Business Operations for Accounting Firms

Thank you for coming today.  This is Intuit Firm of the Future webinar, and we are covering Business operations for accounting firms today, brought to you by Intuit. Also, I'm from Karbon, so I'll talk a little bit about that, but this is part of the Firm of the Future webinar series. Check out to not only see this webinar, but many of the other ones I have given beforehand constantly updating and providing more content day in and day out, so definitely a good resource to go to.

For those of you that are QuickBooks proadvisors, those of you looking to be proadvisors, some might be advanced, if you go to, Intuit has done, has put up a lot of not only live trainings but virtual trainings as well. If you're just starting out, you can go to one of the Firm of the Future events. I'm actually currently here in New York. We're doing one tomorrow in lovely Manhattan. You can go to fundamentals training as well. If you're new to QuickBooks online, you need to get an understanding of exactly the ins and outs of QuickBooks online that can lead you to become certified. Then, ultimately, being advanced certified overall. If you want to find a training event that's right for you, possible local or virtual, go to

                                Before we get started, some tips and tricks and some details. First thing is, before we go on the slides, for those of you looking for CPE credit, there is 1 CPE credit up for grabs today. There will be a slide that I present later on in the presentation with a keyword in it. You must capture the keyword, and I will give a poll at the end of the webinar today for you to submit that, to get your 1 CPE credit. Note, there will be a keyword somewhere during today's presentation, and there will be a poll at the end for you to submit that.

                                For those of you new to go to a meeting or go to a webinar, there's a big orange button up there to expand and collapse the control panel. Close any apps like maybe Skype or the like that might take away your bandwidth. Otherwise, you might lose the audio. Then, we will discuss questions as we go. I've got close friend, colleague, [XMT 00:02:17] employee, too, Andy Ancheta. She is on the questions area as well, so if you got a question, she'll try to answer them there. I will also pop in and try to answer the questions as we go.

                                With that being said, who am I? My name is Ian Vacin. I am a co-founder and the vice president of product marketing for Karbon. My e-mail is down there if you got any questions about today's content or things in general. A little bit of history. I've been working within the accounting industry and amongst the profession for the last 15 plus years, in tech for 25 plus years. I used to work in Intuit beforehand for almost 10 years, working on, [obviously 00:03:01] with the QuickBooks Proadvisor program and other product lines all related to QuickBooks.

                                For those of you not familiar with Karbon and the like, one of the things we try to do is we meet with a lot of your peers and colleagues, maybe some of you in the audience. We've actually brought a lot of that together into Karbon Editions. You can check out editions. The one that's for this quarter coming up is about how to double your firm, practice growth. It actually is not available this week. It's actually available today. It just got launched today. If you like today's content, and you want to get a little bit more of a deep-dive in practice growth, you can check it out. As well as we've been asked a lot about helping people on how to get to that next level of growth, and you can check it out. If you want to get a scorecard and get some tips and tricks, go to\scorecard. Then again, if you're not familiar with Karbon overall, you can check us out at We have a practice growth engine for accountants, and that's what the product looks like.

                                We're not going to talk about Karbon today. What we are going to talk about are business operations for accounting firms. I've taken this topic. There's actually quite a bit of content that we're going to cover today, so buckle your seat belts. We've got quite a bit to go through. I wanted to kick it off, again, every good presentation may or may not have one good quote. I pulled this quote that we actually had used in the recent edition. I think it actually is pretty ... It's good for what we're talking about today. One of the biggest struggles and one of the biggest pain points today, is supposed, faced by everybody in North America, for instance, it's the number 1 barrier is around hiring talent management and so forth. One of the things that this quote brings up is that your business strategy and your business organization needs to figure out what is your key goal and your way to separate yourself from the competition. It needs to emulate that.

                                Keith's quote here, he's from BKE, was that for them, their latest hires have all been from start-up companies. That's because they want to get from an old way of doing things to a more modern scaled services business. They want to have a really scrappy and innovative approach to do that. His business strategy, ultimately, his business operations is impacted by his approach to be more innovative in market. We're not going to go on as much of business strategy conversation today, but there's really [three lenses 00:05:30] you can go on there. You can either be the most innovative firm. You can have the best customer service, or you can be the cost leader. Again, any of those business strategy focuses that you may have and the way that you want to approach it is going to impact your business organization overall.

                                That being said, for business operations, what are we going to talk about today? I broke it down into 5 sections. For those of you that may have been on a webinar with me a couple weeks ago where we talked about how to have an effective sales process, we talked a little bit about measures of success. I'm going to bring it back up today because you need to know where you're starting from and where you're ending up and all the different initiatives along the way. We are talking about operations overall. Your measures are super important because it's about effectiveness, efficiency and all of those things. It needs to be properly measured.

