Post-Tax Season Tune-Up

After the chaos of tax season, it's the perfect time to evaluate your accounting practice and make changes for a smoother upcoming year. In this episode, Roger is joined by guest Amanda Aguillard to discuss strategies to "right-size" your client roster, optimize technology usage, diversify service offerings, and implement better work-life balance. They share tips on reviewing clients, pricing appropriately, leveraging accounting services beyond tax prep, and avoiding the unhealthy grind culture.

Sponsors
Padgett -  Contact Padgett or Email Jeff Phillips

• (00:00) - Welcome to Federal Tax Updates
• (02:04) - Meet Amanda Aguilar: A Journey from CPA to IRS Advisory Council Member
• (03:26) - Post-Tax Season Reflections: Looking Back to Move Forward
• (06:03) - Evaluating Your Practice: The Importance of Client Grading
• (11:02) - Achieving Work-Life Balance Through Right Sizing
• (16:54) - Embracing Specialization for a More Profitable Practice
• (21:41) - The Power of Saying No: Setting Boundaries with Clients
• (26:17) - Leveraging Technology for Efficiency and Balance
• (27:58) - The Challenge of Vetting Software
• (29:23) - The Reality of Clients and Technology Adoption
• (30:38) - Making Tough Decisions on Client Technology Use
• (33:37) - Evaluating Tax Software: Cost vs. Capability
• (38:19) - Diversifying Services Beyond Tax Season
• (42:51) - The Value of Accounting Services in the Age of DIY Software
• (48:38) - Closing Thoughts: Embracing Change for a Healthier Work-Life Balance

Connect with Amanda Aguillard
LinkedIn: https://www.linkedin.com/in/amandaaguillard

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Annie Schwab

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All content from this podcast by SmallBizPros, Inc. DBA PADGETT BUSINESS SERVICES is intended for informational purposes only.

Creators & Guests

Host

Roger Harris, EA

President at Padgett Business Services

Guest

Amanda Aguillard

COO at Padgett Business Services

What is Federal Tax Updates?

CPAs, Enrolled Agents, and Tax Preparers can keep up-to-date with the latest federal tax information while earning NASBA approved CPE credits and IRS approved CE credits by listening to the bi-weekly Federal Tax Updates podcast. The hosts Roger Harris and Annie Schwab have over 75 years of tax experience between them, which has been featured in various media outlets including Wall Street Journal, USA Today, The Morning Business Report, Bloomberg Business News, and Accounting Today.

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Roger Harris: Hello again everybody. Welcome to another federal tax Updates podcast. This is Roger Harris. And Annie is still on her special secret assignment. And, uh, she'll be back shortly with the podcast. But I'm really excited about who our guest is today. And I'm happy to introduce the CEO [00:00:30] at Paget and a current member of the IRS Advisory Council, Amanda Aguilar. Amanda, welcome and thank you for joining us today.

Amanda Aguillard: Thank you. I'm happy to be here.

Roger Harris: Uh, I didn't do your background justice with just talking about your role here in IRS. So talk a little bit. Tell everybody a little bit more about you. I'm sure a lot of people, if you've been active in the accounting industry and been to shows or, uh, conferences, you've probably heard Amanda, but for those that this [00:01:00] is the first time they've heard from you, tell them a little bit about your background and and how you got to where you are today.

Amanda Aguillard: Well, sure. So, um, I am a CPA. Um, I have been a CPA for a long time, um, going on 25 years and, uh, started originally at a big four firm, then had two babies back to back and went on a little bit of a sabbatical. And then when I came back in 2013, I decided to start my own practice. And so [00:01:30] folks who are who have been around the space know that's around the time that cloud software started to get really popular. So I got really involved with accounting technology and loved it. I started to, um, put a cloud accounting software into my own practice and then helped others do the same thing. So fast forward another, you know, eight, nine years when Jeff Phillips, who's our CEO, decided to, um, to invite me to become the pageant's chief Padgett chief [00:02:00] operating officer. And so in my role at Padgett, I get to do what I did for my own firm across our entire network of US practices. So.

Roger Harris: Yeah, and like I said, if you if certainly if you've ever attended any Xero cons or involved with zero, I mean, she wrote the book on Xero, so she should be a familiar, I guess voice because you can't see us, uh, from Amanda. Um, what I thought we'd talk about today is probably something that I don't know if either one of our [00:02:30] day to day jobs at Padgett, but it's something that I know we talk about with our offices is, as you are listening to this, I'm going to say tax season is over because April 15th is past. But don't everybody yell at me and tell me tax season doesn't end on April 15th. Amanda, we know there's a lot of work that's done after April 15th, but for a lot of taxpayers, particularly the individuals, this is the end of tax season. This is how they, uh, they see it ending at April 15th. And and it's a and what we want to talk about [00:03:00] today is what do we do now both from a looking back and looking forward standpoint to help make our business better. While it's, I guess, fresh in our mind. Or maybe you'll do this after you hopefully come back from about a week or two at the beach. So, um, kind of set up what what we're trying to do here today and why we think this is important. Uh, because it's not going to be your technical tax course. It's going to be more of a practice management discussion.

