Earmark Podcast | Earn Free Accounting CPE

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Blake Oliver: [00:00:00] If you'd like to earn CPE credit for listening to this episode, visit earmark Cpcomm. 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. Hello, everyone. Welcome to earmark. I'm Blake Oliver. We are recording live today. Thanks everyone who has joined me. Please put your comments in the chat. Any questions you have, I would love to answer them. Uh, this is going to be a fun session here. We're going to talk about the five apps that you need in your accounting firm. Based on my own experience running, growing a client, accounting services, an outsourced accounting practice. Um, these are the apps that I used. Uh, I tried to distill it down to five, and I cheated a bit because these are actually not just five individual apps. It's five categories of apps. And so you might end up using more than five, but you could get away with running a practice with just these five categories. If you're tuning in on the podcast, the earmark podcast, uh, consider joining me live for my next broadcast. You can do that by going to earmark Cpcomm. That's earmark Cpcomm. Put in your email address and we will notify you of future live streams and webinars. Uh, and if you are watching live and you don't have the podcast, go to podcast earmark Cpcomm and subscribe so you can listen on the go. Let's dig in.

Blake Oliver: [00:01:40] First, why is it important to choose the right software? Well, there's three reasons. It allows you to streamline your operations, enhance your client experience, and drive sustainable growth for your firm. If you choose the wrong software, you're going to get incredibly inefficient processes. Your team is going to get frustrated, and you are going to miss opportunities to scale your practice. And I personally chose the wrong software when I started out. I have an example for you. I chose practice management software, project task management software, whatever you want to call it. And it wasn't the right thing. And I ended up putting something like 20 clients on it, and then I had to pull it out and move all of that over to other software. And I think I lost a couple of weeks of my life doing that. And more importantly, I really stressed out, uh, a key team member doing it. So you really want to avoid choosing the wrong software? When you are selecting software. Really consider how it's going to impact how your team interacts with clients. When you have a remote firm. A lot of us are now operating in a hybrid remote world. Perhaps you are fully remote. The software that your clients use and that your team use is your office. It is the experience that they have working with you. So just as you would select perhaps a decor for your office, depending on the vibe you want to create for your clients, the experience you want to create for them.

Blake Oliver: [00:03:21] Think about that. When you select software, it's not just about what the software does, it's also about how the experience is for not just your clients, but also the people working there. You wouldn't set up an office with bare light bulbs and metal desks and chairs. That wouldn't be the right environment to create for your team. So why would you select software that feels the same way? If you select the right software, you will be able to scale your firm. If you don't or you select too many apps, you're going to have a really hard time scaling and we will talk about that. I definitely have been guilty of this app. Overwhelm is something that we all deal with in our firms when we select apps. So if you have too many, it's going to become a problem and you'll have trouble standardizing your processes. Um, so you want to have a really small, uh, as small as possible set of apps that you use in your firm. I also recommend having a dedicated operations manager. A COO is often the title that people use. Chief Operations officer that oversees the technology in your firm. If you are a firm owner, uh, and you are not a tech person, you need to hire this person as soon as you can or ideally promote them internally. Find somebody in your team who leads software, who is the one who loves apps, and nerd like me who just wants to play with tech.

Blake Oliver: [00:04:52] Um, but also they have to be process minded and put them in charge of overseeing that tech stack. Um, you can think of this person like the the modern office manager, right? Uh, if if the software that we use is now, uh, our office, then you need somebody to manage that. Okay, let's get into the five apps. My first category proposals. Yes. We're going to start with the money coming in the door, getting those clients. You can't serve clients without having proposals, engagement letters. So this is the first software that I typically recommend to anyone who asks me if you want to streamline the client onboarding process. If you want to ensure consistency in your engagements, you need something to manage those service agreements, engagement letters, whatever you call them, you're going to save a lot of time. It's probably the easiest way to get a quick lift, um, in your firm by implementing this. And you're going to have much better cash flow management. And that is very important because, uh, if you are currently billing after the fact or whenever you remember to do it, you're going to be a lot better off when you're collecting those fees or even just deposits up front. So, um. Yeah. If your firm is billing after you file a tax return, there is no reason why you can't implement proposal management software to start collecting the whole fee or part of the fee up front, and that will incentivize better client behavior.

Blake Oliver: [00:06:37] It's going to reduce your, um, outstanding payables, like you're going to collect more. Um, I don't understand why every firm doesn't do this, but I did work for a big firm that, you know, had this problem. Uh, I worked for the largest California based accounting firm for a little while, and when I went in there, I was shocked to find that we were using word documents to do our engagement letters with our clients. There was a template saved in a shared drive, uh, and we would copy that onto our desktop and rename it and edit it. The only problem with that was that every now and then, somebody would accidentally save over the template, and so the terms would change and we would forget to insert new client names. And the worst thing was when a proposal went out with a client's name on it to the wrong client. Uh, that was really embarrassing. And it happens more often than you might think. Uh, so proposal software standardizes this so that you can make sure that you have always the same set of terms in your engagement letters appropriate to the services that you are delivering, and also that the the services that are described in the engagement letter are the same, that they are standardized across your clients.

