. And to think that I'm having that influence on the children of this world, the next generation. It warms the cockles of my little accountant heart. But let's rip me right back down with a brand new segment called Roast Your Podcast Reviews. Roast my review. Roast my review. Is it nice? Is it mean? Let's roast some reviews. This is a segment where I passive-aggressively roast and rate the reviews that people leave for my own podcast on Apple Podcasts, on Spotify. If you are enjoying the podcast, do me a solid. Whatever platform you're listening on, go pop in a 5-star review. I mean, you got a job. Don't, don't overthink it. Don't— you don't have to write a big long love letter or anything like that. Just boop that 5 stars because it does make a difference for what we do here. We got a few, uh, a few reviews here to roast. First one here is— oh good, it's a 5-star. Jason's podcasts have exponentially helped my firm. I don't even recognize my firm from 4 years ago. Night and day. Thank you, Jason. Quick to the point. I love that. I'm gonna give that 5-star review, uh, 4 stars. I'll be honest, I don't know what a 5-star looks like for me yet. And I'm talking about the review that I'm giving to the review. I just want to leave some headroom there for the exceptional, you know. Hey, real quick, the most important question accounting firms are asking right now in 2026 is, how do I use AI securely in my production workflows? I've said this many times, don't take security advice from a YouTuber. What you need is actual, like, proper IT help, like this episode sponsor, Farado. If I had to shoot from the Pro tip: with what I've seen from folks, Vero might be the fastest growing IT solution for small accounting firms. I say small, I mean that like 100 employees and under. You need an IT group that just works with accounting professionals, otherwise you are paying this IT group to learn accounting firm things. Like I had a local IT guy that I once brought over and spent 2 days watching him learn CCH engagement, like how the like database worked on my server. Oh my gosh, please don't do that. Work with an IT group that only supports accounting firms, particularly right now as it is so important that we are beginning to implement AI effectively inside of our firms. You want to do that responsibly too, right? You need better help with this stuff? Look no further than Verito. They do hosting. They'll be your entire IT group. They'll do your— whisp. Can't recommend them enough. Check out the link down in the show notes to learn more. Hey, I know you love Cloud Cowork as much as I do, but have you heard the news about Canopy? Coworker. Subtle is a new AI assistant they launched inside of Canopy, one of this episode's sponsors. Canopy, a practice management system that is a feature nerd's dream. They're trying to cover as much of everything you need in an accounting firm in a single place. But as we talk about on this podcast often, it is much easier to roll out an AI agent inside of a closed system than it is to roll out an AI agent that works across like all of my systems, right? That's the trade-off. I want the AI that works across all my systems, but we're struggling now with like, what's the most secure way to do that? The AI agent that works inside my all-in-one system? Buddy, that is easy. Flip the switch, count me in. Strap in, buckle up, I want it. Canopy is so convinced that you're gonna love what they got to show you, they're gonna cut you a check for 75 big ones. They'll give you a $75 gift card. Gift card to Bed Bath Beyond. What's that? Okay. I'm not sure where the gift card is for, but if you book a demo with Canopy via getcanopy.com/jason, I'll put that link down in the show notes. They give you a $75 gift card just for coming and demoing. Do it. What do you got to lose? Next up, great content daily. It's 5-star review. Super helpful to firm owners, both business operations and technology. Very— can see nice and to the point. That was like 8 words, but those 5 stars makes the machines more likely to recommend me. Okay, next one. We're taking a turn. Here we go. Great podcast. But lots of ads. I love the information you're providing, Jason, but please dial back the amount of ads by at least 50%. I understand you got to make money, but good lord, a 100— what, 130-minute episode having 5 to 6 pod ads is crazy. People have gotten way too greedy with the amount of ads they're willing to run in the middle of a free podcast episode. This is a completely valid review. I'm going to be honest in my review of your review. I'm going to dock a couple of stars because there are some mistakes here. 100 and 30. I think they meant one 30-minute episode. It says 130-minute episode. Also, the last line about the audacity of people running too many ads in a free podcast episode. Isn't that why you would run more ads? Okay, there actually is a right answer for this. How many ads should be in a podcast episode? This is something that we measure and like there is kind of an industry, industry standard right now. Best practice is around 8 minutes of ads per hour of a podcast, like across across big podcasts, across