Amanda Aguillard: Right. So, you know, so when we think about busy [00:03:30] season, the crux of that being probably eight weeks ish, um, where we're we are feeling under the gun. We're getting pressured from clients, as you said. Clearly there are deadlines around the, around the year. Um, and, you know, we have kind of a second bite of tax season in the fall. But, you know, February 15th to April 15th is really the toughest time. So hopefully everybody out there listening to this has taken a minute to recharge themselves, to get away [00:04:00] from the office for a second and rebalance their lives, taking care of their families, everything that gets put to the side. Right. Um, during those eight weeks off. Right. Um, and so what we're going to talk about today is when you're ready to come back and objectively look at the way those eight weeks went. Where do you start? What do you fix, and how do you how do you move forward through the other ten months out of the year?

Roger Harris: Yeah, because I think it's safe to say nobody ends a tax season. And again, whatever I'm [00:04:30] this is kind of I know you're a sports fan. Her son plays basketball and I'm a sports fan to some of us within the first quarter, some it's halftime, some it's the third quarter and some at the end of the game. But wherever you are, we need to reflect back on what has happened and how do we. Build on the good things and not repeat the bad things, because I've never talked to anybody who came out of a tax season and said, well, that was perfect. I wouldn't change a thing, so now's [00:05:00] a good time to do it. As you said, after hopefully coming back from, uh, some time off, one of the first things and I don't think we do this enough as an industry, but, Amanda, should we look at our clients? I mean, you know, because clients are a big problem or a big help in how a tax season goes. So what do we do about our clients at this point? They're. Well, then make sure they pay us.

Amanda Aguillard: Right. Well, I think, I mean, I think the first step in sort of evaluating your practice, [00:05:30] you know, end of April, beginning of May is to really look at the clients and not just not just emotionally, um, because, you know, everybody's got those clients that are very loud that are very, um, they complain that, you know, you can you can say, okay, well, I know this client's a bad client, but what about all those ones in the middle? Um, we need to what? We suggested pageant. And this is sort of the first step in what we call right sizing practices is actually list every single [00:06:00] one of your clients, put it on a spreadsheet, get it out of your tax software, but list every one of your of your tax returns for busy season and put their fees next to it and figure out what they what they paid. You put that there and then look at at how they would rank. So they're going to be some clear A+ clients, right? These are the clients that have a great attitude or treat your staff really well. Um, are very understanding of the pressure of busy season. They [00:06:30] send in their records when they're asked, they respond to questions, you know, and they're also paying a market fee. So they're they're not the ones that are the, you know, loss leaders in your practice. But these are the A+ clients. These are if we could have as many of these as we could, we'd have a, you know, a perfect life. And then so that's probably pretty easy for you to identify on your list. Then identify your F clients who are the clients that are just rotten and miserable and complain about everything. [00:07:00]

Amanda Aguillard: Don't respond to emails and phone calls until it's the 14th, and then they want to know, you know, can I come in 20 minutes and pick up my return? Um, they're probably making comments about how how expensive you are. So those are the F's. So list them all out your A's and your F's, and then start looking at the ones in between. So why weren't they a pluses? Um, is is can you make them into A+ clients by training them how to use software or how to use your processes [00:07:30] or to submit things digitally? Can you get them to the right price? You know, maybe they're great clients and they're easy to work with and you want to help them, but they're way underpriced. So can you get those clients that are in between up to a pluses. Um, and you've and you've got to you've got to pay attention to this right after tax season. Because I know you haven't had delivered children, I have delivered two children and I have not done that. And I can tell you that in the moment you think it's the worst thing ever. But then, [00:08:00] you know, a couple months later you're like, that's great, let's go. Let's have another baby. Um, so it's kind of the same thing with tax season is unless you're in the pain of the moment, you're you're going to have a false reality about the way it actually went. So it's important to do this quickly. So list all your clients and give them a grade. That's the first step.

Roger Harris: Yeah. And involve your staff in this process because many cases clients look good to you because all you do is shake their hands, pat them on the back, tell them what a great job you know, they [00:08:30] did last year with their business or their whatever. And your staff says, I hate these people. These are the worst. So, you know, it'd be interesting to see how your staff would rate them compared to how you would rate them. Because again, you want A-plus clients and you want as many as you can get, but they got to be a plus to you. They can't be a plus to everybody. I should say, you don't want them to be a plus to you and F's for your staff.

Amanda Aguillard: Yeah, and I'll tell you. So I had my own practice for a long time. Still do, but I don't work in it very [00:09:00] much. And and we did a big tax practice for the for a number of years. And that was one hard line that I had. Like if you were rude to my staff, it doesn't matter what you pay me because staff is very hard to find. Clients are easy to find, staff is very hard to find. Right. Um, and I would go to the mat for my clients. So pay attention to that. Or ask your staff, you know, who who do you think is is just not somebody you want to work with and let them have the the authority to make those those calls on that. If [00:09:30] your staff tells you and I just this person doesn't treat us well, that's a that's an immediate F and they get cut.

Roger Harris: Right. Yeah. You need to stick up for your staff because you really can't be successful without them. And as you mentioned, it's hard to find good staff. And if they're in a work environment that they're not going to be happy in or, or don't feel rewarded for what they're doing, you don't want to have to go out in the marketplace and try to replace them, because there's just not that many out there. You [00:10:00] mentioned rightsizing, and I want to dig in a little bit more to that. You know, a big issue in our industry is work life balance and trying to to to maintain a proper relationship with family and health and all these other things, uh, because it's historically not been something we're good at, you know, we we. Wear a badge of honor. How many hours we worked during tax season without realizing the cost of that, both to perhaps ourselves [00:10:30] and our family. When you talk about rightsizing, kind of talk about how that helps also achieve work life balance, which is, again, I think maybe the one of the bigger problems facing our industry today.

