Any business can be expected to have growing pains, and the faster your firm grows, the bigger those pains can be. This may include hiring new team members, onboarding experienced partners (who already have a specific way of doing things) and merging other firms with your own.

Today, David chats with Kyle Walters, who is involved with L&H, a CPA/wealth management combo financial firm. How has merging different kinds of firms worked out for Kyle’s company? What systems does he have in place to make this merging and growing process run smoothly? Keep reading (or give the episode a listen) to find out!

Points to Look Forward to:

• How L&H got started
• How merging new firms works
• Getting everyone on the same page
• Why merging accounting and tax services is a real need
• How to refer clients to a CPA or accountant

Resources:

• https://www.thepersonalcfo.com/
• https://www.amazon.com/Personal-CFO-Secret-Getting-Money-ebook/dp/B07GJ8GK5Z/
• https://www.lhcpafirm.com/

Lessons from Kyle Walters on Growing and Merging Firms

L&H, a project of Kyle’s, combines accounting and CPA to work together under a single roof. But why is this kind of marriage a good idea, how is it valuable to clients, and what lessons about growth, partnerships, and merging does Kyle have to offer?

First, let’s talk about why putting accounting and tax in the same firm is such a great idea.

A Stunning Combination

The owners of both big and small businesses have to trust two people above many others: their accountant and their CPA. As Kyles puts it, these are often times their closest advisors.

Having an accountant and a CPA that work independently of one another can present problems from time to time. For one thing, they may each be seeing the business’s situation from a very different perspective. If they can’t talk to one another, they may give conflicting advice. This isn’t intentional; it’s really a system and communication problem.

Having a CPA and accountant in different houses also means extra work for the client. They may have to have the same conversations twice, once with their CPA and once with their accountant. They may have to give copies of the same documents, or share finances and sensitive information to both firms.

Of course, the more that information is shared, the less secure it is Kyle’s concept is to link a CPA and an accountant so they can work together to help a client. Information is only shared once, keeping it more secure and saving the client time. Advice can be coordinated when the CPA and accountant are able to talk to one another and have the same data.

So merging the two sides of the financial coin seemed like a great idea, one that would provide major value for the client. But that kind of growth and partnership would also mean new challenges. What tips does Kyle have for any who are considering forging a partnership with a firm from across the aisle?

Three Tips to Combat Growing and Merging Pains

Whether you’re thinking of merging with another firm or you’re simply looking to grow your own business, you know that such growth will come with new challenges. New team members will need to be trained. Partners will already have a different way of doing things.

Kyle had three main tips to combat the challenges of growing or merging firms. Let’s look at each of them.

Keep Consistent Systems

The way an accounting firm and a tax firm do things are different in a lot of ways. However, there are similarities there, too.

Focusing on the client’s experience, and on how they’d like to be treated, you can easily work out consistent systems and scorecards to keep things running smoothly across your business.

When new partners come aboard, whether through a merger or just through smart hiring, they may have a different way of doing things. That’s a great opportunity to blend the new with the old and reexamine the systems you already have in place.

This consistency even applies to the language you use across your company. Mixed up terminology will just add confusion to your team, slowing things down or allowing room for more mistakes.

The more you grow, the harder it will be to keep things consistent, so it’s very important to establish firm-wide systems and priorities from the start.

Focus on Broad Strokes First

When looking at systems and scripts across your firm, especially as it grows and you hire new team members, it’s very easy to get lost in the details.

Kyle suggests focusing on big-picture ideas first. How do you make the client happy? How can you bring more value? What exactly will you be charging for: time spent or jobs done?

Answering those questions first will keep you from getting lost in the tiny aspects of your firm’s operations.

Don’t Reinvent the Wheel

When growing or merging firms, it’s a great idea to think outside the box. Creativity is crucial for problem-solving.

However, there is no reason to reinvent the wheel when there are so many wonderful systems out there already, perfect jumping-off-points you can use to add structure to your growing business.

Choosing an Entrepreneurial Operating System (or EOS) will give you a major head start in keeping your firm consistent despite rapid growth. There are so many systems out there to start with. You can look into Verne Harnish’s book, Scaling Up, for help. Or you can also look into Gino Wickman’s book Traction.

Any system you use will mean a huge head-start for your company’s growth.

The Benefits of a Partnership Instead of Merging

Of course, many firm owners may not be interested in merging with another firm, be that a CPA or accounting firm. So what can be done to help your clients in that case?

Many of the problems mentioned above, when a client has a CPA and an accountant that are completely separate and don’t communicate, can be solved with stronger relations between different types of firms.

