Leveraging Technology for CX Enhancement

Welcome to the Accounting for Innovation podcast where we explore cutting edge strategies and insights into the world of accounting and finance. Presented by Decimal and the Radical cba, each episode dives deep into industry trends. Whether you're a seasoned professional or a budding entrepreneur, join us as we unpack key concepts and share practical tips to drive success. Welcome to the Accounting for Innovation podcast. I'm Jody Paidard, the Radical cpa, and I've been at the forefront of innovation in the accounting industry for over 15 years. I have with me my co host, Matt Tate, the CEO of Decimal, which is one of the fastest growing accounting companies in the country. And also he's an amazing accounting innovator.

Ah, thank you, Jody. Well, this is going to be an exciting one. In this episode of Accounting for Innovation, we're going to explore the client experience with within the accounting business, we'll delve into innovative strategies that enable teams to optimize client interactions, streamline processes and deliver exceptional value. So, Jodi, as we talk and you and I have talked a lot about the client experience in the accounting industry. And as I view it, there are three major ways that we can discuss this topic and that it's changing. Number one is experience through pricing and clarity of pricing. Number two is focusing on the client experience as an output. And then number three are the technology and tools that make it easy to do that consistently at scale with multiple clients.

I, I think communication is part of it, but I don't know if it's its own bucket. I think communication goes across all of them around clarity. Right. So clarity and communication, but it, it could hit each one of those three buckets. Right. So when I think about it, I would argue, and again, I'm a pricing person, that the number one killer of client experience is not having upfront pricing. So whether it be fixed pricing or value pricing, but anything that comes in where you talk to a client and you don't give them a clear understanding of the deliverable and the price it's going to cost is not, it doesn't make for a good customer experience. No, but nobody wants to do business with someone that they, that the price is uncertain. The uncertainty, the uncertainty around pricing is huge from a customer experience perspective. And I think that's the number one thing. Now again, I'm a pricing person, so I, I, I take that. But this, but I think until we change that business model, the customer experience is never going to be where it needs to be.

You know, I agree, but I actually throw pricing into a larger bucket which is setting clear expectations at every stage of a client journey. And to me, pricing is a component of that. And it's the language that you talk as you have a continuing experience. But it's also, hey, here's what I'm going to do. Here's a clarity of scope. Here is a set of SLAs that I'm going to achieve in what we're going to do.

And what's an SLA for those who don't know?

So an SLA is, is setting a standard activity, an action. So as I look at an sla, one of the ones that we have at our company is we will respond to your email that business day period. And so as we look at these service and it, by the way, it's service level agreement. The other thing is for every client that we service, you know exactly when you're going to get your financial close, assuming you get us everything you need. So we put all those caveats and I'm a lawyer, so we're good at that. But to me, those are the expectations that you need to set. And you can do it in audit, you can do it in advisory services, you can do it in bookkeeping, and you can do it in tax by saying, hey, here are the agreements that we have around the services that I'm providing. And by the way, it's a two way street. It is. Here's what you expect from us and what we will achieve and here's what we expect from you so that we can do that. A true. And what we're doing here in these creating a great client experience is we're creating a partnership. And any partnership is a shared experience. And it needs to require that you say, hey, I'm gonna do X, Y and Z for this cost. You are gonna do this so I can achieve that for you. And I think you have to have that shared experience of it's a two way street. Does that make sense?

It does. And I think the hard part about it is in traditional firms for years there's never been any standardization on the back end. So it's very hard to get to an SLA to sell with a price. Again, when, when you look at how clients are served at a traditional firm, there may be seven different ways to do the same accounting transaction or the same task. Right. And so the behind the scenes is chaos. And that's why there's no service level agreement in, at the, at the front end because we've always had to build by the, we've always built by the hour. So it never really mattered. We never had to standardize, we never had to organize, we never had to communicate up front. It was just, oh, well, if it takes me an hour, you know, I'm going to bill you for an hour versus saying I'm going to get really organized around what it is I'm selling, what it is I'm servicing, how I'm going to service it, and I'm going to teach my employees how to do that, and then that's what I'm going to sell to my customer. And so there's this big disconnect there, and I think that's the hard part. So, like, if you talk to CPA firm, they don't even know how to get to a SLA because they don't even know what they're selling because they've always sold an hour instead of an outcome. Right.

Well. And the people that understand this the most are the younger accountants that are working for them, where they know that, hey, if I'm doing work for Matt, I gotta do it this way, but if I do the exact same thing for Jody, I gotta tweak it like 20% and do it Jody's way. And that just doesn't make sense. The output to the client, they don't care. They want to get what they get, and they want to be able to understand what that is, and they want to be able to have that translation. I think that's the other part of accounting and the client experience that's really failing right now. And it's an easy win for accountants. And that is, translate this to me, the business owner, tell me what this means. You had a post on LinkedIn a while back that was kind of discussing that, which is people would talk to their accountants. You kind of walk away from your tax account going, I have no idea what he said, but I'm just going to do it, I think. And you translate that, right?

