.png?width=120&height=77&name=Summit-Virtual-CFO_color_rgb%20(1).png "Summit-Virtual-CFO_color_rgb (1)")
The Modern CPA Success Show: Episode 101
Roger Knecht, President of Universal Accounting Center, joins Adam and Tom to share valuable insights on the different types of services offered by accounting firms and how to effectively deliver them. He emphasizes the importance of clear communication and packaging of services to clients. The conversation delves into the hierarchy and pricing of services, the importance of recognizing the value provided, and explaining the return on investment (ROI) to clients. They also discuss the importance of building personal relationships with clients. The episode concludes with insights on meeting frequency and pricing strategies.
intro (00:00:00) - Welcome to the Modern CPA Success Show, the podcast dedicated to helping accounting firms stay ahead of the curve. Our mission is to provide you with the latest and greatest insights on cutting edge tools, innovative marketing strategies, virtual CFO services and alternative billing methods. Join us as we change the way people think about accounting.
Adam (00:00:22) - Hey, Tom, which podcast are we listening to today?
Tom: Adam We're going to listen to Roger Knecht, and this is an interview that we did where he talks to people in accounting firms and helps them break down their main services. So think that's one area that people really enjoy as he talks about the different types of services and really getting clear on that, was there another part of his conversation that you really found valuable?
Adam: Yeah, I remember Roger really well. I really enjoyed this podcast because he talks not only about, you know, what services we should deliver, but also helps out with how to deliver them, which I think is always the hardest part. We get productized in, in doing accounting or, or doing tax services, you know, because we do those so uniform but advisories oftentimes pretty difficult.
Adam (00:01:05) - So it was really cool to hear how he suggests you you know, not only present return on investment to a client from a sales perspective, but then how to follow that up and and really deliver value throughout the engagement. So yeah it was an exciting good interview. Took lots of notes and yeah, so let's just jump into it. Yeah. Think it sounds great. Hope people enjoy it.
Tom: Welcome to this episode of The Modern Success Show. I'm Tom Walton. I work for Andrew and Advisors full time virtual here, joined by my usual co-host, Adam Hale. Adam, welcome to today's episode.
Adam: Hey, thanks, Tom. Glad to be here.
Tom: Adam, I'm excited to talk to our guests. Roger Connect is the president of Universal Accounting Center. Roger, welcome. And if you don't mind a little bit about kind of the background that brought you to what you're doing today and what you spend your time doing.
Roger (00:01:51) - Yes, it's a pleasure to be here. I'm excited for this.
Roger (00:01:54) - My background happens to have started more than 20 years ago, actually working in the placement position, helping individuals find employment. So I was doing temporary and direct placement for accounting professionals. And it was through that experience that I got to become familiar with Universal Accounting Center as a post-secondary school for accounting professionals. I was taking the graduates, placing them on assignment. I was putting them into entry level management positions, and in doing so, I was able to actually become very familiar with the school and short story. I just basically found employment where they took me on, worked a number of positions, and about ten years ago became president of the school.
Adam (00:02:28) - That's a great background. So one of the catchy things I see the three core services and accounting firm, we love numbers and short lists and things like that. So if you want to tell us what you think those three core services are and let's kind of break them down a little bit.
Roger (00:02:39) - You bet. So as I work with the county professionals that are offering services, I oftentimes find that there's not a lot of clarity as to what it is they do for their clients.
Roger (00:02:48) - And I feel that they fail to communicate this very effectively to their clients and packaging. And I think it's unclear to the client what it is they're paying for. So I spent a lot of time actually when I first began working with accounting professionals to help them define clearly what it is they do and what it is that their clients get. And so the easiest way to describe these three things are accounting and bookkeeping services, tax planning and preparation services and then CFO and advisory services. And those three sets really defines six core services that we need to be providing as a profession to our clients. They all need the bookkeeping. It's the compliance. They all need the accounting, the insights that come from the books. They all need the tax planning, the strategy that we can bring to them as an accounting profession to help them legally lower their tax liability. They obviously need the tax preparation, timely filing of those returns. The CFO very key, especially if our cash flow and policies within the organization, vendor relations, relations with those that are providing capital for the business.
Roger (00:03:41) - But lastly, it's the advisory work that we can basically do and in my opinion, more lean in towards to help them actually build an organization, a company that has value, something that actually is built around an exit strategy that the client can be excited about.
Adam (00:03:54) - Yeah. Roger, I got to ask you, is there an order there? Now I know the six different services, but whenever we're talking about positioning and pricing with with clients, do you have a hierarchy of those three or do they kind of just sit in a spectrum or how does that work whenever you're talking about that?
Roger (00:04:11) - So I view it more of a ladder. So the way I would look at it is at the core, we need the bookkeeping services. You have to have the work done so that you have the financial reports to review and analyze in the accounting spectrum. And so obviously you have to have the bookkeeping to begin. Now, whether or not one individual or the organization is specifically doing this isn't my point. My point is, is these things only need to be done, whether it be by one accounting professional or a team of people.
Roger (00:04:37) - It's irrelevant. But the bookkeeping needs to be done. Perhaps it's even done internally within the organization. The accounting is the analysis. Now that analysis is what we're using to make intelligent business decisions as we're running the company, as we're the business owner. But the tax planning are the strategies throughout the year that we're using from the accounting information we're getting. It's the strategy we're using as we're making purchasing decisions and so forth. The tax preparation is obviously taking the numbers that we're prepared in the bookkeeping. And it's the the choices and decisions made in the accounting that we're actually now preparing the returns with the CFO policies within the organization. And lastly, it's the advisory. I don't think you can do advisory unless you've actually become very familiar with the company's accounting process from bookkeeping through the tax.