Blake Oliver: [00:07:58] And if you want to standardize your processes, which is the, I believe, the number one secret to growth. It's not technology, it's standardizing your processes. You have to find tech that will let you do that. So you can't standardize the service delivery to your clients if you don't have standard terms in your engagement letters. If you're promising different things to different people, you're not going to be able to standardize your processes. So, um. We talked about standardizing. There's also simplification, right. You want it to be easy to put together proposals. I think part of the reason that we don't get around to sending out engagement letters is because it's the last thing that we want to do, and we're trying to deliver client services to other people. So if you're really busy, you just need a way to build that proposal really fast, and then you want clients to be able to accept them easily. Uh, you in this day and age, clients should not have to print out something and sign it and scan it back. You want E-signatures in there? And this is the really important part. Uh, payment information. You want a system that will allow you to require payment information up front. And so you can either collect the payment now or when you deliver the service, you've already got the payment information there. You can just auto build the client and charge them. So, uh, here's the million dollar question.

Blake Oliver: [00:09:19] What do I recommend? Well, there's really one proposal software on the market for accountants, and that is ignition. Formerly practice ignition. We use it at Earmark Inc for our CPE course creation packages for our clients. Right. If you want to do a webinar on this platform that we're doing on right now, I would send you or David Leary, my business partner, would send you a proposal via ignition. You would accept it. You would pay. Done. Uh, we also have subscriptions for that. And the beautiful thing is that ignition manages the subscriptions. There's another option which we also use for a different business. And that is anchor. Uh, say anchor com is the URL and they're not nearly as big as ignition. But if you're looking for alternatives, if you want to check something else out, I highly recommend anchor. Uh, they're also a sponsor of my podcast as well. Um, and what's beautiful about anchor is that the pricing is very simple. $5, uh, capped at $5 to get a payment for via ACH, that sort of thing. Um, and both of these services, while they have different ways of, of, you know, doing what they do, they basically do the same thing online proposals, collecting payment information, e-signatures. Um, and then recurring billing. And there is nothing sweeter in the world than getting all the money for everything you do on the first of every month, and then using that money to pay out your team and pay all your bills, and to never have, uh, debt in your firm.

Blake Oliver: [00:10:58] It's a magical thing. And, uh, I highly recommend it. It's what allowed me to grow my firm with $60,000 of initial investment. Uh, as opposed to a lot more than that if I was collecting after the fact. Uh, now, I mentioned those two options specific to accounting, but there is one that is, uh, generic and. I think it's worth mentioning that there are always solutions for all of these problems we have that aren't just for accounting, and you should investigate them, because sometimes the general purpose solution that's made for all types of businesses can be way better than the one that's specifically for accounting. And the one you should look at in proposals is pandadoc. Panda. Doc? Panda! Doc? Uh, that was the proposal management system that we used in my small practice, and. It's very popular. It's probably the most popular on G2, which is a review site that we will take a look at, uh, in a few minutes. And it has a lot of integrations. You can integrate it with Zapier. You can also do that, of course, with ignition. Uh, but Pandadoc probably has the most beautiful proposals. So if you want to create a really customized experience for your clients. Uh pandadoc is something to to look at. Uh, it just doesn't have some of the accounting specific integrations that you might be looking for.

Blake Oliver: [00:12:32] For instance, ignition integrates with carbon to automatically kick off projects in your workflow management system. You can do that manually with a system like Pandadoc, or you can hook it up with Zapier. It's just going to take a little more of a lift. So Pandadoc Ignition and Anchor. Those are my three to look at. Kelly, welcome. Thank you for joining us live. Kelly says great for getting year end reports signed to. Yes, that's a great idea actually. Yeah. You can you can actually use a tool like Pandadoc. I don't know if that's one you're referring to, but if you need clients to sign off on something saying that they received information, you could actually automate that with a tool like Pandadoc. It doesn't have to be just for those agreements or engagement letters. And everyone else. You know, we got dozens of you here online today. If you have questions for me about what I'm saying here, if you have opinions, then, uh, then let me know, Kelly says. Thanks for letting me in. Always, Kelly. Kelly says I use pandadoc for all kinds of signatures. Yep. All right. That's it for proposal apps. Let's move on to my next favorite category the next most essential category. And that is workflow apps. And actually this probably should have come first. This is probably the most important thing in your firm is workflow. I don't know how firms operate. I was just talking with a friend of mine, a colleague, former colleague who's working in a different firm.

