620 The Real Reason Clients and Staff Resist Change [Here’s what to do about it]

Running an accounting firm is very much about how do I get the people on my team and how do I get my clients all working in the same direction? Even if you don't run a team, a lot of the change that scares us most is the change where in your head you're like, oh, this client's never going to say yes to this. Today, I'm going to run you through sort of 5 principles in running the firm that you want to run and ensuring that the team and the, the clients aren't getting in the way of what you're trying to build. Also, did you know the World Cup right now is propped up by accountants? Also, we're covering how to build recurring automated AI workflows to get that accounting firm work out the door faster. Plus, how to simplify your client onboarding so that the new clients coming in the door aren't like, what is— you are making me do way too much work right now. Pull up a chair, take a seat, turn the volume up. Let's do it. 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 the Jason on Firms podcast, where we dig into how to run a better accounting firm every day, whether you run one, whether you work in one, pull up a chair alongside your fellow accounting firm maxers. You just heard the Dirty Dozen transition. We are digging into the 12 biggest macro pains that are being felt by accounting firms, as sourced from my live events last year, the over 1,000 accountants that turned up in person and had a little cry over some soft pretzels, beer, cheese, and at a couple cities, even little churros. And today, The pain, it is change management. Not only internal change management, but equally important, change management with your clients. Getting your clients to just follow your gosh darn system. Because if they don't, then we're kind of beholden to like however they want to work rather than how we want to run our firm, right? You don't want to find yourself in that situation, okay? Let me run you through 5 traps when it comes to navigating change management inside of an accounting firm. It's not even about your team only, it's about your clients as well. First headache is simply the change overload trap. You're going to get this both on the staff side and on the client side. There's like this exponential compounding aspect of change where it's one thing to change one thing, but it's more than two things to change two things, if you know what I mean. I've encountered this very commonly with accounting firms who first find my content and they're like, oh, I see so much opportunity now. The scales have fallen from my eyes. I need to change this system and that system and that system.. And I'm like, cool it, scooter. There is only so much one can do at a time. And maybe what makes this really hard is when you become aware of the better way, the alternative, it just makes your skin crawl every day you have to run this unoptimized thing, right? I know this all too well. I mean, the firm that I bought was an 80-year-old firm with 40 people. It took time to change anything. And I'm, I mean, I'm a millennial. I'm so impatient. And I would hire people into my team that were like change agents. And they're like, "Hey, I see this opportunity and that opportunity." I'm like, "I know, me too. I'm excited for all that, but here's the thing is we are like redlining the volume of change that the team can handle right now." And this is made worse when your team, who's already overwhelmed, doesn't know when the next change will happen. There's this looming specter of like, "Is even more change gonna be thrown at me?" And this is a great argument for change happening on a cadence that everyone will agree to. There are times of the year when change is most likely to fit into the sort of annual cadence and times of the year when change just shouldn't happen. When you're getting into busy season, that is the last time we should be changing anything. At that point, we should have battened the hatches and we should know exactly what we are riding into battle on. This right now, frankly, this time of year right now, this is the best time for like big tech change. I mean, there's no great time. There's no time when most accounting firm teams are going to be like, oh good, yeah, no, I'd love to learn another tool. Tell me more. But we have to be mindful of just how much we're throwing at the team at any given point in time. And this means prioritizing the change that will either have the most impact or give you more momentum for future change. You've probably heard me give the advice when you've got a legacy firm that's really not modernized their tech stack at all, what's the first tool you change? You might think that that ought to be the practice management system because it's kind of the core hub, the the central place where there's the most information about your firm. So you start there, right? Because that's kind of the backbone. The problem is you're taking a firm where people haven't had to change anything in decades and just cramming the biggest, hardest change through that pipeline that you will ever make. And so sometimes it makes sense to make the easier change that can be an easy win and get a little momentum and get folks on your side and excited to do a little bit more change. But if you come at this too hard, You can create this environment where people are like, way too much is going on. I don't know what's going to get thrown at me next day when I come through the door. The better approach here is to say, hey, this is the time of the year that we're in. Here's the scale of change we're considering. And if we're making a big core system change, you can extend this to be like, hey, this sort of system, like, this is the sort of thing that ought to last us years. Like, you should not be changing your practice management system every year. Only people I see do that are the ones who didn't do the upfront work. Of talking with other people that use these systems and actually getting solid information. The zigzag tech change, like how that happens is when you buy based on what your sales rep tells you. Honestly, that is 95% of the firms who are like doing that sort of one thing one year and another thing the next year. They're jumping straight in based on the marketing, based on what the sales reps say. It's not the way to buy software. So if we approach this like in an educated way, validating some of these decisions with peers, then you should be able to come into this change and be like, hey gang, we're gonna change this system and it's the sort of thing that oughta last us at least a couple few years. There's a bit of reciprocity then when it comes to, okay, we'll make this change now, but they're not gonna do the same rug pull on me, you know, next week. Second thing to be looking out for here when it comes to change is the incentives gap. Usually the reason that you're excited about a change stems from like, oh, we get some more projects out the door, maybe a bit more profitability. Those incentives, most firms do not exist for your team members, for the clients. And so we can hardly expect them to be equally excited as we are for that change. Most people, I would argue, would optimize for comfort, which is doing the process the same way and not having to change. When you're