Adam (00:05:20) - Yeah, no, we we kind of find the same thing and, and think that's interesting. I mean, like the latter approach there. And for us that's, that's kind of the way we've done it as well from a positioning standpoint.
Adam (00:05:31) - But think what's a little bit you know. Well, I heard you say that it didn't really matter who was doing the accounting. And for us, that's the kind of what we focus on. We focus on the advisory services first. Like that's what we lead with. That's the reason why you want to work with us. And then of course, we can do the accounting and bookkeeping if you need it, or we can oversee your team. And then with the tax planning and preparation, you know, we say, Yeah, we can do that as well if you want us to. But those, those other pieces are kind of like, you know, depends on their internal resources or if their dad does their tax return or something like that. You know what I mean? Like but we but that, that top piece. I agree. I think that what gets a little bit lost in translation with the team sometimes is even if we're not doing those other two things, it's still at the advisory level.
Adam (00:06:20) - We really need to still have really good intimate working knowledge of those other aspects, right?
Roger (00:06:26) - Yeah, yeah. Look at it from the perspective of the business owner, whether they're working with one person that's doing all of these facets of the accounting or a team of individuals and the team could be some of the book. Maybe the bookkeeping is being done in-house, maybe the accounting is actually being hired out to a CPA firm. Maybe a tax advisor is working for them. It doesn't really matter to me what organizations is fulfilling these services, but it is important to me that the business owner recognized that each is necessary for them as they're running their company. So if you're a firm like you're describing providing each of these services, you might have a firm of 1020 individuals where you have a tax planning expert on staff that actually works with your clients. You have an accounting person that actually oversees the accounting, a bookkeeping person, a tax preparation person, because each of these can technically be expertise that each of us actually take and in our wheelhouse become experts in.
Roger (00:07:20) - And this is how we do our job. This is what we do for a living. This is what we're doing to feed our families. But we're we're collaborating with someone else. That's the CFO, somebody that's the bookkeeper. And I work with individuals that choose to be bookkeeping professionals, and they do tax preparation. They don't do accounting, they don't do tax planning, and they're going to lean on somebody else. I have an associate, somebody that I work with that takes on that area. And so it's not uncommon for a bookkeeper to do the books, for a CPA to do the accounting. It's I think we're all clear that this is a is a multifaceted thing that individually or collectively we should be doing together for the client. Yeah.
Adam (00:07:56) - Is it really common when you go into your clients that you're seeing a similar kind of setup for the clients? They maybe they don't understand those services or they're usually providing like the first two, but not advisory, something like that.
Roger (00:08:08) - Yeah. The confusion that I find in the accounting profession is I'll talk to someone that's and I'll just throw some people under the bus.
Roger (00:08:15) - Here we go into a CPA firm and you find out that they're just doing bookkeeping services. They don't meet with the clients. They don't provide any analytics of the financial reports they're paying for in their opinion accounting services because that's what their their clients assume. But the client is not meeting regularly with the CPA firm. There's nobody advising them on what the financial reports are saying. There's no insights that the business owner is receiving from the books that they're receiving. They're just taking the financial reports and filing them. And I think it's just a horrible, if I could dare say, a sin that is being performed by that that professional simply because the accounting profession is letting the client pay for a service that they're not receiving and they're blindly running their business because they're not getting those insights. The same is true with tax planning and preparation. You could actually have someone say, Pay us and we're going to do your tax planning and preparation and they simply file the returns and that's a valuable service. But there is no no planning.
Roger (00:09:06) - There's no strategy throughout the year. They're never meeting with the client to consider different things that they could be doing. To actually minimize and mitigate their tax liability. And that's a horrible transgression, in my opinion, where the accounting professional is taking a fee for a service they're not providing. And yet it's partly the accounting professional. They just don't understand the distinction between the two and aren't able to perform those feats. But it's also the fact that they've listed it as a service they're providing, and yet the client is paying for it and not getting it.
Adam (00:09:33) - Would you also say that it's fair to say that in some instances it's the other way to where they they're not charging for it, but they're giving the client, you know, because they don't understand how to productize it. And so they are doing a lot of that stuff. They just don't get paid for it.
Roger (00:09:48) - Spot on now. And that's where I prefer to find myself is where the bookkeeper just doesn't know how to price charge and actually get paid for some of those additional accounting services they're providing.
Roger (00:09:58) - It's where the tax professional doesn't know how to articulate and position well the tax planning services they're providing. Therefore, they don't price them, they don't charge them, but yet they provide them. And it's this value add they're giving to the client. But the client just doesn't understand the distinction. They just, for whatever reason, expect it. And in that expectation, the client is taking advantage of the accounting professional because honestly, they're doing a phenomenal job providing more than just tax preparation services. They're providing a very good tax planning strategy that's really benefiting the client financially, but they're not charged or paid for it.
Adam (00:10:32) - So how do you I love this example. If I'm that kind of client, how do you encourage me to start that conversation with the client that I'm doing it for free? And how do I start to productize and get to where I'm charging for that valuable service?
Roger (00:10:45) - Wonderful question, because what I want to do with the accounting professional that's experiencing this is, first of all, empower them to recognize that they are worth the fees that they should be charging.