Blake Oliver: [00:14:10] We used to work together at the big firm, and she told me that at this large regional firm she's at. They manage all of the tax work in a spreadsheet. It's a shared spreadsheet that's shared amongst dozens of partners in the office, and there is an admin for each partner that is responsible for updating a master spreadsheet that has all the tax return information. And the way they do this is not even with like a shared online version of the spreadsheet. It is emailed spreadsheets that then get sent to somebody who's in charge of the whole spreadsheet, who then has to update the big spreadsheet. It sounds insane to me because we have really, really good solutions for this. I mean, even a Google sheet would be a better experience than what these partners are putting their teams through or themselves through. So. We'll talk about how you select workflow apps now. And before I get into that, Penny says I have clients that use Pandadoc and give us access so we can set up. Uh oh. It didn't come. That comment didn't come all the way through Penny. Go ahead and try that again. But she also says the bigger the firm, the worse they are. And using email in Excel. Yeah it is. Isn't it amazing? I thought that when I sold my firm and I went to work for a large firm, I would learn something about process and technology, how to do it right.

Blake Oliver: [00:15:38] It's the opposite. I taught them everything. Uh, what they did teach me was, of course, the technical skills that I didn't have to say close the books for a large client. Uh, but I knew more about how to set up workflow and process than they did. Penny says we set up their invoices from Pandadoc. Oh, okay. That's great. So a lot of Pandadoc fans here. Um, so yeah, check it out. Okay, let's let's move on to workflow. So. In my opinion. In my humble opinion, perhaps not so humble opinion, the lack of workflow software is the number one barrier to growth at firms. Although I guess it's not to say you can't grow big without it. You can get to be a big firm without any workflow software that people actually use, and just manage it in spreadsheets. But if you're a small firm and you want to grow, I don't know how you'd do it. These days in a remote work environment without something to manage the tasks and the projects. Um. Like we said before. The software your team uses is their office. If you're in a remote environment. So. How? How can you work remotely without having workflow software? I don't know how you do it. Um. If you want to make sure that you don't miss deadlines, you're not scrambling. You need a way to track the status of every single client deliverable.

Blake Oliver: [00:17:07] And especially when you start promising recurring deliverables, you actually want to deliver on what you're putting in your proposals. You got to have a way to ensure that you are doing that, and that your team can go into one place every day and see what is assigned to them and what is due and what is urgent and what is not. So when you are evaluating workflow software, this can be really challenging because they all do so many different things and there's so many features, and it can almost be impossible to find something that fits all of your needs, right? Um. So one of the things that I look at, though, there are some things that you should definitely consider having and that is an integrated client portal. Now, client portal is kind of a loaded term. It doesn't necessarily have to be someplace where they log in, but the software that you use, the workflow software that you use, should have a way for you to create requests of clients and for them to respond to those requests. And for all of that to come back into your software, rather then the situation most of us have, which is I have my email over here, I have my workflow software over here. And so my client communications are all in email, and they're totally separate from the workflow software, the project management software. That doesn't have to happen anymore.

Blake Oliver: [00:18:33] Um. There are solutions that integrate email directly into the practice management software, and if they don't do email, they will do some sort of chat for your clients. Either way, there's a way for you to ask for information and to get it. And for all of that to come back in context in the software. And I know I'm going to get questions about the different software that I have experience with that I've used, and I'm more than happy to dig into that with you. Um, Jessica here says, can you speak to the difference between Client Hub and Keeper? So I personally have not used keeper. I have worked with Client Hub. I have used it. I didn't use it in my practice because it wasn't around when I had my practice. Um. But let me just say in general that I think Client Hub offers a very simple, easy to use experience and. It has a. A very interesting approach of having an app that clients can install on their phone. And so you can message with clients securely inside of client hub. And the goal is to actually remove the email. I know they're adding email features, but the idea is to use secure communication in client hub, and every communication then is visible to all those who have access to that workspace on your team. The idea, the core idea that they have got right with this is you want all the client communication to be visible to everyone.

Blake Oliver: [00:20:10] If a client is emailing multiple people on your team and they don't have visibility into that, that's a huge gap because now I have to go ask somebody or I don't have all the context for or the history to help that client. So you want something where you can get the client comms into one place. Going back to, uh, engagement letters. Sammy says Big Four firm. I was at used mis word templates for tax L's through 2019. Amazing Microsoft Word. And these are terms that you hear, you hear in the headlines. Oh, we invested $1 billion in technology. So you invest $1 billion in like AI technology, but you still use Microsoft Word for your engagement letters. What is going on here? It makes me a little skeptical. Um. Let's talk a bit about how to like. Sort through the marketplace because there are a lot of solutions for workflow and practice management. When I say workflow, I mean practice management. Um, so. And there's a lot specifically for accounting. So the question is like, how do you actually sort through it? And one of the tools I like to use is a website called G2. Goto.com. I actually, uh, I used to work with G2's controller when I was at Floqast. They used us for our for their financial close management. Um, but I'm also a just a big fan of G2 for finding apps.