podcastdom, best practice is around 8 minutes per hour, which is actually like way less than like TV, which is like 18 minutes per hour. Now, interestingly, podcasts that have a free version and a paid, uh, ad-free version, which is a growing number of podcasts these days where you can listen to the free version and there's ads, but you can also pay something and get an ad-free version, those types of podcasts, the free version usually goes up to 12 minutes an hour or more of ads. Honestly, like probably just to like push people to the ad-free version because the ads are just so irritating. Right now on the podcast, podcasts usually come in around 60 minutes and we run 6 ads per podcast. With our advertisers, we are contracted for those ads to be 60 seconds. Part of the problem is, is I just, I enjoy doing the ads too much and the ad will go off in some direction that I think is fun and it makes it longer than a minute. But at 6 ads per 60-minute episode, we're doing about 8 minutes of ads per hour. So we're actually right at about the standard right now. Now, one big thing here is pre-roll ads and post-roll ads definitely impact the listener's perception of the ad load in a podcast. So pre-roll ads are the ones that come before an episode even starts. Post-roll ads happen after the end of the episode. We've never done pre-roll or post-roll ads. We've only done ads in the middle of the episode. But if we did move ads to be at the start of the episode or the end of the episode, I mean, if you're like me, you are just like hammering and the skip button to get through those, it would reduce the number of ads that are in the middle of the episode. So maybe that is good feedback that we need to think about, is instead of just putting all the ads in the body of the episode, move some to pre-roll, post-roll. Mr. Bird, thank you for your review. I see your 3 out of 5 star review, and I give your review— honestly, I'm gonna give it a 3 out of 5 stars myself, your review. I'd probably give it a 4 star if there weren't for just some, some mistakes in the review itself. All right, but that is a totally valid Last one, required listening for all public accounting pros. Bless you. Oh, this is Don Cooley, the pride of Ohio. Sincerest congratulations. The public accounting firms have long needed a voice and you have been the perfect one to be that person. Always informative, thought-provoking, and humorous. The thing I listen to on my commute to work every morning. You're honestly a pretty big deal, my friend. I love all the success you're having in this uncharted area. Is that— can we give that one a 5-star? That one might have been a 5-star. Thank you. That's very kind. Thank you for your reviews. Thank you for letting me review your reviews. If you want to have your review reviewed, go leave me a review on the podcast platform that you listen to this podcast from. If you watch this on YouTube, maybe go out to Apple Podcasts or something like that so that your review can be reviewed from me as well. Also, hey, did you hear the transition into the news segment? Whew. I'll tell you what, we got some pretty solid bops. Most of these transitions, we've got like 3 to 5 songs that we cycle through for the transition itself. I hope the Roast My Review segment comes along because some of the The songs we've got for the transitions are really good. Okay, with that in mind, here's a song about mailbag. Mailbag, mailbag, this segment is called Mailbag. Mailbag questions come from email, from social media DMs, from YouTube comments, from my cellular telephone. Number's 1-516-980-4968. Send me a text, leave me a voicemail, and we might just tackle your question on the podcast. First up, do you see a world where there is a premium placed on human tax preparation or bookkeeping versus AI? I do see a world where people pay a premium for this, and I think we are already living in it because for most of what we do, there are productized solutions already in the US. For tax, there's TurboTax, a software platform you can use for it. For bookkeeping, we have like big productized bookkeeping solutions. Even Intuit sells their own. And so arguably already people are paying a premium for quote unquote the human, a higher level of support than you just get from some productized offering. But I think what this question is getting at is almost like, is there going to be a more explicit markup? Some accounting firms today will charge clients for sending them paper documents. They will charge like a scanning fee, like $30, $80, something like that for not sending them their documents digitally. Is there going to be a line item in the future where it's like, do you want a human to review this return or something like that? If I were to guess right now, I would say probably not. That feels a little bit dystopian. I think if people are willing to just let the AI do that thing, they probably aren't coming to us in the first place. They're going to some other productized service provider that has a really good AI for doing this stuff, and we're probably not even talking with those folks to begin with. Now, net overall effect for