Earmark Podcast | Earn Free Accounting CPE

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Ben Sutton: [00:00:00] Most accounting firms don't want to touch them. You know, I heard your conversation a month or so ago about, you know, their their C and D and F clients right there, everyone else's C, D and F clients. And my goal was to provide, you know, to make that my. A client. And it's messy. You know, it's messy. Trust me, it's not easy. And we still struggle through it. But, uh, that's the goal.

Blake Oliver: [00:00:29] If you'd like to earn CPE credit for listening to this episode, visit your mark CPE. Com Download the app, take a short quiz and get your CPE certificate. Continuing education has never been so easy. And now on to the episode. Hey, everybody, and welcome to another episode of the Earmark podcast. I'm Blake Oliver, joined today by Ben Sutton. Ben, welcome to the show.

Ben Sutton: [00:00:59] Thanks, Blake. Good to be here.

Blake Oliver: [00:01:01] And your firm is called Mizushima. Is that.

Ben Sutton: [00:01:04] Right? That's right. Yep.

Blake Oliver: [00:01:06] And we're here today talking. Actually, this is the first time, I think. Is this the first time we've ever met?

Ben Sutton: [00:01:12] Yes, it.

Blake Oliver: [00:01:13] Is. It is. And you're a listener of the show, and you wrote me this wonderful message, an email. And I just want to read a little bit of that for our listeners so they get an idea of what we're talking about today. You recently spoke about whether it's possible to scale bookkeeping services at low prices. Well, I've been grinding away at it for over ten years now and believe I'm on to something. We provide core monthly bookkeeping services, reconciliation, basic financials and tax returns at year end, business and personal, all for a flat fee of $180 per month. My firm did 7 million gross revenue last year and can see a bright future ahead for continued exponential growth. I know you guys talk about niche a lot and you mostly reference it in terms of industry, but there is a niche of businesses across all industries that don't need most of what is being offered by traditional accounting firms. They're what I call lifestyle businesses, which happens to be where the volume is. Anyway, I love your show. Thanks again for solving my CPE woes. Keep it up. Ben and I said, Ben, I would love to talk to you about those two things. First of all, your opinions on CPE and then also how you scaled bookkeeping and and tax for that price up to 7 million in gross revenue a year. That is really exciting. How long did it take you to get there?

Ben Sutton: [00:02:28] Well, it's been over ten years. Yeah. So we we truly it has been a grind. And there's some real, uh, fundamental components, though, that I think has enabled us to get to this point. But it, it wasn't going to happen quickly, I think was the reality. So, yeah, it's been over ten years. We formed the company in 2011.

Blake Oliver: [00:02:50] Okay, so that's around the same time I think that I got into the whole cloud accounting cloud bookkeeping world. I'm thinking. I guess for me it was I started my firm in 2010. What was it that got you to start your own firm? Were you at a CPA firm? Do you have a background in audit tax accounting?

Ben Sutton: [00:03:11] Yeah. So I went to school for accounting at BYU, Idaho, and got a bachelor's degree there. And then, of course, the 150 hour rule. Byu Idaho doesn't have a graduate program, so I had to look elsewhere and decided I want to try something a little bit different. So I went to University of Washington, had a really good experience there, although that one year at University of Washington cost me about five times as much as four years at my last college. So that's the student debt. I'm still paying off from that one year, but so I got my master's degree there in audit, uh, got my CPA license. Soon after that, as I went into an internship and got a job there at a regional firm in Seattle, was there for just a short time before we kind of decided my wife couldn't handle the, the gloom of the, the Seattle weather anymore. And of course, a variety of other factors that led us to looking elsewhere. And I ended up getting a job in Utah for another regional firm and spent the next four years auditing and learning that world and became an audit manager and started over time, though, just realizing, you know, people as much as they like to make me feel like they like me, they don't like to see me coming, you know, when I'm their auditor onsite. And I just had this realization, do I do I want to be doing this the rest of my life? And I think deep inside the answer was no. So I started to just kind of think about other opportunities. And small business had always captured my my attention. Like we worked for medium sized businesses doing audits. So they they weren't the massive ones. You know, where all you do is one account.

Ben Sutton: [00:05:07] But and so I did get some nice perspective as we were auditing and kind of saw top to bottom. But the small business, just what made the small business, the micro business, the the guy who drove by with, you know, Smith's construction on the side of his truck, like, what is it that makes that business go and what what do they need from an accounting stand? But they obviously don't need auditors. What do they need? And I had spent years serving a board, you know, which is kind of nobody it's like there's no person. It's just a group that's representing a larger group. And I was like, I want to serve somebody. I want somebody to be to benefit from my efforts. So that kind of got me in this small, small business mind frame. And I actually came across a blog post about a firm called Zuma in the UK who were trying to do subscription based accounting services for very low monthly fee, and their monthly fee was extremely low. And I was like, How in the world are they doing that? And I don't see anybody doing that in the US. Why isn't anybody doing that in the US? That's what these people need. So I reached out to them and make a long story short, which is already being a long story I can tell. But they, they love the idea of me doing this in the US, but they weren't really able to help me is what it came down to. So there was no, like, franchise arrangement or anything like that that they could offer. So I just decided to find someone here in the US who would partner up with me and go do this on my own here in the US.

Blake Oliver: [00:06:51] So. So they they let you use the name or you just decided it was okay.

Ben Sutton: [00:06:57] Got it. Yeah.

Blake Oliver: [00:06:58] So what does Missoula mean? Like, what's the.

Ben Sutton: [00:07:00] It actually means cash or money in Yiddish. So it's kind of got a neat little relationship there.