optimizing for comfort, somebody plopping a brand new thing in front of you and being like, "Hey, you're gonna have to relearn the way you do this entire thing." And you just put that in front of them and then you walk away, the most comfortable way for them to spend their next week is not learning that new thing. And so when they don't take the time to do it and they just go back to their old ways and we're like, "What are you doing? I told you the new way." We can't always be surprised by that when their incentives are not the same as yours. To me, this is a great argument, at least solving on the staff side. This is a tremendous argument for better incentives, some version of production-based pay where your team makes money when you make money. As soon as your incentives are aligned, this whole debate, this argument, this frustration with them not thinking the same way you do, it gets a lot better. It's not totally solved because, I mean, when I came up in an accounting firm, I was like, "My job is to make the accounting firm as much money as I can." And maybe you were wired that way as well, but that's not normal. That is called being an entrepreneur. And the average person is not wired that way. For most people, if they work for your accounting firm, it is a job. And so we can't project the way that we think and behave onto other people where the incentives are not the same. When it comes to our clients, This is an even harder one because it is tricky to align those incentives. When you wanna change a system, generally that's oftentimes because you want it to be that way and it can be hard to find the language for what's in it for the client. That being said, AI can be your friend here. I've stolen this trick from Geraldine Carter. If you're gonna communicate something to clients around some sort of process change or pricing change even, work with AI to frame that communication in a way that will make it sound like it is great news for the client. Usually there is a way in. Here where you can find the angle that is like, hey, here's why we're doing it and why we ultimately think this will be better for you. If the communication is simply trying to garner their pity by saying, you know, rising costs, all these different things, like, don't, don't go down that path. Everybody's seen every flavor of that, like the worst way to win somebody over. So if possible, try to frame this through the lens of what's in it for your clients to follow this process. Maybe they're going to get their work back Maybe it's gonna require less back and forth. Put it through their lens to give them some sort of rationale for why they should be leaning in. Third trap around change management is acknowledging the quiet skeptics, the people who aren't bought in, but you may not know about it because you don't take the time to figure out who those quiet skeptics are. These can be staff. These can also be clients. Now, when this stuff raises its ugly head, oftentimes it can be easy to personalize. Why is everybody not getting on board with this? Why are they not as excited as me? And it's easy to internalize this as like, they're just trying to like thwart my plan or something like that. And it's usually not that. It usually has nothing to do with you. It has everything to do with them. And it's not something being done out of malice. What is that? There's like a parable of the guy in the empty boat. You heard this one? It's like a monk or something goes out on a lake on a boat and just sits on the boat to meditate. He's meditating. He's got his eyes closed, and then he can feel another boat bump into his boat. And he's like, what the heck, man? I'm just sitting here in the middle of the lake. Quit running your boat into mine. And then he opens his eyes. Ready for the twist? And the boat that bumped into him is empty. And he's like, who am I mad at right now? This boat is just floating around like boats do. And it bumped into me. It's not your fault, little boat. And that is how most things in life are. Nobody's actually out to get you. It's just— it just happened. And if you can avoid internalizing that event as something that was done out of malice or to come and get you, your decision-making it will be more effective because you can see problems through other people's lenses. And so why is it that these people are skeptical? We talked about incentives. That is just like we have to assume the lazy default that people will continue doing things the same way they always have unless there's some incentive for them to change. Sometimes these people will genuinely not agree. Like I found in change management and accounting firms that the deeper I dug, the more vast differences there were between the different people in my firm and how they got the same job done. And sometimes a new process would bump into their process in ways that I didn't expect. And so you can sometimes have like very well-founded reasons for why they may not agree that this is the correct direction. But I would say the biggest trap is not making the time to have those conversations, is just like cruising through and being like, here's the process now and not making the space to hear people out. We can come into these changes oftentimes with a whole bunch of momentum and we're all bullheaded. And it is worth stopping to consider why it is that you are so convicted of this change. Why is your answer the right answer? And if you can kind of reverse engineer that logic, oftentimes it is because of context that you have that the other people don't have. And maybe that was you went to a conference and you saw a talk and that was like really profound for you, or you had some conversations with people and they brought you around and by the end you're like, yeah, no, this totally makes sense. I remember when I, I was sour on offshore staffing for the longest time, like most people are. I was at an 80-year-old firm. We were not doing any sort of offshoring. And at that time I was starting to meet other firm owners and there was a firm owner that I super respected that I learned a bunch from. Then come to find out one day she does a whole bunch of offshoring and I'm like, wait a minute, like this person is crushing everything about their firm. I'm learning a ton from them. Seems like they got things figured out. But they're offshoring? And it required me to sort of hit pause on my model for what was the right way to do this. And I learned more about how they did it. And I'm like, yeah, no, actually that does make a lot of sense. The trouble was when I then brought the offshoring idea to my partners, they didn't have any of that context. They hadn't had those conversations. And so their reaction was exactly what my reaction would have been if I didn't have that context. Is there a way for you to expose these folks to the same context that brought you around. I know that's a big reason why a lot of folks share my videos with their teams, is it's maybe easier for me to convince somebody of something than it is for you, right? But that's exactly the sort of thing that will make your life easier, is try to reverse engineer what gives you so much conviction about this decision and see if you can get other people to the same place. 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. 