this, I think I still stay in the same place as I've been the last couple of years where AI ultimately makes the productized solutions continue to come up market. Market, and they keep getting better. And this is a continuation of a trend from the last 5 years where they have been getting more powerful and charging more money for, you know, TurboTax to have this full-service offering to do your small business taxes, and you can call and talk to an enrolled agent. Like that, like the level of service for these productized offerings continues to go up. You look at a productized bookkeeping service like Pilot, you have to pay thousands of dollars to work with them, more than many accounting firms charge. But AI, I think, ultimately makes these productized solutions continue to come upmarket. And that only becomes problematic for people like you and I if we are not also going upmarket and not trying to serve the same sort of client and deliver the same sort of service that these productized solutions offer. And this is why I will say things like, uh, never let AI become, uh, become between you and the client. Like, never let AI get into the interaction. The touchpoints are kind of like what we have left, right? If you assume there will be a future day where AI can do most of the production, what's left? It's the interactions you have with the clients. It's the intelligent questions that you can ask. It's the back and forth that can lead to the production actually getting to a better result. AI being able to do a set of books or, or do a tax return. We're pretty darn close to that. But what matters is what are the questions that you're asking? Hey, what did you put any business stuff on a personal credit card? You did? Okay. Hey, did you pay any interest on that personal credit card? Can we allocate part of that to business? I see you got this office and home, but there's like no furniture. Are you just sitting on the floor in your office and home? So much of doing this well boils down to the questions that we're asking, not just getting the forms and putting the numbers onto some other forms. There's a lot more to it than that. And so our place long term is not in the production, is not in entering things into Tax Offer or classifying transactions in the accounting file. It is in how we relate to the client, how we help them feel understood, and the quality of the questions we can ask them to get all of the work to a better outcome. The premium will be built into that because we need to be charging more than the productized services. But I don't think people will come to us for the AI version. They're only going to come to us if they want the human. Next question on AI doing your bookkeeping. If a bank statement only shows the check number, dollar amount, and date cleared, how would AI even know how to categorize that expense? So many bank statements, if you have checks that clear, there's a whole section for the checks, right? It just gives the date cleared and the amount and the check number. How's AI gonna know how to, how to categorize that? I mean, the short answer is that it won't, but the better framing for that is how will you know how to categorize it? What's the progression you would go through? I would probably look and see like, is this something that comes through every month? Month. Is there a check for $1,515 every single month around the same time of the month? Oh yeah, I can see it for the last 13 months. This is the monthly rent check. Great, I'm gonna classify it that way. AI can do the same thing. It can look back and see like, is there a trend of similar transactions? Otherwise we ask for it. And so how is AI helping us in that situation specifically? Well, it's going back and looking through the history and seeing if it can make that determination itself. If it can't, then it adds it to the list of questions. No different than like what you would ask a junior bookkeeper to do in that situation. In a perfect world, you could pull check images, you get the bank statement copy that has check images. In fact, last week on tour, somebody shared the use case of how they've got this client that has to issue hundreds of checks a month, but now they use AI to review the check images and put in the recipient and the classification in the accounting software because AI can read the handwritten check that like that is fully done by AI for them now. So yes, like there, there will be gaps in information that AI can't magically come up with the answer to, but that's no different than when we are working with clients and end up having to send 'em some questions. What is the most surprising thing you've learned? Oh, I've learned from hosting my in-person events. That's a great question. The most surprising thing I've learned, it is that the breakouts, when we, when we put attendees into small groups, are literally the highlight of the day. In the feedback forms, people say, This was the best part of the day. And to be clear, those breakouts happen between an opening keynote from me and like a final kind of town hall Q&A thing from me. In the middle is the breakouts. And so when people