Blake Oliver: [00:07:08] So you were inspired by this company and you decided to do the same thing? Well, let's get to the the thing that I think is probably most interesting to our listeners or the biggest question I have, and I'm sure they have, is how do you do bookkeeping for those prices and I assume make it profitable? I assume you're not doing this as a charitable endeavor.

Ben Sutton: [00:07:30] That's right. Yeah.

Blake Oliver: [00:07:32] So you wanted to serve small businesses. You were you were doing audit working for larger businesses. And, you know, you got to do it at a price point they can afford. So, yeah, like $180 a month. Is that still the the starting price point for you guys?

Ben Sutton: [00:07:45] Yes, That's well, we actually have a lower plan that's $120 a month. Oh, wow. That is quarterly bookkeeping and only provides one tax return. So just to clarify, the $180 plan is a monthly bookkeeping plan that includes a year end personal and business tax return for the owner of the business. And then the $120 month plan provides quarterly bookkeeping with just one tax return. So if we're doing an S corp, you know, that needs its own tax return, that's the only return they get. They don't also get their personal. But if they if they're a single member LLC, we we do their personal tax return. So. Early in my career, I noticed in the write up department there was all this back and forth with the client, just all kinds of clean up all the time. It was just cleaning up the books all the time so that the tax return could be prepared. And I said, Why? These clients, small business clients, microbusinesses, lifestyle businesses, they don't know accounting. So why in the world are we letting them touch anything in the books, you know? And the answer was, well, because we don't want to do all the work. You know, the accountant is like, well, it's easier. And they they then do the work throughout the year and we just get to kind of swoop in and fix things and then prepare the return.

Ben Sutton: [00:09:18] Well, I, I kind of rejected that a little bit and said, no, I think it would be easier if we just did all of the work associated with the the data entry, the reconciliations, the financial statement preparation. And just let the client look at what we're doing and provide comments, you know, and changes and notes and, you know, tell us what they want different. And so we started out with that premise that the client is not going to be modifying the data in their accounting, in the accounting software at all. So that any mistakes or any weird things going on, you know, we know how they happen, why they happen, and we then can quickly fix them. So that's that's a that's a fundamental line in the sand that we've drawn. So so we don't let the clients change or modify data in their books. We also don't provide, you know, crappy full accounting services that way. We are we are strictly providing a service of, uh, reconciliation, financial statement, preparation, tax return, preparation. So that's obviously makes the workload much less than it would be if we were tracking AR or inventory or AP. Um, and so that's obviously it's.

Blake Oliver: [00:10:36] So another way to say it is it's just write up pure write up work, right? You're pulling in the transactions, you're categorizing them. Clients can have input, but very importantly they don't have access to do it themselves. Where then you have to go? Well, we've all been in that experience where we've had clients do it and then it's more work for us to untangle it after the fact.

Ben Sutton: [00:10:57] Exactly.

Blake Oliver: [00:10:57] So, okay, Yeah, Yeah. And so that's that's then the core offering is either on a quarterly or monthly basis. You do that right up. Work. What do you send them each month or each quarter? Like what is the client get as a deliverable or do they get one?

Ben Sutton: [00:11:16] So back in the day we used to, you know, we actually started out using the envelope method where people would actually the shoe box, you know, shove, shove the receipts, shove the bank statements and anything you want into this bag, the pre address pre postage, you know, and send it to us and then we would print out their financial income statement, balance sheet, general ledger and you know, punch it and package it all up and mail it back to them. Now we have a client portal that the clients log into to view their financial statements and they can see the months that have been done and view their income statement, balance sheet, General Ledger online. They also go online to upload bank statements to us if they haven't linked their bank account. You know, so that's how they exchange documentation with us for taxes and so on.

Blake Oliver: [00:12:08] Got it. And your starter plan, the 120 per month that's the business tax return is included with quarterly bookkeeping on the plus plan 180 a month. It's monthly bookkeeping and they get the business and the personal tax return. Now, let's talk about the tax work well, or let's just talk about how you manage the team doing this. Like, how do you make it profitable? Because my experience working at a larger firm, which you may have heard on a previous episode, I like to talk about this a lot was. I couldn't figure out how to fit into the firm's methodology. Anything less than $1,000 a month to do bookkeeping, even just to do accounting work, because we were using, you know, staff in Los Angeles, high cost area. All of us had to compute billable rates. And it was, you know, I think even just some of the the the entry level folks were built at over $100 an hour. So for us to even like, it wouldn't even be possible for us to work on a client for $200 a month because we'd blow the budget if we worked more than 2 hours. So how are you? How are you doing this?

Ben Sutton: [00:13:19] So I have, of course, had to abandon the time tracking concept and really leave behind what I had been taught in traditional accounting firms and change this from. A focus on providing accounting services to really an operational exercise of how can I make this more efficient? And nothing was sacred. You know, just like, how can we move this data? Because that's really what you're doing. You're moving data from their bank into the accounting system, getting it classified, and the financial statements are there, right? I didn't believe that it takes an accounting degree to reconcile a bank account. So I wasn't hiring accounting degrees to start. And for the first, you know, for the first six, six, probably, yeah, six years, I think I was the only CPA, you know, licensed person here. And so I taught high school graduates to reconcile a bank account properly and to do their best understanding categorization and and what a business is doing. And how might this transaction be coded for them? That's not rocket science. Right. And and I think we don't spend enough time just doing that as part of the accounting education, because you got accounting degrees, you come out of college and can't even do that properly. Yeah.