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. Are you still running your accounting firm on a spreadsheet? Puh. Don't do that, man. That's gross. Financial Sense, it is the practice management system for small and growing teams. Think 20 employees and under. It is everything you need to get your work done all in one place, and they've been shipping some some cool stuff lately, like built-in month-end close automation, this deep integration into the accounting ledger to actually pull all the transactions in platform and do that sort of quality assurance pass from inside of Financial Sense. Now, they also recently launched a campaign called Proudly Small, because being small isn't something to apologize for, it's something to be proud of. And just to be clear, we are talking about your accounting firm. Wouldn't it be nice to have a tool that's actually built for small firms. It's actually a very common complaint right now is tools are increasing in cost, they won't come down to support firms beyond like a certain number of clients. Financial Sense, they are built for you. Plus, if you use code JASON10, it will make the price of Financial Sense even smaller for your small firm. You'll get 10% off the annual team or scale plans with 2 or more users. I'll put the link to claim that, uh, down in the show notes. Check that out, see if Financial Sense might be for you. Two more thoughts here. Number 4 is handling those carve-out clients. When it comes to changes that, you know, some clients may not be okay with, is it okay to carve that out and make that change not apply to them? I give you my take here. A lot of folks are like super against this. They're like, I'm running my machine. You have to adopt to the way that I work, and that's how it is. And that's fine. There might be a little bit of shrinking room for firms like that as we kind of have to be more premium, I think, in the direction that the world is headed. I don't know. I don't know if that's true or not. I can tell you in my case, I was usually fine making carve-outs for people when there was legitimate reasons for those carve-outs. Sometimes it was older folks that didn't have access to, didn't have enough access to be able to do things the way that we wanted them to. And there are sometimes totally legitimate reasons. Why people may not be able to adopt that process. And in those cases, our process then became, what is the process to serve those people? Like, still have to have a system for it. It doesn't mean then that there is no system, but if you're willing to do this, there's just a different system for handling those folks. Now, the thing I have a bigger problem with is when you think about those people who might need a carve-out and the fact that they can't comply with this new system means the new system doesn't happen at all. And I'm speaking from experience here, spending like 10 years not making the changes I wanted to make in the firm because there were a few clients in the firm that you knew would never go with it. And this is where I talk about like, don't waste 10 years placating the C and D clients and letting that get in the way of you building the firm that your A clients want, right? Pretty much any change inside of a firm, there's going to be a client that doesn't like it, but it's ultimately up to you to decide, are we building the firm for the next A client that we're trying to attract? That's who we're building for. You have to be mindful to a degree of the people that you have on the bus right now, more so your A and B clients than your C and D clients. Your C and D clients honestly should not have a say in where your firm is trying to get to, because if things go well, those C and D clients are probably somewhere else in a couple of years. So we're trying to build the type of firm that your next A client will find irresistible. They're like, oh my gosh, this firm has everything that I need, everything that I've wanted, everything that my last firm did not have. I found it here. Totally makes sense for me to go and work with them. One asterisk on all this is sometimes it can be easy to assume the worst of people before giving them the chance to prove you otherwise. This is very common with pricing where you're like, these people will never pay this price. And we are constantly surprised by how many people will happily pay more or how many people didn't have an objection when you thought that they would. This can also be the case with process change. We assume that everybody's gonna throw a fit and when you do it, maybe some people do, but in my experience, it's never quite as bad as we might be concerned that it will be. And so we do have to be careful not to blow this thing up in our head to be a bigger thing than it actually is. Last, preparing yourself for the adoption letdown. This has been my experience rolling things out for clients as well as rolling things out for staff. You push that thing out, you try to do all the communication that you thought you should need to do for a compliant person to follow the rules, and then they don't. And you're like, why can't everyone just follow the process? This would all be so much easier if they just followed my rules. And we stamp our feet and we think that they're doing this out of, out of malice or something, when in reality, I think people just do what they always do out of like momentum, out of habit, because that's what they've always done. I think if you're coming into a change, you almost have to assume noncompliance and that you will have to reeducate people and remind people a number of times before that becomes the new habit, simply because that is how human beings are, right? Like, does that resonate with you? If you've gone through a lot of change management, this has definitely been my experience. This is a huge thing with like if you're rolling out a client portal for the first time or sending out upfront pricing proposals for the first time. People are always like, nobody's responding, nobody's opening it, nobody's doing the new process. And we think it's because they're unwilling to, when more frequently it's actually a bigger percentage of those people that are just like, they just don't care as much as you do. Like they've got their own things that they're thinking about. They're not getting up in the morning going, ooh, what's the process for my accounting firm that I can follow? Some people are that way. The clients that are super compliant like that, oh my gosh, you are the best. But most people, they will just keep doing things the same way they've always done things because they don't even remember that you wanted them to change. And we can't attribute that to a refusal to comply. It's just, we just have to build into the process. It's going to take some reminding, some reeducating, some encouraging. I experienced this myself working with an accounting firm for the first time. So I, when I sold my firm, I had to go out and get an accounting firm to support me. I don't have like tax software and all that stuff anymore, right? I'm also the type of person that always left my stuff last. So I was a terrible accountant for myself. So I go out and I hire a firm and they start pushing me messages via their portal and I'm not responding to them. And a few weeks later they're like, hey man, like, are you getting