Jody Padar becomes our first returning guest to discuss how to become a Radical CPA.

It’s all in her new book, “Radical CPA,” and there are 4 tenets to becoming one yourself.

In this episode of the Growing Your Firm Podcast, David Cristello and Jody Padar discuss:

• The 4 tenets that define a radical CPA and the “new firm”
• How to incorporate customer experience into your workflow
• Why pricing is so fundamental to a radical CPA

ADDITIONAL LINKS: 

• Jody Padar’s book: Radical CPA
• Verisage
• Jody’s first interview

What is a “Radical CPA” & How Do You Become One?

Jody Padar is our first second-time-around guest on the podcast. (Here’s her first interview we did with her). She’s recently written a book, “Radical CPA,” Her publishers and Jody decided on the term ‘radical’ sprawled on the cover for two reasons — #1 There is something disruptive in this book. If you pick up a copy, you’ll find many exercises in the back of the book that will shift your mindset and tactics literally overnight. #2 Everyone wants to be part of a ‘radical’ movement. Jody wanted to create a new community.
There are 4 tenets to becoming a radical CPA:

1. CLOUD === this technology is the core of becoming a CPA of ‘today’ and not ‘yesterday
2. SOCIAL === this deals with social media. This helps with how you connect with others and your clients
3. VALUE === sell on value and not time
4. PROCESS/EXPERIENCE === how do you create the ultimate customer experience? how do you delight the customer?

How to Incorporate Your Customer Experience into the Process: 

When you go to Starbucks and pay more than you should for coffee…are you buying it for the coffee?

When you plan the perfect birthday party for your child…are you doing it for the actual birthday?

Or — are you doing these things for the experience. Something that makes you feel something. Today, everyone wants to create an experience for their customers. We interact with customers different than we used to.

We need to have more ‘design’ in our firms around the customer experience. Too long have accountants solely looked inwards at themselves and thought “how can I be more efficient?” That’s not a customer-experience mindset. That’s a bottom-line profit thought.

We had on Ed Kless recently, and he recommended first start calling your clients, customers. Client means “someone who leans.” The word “customer” comes from the old tradition that it was ‘customary’ for visitors to purchase goods in towns they visited. Make it a ‘custom’ for your customers to happily do business with you. 

How do you start doing this in your CPA firm? 

Here’s what to do:

Take one process you do every day. Make it a customer-need process such as updating their books, etc. Go through the entire process and attach your customer’s emotions to it.

Where in the process could you delight the customer? Where does a customer get frustrated or  have a ‘frown?’ Sometimes you have to talk to them first to get this information.

Sometimes it’s something simple such as sending a two sentence email letting them know you’re working on it.

You don’t need to necessarily change any technical step of the process. You may have a limitation on software, etc. That’s okay. You want to find those spots that would really upgrade the customer experience and do those things. They don’t have to take a long time. Perhaps, you only need to change the communication around the process with your client.

DAVID’S TIP: This is basically a mindset shift, not as much tactical. You must commit to wanting to improve your firm at any cost. Even if it’s just small, incremental improvements over time. Try out different things. The world is moving and changing fast. Many CPA firms struggle because they are 5 years behind the newest technology or processes. Today, technology and new ideas are arriving so fast, you’re more than likely already behind the curve. It doesn’t mean you failed. But, you do want to look back in 5 years and know you made an effort to improve.

Starting on Value Pricing (Tenet #3):

Value pricing is one of the most talked about topics on the Growing Your Firm Podcast. Ron Baker is the most well-known speaker on the subject in the CPA field.

A big question that causes stumbles is “when do I actually start implementing it?” The easy answer is with the next new client that walks in the door. Funny enough, Jody sees many firms who have a value pricing model, but they just don’t call it that.

They bill their clients the same amount each year, even as they get faster. That’s a good start, but there are ways to get better.

First, at least start with charging upfront and not after-the-fact. Jody actually backed into value pricing as she needed money to pay her employees. So, she charged for services first before doing them. That saved her.

The accounts receivable portion of time-billing should already cause you to look into value pricing as it’s such a waste of time and resources.