Blake Oliver: [00:14:53] Oh yeah, I got my accounting certificate at UCLA so I could sit for the CPA exam. And we never talked about how do you categorize transactions in their chart of accounts. I don't even think the chart of accounts ever even came up.

Ben Sutton: [00:15:04] Yeah, right, Right. Yeah. So I just, you know, it was a little bit nerve wracking to do this because, you know, in the accounting world you're taught we CPA licenses or basically the only ones who could ever do this, right? Yeah. You know, and I just. But I had to believe. No, I think. My little sister, you know, can figure this out. Who graduated high school or my neighbor, who's a a mother at home looking for a job, you know, can do this, can learn this. And so that was a fundamental part of Missoula. As we take people and we teach them these basic accounting processes, they're not the ones preparing or reviewing tax returns. They are the ones helping with that lower level work that that heavy lifting. When you talk about the amount of data that has to move in. So that was that's an important component. So efficiency not over, you know, not hiring above pay grade to do work that that doesn't require it.

Blake Oliver: [00:16:10] So you're taking non accountants. You're teaching them how to do bookkeeping. Do you have a standard chart of accounts that you use for every client? Do you have? A niche that you specialize in. How do you keep it consistent? I suppose because it would be very difficult to take somebody who doesn't know accounting and then have them serve, you know, 12 different clients from different industries, I imagine.

Ben Sutton: [00:16:33] Yeah. So, uh, we do have a standard chart of accounts that we start with, but we allow the client to make modifications to that. So if they've got cost of goods sold, we'll make sure that that's there and showing up the way they want it to, the way they want to see it and the, the. So we have teams, right? So we have a tax professional who's sometimes a CPA license, sometimes not paired up with an experienced bookkeeper. And together they kind of act as the mom and dad of the team, kind of the parents of the team. And then we've got a few bookkeepers working underneath them. And so there's supervision. There still is review and supervision going on and a place for these new, uh, you know, new employees who are learning, accounting to ask questions and be trained. We definitely have training that we provide in a formal way, more formal now than it used to be. But as far as niching, you know, this is a question that we've asked ourselves many times and that people have posed to us many times as as a suggestion. And it's partly been driven by where we've gone, is partly been driven by the lead sources that we can find. But we don't niche into a specific industry. We do have groups of of clients from similar industries and we are trying to group them under the same team, but we service all small businesses, any kind, you know, that that aren't in illicit industries and things like illegal or illicit industries. Um, and so no, we, our niche is the micro-business. It's people who can tolerate this level of service and really this is all they want. It's the people who would be doing it themselves if we weren't offering this level of service. So their requirements just aren't as heavy, you know, and significant as as someone with a more sophisticated business.

Blake Oliver: [00:18:37] Well, there there's millions of them, and they're looking to get their taxes taken care of. That's the primary goal. And so they've got to do the bookkeeping to get the taxes done. And you're providing. It's not that complicated. That's what I love about this business model is that it's it's solving a problem that most CPA firms don't touch because they might do the tax return, but they won't do the books you're offering the books and the tax return together as a package, as a monthly fee, and it's priced right for that type of business, I imagine. Like what? What's the annual revenue of a typical client of Missoula?

Ben Sutton: [00:19:19] Oh, it gets down as low as 50,000 up to millions. Um, but, but I'd say the, the bulk of our clients are between. 100,000 and 500,000 in in annual revenue. And it's the type of business that can make a living. They can pay the bills. They're not trying to go raise capital. They're not trying to expand in large ways. They are a realtor who wants to provide a good lifestyle for them and their family, their, uh, insurance agent, their, you know, landscaper. That's where most small businesses are. And you're right. Most accounting firms don't want to touch them. I heard your conversation a month or so ago about, you know, their their C and D and F clients right there, everyone else's C, D and F clients. And my goal was to provide, you know, to make that my a client. And it's messy. You know, it's messy. Trust me, it's not easy. And we still struggle through it, but, uh, that's the goal.

Blake Oliver: [00:20:26] And are you doing this with all staff in Salt Lake City? Because that's you're in the Greater Salt Lake area, or do you use remote staff in the US? Do you use offshore?

Ben Sutton: [00:20:36] So all of the above. So we do have a large amount of a large portion of our our employees coming to the office every day and then there's a portion. So about half of our, our us uh, domestic uh, employees are coming to the office. Then we ve got about half that are remote. And that was a more recent. We just started hiring remote accountants and bookkeepers. In the past two years, we had a phase where we needed to ramp up significantly and, and we couldn't hire fast enough here and locally. And so we opened up that door and that it's been working out pretty well, coming with its own unique challenges. But we also do outsource some work to the Philippines. And so it really need to hear your recent podcast with that gentleman who built his firm, it seems like, on the Philippines. Oh yeah, yeah.

Blake Oliver: [00:21:31] Yeah. That was our Jill Sybilla.

Ben Sutton: [00:21:33] Yeah, yeah. And that was really neat to hear and relate to his experience. You know, we've, we've, it's a different approach for us. We don't use them as client facing, uh, even though, you know, contemplated it and who knows down the road. But right now they are more data entry. They do, they do answer phones and, and kind of act as our first defense. So for clients calling in and needs to change their password or can't log in to the client portal it's not being taken the time of a of an accountant to deal with issues like that. So they do help with phones. We also use them for software development and um, they are amazing people. They just I'm so grateful. We are so blessed by their contribution to our business. It's it's been a really neat experience working with, with the Philippines.