Amanda Aguillard: Yeah, I, I, um, have a mission to end the martyrdom of accounting, uh, practice owners, you know, there's there's it's only us, by the way. All the only the people that are listening to this podcast, nobody else in the real world cares thinks it's a good thing. Nobody else thinks it's a good thing that you are, [00:11:00] you know, working six, seven days a week, 12 hours a day. And, um, and, you know, generally unhappy and not talking to your partner or children. So nobody, nobody outside of our industry believes that that's, like you said, a badge of honor. So, um, there it is possible to have a great practice and also have a great non-work life. So when we talk about rightsizing at pageant, what we're talking about is doing the right kind of work for the right kind of clients, [00:11:30] for the right price, with the right staff. So it's all those things. And when you've got this, um, this magical blend of all those things being right, what happens is. You become more profitable, your average per client revenue goes up and generally your workload goes down. So one of the metrics that we measure at Paget across our network is how many hours our owners are working.

Amanda Aguillard: And we really want that to go down. I mean, [00:12:00] I remember in my public accounting days, you know, I was rewarded for having more billable hours, which is fine as a staff, right? Like when you have staff, you want to get get value out of them. But as an owner, you really want more billable hours to go down. Um, so what happens when we go through a rightsizing exercise is that we eliminate the bad clients, we keep the great clients, and we increase the prices of the middle clients generally. And so our per return fee goes up. Our our annual [00:12:30] revenue per client goes up, but our workload starts to go down. Or if, if, if we, um, end up with keeping the same number of clients but at a higher rate, what that does is it buys us some capacity. So then we have additional revenue. We can go out and hire more staff or put in other resources so that we are, again, spreading out that that workload and getting more of a, um, a work life balance.

Roger Harris: Yeah. I mean, it's [00:13:00] one of these things that I think that, you know, we have examples of people who are very successful at this. So a lot of people say, well, that's not possible. It's tax season. You got to work 20 hour days. And no, you don't. I mean it's very doable. And people who make it a priority. And that's one of the things I try to tell people is it kind of starts with you. If it's your firm, you need to set the goal to have proper work life balance and let everything else change from that as opposed to changing that. And because sometimes [00:13:30] it's easier to just work longer than to make a hard decision with a client. We also talked about staff. Think about how much easier it is to recruit staff into a firm who doesn't require them to give up family time and put health at risk and all those sorts of things. It's not just you, it's everybody that works in your firm. Well, I.

Amanda Aguillard: Will tell you, uh, the generations that are coming behind you and I aren't putting up with it. No, you know, I mean, right, they wouldn't do it. So I finished graduate school in 1998. Uh, so I guess that makes me a Gen [00:14:00] X. Uh, the folks behind me are have zero interest in billing, you know, uh, 60 hours a week. They won't do it. They just won't do it. So. So if you don't retool your practice to get it to a place where you can hire folks that work a reasonable full time job, you're not going to have staff.

Roger Harris: Yeah, and it's true. I mean, we're talking about tax firms and accounting firms for small businesses. But but you see it [00:14:30] across the industry, fewer people are taking the CPA test. Fewer people are going into college. And, you know, majoring in accounting. And a big reason for that is look at what you're working to become, right?

Amanda Aguillard: We've been we've been the worst commercial for for for happiness that exists. Right. You know, so so why are we surprised? It's just we're not we shouldn't be surprised. And the reality is it's becoming a smaller and smaller pool of folks to help us with our practices. So you [00:15:00] got to fix it. You got to fix it.

Roger Harris: And we talk about, you know, going through this process and having clients. Decide that they're not the right fit for you because you've set some rules. And one of those rules is, this is my minimum fear. This is how I charge. And whatever the case is and the clients, you know, go somewhere else. And we sometimes get confused when we're in high demand because all these clients are coming to us that other people have done this, and now they're looking for someone to go baby [00:15:30] them like they were told wasn't going to happen anymore. So be careful, you know, take advantage of the fact that you're in high demand to give you the courage to do it. But be careful of people knocking down your door, because they might be the people that somebody else kicked out, and you don't necessarily want to bring them into your firm unless they're willing to make changes to fit your business model.

Amanda Aguillard: Yeah. And you know, one things we coach with our firms is, is objectively deciding who your right, what you're the right kind of client is [00:16:00] for you. So I started my own practice in 2013 and bootstrapped it and went out on my own. I was a single mom. Like I had a lot of pressure. I had to pretty much take anybody who walked in the door. So somebody came in. That was restaurant. I was doing their, you know, restaurant tax return and their accounting. If somebody came in that was real estate. Like I was learning these things on the fly. Um, and I had to do that at the beginning. But I got to the point pretty quickly that I realized that was incredibly inefficient. Uh, it's really [00:16:30] hard to go learn special rules for each one of your clients. It's much more efficient to pick a couple of industry verticals, or pick a couple of client profiles and really focus on that. And so what I'm saying I understand there there are caveats to it. Right? I can I can sit here on this podcast and say, you know, you should you should never you should have an industry vertical and you should never take clients that don't fit you.