                                The second one goes on higher level of firm management strategies because those strategies ultimately are going to transform the culture. They're going to lead to better ways of functioning and across the entire organization. Your strategies at the top level will ultimately lead to the best outcomes as you go forward. Then, we're going to talk a little bit about organization design theory because it's going to have implications on how you might structure and how you might approach the problem overall. That's going to lead to ... I want to talk a little bit about some role definitions and specifically around some dedicated functions that we see. Those firms that are operating at what I see is above normal capabilities, what have they done that's a bit different than the norm? We're going to look at that. Then, lastly, we're going to look at some strategies for operational excellence.

                                I've got, I think, it's about 7 tips there. Again, I'm trying to be able to give you some insight on what others are doing and how that ultimately leads to good value and ultimately, the best, the most efficient firm you can. That being said, let's jump into the first section here. Again, I'm going to go over this relatively quickly today because we have talked about it in the previous webinar before. To bring in the business strategy guru, Peter Drucker, those of you who don't know him, he's pretty famous if you've actually gone to a business school or taken any business courses, generally, or read a book by him, or study some of his concepts. "If you can't measure it, you can't improve it." That translates across all factors and all functions within the business. Again, we're about being able to ultimately provide high value to clients and ultimately drive revenue and profits for the business. Ultimately, you need to make sure that every lever, whether it be in the sales marketing side, or let's say it's in services. All are adding value and ultimately driving towards the goals that we want.

                                I put up some key questions here. I think the change here is going from a mindset of the once a year type business and tax work and looking at just ultimately, profitability numbers and doing it more of how a tech company might look at and what we nicknamed as accounting as a service. Again, we're moving towards more advisory services, more ongoing subscription capabilities with bookkeeping payroll and accounting work. You need to be thinking about how you're looking at your business on an ongoing fashion and how each one of those services is accretive in each customer or a client as accretive to your roll of business. I put up some key questions to think about. It's really thinking about it more granularly, like month-over-month growth, or what is really the net worth? What's the productivity of the employee?

                                One of the key concepts here in terms of thinking about subscription-based businesses is this concept of the magic number. What is that? I put up an example of what it is here. It's essentially looking at the revenue increase over a prior quarter, multiplying that out for a year. Then, dividing it by the sales and marketing expense in the previous quarter. It's taking a look and understanding the efficiency of your sales and understanding it's payback and how that's going to impact the business overall. Yes, and I've talked about this at length at the previous webinar, which again, you can go to Again, it's the effective sales webinar. Ultimately, that's going to translate to the different measurements for managing the firm. On the first part, the overall business metrics, many of you are tracking this already, but you may not be tracking lifetime value. You may not be tracking cast cost of cancellation or month-over-month growth. Again, those are other metrics that you need to be incorporating in to see how things are translating over time.

                                I've got some ratios up here. We talked about magic number. You the quick ratio. Those are not new things to you, but I think where you really want to start spending, in terms of also business operations is the efficiency tasks and works insights. What's the productivity of a particular staff member? What is their contribution, ultimately into the revenue? When you take a look at your clients, your best and worst over against the medium, understanding where that best value is coming from, where your risk lies. Again, those are a bit unique, but again, you need to be having that understanding of the efficiency and productivity of the firm on individuals in it.

                                Lastly, and again, this was what we had talked about before. It was really sales measures and really understanding your marketing funnel [within 00:11:14] to your sales funnel, which ultimately leads to the service work in the ongoing subscription revenue overall. Again, the ways to measure that are closure rates, ops and opportunity to close. I just wanted to have a quick refresher on what are the measurements over all just to make sure that when you're going into thinking about this particular topic overall, that you are indeed looking at it the 10,000-foot view, and then bringing it down and measuring it over time.

                                That brings us to the second step, which I want to talk about a little bit more in depth. That's really the firm management strategies overall. The questions here around this are, again, do you have a business plan? Do you have a succession plan? What's your 1 year plan, 3-year plan? Are you taking time to step back in your business once a quarter and think about where you're going to end towards the year? Are you taking a step back once every 6 months and thinking where you're going to be in 3 years? Over the last year, I've talked to several thousand firm owners and practitioners, and time and time again, we're all caught in the weeds of trying to get all of the work that needs to be done because there's just so much in everybody's plate. We're not taking the time to take a step back to understand where we're headed. Then, putting in the different pieces in place to make it happen, so please, please do it. Please do that.