It never gets translated. Because accountants traditionally haven't made time or space for those conversations. And I believe time and space have to have to be scheduled and booked to have those conversations. And your team must be trained on how to have those conversations. What. What is the deliverable of that conversation or how do you have that conversation? You don't have to be that specific, but they need to know that there needs to be conversation that happens. And it's going to cover these three points. Right? And that's what many technology companies have already done. Right? They've just done it in an experience. And I think those are the things that we have to really think about as we're delivering services is how do we restructure what we do on the back end so that we meet the customer experience. And included in that is communication and clarity and all of these things. It has to be priced up front. And like you said, how do you, or how do you bring technology into the picture? I think everyone wants to put like a tool on it and they think the tool is going to solve the problem. But the tool doesn't solve the problem if you don't have the back of the house correct and you don't even know what you're selling to the front. Right. So I think the biggest, the last or the biggest mistake over the last, I'll say 10 years or kind of this, this iteration of getting here has been. Accountants are sold a tool from a vendor and they think that this tool is going to solve all their problems because they think if they adopt this tool that their workflow is going to be good now, and now they're going to be able to have the, the interactions with the client is going to make everything efficient. But it lacks on being effective. And the reason it lacks on being effective is because all the other strategic business things haven't changed. So they put a tool on a broken process, on a broken business model, on a broken. There's no strategy behind it. It's just like, let's put this tool on. Because some, someone told me I should use this tool and like, it's going to make my practice better. But they never like, stop to rethink about all the broken things in their process or in their, in their firm that they need before they get to the tool. And I think that's where companies like yours have a head start, because you started with a blank slate. So you don't have this legacy base that you have to kind of restructure. Right. You can start like, if you start with a blank slate, you can kind of think through it a little bit differently. But I'm sure before you went out and acquired all these clients, you kind of thought through what you were selling, right?

Well, and even when we acquired Spark from kpmg, we thought through how are we going to bring them into our model? How are we going to do that? The way that quite frankly gives the client a better experience, gives the employee a better experience. And one of the things that you've alluded to is every task, everything you get paid to do, just taxes, filing taxes for a business, as a simple example, you have to not look at it as a singular thing. But break it out into its component parts? How do I get the information I need from the client? How do I translate that information into a tax form? How do I then translate that tax form to. To my client so they understand it, Give them the advice that they need to do it effectively? Every business has the exact same goal I do. I want to pay as little taxes as is legally possible. So how do you translate that to your business client and file the taxes? It's a been. There are multiple steps within each one of those, but you have to break that out and think, how do I as cheaply and effectively, with a great experience, get the information? How do I cheaply and effectively as possible get the information onto a tax form? How do I spend myself? I am my greatest asset. Me as a cpa, I am my greatest asset. How do I effectively and profitably use my time? It's the translating of that information to the client. I should do nothing else between that and so it's breaking the component parts out. And I think one of the things that's hard in traditional accounting and CPA firms is, is they look at it as one big bubble and entity. And you have to stop doing that, because to me, change is so hard. I talked to our team about this where it's like, people get paralyzed knowing they have to do so much. And so it's, how do I start? Like, what's. How do I take the first step? The first step is breaking it out so that you can then take another step.

And in order to automate something, you have to standardize it. So when we think about technology coming in, you can't automate anything that's not standardized. And most firms are not standardized at all. And I would. I would argue 85% of the work you do can be standard standardized. Very significantly in the last 15% has a little bit of customization to it, but. And if you don't have that in your firm, then that's where you have to start and say, okay, where am I going to standardize things to start? But I think what's really critical is, like, you started from nothing, right? It was a blank slate when you started to build your cast practice. Correct? How did you think about, like, doing this? Like, did you just, like, wake up one day and say, like, I want to optimize all these processes so that I can standardize them and break them apart? So, like, what was kind of what made you realize you had us do it differently as you started to build this cast practice?

What I had seen in the industry. I had seen from a consumer perspective. I had been a business owner at other companies before and I had tried hiring bookkeepers, controllers, even AP clerks. I then, and that was a terrible experience. So I then said, I'm going to hire the best accounting firms to do that. That was an equally bad experience for me for a different reason. And so as we started diving into the industry, what we found was two things. Number one, the internal economics behind how it was being accomplished were really, really poor. Number two, the client experience is something that can be a game changer for doing what we call CAST work. And that to me is where we focused was the first SLA that we put out as a company is we, we will respond to your email in two hours period. We will be the most responsive partner you ever work with because every business owner has dealt with the accountant, the lawyer, et cetera. Three days later, then email to and it's like three days later I did a poll on LinkedIn and I asked people personally, what do you view your responsiveness? Everybody said one business day or under, like it was 85% of the poll. And then I got the, I asked the question later, a separate pull, what are you getting from your accountant, service provider, lawyer? And it was over three days. And so what you expect from yourself as business owners and what you're receiving is way, way off. And I would argue that it's probably worse than that three day time period. So that's what we did was we put client experience at the forefront of executing everything we do. The other thing is you can't look at something and say, I'm going to automate tax. That's a nothing state. You have to break it out into its component parts. And that's where you can say, you know what, I'm going to automate this part. And you're right, you have to standardize it. So I'm going to make sure that everything we do is exactly standardized. And then I'm going to automate it. I'm going to make sure it's standardized, I'm automated and I'm going to look at each component part and figure out how can I do this as cheaply as possible. Exceptionally well.