Say you own an accounting firm. You’re dealing with wealth management. Your client likes what you do and considers you a trusted advisor. They may ask for your advice on what CPA they should use.

At this point, you’re faced with a hard decision. If you suggest someone, and your client doesn’t like the person or firm you choose, you lose relationship points with that client.

Many accountants in this situation chose to suggest a list of three to five CPAs. That way they are not directly responsible for anyone suggested individual or firm.

But that is also a missed opportunity.

What if firms worked to select other firms they’d like to work closely with? What if accountants and CPAs found each other and formed loose partnerships, not merging, just working in tighter harmony and sending referrals back and forth?

Then clients would have a better experience, close to the experience of a merged tax and accounting firm, but with two distinct-but-friendly entities.

That is something suggested in this episode, an opportunity to build a business relationship that would help clients and generate more profits.

All in all, growing a business means new challenges. Taking on partners and hiring new team members means certain difficulties. And merging firms into one business will cause new struggles, as well. All those growing pains can be dealt with. Kyle Walters gave some amazing tips drawn from his own experience for firms aiming to grow rapidly or merge.

RELATED LINKS:

1. How to Build a Team that Fuels Firm Growth: The Sandra Wiley Interview
2. The Best Ways for CPAs to Stay Sane During the Tax Season
3. 5 Tools To Improve Your Firm (For Accountants & Bookkeepers)

On the Grow Your Firm podcast, we like to highlight companies that have successfully scaled themselves to run at a level of freedom that other companies should strive to emulate. In one of our customer surveys, we found that Steven Brewer & Company, CPAs, is one of those and we invited the founder to speak with us.

How did a company in a tiny town in Indiana grow to be a national presence? Find out in this week’s podcast.

Summary:

• About Steven’s Company
• How a company in a tiny town went national
• How they went from working every Sunday to only three during tax season
• The company’s structure
• Why he says she should have hired an accounting supervisor sooner

Resources:
Steven’s email: steve@stevenbrewercpa.com
Steven’s website: https://www.stevenbrewercpa.com/
Steven’s company Facebook page: https://www.facebook.com/StevenBrewerCoCPA/

How An Old Business Learned New Tricks

Steven Brewer & Company CPAs has been in business for around 23 years. That’s a long time for any business. They’ve found a formula for success, but technology and smart hiring have made them even more efficient over the past few years.

The company is located in a rural community in southern Indiana, but they now get 70% of their business from national clients in 20 states. Most of their clients are small businesses of under 50 employees with a focus in the home inspection niche. They’ve honed their workflows to the point that they only work three Sundays every year during tax season. And they’ve managed to grow their advisory services to the point that only 40% of their revenue comes from tax preparation.

How did they get to this point?

Increasing Value

The first thing Steven did was take his years of experience and put together a package of valuable services he could offer to his clients beyond the basics of tax preparation.

His story is like many others. Small businesses would come in with boxes of physical receipts. He and his team would work like mad trying to reconcile everything before doing the taxes. And given the age of the company that was how things were for a long time.

These days he requires his clients to allow access to their accounts so he can use software to reconcile their information each month. But this lets him do more than just save time during tax season. It allows him to advise his clients on what to do in order to save money throughout the year.

He sells his clients on the idea by explaining to them that once the year is done there is little that he can do to fix any problems that have been building throughout the year.

By pointing out that his team could create reports and advise clients on where they could save money before these major deadlines, Steven found it easy to sell advisory services. Essentially, he made them aware of the value of advisory by pointing out his client’s mistakes and how they could have fixed them earlier had they known.

How The Company Went National

In two words: social media. The company has a very heavy social media presence. It’s not just an active company page. They also created a group for their niche that currently has over 900 members. Not all of these are clients, but they are all potential clients.

Steven also takes a step that many businesses fail to do. He reaches out to other social media groups to make alliances. For instance, he may contact a school that teaches home inspection or business training and try to set up some sort of arrangement. It could be a booth at an event, a workshop, a presentation, something that puts his business in front of a larger audience. Making alliances in this way is a low-risk  high-reward action that has paid off handsomely.

Freeing Up Time

When we asked how he was able to free up so much time, the answer came down to one word: control. Using tools like Jetpack Workflow, he was able to get his client’s data slowly over the course of the year rather than in a big lump at the end of the year. This saves his company a ton of time.

Removing this time pressure has been something his company has worked on for about five years now. At this point, by the end of the year, his bookkeeping clients are caught up to November/December and are complete by early February. It all started with gaining access to client information so they could get it on their terms rather than chasing them down for paper receipts and QuickBooks files. According to Steven, 80% of his clients don’t bring things in. It’s all electronic.