                                Again, it's about what we call horizon planning, understanding your short-term goals, which are this month or this quarter, medium, which is doing this year, and then long-term is beyond that. Again, then, it's driving those objectives from each one of the organizations just like when you're coaching your small business, it's understanding what ultimate goal we're driving towards it, and breaking it down by the various different departments. Then, it's alignment across that with your employees and so forth. What I'm going to do is we're going to talk about 5 concepts here about how you can put that into place and be able to make sure, from an operations perspective, that everyone's beating to the same rhythm of the same drum, for lack of better words.

                                The first one, actually ... This is actually a concept from Intuit. It's something that I always had, I worked through when I was there for almost a decade. It's a concept called Big Y and true north. It's a very simple concept. For the firm, overall, there should be a set of objectives. It may be 3. It may be less of what overall was everybody in the firm driving towards. These are the objectives of the partner or the CEO, whoever the leading person is or persons. What are they driving to, overall? Then, it's ensuring that everybody underneath that reporting structure is aligning to those particular setups of very narrowly defined goals. That ensures that people are working on the right thing. The big Y is why are we doing this? What are we trying to accomplish? That true north is everybody that's in the organization, pointing to the key priorities that are driving the firm overall. There should be nobody working on something that isn't directly aligned to that. If they are, they should stop doing it.

                                Concept number 2. This is a concept from John [Dore 00:14:28]. This is used at places like Google and Facebook and a bunch of these big tech companies, but also companies across all sorts of industries. It's another pretty simple concept, but it's about having key objectives and making sure that they're measurable overall. It's an extension of number 1. The best practices are is that you should be you, yourself and your staff should all have somewhere around no more than 5 objectives, but preferably maybe 3 objectives that you're going to accomplish between now and the quarter that's going to close. At the beginning of the quarter, you're going to state what your objectives are. They better line up to what that big Y is, and then, ultimately creating very measurable results about how to be able to find whether or not there's success or not. You score that from a zero to 1, in terms of infractions. Then, you can see how you end at the end of the quarter. Then, you build the objectives for the next quarter.

                                What this does is it ensures that people aren't making goals that are 1 year out, that are completely erroneous. It's making sure that they're always measurable, so that way, you can clearly understand what it is that we're trying to obtain and whether or not we did obtain it. This concept of OKRs is very good in terms of when you're managing your firm and the operations and ensuring that everybody has a clear line of sight to what they need to accomplish over the time period that by which they can actually influence it. That is by best practice a quarter 3-month lookout.

                                The third concept is the directly responsible individual. The DRI. This is actually pulled from Apple. This is also a pretty simple concept, but really important, especially when you're in a team setting, and there's a lot of work that's being collaborated on to complete. Again, for many of you out there, you're working with clients, and you may have worked, that's payroll, bookkeeping, accounting and advisory related, and that may have multiple people touching it at any given time. The directly responsible individual is that 1 person that ensures that the work is going to get done. Every task, every checklist item, every process or checklist overall, every client, every project all have 1 person that owns it. It's 1 ownership for everything that might go on. That ownership can change from task to task. It can change from client to client, but there should always be, for lack of better words, 1 throat to choke to ensure that the work is getting done on time, on quality and at the expectations of both the firm and for the client. That ensures that there's no finger-pointing and that things go out when they're supposed to.

                                The fourth one is another concept that Intuit used quite successfully. Other companies use it as well, but this is for projects. Again, most of the work we do is project-related. It's ensuring that everybody knows their role in the equation. Again, we're talking about business operations. It's very good to understand, from a project by project basis, each person knows what they're going to contribute, how they're going to be a part of it. There is 2 models. There's one called the [RASCI 00:17:48], and there's another one called the DACI. They're roughly the same. I'm picking the DACI one here.

                                That means that every project has a driver. One person that's going to ensure that it's going to get done. This would be the directly responsible individual that we just talked about. There's one approver for everything. There's not 2 approvers. If you've got 3 partners in a firm, it's not 3 partners. It's 1 partner who's approving the particular details of a given project. There are people who assist in the work who actually are getting their hands dirty. Those are contributors. They're not driving the project, but they're helping the driver to complete it and are called on to help. Then, there's people who are informed. They are not contributing to the work. They just need to know it's getting done and what the status is so that they can influence the work that they're doing. They don't have a say in the project. Unless they're promoted up to a contributor, they ultimately are not going to be able to inform or change the project on how it's being done.

                                The last concept here is operating mechanisms. The top 4 pieces here are really around how to manage the firm, make sure people know what their roles are. The operating mechanisms are the overlay to ensure as the work is being done, that it's being done in the way, in the manner that surprises are not popping up too late in the process and that we don't have the surprises. We ensure that we get things done on quality and on time. The way this breaks down is that the folks who do this really well, everybody in the firm. No matter if you're the partner, all the way down to the person that's doing certain tasks. You are reporting out what are the 3 to 5 things you're going to accomplish each day. That's broadcasting it out there because it then provides the fact that you're taking ownership of what you need to do and responsibility. You're prioritizing the work day in and day out. Every week, it's reporting out what you've done, but then forecasting what you're going to do the next week.