Amanda Aguillard: Well, I know that there are some some conditions to that, especially when you're starting out. But I will tell you as soon as you can get to that [00:17:00] and get to that place of, of specialization. And, you know, a persona that is your ideal client, it gets much easier to say no to the wrong kinds of clients. So so we aren't bending over backwards to accommodate, you know, nonprofits or trusts or whatever. These, you know, kind of one off issues are we can say, well, we just don't do that. It's not about you, client. You know, it doesn't it doesn't have to be a personal thing. It doesn't have to be personal. But it's just like, we don't do that. That's not what our practice does. Here are some other great [00:17:30] practices that do. But we don't do that. And the sooner you can get to that and have your boundaries, it gets easier over time and it just becomes it's just a more profitable way to run a firm.

Roger Harris: Yeah. Well, and if you look at, you know, professional firms of all types, we've gotten into a world now of more specialization. To your point, um, compared to the metal we used to, you know, if you go back and watch Marcus Welby or whatever the TV shows were from, you know, many, many [00:18:00] years ago, every doctor was this GP. They did everything, but now there's a different doctor for every part of your body, there's a different lawyer for every thing that you need. So specialization is not only okay, it's the norm. And it's to your point. It's okay to tell somebody, I don't know that I don't do that. And because there's no there's no margins that to be made. If you have to learn everything to do it one time. That's right, that's right. It then the learning curve is there. So specialization, uh, [00:18:30] is actually a very common thing that clients are used to dealing with. I think sometimes we think our clients deal with us differently than they do with everybody else. You know that somehow they want to walk into a doctor that'll do everything. Instead of here's the doctor for your heart, here's the doctor for your head, here's the doctor for your feet. But. We got to be the same way. Specialized focus and search out clients who. Meet, what your definition [00:19:00] of your expertise is.

Amanda Aguillard: And what you want to do. I mean, I think a lot of us, by our nature, want to help. We have this this knowledge that for so many people is really overwhelming, whether it's tax, accounting, software, whatever, like we know it. And so it's easy for easier for us to do this thing that we see our friends and family and acquaintances really struggle with. And so, so we we want to be helpful and we [00:19:30] want to solve problems. I mean, that's, you know, part of our nature too. We want to solve these people's problems. But what we have to do is, is remove ourselves and kind of take a much higher view of our practice as a business and think of it as a business like, how would you advise your client to run this business called accounting firm? Um, and it's probably not taking everybody that walks in the door for $25 an hour. You know, it's it's it's much more it's much more strategic. So, um, that's what we're talking about doing post tax season is like, okay, now's the time. Take [00:20:00] this little, this little, uh, break after the busiest part of the year and look at the business of your business. Figure out what what would you advise your client to do if this was, you know, if these were the financials? This was the efficiency. These were the metrics. How do you rebuild it. Um, and so that's what we're talking about today.

Roger Harris: Yeah. And and a couple of comments based on what you said, we are better at giving advice than taking our own advice. You know, we may tell a client to do everything that we won't do for ourselves. So, [00:20:30] number one, listen to yourself when you're advising clients and do that for yourself. Secondly, I don't want to give the impression that the end of this exercise that we're talking about, you're going to have more free time, but you're also going to have less money. The reality is you're going to have more money and more time, which I'm not sure there's anything wrong with that result.

Amanda Aguillard: Not to me. No.

Roger Harris: I mean, even if you have the same money in more time, I mean, there's just so many ways to to benefit from [00:21:00] this, if you will just make it a priority and look into your firm. And we're talking primarily here about clients. You want to make sure that your firm has the clients that you can serve best, that appreciate what you do for them, and are willing to pay you what you're worth. And if you do that, you will have time, and you will have money and you'll have better clients.

Amanda Aguillard: Yeah, we've we've seen some of our firms go through this very deliberately. And, you know, nine times out of ten, they're ending [00:21:30] up with more revenue at the end of the day. Because they are. Stripping out more capacity than dollars. And so they're backfilling it with with with better clients. But it does take a little bit of a leap of faith. I'm not going to sit here naively and say, well, take all these F clients and, you know, it could be a chunk of a bunch of dollars and just kick them to the curb and hope for the best. I mean, some of these are going to be easy. Some of them are not going to be easy. But, you know, even if you can kind of fire a few, see how it goes, fire a few, [00:22:00] see how it goes, fire a few, see how it goes. You're still going to end up better this time next year, like you said, with either more or the same revenue, but definitely with less stress and and pressure. Yeah.

Roger Harris: And the clients aren't going to do it. You got to do it. I mean no client is going to come in and say, would you raise my fee? You're worth more. So if you don't institute this kind of review and whatever plan that you come up with and don't execute it, it's not going to happen. So it starts with you. You've [00:22:30] got to have the plan and you've got to make sure it's it's properly executed.

Amanda Aguillard: And our folks who have done it, um. But have consistently come back to us and said, I wish we had done this years ago. Yeah. And also, they say our clients almost unfailingly accept the, the, the increases in fees without any complaint or comment. Or they'll say, you know, I was kind of waiting for this. I feel like I've been paying you too little for years. So yeah.

Roger Harris: I think clients in many instances [00:23:00] value us more than we value ourselves. And if you just ask them to pay what you're worth, I think you'll be shocked how many of them won't bat an eye. Some will. There's always going to be somebody that's going to complain no matter what you do.