Roger (00:10:55) - I think sometimes they just struggle to see the financial value for what it is that they've through experienced in education, learned, and that they can take to the client and they just don't know how to put a monetary value on that because in their mind it's easy, it's intuitive, it's it's clear. But for the client, this is what they're paying for. So the first thing that I do with them is I put them through an exercise where I say, okay, I want you to take a moment and let's go through and list all the services you're providing, the feature side of it, the tasks you're performing. And as they go through and define these, you're going to define, okay, in the tax preparation example, these are my preparation services, these are my planning services in the bookkeeping accounting. These are the bookkeeping that I'm doing to prepare the financial reports. But this is the accounting, the analytics. This is the time I'm spending where I'm giving you trends and analysis. Well, as they take and break those things out, then I take and ask them to put next to each of those services and tasks the benefits that the client's receiving for having them perform them.
Roger (00:11:51) - And if it becomes clear in the accounting professional's mind, this is what the client is getting, having me do this, they can start now seeing that there's a value to it, there's a worth. And so all of a sudden we go through this exercise of clustering. Okay, these are the bookkeeping services, these are the accounting services, these are the tax planning, these are the tax preparation. As they start to see that and the associated value now, we can start putting dollar amounts to these. And this comes into the pricing. I can now in the in the case of menu pricing, cluster and package these services in such a way that I can put a dollar amount on them and all of a sudden whether you're doing revenue, pricing, value pricing, all those things kind of lead into this where I can ultimately feel comfortable about the dollar amounts that I'm going to be charging my clients. Here's the challenge that I find accounting professionals struggle with. It's when the client pushes back on the pricing.
Roger (00:12:40) - It's their ability to explain why the cost is what it is. My fees are this way because if you can't, in your own mind, kind of grapple and grapple and understand what it is that you've used to come up with that amount, I think a lot of people struggle asking for it.
Adam (00:12:56) - Yeah, bet you're right. I would guess one of the things you probably find frequently is some of the things that clients should be paying the most for is what they're getting for free Some of the high level tax planning. Then I'm saying, well, do your taxes and by the way, I'll meet with you and give you all these great suggestions. That's probably what the client is saying. Oh, you can save me $50,000 a year because of this planning and I'm giving that to you for free. But the preparation part I'm charging for, am I right? That's probably a lot of what you find.
Roger (00:13:21) - Yeah, because we're able to quantify the task. We're able to say it took me a period of time, This took me so much effort.
Roger (00:13:28) - What we struggle to articulate is that thought, that intelligence, that wisdom that we bring to the discussion, we're assuming that because it took me about a moment to think of the answer and but a moment to give them the suggestion that that thing is worth that five seconds that 60s that it took to actually come up with it, when in reality that five minute explanation that you have that was ingenious as a tax strategy to help them save tens of thousands, if not hundreds of thousands or millions of dollars, literally, was the the broad experiment of your experience, your training, your study, your experience in the field. You're going to different conferences, you're reading different updates. All of these things culminate into that five minute answer. And you just need to give yourself credit where it's due, that you're a professional and you're deserving of that value.
Adam (00:14:17) - Yeah, think, think you're right. I mean, imposter syndrome, we talk about it a lot. Is as a component of it. But and then also to your point, it's just whenever it's, you know, you're not paying for the hour, you're paying for the 20 years of experience that I that I accumulated to give you that answer, you know, that kind of a thing.
Adam (00:14:32) - So how do you explain then, or how do you approach the situation? Because this comes up a lot whenever people say, how do I what's the ROI of an advisory service or or what's the or how do I explain the ROI of of what I'm doing as opposed to like necessarily the cost, but just focusing on what the return on investment, How do you articulate that to a client?
Roger (00:14:55) - It's a great question because I think so often it is hard to articulate what this is. And so having experienced this myself, having moved into the space of working with business owners as a business coach, I struggled for a few years trying to explain what my service was, what they were paying me for and what they could expect through the experience. And so having experienced all of that, I would explain it this way. I think the client wants to know that you're going to be able to help them in an capacity. As it relates to top line revenue, you're going to actually help them identify where is the best place to be spending their money from a marketing and accounting or marketing and sales perspective to actually have a greater return on investment.
Roger (00:15:32) - So you're helping them with advertising spends and so forth. That strategy there, those insights from an accounting perspective in the business model is hugely important, I feel. The second thing is improving profit. If you can increase revenue and improve profit, you're hitting the two things that are perhaps the most important to that business owner as they're running their business. They want to they want to see top line growth. They want to see that the retaining a lot of the things that they're earning. So improving the profit. I like to then clearly identify that I bring to the table very specific strategies that will help them make profit, deliberate and intentional. The third thing is cash flow. If you can actually help them from a perspective perspective, implement policies and procedures that actually help them with their payables, their receivables, if you can help them with their sales, determining what are the costs associated with actually fulfilling that sell that if we got 20, 30, 50% of the revenue up front at the time of sale, we can cover a lot of our upfront costs associated with Cogs and payroll.
Roger (00:16:27) - All of a sudden we're not becoming this bank that's actually fronting the money to our client until we can get the job done or the work done to be paid. And all these things that the CFO level really help with that cash flow perspective. And then the last thing that I would emphasize is the fact that in an advisory capacity I'm able to actually help them work on the value of their business, the valuation, the EBITDA and everything else that you want to think of. All of those things that I can do to help them mitigate the risks associated with what they're building as a company so that they can build a company that has the worth and value that they expect it should. That's huge to a business owner. And so the big things that I started to focus on are increasing revenue, improving profit building value. Those three really resonated with my marketing and selling. As I put that out there, clients, potential clients were drawn. They wanted to have that conversation. I was able to explain that that was the goal of the whole coaching and then all of a sudden they were willing to actually engage and pay.
