MOVING YOUR FIRM FROM COMPLIANCE TO ADVISORY AND HOW THIS TRANSITION HAS ACCELERATED WITH THE PANDEMIC

02 Jun 2021  |  66
MOVING YOUR FIRM FROM COMPLIANCE TO ADVISORY AND HOW THIS TRANSITION HAS ACCELERATED WITH THE PANDEMIC

Our experts Chris Rivera and Janel Sykora discussed moving your firm from compliance to advisory and how this transition has accelerated post-pandemic in this podcast.

#BKOT 36: BUILD A KICKASS OFFSHORE TEAM

MOVING YOUR FIRM FROM COMPLIANCE TO ADVISORY AND HOW THIS TRANSITION HAS ACCELERATED WITH THE PANDEMIC 

 


Hosted by: Chris Rivera, Director Client relations, Entigrity Offshore Staffing

Guest: Janel Sykora, Chief Marketing Officer, TaxExact for Accountants


 


Transcript

Chris: Alright! Good morning, happy Wednesday everybody. It's Chris average coming at you for episode number 36 of #BKOT. Very excited to have a guest today Janel and she's the Chief Marketing Officer of TaxExact for accountants and we're going to be talking about moving your firm into a post-2020 world and so really excited for our audience today to have Janel on because she's got a lot of statistics, she's got a lot of ideas and she's ready to rock and roll. So Janel please introduce yourself and tell us about what you do for TaxExact.

Janel: Yeah, thank you so much for having me Chris, I am so excited I love to have these conversations and exchange ideas and insights so really excited about the topic of this morning's conversation something I am very passionate about but as you mentioned I am the Chief Marketing Officer for TaxExact and what we do it's a tool for accountants for CPAs tax accounts specifically to verify independently verify 1040 returns. 

So specific for 1040 but it's we've been told it's also the best training tool out there so it definitely helps firms turn preparers into reviewers and then it definitely accelerates the amount of time it takes to review a return which is a big time sucking a lot of firms. So that's what we do at TaxExact and the funny little background story is I actually met the founder of TaxExact two years ago now. When I was working for one of the big large tax software firms selling tax software, selling outsourcing and all those things to tax firms and I kept hearing somethings over and over again a recurring theme across all the firms that I was working with and just by happen chance we're in a conference together in Chicago and we sat down together at lunch didn't know each other just landed right next to each other and that's where I found out about tax executive design like eight years ago and he starts telling me about it and it immediately peaked my curiosity because it was an answer to the issue that all the firms I was working with had so that in conjunction with outsourcing I think it's a really great solution which we'll get into more but that's a little bit more about me.

Chris: Cool, now that's an awesome story because that's what I missed too about this is the conferences, because I have met some amazing people which have become amazing clients of Entigrity’s through these conferences right and unfortunately last year with the pandemic they're on hold, this year they're starting to trickle back but with anything that goes on in our world today I mean there's opportunity that exists here and so the accounting community has been slow to move over to that remote virtual environment and it's accelerated like you said a lot of key factors here and so please share with us some ideas that you want to talk about today in regards to that and transitioning from compliance.

Janel: Yeah, so it's really been interesting Chris. I have been working with accounting firms for a number of years and there's always been this buzz out there of the transition from compliance to advisory, what does that really mean? When is it going to happen? And then all of a sudden boom last year we get hit with this unbelievable worldwide pandemic, just completely pulls the rug out from underneath everybody in the entire world nothing like it.

Even my 95 year old grandfather said I never thought I would see the day right so it rocked everybody's world and especially when we think about how that's impacted accounting firms. Think about this, have you ever heard of zoom towns? Do you know what that town is or zoom okay. So here's what a zoom town is there's been a lot written on zoom towns and I think that there I think that there are primarily there's a lot of factors that are affecting that acceleration from compliance to advisory and accounting firms but I think that there are three pretty big ones and one of them is this new concept of zoomtowns and what that is there's a really good article out there on hp's blog I think it's called the garage or something like that but zoom towns are these little bitty towns it could be like lake in illinois and little tiny little farm towns out in the country that no one wanted to live in before because in order to have the good jobs right you had to commute, you had to live in the big city.

