The New Way CPAs are Delivering Value: Aligning Automation with Client Success
- 5. Agenda 1. Additional Background 2. Defining + Using Automation 3. Types of Complexity 4. Building Your Strategy 5. Example – Construction Clients
- 6. Additional Background • EY : Transaction Support (Due Diligence)(2010 – 2014) • Financial + Operational Controller (2014 - 2017) • Launched Gyroscope CPA Firm (2017 – 2021) • Bookkeeping, Back Office, Controllership, CFO • Firm Nexus – Mentorship + Coaching for Firms • Currently Fractional CFO for Property Valet • We manage 170 properties across the country
- 7. Who Is This Webinar for? • Firms that want to transition to adding predictable and scalable recurring service revenues. • Tax automation won’t get too much attention here • Firms that want to systemize and automate their expertise and not build their service delivery around themselves.
- 8. Survey Question #1 How would you rate your department’s or firm’s current approach to automation? 1. Very effective 2. Somewhat effective 3. Neutral 4. Needs improvement 5. Not effective at all
- 9. Defining + Using Automation In the broad sense: • Doing more, or offering more value with less resources • We get stuck thinking about how can we do more, instead of offering more value.
- 10. Defining + Using Automation Automation defines what we do with Data: • Collect Data • Format Data • Move Data • Report Data • Enhance Data • Interpret Data • Project Data
- 11. Defining + Using Automation My experience shows that automation happens faster and creates more efficiency when you: • Clearly know what the deliverable or outcome could look like - Not just speeding up what you usually do • Know the return on investment • Internal processes vs. client facing processes • Don’t build it around what you want, but rather what the client needs.
- 12. Survey Question #2 What is the primary goal of your current automation efforts? 1. Reducing cost 2. Increasing efficiency 3. Enhancing the client or internal stakeholder experience 4. Driving strategic growth initiatives
- 13. Types of Complexity Two Main Types of Complexity that impact the overall effectiveness of your firm’s automation • Frontline, Tactical Complexity • High-level, Strategic Complexity • Many of use think that we will be more profitable by solving the tactical complexity – which is true… by 10 – 15% • But solving and executing on the strategic complexity results in increasing profits by 80 – 100%
- 14. Types of Complexity Tactical Complexity • This gets all the attention • The tactical complexity in your firm is driven by two primary variables • Client’s (1) Size and (2)Industry: By working with all types of clients in various industries you run into different: • Systems • Nuances • Problems
- 15. Types of Complexity Here’s an example of what this looks like, in spreadsheet form:
- 17. Types of Complexity • This firm opted for massive service options and neglected an intentional firm direction. • No level of automation was going to vastly improve their efficiency. • They had a ‘revenue at all costs’ mentality. • Their revenue growth plans left them with little profit, time or scalability. • Unknowingly, they’ve embraced (and are trying to solve) the wrong type of complexity.
- 18. Types of Complexity Strategic Complexity • Doesn’t get the attention it deserves. • The strategic complexity in your firm is driven by YOU and your choices. • You choose who you work with and what you do for them. • You control how much the client’s size and industry impact your level of automation. • It is only way to offer move value while simplifying your firm.
- 19. Types of Complexity “ Simplicity is the ultimate sophistication.” • A quote usually attributed to Leonardo Da Vinci doesn’t instruct us how to get to Simplicity.
- 20. Types of Complexity What the quote doesn’t say is that you have to move through a lot of complexity… • But not the operational complexity of how to figure out how to be all things to all clients. • But the mental and visionary complexity to not do all the things.
- 21. Survey Question #3 How often does your department or firm reevaluate services or process structure to align with organizational needs? 1. Regularly 2. Occasionally 3. Rarely 4. Never
- 22. Building Your Strategy Increasing the value you offer and simplifying your firm starts well before you pick any tools. • Identify and commit to a new core service offer • Remove all clients who don’t fit in your core offer • Remove all clients who don’t won’t use your tools + processes • Find partners that deliver secondar services to your core offer • Reduce headcount to balance the new workload • Build a lead generation system for your new core offer. • Build automations and workflows for your new core offer.
- 23. Building Your Strategy None of those steps are easy, regardless of firm stage: • As a new firm owner, your need for cashflow outweighs ‘waiting’ for the right clients. • As a seasoned firm owner, your schedule and capacity outweighs adjusting your trajectory
- 24. Building Your Strategy The first domino: Identify and commit to a new core service offer This is your niche • Defined as the problems you solve for your client. • Industry and size will come out of identifying what problems you solve. What do you (your firm) do best to solve your client’s problems?