Amanda Aguillard: But but look, we can be friends. We just don't have to do business together. That's right. You know, it doesn't mean.

Roger Harris: Our friendship ends. That's right.

Amanda Aguillard: It's just an objective. This is what I need to be making to make it worth my time. And if you can't or don't feel like you should be paid, that's fine. That's fine. Then there are lots of other people that will [00:23:30] take your business. But that's for me. I'm running my business. This is what I need to make this relationship. Um, continue.

Roger Harris: And if you have business clients, they do the same thing. They're not going to, you know, if they're a restaurant, they're not going to cook. Whatever you order, you're going to order off the menu like everybody else. So they do it. So they should expect you to do it as well. I don't want to get into details about particular pieces of technology, but you mentioned you probably got the best background in technology of anybody that I know. How [00:24:00] does examining technology and making sure your technology is right, how does it play into this whole right sizing and work life balance? Where does technology fit into this process?

Amanda Aguillard: So I will say first we need to we need to back up a second because technology is a tool to help you with your processes. It's not a replacement for processes. So so the first step is really to think about what are the things that went badly, how did they go badly. And then [00:24:30] comma can a piece of software help us do it better and.

Roger Harris: It speed it up or make it more efficient or whatever?

Amanda Aguillard: Right. Whatever those things, those things are. So, um, let's take client information exchange as a, as an example. Um, so let's say we look at our taxis and we say, okay, well, we really struggled getting our information from the clients. Is there a way we can use technology to make it easier then? Um, then you go down a rabbit hole of software. Um, [00:25:00] frankly, um, but but but you the right way to go about it is to say, okay, what are the what are the things that are really non-negotiable pieces I have to solve? So, um, you know, do you need a client portal for this? Does it have to have mobile capabilities? Does it, you know, what are your security requirements on that? And if you can objectively figure out what your, your, you know, must haves are on software for whatever kind of software it is, it really helps a ton. [00:25:30] And then the next piece, the next way to vet software, I think, is to ask peers, um, which is, you know, one of the values that we have at Paget, we have 100 and almost 180 small, small ish firms, um, that are working kind of the same business model. So it's, it's easy to have a for us and our firms to have community of like minded practices. But but there are plenty of them out there outside of Paget. So uh suggestion on that would be to, to ask, um, there [00:26:00] are folks that are out there that are super interested in technology and can give you, you know, at least a shortened list of what these, these possible solutions are.

Roger Harris: Yeah, because there's so much technology out there, it's almost overwhelming to try to keep up with it and decide what's best. What's the good one? What's the bad one? I know that's something you try to, you know, try to you do take the lead of in Paget and working with offices to try to narrow down those choices and come to our people and say, here are the products that we've looked at. Here's what we think [00:26:30] works, works best. Yeah. Answer. Go ahead and I'll ask my question.

Amanda Aguillard: Well, I was just going to say it's hard. Um, and googling doesn't help because all software sites look exactly the same and promise you the world, um, and say that they do all these things and have all these integrations and they're marketing sites, they're built for sales. They're not built for for accounting people. So yeah. So it's really tough. It's really tough.

Roger Harris: How do you answer the the common. Armpits [00:27:00] a complaint or a comment, and I'll blame it on people my age or older. Well, my clients don't deal with technology. They won't. They won't adjust. You know, I have to do it the old fashioned way now. There might be 1 or 2 clients that that's true for, but come on, they did.

Amanda Aguillard: Yeah. I will say people are.

Roger Harris: Dealing with technology in every day.

Amanda Aguillard: Well, I will say Covid did us a favor in this regard in that it forced a lot of people of all ages to at least somewhat embrace [00:27:30] technology. So, I mean, I think about my mother, you know. Yeah. Um, uh, during Covid, if you needed to schedule an appointment or you needed to order food or you wanted to download a library book because you were so bored, I mean, you had to use technology to some degree. And so I feel like that there was a significant jump in folks who are, um, becoming more tech savvy. Having said that, you know, we do hear it from our firms. Well, I've got a segment of the population that just won't [00:28:00] use software. Um, they just won't use their phones. They won't, you know, they won't even email things to me. And they they insist on dropping it off. So I think. You have a decision to make. Um. First. It is incredibly inefficient to run a practice where you're taking in. You're dealing with clients in seven different ways, where you're letting the client decide how they interact with you. Like like your restaurant analogy, right? We don't we don't have a waiter come to the table and say, just what would you like and how would you like it prepared [00:28:30] and when would you like it? And no, it's, you know, there's a list of certain things.

Amanda Aguillard: So if you can, if you can narrow the methods for your clients communicating with you and exchanging information with you as much as possible, that's a good start. If you deliberately bully, like feel there, there are some very important clients to me that will not use any kind of technology. They just won't. Um, you have a decision to make. Are you going to keep those clients or not? And if you're going to keep them, [00:29:00] is there a way that you can? Close the gap between what they're willing to, how they're willing to interact with you, um, against how you or want to run your practice. And that may that may be adding a virtual assistant or a person in the office to scan to convert to digital. And you got to figure that into your, into your profit. So are you are you willing to pay more to keep these clients? And I would say when you really look at it, it's probably not worth it. It's probably [00:29:30] not worth it to add staff or to add, um, you know, assistants to. Just to make your your clients happy. So it's tough. And again, going back to I think we are built to help people, it's really hard to tell the little old lady with a shoe box, I can't do your return anymore. This way. Um, so it's a struggle. Yeah.