say that's the highlight, my feelings are totally not hurt. No, I'm, I'm kind of joking, but I like that. I mean, this is kind of my mission now is like, how do I just connect more accountants with each other so they can have these conversations? Everything we do is kind of built around that. Like, people find us from the edutainment content, but the only way down into the funnel is like, oh, Jason has a paid community and that's the whole point of the community is people meet each other and Jason has these paid in-person events and the, the whole events are built around you being able to meet other local people. So that makes me so happy that the most powerful part of these events is actually people meeting the people in the room. And that totally maps to my experience going to accounting conferences where I'm like, poof, here comes another hour of watching someone flip through a slide deck and me wondering if this was sponsored or not. And then you go out in the hall or you sit down at lunch next to a couple of people and you're like, I just want to jam with these people all day. Like, this is the best part of the conference for me is meeting the other attendees. So I will say that's been the most surprising part of hosting live events is just how easily that stuff happens. Like, you kind of have to get out of the way. There's a world where you overprogram the events and you get in the way of people just connecting with each other, but that the feedback is like, this is the very best part. That's amazing. Like, that makes me super happy. But the ease at which— with which that happens that has been a surprise. We have found it's helpful to do things to make the connecting as not cringe as possible because we are accountants still and not everyone is comfortable walking up and meeting somebody. And so we will literally like control the process and be like, "You, you are now in a group with this person and that person." And they're like, "Cool, we didn't have a choice. We're together now." And the conversation just happens. But if you don't do that, if you just stare at the room and you say, "Everyone make groups of 3," not gonna happen. You'll be 25 minutes in and 50% of the room will have not found a group somehow. So there are ways that you can make this just easier so it's not this like socially taxing thing. But that I love. That just the notion that people just want to connect with each other. That's so much cooler than listening to me talk more because who needs more of that? There's an abundance of that out on the internet, right? My thought leadership journey. It's where I try to collect what I think are the most important things for you to see every single week, sent to you every Wednesday morning. Make sure you don't miss any of the good stuff, right? Increasingly, we're also building into that some, like, of the best evergreen thought leadership I've ever done, kind of make that, like, the most action-packed, highest quality email you get to your inbox each week. Because listen, we're all busy, all right? You're not gonna see every single little thing that I put out. Goodness sakes, there's just too much. If you're not on my newsletter yet, check that out, jasononfirms.com, or I'll put a link to it down in the show notes. Hey, quick word from one of today's sponsors, me, me. Yes. I run a community, Realize, that is for accounting firm owners. And Realize is kind of the secret behind how I've done all of my content and been able to like financially turn thought leadership into a business. About 100 firm owners in there. Realize is a systematic way to build connections with other peer firm owners. It's not a framework for how to run a firm. It's a way to introduce you to other super cool firm owners. Right now we're putting together small groups so you can have a group of like 5, 6, 7 other firm owners just like you that you meet with every single month, run very similar firms. Having this for me totally transformed firm running. My North Star, like my goal for you coming into this group, is to make a new best friend, somebody that runs a firm because that was what I needed in my journey. The whole community is built around that. It's called Realize. Link down in the show notes if you wanna learn more. Do you worry about AI replacing you like me? Why do you have so many questions about me? Do I worry about AI replacing me? Uh, I did. I'm not too worried about AI replacing me and what I do and all of this as much as I am worried about AI replacing my clients. My clients being you listeners, people that run accounting firms. And if I run an accounting firm, I feel the same way. I'm not super worried about AI, like, very quickly displacing accounting firms. What is a bigger risk is what if AI displaces my clients? Let's say I work exclusively with, like, creative agencies. Creative work is changing big time right now. Or maybe I work exclusively with, like, uh, VFX shops that are contracted to help with VFX shots for movies and shows and all that stuff. That work is all changing so much right now. It's kind of getting gutted because AI is so good it. And so if the entirety of my