Well guess what now that everybody got sent home or not now but a year ago when everyone got sent home all of a sudden you could work from anywhere so it's been really amazing that there's been this boom with all these little small rural towns where people are kind of trading in that commute for lifestyle and going I want to live there. So it's kind of been this this new up and coming trend called zoomtown so now you've got people that well actually I think that there was even a survey out done by PWC said that 55% of all workers would like to continue to work remotely three plus days a week which definitely it gets better than that but that really says something for these zoom towns right people want to live there they don't want to have to commute or pay the price to live in big cities anymore right.

And you know another thing so this one's really mind-blowing so I heard the statistic on another podcast not too long ago and immediately I was so mind blown I went home and I started researching it so get this and that this is another big factor that I think is going to impact in addition to the remote work migration I think the whole labor shift is going to impact accounting firms so there was a CNBC poll that showed that one in four workers, now that's 25% of workers are going to consider quitting their job post pandemic. I mean let just let that sink in for a minute right that is that's mind numbing right, 25%? okay so let's just say I own an accounting firm I am already having trouble finding people that want to work you know and come to me and find the people that I want public accounting now I am just being told I am probably going to have a 25% turnover that's just my numbing to me so I think that in addition to the pressure of this remote work migration now you've got people who because they were at home during the pandemic a huge percentage of them kind of really did a lot of soul-searching to determine what is my skill set? What do I want it to be? Can I learn something new? 

So now I think we're going to see a shift in the entire labor market right so think about that in terms of an accounting firm because you've also got the AICPA members who what 75% of them are approaching retirement age ish by 2023 something like that so if you've got this huge generation of public accountants that are getting ready to exit and you've got this change in the whole labor force coming and then the icing on the top right the third big factor here I think that's accelerating is just this massive increase in workload we had the PPP right.

So now tax season isn't just tax season anymore now we've got this changing legislation and the PPP and now you've got these small businesses that just need you to survive let alone thrive so you know it's in in everything that I have seen and what I have read and experienced I really think that these are some key factors that are massively accelerating the transition and the need to figure out how to spend as little time as you can on compliance and really focus your world on building your advisory services and be the first one to do it because it's competitive.

Chris: Zoomtext, I love it so while you were telling us about this I looked it up and yeah this resonates with me because just yesterday I had a call with a client and one of their a young lady that was really sharp, really smart decided to move and the firm was in shock and this was during the season and she's like I love working here but I am just not living here anymore. So she moved and they set up a remote server just for her to try this out and it worked out beautifully and she's very happy she's wanting to continue to work year-round and I had had a call with this guy and not back in October and they're still kind of hesitant about moving over to that remote environment. Well because of her they did and they were able to retain her and then in speaking with the client they were seeing about having staff of ours report to her and I was like that is an amazing idea so this just opens up opportunities everywhere.

Janel: Yeah spot on!

Chris: Not having to do that compliance work. So tell us a little bit about the product that you guys have because I remember when we first initially spoke I was very intrigued with this because it does kind of help take off that compliance and help the onshore team kind of move into advisory so can you review that with us.

Janel: Yeah for sure, so our whole goal here is to try and help firms offload as much of the compliance work from a tax perspective as they possibly can now we're very 1040 focused right now. we're newer and we're specific to the 1040s but you know even going back to my days prior to TaxExact, I was really focused on trying to help firms just move all of that off your plate right. It's our opinion at TaxExact the CPAs that we have on staff as well as myself and the founder that we really need to turn preparers into reviewers and turn you know doers into reviewers if you will. And we like to just say don't do it review it right and so what does that look like for a firm right so if I am a firm that sounds so much easier said than done because I might have 10 preparers in my firm and maybe they're all smart people who have degrees maybe they're getting ready to sit for their CPAs maybe they have their EA  maybe they don't, but if they're used to preparing returns how do I turn them into reviewers overnight and that's what you want because you want people who are focused on the story inside the tax return not the ones just putting you know the numbers in the boxes, you really want them to understand that tax code so what our product does is it trains them naturally to understand the tax code because while they're taking only the data that matters out of the client source documents or the work papers whatever you like to call them and putting that into the TaxExact tool.