Blake Oliver: [00:22:26] So we do that at earmark as well. Like all of our CPE courses are managed and developed in the Philippines by a team there. We couldn't yeah, we couldn't do it otherwise. So our CPE manager is a CPA and a CMA, and he was previously working a corporate role from the Philippines and wasn't really, you know, it wasn't exciting him because a lot of times the work that gets sent over there by Fortune 500 companies, I imagine is pretty tedious for somebody who's talented and smart. And so he found us and said, Hey, can I help with earmark? I think it's a great idea. And so that's where we do all of our development, and we can do it for a fraction of the cost. The business model wouldn't even be possible without that. Wow. Development is done in Pakistan for the app.

Ben Sutton: [00:23:15] Okay.

Blake Oliver: [00:23:16] And yeah, I feel like with the labor shortage getting worse every year in accounting, I don't see how firms are going to be able to stay in business if they don't offshore. I think every firm at some point will have at least some aspect of of work being offshore.

Ben Sutton: [00:23:34] Yeah, absolutely. The the firm I used to work for just recently did it for the first time and, and that's a surprise to me that's a real big but yeah the fact that they they're doing it traditional firms are now. You know, the big firms we all know have been doing this for probably decades, you know, but them smaller firms, medium sized firms who haven't considered it are definitely considering it now.

Blake Oliver: [00:23:58] Well, on the episode that you mentioned, the interview with Argyle Sabelo, the inspiration for his firm came from him working at Deloitte. And Deloitte, like you said, has been offshoring to India for decades now. And so he was very familiar with that and felt like he could build a firm and improve that process. And so I think, yeah, a lot of the younger generation, especially those coming out of Big Four who are going into smaller firms, are starting their own, that's the way they've always done it. So that's the way they're going to build firms now.

Ben Sutton: [00:24:26] Absolutely.

Blake Oliver: [00:24:27] It does have its own challenges, as you mentioned. Right. The time differences, you really have to be clear with directions and documentation is so important, which is something that's often missing in firms because we can just walk over to somebody's desk and ask a question. But when you've got this 12 to 24 hour delay, you've got to be really clear with what you want. And so I have had I have learned over the years, to be precise.

Ben Sutton: [00:24:57] Yes. Yeah.

Blake Oliver: [00:24:59] And using a video I use Loom. Loom is a great tool to help clarify and to create like that human connection that you don't get over a chat or email.

Ben Sutton: [00:25:08] Mm hmm. Yeah, absolutely.

Blake Oliver: [00:25:10] So the tax work, Do you do the tax work here in the US?

Ben Sutton: [00:25:13] Yes, we do have some prep, some preparation happening in the Philippines, but all the review and, you know, finalizing and communicating, delivering to the client is done here in the US.

Blake Oliver: [00:25:28] Yeah. Let's talk about the technology stack. I imagine you've standardized, right? That's one of the first things you've got to do if you're going to offer this kind of streamlined service. So do you mind walking me through a typical client's technology stack from starting with the bank and then going through to the tax return at the end?

Ben Sutton: [00:25:47] Sure. So, um, we're actually so, you know, the bank is we can have thousands of different banks and we use a service, a company called M X. I'm not sure if you've heard of them, but they're like a yodeler or a Plaid uh, which is an aggregator, You know, they they facilitate bank connections to our software that we're actually kind of proud to announce. Just this year, we finished development of our own. Our own GL. So. Wow. And, uh, so that, that data feeds into our, our own accounting software. And then, uh, that's where all the accounting is done. Bookkeeping. We use Zoho as our main, I guess, you know, ERP type system, CRM and a variety of, of their other apps to manage workflow and to manage people and to automate as much as we can. You've talked about Zoho on here before. You know, it's a very. Very robust platform. And for someone who's a little bit technology minded, you can really dig in there and do some really neat stuff with automation, custom coding and and that's a little bit part of my background too. I, I minored in in I.T information systems and so that's always been fascinating to me.

Blake Oliver: [00:27:16] Yeah, well, I got I know I asked you to walk me through it, but now I got to stop you because you said two things that are really interesting, which is you have your own proprietary GL. I want to learn more about that. That's really interesting. Not a lot of firms building their own. And then also Zoho, they were a sponsor of The Cloud Accounting Podcast and I've known about them for years, but I haven't met a ton of U.S. based firms that are platformed on Zoho. So yeah, know, where do you want to start? I'd love to hear more about what you think about, like Zoho or the the.

Ben Sutton: [00:27:45] Gl Yeah, so on the GL side, we've actually never used QuickBooks because of its inefficiencies for us from early on, I, I could not get myself to, to, you know, with my early focus on efficiency. It just never fit. It just never met the speed of data and the transparency of data that I felt like I needed to to be quick at this and to make it a seamless process to get the data in and out. And, you know, because I'm talking about high volume here, right, like. When you have to click five extra times to get an income statement into a, you know, a deliverable format or. Or back in the day when they didn't have mass, you know, I was I don't know how long they have had this tool, but you couldn't move a batch of transactions from one account to another. Right. And you get to the end of the year and there's 500 transactions in the wrong place to fix that. That shouldn't take more than a minute. Right. But in QuickBooks, it was taking it was just too long. I know they've got tools and things now, but that kind of set me off on this. This other course of not being able to use that. Ultimately, what we need is our operational data to integrate with our accounting data, to give the client the experiences that we want, which is more than an income statement and balance sheet, because we know they don't they don't get much value out of those things.