                                This is how you are able to start to see whether or not we're meeting the objectives for the projects, overall. Then, monthly, it's more tops down than bottoms up, which is reporting out how the projects are progressing to their ultimate goals, how we're going to end up towards the quarter and the quarterly is to look at the business, overall. Are we meeting the revenue goals? Are we meeting the project fluidity that we're supposed to have? That's really to report out from the partners to the rest of the organization. I've wrung these 5 different pieces. They're very good tools on how to manage the business operations overall. It sets the right tone. It provides the right visibility. It creates the transparency it's needed so that everyone can work together to make sure they're accomplishing the key priorities that are going to drive the business to the goals that are identified. I know it's a bit much, but it's really critical in order to have a really efficient and well-oiled machine, in terms of your organization overall.

                                With that being said, let's take a look to see if there's any questions popped up? Okay. Let's talk about organizational design theory. What are the things that are unique about practices today and the environment that we're in that ultimately lead to the uniqueness of an accounting firm versus a standard small business or other types of organization structures? A couple things that influence organization design in terms of from 1 firm to another in the accounting realm is what are the services that you offer? If you're offering the full accounting sweep, you're doing payroll, accounting, tax, advisory, you're doing audit, IT consulting, the more services that you offer, the more or the larger the organization has to be. While you could have yourself who could do all of those things, certain pieces of the service stack are more profitable than others. Again, as the clients are going to increase, the amount of services will narrow if the organization size isn't increasing as well. We see this time and time again.

                                The second one again is that factor of number of employees. The more employees you have, the more services you're going to offer that are more specialized. You can have certain resources be, while you have a more general pool that can do more departmental functions. We're going to see that in a second. Then, the knowledge is the last component. Knowledge of the employees allow for them to be more generalistic across the services. Again, you could have 1 person who is quite knowledgeable that you pay a significant amount of money, but they could be doing audit. They could be doing advisory, maybe [that's okay 00:22:34] with the same client, but they are able to cross over it in different services overall.

                                That leads to this particular diagram. No matter what type of firm you are, whether you're accounting-centric or bookkeeping-centric, audit or whatnot, these are the 7 major category of service offerings that you can provide with the definition of all the different underlying pieces of services that you could do. This is actually a good diagram for those of you out there that are trying to define what your bundles might be when you're presenting to clients. The reason for showing this is you're choosing from this set of 7 major services. Financial wealth management is another one, but I'm focusing purely on enablement of small businesses overall. Now, those firms, while they may be offering those 7 services to a client, the average firm size is roughly 3. For those of you out there that are by yourself, you're a part of a long tail of smaller firms, and there's some really massive firms as well, but the average firm size is 3.

                                Ultimately, firms have 2 paths. They can either be specialist firms where they're focusing just ... They get a majority of their revenue on audit or on payroll, or they're doing virtual CFO services, or they're going to be more general. Again, that's where you get the definition of an accounting firm where we're offering a whole set of services and not one of them is more dominant than the other. Again, the size of those firms are dictated by how much of the services they can offer. Again, that's why you see service-sizing out there as well. You can probably figure out in the chart where you're at based on what you're doing. Now, how this impacts organizational design is there is a factor of 1 to 6. When you have 6 people working on a project together, you then get to a point of communication and collaboration problems. That's where you're going to have to have a manager within the mix. That sweet spot is 1 to 6, 1 maybe up to 8 employees where again, that's when it requires some oversight and some management overall.

                                We do see, however, some really, really efficient firms out there. They're able to blend that up to 15 employees to 1 manager, but again, that's because they have really tight processes and coordination. Now, in a firm that then goes to those who do the work, there's managers because of that 1 to 6 ratio. Then, there's partners that sit above that. Again, you start to see the hierarchical structure. When we talk about business operations, you have to take that into account because the size of the firm is going to dictate that hierarchy being built out. Now, what's interesting is even with that being said, there are really 2 different distinct types of accounting firms out there overall. There are those that are vertically oriented and those that are horizontal. Then, there's obviously some hybrid in between that, but this is how those firms look overall.