For his tax clients, the workflows have been smoothed to the point where if something is missing he’ll contact people around the 20^th of March to see what’s going on and not feel rushed. The company deadline for on-time tax returns is April 5^th.

Internal Workflow

By using Jetpack, Steven’s team has everything they need to onboard new clients and to pull and process information in a timely manner. If a client came in through the front door and gave them a box of receipts, his administrative assistant would set up the job in Jetpack for the month and assigns the job to one of the bookkeepers. The bookkeeper scans all the paper into their document management system plus pulls whatever data they can access from websites and baking information into their accounting software.

Once the data is reconciled, the job is passed off for review to a supervisor, and then up to Steven for a final review. Steven still examines all the financial statements and tax documents before they go out the door, but thanks to the workflows in place it’s just a cursory examination. That’s how he’s able to handle reviewing over 500 tax returns on his own every year!

Depending on the month, Steven will also process financial statements. Steven estimates that if everyone was available they could do a single client from beginning to end in

6-7 hours, though more realistically it takes a couple of days. Despite what seems like a heavy workload, Steven is still able to spend at least three days a week working on the business pursuing leads on social media and strategizing for the business.

Technology Stack

Finally, we’ve added a new part of the interview and asked our guests what their technology stack is. Here are the top apps used by Steven at his company:

• Jetpack Workflow
• AccountantsWorld products for payroll and bookkeeping
• Drake for taxes
• Zoom for communication (did you know they went public recently?)

Thanks again to Steven Brewer for his time and thank you for listening and reading about our interview. If you’ve been experiencing growth in your accounting firm and want to share your story, contact us.

RELATED LINKS:

1. The Mindset of a Successful Owner & Partner: The Sandi Leyva Interview
2. Adding a Wildly Successful Consulting Profit Center To Your Accounting Firm
3. Automate Your Accounting Firm to 1500% Growth with Heather Pranitis

Scaling is one problem that many financial firms face when they get a little success under their belts. When you reach certain thresholds, the old ways of running your business will show their brittleness. What may have worked for a team of 6-12 might not work as you add more clients.

How do you prepare for successful growth? We’ll be talking about a way to do that in this episode of the Growing Your Firm podcast. Jody Grunden is our guest. He is the co-founder and CEO of Summit CPA Group and a member of the Forbes Finance Council. He’s also the author of “Digital Dollars and Cents: A Virtual CFO’s Playbook to help Digital Companies Create a Financial Roadmap to Success”

We’ll look at how he grew Summit CPA Group and how he used the lessons from that to take dozens of other financial services businesses to the next level.

Summary:

• How Summit CPA got started and how it blew up.
• Deciding how to find the best candidates through rigorous testing
• When you need to hire a director
• And much more that’s all in the podcast!

Additional Links:

• Jody can be reached at jody@summitCPA.net
• Summit CPA Group can be reached at https://www.summitCPA.net

How Summit CPA Started Growing

My business partner and I started like many new companies do. We were just out of college and only had a handful of clients from our friends and family. We did make $100,000 that first year, which was great. But then I decided I didn’t want to bill hourly anymore. We went flat-fee and that almost killed the business. Luckily, we found a way to move to consulting and billing based on the value we gave our clients on a monthly basis.

We dug into forecasting and non-financial KPIs, things our clients could use for future planning, not just traditional financial statements. During the monthly meetings, we’d ask what changes they were expecting over the next month, plow that back into our forecasting model, and come up with predicted changes in net income and on the balance sheet.

Our clients loved this and we decided to add another tier of service where we’d meet weekly. The clients loved us even more. But we started to hit scaling problems. My partner, Adam, and I were doing all the work and we didn’t really want to bring new people out to our clients and sit in at the meetings. So we tried doing it through phone and over the internet. Back in 2007, video conferencing was really horrible, but it’s what we had and the clients loved it.

Now we have about 75 digital marketing companies, our main vertical, and a smattering of clients in other industries from our earlier days. Until about 2011, we only had about 18 clients, and then we picked up 11 more in one month thanks to narrowing our niche and word of mouth. It was exciting, but the scaling problems were tough.

Here’s how we were able to do it.

Buried By Resumes

Considering we were doing something that was new at the time, virtual CFO services, we needed to find people who had our skillsets. We did an interview with FlexJobs to see if they could help us. They took the interview about what we did and they made an article out of it. That article got picked up by Forbes without our knowing and my email blew up with resumes in the middle of a client call. I was getting a resume about once every three seconds. I thought it was a spam attack at first.