Ben Sutton: [00:29:19] It's all about the tax return for them. We want to give them more insight, more understanding in their finances. And as long as we are handcuffed by a third party accounting software, we're never going to be able to do it. So that's about two years ago, is when we decided we're going to start developing our own that we've got full access to so that we can use the revenue and net income data to to congratulate the clients, to warn the clients to, you know, give them a heads up about tax implications because their profit this year is bigger than you know and do that in an automated efficient way was going to require us to have our own GL. Now, we also aren't catering to business owners who are using us for a crappy inventory moving money, you know, yet we're not. So we felt like, okay, we don't have all of these extra features that we know are very valuable in other platforms like QuickBooks, obviously, and and the others. But for now we're going to focus on just being as efficient as possible and providing a new experience with the client between the client and their money, and try and get out of this paradigm of the tax return being the only thing they care about because and giving them giving them insights into their business that an income statement and balance sheet won't provide. So that's that's the background between our own.

Blake Oliver: [00:30:47] Gl And how did you develop it? You said you have a background in in code or.

Ben Sutton: [00:30:53] Yeah, so it was a little bit, you know, so I had started working with developers to build our client portal, to build our website where clients can log in and stuff. So I hired a company, you know, to, to build that for us, and I was the only one in the company who was really leaned technology side of things and. I. I could do it. Like back in the day I would write macros. You know, it all started with Excel macros and, and writing in VBA and trying to make my jobs faster and easier when I was an intern somewhere. But. So I, I had an understanding of of code and what could be done. And so, and then working with these companies who are building our website our client portal, I gained a little bit of confidence like, okay, I can, I can maybe manage a project like this. And then I for our next, the next version of our client portal, I went directly to a developer in the Philippines, just hired a, a guy who was looking for a job, not through a, a management company or anything, just an individual. And together, he and I and one other developer got the client portal, a new client portal developed so that again, confidence is just kind of growing, experience is growing. And I said. Hey, we're going to let's let's do this accounting system thing. And I understood debits and credits enough. I just thought we can figure this out. And so it took a lot longer than we thought it would, two years instead of one. But but we finally launched it this summer at the end of this summer.

Blake Oliver: [00:32:35] Well, congratulations. So how many clients do you have on it? Have you moved them all over or are you gradually shifting them?

Ben Sutton: [00:32:43] They're all moved over now. All right. Yeah. There's so all all 6000 clients are, are there?

Blake Oliver: [00:32:51] That's amazing. Do you have any plans to license this out to other firms or is this going to stay proprietary to Missoula?

Ben Sutton: [00:32:58] It's no plans. It's so integrated into our workflow and into the way that we think about accounting and bookkeeping that it's a little bit hard for me to imagine trying to sell somebody else on it because like, you'd have to bring the whole Zoho thing with it in order to really have it, you know, have its power. So.

Blake Oliver: [00:33:23] So tell me about that. Is that because you've integrated with Zoho deeply?

Ben Sutton: [00:33:27] Yes. Yeah. So so again, you can our accounting software is pulling information out of Zoho for our bookkeepers to utilize as they are diving into a set of books to to reconcile and what.

Blake Oliver: [00:33:42] Would be an example of that.

Ben Sutton: [00:33:44] So like, well, first of all, they open up the CRM, Zoho CRM, and there's a one button link to open up that client's books, right? So I open up Jones Construction and I've got tabs that show me all the bookkeeping tasks that need to be done for Jones Construction, and I click a hyperlink that automatically pops open their bookkeeping software, right? And so then in the bookkeeping software, I'm seeing information that's being pulled from Zoho, such as what type of business they are with, what their name and email address, their contact information. If I need to send them a note or call them at that point. And then we are also sending back and forth information about whether or not this client's bank account is linked, because, as you know, bank account links don't always last. They break for various reasons. And so if that breaks, we want to be able to see it in the CRM side or or on the accounting side. And so that integration is has been necessary. And we're really just at kind of the beginning stages of of that integration. But our goal is to also, you know, display. Uh, on the client portal graphs and features and things that tell the client where they're at. And that all kind of integrates with the CRM. It's a triangle, right? We've got our front end website, we've got our CRM, and then we've got our accounting data and they all kind of work together to hopefully provide an experience for the clients that we're excited about.

Blake Oliver: [00:35:21] How did you decide on Zoho versus Microsoft or Google?

Ben Sutton: [00:35:25] Uh, we've, I went through both of those. Uh, we started out with Google and it was good. And then, uh, I met my cousin who was kind of helping us with our i.t. Networking and stuff pushed me on to the Microsoft environment, and that was good too. But we've been on Zoho, I think, about three years now. And the and so maybe it was just like the Google and the Microsoft weren't as evolved. As I you know, as I needed them to be or as I was hoping they would be. And then when? And by the time I was looking elsewhere, Zoho was evolved enough and and Zoho just had more tools at the time. You know, Google's, I think, probably catching up. But Zoho just has so many tools to to, to use in your business surveys, mass emailing, you know, e-signature. It's got internal communication tools, it's got email, it's got the CRM, it's got marketing platform, it's got intranet for internal websites. It's got just you can go on there just about 40, you know, the relevant tools out there in Zoho and the, the idea of being able to. Integrate all of those things together, even though it doesn't work as well as you wish it would, and it's as you think it would, since they're all Zoho. Why can't these things just play nice? But I think that is what really appealed to me, just the integration across. Yeah, it's it's.

Blake Oliver: [00:37:03] I mean, when I look at it, I haven't used it myself, but when I look at it, it really feels like an ERP for small businesses in the in the sense of it can do so many different things. And like you said, the CRM that is still unique to Zoho, Google doesn't come with one Microsoft. You got to buy dynamics if you want to integrate it. And it's not it's not as it's not as smooth. So that's really interesting. And then you've integrated the CRM with your own software so you can pull in data, send it back and forth. That's really interesting. Okay. So I took you off track there with the the GL and Zoho. Let's let's keep going. I'd love to get through a full accounting. Yeah, a full accounting cycle.