And that is the right person doing the work too.

Right person. Right, right. And so, and that's where you're seeing the growth of technology is also backed by the growth of outsourcing. I talked to a really big firm two days ago and they had already opened a tax practice in India and they had opened a CAST practice in The Philippines, they were. More and more firms are getting into that, because what they're doing is they're stair stepping down their economics to say, you know what? We're going to have the right person, and eventually it'll be the right tool. Because as I look at it, I look at it as the most expensive resource I have is a US Accountant. The second is a outsourced Philippines accountant, and the third is technology. So how do I start here and start to push work down without sacrificing quality? And so that, to me, is. You asked how we built it, we broke it into its component parts, and we put client experience first. Now, I think there are tools that you can put in place that make client experience better. Like, having an SLA is only effective if you can measure it.

Right. And then if you have the right, I'll say, email tool to respond to emails so that they don't get buried in one client's or in one employee's inbox. Right. And how do you distribute the work effectively so that maybe there's a team working on a small business as opposed to one person? Because if you only have one person that sees it, that one person gets buried. It's just the reality of it. So not only did you put the sla, you kind of designed your teams around it and your tools around that as well. And I think that's kind of, again, this restructuring that CPAs have to think about. It's not just one accountant gets assigned to a client, and that's it. And. And that's where the. It's so disruptive, which is why I don't think things have changed as fast as they could have. Because what happens is, like, firms are kind of sold the tool or heard that this tool is good, but they don't change everything else. And if you don't change the other pieces, the tool's only as good as the bad process that you have utilizing the tool.

Well, and I think what you've hit on is a really good point, which is so us as a company, we've grown from zero to 600 clients in four years. And if you are a CPA firm and you start out and it's just, Jody, you can handle 10 clients, you can be the most responsive, and it's amazing. Well, you get to a hundred clients, you cannot. It is physically impossible. So what we used, we looked out in the marketplace, and we stole tools from the tech industry. And we said, look, we put front. Front is a shared inbox kind of tool that we use that Allows me to see Jody's inbox when I need to see it. Jody to see Matt's inbox. Internally, I receive under 5 emails from my team every year. And if you think about, like your practice, that's like crazy. We can also talk about things there. So it's efficient. And then finally I get reporting. I can look at all 81 of my team members and see their response to this. Are they meeting SLAs? How is the team doing at sharing communications? And so it changes how client experience occurs by also sharing it between people and not and removing single points of failure. So I think that there is a ton that can happen in this industry, but you have to look outside of it to figure out first what do you want to achieve and then how do you achieve that?

So, yeah, and I think that's where it comes back to is client experience a priority for your firm? Because I think a lot of firms say, oh, we love our clients, but yet they don't respond to email. It takes days. Or they don't have a conversation with their client during tax season because they're so busy. Right. And until you say client experience is a priority and I'm going to work to change my firm to make it a priority, you're never going to change. And unfortunately, or fortunately, I think, again, I like change and innovation and whatever. You're not competing against the firm down the block who has the same poor service offering that you do. You're competing against the technology company who's figured a lot of this out and will happily come and take your customer away from you. And you know, CPA firms say, oh, my client's been with me for 10 years. They're never going to leave. Guess what? They're leaving. And they're leaving because of customer experience and because of poor service offerings. Not because, not because of a relationship that they had or whatever the relationship is becoming. I don't want to say immaterial, but different. Right. Because it's a relationship with a way of doing business as opposed to a relationship with a single professional. Right. And then the last part about that, which I think is critical is, is if you don't change, what's the value of your firm to the future? And if you don't make time to have a customer experience, it's never going to happen. And where are we going to be as a profession or professional service firms in the future? And I, I would argue that professional service firms are going to be a mix of technology and professional service firms moving in the future. It's not going to be a complete professional service firm in the future. Bots and everything else are coming in and that's going to be our competition. It's not going to be, you know, the CPA firm down the block.

Well, and I'll say one thing to wrap it up. It is time for this industry to ask and answer the second question. First question is am I going to innovate and change? Second question that you need to ask and answer exactly how and when you do that, you can keep up and you can change for the better. So with that, thank you for tuning in to the Accounting for Innovation podcast brought to you by Decimal and the Radical cpa. You can find more insightful episodes of Accounting for Innovation wherever you listen to your podcasts. And please don't forget to pick up Jody's new book, Radical Pricing how to Optimize Profits, Delight Clients and Build a Top Value Firm. If you're interested in joining the conversation, Jody and I would love to connect with you on LinkedIn.

Thank you.