these messages? You got to pay attention to these. And I'm like, oh, they had been going to junk and like, I wasn't paying attention and they had told me to look out for this ahead of time and like, this might go to junk. And I was that client. And it took them reminding me a couple of times to be like, okay, this is where I'm gonna get messages and this is what I gotta pay attention to. This is just how I'm gonna interact with the firm. And it wasn't because I didn't want to or was unwilling to, it was simply because like that wasn't my default. We had been emailing and so I was looking out for the next email from that specific person. And when these notifications came in a different way, they just got lost in the shuffle. But eventually I complied, all right? I'm a great client. I don't know why you're acting like I'm not, okay? So as you navigate change, and this is the time of year where we probably are because this is the best time of the year to do the big change, watch out for taking on too much at once. Consider the incentives of the people involved. If they're not as excited, as thrilled as you, is there a way that you could better align incentives so that problem sort of takes care of itself? Watch out for those quiet skeptics, the people who may undermine the process or make things slower than they need to be because we're not making the space and time to seek out their opinion and any objections they may have to the process. Have a plan for any carve-outs. The, the clients that may not be able to comply, what's the system that we're going to enable for them without letting them prevent the change that we think is good for the entirety of the firm? And last, prepare to be let down. Prepared for everyone to not do it perfectly the first time and have a plan when that happens, because it will happen. And that is not a failure of change management, that is just human nature We're going to follow the same habits and processes that we've done historically, and we're probably going to have to be reminded a couple of times. That's just how people are. You're probably the same way. I know you can do it. Okay? Don't let those C and D clients get in the way of the change that you know you want to make because you got better things you want to move on to. Like right now, I can tell you, man, I have got a fever. I have got World Cup fever. I don't know about you. Let's talk about how accountants are actually propping up the World Cup right now. Niche of the week. Niche of the week. Let's talk about the niche of the week. Can I tell you, at no point in my life have I been a soccer guy until last year. My 7-year-old got just so into soccer, watching soccer, playing soccer, all he wants to do. I'd been watching the Welcome to Wrexham documentary, started following Wrexham a bit, as in, I mean, if you're close to like the English pyramid, I am that. Soulless American following Disney FC. But my son's love of soccer got me into, like, the finances, the accounting behind soccer. There's a really interesting podcast if you are into this called The Price of Football. It's kind of like basically the leading— one of the leading finance experts around soccer because, oh my gosh, is there so much complexity around player contracts and incentives and the financial rules around football clubs and very real penalties if the rules are broken, like literally losing points in the standings that can impact like a team potentially going down to a worse league or going up to a better league. Like all of this stuff is driven by the finances of the club and the players they're able to buy and sell and all this stuff. And it's just this like insanely tangled web of compliance that is managed by you know who, accountants, man. And it just brings me back to what might be the coolest thing about accounting. That is, accounting is everywhere. Like everybody needs accountants. But what do most of us do? We either do everything, we're either generalists, or you do dental. Like, yeah, I found the thing that lit me up, talking to freaking dentists all day. Actually not during the day, I can't even talk to them during the day because they're chairside, so I only talk to them at night. It's a ton of fun. Surely that's not the ceiling. For what we can do in this profession, right? And there are people who are like marrying their passion with their specialty in a way that I think is such an amazing opportunity. Like we already know, running an accounting firm can make great money, like give you great lifestyle flexibility if you let it. But what if it was backed by something you were passionate about? Somebody shared online a CFO guy that only works with the owners of sports teams. I ran into a gal on LinkedIn the other day that, in the UK, that just works with footballers. Literally only clients are soccer players. So many people that are like, don't make your hobby your job. And there is this whole like Cal Newport kind of popularized this way of thinking that the not sexy things where you build expertise, you can find joy in. And that's absolutely true. Like you can find joy in a thing that is not an attractive thing, but that can also be the case within the context of something that you love. Do you love golf? Do you love marine biology? Do you love tacos? All of these things require accountants. And if you're going to build your accounting firm around anything, to me it seems like terrible life advice to run from the things that you love. Could it ruin those things? Maybe. But is there really not going to be another thing? Like if you love golf and you golfed every single day until you were sick of golf, would you regret having done that? I don't think so. You're following the thing that you enjoy. AI hasn't quite replaced accountants yet, but if there is a part of accounting that is in an endangered state? It is accounts payable. It is the AP department and the company that I think is taking AI the farthest right now, specifically inside of AP. It is Maker's Hub. They have taken automated extraction from invoices and receipts farther than I've ever seen anybody take it, but have followed that through all the way to like complex approval processes. You know, like when you need a delineator that is more than is bill over X dollars or under Y dollars. When there's a little more complexity to it than that, MakerSub's got you covered. They handle payments as well. They're doing foreign exchange stuff. They are doing Canada stuff. It is an elegant solution to a problem that I think we all wish didn't exist in the first place. When you have ugly bill pay needs, be it from project tracking, inventory management, whatever that is, and the normal tools, they're just not cutting it, not getting the job done. MakersHub, worth checking out. Putting AI to work on the most hairy accounts payable workflows. Learn more about MakersHub, 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 gotta look at this episode sponsor, Sorban. One of my leaders in tax workflow automation can save you 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 US 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 us so much chasing clients for documents and just tedious organizing of all these PDFs. Oh my gosh, can't say enough about Swordman. 