                                Again, you may or may not have done an active choice into being one of these 2, but it's understanding why they exist and the limitations of them that ultimately, in terms of understanding how your business operations are going to be impacted. If you're a vertically created firm or oriented firm, you have, essentially, a pool of specialists that an do anything for any client. What happens is as the partner, you may have a client that you ultimately sign up, you, then, are going to hand that client to 1 person who's going to be doing the accounting, the advisory work, the bookkeeping, for instance. You may have another client that comes in that needs tax services. You may expand that to accounting over time, but that 1 person can handle all the needs for that particular client. It requires a really knowledgeable specialist or accounting expert, depending on which service is being offered. It might require a CPA that has a whole rounded skillset, but you need a pool of those to be able to dish them out.

                                As companies get larger and larger, and we generally see this with firms that increase over a size of 12. They, then, ultimately start to focus and narrow what the actual groups of employees are doing. This is where it becomes departmentalized. You have an accounting department. you have a payroll department. you have a tax department. you have a bookkeeping department. That, then, allows you to have younger talent. It's all about efficiency and driving the work through those different departments as fast as possible. Then, it becomes this more complicated coordination effort as the work has to move between group to group to group. You then start to see things like account managers, ultimately be driven in order to make sure the work is done, and there's 1 person that's [interfacing 00:27:21] to the client. Again, understanding where you're at and where you want to go to has implications on your hiring, on your retention strategies and ultimately, how you're going to motivate and get work done overall.

                                Now, we've gone through a lot of the background information. It's teeing up the conversation we're going to have for the second half. It's a great time for us to take a moment and have your CPE keyword today. That keyword is chimpanzee. For those of you looking for CPE credit today, you got to capture this word "chimpanzee' down. I'm going to give a poll later. You can put in chimpanzee, and ultimately get your CPE credits, all right? Last thing before we move on is your CPE keyword today is chimpanzee.

                                We've now talked about the fact that the organization designs that exist. We've talked about measuring it over time. We've talked about how to ultimately manage the firm on a top level, know how does that translate into the roles that people are going to play, and ultimately, some different functions or dedicated roles that we're going to need to have based on our strategy going forward. I pulled out this quote from Kenji from Acuity who, by the way, I think does an amazing job, in terms of their sales organization, really innovating about what they're doing and how they're doing it. It's a really good test case.

                                Again, their decision was they didn't want to run it like a business, but they wanted to run it instead like a rapid growth business. For them, they had to go from a generous pool to a pool of becoming a company of specialists. They have this pool of accounting professionals, but they want to make sure that had roles that were assigned. Again, this is essentially that departmentalization, but of higher-skilled folks within that in order to scale and have higher quality and lower risk, better repeatability and be able to do that in a high volume at a much rapid pace. Again, they've been living and breathing this overall.

                                That goes back to the structure that we talked about. It terms of just having, for Kenji, in terms of he hit a wall when he had his pool of accounting professionals that he was able to just throw the work at, he now decided that he was going to invest his employees, make them more focused, be able to do a smaller set of the work, which might have been accounting, payroll or tax. I'm using this as an example, but to allow for their efficiency to allow for more work to be driven to the organization overall and that provided the capability to have things done at a higher quality, less [lead 00:30:03] time, fast and better [through put 00:30:05], which ultimately allows for more profitability off of the work that was already being done. Then, more work can capacity in this system to be able to bring up the capabilities and the capacity for more top-line revenue.

                                That leads to what are some of the unique roles that we're seeing there being driven in organizations today and how that's changing a bit of what the traditional model was. Some of these might not be unique to what you're operating. Again, it may be, and so there may be ones that you already have. There may be ones that you want to consider new. The first one here is really having a true CEO. They're really the visionary. They're really the one that's able to implement the plan, be able to negotiate. Again, you may have a situation where you have multiple portions in the organization, but it's always going to be easier, more efficient by having 1 leader that ultimately is able to make sure everyone's aligned and working towards the collective goals that were set. Again, referencing back to those firm management strategies.

                                Now, the second one to me is one of the most important ones. I get the fact that when you're a smaller organization, it's hard to put this in. A lot of firms, what they do is someone will step up into to this position, even though it's not necessarily in their title, but it's an operations manager. The quickest way to get more value out of what you're doing, and again, to be able to grow the company overall in terms of revenue and profits, it's not about going out and getting more clients. It's about doing the work that you have today more efficiently, I can't stress enough about going and doing business process improvement and getting that continuous improvement mindset driven into the organization because if you look at the processes, and you figure how to do what you're doing today, just that little bit more, a little bit quicker, that translates across all of your clients.

                                It allows for you to free a capacity. That capacity can be used in so many different ways that can be allowing you to do other service lines. Maybe bring in advisory work. It may allow you to get more clients. Again, there is so much opportunity that sits in organizations that I see day in and day out, to be able to do what they do, just that much faster. It really is about taking a step back and taking the time to analyze those processes overall. If you're interested on the steps to process improvement, go check out I've done a talk up there about business, about process improvement overall. It gives you the 10 steps to do it.