Blake Oliver: [00:21:45] And what's great about G2 is that it's, um, developers sign up for a profile they have to apply to get a profile on G2, and then they can get users to submit reviews. And then G2 ranks in different categories, all of the apps by the reviews in a variety of categories. And while yes, you can game the system a bit by, uh, trying to get really positive reviews for your app in general, I think it provides an interesting sorting of, you know, who has the best reviews. And so you can actually find now some very specific categories like accounting, practice management. I'm just going to type that in here and open up this category. And you'll see if you scroll down the list. There's 90 listings in accounting practice Management available. And carbon is here at the top. Congrats carbon. They've got a 4.8 out of five with 535 reviews. And you can scroll down the list and you see canopies there. They got a 4.6 QuickBooks online accountant gets in there. Tax dome is in there. That's one that I need to check out. I'm not that familiar with it. Xero practice manager gets on the list. Um, but rather than going through the list, I like to open up the grid. There's a G2 grid here on the right side, and you can click on View Full Grid, and then you can see all the apps visualized on a grid with four quadrants.

Blake Oliver: [00:23:16] You can filter by company size on the left so you can select small business or mid-market. Sometimes there's also enterprise if there are enterprise apps for big businesses in that category. So I'm going to filter for small business. And this sorts the reviews by smaller firms. Fewer employees. And I see here the logos for the different apps on these four quadrants and. In short. The higher up and to the right you are, which I believe on my screen is. I can't. There we go. That way. I'm pointing up into the right. That's better. And down into the left is worse. The vertical axis represents market presence. So the higher up vertically that an app is, the more firms are using it. The lower down it is, the fewer firms are using it. The closer to the right an app is. The more satisfied firms are using it. So the x axis is satisfying satisfaction. So if something is up and to the right, that means that you've got high satisfaction. And a lot of firms are using it. And that's a pretty good proxy for, uh, how good the app is. And we see here in the upper right quadrant, the leaders quadrant, we've got Canopy Carbon and Taxam. So if you just want to filter and just narrow down your search, this is a great way to do it. I use this for evaluating most apps. When I do that for my business. We can also see here in the lower right quadrant we've got keeper.

Blake Oliver: [00:25:00] We've got Financial Sense Suite files, Sharelink, Ooku, I don't know, Sharelink and Youku, but I know financial sense and Keeper. That means those are getting good reviews. They're just not as big yet. So that's a way to decide how do you prioritize what you look at? Now? You don't want to necessarily limit your search to apps that are on G2. There are some great apps like Client Hub like I mentioned, that are not on G2 yet, and that's simply because I imagine they're smaller and they haven't prioritized making the big initiative to go out and get the reviews from their users. Right. So they would be very small compared to, say, a carbon. Um, so we can come back to this for other different apps in the categories, and we will do that for payroll later. One other thing I want to mention about workflow apps. Um. The mistake I see people make is they prioritize features. They make a big, long list of features, and they say, we want to find the app that meets all these feature requirements. And. While you do need to have a list of must haves versus nice to haves. I wouldn't prioritize features. You always want to prioritize ease of use, and that's because. If the software isn't easy to use and your team doesn't want to use it, it doesn't matter how many features it has because they won't use those features.

Blake Oliver: [00:26:26] You cannot force people to use the software you can try. I have always failed to do this. It has never worked for me. So. You need to make it easy to use whatever you pick, it has to be pleasant to use. Um, it should be intuitive. It should require minimal training. And one way I test this out is, um, you know, I'll just start a demo of an app, and if I can't figure it out on my own, at least some of it, right? If I start getting frustrated and I have to, like, read documentation to learn how to use it, it's probably not a great app these days. There are ways to build apps that are intuitive, so if it's not easy to figure out in like an hour, I wouldn't, uh, I wouldn't sign up for it. And that's the best way to test things, is just sign up for a demo, don't have somebody walk you through it. Just start building out a project. Start building out tasks. See if you can figure out the basics. And is it pleasant to use? I would focus on that. All right, moving on. General ledger apps. So we've we've touched on proposal management. We've talked about workflow. And now we're actually going to get into the accounting software. So obviously if you're going to do accounting you need a general ledger. So what's the default. Quickbooks obviously right.