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 Swordman, check out the link down in the show notes. This is like the best part of accounting, I think, is you can marry that thing you're passionate about with the doing of the accounting and the people that you get to talk to and have conversations with. The other day, last week, I shared just my excitement for intergalactic accounting and compliance. SpaceX had their huge IPO, and my hope is sometime in my lifetime, like, all the sort of exciting space-based stuff happens from space tourism to getting to Mars to mining asteroids. The Earth, like, I don't know, the Earth is what it is, right? Definitely got our problems. In some ways we're having to now like restrict our ambitions on Earth because it turns out we might actually hurt the planet. I said that in a way that's like we're just starting to do that and we're just starting to learn that. That's not really what I meant. But the Earth is the Earth, right? We've kind of seen everything. But space, brother, space is the Wild West. And that's what makes space so exciting. I was talking about this on Twitter the other day and somebody swoops in and they're like, "Well, there won't be taxes in space." Why does everybody think if it's a new thing that taxes just won't apply? I think we did this with crypto, right? With Web3. Like, "Meh, cryptocurrency is not taxable." Man, everything's going to be taxable. If there's a hotel orbiting the moon, if you are transacting in that hotel, somebody's going to be collecting taxes on that. Okay? And I'm so excited for that day to come. That might get me back into running an accounting firm because like, whose territory is the moon? Is that hotel that's orbiting the moon? Does the moon have anything that's orbiting it? Actually, that may not be correct. Let's say a hotel that's orbiting Mars. There's probably somebody already doing this, like the finance person for, I don't know, rocket companies or folks within the supply chain that goes into rocket development. But what I'm interested in is the franchisor who plops down a Shake Shack in a food court in a mall that is on the moon. Are they using Square for point of sale? How are they processing payroll? Is that a part of the United States of the Galaxy? Somebody else figure out how to build rockets. I am living proof that the thing that you can enjoy, the thing that you can geek on is a gift, is the greatest thing that adults have to use to their advantage. The reason why people now like my videos is that I learned during COVID that I enjoyed making silly videos. And it meant that after publishing 2 videos a week to YouTube for 18 months while running a 40-person firm, doing more of this than any person in their right mind would have because I enjoyed it. And so I, after the kids were in bed, I would go out and I would make a video. Like that was a fun thing for me to do. I did that for 18 months. At the end of that 18 months, had 500 YouTube subscribers. I'll say that number again, 500 after 2 videos per week after 18 months. Because I enjoy doing that. And so I put in a whole ton of repetitions. Now the stuff is good. And that, like, that is the secret to doing anything at a high level is just volume. And who are the people that can do the most volume? The people that love doing that thing. So don't run away from the thing that for you does not feel like work, but feels like work for other people. If you're into beekeeping, man, what a thing to be able to talk with beekeepers all day, every day. You have all the agency in the world running a firm. What are we doing with it? Building a firm that looks like everybody else's firm? Whoa, that was too direct of an attack. I'm sorry. Okay. You get the idea. Go run a firm that is a reflection of you, the stuff that you're into. That is the coolest type of firm I think you can run. You could even work exclusively with mail carriers, one of whom has just hauled in the mailbag. Let's get into it. Mailbag, mailbag, mailbag, mailbag. This segment This is called Mailbag. Mailbag questions are sourced from social media DMs, from YouTube comments, from my email, from my phone. Number's 1516-980-4968. First question, real practically, how do you break down a recurring task into components that you can build a Claude skill or agent around? All right, so meat and potatoes. I got a thing I gotta do. How do I get AI to do that thing? Thing. Right now, when it comes to an AI agent being able to help you, connectivity is the biggest blocker. If the work is happening inside of this app that your AI agent can't access, that's a problem, right? That means a human still has to do that thing. This is an argument for some of our workflows coming back to surfaces where an AI agent can actually work. Frankly, it's a tremendous argument for ye olde Excel. Because AI agents right now are very, very good at using Excel. You look at, say, an audit shop, audit firms, a huge percentage of their work papers are hap— are in Excel. There are huge opportunities in automating that work because Claude can have access to all of those work papers. But what I really try to encourage people to do is if you're trying to do something, literally just bring it to Claude and say, here's what I'm trying to get done. How can you help? You won't always be able to guess the ways that it can help you because Claude can write code. It has access to open source libraries. There's all these things that it can do that I can't do. And so I will not be a reliable guesser as to what it can successfully do or not. So if I have a job I'm trying to do, bring that to Claude. There will be times where it is amazing and there'll be times where it will disappoint you. But when you stumble into the things that it can do very well, turn that into a skill, literally by at the end saying, Claude, now turn this into a skill. And that sort of templatizes the work that it did so that you can reuse it for future runs of the same thing. And keep in mind, if you have work happening in closed systems that AI can't access, one, have we actually confirmed this? Have you talked with Claude to say like, hey, is there any way you can help me automate this thing? There, there are all sorts of ways to like automate stuff that's happening on your desktop and like let Claude try to get creative for how could we actually automate the system. Second consideration, is there an alternative system that is more open? Right now, our practice management systems are a great example of where, wouldn't it be nice for your AI assistant to have access to all the information in the PM? Some PMs are going to open that up. Other PMs are not going to. I would rather build my firm around software that will open itself up to my AI agents. And then third consideration, is there a different way that we could get the same work done that is accessible by an AI agent? Huh? Okay, this might mean building out a work paper template in Excel that was previously in some other closed system. Every process, every little bit of work, every task is an opportunity right now. You have this machine sitting on the sideline that can literally replace human hours with machine hours, but we will still bill that work as if the human did the whole thing. Try to make as much of that work accessible to AI as possible and then just start banging around with it. Obviously there's