A main point Jody stresses for new value billers === Never go out of scope. Just because you quote an all-inclusive package, you still need a scope on that package. If you’re unsure about a scope, then bill in phases. You won’t get to pre-charge, but you can take a deposit.

Clients don’t like when they think a tax return with cost $1,000 and you ship a $3,000 invoice. It bombards them. Not to mention, you end up writing off part of the bill which defeats the point of time-billing.

Not to mention – as your team gets more efficient, you get punished under time-billing. If you don’t adapt based on better efficiency, you’ll need more and more clients to stay afloat and grow.

In today’s CPA world, there are many plays you can add value, you just need to find them.

How Jody Wants to Impact the CPA World

With her new book, “Radical CPA”, Jody hopes to really shift this industry. She has around 5 years of content accumulation packed into her book. Her main message is to help CPA firms ‘update’ themselves.

Before cloud technology, we were very limited in how much value we can provide a client because we had to focus on the work and getting it done. Those tables have turned.

Cloud technology today allows us to get more done in less time. That’s when you pile on advisory and other technical services. Now, you have the time to really help clients rather than simply doing grunt work.

Jody herself charges a fixed price + a value add-on. She scopes the project for a fixed price. Then, provides options to the customer that are value-adds. These can be highly profitable and Jody’s seen the effectiveness of it.

A good first step to learn more about all this is pick up a copy of her book, “Radical CPA.” 

If you’ve read the book, leave a comment below with your thoughts!

Signing the contract is only the beginning. Going through the process to onboard new clients is where the real money is, and Chad Davis from LiveCA will show you what to do.

On top of that, Chad will also show you how his firm manages to stay profitable despite having an all-remote team.

On this episode of the Growing Your Firm Podcast by Jetpack Workflow Software, David Cristello and Chad Davis dive into:

• Chad’s dream profit margin, but why he’s not obsessed with getting there
• How they manage a remote team through unique metrics (such as “mushy points”) and more
• How they created a world-class experience to onboard new clients

Click Below to Listen to the Interview or Find Us on iTunes

ADDITIONAL LINKS:

LiveCA
Slack.com
Josh Zweig interview

Understand This One Thing, and You’ll Always Have a Smooth Client Experience: 

Chad Davis, Partner at LiveCA (with past Jetpack guest, Josh Zweig), is a CA (Canadian equivalent of a CPA in the United States). He started off his career as most in this industry do — he got a degree, an MBA, became a controller, did accounting gigs like accounts payable and P/L work.

At the time, he worked in the Grand Cayman Islands. His clients were all around the world — this was his first taste of working in accounting but remotely.

He discovered that he mostly enjoyed the technology side of accounting moreso than just doing the financials. Chad dove headfirst into tech consulting. This led him to his boldest move yet…

He convinced his wife they should set roots down in Canada and launch a technology consulting business. As you can imagine, there was plenty of risks built in here. As most accountants, Chad isn’t a massive risk-taker…but he was here.

And that wasn’t even the craziest part of the story. They moved and launched the business with zero clients and zero connections. The first year as a full-blown entrepreneur was tough. Chad wasn’t an experienced salesman, so it was tough to handle.

Then, something clicked…

He realized one important thing inside his tech consulting business…

Everyone has an issue. They need that issue solved. We all have problems. The way to show he could solve it was push to demos of tech products so they could see the solution themselves. This worked well, except Chad was underpricing like mad.

That led him to work more on the right process to onboard new clients. More on that in a second.

A New Partnership That Changed His Onboarding Process

In 2013, Chad got an interesting message through the Xero website. It was from a guy named Josh Zweig. Josh was a ‘Skype Accountant’ who, like Chad, worked remotely with his clients. Josh needed help on the tech side — Chad had clients needing straight accounting. After some back and forth questions, they realized it was a perfect match to work together.

They started with updating the onboarding process to better retain clients — and better retain clients they like!
At a top level, Chad’s method of providing a demo was a good start i.e. listen to a problem, show solution, demonstrate the solution. This builds trust…the foundation of a long-time customer.