Adam (00:17:20) - Okay, well, and part of that and understanding what your ROI is and, and productize it is understanding what you are going to deliver. So I know we kind of spoke briefly about the differences between, you know, being a mentor versus a consultant advisor. There's a lot of names out there. Can you kind of walk us through maybe helping us understand from a delivery standpoint what each one of those things mean?
Roger (00:17:44) - Yeah. And before I start, I'm going to say that I'm a little particular about this. Some may say I'm a little anal, but it's for good reason. Before I start this, I'm going to also point out that in a casual conversation, I'm not going to be nitpicky about all of these because I do. I do believe that people use them in a in a synonym fashion. But it's very clear in my mind what each is. And I think it's important that when we explain our services, we state them correctly and our clients understand what they're paying for. So let's start.
Roger (00:18:09) - The first is mentor mentors. Typically someone that you associate with, you're interacting with, but it's not through anything paid. It's not because there's a structured program you're going through. Mentoring is just you're associating with and being influenced by someone that has had success and you're trying to glean through your interactions with them, insights as to what it is about their character and decisions that help them be successful. And it's just not a structured program. It's lunches, it's activities, it's events, and it's through those interactions over time that you just kind of take in that essence of who they are. The next is a consultant. A consultant is someone that has a specific, a specific skill and ability, and you're going to pay them to perform that within the organization. You need something done. You're going to pay them as a consultant to come in and take care of that project and leave with that expertise that they have. Now. They're just going to come in and do it and leave. But the advisor is someone that's going to come into the organization and they're going to teach.
Roger (00:19:03) - And this could be in a formal setting such as you're going to a class A training, you're going to go to a conference. They're advising, they're saying this is best practice, this is what you ought to be doing. Here's what you should learn and do. And as an advisor, they're giving you basically those insights that you don't otherwise have and those perspectives that you need so that you can make better informed decisions. But here's the difference now between the advisor and the coach. The advisor stops there, they've educated you, they've taught you what what needs to be done. Whether or not you go and implement them is entirely indifferent to them. They've been paid to provide you those insights and they're finished. The coach, however, they're going to take that advisory role one step further. They're likewise going to educate you. They're going to tell you what the best practices are. But as a coach, you take it a step further where you ask the right questions. You try to find how this actually applies in their unique situation as a business owner.
Roger (00:19:52) - And then the last part is you actually hold them accountable. The coach is meant to actually find out deadlines and timelines that you're able to now ask and hold the business owner accountable for. So when you're in a mentorship, there's no accountability. It's a casual conversation, it's interactions, it's lunch. When you're a consultant, yes, you're being paid to perform a task and function. And I trust that you're going to do it effectively. Advisor You taught me well, that's wonderful, but the coach is going to advise me. But and more importantly, ask questions that help me apply it to my business and ultimately hold me accountable for the things that I say need to be done in the timeline that I expect. And that coach does two things. They accelerate the success that we're going to have as business owners and we all need to be working with coaches.
Adam (00:20:35) - Yeah, so I love that description. Go ahead, Adam. I was just going to say, so the answer is, coach, is what I'm hearing.
Adam (00:20:41) - Like that's what you want ultimately, like whenever you're getting to delivering that service, if you want an annuities relationship and you want to really add value, then you need to really kind of approach it from a delivery standpoint of everything you just said regarding the coach. So it would seem to me that whenever you're trying to explain ROI, what I heard you say at the end there was, you know, you're accelerating all of these things. What always scares me a little bit whenever I hear, don't get me wrong, like from a marketing standpoint, like I'm going to help you with growth and prove your bottom line, you know, all those kind of things, like those are natural, like things that should come out of it. But it always scares me because people are like, you know, because, one, I'm not your salesperson, you know what I mean? Those kind of things. And, you know, ultimately you're in control of whether you decide to cut those costs or take my recommendations and do those kind of things.
Adam (00:21:32) - So Right. So like, I hate throwing out numbers or percentages or say that I'm going to do this and I'm going to do that. I mean, ours is really about, you know, helping them get intentional and deliberate with, you know, accelerating all those areas. Really, that's that's kind of, you know, improve the decision making so that everybody can make really fast informed decisions based on good information. Like that's really where we see our return on investment that, you know, instead of navigating your company through emotion or gut, you know, you can say, no, I know what I'm supposed to do here, here, you know, whether it's operations, sales, finance, it doesn't really matter. Like everybody's kind of rowing in the same direction. And that's what we usually kind of lean into whenever we're talking to our clients, that kind of thing.
Roger (00:22:23) - Yeah, Yeah. When I'm talking about ROI, as you're mentioning, I am going to find out at the very beginning the onset of the conversation with the potential client, what objective or goal they have, where do they feel that their company is either facing its largest challenge that they'd like to address or biggest opportunity that they're excited for? And as they declare, to me, it's, you know, top line revenue, it's improving profits.
Roger (00:22:43) - It's. Cash flow. I'm more clear as to what it is I'm going to be delivering as an ROI, and ultimately it's going to be based on the financial reports. Ultimately, it's going to be based on building value. So I can let's say EBITDA is going to be the thing that we're going to gauge it upon. They're struggling because they're running a business. They think it should be a $3 million business. But with EBITDA, it's clear that it's not. Well, it's obvious what we're going to work towards. We're going to be working for the next 12, 18, 24 months on changing that multiple. And it's just basically with a very clear objective based on what they've defined. As for the pinnacle of coaching, you are right. Coaching in my mind is the pinnacle of it. I know that a lot of people speak of. I'm trying to offer CFO and advisory services and I think that's fine. It's it's a nice little statement, but I think the pinnacle is coaching. My objective with my clients isn't just to teach them best practices and then sit back and be indifferent to whether or not they implement them in order to get results and actually see the ROI.