Roger Harris: And these tend to be probably clients you've had for forever, you know, and so you feel a stronger obligation to them because they've been your [00:30:00] client for 30 years. And the way that you started with them was fine, but they want to still do it the way you did it when you started with them 30 years ago. So, you know, the one thing I can tell you, you can't keep them all. But if you want to keep 1 or 2, do the things that we've talked about up to now to free up some time so they aren't such a burden, and pick the 1 or 2 that have been with you for 30 years and, you know, make a concession for them. But you know, you can't you can't do it in the in the mass. No. [00:30:30] And they are used to technology more than they used to.

Amanda Aguillard: And I'll tell you too, you know, we talk about succession all the time at pageant. And, um, there are many of the many ferm owners who will be ready to retire soon and hoping to sell their practices. You're not selling the little old lady with the shoe box her to anybody. So. So to your point, if you want to, if you want to take on a certain number is like freebies, charity cases, pro bono, you need to just. Recognize [00:31:00] that that is what you were doing, and there will be no value to that part of the practice when you get ready to sell. Nobody besides you. Nobody's going to buy it.

Roger Harris: Nobody's going to pay you for them. Mhm. We've talked a lot about technology in general. I mean probably the one of the bigger pieces of technology we all have is our tax software. Mhm. Um. Should we look at that every year? How do we analyze it? What? How do we I mean, some of it, it's just we know how to use it. So we assume it's it's the best because it's I know how [00:31:30] to use it. But is that smart? I mean, how do I value why do some tax softwares cost 30,000 and some cost 300?

Amanda Aguillard: That's a really good question. And and it's a question we're we look at a pageant every day. Um, it's it's probably the most disruptive software change you can make in a tax heavy practice. I would say it definitely is. Oh, yeah. Um, I will also say I don't think there's a very big delta between the worst software and the best software. [00:32:00] Um, so probably the best software that you can use is the software you're using. Um, unless there's particular problems like, um, you know, none of them are really, truly cloud based, which is a deficiency in the whole industry to to a very strong majority. They are remote hosted. Um. Desktop products. And that is the way, the way it is. So, uh, I don't know. I mean, we we really. We are an [00:32:30] ultra tax shop. Um, Padgett is. But, you know, I think I think most, I think most software is probably on par. Um, and I wouldn't, I wouldn't advise unless you've got serious deficiencies in your software, I think you can get a lot more bang for the buck looking at other technology to change or improve.

Roger Harris: Yeah. I think, you know, in theory, every tax software should get the same result, given the same information, because we're all trying to comply with the same tax law. So it's not a matter of who [00:33:00] does what right versus wrong. Sometimes it's the base price and then the add ons add up and you're actually paying more than you could have gotten in a bundle at another software. You mentioned the key one if you know how to use it. Um, and it's got all the functionality that you need. A lot depends on whether you're doing just individual returns, whether you're doing more complicated business returns and business entities. So you really have to look at your practice and say, what capabilities do I need? And if [00:33:30] you find something that manages all your capabilities and is priced fairly. If you've ever changed tax softwares, it's no fun. Um, and you don't want to do it, but sometimes companies force you into it. They get bought up, put out of business, they're all going to have a bad year every now and then, and they're going to make you angry, and you're going to want to run somewhere else, or somebody's going to come up and offer you this great deal for the first year, and they're going to coax you into it. But, um. Pick the one that [00:34:00] works. That's consistent with the kind of practice you want to have that your staff knows how to use. Because it's not just you, it's your whole staff. Got to learn a new one.

Amanda Aguillard: Yeah. And I'll say, um, if you are considering changing tax software, you need to make that decision probably by June. Yep. For the following year. And and, you know, will die by it. Make the decision and then you're like, okay, well, we're in or we're out for the next year because, um, [00:34:30] you've when you're looking at changing such a core piece of software, if you're going to go look for alternatives, it takes a long time to test them. Um, it takes a long time to onboard a lot of software's. You know, there are two in accounting, there are two probably prime conversion or switch seasons. One is the summer and one is like November, December and you. That means you're ready to go. Not that you're making decisions in November or December that you have made the decision. You have paid the money, [00:35:00] you have prepped all the data that you have gotten your staff trained, and you are changing. So in order to really do a November December conversion, you've got to make the decision by June that you're going to do it. Um, so whatever, wherever you land, I guess I'm saying. You've got to make that decision in the next two months from now and stick with it until next, next summer.

Roger Harris: And that's why all the software companies try to get you to renew in May. They want to lock you in because they know that's the prime time. [00:35:30] They know two things in May. You have more money than you'll probably have all year, so it's easier to pay them. And secondly, that if you if you go beyond that May June time frame to make a decision, you're just asking for trouble to try to do it, you know, at year end. So they're all trying to get you locked back in. Yep. Okay. Let's move a little bit. You know, one of the things that that I know we talk about at Paget, we're trying to be more diversified. There's a lot of different ways to make money in our industry. [00:36:00] And there are some firms that I will use April 15th. I know it's not the absolute deadline. We'll get 95% of their revenue by doing taxes by April 15th. And then you sit around all year. How do you keep staff happy the rest of the year when there's no work? Or what are you doing? What about diversifying your service and your product offerings? How do you do that and and why do you do that? And what's the advantages of doing that? Because that's something that we've [00:36:30] when this company first started, we started mainly as an accounting firm for small businesses. And taxes were kind of a trailer to that. If you did the accounting they had to file a tax return. Now, most of us are not all most of us, but a lot of us have gotten into the thing where taxes are the driver. So what are the opportunities that are out there? Uh, by diversifying your product offering, um, to bring in revenue all during the year and not be so heavily tilted towards tax season?