                                Now, the next one is business development manager. I put this up here because I wanted 1 bullet, but generally, that's what people are calling it in terms of someone who's going to ultimately drive more clients to the organization. Now, typically, this is somebody that's being contracted in, or it could be a full time person that's generally focused on the marketing side. I view this as you generally want to have a marketer, and you generally want to have a sales person. They are different skill sets. They provide different capabilities overall, but you need to be having somebody focusing on that sales and marketing funnel overall. Whether that be, again, sometimes, it's the partner that focusing on it. Sometimes, you're going to bring in a contractor, but you need somebody to make it so that you're leveraging your referrals, your referral marketing and putting that place. Somebody that's helping you and guiding you to ultimately help you narrow your focus on a marketing perspective so that you can have a really well-tuned message, proper website and so forth.

                                You need to somebody that's able to drive the sales funnel to ultimately ensure that you're bringing in more clients. You're replacing the ones that you're using. You're increasing the cross-sell and the up-sell across the organization. You always have to be out there, forming, cultivating new opportunities and new clients into the mix if you want to be growing the firm. Otherwise, you'll slowly in decline.

                                The next one is a service delivery expert. This is an extension of what we talked about before, in terms of the vertical and horizontal firms. Again, once you've brought a more focused target that you're going after, you figured out what niche you're going to be in, then, it's getting the experts that are going to be able to drive higher willingness to pay from clients in order to get their particular [verticalized 00:34:33] or the specialty that you're focused on, being able to have the knowledge and the expertise to be able to charge more and to be able to do and perform better work. That output's going to lead to more referrals, which is going to be leading to a higher willingness to pay, which then brings in more value.

                                The fifth one here, which is something that's quite unique. We saw that firms that are able to do onboarding consistently less than 30 days had lower loss of new clients during that step process of onboarding had a dedicated onboarding specialist that focuses strictly on ensuring that clients who came through the front door in sales, ultimately got into the back door or got through the process to be serviced on a monthly basis on the back end. That's because somebody was dedicated to make sure that they're constantly prodding to get the next piece of information or decision that needed to be made in order to continue to move that project along so that it becomes routine work on the back end. If you are by yourself, and you don't have the ability to have a dedicated onboard specialist, you should dedicate time on your calendar every week to ensure that you're focusing on moving those clients from as an opportunity into the work that you've promised to do.

                                The last one is an IT specialist. In this, you can have in different embodiments, but there is a sea of applications for you to discover. You can go to [AccountTechs 00:36:07] and see this chart that they have of well over 500 applications to choose from. If you are uncomfortable with testing out technology or again, you're strapped with doing things that are more strategic or tactical in the business, go hire an intern that can live and breath in this. There's usually somebody in the firm that's a tech specialist or someone who is always looking for ways to do things in faster and better ways. Empower them to be that IT specialist. The person who can kick the tires on new products and be able to be on top of the trends and the changes so that you're not the last to adopt. You may not want to be the first to adopt either, but that you're understanding where you can use technology to better increase your efficiencies overall. Again, your processes are first, but your technology should be part of that discussion as well.

                                Those are the different roles that we see being formed in those firms that, again, are a little bit more progressive, but are doing really, really well out there. The last tip I wanted to bring up here is this concept of what I call the 5 S's. Again, it's thinking it from a client perspective on their experience or their journey as they work with you over time. The first is really the selling side of the equation. How'd they learn about you? What was the process to be sold, to sign, to move forward? Then, it was that onboarding, that setup phase about being able to learn the systems, the technology, being able to exchange necessary information so that you can get them up and running. Then, being able to move the work into something that's more outgoing. Then, it's the thing that we all know and do and love and that we're comfortable with at service them. Getting those projects done, but on the backside of that, it's about supporting them day in and day out.

                                That support is also a training opportunity. It's also where you're ultimately understanding their changing needs, being able to advise them overall. That then translates back into sell. You may have sold them as a new client, but then, you've got to be able to do all the cross-sell and the up-sell. In thinking about it this way, this is where you want to focus on understanding what parts of this equation are the most important to you. Even rank them as maybe service as the most important, and maybe sell is the second important. Then, looking at should I have ... What are the functions that I'm going to need in order to enable that to exist?

                                Again, if sell is the most important in the first part of that, then, you're looking at a dedicated sales and marketing function in order to drive clients in the front door. If it's sell on the other side, on the backend of that, then, it's about cross training those who are actually doing the work or having account managers that follow up in order to use the information you use to complete projects, deliver them from clients and ultimately drive that into referrals or be able to up-sell clients into, let's say, advisory services on the backs of doing bookkeeping work.