client base is disrupted, well, even if my accounting firm is not quote unquote replaced by AI, that's a problem for my accounting firm, right? I mean, we had a version of this during COVID Like, I'd built a niche practice around dental, and I'm like, I got a really smart novel idea. I'm going to charge them a percentage of collections. And then very shortly after I did that, COVID came around and they said, everybody's got to close your dental clinics, and collections just stopped overnight. And I'm like, wow, well, that was a great idea, Jason Staats. And so some like, uh, extinction event for my clients. Like, that's a big-time problem for the accounting firm. Me and what I do right now and kind of thought leadership and all that, the whole sort of internet grift, I don't worry about it replacing me because I think the thing that persists is folks wanting to hear from other people and connecting with a person's point of view. We're way past us being able to generate endless AI podcasts of even my thought leadership specifically. Like, we could generate a 1-hour podcast every single day of me talking about whatever you want to talk about. But if I publish that, what would your reaction be? You'd be like, that sucks, that's lame. Like, if that were— if I were you, I would be offended. I'm like, I'll just go watch someone who will actually show up and give me their perspective. And so I think if anything, media continues to trend from like generalist media to more special interest media. So I think this whole like me and you, like this interaction, I think this is here to stay. If there's any risk to me, it is more the existential risk to accounting firms. But if AI is coming for accounting firms, like at that stage it has come for almost all of knowledge work, I think. Like, of all the things that are inclusive, uh, like that make up what knowledge work is, accounting firm work is one of the most protected things. And so if AI really does like undermine accounting firms, we are in a wildly different society at that point. Next question. This is actually very related to what I was just talking about. Does AI increase the risk of niching down your firm? In short, yes, it does. But you know what it also does? It also increases the risk of not niching down your firm. Risk of all types have gone up thanks to AI, thanks to offshoring, thanks to the world getting smaller. There's never been a riskier time to own an accounting firm than today, I would argue, because a lot is changing. We're not quite sure where everything's headed, right? But specifically around niching down and specialization, this has long been a counterargument to niching down. What about restaurants and COVID? If I had niched down in restaurants during COVID I would have been hosed. And that is for sure a risk, like absolutely. But what I would say the more important thing than like getting the perfect niche is, is actually you being able to build the skill of specialization, of getting into a specialization and continuing to specialize a business more and more. Because niching down is not a binary thing where you're either niche or you're not niche. As soon as you niche, the question is, well, what's the next niche? I've shared the story of the attorney— not attorney, the, uh, CPA that I met who runs a firm for attorneys. And as soon as they finally committed to just working with attorneys and they did a whole rebrand, he's like, I got a problem. I've now identified like 3 sub-niches that are way juicier than just saying we work with with attorneys, and now I think I might need to do another rebrand. And so niching, like, it is a spectrum of how specialized you are. I actually prefer the framing of specialization and how specialized you are more so than either being niche or not niche. And so most firms will stay generalist until the end of time because they like the idea of kind of being able to do anything, and it feels risky to go deeper into one thing. But what the people who are niching down are gaining is one, the skill of how to niche down, the skill of how to find a more specific, more valuable problem to solve that people will pay you more money for. But also two, they are building an entire network within this niche that they would not otherwise have. And the problems they're solving within these, this niche are more scarce, more nuanced. Other people aren't aware of them. And once you get into a niche, you find that there's like a whole ecosystem of people that serve this niche. And any little like part of that ecosystem could become your next niche. And so if you did truly have an extinction event for a niche and something came and wiped it out, what are all those people going to do? Because ultimately this is about human connections and your network and all that. What are all those people gonna do? Surely they're gonna move on to something else. There will be a next thing. They're not all just gonna go play pickleball. And if they did pickleball, I don't, there, I mean, pickleball, there's probably all sorts of stuff you could get into in pickleball. But wherever those people go, you still have those connections. And