Amanda Aguillard: Well, I mean, [00:37:00] you you said it accounting work has to be should be done throughout the year. Right. And there's an opportunity to build for that throughout the year. So if you look at, let's say a nice individual tax return might be, you know, six, seven, $800. I'm picking this out of the sky because it clearly it depends. But um, if you get a $600 a month accounting client, that's actually a $7,200 client, you know, compared to $600 return. So just by converting, um, your, sort of [00:37:30] your, your mindset from. The dollars to really like the annual revenue of a client. You can see that accounting services, payroll services, advisory services are all much, much of a bigger spread. So so we and and the reality is to a lot of times you're doing the work anyway you're just not charging for it. So a lot of times, particularly in.

Roger Harris: Advice, we just want to give advice away to show how smart we are and not get paid for it.

Amanda Aguillard: Right? [00:38:00] Right. We want our clients to be like, oh gosh, you're just you're so smart. But we don't. But we that's, you know, that's we've saved them thousands of dollars and we're not charging them any for it. So, um, so I think the mindset has to be, how do we best serve our clients and probably mostly business clients? How do we serve these business clients, which, by the way, almost everybody is a business client now. Everybody's got a side hustle or some kind of gig or or something. So we need to also think about our 1040 clients that have businesses as [00:38:30] business clients, not just individual clients, but. How can we? How can we serve them throughout the year? Um, so so there's the benefit of the the revenue, right? The revenue the revenue increases exponentially if we can convert them to some kind of monthly, um, engagement. We spread out the tax season compression a bit with our business clients. Imagine if you, you know, walk into the office on February 1st, you've got a tax return ready trial balance on your your client, [00:39:00] which is what happens when you're doing the accounting. If you're doing the accounting, it's already done by the end of January generally. Um, so then you're just pulling it into, into software and, and it's done. So, you know, a lot of term a lot of times firms think of accounting and bookkeeping work or you know, there are a million names for it. Cass work, BSO work, um, back office work as low value. But I mean, if you need any indication, there are all [00:39:30] the big huge biggest firms are building service lines in this, right. Like they've got divisions in this private equity money is going into. Firms that are not necessarily tax firms. They're getting investment from firms that are much more, uh, virtual accounting firms. So, you know, even if you if you're not sure, like, look where the smart money is going, the smart money is going on recurring monthly, monthly recurring revenue that's generally linked to accounting. Financial [00:40:00] statement preparation or or back office services. So.

Roger Harris: No. It's a great opportunity. And then, Amanda, your firm is almost 100% built around that. You you I don't think you do any tax returns.

Amanda Aguillard: We don't do any returns. We do 1099 so our little our little taxes I'm using my air quotes. Our little tax season is like January 15th to February 1st. Um, but.

Roger Harris: You've built a whole firm built on doing the accounting work for businesses. And yet one of the things we [00:40:30] hear from people in our industry is, well, they don't need us anymore. There's QuickBooks, there's zero. There's your clients could be using QuickBooks. Maybe they are. They could be using Xero, maybe they are. So talk about the value that you bring to that. Even you know we're not just being competing with technology. There's things that Amanda can do that no software can do.

Amanda Aguillard: Yeah, absolutely. So for one, yeah, I did have a very tax heavy practice when I started my accounting firm. It was almost all [00:41:00] tax return work. Um, but I hated that, you know, from February to April and then August to October, I couldn't do the stuff I liked, which was the accounting work. So I ended up selling off that part of part of my practice. Now we are basically exclusively accounting work. Um, so to your to your question about, well, aren't we just competing with software? Um, no. Have you, have you looked at your clients [00:41:30] books that they've tried to do on their own? Um, they're not a lot of times not accurate. They're not optimized. Um, they're using out of the box charts of accounts, which probably maybe aren't correct for them or or the most appropriate, um, they aren't leveraging software connections. So while your business clients may have access to QuickBooks or access to zero, and then maybe they're clicking a couple buttons and checking off some things, are [00:42:00] they really leveraging like what I would call their operational software. So where they're making money, a lot of times they're using point of sale systems, uh, e-commerce platforms, um, you know, project costing, uh, systems. So are are they connecting those to the general ledger correctly? So those are the kinds of things that we, you know, we can add where we can add value as accountants and advisors that will save our clients time. If we save them time, they're willing to pay for it. Oh, sure. If we save them stress, they're willing [00:42:30] to pay for it. So things that become easy for us, we can we can productize and put out there as a service and make pretty good money doing it.

Roger Harris: Oh yeah. Well, I think, you know, I think a lot of them fell for the good advertising from the software companies like, oh, anybody can do this. You just go buy software and you know, everything happens automatically and it'll be perfect. And you don't need an accountant or a tax preparer will just they don't want to do that stuff, you know, and and they don't know what they're doing and they don't know debits [00:43:00] from credits. And you know, it's I.