Blake Oliver: [00:27:53] That's what people are using. Um I built a firm using Xero. You could build a firm using FreshBooks or Wave. Will Lopez at Gusto. He built a firm using mostly wave free accounting software. Um, so I wouldn't limit your search to just the market leader. But I would agree that it's important to not serve a lot of general ledgers. Don't try to do everything for everyone. Don't use Xero and QuickBooks and NetSuite and FreshBooks and wave. Uh, you will go insane, because every GL app that you add to your firm means you got to manage different integrations, and it means you got to document different ways of doing your standardized processes. The most successful firms that I see growing remotely quickly are standardized on a single general ledger that meets the needs of their target customer. Focus on scalability. Look at the integration capabilities. Is this going to integrate with the other apps in my stack? We're going to talk about payroll and bill pay. Next. Will this general ledger integrate with those apps. If it doesn't it could create a lot of extra work for you. And like I said, with workflow software, is it easy to use and is it easy to use for your team, but also the parts that your clients are going to use. So for instance, if you have clients that send a lot of invoices, is that the priority? I had a client in when I had my practice who sent a lot of invoices, and he wanted his team to be able to send invoices, and we didn't want them to be able to get into the accounting data.

Blake Oliver: [00:29:32] We actually ended up using FreshBooks as their primary system for all their invoicing. And then we used Xero just to do the cash basis accounting. So we had all the detail of all the invoicing in FreshBooks, and then we just tracked cash deposits and Xero. We created this very simple automated system for tracking, uh, the cash in and cash out in the GL. But we did all the invoicing in another system. Think about that when you're designing your app stack. I'd also focus on the reporting features. Think about the output. What do you actually need to get out of this general ledger at the end of the day or the year or the month? If all you're doing is prepping cash based cash basis tax returns, maybe you don't need all the bells and whistles. I spoke to a firm owner, uh, last year who has built his own general ledger accounting software because he didn't find anything on the market that could do the cash basis accounting quickly for his clients. And he wanted all the clients on a single general ledger. So imagine accounting software where every client has the same general ledger or not, general ledger chart of accounts, the same chart of accounts. And it's not possible to deviate from that because every client is getting their books done exactly the same way.

Blake Oliver: [00:30:53] That's really fascinating to me. So if you're going to have more than one GL, um, consider having like just two, right? One for the simple cash basis clients and then one for the more complex accrual clients. So maybe that's like FreshBooks and QuickBooks or FreshBooks and Xero or Wave and Xero, right. Mix and match. Or perhaps you don't do any cash basis stuff and you only do more complex clients. Maybe that means I'm using QuickBooks and NetSuite and that covers every client. And I only have to manage documentation and training for those two systems and refuse. You must be disciplined and refuse to take on clients that don't use one of those two systems. And if they do, you make them switch. If they don't want to switch, they don't want to work with you. They're not a good fit. And I credit the fact that my firm grew with the fact that, uh, we didn't take on any QuickBooks clients. We just did Xero. And it made things a lot easier. And Jessica asked about the example. Um. And then you would consolidate those two goals monthly or something. Yeah. Well, so basically I would um, we'd look at the invoicing data and FreshBooks and the deposits and whatnot, and we'd, we'd, we'd basically journal the ah into. Zero every month so they could see their accounts receivable. It was just we used FreshBooks as the Subledger, essentially.

Blake Oliver: [00:32:20] And then we didn't have to worry about invoicing, mucking up all of our clean data on a cash basis in zero. And one fun thing about zero is that if you do all of the. Data entry. If you do all the bank feed categorization to expense and income accounts only, and you don't touch the balance sheet, you can then do journal entries that only affect accrual reports. So you can actually truly, simultaneously have cash and accrual books, which you cannot do in QuickBooks. It's a fun fact. Okay, let's get into payroll apps. I debated whether or not this was an essential thing, actually, because there's so many choices, but it was in my firm, so I got to talk about it. We did three things right. We did bookkeeping, we did payroll, and we did bill pay. Very simple. And we did them mostly for small businesses, you know, up to $10 million a year in revenue. I think we had one that was, you know, eight perhaps. So not humongous businesses. Right. Um, and payroll is something you got to deal with, uh, even with one employee. Right. So you need a solution. And there are so many options. If we go to G2 and just look at payroll, it's nuts how many choices there are these days. But there are some clear leaders. So I'm going to search payroll services. Payroll software. Here we go.

Blake Oliver: [00:33:45] Not payroll services. Although what's a software. What's a service these days? Right. Hard to say. So just look at look at this list. It's crazy how many there are. There must be I mean there's 74 logos on this chart, but we can see some clear leaders, right. We got um, ADP at the top vertically run powered by ADP. And then we've got gusto on the far right. So the clear leaders are ADP run powered by Gus uh run powered by ADP and then gusto. And also deal deal. Surprisingly uh doing well on on G2 we got rippling. We got just works. We got remote. Um, one that I want to highlight. Uh, that kind of gets a little buried is on pay on pay is a sponsor of my podcast, and I use on pay for my own payroll, my S Corp payroll for our earmark media company payroll. Um, I have found them very easy to work with, and they've been around for a long time. They're a they're a traditional payroll company that has added modern cloud based features. So I just want to call them out. Thank you on pay for your support Patriots there as well. Patriot has been a sponsor of my show um, and many more, which I don't think I can. Mention, I don't I don't think I missed any apologies to our sponsors if I did. Um, so there you go. Right. This is one way to narrow it down now.

