your client base is global

it’s yours if you want it. get radical.

by jody padar

i had just come off a really bad tax season and i knew there had to be a better way. i left a midsized firm, with seven partners and about 50 other employees and i joined my dad’s firm – literally and figuratively. figuratively, because many of his technologies and processes were “old school.”

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i was tired of working part-time and not being treated like a contributing member of the firm. my family was young. my son was four years old and my daughter was six. my son was in the process of getting ready for full-time kindergarten and things were just changing in my life. i no longer felt the need to only work part-time, so it seemed like the right time.

my dad’s firm at the time was very different than our firm is today. it was mainly a side 1040 practice that he built while working as a director of taxes for a publicly traded multinational company. he worked out of a home office before they were trendy. my dad had been doing 1040s since i was a baby. i grew up in a tax home. when i joined him, the first thing he said to me was, “go get your own customers.” it was transformative for me because even though i was joining him, he was setting me up to change the way that our firm would run. he was not going to share his customers. period. the end. i really had a blank slate and the freedom to change the firm.

as i acquired new customers, i used new technologies and brought them into our firm – this transformed our firm dramatically. because the changes proved to be extremely profitable, my dad was delighted and became open to even more new changes. the transformation initially happened unconsciously and i didn’t really put much thought into how i was going change things. i just did it. because hindsight is 20/20, the questions i wished i had asked myself going in were:

  • why do i want to change?
  • why do i need to change?
  • why is now the right time to change?

the questions i ask you now are:

  • if you had a blank slate what would be the first thing you would change about how you run your firm?
  • how has the world changed since you started working in the profession or since you started your firm?
  • are you ready to have your world, your firm and your life rocked?

the birth of the ‘new firm’

i started to use this newfangled payroll software that worked through the internet. back then they didn’t call it the cloud. it was just payroll software that used an internet browser. it solved my business problems of preparing paychecks, paying taxes and filing tax returns for my customers. the technology was paycycle, a cloud-based payroll software. paycycle (which has since been acquired by intuit) fundamentally changed my firm and my life. all of a sudden payroll became one of the most profitable areas of our firm. it also became a catalyst to selling and packaging our other core services.

it was the beginning of something bigger.

i would never go back to working the way a traditional firm works. a lot of people don’t get it. the reason it’s so hard to understand is because it’s conceptually difficult to realize how using today’s tools can holistically change the face and infrastructure of a firm. the tools exponentially move you into redefining all your processes around communication, deliverables, pricing, even extending into your business model.

they call us the ‘radical’ practitioners

there’s an uprising of innovative cpas in the accounting profession. this group created a new support community that is no longer driven by the aicpa or the state societies. the establishment can’t control the conversation. in fact, they almost missed it. as it turned out, they found and promoted us in the “nick of time” for the rest of the profession’s benefit. the aicpa leadership team helped strategically place the leaders of our movement within the aicpa committees to promote faster change. years later when i asked what they saw in us, i was told we were the business case example of the research they had conducted in the cpa horizons 2025 survey. now they endorse and support us.

but it didn’t begin with them.

when i first started doing this, i wasn’t aware of anyone doing what i was doing. then i went to twitter. that’s where i really met my peers. we were learning from each other from day one and that same community of support is still happening today.

mark koziel – vice president of firm services and global alliances at the aicpa – coined us “a movement” in the fall of 2010. a “radical” practitioner is a person who calls upon himself and others to redefine their firms and their lives by moving away from the traditional firm business model.

why do we use the term radical’?

rad·i·cal

adjective \ ra-di-k l\

: very new and different from what is traditional or ordinary

: very basic and important

: having extreme political or social views that are not shared by most people

the term radical applies because what we are doing to our firms and indirectly to the profession is fundamental to its core. it’s abrupt, disruptive, unexpected and far-reaching. we are shaking up the status quo. however, as you keep reading you learn that it’s not just us creating drama for the sake of drama. we are changing because our customers and the world are changing around us. some might also perceive radical to be a negative term. it’s not. our movement is more likely following the happy expression, “that’s radical, dude.” we want everyone to learn and join us.

why should i be radical?

cpas must be “radicalized” so they cannot be lulled into complacency and driven by reaction to their current firm or livelihood. the changes that are happening in today’s fast-paced world need to be addressed. you and your team have already felt the changes. the silent majority of many employees are hurt, suspicious and feeling unheard. they see and experience the changes happening around them and don’t understand the complacency or the resistance to change from firm management. you may even be feeling this yourself within your firm of one. this toxic condition within many firms is corrosive and detrimental. employee frustrations are mounting to the point of revolt and indifference. an employee who is indifferent is more destructive to a firm than one who is leading a revolt.