Amanda Aguillard: Had I give you a story, I had a client that came to us that was using Xero, that was trying to do their own stuff. And so you asked them on the, on the, you know, discovery call, like what? What is the shape of your books? Like how do they're like, well, I have cleared all my bank lines, so it must be right. And then you go in, you look in like are is -$170,000, or they've got a chart of accounts that this is also a true story. One of my clients on their own set up a [00:43:30] general ledger line for every product that they sold. So so they had about 600 lines for t shirts, t shirt, revenue, t shirt, cost of goods sold, t shirt, uh, asset like inventory, asset accounts. And so yeah, sure, they could, you know, they can push buttons in their software, but, um, not always a good idea.

Roger Harris: And that's not what they want to do. They didn't get in business to do accounting. We got in business to do accounting. They got in business to make t shirts [00:44:00] or to serve food or whatever they did. Most of them don't want to do that, but they just want to go somewhere where it's they can hand it over. No one's getting done. No, it's getting done accurately. You can use that data to help them throughout the year. I think the biggest thing that a year round engagement with a business, particularly does, is it allows us to be more than just a collator of information. During tax season. We can make differences to the business, we can make difference to their tax return [00:44:30] because we're working in it in a real time. And and all those questions you wish that you knew happened when they bring their taxes to you and you go, well, I wish you'd have called me or I wish you'd have told me, well, if you've got an ongoing relationship with them throughout the year, you probably knew that.

Amanda Aguillard: Um.

Amanda Aguillard: Yeah. I mean, it's it's incredibly frustrating to get a, you know, a set of records in February and know that if if you knew this two months ago, you could have changed something in their business life. And that happens [00:45:00] all the time.

Roger Harris: Yeah, yeah.

Roger Harris: I tell people. If you wait to deal with me during from January to April, I'm just a human calculator.

Amanda Aguillard: Mhm.

Roger Harris: Pretty much all I can do is I can take what's already happened and add it up and put it on a form. But during the rest of the year I might can actually make a difference. Am, I can give you some advice that'll make you more money or save you some taxes. But that that's over pretty much when December 31st is over. Yeah. [00:45:30]

Amanda Aguillard: And that's these are the this is the big thing folks need to be thinking about right now is like, how can you retool your entire year? Because if you have a traditional practice that's very compressed in the spring and the fall, you don't have the you're going to be catching up. You know, you have to think about how can you retool your practice so that, um, we are doing as much work as possible consistently throughout the year, keeping our staff consistently busy, getting in consistent revenue, um, and not and not [00:46:00] feeling this pressure in February, March, April and August and September. Um, and that's those are the decisions that you guys need to make right now. Right now.

Roger Harris: All right. In our last few minutes. Let's let's hope we haven't convinced everybody they're doing everything wrong. They got to throw everything out and start over from scratch. High level. Look at clients.

Amanda Aguillard: Look at pricing.

Roger Harris: Work life balance. Pricing is a big part of looking at clients. That's not just look at them and see what they do. How are they priced technology, [00:46:30] different service lines. What what what are the other kind of big picture things that they should work with and in getting staff involved, obviously.

Amanda Aguillard: Well, I think that's it. I mean, if if you are a practice owner and you can do those things, look at your clients and rightsize your clients, uh, evaluate your how technology might change your workflow for the better and look at service offerings if you if you spent, you know, call it. Half [00:47:00] a week doing that right now. You would have an infinitely better practice this time next year.

Roger Harris: Yeah.

Roger Harris: And if when you're listening to this, if you've just come off a tax season where you put in seven day weeks and 20 hour days, it doesn't have to be that way. It really doesn't. There's there's great ways to to make changes. Even. I don't care if you've been in business for two months or 200 years. There's changes that you can make, and you can have a firm that will [00:47:30] provide well for you financially, but allow you the fruits of that work to to spend it with your family. And, and mainly we have too many people in this industry who their health just declines because it's not healthy.

Amanda Aguillard: Yeah. I mean, what's the point? You know, what's the point of having a business if you can't enjoy your non-business life? Yeah.

Roger Harris: So yeah. So it's it's time to do that, you know, go take a few days off or a week or two off, get to the beach, [00:48:00] go wherever the mountains, do whatever you want to do, get refreshed and come back and take advantage of the fact that at least some portion of the tax season is over. And let's don't repeat. Let's just let's, you know, what's the saying if you keep doing the same thing over and over again, expect different results. That's what definition of insanity. So, uh, let's don't fall into that trap. Any final parting words? Amanda, thank you so much for being here today.

Amanda Aguillard: Well, it was my pleasure. I just, um, send [00:48:30] all the good vibes, healing energy out to all the accounting firm owners at this time of year. Um, it's great to to hang out with you, Roger, as usual. And everybody out there. Congrats. You made it through another season.

Roger Harris: You made it through. And if you're out at certain, uh, seminars, conferences over the summer, IRS or Xero or scaling Newhouse, uh, you might run into one of us and come up if you do and say hello, please do and tell somebody about this podcast. Ask [00:49:00] them to give it a listen and hope you enjoy it. And, um, Amanda, thanks again. Thanks for everything you do at pageant, but thank you for helping us with this podcast today. And, uh, we'll probably be talking again later today.

Amanda Aguillard: Sounds good. See you guys.

Roger Harris: Thanks, Amanda. Thanks, everybody.