Blake Oliver: [00:35:13] When you are looking at payroll apps, you know, what do you think about right? A lot of them have the same features now. It's almost like like you can just use any of them, right and get the job done. So what do you focus on? And my advice is to think about, do you want to have clients run their own payroll? You just recommend the software, you just recommend the service and they do it all. And you just get the reports so you can, you know. Do the journal entry or integrate it, or do you want to run it for them? Now, when I say run it for them, I am not talking about manually processing payroll. I think that's just should not be an option anymore. Uh, there are many, many better ways to make money in your firm than manually processing payroll. Most of the time, unless you decide you want to run a payroll service, which is what, uh, a few firm owners have done. They've acquired payroll companies, and they actually manually run payroll, and that works. Right? But that's that's the business. But if you're running an accounting business, payroll is not like running payroll is not your core competency. Right? So I would not do that. But that doesn't mean you can't run it. You can't like work with the client to process the payroll. You just have to, you know, have access into the system to do it for them.

Blake Oliver: [00:36:35] So it's are they going to do it themselves or are you going to do it for them or with them? And that will change what I recommend. Right? So if you just want to refer clients to something and they can get all the help they need, you can't go wrong with ADP right? That's what they've always done. If you want to help your clients do the payroll, do it with them. You've got gusto. You've got on pay, great options. And of course there are many others as well, but those are the two I just want to call out because I personally used both and had good experiences with them. They've got user friendly interfaces. They've got strong integrations. It's easy for the clients to use. That's important. There's also this concept of people advisory that Will Lopez at Gusto has built, and I think it's really intriguing to build services in your firm where you help clients with HR and, you know, hiring, firing, bonusing, uh, incentivizing employees as like an advisory service. You can do that with any payroll service. Um, but, you know, like, I think that's a great concept. And if I were building my firm again, I might hire somebody to help my clients with HR questions to be their outsourced HR person in addition to accounting, because the two are so linked these days. Something to consider. All right, we're on to the fifth and final category.

Blake Oliver: [00:38:03] Bill. Pay apps. So I did bookkeeping, I did payroll, and I did, uh, bill pay, meaning helping clients pay their bills. This is another situation where you will have to decide, do I want to pay the bills for my clients? Do I want to be involved in that approval process? Do I want to help them set up their internal controls, or do I want to just give them something they can use and I just do the after the fact bookkeeping? I have talked to many Ferm owners that are on one side or the other, and they are totally fine. Um. Kayla Hill. She decided not to do bill pay anymore because she wants to have a small firm and link up. She wants to cap her firm at like $1 million in revenue. And when you're that small, it's really hard to have the team that's big enough to do bill pay for clients in a timely way while still taking vacations. You just don't have the redundancy. So she said, I'm not going to do that. I'm going to let them do it. We're just going to do the bookkeeping accounting advisory work. In my firm. We did the bill pay, so we would actually set up a system where the clients would forward bills to an email address. We would process them for payment, they would go in and approve, and then we would pay. Based on the bank balance, and we would notify clients if we thought they were going to be cash flow issues.

Blake Oliver: [00:39:31] That's a heavy service offering. It's something that requires vigilance on a weekly basis at a minimum, if not every day for certain clients. So you got to charge the right price for it, and you got to have the capacity to deliver that service as if you are that in-house accounting manager for a client. So what are my recommendations? Obviously the big one is Bill.com. You really can't go wrong with using Bill.com to build out the complex approval process, the customized approval levels, um, they just do it right. They have the most accounting firms. You know, when they went public, half of their business was through accounting firms. So you're not going to go wrong with them. The only problem is it's expensive. And I found in my practice I used Bill.com for maybe 20% of my clients. The other 80% I didn't have a solution for because they didn't have enough bills to make it worth using something like a Bill.com, and maybe they didn't need complex approval processes. So my solution at the time. Was leave them alone. You know, this is ten years ago, right? Just let them do their own thing and they would pay the bills. I would have them send their receipts to a solution like Hubdoc or Dext. Right. So that we had them. But I didn't pay the bills. But there is a solution now and that is relay.

Blake Oliver: [00:40:54] Relays a bank, but they also have accounts payable functionality now. And to me it's it's the perfect solution for those clients that are not big enough for Bill.com. Um, I am the accounting community advocate at relay, so I have a financial relationship and a role with relay part time. You should know that. But I also use relay for all of my businesses. So I use the bill pay product, the accounts payable product, um, and I use all their banking features and it integrates with Xero and QuickBooks to pull in the bills. So if you can get the bills into Xero and QuickBooks as accounts payable items, you can pull them into relay and then either you or your client can pay those and you can have approval processes. So great fit. Now you got to design the process and the workflow so that, you know this is streamlined, but it's doable. And the big question is do you pay the bills or do you have your clients hit pay? There's a lot of back and forth that can happen. So like how you do that is is very important. Um, but there's not time to go into that. That could be a whole webinar. It could be a whole episode just on its own. I think that's everything about bill pay. Bonus app. I. I have done entire episodes, uh, sessions on artificial intelligence. And I encourage you to go find my presentation on practical AI for accountants on the earmark app, uh, where I dive into actual use cases of AI.