Ben Sutton: [00:37:47] So really, as far as the stack, the tech stack, and then you'd add our client portal, you know, just our own website onto that, that, that, uh, facilitates information exchange and communication with the clients. We're, we're not yet at the app stage. The next kind of leg of our race is we want the clients to be able to get the service through an app that's obviously really a mobile app. Yeah, through a mobile app. Uh, we feel like that's really important. We feel way behind, you know, not really compared to other accountants, but maybe, but compared to what our business, what our clients are engaging with in other aspects of, of their lives. It's all mobile based and, and we need to, to simplify and consolidate and focus our service down good enough to deliver it through a phone.

Blake Oliver: [00:38:43] What do you do for the tax? What's your. Oh, yes, your tax software.

Ben Sutton: [00:38:48] We use ultra tax and we've used that almost since the beginning. I was on Intuit online. They're professional. You know, the Intuit professional tax software that was kind of new at the time. It was probably eight or ten years ago that I was on it, and that was good. But again, they were building around the QuickBooks environment and that wasn't where I was headed. So we ended up looking for other options and needed something nationwide, you know, that serviced the whole country and had the state and the city a little, you know, unique forms that anyone could need anywhere in the US. And ultra tax was kind of the most robust, the most affordable solution we found. And uh, frankly, I think it's been really frustrating at how separate that piece has had to remain from the rest of our technology. There's no API. Yeah.

Blake Oliver: [00:39:48] Um, so that's what I was going to ask you is how do you get the data from your bookkeeping system you've built into the tax software and make adjustments now, do you, do you do book to tax in your own software? Do you do that in spreadsheets? Or maybe that's not even necessary because of the way you've set things up.

Ben Sutton: [00:40:07] It's cash. So we do cash based bookkeeping. It's essentially tax based bookkeeping, right, is kind of what we're mostly doing. And so it's a manual process to get it from our accounting software into ultra tax, which is a major weakness, you know, of ours and and a breakdown in efficiency. But that's, you know, that's kind of the the poison we chose.

Blake Oliver: [00:40:29] And well, I mean, that's that's kind of the the everybody's in that boat really right now. There's I mean, unless like you said, you're using QuickBooks and you're using Intuit's into a tax online and you can just pull the data in, pretty much everybody's doing that. You're just keying it in. Yeah.

Ben Sutton: [00:40:46] And there's and it's not as simple as, you know you lie there's still a lot of with integrations that I've experienced in the past and pulling data directly in to the tax software, there's always some kind of conversion or some kind of mapping or some kind of other element that has to be maintained and that takes work too. And so we just decided we're just going to key it in.

Blake Oliver: [00:41:10] Well, and I imagine you're not using a ton of accounts in your chart of accounts. You've streamlined that. So. Right. How long does it really take? It's it's one of those things we have to stop and think about and say, well, I could automate this, but is it worth the time it takes to automate it unless I can make it perfect where all the data just flows seamlessly, then maybe it is easier just for the tax team to to key in the numbers. And that provides some level of, you know, double checking as well. Right? When I'm looking at those numbers and keying them in, I might see, oh, this doesn't make sense. It doesn't look right.

Ben Sutton: [00:41:41] Yes, absolutely. That's a. Really important point, I think. If you don't know what's going on every step of the way, then you're kind of walking on thin ice.

Blake Oliver: [00:41:52] Yeah. So your clients, you know, they do their, ah, their AP on their own. They pay their own bills, they invoice. They I imagine. Do they run payroll? They must, you know, if they've got an S corp they got to run their own payroll. Yeah. So you don't get involved in that or do you. And do you recommend software to them.

Ben Sutton: [00:42:11] We used to offer payroll. Uh, interestingly, we were using QuickBooks to run payroll for our clients at the very beginning. Um, and then we moved to other softwares and realized, uh, over time, as, as we started to grow a little bit, it was becoming more of a liability. We were very focused on being the affordable option on the bookkeeping side, and we kind of carried that same philosophy over into payroll and realized we're not making any money doing this. In fact, we're causing ourselves a lot of headaches. Um, because we re not doing it as well as we need to be. So let's just be done. So we we stopped our payroll service. We actually sold our, our payroll business to ADP about five years ago, four years ago, and, uh, since then have just tried to laser focus on this bookkeeping tax cycle. Iteration after iteration after iteration of processes and procedures to try and stabilize it to ensure it's scalable, um, with the quality that we want and that's acceptable to the client. So that's really been our focus. So, so really we just take an advisory role on the payroll side. We, our tax pros are available to answer questions about anything. And so they often, you know, the clients can ask the tax pro what should my withholdings be? You know. Um, and we can help them guide them through notices they receive or things like that. But it's really on them and their payroll provider at this point.

Blake Oliver: [00:43:43] That makes makes sense. Why get in the middle of that when if you got that relationship with a payroll service, they can take care of it, Right? And that's their job. And they've automated that and they've made that their expertise.

Ben Sutton: [00:43:58] Right? Right. So we just refer them.

Blake Oliver: [00:44:02] Yeah. Anything else that I haven't I haven't asked about when it comes to technology that you'd like to share.

