Beyond Billable Hours: Building for the Future with Mike Payne

Mike Payne of BOSS Advisors rejoins host John Randolph for part two of their conversation about building a modern CPA firm on Episode 28 of CPA Life. They pick up on their discussion of how BOSS is breaking the traditional firm mold through a subscription-based pricing model, prioritizing employees over billable hours, and more. Mike details practical strategies for attracting and retaining top talent, delighting clients with proactive service, and creating a culture of open communication. In an episode full of actionable tips for firm owners looking to transform their own organizations, John backs Mike’s insights up with his perspective as a consumer of CPA services and they both agree on the importance of making sure you are keeping your “internal customers”—your employees—happy.

Transcript:

Thanks for tuning into CPA Life. Today, we rejoin host John Randolph and Mike Payne for part two of their conversation about Mike’s firm, BOSS Advisors, which is breaking the big firm mold and mindset through prioritizing employees, value billing, and more. Welcome to CPA Life.

There’s a lot of firms that think that, well, if we can bring people in at that one to three year level to just do busy work, just crank out returns, just, you know, hey, we’re gonna give this person all the 1040s year one, so that nobody else has to deal with them—well, the challenge with that is year two, they don’t really know how to do anything else. But the other thing is, have you really set that person up to succeed for you in year two and year three, if you didn’t train, mold, and give them the knowledge they need? And it sounds like you guys realized, that’s not who we are. There’s other firms that do that better.

Yeah, we prefer to work with people like you so that when we’re ready to hire, you can help us just pick off the people who are already bitter and angry at their current firms and come work with us!

And we do talk to several of those people on a daily basis!

You know, it’s interesting you say that, because what I was going to ask you is—talk to me about, you know, we’re connected on LinkedIn, and I see a lot of your content. Talking about some of the things you’ve done over the last year, because it seems like you were doing a lot of things in the first three to four years that were right and were good. But it seems like over the last 12 months, there’s been some things that you guys have looked at internally, from a structure standpoint, to say, hey, we could be better in some of these areas. And I think one of those was earlier this year, you made the decision to lean a little bit more into a remote workforce.

Yep.

Just kind of as as an example.

Yeah, we did. To be honest, John, we started our firm in the only way that we knew how, which was in the model of every other traditional CPA firm and law firm that we had ever known. And so over time, I found my online community, which is your podcast and similar podcasts and the Realize group that Jason Staats puts on, and #TaxTwitter, and everything that goes on in those groups—these are future-minded accountants. And I figured out very quickly that some of the ideas that I had had on how a firm might be run efficiently, there were already people doing a lot of the things that I wanted to do.

I wanted to do a tax subscription before I knew it was a thing. And so I put something together, only to realize, like, there are firms that are doing tax subscriptions very efficiently and have this nailed down. And so I started to lean more and more on these other people. I know you interviewed Henry Huie recently, and he’s got the benefit of starting his firm already knowing that there’s a better way to do it, instead of having to figure it out as he goes. And so he’s starting a firm that’s just going to be tremendously successful because he can already see, you know, what works for other people.

So, yeah, there’s some specific things we’ve done. I think our pricing model is one of our strongest points. We have subscription-based pricing for accounting, tax, legal, and nonprofit. We do everything on either a flat fee basis or a subscription basis. And the flat fee is not based on how long it takes us or what the cost is to us—it’s based on, what is the market value of that service.

Right.

On the subscription basis, we solve the problem, which is, the clients have stuff that pops up that doesn’t fit anywhere. I was actually going through some of the Facebook groups that I belong to that are for small firm owners. I saw a post this morning where a guy said, “Hey, I wanted to talk to you, because I knew if I called my attorney, he would start billing me $400 an hour.” And so this guy is frustrated. He’s like, “What’s the best way to have people expect to bill if they contact me? Because I’m trying to get it through my clients’ heads that if they do contact me, I need to get paid for that time.” He’s like, “Should I just start sending invoices?” And this is the mindset that you start out with.

But I responded to him, I basically said, “Flip it around. Instead of encouraging the client not to call you because they’re going to get a bill, let’s have the client agree to pay us for our availability.” It’s almost like a retainer agreement, as part of our subscription, and probably the most valuable part of our subscription is you get access to our team whenever stuff pops up, and that’s not going to happen exactly at every quarterly estimated tax meeting. It’s not going to happen exactly when your tax return is due. It’s gonna happen in the middle of the holidays, or on a Saturday afternoon when you’re’at the car dealership, and you don’t know how to structure the purchase of this business vehicle. And so that on-call advice that’s included in their subscription for no extra charge now encourages the client to call us first, instead of googling it. We don’t want them to go have to figure it out themselves. The more touchpoints we have with our clients, the stronger our relationship is, the more we learn about them, the better we can serve them, and the more they trust us. It all just is very cohesive.