Blake Oliver: [00:42:22] And I think that having a team subscription to ChatGPT or whatever is next is going to become the the must have for every accounting firm, and it's finally available. You can now sign up for ChatGPT for teams and get a secure workspace with data protection, where you can give access to your team to use ChatGPT and ChatGPT promises and their terms of service that they will not use the data that you prompt it with for training the model so it does not go into the public domain, as you've heard some people say. According to their terms of service. So. I feel good about that, considering that Microsoft invested $10 billion in OpenAI. I feel like if I'm willing to trust my data to Microsoft, I could probably trust it to what's effectively a subsidiary of Microsoft. Now, although they don't want to call it that because they don't want to consolidate it in their balance sheets, you know, but like, they basically own a huge chunk of OpenAI, just not more than 50%. Um, Penny says relay is the bonus app. Well, I put relay in my bill pay section. Penny. Um. Yeah it is. It is a fantastic service. So, uh, let's see, in the time we have left, I'll be happy to answer any questions. But I also want to talk about integration strategies and best practices.

Blake Oliver: [00:43:47] So like how do you pull these apps together. Because you don't just buy these on their own. You don't just implement them on their own. They have to like, talk to each other. Right? Um, you want the bill pay to sync over what it did into the accounting system? You don't want to have to manually do that. You want ideally the payroll journal entries to get booked automatically and sync over. And the apps that I've recommended will do this. But. You don't always have to integrate apps. It seems kind of obvious, but it took me a while to realize this. Payroll is a great example. Do you need to integrate the payroll system with the GL? Not necessarily. For instance. I have a rule in my zero for earmark ink that automatically books any payroll debits, both the tax and the salaries and wages to a payroll expenses account. I could also call it a payroll clearing account. It's just an expense account. So I see automatically every month payroll expenses just in one category. Now I could be sinking in journal entries, right? In order to pull out the payroll taxes and the wages and salaries. But guess what? From a management perspective, I don't care. I just want to know what is my cost. Total, and most clients probably just care about that. So instead of dealing with an integration that might break or might get messed up, and where I have to match something to a bill.

Blake Oliver: [00:45:21] Why not just use bank rolls to automate the coding of these into a clearing account? And make an expense account. So it just shows up on the PNL. And then I can do an annual journal entry to break out the salaries and wages from the payroll tax expense. It's up to you. Do you want to have a monthly process to do this, or do you want to have an annual process to do this? So same thing with, uh, syncing up like a e-commerce system or a bill pay system. A lot of times these integrations are built by non accountants and they just don't work that well. So you might save yourself a headache by just doing, uh, doing it manually on a more infrequent basis. And build a process in your workflow software. When in doubt, prioritize simplicity and efficiency in your integrations. Now implementing new tech in a firm can cause. Challenges. It can be a real challenge, especially if you're in a big traditional firm. And it was so challenging for me that I gave up, I quit, I left after eight months, I could not make enough progress and I just said, look, I'm I'm going to spend eight years trying to modernize this traditional firm. Even though they talk about how forward thinking they are, it's clear the business model is just not set up to prioritize innovation.

Blake Oliver: [00:46:38] And you're always going to have a challenge implementing tech that makes people more efficient when the firm is rooted in hourly thinking. If your staff are incentivized based on hourly time sheets, they don't want to become more efficient, because when they become more efficient, they have fewer hours and you're incentivizing them on how many hours they bill. And if if you incentivize them that way and they become more efficient, you're just going to give them more clients. So there's no gain, right? For these staff from the performance management system that you have designed. And that's why I don't think that any firm that operates under an hourly model of incentive compensation can innovate. They will get dragged along as laggards by the rest of the market because they eventually have to do something like offer e-signatures to their clients or offer a fillable PDF form, but they're going to do it five, ten years later. So they're not going to be leaders. So if you want to have tech in your firm that's modern, you got to get away from that. You got to find a way to incentivize staff to be more efficient and effective with clients. And I would say get rid of the hourly come up with something else a different way. For me. I didn't need to track the hours that my team was working on every individual client, because I just knew how many clients they had, and our business was standardized enough where I could say, this bookkeeper has excuse me, this bookkeeper has 15 clients.