Ben Sutton: [00:44:09] Um, I think, I think just nothing that I really haven't mentioned, except for the fact that it's not, uh, I think it's within our role as, as accountants to be thinking about the best solutions and don't always you may not always find it off the shelf, you know, and don't be afraid to learn something and develop something that could, could really benefit your clients and your business in general. I think there's are lots of third party softwares that are great and amazing and do amazing things, but there's a lot of stuff that you get with them that you don't need or, you know, and the cost of them obviously is is a major prohibitive for I could not charge my clients an extra, you know, with our prices, right. If I was charging an extra $50 or, you know, $75 or a hundred, I, I don't know what into it online, you know, the online bookkeeping costs any more, but it would be impossible to be at this price point. And I think that's a real important thing to factor in. Like if. But it all depends on the market you're going after, right? We are chosen to go after people who, like I said, would probably rather do this themselves, try and work through this on their own, in their own set of books, as opposed instead of paying $500 or whatever it would cost to have somebody else do it. And so. Anyway. I think that innovation on the software side, we can do a lot of that as accountants because we we know what the issues are. And instead of a software developer, some venture backed software company that's out of touch with with what we do producing those.

Blake Oliver: [00:46:00] Yeah. My take away from this is that you have tailored your technology to the experience that you can deliver at the price point your clients are willing to pay and you've you stripped out all of the unnecessary cost and complexity by building your own GL that is designed just to get those books done so that you can get their tax return done and offer them those insights that you want to offer them through. I assume you're going to email those out to clients every month or every quarter and they don't have to look at a pencil or a balance sheet anymore to get what they need to know.

Ben Sutton: [00:46:40] Right.

Blake Oliver: [00:46:41] And and that's the value, right? It's it's I've got my compliance headache taking care of my taxes. I don't have to worry about it. My books are done. And yeah, I'm even going to get a little bit of light automated advisory out of it, which is more than they'll get from any freelance bookkeeper, I imagine. Mm hmm. So and 6000 clients, that's like. That's a big number. Did you imagine when you started? How long? How long has it been? 12.

Ben Sutton: [00:47:13] 12 years. Yeah. Mm hmm. Yeah, we our main. Our goal was to take over the, you know, take over QuickBooks.

Blake Oliver: [00:47:23] So you're given QuickBooks Live a run for its money, I imagine?

Ben Sutton: [00:47:26] Yeah, that's the hope. I guess. I don't know. I doubt they even know we exist. But, yeah, we. Scalability and affordability have been kind of our mantra. We've opened our eyes a little bit to over the past few years to making sure quality remains as we scale. Mm hmm. And as we and we've had to raise our prices. We used to be at lower prices, but we've raised our prices to try and maintain that quality and make sure that our client to, to employee ratio doesn't get out of, doesn't get crazy. Um, and that our people are not working more here than they would be at another accounting firm. We need them to be working less here than they would be at another accounting firm. Yeah. Yeah. Really important to us. What is.

Blake Oliver: [00:48:10] What is that ratio? You know, how many clients does a bookkeeper have, for instance?

Ben Sutton: [00:48:15] Average. So I probably would keep that a little bit closer to. It's over a hundred.

Blake Oliver: [00:48:22] Okay. Yeah. Yeah. Well, I imagine it's doable with the systems you have. I think in my firm, you know, in all, Star could have done a hundred, but most of our bookkeepers were 30 or 40 clients. But we didn't have the. The tech stack that you have, Right? We were using off the off the shelf in every client was a little different. So that, you know, you just don't get as many efficiencies, right?

Ben Sutton: [00:48:44] Yeah. Yep. So our our goal is to make that ratio as high as we can without, you know, uh, losing.

Blake Oliver: [00:48:52] The quality of.

Ben Sutton: [00:48:52] The work.

Blake Oliver: [00:48:53] Well, how do you, how do you manage that with 6000 clients? How do you know who's getting the quality that they expect?

Ben Sutton: [00:49:02] So we, we listen to our clients, we survey clients, We and our operations team is is very in touch with the work that we do. Uh, our operations director, who works just under me, she came on as a bookkeeper five years ago. Um, and has seen the evolution, has interacted with clients, and that awareness of our leadership having come from the bookkeeping, you know, the bookkeeping service has been really important to, to maintaining. Uh, quality, I think, and, and concern when you when you know what it's like to for a client to complain to you and and how bad it feels when a client's upset, you care a little bit more about making sure that doesn't happen and making sure that our bookkeepers are not dealing with that every day. Right. That that those are rare. More as rare as possible. Um so, you know, we just listen and and try and accommodate and change in order to prevent them from having their, uh, bad experiences. I mean, they know what they're paying. We know what they're paying. It's not. They're not going to get the same service as they would from a main Street account who's charging them $200 an hour. That's just not the reality.

Blake Oliver: [00:50:29] Right. But you've set that expectation, which is. That's fine, right? It's it's deliver what the client expects and and set that expectation upfront.

Ben Sutton: [00:50:40] Exactly. That's really important. Yeah. Uh, this is a subscription. We don't lock people into contracts, so it's month to month, and that's been important. We put it on us to do a good enough job that these people will stay. And yeah, and we feel like that's been a really important motivation.

Blake Oliver: [00:51:00] One more thing before we go. You know, getting to 6000 clients can be a challenge just in terms of acquiring them. How do you continue to grow? Is it word of mouth? Is it online advertising, marketing? How do you get the name of Zuma out there?

Ben Sutton: [00:51:17] So we do advertise online, we do SEO. We've and we've done iterations of radio and, um, networking and things like that. We've a lot of our real growth though has come through partnerships, other companies that the businesses, small businesses, our type of client is, is being aggregated in and we set up a revenue share deal that we pay for leads that come over. Well we actually it's revenue share, so we pay when we get paid. Um, so forming partnerships has really been the key to, to getting a consistent high volume of leads.