along the way, by niching down, you, you probably discovered a whole bunch of other interesting things. Things that will still remain relevant even if your little corner of the industry went away. And so any exploration into greater depth, greater nuance, I think is worthwhile and still more valuable than keeping at the generous generalist level, especially as AI is now the ultimate generalist. ChatGPT, Claude, like, what can these things do well? They are the smartest person that has ever existed while simultaneously not being quite as good as specialists specialists within their domain. And so if we are generalists, in some ways we are positioning ourselves in the same way that a large language model is positioned, where it's like, ah, it's pretty good at everything. And so while it maybe has gotten more risky to niche due to AI, I would say it's also gotten more risky to remain a generalist due to AI. I don't like, if it's me, like I'm not really scared still. I'm not spooked by this as long as we're like leaning into it and learning this stuff along the way. People have very different reactions to the AI conversation from it being overwhelming and they immediately go to a place of fear and they have to like turn the episode off. Two other ones who are like, keep shooting it in my veins, man, I need it. 'Cause if you're not talking about it, who else will? It's a very polarizing thing. I mean, there was a, there was a post on, uh, Reddit last week that was like, what's everybody think about Jason Staats on the Tax Pros subreddit? And the main objections were, it was, uh, man, he does a lot of AI content now. Uh, he talks a lot about offshoring, which is like, yeah, like that's, if I were on the other side of that, the most common things I think people wouldn't like about the hard things I have to say, probably around AI, probably around offshore, also around like ads and marketing and stuff like that. Paid content for AI companies, which is like, that's where all the funding is right now. That's where all the excitement is around tech adoption is like, who are the folks that are bringing AI to accounting firms? But we do like, I mean, the number of times I've been like, are we talking about AI the right amount on this podcast? Tell me, do you want more? Do you want less? Or is this about right? And almost unanimously people come back and they're like, eh, it's a lot, but it probably feels about right because we need to be thinking about this. Stuff. I mean, even the, like, the questions we get for this podcast, 80% of questions are around AI right now. I'll be totally honest, I get incredibly sick of AI. I get very sick of the AI conversation. Sometimes I just need to, like, rinse my brain out. But I mean, the crazy thing, I mean, our first big Claude video that we put out a month ago, a half a million accountants went through that video across all platforms. That is unlike any other video that we've ever put out. And now we've just, last week we put out another one that is almost as big as the first one that we put out. And I don't think that's, like, me manifesting getting more people interested in AI. I think that is a signal that the big part of the profession is like, all right, like, all— what do I need to learn? Like, show me how I need to be using this. Because what's the alternative, right? Like, we're not going to think about AI? We're not going to try to learn AI? That is the most risky thing you can do, I think. Two more to go. This one's cool. We automated invoice processing for a client last month and discovered they were spending 14 hours weekly on manually keying them between the accounting software and their PowerToys has some genuinely useful utilities that most people never discover. These are some, uh, Microsoft-created extensions for Windows called PowerToys. We were talking about this in my newsletter. Some really cool stuff. They said the window management tool alone probably saves me 30 minutes daily. Jason, have you found other workflow bottlenecks in accounting work that simple tech solution— that had simple tech solutions hiding in plain sight? I would say the hardest stuff to automate right now is the things in your accounting firm, and the much easier place to automate automate is in the back office of your clients. And there's a really cool triage opportunity here where if I can find just what they're describing here, if I can save the client 14 hours a week of keying this stuff in— did I say triage opportunity? Arbitrage opportunity— where I can come in and be like, hey, this was taking how many hours for that person? We'll take that work off the plate. Like, we'll handle that for you. And behind the scenes, like, we're automating that stuff, especially with AI. I mean, if you've seen into to the back office of the average small business. There's so much dialing in of the accounting system and how those things integrate that can save a tremendous amount of time, doubly so now with AI adoption. I shared last podcast episode how we went, uh, we started working with these retail flooring, this retail flooring franchise, and the franchisees all had to