So, we got lucky by getting great press out (accidentally) on an entirely new way of doing CFO services. But then we had another problem. How do we pick the best of the bunch? This is much easier these days, but back then we didn’t have to tools to filter resumes like we do today.

We quickly discovered that most of the people sending resumes were highly qualified on the accounting side, so we had to focus on who had the best soft skills to work with our clients. The best people for our business were those who had a high score on the Emotional Quotient Inventory (EQI). We needed people who could interact with the clients, find out their needs, smooth over problems, and basically read other people well. We estimate that about 50-60% of our job comes down to using skills that are measured by EQI.

Find Candidates That Fit Your Values

You can’t really ask someone how emotionally aware they are. It takes skillful questions and careful observation after hire.

At Summit CPA, we have six core values that we look for in candidates to see if they’ll fit our company culture.

• The first is humor, which may sound strange for an accounting firm. But people with a good sense of humor are able to adapt to changes much better. A lot of CPAs have a problem when things change too much. And we like to have fun too.
• The second is delegation. We try to avoid people who like to do everything themselves and become linchpins. We want our hires to teach and empower others so we can all work at our best, which is vital when you have rapid growth.
• The third is candor. CPAs have to be blunt with people sometimes. We look to see how they tell clients to start things, stop things, continue with things, that sort of thing.
• The fourth is curiosity. We want people who can crunch numbers, but we also want people who can question processes and ask why we do things a certain way.
• The last two are grit and resilience. It took a lot of time to develop a way to filter for these qualities. Now we put candidates through six or seven interviews, have them take the EQI test, and look for these factors by putting them through scenarios. And then we have a 90-day probationary period where they get extra training and reviews every two weeks.

And it doesn’t stop after the probationary period. We do employee reviews every six months and we also talk with our clients about their experience with us to see where we could do better.

The bottom line is that if you have skilled people pounding your inbox, switch your interview focus to those soft skills that aren’t so easy to measure.

Hire Directors When Necessary

Another way that we improved our scalability is through our organizational structure. This was another thing we learned the hard way. We wanted to increase revenue during the slow season so I looked into doing 401k audits. But after we got a few clients, I realized I wanted nothing to do with it.

That’s how we brought in our first director, Kim. She’s amazing at it, and I don’t have to worry about doing it. And then the same thing happened with our tax division. Dave took over that responsibility. Now Adam and I hardly do any tax returns.

This delegation isn’t just important for us, but also for the teams as well. Each one of our virtual CFOs is only responsible for a certain number of clients and they’re only responsible for the tax returns of those clients. We don’t have a lot of one-offs. Each person is responsible for maybe 20 tax returns each year. This makes our clients happy because their taxes are done faster, but it’s a huge boon to our employees. They don’t have to work huge amounts of overtime during the tax season.

My recommendation for when you need to hire a director is when you reach a point where you want to grow but cannot do it anymore. We wanted to grow, but we didn’t want to do audits ourselves because it was such a time-intensive process. So we hired the best person we could find. And it wasn’t all external either. We took one of our employees, Jake, off of CFO services and onto our technology team because he was so good at it. We gradually transferred his clients to others so he could focus full-time on technology.

Find the things that you aren’t good at or don’t want to do or that are holding you back, then look for people that can do that for you. Trust them and empower them to take advantage of your funnel instead of routing everything through you. As a CEO, most of my emails are from vendors and speaking engagements, not clients, because my directors have the power to take care of things.

Further Insights

These are the things that worked for me, but they may not work for you. However, I can recommend the books that shaped my thinking in this direction. If you’re wanting to craft a new structure for your business because you can’t grow anymore, I recommend the following:

• The Myth by Michael Gerber
• Grit by Angela Ducksworth
• Radical Candor by Kim Scott
• Emotional Intelligence by Daniel Goleman
• The Richest Man In Babylon by Charles Conrad

My email is up in the additional links section. Feel free to reach out to me if you have more questions about scaling your business.

RELATED LINKS:

1. The #1 Way To Grow Your Bookkeeping Practice
2. Grow Your Accounting Practice Through Acquisitions with 0% Risk
3. Automate Your Accounting Firm to 1500% Growth with Heather Pranitis

Welcome back to Growing Your Firm. This week’s podcast guest is Diana Stefanyshin, owner and founder of Bottom Line Bookkeeping. She uses Jetpack Workflow in her business and is using it in a way that compelled us to reach out to her for tips and tricks.

Before using Jetpack Workflow, Diana was working 60 hour weeks to get everything done. The software has enabled her to work a standard 40 hour work week with free weekends. We hope that our users can get some good information from the interview, and even those who are just curious about Jetpack Workflow will learn something as well.