                                Again, this is the process an the experiences that your clients go through and understanding which ones and in what priority those are most important so that you can take your organization and focus it and be able to understand what's going to be important to drive, and do that order of operations to develop the organization, the capability. That leads to step 5, which is some strategies for operational success. From what we've seen out there from folks that have really, really, I would say, progressive, but effective organizations.

                                One of them goes back to that vertical and horizontal oriented organizations. If you're taking those organizations, and you want to be able to ultimately optimize them further, is that organization going to get more focused, more narrow, more specialized? Are you going to drive a more hierarchical structure in departments whereby you need to be able to simplify the work, simplify the task, have really fine-tuned processes so that you can lower the cost of the employee pool and the head count that you can be able to more systematically get that work done and be able to have maybe lower skilled work, doing the accounting or the bookkeeping and so forth. Again, you're trying to be like Keith Mueller, which is I'm trying to drive a really efficient organization overall.

                                The second one, which is what we've covered with a little bit earlier on step 4 was you advise small businesses day in and day out, but you need to run your accounting practice just like a small business. That means you need to know what your firm does really well. You focus and hone in on that. Then, you need to know what functions that need to be brought in. Again, you should have a sales and marketing function. You should have a support function. You should have those that are doing the service work. Maybe it's onboardings. There's a pat of it, but you need to have dedicated resources, ensuring that all of the key capabilities in the firm are being done correctly, so that you're able to accelerate and perform just like a regular business would, like a small business that you advise.

                                Third one's a big situation here in terms of the biggest barrier in market today is all about talent. It's really hard to find new talent. With that being said, you just need to spend the time and the energy to make sure you retain your good talent as well. We see this in smaller firms. There's a pretty big hold up situation. You may have someone who is doing all of your advisory work. You may have, in terms of, you're doing tax, you may have 1 CPA that has all the answers to the key questions that are being asked. If that person leaves you, you are in a lot of trouble because it's not only did you lose the capability, but it is going to take you months upon months to find a replacement. One of the key actions here is try to cross train your key roles and your staff so that you're not in a situation where if somebody leaves, you're completely in hot water with your clients. That helps you avoid the hold up problem.

                                Interestingly enough, when you cross train people, it actually motivates them because they are able to obtain a wider set of skills, which makes them more marketable and also is more enriching for the job. Again, cross training is a really good way to ultimately help motivate employees as well. It's a win-win for both sides. Again, don't underestimate the value of cross training.

                                The third one is what I retool as you evolve. This goes to the concept of process improvement. What we see is that when firms go ahead, and they make certain step-function jumps. Maybe they're implementing new technologies to modernize the firm, or they changed the processes and they innovate on them to ultimately do things in a different way that provide a step change and the amount of time it takes to complete. Then, that's hard for a lot of staff. People are, they want to stay in something that's comfortable, but change is sometimes hard for a group of people. Typically, as you're retooling, it's not going to be right for everybody in the firm. You will ultimately lose some of your staff. Maybe because they want to leave, and maybe because you've also got to push them out. You have to be [constant 00:43:52] to the fact that as you're retooling, you're going to lose some staff. It's an opportunity to be able to find the right people for the right roles. It's also helpful for those people who it's not right for, for them to be able to go some place where they feel more comfortable.

                                Just note that when you go through this modernization, and you're making these changes to your business operations, you're going to see. It's going to go in these bits of cycles of improvements. That can happen from all sorts of changes that I list here on different phases. Again, be [condescent 00:44:21] to the fact that's going to have ripple effects within the operations overall.

                                Okay, our next one here is really around structure. The structure that you pick and how you're driving the firm overall, in terms of your firm management strategies, is going to impact your production planning. What I mean by that, and again, I've given other talks that again, you can find in around capacity planning and production planning. There's 2 different types of work that can be done. You can shove work in. Again, you may be a tax business, and everybody that walks in your front door that wants a 10 40 completed, you take that, and you shove it into the queue. You just keep pushing it and pushing it. It's this waterfall that ultimately, again, it's when however much time you have on resources, the work will come out the other end, based on when it entered, how big the queue is, and then, how long it takes to get out.