Roger (00:23:38) - I need to be bold enough to take the money that they're paying me for my services and next time I meet with them ask You told me that this was very important, that you were going to work on X and you're going to get it done by Friday. Tell me about that. Did you get it done? And when the relationship turns to the fact that I'm continually asking them about things that they said were important, the relationship changes to where I'm not just teaching them correct business principles, I'm now holding them accountable in their relationship with me is going to be different than anyone else that they have it with. And that's where I think the needle starts to move.
Adam (00:24:08) - Yeah, think one of the opportunities that we seen and maybe some difference. We put a lot of our effort into forecasting, but we've talked to firms who will work with the business owner and charge them for a forecast and deliver a forecast, but then they're done. I think one of the things that think what we like to do is then that's an ongoing coaching.
Adam (00:24:24) - The forecast continues to be developing. But if I'm reviewing a financial statement in Roger, you're spending way more than what we had forecast. There's an accountability piece of, hey, we sat down a month ago and we talked about this and we agreed that things were tight. And then you went and did three conferences and you sponsored a bunch of stuff. Tell me more about how that decision was made because it didn't fit. When we plan this out, there's an accountability piece that we can put people under.
Roger (00:24:46) - Yeah. Otherwise, who's asking that question? You've told me that this is your forecast and you spent more money in advertising. Can we see a correlation then with an increase in sales? If there wasn't, then why did you spend the money? Was testing something? Okay. Is the test over? Are you done spending those monies? Can we go back to the forecast? Because I see the shiny object is being something we're testing, but obviously we're not seeing the net gain. Let's knock it off.
Roger (00:25:07) - And so there's that conversation. Now, to your point, Adam, it is their company. It's their decision whether or not they're going to change. But I'm trying to be the one that's the the individual that maybe doesn't exist in the organization to say, help me understand. And I'm trying to, through questions, get them to feel as if they need to verbally communicate some explanation of why they're doing what they're doing in their business. And all the business clients I work with appreciate that dialogue. Appreciate that exchange.
Adam (00:25:32) - Yeah, I think that's that's the important kind of twist there is doing it through questions like, help me understand, you know what I mean? Instead of just telling them or barking out an order, you're actually asking them, you know, because otherwise sometimes it's this, you know, in an advisory or coaching kind of aspect. Like if you're constantly beating up the client, they just stop wanting to show up, you know what I mean? They know sales are bad. They know this is happening.
Adam (00:25:55) - So there's always this delicate blend. But then I think we have a tendency and this was a big lesson learned for us is you have a tendency when things are going good, you're just kind of like, okay, okay, you're not really calling those things out or asking those questions because everything seems okay, Or maybe they seem a little stressed, but sure is the world. You know, it's like as soon as you know, things go bad, you know, the very first place they come back to is like, Why didn't you ask me that three months ago or four months ago? And and it's a really, really tough learning curve for almost, I would say, every single that we bring into the team, we tell them this, we explain it to them. And then whenever they're live in front of the client, they're just kind of like. Yeah, but you should. What about this? You know, they almost say it like in passing, and they're not really, like, super confident in, like, wanting to dig in a little bit with the client.
Adam (00:26:45) - And of course it's the relationship, but it's one of those things where it almost unfortunately in our in our circumstances, it almost feels like everybody's got to get burnt once before they're just like, okay, I need to make sure that I'm really, really like, I want to make sure. Roger you heard what I just ask, like just to be clear.
Roger (00:27:04) - So I'm going to add two things to that. One, it isn't 21 questions where you're just like you're saying, you're not belaboring this person and belittling them through questions. What we want to do is, first of all, realize that a great coach ask the right questions and holds their clients accountable. Those two elements. But in asking the questions, we need to get beyond, Just tell me why. What are you doing? Why is it it's not an interrogation? What we're trying to do is get even to more of the feel feeling questions of that was interesting. You know what happened in the business. Tell me what led you to make that decision and how did you feel about it afterwards? It's helping them actually communicate some of those emotions because a lot of the decisions they're making are emotional, emotional based ones.
Roger (00:27:43) - The second thing I'd point out is you need to have a safe environment for your client. Creating a safe environment allows them to become vulnerable and allows them to admit they don't know what they're doing. And at that time, I think that vulnerability allows curiosity to step in and both of you get to explore various solutions and options. There's no right or wrong answer. It's just we're going to try and make the best solution or the best answer at the time. And to your point, there's a there are those experiences where you have what you feel is the right solution, but it's not your company. So you need to be, over time, kind of taught and it's self taught oftentimes how to volunteer an option, a solution without it appearing as if it's a directive and a mandate.
Adam (00:28:26) - Right? Yeah, that's really important. Yeah. Think that, you know, digging into that just a little bit, you know, whenever it comes to just your ability to again, talk through those questions and work through some of that kind of stuff with the clients, again, I think that's always been a little bit of a friction point for a lot of our our CFOs is just understanding how to offer up those, you know, that advice without sounding like a mandate.
Adam (00:28:52) - So. Yeah, I think you're right in that idea of asking the questions, I think is also how it can really the client can grab it really well, right? I can tell you, Roger, you should be doing this and that. And I feel good because I said it. You may have totally not listened. And how much better could I get if I could get ask a question that gets you to arrive at the same solution on your own and think through that together.
Roger (00:29:11) - That's the genius. When they can own it as if it was their own idea, they'll actually implement it and they'll feel more good. They'll feel better, more good. They'll feel better about going to their clients, excuse me, their employees and implementing it because it is their idea. Yeah. And so we do want to actually it's I don't want to say it's manipulative, but it is through the right questions that you get them to draw their own conclusions.