use this awful legacy backend like accounting system. That was a great example of how you could build all this automation around this platform, but then start working with a bunch of clients just like and scale that arbitrage opportunity? Those are the golden nuggets inside of accounting firms that we are looking for. What's that really irritating, annoying pain in your client's business that you didn't know exists that you can provide a novel solution for and then go find 100 other clients just like that? That is how you build an accounting firm that just cranks and finds a really valuable problem to solve. And it's scalable because you're doing the same thing for all these different firms. So yes, like there, there are for sure workflow opportunities, but honestly, I think they are easier to find in our clients' businesses than they are in our accounting firms. That's why I had a blast building a whole bookkeeping practice. It was just really fun getting to see behind the scenes of all these SMBs and learn how we could help them. Last one. Are there a lot of people who have launched their accounting firm in the last few years? If so, why do you think that is? I don't like, I don't have any actual data on this, but I can tell you at these live events that I host— by the way, we're halfway through my 20-city tour. Jasononfirms.com/events to see the whole cities and grab tickets. I can tell you anecdotally, at these live events, like half of the room are people who have launched a firm in the last 3 years, and they're everything from solo firms to teams of 30, like firms that have grown ridiculously fast. I suspect there are more people that have launched their firm the last few years than ever before, simply because there is so much more information available out there on how to do do it. And if you think about why people historically haven't launched their own firm, it is fear. It is the unknown. It's not— it's just not knowing how to do it and how to even start. But now there's just a growing number of people out there putting out great content. Like, my best Logan Graf dig is, you know, people can go and watch a Logan Graf video and be like, well, he could— he can do it. People see that and they're like, well, if Logan Graf can do it, then I can do it for sure. And I love that joke. And you know what? Logan loves that joke too. He just loves it at like 0.8x the speed that I love it. But there's so much great stuff out there now and like online communities and like, but, but even just the totally free stuff, availability of information and also just the world getting smaller and people being more willing to have conversations and share their experiences. We talked about the Tax Pros subreddit, like the whole subreddit of Tax Pros. You can go and pick up stuff from, um, Tax Pros Discord. There are all these little things that didn't exist even 5 years ago where people can go and get good information and learn what it looks like to do this stuff. And, you know, if I think about some of the more old school dudes that I bought out in my practice and the resources that were available to them when they were my age, it's just totally unfair. Like, those resources did not exist. Now you can have someone at 30 years old who's got like a 60-year-old head on their shoulders of like all this experience and things they know not to do just because they're more exposed to the, uh, what, what other firms do than past generations were. And frankly, I think that's awesome. I like these days, you know, people say information is free. Having access to answers that can save you just like years of really painful missteps. That's amazing. It's still not going to be for everybody. And like running your own thing for sure still has its downsides, but just the wealth of information that is out there and the number of people that are talking about their journey. Brad Wooten now is putting out videos on, on YouTube. Yuri's been doing a bunch of stuff on LinkedIn. Erica Goody. So many people just sharing their journey to help the next generation of folks who are coming into this. Stuff. And I think it is ultimately for the good of the profession because the perception of what we do for so long has been not great. And you know just how bad the average firm is, like the Main Street firm you walk into right now. It is like, it's like a doctor's office or worse. Like, good luck getting that person to call you back. So hopefully we are building a new generation of firm that can change that perception. And it, I mean, it can't come soon enough with everything else that's changing in the world. So yes, I think there's more people launching firms now than ever before, probably just because of the availability of information that's out there. Gang, thanks for tagging along today. It's great to see you looking smart. The new haircut. Hey, we're gonna do this again in a couple days. I'd love to see you there. You got any questions, pop that stuff down in the comments. You want to leave me a review on your podcast platform of choice, do it. I double dog dare ya. Thanks for tuning in today, and I'll catch you in the next one.