many of us fight with the idea of rationalization, where we say it’s not that bad. we can wait before we take action – let the next generation make the changes, i’m retiring.

however, we can’t wait any longer.

the first step in a new organization is disorganization. that’s scary! the disruption of the present organization is the first step toward a new organization. the present arrangements must be shook up if they are to be replaced by new patterns that provide the opportunities and means for new participation. all change means is disorganization of the old and organization of the new.

this is why the firm leader is immediately confronted with conflict. the leader dedicated to changing the life of a particular organization must challenge and acknowledge the fear and resentment of the people in the organization. if there is no controversy, people are not concerned enough to act. when there is agreement there is no issue; issues only arise when there is disagreement or controversy.

insecure in this fast-changing world, the people of the organization will cling to illusory fixed points that are very real to them, “i don’t want to argue with you, just tell me how social media is not a waste of time” or “what do you think of these millennials who want to work from home?” it is this pervasive attitude that presents our challenge for the “new firm.”

the leader must be able to address the underlying guilt for having accepted the existing situation for so long. the leader must be okay with stepping up to the challenge.

we are here to help you be radical

the best part about these radical professionals who have gone before is that we believe in abundance. we promote and celebrate a new way of doing business and encourage the rest of the profession to move forward and change as a whole. do you know shayna chapman, jason blumer, w. michael hsu and chris farmand? or maybe you’ve heard their names in accounting circles? they are the members of the “original” movement. they know that the best part about this whole thing is that it’s not about us; it’s about moving the profession forward and encouraging the profession to come with us. and that while in the process of all this, we’re not leaving the profession behind.

what exactly makes a ‘new firm’?

people often ask me: what makes a firm a “new firm”? there are four fundamental tenets. these four tenets, although adopted differently within each firm, compromise a new set of values that most of the “movement” firms embrace. ready? here we go:

  • cloud/technology
  • social/communication
  • pricing/value
  • process/experience

a holistic approach

there are many ideas and books about the above four tenets but no one has really explained how these tenets holistically change a firm at its core. it’s not just about the cloud technology. it’s not just about social media; it’s about communication and transparency. communication and transparency is what holds cpas back. it’s an intangible that is difficult to quantify. it’s breaking open the core model of the firm and asking: how will you exist? will you be a partnership? or will you be organized as something else? there are so many elements to consider. you have to realize that it’s not just one thing that is disrupting today’s traditional firm.

the radical practitioners believe that technology is a necessity, but we also believe in building relationships. we just use different tools. the popular mindset i’ve come across is, “oh if you’re going to use tech then you’re not going to be connected with your customers?” i don’t believe that at all, in fact i think it connects you even more to your customers in certain ways and that transparency is what causes fear of change. i do believe that sometimes you need to see customers face to face, but i also truly believe that for the most part, the work you need to get done can be accomplished using the cloud, the phone and text or zoom. it just makes the world smaller. it opens up your customer base to much more of an advisor relationship/partnership. trust me. i know firsthand.

the radical practitioners incorporate many forms of social media in their firms, which is a huge fundamental difference. this social media is what i like to call social business because let’s face it, it’s not really social media. social media is business and that’s what i do. i don’t market. social business is both internal and external. ask yourself this: how transparent are you going to be with your employees and customers? and where will they be able to reach you and at what time? as radical practitioners, we believe that our knowledge is inherently valuable. those brilliant shower ideas cannot be fairly monetized on a time measurement. our knowledge is not a commodity and therefore our services will be priced on value, not time. therefore our current processes are re-evaluated often. we look for efficiencies as well as effectiveness and this includes design-thinking principles.

let’s be real. my firm is never going to look like your firm. there may be some things that are similar but most will be different. and that’s fine by me. the reason why these fundamental beliefs are so important is because the world has changed around us. we know that our customers are working with us differently now, their expectations have changed and we are just trying to keep up. how do we move forward?

the world has changed!

some of the current conversations taking place within the accounting industry are all focused on the cloud and whether the next big thing is xero, sage one, quickbooks online, kashoo or some other hosted software. there are also pricing experts saying we should no longer be using time and billing and instead jump into “value pricing.” and of course, every firm must be on social media. the topic of lean process improvement has just gotten started within the profession, but there is little on how to apply design thinking to cpa firms. these are hot topics, yes, but it’s not just about them as individual entities. you need to be concerned about the above items as a response to the way the world has changed. what we are solving is the real-time problem of communicating. the exchange of information and data is being shared to the world significantly faster than we’ve ever been used to – and it keeps getting faster.