It's independently calculating the results of the return so that you can compare that to whatever your tax software is it doesn't matter what the tax software is it works with all of them but what it does is in the way that we have this product engineered is that you can figure out where if you you've made a mistake so instead of me preparing a return if I am a preparer in xyz tax software and sending it to a reviewer who's going to find a ton of mistakes and write out review notes and go back to me and try and coach me and teach me what this does is it allows the preparer or the first level reviewer to recreate that return a very truncated abbreviated version very quickly instead of ticking and tying inside TaxExact and then that same person can compare it with what they got in the tax software and instantly you can see if there's a discrepancy and then wherever that discrepancy is you can click into it and see how that was calculated.

So I have had a matter of fact recently I had to prepare a young guy right out of college with an accounting degree getting ready to sit for his CPA, he said you know what I was an accounting major never saw a tax form and I said well that's crazy, that's interesting and so that's really that's a whole other topic right but anyhow he said you know for three months I did tax returns in our tax software which he happened to use lesser and he said you know I figured out I learned how to just put the numbers in the boxes where they were supposed to go but I never really understood when I made a mistake why right and so he said then they unleashed me on TaxExact and I was invited in to interview him after one day and he's like Janel I learned more about the tax code in one day with TaxExact in three months with the tax software because I could actually figure out what the mistakes were before I sent them on to review. 

So the reviewers not having to spend all this time correcting and teaching me so what our thought process is and where you know where this goes is you know if you can turn your preparers into reviewers and you can take all of the data entry and just outsource that then you have so much more time to focus on your business instead of the minutia inside your business right and I think you had Tyler Clark on here a week or two ago and he was talking about that and I agree I think accounting firms traditionally they've gotten a lot of business via referrals well you'll continue to get business via referrals if all you want is tax returns but we know that that's not the money maker right so what you need to do is be able to get all of that off your plate but yet you still have to understand the tax code so you just want to be in a position to do a quick cursory review and understand the story inside the text code when it comes back to you in order to have those higher value advisory conversations with clients.

Chris: Heck! That is such a cool story you already know.

Janel: And my dog agrees I am very sorry.

Chris: New dog, that's such a cool story there's a client testimonial for sure heck it could make me I mean I do not have an accounting background either but it seems like I could now do taxes myself wow so all right. So now let's talk about okay so this is obviously an awesome tool and then you said it works with all the major tax offers right yeah awesome so now okay so your thoughts on offshoring and how do you think you could they could be integrated into this process and then we'll talk some about the back to the firm but yeah can you talk your thoughts about offshoring?

Janel: Absolutely! 100% even in my prior position when I was at the company that one of the big product lines was outsourcing and one of the objections that I used to get was okay Janel. That's great but the problem is we still have to review this when it comes back to us inside the firm. 

So I think that this is just kind of a like a the perfect marriage right offshore all of your 1040s get rid of them don't spend your precious advisory time on compliance period slash the time offshore that stuff, trust the experts that do that and then what you can do is when that comes back in the firm so as an example you can do this two ways as it comes back in the firm you could have those preparers the younger preparers, that you're trying to train and become reviewers they could be taking that same set of work papers that you send offshore and they could be creating the TaxExact project the instance and then as it comes back in they're basically just doing a quick check if there's something that isn't matching send it back.