Adam (00:29:34) - That's helping to lead them. You know, you're more of a guide then than anything else in that aspect.
Adam (00:29:39) - And I think another important point that you mentioned earlier was the vulnerability and giving them a safe space. I think that a lot of times, especially as a sometimes we're coming into like a small table, small council, a leadership team where there might be 3 or 4 of us on a call and you might feel a certain vibe from the owner or somebody, a leader on the team, whatever you're talking through or asking some of those questions. And I've always really tried to, you know, let our team know that sometimes it means you got to just pick up the phone after the call, you know, and then have a one on one conversation. Like maybe that conversation is not the best conversation to have. In that meeting or to talk through that kind of stuff, because you can just tell like Tom's just turned off by the conversation. He's in a bad mood, you know, pick up the phone, say, Hey, Tom concerned. I just got the vibe, you know, I know you're going through a lot.
Adam (00:30:30) - There's this happening, this happening. And I know I keep pressing on this, but I just want to make sure that you understand that I'm doing it to to try to get us to this point. And I've had some really great conversations and some really good friendships kind of develop through having that kind of a conversation with our clients.
Roger (00:30:48) - You know, I really appreciate you bringing that up. Um, yes. In a group setting, there is that dynamic where you're on a call together or whatever in a meeting and you get that vibe and you don't want to put them necessarily on the spot in that group setting, but to pull them aside and hopefully have a one on one relationship with them, one that you can build where these things can come up is critical. So I already pointed out earlier that there are three things I focus on. It's basically increased revenue, improved profit and build value. But there are two others that we actually do. The first actually starts with engage in Manifest and then the next is understanding the county.
Roger (00:31:20) - So there's five. When we start with engage in Manifest, I really want to dive into the businesses, the business owners mindset as to why they're doing this. Why are they willing to put a second mortgage on their home? Why did they go in that first year of business without a paycheck? I want to know why. When it came to taking care of things, cash flow got tight and they didn't take a paycheck last month. There's history here and there, sacrifice. And I want to understand what is it that they draw upon to go through the hard times and those hard times come up. And if you take the time to just be curious about who they are as a person and what their motivations are in their business, all of a sudden they'll start to reveal things that you can later draw upon in future conversations. And I've had conversations where the client is not attentive. They're off topic. They don't even want to discuss what we came to discuss today in the meeting. And I have conversations about marital relationships.
Roger (00:32:10) - I have conversations about children, I have conversations about health, I have conversations about depression. I have conversations with them about a variety of things that are typically off topic. But in the advisory space that that coaching space becomes so valuable because those things are impacting their ability to work on the business and be the leaders they need to be. And I'm perhaps the only individual that's providing for them a safe environment to address these things because they can't take it to their employees, they can't take it to their family. To whom are they taking it? And until it crosses that threshold of maybe they need professional psychiatric or counseling or whatever, I'm happy to be that person for them to have those conversations. And I've had wonderful discussions.
Adam (00:32:52) - I'm glad to hear you say that. I've got one particular client who is currently separating, going through a divorce, and we've had 2 or 3 meetings where he said this feels more like a therapy session than a meeting with my accountant. And we sort of laugh and joke, but I go away feeling well, good, if that's what you needed to have this discussion.
Adam (00:33:08) - And there's a little bit of financial advice, but mostly just listening about the difficult challenges going through. If I totally ignore that, my guess, I mean, I'm sure that is taking up a huge portion of his mind space. So that's totally ignored here. I'm going to focus business, business, business. And he's hearing a bit of it, but 80% of what he's dealing with is his life is changing significantly.
Roger (00:33:26) - You mentioning that because at the end of the day, as even though we're accounting professionals, I do believe that our business is built upon personal relationships. It is. And I really believe this. The relationship you can build with your client will determine the lifetime value of that client relationship. If they see that you're more invested in them than just the business, they're going to lean on you for other things over the next ten, you know, five, ten, 15 years as you work with them, as they're running their business. And so I think we need to be willing to have those types of conversations.
intro (00:33:57) - Elevate your firm with a virtual CFO playbook. How to land $60,000 per year clients and provide a killer client experience. This comprehensive online series of modules provide you with the essential tools to create and deliver scalable services developed from Summit's successful approach, which propelled them from $500,000 to over $10 million in revenue in ten years. This playbook will equip you with the skills to take your firm to the next level. Additionally, upon completion, you can receive 24 hours of CPE credit for the course Ready to grow your firm. Enroll now at Playbook Summit CPA Net.
Adam (00:34:38) - Yeah. And just to kind of go back. Think one big takeaway I got from, you know, our conversation so far was we're really good at the beginning of an engagement, like engaging with the client on, you know, the business purpose and all those kind of things. I think we we spent a lot of time there, but don't think where we we don't intentionally focus on the owner. And the reason why the owner you know, we talk about their in state and what they want from the business but and we talk about what makes the business work like you know really dive into that but don't think we talk about the initial motivations of when they got started and what they were trying to do and think that's a that's a good takeaway and something that can help establish that relationship early on.
Adam (00:35:24) - Like you said, what do you lean on whenever you get into the tough times and those kind of things that, you know, going back into that history, they'll give us a little bit of a history lesson. But it's more about like the company, you know, the company did this and then we did this. You know, it's very just like time date stamped, but it doesn't really involve like their personal motivations through those periods. So think that taking inventory of that at the beginning of the conversation I think would be a good better start for us for sure.