engaging in social business and the cloud is really about meeting customers’ needs and the needs of today’s accounting professionals. i mean, who doesn’t like to be able to be flexible in their work? yeah, at my firm we still have an office and i still go to an office every day, i just love to have the flexibility where i can choose where i want to work. my employees have that choice as well.

time to start moving

our movement is about breaking ground. this is about rebuilding a firm from the foundation up, and it may just be one or two steps this year but it’s a beginning. you have to get started. there’s no easy way to do this. i wish i could just give you a road map but unfortunately, there really isn’t one. and i certainly don’t have all the answers, i’m still learning as i forge my way.

but think about starting here: take a critical look at your firm. assess where it’s been and where you want it to go. use the tools provided within this post. once you know that, just start moving in that direction. take the first step. you will have to start to move process by process and step by step. there is really no other way.

why now?

i’ve been in the cloud for over a decade so it’s old news to me.

the biggest thing to do is to look around and look at the competition. you can probably leave your firm and start your own firm with less than $400 a month in software and without or very limited overhead. isn’t that terrifying for you old-timers! that’s what the next generation of accountants has at their disposal. and they are doing it whether it’s good or bad, whether they have the experience or not. they are opening their own accounting firms. the times they are a-changin’.

we already know managers are not happy with their current employment situations and they are jumping ship. new cpas who have no real work experience are hanging a shingle out and starting firms. granted, they will have a learning curve, however, never before was it so easy. what’s interesting to me is that younger and younger people are establishing firms. i’m not sure any other generation would have had the confidence to do so, but generation y isn’t afraid. the fear is gone.

it’s also a good time because the trailblazers paved the way. it’s time for the early majority to get on board and move the adoption curve. our group of radical cpas has used our collective power and voice to connect with the media, various software vendors and the aicpa. now, in return, they are helping to push this movement message out to the mainstream. we have proven it works, it’s fun and we wouldn’t go back.

i’m going to get very real with you now: if you don’t start changing, you will not survive. this is not a threat. what we’re seeing is that the divide between those who get it and who are moving toward change and those who don’t is just getting bigger. and it’s not just happening with your firm and your customers. you’d better keep an eye on your employees, too. now is the time to engage them, so well, frankly, they don’t leave your firm. the current firm culture is not meeting today’s employees’ needs. timesheets and the “butt in seats” mentality are oppressive. your local firms and big four are not the only competition in town; your employees might engage with a virtual firm. they may also go work for someone else that has more flexibility because they’re working with the cloud and can accommodate telecommuting employees.

and it’s not just your employees…

the next generation of business owners expect it, period! your legacy firm owners, well, the scary thing for them is that there are many who believe that because they’ve had a customer for 20 years they’re never going to leave. go ahead, think about that for a minute and feel the fear rise in you as you imagine that happening. but we all know what happens, it’s sadly a common scenario: the customer has a succession issue within their family or business and the next-generation business owner doesn’t have the connection to the current professional. the new relationship that the new technologies facilitate ultimately becomes more important than the prior relationship with the partner and/or firm.

for all of the firm owners who think, “it’s not going to affect me, i have an established customer base,” that’s not true anymore. the successor business owner is saying, “i want my cpa or my accountant to be cutting-edge or at least up to date. i want them to be using technology to help me.” i mean, who wants to see a doctor who doesn’t have the latest technology? technology has fiercely increased the competition.

here’s one of my favorite examples of how a firm like mine can now compete with the big guns. a lead came in through facebook from a billion-dollar uk company that was going to do business in north carolina.

we were located in chicago, so we flew down to meet them. the company was related to the professional sports industry and it was between a midsized firm, a big four global firm and us. what most people don’t realize is that our firm only has six people.

we’re a really small firm.

who should have gotten this account in the old paradigm? it should have been the local midsized firm. well, they were kicked out right away because their technology skills weren’t up to speed – so it was between a big four global firm and us. think about that! ultimately, we didn’t get the account. of course, the experience stayed with me, but i thought it was just a fluke.

but then it happened again. we got a lead for a huge company that was coming in to do business in chicago with an australian presence and they were going be a vendor to a large retail drugstore chain that is headquartered in the midwest. that lead came in and again it was between a big global firm and us.

i suddenly realized that we have a significant social presence where potential customers can see us, and we’re a viable and relevant resource to them. we could do the work if we decided to and we could also connect with bigger firms if necessary. the most exciting thing to me is that in the past we wouldn’t have even gotten this opportunity. if you are an owner of a midsized firm, i would see that as a threat.

the midsized firms used to get these leads because they were part of these global networks. we are now getting them on our own. and they come from all over the world. how many of you have foreign customers? we’re getting more and more. the world is getting smaller. the global landscape is changing; big firms watch out!

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