So they're not really spending any time reviewing but yet they are learning the tax code and they are able to understand what's going on the story inside the tax return but yet they've saved how many hours now not having to actually put the numbers in the boxes and do the return so one of the firms that we're working with too had another idea and what they're doing they do about 3000 returns 1040s and he said you know what we're going to do he said we're actually looking at offshoring all of our 1040s and then we're going to also send the offshore company a copy of the TaxExact project and have them do the project so that when they send the return back to them as a firm they will already have it 100% verified so they're not going to have to spend any time reviewing it for accuracy they literally will only have to spend you know 15 minutes or so looking at it just to understand are there planning opportunities in here we could take advantage of how can we be proactive with our clients and that's what they want anyhow so it can really plug into places if you're looking at offshoring but I really think if you're thinking about you've got to do something as an accounting firm you still have the same amount of resources and just because of the PPP and the pandemic we haven't been given you know 26 hours in a day instead of 24 so we've got to figure out how to cut time and the way to do that is to off load compliance off your plate as much as you possibly can.

Chris: 3000 returns right maybe takes an hour of return I mean you need a whole lot of employees to take care of that and then right so with your software and now in the integration of offshore and so now you have the firm ready to meet with the client and then come up with different strategies and tax planning which the firm may not have maybe trying to move into and may not have done before and doesn't know where to start. 

So if it's a so what I am hearing is like it doesn't have to be a tax only firm but it'll really help out them but also because in speaking with clients they don't like to do taxes right but it helps them they're already an advisory firm and so it helps them you know work with their clients on a different level but it's just like that tax work but it's got to get done right got to get done this is another opportunity in that aspect on helping them out okay. 

So now let's go back to the firm right, they got this integrated and so what do you think now and any tips you have or ideas as the CMO over at TaxExact for firms and ideas for firms to kind of move into this model and what can they do more for their clients that's valuable?

Janel: Yeah, so I think that the best thing that firms can do well a couple things one we talked about slashing time on compliance and getting outsourcing as much as you can allow the outsourcing companies to do as much of that compliance work, I think that there are firms also that are using scan technology do that too right, if you can scan in all of the work papers and then even auto populate some of the return fantastic use technology to do what it can use it max it out and then turn your people into critical thinkers. 

Use technology that will help them tap into some critical thinking skills where machines can't go right so turning those preparers again into reviewers I think is key but the other thing is and with regards to TaxExact you had asked Chris what are some other things that firms can do to become more advisory right, So the key is put yourself in a position to focus on that story that's inside a return so as an example a lot of our firms who use TaxExact they will use that project to do a zoom call or review with their clients so at the point where the tax return is done and it's time to deliver it and discuss how much you owe or how much you're getting back it's a client-facing planning tool actually also does projections and everything so being able to have all that work done for you right so if I am if I am a managing partner of a firm and I am working with you Chris you're my client then I have offshored the return the 1040. I have got it back I didn't have to spend any time on that work it's done it's verified I know it's correct now what I am doing is I am looking inside that return going okay what do I need to talk to Chris about and maybe I notice things right now maybe I now have time to notice things what types of things could I notice? I might notice that well gosh Chris has a schedule C and he's a sole proprietor and he's had this lawn care business and it's doing really well a whole lot better than it did last year. 

Maybe it's time to think about switching over into an S score maybe we need to have that conversation that could lead to consulting engagements for me right maybe I find that Chris owes a lot of money and so I am panicking this is not going to be a fun conversation so maybe I can look for areas and I see wow well there's an opportunity for him to dump another five grand into a (SEP) IRA so I get Chris on the phone and say hey Chris if I don't know if you've got it handy but if you've got five grand we could jump into your (SEP) IRA it would reduce your balance due by X. So those are just two little tiny examples but there's a lot of examples that if you have the time to really look for those things you're going to get a stickier client right because they see that you're being proactive and it's going to lead you to things like maybe you don't have their small business maybe you're only doing their 1040 for whatever reason that would be slightly unusual but and maybe there's other opportunities to become that lead into becoming an outsourced CFO or bookkeeping what quarterly consulting engagements that you can drive all based out of a meaningful conversation from a tax return.