Roger (00:35:52) - Yeah, that first month for us is typically a lot of. Just tell me a little bit about you, your story, your background, what are your goals? And that first month is really a couple of meetings where we're kind of diving into the mindset of that person, their intentions, what sacrifices they've made along the way. And one thing I would add to all of this is, especially where we're doing so much virtually now as a profession is, if possible, I strongly suggest as quickly as you can go out to the client and do a site visit, you will learn so much about the business when you can walk through their facility, their office and if they have employees meet with, introduce yourself to have them kind of show you around and show you how business is done, the work flow.
Roger (00:36:33) - And as you take a time going on that tour, you'll probably leave with a little bit of swag. That's nice. Kind of nice to leave with a hat or t shirt. But what's more important is you get to now have a frame of reference that you can refer back to in conversations months from now. Hey Tom, I remember when I met Sally and in her office, she seemed a little cramped. How is she doing over there? Oh, yeah, We've got her a new office space. I mean, you have context that you can draw upon, and it makes everything so much more personable. And I've had great conversations simply because visually, in my mind, I can see what they're talking about.
Adam (00:37:04) - Yeah, I agree. You know, we work remotely, yet probably half of my clients I've had a chance to meet in person. And similar to what you're you're saying, the amount that I can feel like I learned about the client just in 15 minutes of being in their environment, you can learn and was just telling Adam recently he and I are traveling to do a conference and so I'm driving to see a client and often I'll sit down for a couple hours and really work through some detailed things.
Adam (00:37:26) - But I had told them I'm coming, They're excited, but they're like, okay, well go out and do running because I enjoy that and then we'll have lunch and then we'll do zip lining and then we'll we're just going to play together. But I'm like, How perfect for building the relationships. It's different than expected, but it'll be a great chance to get to know them better.
Roger (00:37:40) - Yeah. Yeah, Totally understand. Um, just can't say enough about doing the tour, though.
Adam (00:37:44) - Yeah. Yeah, I agree with that. That background. I agree with you, Adam. We don't focus as much and think of a client that I'm sure you know who went through bankruptcy several years ago is doing really well now. It drives so much of his behavior currently that understanding that and knowing we've had things like with the bank gets a little out of communication, he will go ten x what needs to be done. But just that understanding of that. And so if you know that you're like all over it where other clients wouldn't, but just that understanding that background has made a huge difference in how we interact with this client totally.
Roger (00:38:15) - It gives you context. That's what you're looking for.
Adam (00:38:17) - Yeah. Yeah, that's true. So what do you I'm just curious. You'll talk to people and my guess is you find some resistance from CFOs stepping into that advisory role. They put themselves out there and maybe you don't find that think we do. People are nervous. Is there a way that you try to help people sort of take that step and say maybe it's not quite as scary as what you think to call yourself the advisor or the coach?
Roger (00:38:37) - I'll break it into three things. One is permission. I find that a lot of people just wonder and it's kind of like what you were saying earlier, Adam, of the imposter syndrome. It's where did they get the permission to actually have these types of conversations that are a little bit outside of the accounting scope? It does get into human resources sales. There's a lot of elements that are not necessarily accounting, at least at the surface. And so when you work with somebody, they're just kind of like, you know, what gives me the right the permission to go in and ask money for that type of service and to have that dialogue and help them realize that they do have the ability to ask questions.
Roger (00:39:09) - And again, they don't need to have the answers. The business owner has the answers, ask the right questions and hold them accountable. And it allows you to move into that advisory space and that coaching space. That's the first thing is the mental permission to become an advisor. The second thing and this is really important, I can't stress this enough, I think a lot of people struggle with, okay, I get a client that agrees to pay me. We haven't talked about amount yet, but pay me for the service. But what does it really look like? How often am I meeting with them? A client as a client do meet with them once a month. Do I meet with them twice a month? Do I meet with them for an hour for three hours? The idea of the deliverable, How am I going to fulfill this engagement? And then the next part of that fulfillment is okay, six months down the line, nine months down the line, Yes, they're giving me the money and I know what I'm going to do for the first six months.
Roger (00:39:53) - But what do they pay me to do nine months from now? What are they paying me to do 12 months from now? And that clarity of I've got a client and I'm meeting with them tomorrow, what am I going to talk to them about? When you can get some clarity as to what it is you're actually delivering and what it is your client is going to experience in month 12 months 18 That becomes very empowering to then be able to say, I have a program, a process that I can deliver for you in an advisory space that's literally going to help my clients in running their business. That empowers you to have that role as an advisor to now actually offer something that is part of the engagement and that brings you to pricing. And with pricing, it runs the gamut. The thing that I would advise, and I don't know how deep you want to get into pricing is, first of all, you have to be able to separate the CFO and advisory services from the bookkeeping, the accounting, the tax planning, tax preparation.
Roger (00:40:44) - All those other services need to have their own price points. What we want to do is have as a standalone fee. Or this service over here. And if they're paying for the other things, great. We're just going to add this on top. I think too often they're just trying to get this single amount and it's you pay me $3,000 and I do your bookkeeping, your accounting, your tax plan, tax break. And it's like, no, no, no, no, no, no. You're paying this much for bookkeeping. You're paying this much for accounting, you're paying this much for the tax preparation. And if you can chunk it down like that, it's a little bit more manageable because when the client is paying, they have some expectations as to what they're receiving and you're able to manage that deliverable a lot better.
Adam (00:41:23) - Interesting. Yeah. Yeah, that's a great description. Think in the separating and think of the way we do our pricing is a similar way that let's, let's talk about the advisory services.