                                The other concept is pull planning, which is you have a bunch of work that's queued up. You don't bring it into the process until it's ready to be worked on. Then, it comes out the other side, and it's more predictable. That's more of a kanban style or [adjusting 00:45:29] times for the manufacturing. Your structure will impact that and also impact your forecasting of how you do work. Just be cognizant of that. The next one's really around incentives. I talked about this a lot in the sales conversation, but you need to be really deliver a bit, deliver it on your incentives. Everyone is trying to maximize their value in the equation. It's not bad. It's just people want to ultimately be able to get most out of it, as much as they can in the relationship. You need to be thoughtful in terms of how you're structuring people's compensation and their incentive structure. If you don't think that through clearly, you can incentivize really bad behavior, and it's not coming from a bad place, but it's again, people are just trying to maximize the value. W

                                e recommend, for instance, if you're hiring a sales person. You should have 70% of their salary on like a base salary. It's fixed. Then, 30% variable, with half of that 30% being on opportunities that they open that are qualified. Then, the other half of that 30% on the deals that they close. You're incetivizing them to work hard, to bring in good quality opportunities. Then, close them as much as they can because it's ultimately that whole package that comes together. Again, you may, if you want to drive a culture of high-end customer service, then you want to be focusing on how quickly you're able to answer questions from the clients that come up and how interactive you are with that. You may want to think of the incentives that's going to drive that behavior of always being available at a moment's notice for a client. That may not be the right answer, so you need to think about how you want to drive your organization and the behaviors that people are going to do. You really need to include and to think about the incentives that are underlie that.

                                The next one is really always be motivating. This goes back to some of that cross training, but it's realizing that hiring talent is so hard these days that your best bet is to make sure you retain the good talent that you have. Providing ability for people to stretch what they're doing, possibly making more ownership, flex time, being able to cross training, being able to put people out into situations that are going to help the grow their skillset and their career. Your talent will go somewhere else if they're stagnant. That can be pretty detrimental to the organization.

                                One of the key ways I hope that you do is when motivating other people, it doesn't take just ... It's not all about the money, but you can just write a thank you card to say thank you for someone for doing a great job on a project. It's amazing how a hand-written note and a simple thoughtful gift that someone might love. That person may love Starbucks. Go get him a Starbucks gift card. Maybe you know that what they do on the weekend is they like to sit back and sip a nice glass of wine. Go get them a bottle of wine and write a nice thank you card. If you really want to retain your talent, it's not just about bonuses and sharing your profits and whatnot. It's just about spending the time to appreciate that person.

                                That being said, we talked about a lot of things today. We talked about ultimately, in terms of business operations, the real highest level of things of are we all aligned? Are we measuring the operations as a while, so as we make changes, we can make sure that we're making the right changes in the right direction? It's about setting up the strategies about how do we get visibility, transparency, trust and ultimately be able to drive an organization that operates at a well-tuned machine, well-oiled machine and that everybody knows that everybody else is doing. We're all in the same page in driving towards the same priorities and goals overall. The third one is understanding a bit of the nuances of ultimately how we do the work and how that impacts the structure, in terms of ... There's 2 different [rally realms 00:49:33] you can go down, whether you're more vertically oriented, more horizontal. How does the size of my organization impact how it needs to break out hierarchically and just having a good understanding of that, so you can think about where you're at today. If and how you're going to grow, what structure that's going to take you to tomorrow.

                                The next one is understanding the people, the roles that they play, the functions that might be missing so that you have the whole operations under control and understood. Lastly, what are some of those key strategies to be able to drive as much efficiency in the organization overall and be able to make sure that you're maximizing all that you can with the resources that you got. What I want to do here is I quickly want to go ahead into the poll and launch the poll for everybody. Please select the CPE keyword that I brought out before in the presentation. Is it chimpanzee? Is it gorilla? Is it baboon? Is it orangutan? Is it a monkey? Again, for the CPE credit today, please answer the polling question. The faster you answer, the quicker I can move on. Is it chimpanzee? Is it gorilla? Is it baboon? Is it orangutan? Is it a monkey? I'm going to close that out here in 5, 4, 3, 2, 1.

                                Thank you so much. This webinar and other ones that I referenced as well as a whole host of other webinars can be found at It's actually getting a pretty good face lift here, ultimately this week or next week. Definitely check it out. There's a [slew 00:51:16] of content up there so again, I took a screenshot of that. Definitely check it out again, if you liked the content here today. Just as a reminder again, talking about the QuickBooks Education overall and the QuickBooks journey. Again, go to QuickBooks, You can do anything from firm of the future training to fundamentals to cert advance cert. It's all up there, both live in person. There's plenty going into probably a city near you or virtual overall. If you're interested in some of the content and topics that I've talked about, you can check it out on the Karbon side. We just launched the next edition. The first one was Generational Shift. The next one is on Practice Growth. Go to\editions. If you want to learn about Karbon overall, just check us out at

                                Again, thank you from Intuit. Check out QuickBooks Online. Thank you from the Karbon side. Ultimately, if you have any questions today on the content and so forth, feel free to e-mail me at Again, appreciate your time today.