Blake Oliver: [00:51:55] Interesting. So partnerships with what kind of companies.

Ben Sutton: [00:51:59] So companies that uh, are, you know, like entity formation companies. Hmm. Uh, companies that uh, we're a lot of 1099 contractors are consolidated. You've got real estate associations, you've got, uh, trucking carriers, you know, who have thousands of truckers out there on the road that are all their own SW corp or, you know, single member LLC. Mm hmm. So just any larger organization that is servicing these 1099 people gives us an opportunity to help them, help those people and, uh, get, get leads that way.

Blake Oliver: [00:52:43] Yeah, that's, that's interesting. I, I haven't heard that from a lot of firm owners. I mean, I know that. Smaller firms will get referrals from attorneys and insurance agents and that sort of thing. But what you've done is taken that to another level where you've got an association referring you clients or or a larger business doing that.

Ben Sutton: [00:53:04] So yeah, that's.

Blake Oliver: [00:53:06] That's.

Ben Sutton: [00:53:06] Fascinating. And the main thing they, the pre prerequisite to that is scalability. You know, they can't they're not willing to send over hundreds of clients if you're not confident you can service them. Right. So I think that our platform, our foundation that we've built was all about scalability. And so that opens us up to those opportunities.

Blake Oliver: [00:53:30] Well, Ben, this has been so educational for me, and I'm sure our listeners learned a lot as well.

Ben Sutton: [00:53:37] We haven't talked about the CPE yet.

Blake Oliver: [00:53:39] Oh, I know we didn't get to that. So let's let's do that. Let's do that. This is the this is the bonus portion of the episode. Okay. Let's talk about your opinions on CPE. Yes.

Ben Sutton: [00:53:50] So I you really solve like, every year. Well, every two years, right? Because that's when we have to in Utah, we have to have 80 hours every two years. And so every year, the only way that I could like, really be sure that I was going to get enough CPE was if I left home, left work when stayed in a hotel somewhere and sat through 8 hours a day of of speakers who have been doing this, who that is their job and have been doing this for generations, it feels like. And I remember I took a I actually was trying to find this picture to send to you. I couldn't find it on my phone, but I remember sitting in the back of one of these huge conference rooms in the Mirage at Las Vegas, took a picture in the front and. All it was was, uh, I don't want to be rude here, but aged very. I was of a different generation. Like all the attendees were. White hair, bald. It looked like they were on their way out of the industry, like they're getting ready to retire. And I'm the only one here for some reason. I'm wondering, how does everyone else get their CPE? But I'm the only one here. Uh, that, uh, seems to have brown hair still. And it was just so clear that this doesn't feel like it's for me, but it was the only way that I could fit it in and make sure it got done. So this particular two year period of 2022, I happen to be way behind, like starting midway through this year, I had only done like 4 hours, so I had 76 hours left to do between June and the end of the year.

Ben Sutton: [00:55:32] And then I came, I don't know how I came across earmarked, but somehow, some way I found you. And that's I've gotten like 68 hours done since that time. Just being able to listen to it on my way to work, you know, I listened to it on my way in. I sit there in the car until the episode finishes, and then I take the test and boom, I got another hour done. And and it's really not just only about the convenience, it's about the topics. And the subject matter is so much more relevant than hearing the same conversation about this form and the nuances with partnerships and basis and all this stuff that are important. Yeah, but I can research that when I need to, you know, like those are top technical topics. I have resources, right, to go guide me through those. You're never going to sit me down for 40 hours and teach me everything I'm going to run into during tax season. So let me just figure that out when I need it and get my CPE like seeing the lay of the land, understanding the industry, understanding the market, understanding my client more and how to better service them and and challenge my paradigm of what I've been doing for ten years. Wow. This other things going on, maybe I should consider doing that. So it's just been so much more valuable to me that way.

Blake Oliver: [00:56:55] Well, thank you so much. And now you've participated in creating an excellent hour of CPE that I hope our listeners will really enjoy and get a lot out of. I know they will. And so if our listeners want to connect with you, Ben, and learn more about what you're doing, just, you know, are you online, do you do social media?

Ben Sutton: [00:57:13] Where do you like to connect? The company is online. Missoula, USA. Um, I think is our handle, our Facebook and LinkedIn. I think we do Instagram too. Um, and I that's our website as well. So um, I don't do direct client service much anymore, but um, you can definitely weasel your way through the, you know, the channels and get to me if you want to.

Blake Oliver: [00:57:39] All right. Are you hiring.

Ben Sutton: [00:57:42] At the moment? No, we we actually had to downsize quite a bit this year because of some ups up increased hiring that we did earlier in the year in in anticipation of some new partnerships. They didn't end up landing when we thought they would. So they're they're delayed. And so we actually we actually had to, uh, decrease our staff for temporarily until those come online. But as soon as as soon as they do, we're gonna be back out there in full force hiring as much as we can.

Blake Oliver: [00:58:13] Well, I'm looking forward to following your journey and the growth, and it sounds like there's amazing things coming in the future. Then. Thanks for your time and I hope to get to see you in person sometime soon.

Ben Sutton: [00:58:26] That'd be great. Blake, Thank you very much.

Blake Oliver: [00:58:28] All right. Thanks. Thanks for listening. I hope you enjoyed this episode and that you learn something new. And if you did, wouldn't it be nice to get some CPE credit for it? Well, I've got great news. My new app, Earmark CPE offers free Naspa approved CPE credits for listening to podcasts, including this one. Visit earmarked CPE to download the app. Take a short quiz and get your CPE certificate. That's earmark CPE. Com.