At a deeper level, the onboarding of a new client was smooth and broken up into 3 parts.

1. Introductory discussions — go over pain points, the issues, top 5 expenses at the client’s company, plus any other problems they’ve had with accountants in the past.
2. The value conversation — go over a plan of action, determine the outcome that best fits their business, prep the demo to show, and keep the solution top-of-mind for them. Then, they go through the top applications while keeping a close eye that the tech is covering their needs/wants completely
3. Actual pricing and finalizing contract — show them the outcomes again, reveal multiple packages for the client to choose. The key here is to ‘reduce surprises.’ Your pricing should also reduce their expenses in total.

Since we are on the topic of pricing, Chad definitely believes the price should be agreed upon before any work is done. Compare that to billing by the hour. On top of that, make sure you work on payment terms that fit your client’s business. Their business may be seasonal. You will know about this seasonality in the onboarding process as you collect information.

Of course, you need the right team members in place to make sure these steps go off without a hitch. That’s why Chad and Josh work tirelessly at hiring the right remote workers.

How to Hire & Work Efficiently With a Remote Team: 

To keep your clients happy, you need happy workers. That means you need to spend as much time vetting new hires as you do searching for new business. Bad employees, especially if they’re working remotely, can breed fast. You need to put in systems to catch these early.

To start, they put new employees through a ‘trial’ spot. During the trial, they are meeting with team members, understanding how they work, and how they click. They use SLACK to keep in contact with each other. This, without a doubt, helps cut down wasted efforts on emails. Actually, Chad says emails are virtually ‘non-existent.’ During the trail, Chad and his team are looking for high performance and that the team member is trustworthy.
Outside of just communicating, they’ve also added Workflow MAX. This software keeps track of items concerning clients. A few kinks are still being ironed out.

‘MUSHY POINTS’

As part of the onboarding new clients process and overall retention of the firm…it is important to keep track of your clients. The sale doesn’t simply end at the handshake. Instead, you must keep tally on how your new onboarded clents do.

A bad client can poison an entire team.

But, there were no tools to track clients after onboarding. That’s why, while on a company retreat, Chad and his team hatched the idea for a “mushy point” as a way to measure a client. This is completely subjective in many ways, but when consistent, it’s very telling.

A ‘mushy point’ measures “How do you feel about a client from 1 to 5. Rate them.”  This number, then divided by revenue is a measure of how the client fits into the firm overall. That number should match your emotion and your team’s. Very rarely are the numbers horribly different. In the end, a client is measured along these points:

1) do they match our ideal client?
2) Do they communicate well with everyone on the team?
3) Do they possess the skills to survive? “

We do not want ourselves to change for the client. This causes inefficiency and overstretching. We built this company. However, a poor client is required to always follow the above. If their ‘Mushy Point’ isn’t top notch, they can get a warning/help, then it’d be time to decide if they stay on as a client. You should know what the client values because you spoke about it in value conversation.

This idea is different, but it just might work…

WHAT”S YOUR ONBOARDING PROCESS? SHARE BELOW.

Randy Johnston, Executive Vice President at K2 Enterprises and Owner, knows how to tackle software for accountants and their firms.
We’re in a special time in the industry when technology is advancing at a fast pace. Let’s unpack it.

In this episode of the Growing Your Firm Podcast by Jetpack Workflow Software, David Cristello and Randy Johnston discuss:

•  How Accounting firms should think about software and technology implementation
•  How to review and understand which application will fit your firm
•  Common mistakes owners make when reviewing their technology stack
•  And much more! Click below to listen to the full interview and implementing the best software for accountants:

ADDITIONAL LINKS:

• LINKEDIN – Randy Johnston
• K2 Enterprises

What is the Best Software for Accountants in my Firm?

Randy Johnston, EVP at K2 Enterprises, was always drawn to the technology of the firm. Today, when he’s not helping 60,000 accountants through the 1,100 events managed by K2, or writing for industry pubs, he’s doing strategic consulting on the best technology and software to put in your firm.