good and bad versions of this and not everybody will be able to get it. To like the same level of effectiveness. But the way that you learn is by spending time with it, working through this stuff. The whole connectivity with AI, like, is going to be such a huge conversation over the next few years. Next question. Should I sell my Intuit stock? Have you seen this? Just how much Intuit stock has absolutely tanked? And it has happened at a time where they're actually exceeding earnings expectations. Stock price is down 65% in the past year. Intuit stock price. Why is this? I mean, this is, this is an AI thing. There's a lot of software companies whose stock price, every time there's a new big cloud update or something like that, stock price takes a hit. Definitely comes back to the perception of what accountants do and tax work and AI being able to get involved in knowledge work. What Intuit does doesn't map perfectly to what we do because they're serving different areas of the market, right? And I think most people would agree the bottom of the market is much more ripe for disruption from AI than the higher end of the market that we are serving. But the other angle to this is QuickBooks. And this is something like 50 to 60% of Intuit's revenue. QuickBooks is positioned as this sort of mature product that's been around for a long time, right? I mean, QuickBooks Online, like there is so much bloat in that platform. You log in, there's 50 different things shouting at you. It's trying to do everything under the sun because the only place that tool has to go is up is how can we charge more next year and justify a higher subscription fee? And that's why you see them doing things like Intuit Enterprise Suite, which is like trying to keep people from leaving QuickBooks to go to mid-market platforms like NetSuite. A company that is like late in its lifecycle like that, they are looking at how do we get more premium users so we can justify increasing prices further and how do we make strategic acquisitions to keep the product around for longer? You look at like Bill, right? Bill's been around a very long time. Pretty long in the teeth now. The whole strategy is like, how do we keep people on the platform? How do we justify price increases? And can we make some acquisitions to make us feel like the cool kids again? But I would argue those are the companies that have the most to lose by us having really good AI agents at our fingertips. If I have an AI agent that can more or less do the accounting, if it has access to the accounting platform, and it removes the bulk of me logging into that platform to use it, then we value it less, right? You just, you're just not willing to pay $85 a month for that thing anymore. So some of this Intuit stock price stuff, I would say, has nothing to do with accounting and tax and has everything to do with the existential risk to all software right now. If we have these AI agents that are really good, really capable, it will mean that we're using our other tools less. I mean, the last question I just answered We're talking about how do we actually take some workflows out of closed systems so that AI has access to them so that it can do that work. In a perfect world, we would have tools that were really good at doing a job, but we're still like open to our AI using them. And that happens via having an MCP connector so Claude can connect to the tool, but also being a robust MCP that doesn't let you only like read reports or something, but actually lets Claude do work in the platform. So it's both read/write. We talked last episode about the Claude QuickBooks Online connector. Their MCP is very limited. You can only read and get some stuff out, right? Because as soon as the AI can actually do stuff in the platform, the platform is a little bit less valuable. So Intuit's stock price taking a big hit, but I wouldn't totally chalk that up to the accounting domain and tax work and that being undermined. That being said, man, earnings are up. It's through no fault of their own that their stock price has taken a hit. Should you sell your— sell into a stock? I don't know. If anything, we should do the opposite. Not financial advice, but their earnings per share right now is a whole lot better than it was a year ago. Next up, Jason Staats, we are stuck on automating the boring side of onboarding new clients. How do we get them from excited to experiencing the magic as quickly and frictionlessly as possible? Man, first impressions matter when your clients come in the door. They really do. I think it was, who was it that told this story? Matt Tate, I think, from Decimal. So they're a bookkeeping shop and they actually made this change where they don't do any bookkeeping cleanup until after they've done the first month of bookkeeping with the client, which is like, how's that even possible? How do you do bookkeeping without doing the cleanup that like gets the file to the clean starting point? The reality is like you're just classifying a month's transactions. And the whole rationale around this was, when somebody started working with you, you had to do this humongous, painful excavation. And that's just the worst possible first experience that you can have, right? So it's worth considering what elements of the onboarding process could be deferred or taken off the plate entirely. Like, are we totally sure that everything we're doing in the onboarding process is absolutely necessary? Also, what, what is required from the client versus what can we do ourselves? Like if you're doing tax work, I'm talking like, can you DIY fetch IRS transcripts? And that maybe takes a little bit of work off of the client's plate. I made the mistake for a couple of years of when I'd onboard a new client to our cash practice, we're doing the monthly bookkeeping work, needing to have everything just perfect before we could ship a set of financials. Like it had to be to a crazy high level. We were a CPA firm and my thinking was like, hey, if they're going to get financials, these monthly interim financials from a CPA firm, they need to be absolutely spotless. Eventually I got over that and we would communicate to clients like, hey, there's going to be like a 3 to 6 month process of evolving your systems and all that to get it to a place where it's really, really good. And that is a much easier space to operate in than telling them we have to pull up all of the carpet and do this huge remodel and your first set of financials are going to be delivered 45 days late. That is just a really hard thing to do with clients and it does not leave a good taste in their mouth. As dumb as it sounds, The solution is it's doing less, eliminating as much as we possibly can, and wherever possible, us getting access and us driving the work rather than needing the client to drive the work. Hey, I know you love Cloud Cowork as much as I do, but have you heard the news about Canopy Coworker? Subtle. It's 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 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, 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? Hey, real quick, I want to invite you to my Super Excellent Weekly Newsletter. My newsletter was like the start of 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. Mm. If you're not on my newsletter yet, check