Chris: Wow! Yeah, it got me thinking that was awesome because clients sometimes have that drop-off model and they'll sit there with the client for an hour it's basic and they get it done but still that's an hour so now think right they prepared returned it and then you have your software review it and so within that hour now and they say you spend 10 minutes right with a client that's now rather than spending one hour doing a 1040 for a drop off about speed and thinking about just in the speed aspect you can meet virtually with five-six-seven different clients in that same hour and now you're not just for giving them back the return you're noticing things and then the client is as like ‘oh’ service delivery check they feel like they care about me, check ideas on ways to whether it's a refund or payment ideas and ways to overcome that check and bam right so no that was really good info because it just made me have an aha moment in regards because I have worked with clients that have that type of model and it's worked well but I think there's technology out there and software's like yours and so you got to utilize it you could you could I always say you can love technology you can hate it but you gotta embrace it.

Janel: You really do!

Chris: Because really here it's evolving and it's only going to get better right and I know there's a lot out there and it could be overwhelming but tools like this especially for tax firms is just a no-brainer in my opinion.

Janel: The other thing too just to add on to that is if you think about if you circle back to the first part of the conversation where we're talking about zoom towns and all of this major shift in the labor market so think about this I know in the one podcast where you were considered a geriatric millennial that cracked me up.

Chris: Bring that up.

Janel: Again Daniel I am a gen xer I don't know what that makes me very geriatric.

Chris: But yours sounds cool, mine sounds like I am an old dinosaur.

Janel: Right, No but think about the labor market, it's millennials and it's gen z now right okay so these in those generations they grew up with technology, it's a minimum baseline expectation and social media the other thing they grew up with is they don't want to just do this rote work they want meaningful work and if you're able to take young inexperienced people and hire them into your firm and cast a really meaningful vision for them that hey you come in you're going to start a staff account in one yes that means you're know preparing tax returns but we do this a little bit differently we don't have you just you know plunk numbers into tax software we offshore our tax returns but this is how you learn the tax code it's critical that you learn a tax code because what we want is by the end of the first tax season we want you doing client facing meetings and actually advising clients it's possible to do that if the technology and the methodology that we've been talking about is put into play and then what you've got is you've got people who actually want to work for the firm want to grow with the firm and feel like wow my work is really meaningful back to the same young man that I had the opportunity to interview where he had used TaxExact for one day I am like so how do you feel about your job and he's like I love my job he actually started right out of college in industry and moved out of industry into public accounting and so the firm was like oh I don't know is he going to love this is he going to hate it and he's like no I get it, I can understand things, I feel like I can actually have meaningful conversations with clients and I can't wait to do that so you know it's important to keep in mind the generations that we're hiring and what they want in order for us to keep them engaged with firms.

Chris: Yeah, it's just full of good ideas I love it yeah because it there's a shortage going on for sure and speaking with clients and partners and directors and firm owners I am like the clients are just like they're nervous they're just tons of anxiety as they're building their business plan for 20 that's an extra 2022. And so you know they're calling us turning to us and but at the same time you know it's all we're always about complimenting the onshore staff so this just brings a another idea in my head to take because they're seeking you know senior opportunities and so being able to bring somebody on like the story you're talking about the young fella and get them trained quickly and make them client-facing and have backup support with offshore. I mean this will help kind of alleviate the staffing shortages wow yeah any other ideas this is great.

Janel: What I will throw one other one out there because I am a marketing nerd that's my thing I have got my whole career I have been sales and marketing,

Chris: You're great at it!