Now, when you think of new software, your eyes might glaze over. Not because it’s boring or important, but it can get extremely complex very fast. Most firms that are smaller still use 70+ applications! Larger firms even more!

It’s overwhelming to do your own analysis of the tech, which is what Johnston typically helps with.

Adoption of technology can be challenging for small (and medium-sized) firms, but Randy found in his research that we have to look at technology for the core practice (example: tax) vs extended practice (example: Advisory services). Then getting the technology education, and then looking at business development angle.
Successful adoption of technology varies between firms since many firms are not “cookie cutter” firms for technology.

So for many accounting firms and accountants, think about clients, what you’re trying to deliver, and the client process. Then, select the right tool for the future of the firm.

The best way to figure out what you need is to sit down with the client directly. Ask them “what works for you? what do you find helpful right now? what do you find as inefficient?” 

Clients probably aren’t as tech-savvy as you so they will be able to explain their issues without any barriers. Your job is to match the problem with a technology solution. This may entail introducing new software ideas to them. Perhaps even a training with them. The key, again, is not to come across as ‘cookie-cutter.’

Cloud technology is good for client-facing activities, but tax software might be best (for your firm) if it’s desktop based. Same for your client. They may not be a good cloud client. If you only want cloud clients, then they might not be a good client for you period. However, it’s OK to have a mixture of cloud and desktop applications, but again it’s dependent on your firm, the process, and the technology.

So there are applications and software for completing client work, others are client modeling and forecasting, others with productivity. You need to remember and review compatibility between the existing platform and new.
When outlining a job or service, think through the current process AND the associated applications/software that are used to complete that.

DAVID’S TIP: Think through the frequency of usage, the importance of usage, and the foundation of your technology and software for your accounting firm or practice. Whether you’re a CPA firm, bookkeeper, accounting practice or firm, it’s critical to map out the tools paired with the process. Finding the right software for accountants can be challenging, but following these steps, you can begin to gain clarity on the proper technology stack for your firm or practice.

How to get an ROI on Your Software:

It’s tempting to try as many apps and software as you can in order to not be ‘left behind.’ However, remember, you’re trying to get an ROI on the tools. Whether that ROI is in time, productivity or profit.

You may find the new upgrades in one software may make it non-compatible with some of your older software. Then, you’re trying to juggle updates, patches, and bridge-technology to fit the problem. New software may be even more of a headache.

That’s why you look at only what you need in the moment.

The simple rule of thumb to get an ROI is: don’t buy software you, team members and/or clients don’t want. It may be sexy to try a new software so you can call yourself a ‘pioneer,’ but that will lead to in-efficiences and work falling through the crack.

Many thought iPads would be the future of accounting firms. “You can run your firm from a tablet,” many thought. Turns out, not yet. Too much trouble and some of our fingers are too stubby for that!

A basic question to ask yourself and the team is: “Does it make sense at this juncture to do this?” Are you actually solving a problem or is this a show? Remember, you’re working to better the client experience. All technology should center around: faster turnarounds, better client service. 

How to Pick the Right Software Today?

Funny enough, as you try and make more simpler tasks, the software back-end gets more complex. That’s why you need someone in your firm that’s well-versed in tech.
But, to avoid any stumbling blocks now, here’s the best way to pick the right software for accountants in your firm: 

• For simpler tasks — master them. Even if that requires manual work
• For repetitive tasks — automate them now. This is where you get the big gains

The first step is to sit down with your team every 6 months and discuss the processes. Where are there simple, small tasks you can master? Where are there regular, repetitive tasks across all clients you can automate?

Build that culture where everyone is invested so they all feel confident to speak up and contribute.
This comes into play most with the ‘great’ clash between the up-and-coming younger accountants and the older ones. Many younger CPAs may not be used to certain manual tasks, while older folks grew up with them. Everyone will have a different way that they think is the right way in their own unique processes.

Get everyone invested in one process, and the technology surrounding it. Have entire team bring their best ideas to make processes move fastest and throw out the steps not needed.

Summary: 
When selecting software, think through:
*What’s best for clients?
*What’s best for the firm?