Adam (00:41:31) - Oh. Do you want bookkeeping? Yes, we can do bookkeeping. It's okay if you want to do it. Oh, taxes. Yes, we can do that piece and people can play around with that from a pricing standpoint. Yeah, we just don't separately price all three of them. I mean, as you're building, you're kind of getting the visual of watching it kind of move around. Yeah, but you're not necessarily seeing three separate prices, so that's something that you want.
Roger (00:41:55) - Well, yeah, I'm not saying that you're on the statement going to see three different transactions, but what I'm trying to say is mentally, in your mind as the accounting professional explaining what your services are, you should be able to have a very clear distinction between feature and benefit. This is what I do. This is what my client is getting and why they're paying me to do this. And associated with that feature and benefit is this fee and I'm going to cluster this together. And at the end of the day, I'm going to quote the client based on what they want.
Roger (00:42:20) - Do you want bookkeeping services? Great. Do you want accounting services? Wonderful. Do you want tax planning? Preparation, CFO advisory. Okay. You're getting four of the six services. Great. My service for that for you based on the size of your business and so forth, is going to be 2500 a month.
Adam (00:42:36) - Great. So in this a little bit of lightning round here as we're wrapping things up. So, yeah. What do you think is an optimal amount of touchpoints in a month if you're doing the the coaching? For a client.
Roger (00:42:53) - So if you're if you're doing the coaching and this is through experience, I think I'm sure everybody has a different point of view. This is my point. If I'm actually meeting with a client, I want to have at least one meeting a month that is counting related. So I'm going over the financials, whether I'm in a bookkeeping capacity or an accounting capacity once a month, and then I want to have a second meeting with them. That's more an advisory role.
Roger (00:43:13) - So at least two meetings where I'm actually working on their business and we're working in their business with the accounting numbers. This is where I'm delivering the KPIs, this is where I'm doing the Dashboarding, all those types of things. Now, in that capacity, if I'm also providing CFO related services, I would consider the CFO related services, possibly a third meeting, because you're dealing with policies, you're dealing with payables, receivables, cash flow. And I think that is a deep enough conversation that you need to be having with your client at least once a month. That is outside of the accounting to conversation and it's outside of the advisory conversation. So if I happen to be providing those three services, that's where I'd be doing that. When it gets to tax planning and preparation, preparation, you're probably meeting with a client once a year prior to actually doing the filing, and then you're meeting with them when the returns are prepared. But during the planning stage you might be meeting quarterly at least semiannually, only because of the fact that I think you need to have a strategy session and then you have to have an implementation.
Roger (00:44:07) - You need to follow up with the client. Did they do everything before a year end? And so that's at least two different meetings, if not more. So that gives you some context. But at least on a monthly basis, you're looking with as many as three meetings. I would keep them separate meetings. I would rather not do them all together. But I can see for logistics, you know, travel perhaps, or whatever. Somebody may say the first hours, this the second hour is this third hour, however you want to organize it. I just want to keep it compartmentalized so that it's simple and manageable, though.
Adam (00:44:33) - Gotcha. Okay. So 2 to 3 and then price value based fixed fee or hourly? What's your preference there?
Roger (00:44:42) - My preference happens to be fixed fee. I want to do that based on an assessment of the client's needs so the fee can range a little bit. But value pricing, I think that's more project based in my personal opinion. Maybe the tax planning side, a lot of strategy there.
Roger (00:44:59) - It's a single fee for a very specific deliverable when it comes to CFO and advisory services. I go the fixed fee route. This is what my services will cost on a monthly basis and usually my engagements are 12 to 18 month and duration. On the advisory side, CFO can go and definitely the advisory side, I do 12 to 18 month engagement. I tell them at a minimum it's 12 months. I give them three months of I don't want to talk about whether or not this is working because there's so much at the end, at the beginning, that it's hard to say the needle is moving. But from the fourth month on, I give them the flexibility to say at month seven, you know, I just don't see the advisory working well. And that usually gives the client the comfort of engaging because they see that there's an out. But most of my clients have gone between 12 to 20 4 to 36 months in implementation, and that's just in the advisory space. Great.
Adam (00:45:50) - Good. Yeah, that's really helpful.
Adam (00:45:53) - So, Roger, I'm curious, give you a chance to to promote if people want to try to connect with you. I know you've got you want to talk podcast book ways they can do coaching. Let people know how way they can continue kind of learning from you if they want to.
Roger (00:46:04) - Yeah. So first of all, I definitely invite everyone to engage with me on LinkedIn. I love connecting there. That'd be wonderful. Second thing I would definitely promote is universal accounting. We have a great deal of free resources there that I would encourage you to take advantage of as an accounting professional. Particularly, there's a book there that is called Red to Black and another titled In the Black, that some of these principles that I've been sharing today are derived from. And that would be a great place to start. And with that, take advantage of those free resources. They're literally there to help you. And as you mentioned, I also host a podcast. It's called Building the Premier Accounting Firm. And happy to have everybody come listen in.
Roger (00:46:40) - We try to address these various things to help them work on their business to ultimately have the premier accounting firm in their area.
Adam (00:46:46) - That sounds great. Good. Adam, any final thoughts? Just lots of great parallels to what we're doing. Good insight. I think focusing in on the you know, on the coach aspect and everything around the curiosity and in the delivery of that is super helpful, really insightful. So appreciate your time, Roger.
Roger (00:47:04) - Yeah, it was a pleasure. Thank you so much. And if it's about accounting, it is universal.
Adam (00:47:08) - Oh, nice. All right. That's a great close. Thanks, everyone. Have a great day.
intro (00:47:13) - Enjoy this podcast. Visit our website, Summit CPA Net to get more tips and strategy for achieving modern CPA firm success. We are here to be a resource in this ever changing industry.