Janel: Oh thank you! I also can't underscore enough that the other reason that firms need to slash the time they're spending on compliance is because they do need to spend time on marketing. Again the referral business is always going to be there right but it's going to be referring you tax return business you don't want another 1040 right but I really believe and I have heard so many thought leaders in this industry say you've got to update your marketing message you have to believe it or not there are still firms out there don't have websites or they have websites that are horrible or sound like everybody else is right down the street and I really think it's absolutely mission critical to clarify your brand, clarify a solid brand script and marketing strategy, have a sales funnel in place, have good lead generators turn your website into an inbound sales machine.

And I think that that is something that if as a firm you don't have the resources in place to do it find a marketing consultant that could do it for you I just got certified as a story brand guide so I do that for accounting firms too but I think that if firms can learn how to position themselves to attract the niche that they're focused on and really be proactive about that then they're going to start to attract that advisory business that they want versus relying on the old school referrals which are always going to be there they just aren't going to be the profitable rights that you want.

Chris: Right yeah! no, that's spot on with that idea because I spoke with a client on Monday working. She's working 11 hours a day and she told me after a conversation that she'd like to work with you guys, could give us an opportunity to work on my website or quote-unquote her words. She said that and your right accounts websites can sometimes be a little interesting but they're not like lively and fun and engaging it's just like basic and now that we are I mean everyone's been on the internet but it's just when you're doing your research and you and you go and find your local accountant and the website just pops open and all the services advisory and you get your 1040 back and you get a five-minute 10-minute meeting and it's just like it'll blow them away and so they need but you need time right you got to have time and so that's kind of what we've been focusing on because 70% is all just compliance and correspondence and so you know they need the time and so with tools like this and the right staff to be able to have the time to do this.

Janel: Absolutely!

Chris: All right so in winding down this was really good honestly and I had a lot of fun but any final thoughts before we sign off?

Janel: No this was a lot of fun, I really appreciate you having me. Yeah I just let people know come hang out with us and follow us on social media. I would love for you to check out our website it's taxexact.com we're out on Facebook, TaxExact for accountants, Instagram even, YouTube, LinkedIn follow us and give us feedback one of the things that our founder our founder is a CPA and he developed this tool nine years ago now, for his firm based on a need and one of the things that we love is the fact that the tool is built by CPAs for CPAs so buy a tax accountant for tax accountants and so we continue to solicit feedback we want it to be really powerful for people so and we want it to make a difference in the accounting firm world so public accounting world so in wrapping up I really appreciate you having me this has been a super fun conversation and we could probably sit all afternoon and chat.

Chris: Right for sure yeah it's such a nice day in Newyork we go outside it's like 86 degrees today.

Janel: Oh wow!

Chris: It's like where this is spring finally it's here we're almost in June.

Janel: Oh it's Summer up there for you guys.

Chris: All right so to our audience thanks for joining in hope you learned a lot today and that's the whole goal of the #BKOT is to provide resources and experts and influencers like Janel to help you guys out right and make life easier taxes it does not have to be a nightmare it really doesn't there's just so many resources and that's the whole idea here. 

So for now everyone has a good holiday. We'll be back in about two weeks with some more guests coming on and Janel thank you so much for coming on. It was a pleasure meeting with you earlier and this was awesome today and we'll be in touch in the future okay.

Janel: Sounds great thanks so much Chris have an awesome day everyone.

Chris: Yes, take care bye.


Entigrity™ is a trusted offshore staffing partner to over 550+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model helps firms of all sizes hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants', Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management, still, you are left with least to worry about compliance, payroll taxes, overheads or any other benefits.

About The Author
Director, Client Relations

Christopher Rivera, Chris serves as a Director of Client Relations and Business Development at Entigrity. He is an expert at leading and managing teams actively from the front. His expertise in sales, training, coaching, mentoring and influencing combined with his competitive nature makes him a strong leader.  Chris has traveled through the length and width of the country and has spoken with more than five thousand CPAs, understanding their challenges and limitations. On the grounds of that, he can now easily provide opinions and solutions that can be immensely helpful to the professionals. He has also represented Entigrity at a number of major accounting conferences and networking events.

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