- 25. Building Your Strategy 4 Root Problems Clients are trying to solve: 1. They want to stay compliant 2. They want to save money 3. They want to make more money 4. They want a different lifestyle
- 26. Building Your Strategy The tools we have available to help clients with the root problems 2 – 4 (i.e. not compliance) are: • Reporting (Segments + Operations) • Systems + Processes • Short term management (Cash + Improve Profit) • Long term management (Growth + Increase Profit)
- 33. Building Your Strategy Solving the Compliance Problem
- 34. Building Your Strategy Solving The Saving Money Problem
- 35. Building Your Strategy Solving The Making More Money Problem
- 36. Building Your Strategy • To deliver more value to clients, we need to align our automations and processes that impact their operational and financial decision making. • What are the tools and automations available in their industry? • How can you build your firm’s systems to support and integrate with your client’s systems?
- 37. Survey Question #4 Do you offer automation or process improvement services to your clients? 1. Regularly 2. Occasionally 3. Rarely 4. Never 5. Planning on it
- 38. Example – Construction Clients • First step: We’re going to commit to a niche: • Construction • Commercial vs. Residential • Residential: Construction Management vs. Trades/Contractors • Construction Management: General Contractors or Home Builders • $0 - $1M vs. $1M - $3M vs. $3M - $5M
- 39. Example – Construction Clients • Problems in Construction (Home Builders) • Estimate and invoices are on spreadsheets • No centralized financial data (Disconnected Systems) • No database to build estimates efficiently Poor estimating process- losing money on jobs even when efficient due to bad variables inputs (34% in 2023 are over budget - Sorci 2024 Home Builders Reports)
- 40. Example – Construction Clients • Problems in Construction (Home Builders) • Job cost tracking is non-existent • No job margin analysis and review • No information about which types of jobs are profitable Poor project costing – cost overruns and lack of budget control go unnoticed. (92% in 2023 are looking at incomplete financial information - Sorci 2024 Home Builders Reports)
- 41. Example – Construction Clients • Solving Problem 1: Poor Estimating Process • Standardized process for estimating • Tool/app to create and approve estimates • Feedback for estimate accuracy… • Solving Problem 2: Poor Project Costing • Change of accounts for cost codes (Used in Estimate to Review) • System to move bookkeeping to project accounting • Review process to routinely analyze project results
- 42. Example – Construction Clients • When you identify how you mesh your automations and systems to the clients, you unlock NEW value for your clients. • You also create a more profitable firm: • By standardizing your solution steps, you codify how you build and scale client services AND value. • Pre assembled templates, workflows, instruction for One time and Recurring steps • You invest time refining and adding value to this process, instead of figuring out complete the work for your next client.
- 43. Example – Construction Clients • The more you focus, the more value you can offer. • There is no shortage to problems that clients encounter: • Poor estimating - No systems with data • Poor cost tracking - No project costing • No month end close - overstating rev (leads to paying taxes/ sales tax early) • Minimal marketing - no tracking + ROI calc • No capacity/labor planning for key hires • No strategic direction - No profit visibility beyond 2 -3 months
- 44. Survey Question #5 What are the biggest pain points your department or firm is facing in relation to automation? (Select all that apply) 1. Manual or repetitive tasks 2. Lack of data insights for decision-making 3. Inconsistent processes 4. Limited resources or budget 5. Siloed information across teams 6. Difficulty adopting new technology
- 45. Example – Construction Clients When you created pre-assembled processes to solve those problems, you already know what your clients need: 1. Poor estimating -> Need estimating and project tracking system 2. Poor cost tracking -> Project tracking and cost code assignment 3. No month end close process -> Checklists and templates 4. Minimal marketing -> ROI Tracking on current marketing channels 5. No labor/capacity planning -> Forecasts and projections 6. No strategic direction -> Monthly management reviews
- 46. Example – Construction Clients Clients don’t need a better client portal. They need a partner that knows how to solve their next problem.
- 47. Summary • By aligning your firm’s automations (tools and processes) to deploy the next solve to your client is the new way CPAs are delivering value – It requires: • A Clear niche • Problem identification • Process and system understanding • Pre built solutions + templates • Marketing to that niche