Summary:

• Diana’s transition to the cloud
• Why she loves Jetpack Workflow so much
• How the software helped her cut 20 hours of work a week from her schedule
• How it enabled her to add in more clients during tax season without missing deadlines
• What the “oh crap” moment is and how her meticulous setup keeps her from having them.

Resources:
Diana’s Website: http://bottomlinebookkeeping.ca
Diana’s email: diana@bottomlinebookkeeping.ca

Diana’s Story With Jetpack

Before using software to track clients, Diana would waste a lot of time double-checking the status of tasks. She would forget whether or not something was done. What Jetpack Workflow let her do is to see the status of her clients at a glance and see quickly, thanks to tagging, what has been done and what needs to be prioritized.

This story is quite similar to another client of ours who experienced the same problem. That client would call these “oh crap” moments. They would wake up in the middle of the night worried if they had done something and then have to check it or write a note. Not very efficient!

Diana started her company in 2012 and has already made the transition from desktop to cloud-based accounting. Most of her clients are local, but she still prefers to use online tools like Zoom for communication. Her business covers a wide range of accounting and bookkeeping services for several different industries, from retail to equestrian services.

This year, she managed to onboard several new clients while still processing an extremely busy workload during tax season. Normally, this would be a recipe for disaster but she didn’t miss a single deadline. How was she able to do it? She did it by leveraging Jetpack Workflow. She created a detailed onboarding workflow ahead of time to make it as easy as possible to bring new clients in.

Onboarding workflows are crucial for scaling businesses. What often happens is that growing businesses get excited about everything new coming in that they start to drop deadlines. They stop fulfilling their obligations to other clients. Often a business will hire someone at this point, but without standardized workflows, a new hire just adds more fuel to the fire because they’ll want to do things their way.

Diana loves our software is because it is easy to set up compared to other products on the market. Inside of the workflow, Diana takes careful steps to detail every part of the process on both her side and on her client’s side, even up to the point of making an item for whether or not a client has logged into a piece of software. She literally walked herself through the onboarding process and thought about every piece of setup and made entries for them in Jetpack Workflow.

The reason for being so detailed wasn’t just so she wouldn’t miss a step. It was also because she wants to hire someone eventually. We’ve had several guests in the past talk about the importance of standardizing workflows across a company so that new hires can get involved without disrupting existing processes.

But in order to do this right, the workflow steps have to be simple enough that anyone who hasn’t used a piece of software before can get everything necessary done to use it.

Diana would take a couple of hours each morning setting things up for a client and assigning jobs and tasks. Each one would serve as a template for the next and now it’s simple for her to bring someone new in.

Retraining Yourself

One of the things that Diana discovered while building her workflow was how many steps she didn’t think about. There was a learning curve getting everything set up, but at this point, everything is pretty automatic.

However, she also had to change how she does some of her tasks in order to fit Jetpack’s way of doing things. For instance, when she emails someone, Jetpack doesn’t record that email. However, she wanted to record those emails as a paper trail in the software. So she cuts and pastes emails into the notes and tags them to mark the status of the email chain.

Diana has over 40 clients and it would be very difficult to remember the status of every client without a system like this to keep everything in mind. Furthermore, by being detailed like this, a new hire could be able to look at the history of the job and understand what has already happened and what the next steps are.

As you create workflows, you discover these missing steps and bottlenecks. A thing we’ve noticed is that sometimes clients will regularly get stuck on a particular part of the process. That’s a warning bell to rewrite that part of the workflow to remove the bottleneck. And things like retaining email chains can provide the proof necessary to make the change happen.

Another thing that we provide with our software is training videos in the knowledge base. These were also helpful for Diana when she was trying to see the best ways to use our software. That helped her get up to speed quickly and see what changes she needed to make in her workflows.

By using colors and labels on her tasks, Diana can see that if something is overdue there’s a reason why. The label might say that she’s waiting on a signature or for some documentation. It took her some time to find labels and colors that worked well for her needs, but that was a matter of trial and error.

Again, using a system like this helps standardizes processes for anyone you hire as well. It keeps everyone on the same page and makes it much easier to scale. It lets teams talk to one another and see what needs to be triaged if an important deadline is coming up and you’re waiting on the client.

We want to thank Diana for sharing her experiences with using Jetpack Workflow and we hope that our readers and listeners will take to heart the power of leveraging workflows and tagging in their own practices.

RELATED LINKS:

1. 3 Crucial Steps to Building an Effective Accounting Team
2. 3 Simple Steps To Transform Your CPA Firm Into A Profitable Powerhouse
3. 5 Software Applications to Ease the Busy Season Burden