that out. Jasononfirms.com. I'll put a link to it down in the show notes. Next up. Thanks for your Cloud Cowork content. I've been using Cloud on my own for the last 45 to 60 days. We've seen real results enough that I'm ready to roll it out to my team or a group of 10. But what I'm having trouble finding is guidance at the team level, file and workspace scoping for client confidentiality, any usage policy considerations, anything I should be calling out before I push this out to my team of 5? There's not much, honestly. And we've talked before as we talk around cloud security about like, what are the best things to consider in your cloud organization settings? Definitely disabling Cloud in Chrome. I recommend this. Cloud in Chrome is the ability of cloud to take over a Chrome browser on your computer and bang around on the web. The risk of this is it is now navigating the open web and could potentially be tricked into disclosing something that it shouldn't disclose. Might also be worth disabling skill creation from your team. So Claude skill creation. And as much as I, it sucks to have to disable this, there is a risk of your team member going out and downloading a Claude skill from somewhere online that could have something malicious in it. Skills, and this is exceptionally unlikely, but skills could potentially trick your AI into doing something that it shouldn't. And so if a skill is gonna be used by the entire organization, there's probably a bit of a vetting process that that skill ought to go through before it is rolled out. That being said, yeah, by default, like everybody in the Claude organization only has access to their own stuff. Anything that should be shared with the rest of the team, you have to take an action to share it with the rest of the team. In my opinion, there's not much to it, especially with a team of 5. And we do this not just with AI, we do this with a number of things where we want to kind of build the whole plan. The biggest thing people need to do, Understand security, but after that, just start. Just get it in people's hands and then see if you can gamify the process of giving them something to work on every week, like do a weekly AI challenge or something like that where it's maybe just for fun or maybe it is actually trying to get to something useful. The sooner we build it into the process, that is, there's a meeting happening every week that like you can see it on the calendar, like somehow it has to be built into the weekly cadence of the firm, otherwise it gets forgotten. The biggest thing is, is to get your head Get around like the due diligence of security and all that stuff. But after that, just get it in people's hands. My experience doing this with my team, you'll be surprised at the people that, that take off with it, that really excel with it. And the more people are sharing the way they're approaching the same problems differently, man, rolling all those ideas up so everybody can see them all, everybody learns so much faster. The more transparency there is in how they're using AI. Next up, our biggest pain point in switching to a practice management system like TaxDome, Canopy, or Karbonn is the trial balance feature we use in Engagement Manager for all our entity returns. We typically import the trial balance from QuickBooks into Engagement Manager, make all of our adjustments, and then import the adjusted trial balance into UltraTax. For the most part, this works well for us. How are other, other firms doing this when they switch to a cloud practice management system? This to me is like actually not really a thing I would ever expect to see in a practice management system. The trial balance management. Aspect. Leading tools for trial balance stuff like you're describing right now, as much as people still use them, Tallyfor, Tallyfor, all one word. 10keyATB is kind of a more traditional, like old school version of trial balance software. That one is exceptionally cheap, like less than $1,000 a year. Tallyfor can get a little expensive. Tallyfor is like a cloud-based trial balance tool that'll connect with QuickBooks and Xero and all that. I'll be honest, a growing number of people do not have a dedicated piece of software for the trial balance function anymore. They do all of the book entries in the accounting tool itself, and then any tax entries they do in a spreadsheet or they just plop the M1s in the, in the tax software. I was in a firm that used CCH Engagement, and so we used Engagement trial balance, but over time we used it less and less and more of it was just managed directly inside of the accounting file or by exporting to a QuickBooks trial balance and just putting the 2 or 3 the federal tax journal entries there and there that you needed. Obviously, if you're doing more complex stuff that requires a bunch of tax entries, there's a greater argument there for having a trial balance tool. But there are third-party independent trial balance tools out there. Not a lot of very good ones. I would say look at Tally4 and 10KeyATB. Bigger picture, when it comes to moving to a cloud practice management system, it can be very, very hard in any sort of software change to not fixate on that one thing that you had with the last system that you won't have with the new system. Talking with somebody the other day who was considering a switch to a more modern system that is generally perceived as being kind of a better option. And they were like, the trouble is none of these platforms will let us report revenue the way that we want to with our monthly clients. And I've kind of like dug into that a little more and it was like, well, they have this specific way of tracking month over month revenue and the PMs don't support it, which is also a signal of like, you must be doing this different than how most people do it. I could tell you when we changed practice management systems, we had all sorts of issues like this. We had similar issues with revenue tracking. And what that looked like each month was we just, we had to post a monthly journal entry. Like we had a little spreadsheet that reconciled it the way that we wanted it. And we posted an adjustment. And unfortunately, that to me is the reality of using off-the-shelf software. Like it will never do 100% of the things that you want just the way that you want them done. But if we fixate on the couple of things it doesn't do, we run the risk of losing sight of the vast amount of upsides, like all the things that it does better. And this is a real headache with change management when you can be gaining 100 things, but if you lose that one thing, that's the only thing people can think about, right? And so, like, it's worth coming into these conversations not expecting it to be perfect because there's no such thing. It's amazing how different accounting firms all run their firms despite the fact we're largely doing the same work. And it is okay to have that side process. Like, I wish we didn't have to, but isn't that the reality of the world that we live in? Man, I, the other exciting thing is like AI and agents and Claude and all that, it's the best Band-Aid we've ever had. It is so good at automating the things that we didn't wish existed in the first place. And to me, it does take a little bit of the sting out of having to have that little side