Blake Oliver: [00:48:09] This bookkeeper has 20 clients. This bookkeeper has 30 clients on average. Right. It's about even. So I can see who's the most productive, who's handling the biggest book of business. And I could even attribute revenue to each of those bookkeepers. How would you rather manage your team? Uh, would you rather link it to revenue, which is what you care about, or profit, which is what you care about? Or would you rather link it to hours which are imaginary? When you select software, you cannot do it in a vacuum. You can't do it by yourself from the top and implement it down. And I tried to do this and it failed. The team has to like the software. They have to want to use it. They have to feel like they're part of the decision. So you've got to involve your client facing team, the team that's going to be using the software in the selection process and the implementation. Too many big firms especially do this top down and then nobody uses it because the IT people who selected the software have no clue what it is that we actually want and need. So prioritize ease of use, right? Make sure that this is something they want to use, that they're excited to use, and find champions on the team that are excited to try the software and to get other people to use it.

Blake Oliver: [00:49:21] You got to do this. Grassroots. Go for small wins. Try a few clients before you put everyone on it. But don't lag, right? If it works, then make a plan to implement across your whole client base. And I said this before, but it bears repeating. You need a COO in your firm. Who who oversees the tech stack? Somebody whose job is to. Manage this thing, design processes around it, and be responsible for upgrading it and improving it. This is your new office manager. This is your new IT team. And it needs to be operational. It's not just this team off on the side where you've got like client service and then you've got it. I think the whole concept of having a separate IT department should go away. They need to be integrated with client services. So my key takeaways I want to summarize for you. Again the best software, the right software will streamline operations, enhance client experience, and drive your growth. You must involve your team in the process. You must standardize your technology stack. You must prioritize easy use, ease of use and adoption. Minimal training. You don't want to be spending a lot of time training people. And you need to be strategic about integrating these apps. Maybe it makes sense to do it manually. Maybe it makes sense to do an entire process in spreadsheets. Great example of that is cash flow forecasting.

Blake Oliver: [00:50:52] I don't have a cash flow forecasting app in this list because you don't need it. You could do it in an Excel spreadsheet, and I have yet to find a cash flow forecasting app that works well enough to justify having a dedicated solution in your firm. Some people have have it and use it, but it's very rare. Um, appoint a dedicated operations leader who has responsibility for the tech stack, not it. And then, uh, the last one is just get started. So. If your team is just using a bunch of stuff in every partner and practice has their own technology, you got to start wrangling this. So maybe you start with one of your practices, right? Start with CAS. And try to get things in order. And if your firm is too big, actually one of the solutions is to simply start a new team, like a startup inside of your firm, and let them build everything from scratch, because it's too hard to change a team that's been operating a certain way for a long time. So you can build a brand new accounting firm inside of your firm. Give it a cool name. Aprio. They did Aprio Cloud. A lot of my people that worked for me now work at Aprio Cloud, because my firm eventually got acquired by them. So they have this division that's separate, that gets its own tech, its own PNL, its own people, its own processes. That's a really great way to do it.

Blake Oliver: [00:52:17] Yeah, and get started. I encourage you. I'll be happy to answer any questions in the few minutes that we have left. Thank you all so much for coming. Um. Valerie says doing an assessment of what clients are already doing is huge, too, especially for larger teams. Yeah, that's a great idea. Survey your clients, right? Ask your team what are what are clients already using for these solutions or for these problems that they're solving? We have a question here. Is it worth using cloud based tools like write works to avoid IT expenses? I think this is a really good option these days is to outsource it. Um, but that's different than outsourcing the like tech stack, because the tech stack needs to be linked to your processes. So management of devices and virtual machines that you can outsource or you can have an IT department do. But the operational tech stack is different because this is your client experience. This is your people experience. Jessica says, I want to just get started, but I'm worried about needing to switch and annoying clients who need to switch too. Yeah. Um. So that's a that's a challenge, right? Clients may say I don't want to switch. Uh, you know, that's like the number one objection to, say, getting them to switch to relay is, uh, accountants say. I can't get my clients to switch. They don't want to switch. So you have to decide.

Blake Oliver: [00:53:47] And this is easier to start with new clients than existing ones is to say, look, if you're not willing to use our tech stack, we cannot serve you, we can't help you. And that's a scary thing to turn away potential revenue. But if you don't do that, you're going to end up with a situation where you have clients on a variety of different systems, and it's not scalable. You can't grow that practice. So if you want to grow and hire people to do the work that you're doing now, someday you really have to be disciplined. I made the mistakes, so I know I didn't do it right from the beginning. I just took everything that came in the door. But I spent probably a year undoing that. It was very expensive in terms of my time. But you can start with the new people. Just don't take people coming in the door. That won't do it your way. All right. Uh, thank you, everyone, for coming. I really appreciate you being here. I hope this was helpful. Stay tuned for future earmark webinars, and stay tuned for a message about how to get CPE. Thanks for listening. I hope you enjoyed this episode and that you learned 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 earmark Cpcomm to download the app, take a short quiz, and get your CPE certificate. That's earmark Cpcomm.