manual spreadsheet or whatever it is. You got any thoughts on the trial balance thing there specifically. This is actually a very US-specific thing. Like other countries are like, what are you even talking about? Imagine being an Australian that can literally file the tax return from Xero as opposed to being in the US and you have to have like this whole suite of tax software and all these adjustments that have to happen to the numbers before those tax numbers are reported. Oh my gosh. It's the American way, okay? You couldn't believe to understand how complex business is here in the United States. Ooh, just wait until we get to space though, man. Whew. Can't stop thinking about it. Okay. Two more to go. How do you get over the fear of investing firm resources into an AI tool that may go away or no longer work with your software? A lot of folks had built up organizational history in ChatGPT and they're like, I don't want to go to cloud now. I've spent all this time with ChatGPT. Honestly, I would tell you like the biggest upside of just like, you just got to use the tool. Like you just got to learn it. Is the growth that's happening inside of you. In fact, the people right now that are best with Claude are the people that spent the last 3 years using ChatGPT. But I actually have less fear of generalist AI tool hopping with these big AI agent tools than I do tool hopping in the accounting firm software space. Imagine going on to a practice management system and you realize a year into it, you're like, I'm on the wrong platform and now I got to change platforms.. That is a nightmare. Like a PM that holds all of the information about your accounting firm. That is such a nightmare. Or the growing concern, we get a year down the road and that practice management system hasn't opened up any sort of connector for your cloud, for your cloud to be able to see the information in there and hopefully do some work. We've got, I think we've got MCPs. So Carbon has talked about doing an MCP. I don't know if it's actually live yet, if you can get access to it. Canopy has confirmed that in the second half of this year, they're planning to ship an MCP. MCP. To my knowledge, those are the only practice management systems I've seen yet talk about an MCP, a connector for your Claude. And there's just so much firm data that lives inside of the practice management systems. But you can completely see where this puts the, the PMs in a tough position, right? A really good MCP where your Claude can do a bunch of the work in your practice management system— I think it probably does inevitably, to a degree at least, devalue the practice management system when it's not the humans doing the work in it. It's your AI agent doing the work in it. Does that devalue the tool? I don't know. Time will tell. But you can understand why software companies might be hesitant to open this stuff up. But you and I, the accountants, we so badly want the system that will open up that I think they kind of don't have a choice anymore. That is actually very connected to the last question. How large do you think a solo firm can grow by using AI? So we have, we have at our disposal now the biggest lever of all time, AI. So much more powerful than just off-the-shelf software to enable you to deploy your systems, your approach at practically any scale at an amazingly cheap cost. That's scaling new heights. A couple of weeks ago, maybe the biggest accounting conference in the US, the founder of Qik, which is like an AI general ledger company, told the story of how they have an in-house bookkeeper. I don't know if there's an in-house or not bookkeeper, but a single bookkeeper that was managing a $630,000 book of business using Qik. And Qik's party trick is like it just being this AI-native, much more automatable platform. They have, to my knowledge, the most powerful MCP connector that's out there. It will not only let Claude read information from the ledger, but also write information to the ledger so it can automate— Claude can automate stuff happening in the Qik platform like that. Looks like, you going to Claude and saying, "Go do the books inside of Kick." Like that is a thing today that people can have. And I think very soon will be a requirement from us. We're like, "Well, if my Claude can go in and do the accounting in the books, I'm only gonna use a platform that will allow for that." And this, that might be why Intuit's stock value's going down. This is kind of the new paradigm of how we get work done that is led by AI agents. A couple years ago we did a, I think I mentioned this a few weeks back, but a couple years ago we did an episode around like who will build the first single person $10 million firm and what would that look like? I don't know what the answer is for how large a solo firm can grow, but I would say it's gotten bigger, both due to how much we can lean on AI agents to automate work, but also just because there's a new and different business model you can build around single like identities now, kind of these creator businesses. You look at like your Dan Martells and your Alex Hormozis and Cody Sanchez, stuff like that. There's an increasing sophistication around how do you build a company around a single person's identity. And so a really high-leverage accounting firm these days probably looks like a niche celebrity that an accounting firm is built around. Like, how do you be a notable person for beekeepers, for soccer players, for whoever it is your accounting firm wants to work with? You have this notable identity, this, this system by which you are attracting people to your firm., and then your people do the work and that identity is the one attracting those clients. Now, obviously, if you're doing this around a single person, there's very real trade-offs to that, right? Because the person has to both be the identity and do the work. But depending on whose AI thought leadership you subscribe to, there's a lot of people that are saying, well, the doing of work over time will be compressed to next to nothing. And so what people will eventually buy on then is like taste. Trust, who has the angle on this problem that you are most bought into. And at that point, then it really does become about what you have to say. What is your unique and different approach? And the doing of the work becomes increasingly trivial. So I don't know what that ceiling is right now. Anecdotally, we did hear this story of a bookkeeper managing a $630,000 book of business, but I can tell you it's going up. It's getting bigger. We've got more leverage at our fingertips than we ever have before. And thus far in June of 2026, we are not taking lower pricing than we've ever had before. There's this fear that it will cheapen what we do. I don't think any of us have seen any signal of that yet. Will that change? Don't know. We'll be here talking about it if it does. Appreciate you showing up. If you got any questions or comments on this stuff, pop it down in the YouTube comments. If you're listening to this on your audio player, you will see a link to the YouTube version of the podcast. Come on over sometime. Pop a question down there. Join the conversation. And you, you beautiful accountant, you're looking sharp today, man. Thanks for being here today. I'll catch you in the next one. Jason Staats.