I think it creates a situation for you also where the more touchpoints you have, the more connective tissue, is the phrase that I use, but the more connective tissue you create in that relationship where the relationship may start out with, “Hey, Mike, I’m at the car dealership, it’s Saturday at two o’clock. I know you’re busy. Do you have five minutes?” It may start there. But two or three years from now, where it possibly ends up is, “Hey, Mike, it’s Thursday. I’m going on Saturday to do this. What should I do?” They’re comfortable having that conversation because there’s that connective tissue. And I would assume that’s kind of the desire, is to get to that point that we’re having proactive conversations, not reactive in the middle of the battle. Is that correct?

Yeah, and I would take it a step further, and we try to do this. When we have our quarterly touchpoints with our clients, we ask them those probing questions, like “Do you have a need to purchase any significant assets like a vehicle coming forward?” And you know, every three months, you’re talking to your client—you typically have a pretty good idea of what they have going on. And so we know that they’re going to be buying a car before year end. And so we can have the conversation in a controlled environment and say, “Hey, you’re gonna buy a car? Let’s work through the scenario. What are you looking at? What are your needs? Okay, great now that we understand that we can provide you advice right now, that when you’re ready to pull the trigger, you can go back and look at this white paper that we sent you, you can go back and refresh your notes on advice we already gave you about buying a car.”

So you’ve talked before about how the new generations are wanting to be educated and informed and become good advisors—I would attribute the same qualities to clients. Clients want to be educated, they want to be informed. It’s a falsity to believe that, if you pour knowledge and invest time in your clients to educate them, that they’ll just take that and go do it themselves. The opposite is true. The more you educate your clients and teach them, the more they trust you to be their leader and their teacher, and the more they want to come back to you to learn more and become better at what they do.

Absolutely. You know, I think, I think it’s a mindset, my that is a generational mindset. I’ve got a 24, 25-year-old, hopefully doesn’t listen to this podcast, but maybe 26-year-old son-in-law, who intellectually is lightyears ahead of where I was at 25, 26, 27. And it’s because of his desire to learn. He’s a real estate agent—he’s done phenomenally well. And he has got a hunger for knowledge. On the other hand, when I was 25, 26, 27, I had a hunger to find out where the nearest club was that had the best happy hour, you know? It’s not that I didn’t want to learn, and it’s not that you didn’t want to learn. We just have different priorities.

I mean, I think that’s part of it. And I think that we have a generation today in that 25-to-40-year-old business person, that not only do they have a desire to learn, but they also have a desire to offload the mental capacity of things that they don’t want to deal with. So they look to guys like you to say, “Hey Mike, how do you do this? Okay, great. Now go do it for me.”

Yep.

But they want to understand what it is that you’re doing, and I would assume in many of the small to mid-size business owners and entrepreneurs you guys deal with, you see a lot of that behavior.

Yeah, absolutely. One of the worst things the client can tell me, or feedback they can provide about me is, “Yeah, my accountant just works magic, or my lawyer just gets it done. I don’t really know what he’s doing, but I know that it saves me money. I know that it keeps me out of trouble.” I don’t like that, because that’s not doing my job. I want them to understand and be able to explain to their friends, “Hey, have you guys heard of a cost segregation study? I just bought some real estate and my accountant walked me through a way to save $100,000 on my taxes this year, because I bought this real estate and it qualified to do the study.” And then their friends are like, “Hey, my accountant doesn’t do that. Let me go talk to your guy.”

Absolutely. You know, you talked about the subscription-based pricing model, the flat fee pricing model. And obviously, there’s a component of our show that that is not only “Hey, let’s help some business owners and firm owners that are trying to head down this path,” but obviously a big component of our audience is potential candidates, people in the profession that are scratching their head, during that, as you call it, numbing hour, wondering, what are my options?

When you look at a flat fee model, when you look at a subscription model, what is the value in that to an employee at BOSS Advisors?

There’s a lot less pressure on how you’re spending your time. The focus shifts from “Is my butt in the seat 48 hours or 50 hours a week,” to “What am I being judged on? What am I being graded on?” Well, if it’s a subscription model, you should be judged on client satisfaction. That should be the number one—maybe the only thing—that you’re judged on. If your clients are happy, and they’re paying their bill, then that relationship is working. It means you’re providing good advice, it means you’re providing timely and responsive advice, it means you’re proactive. And so now the shift is from making sure I’m, you know, sitting in my seat long enough and billing enough hours and using all my brainpower to, “Hey, how can I just make my clients happy? Oh, that actually sounds satisfying, like, keep my clients happy, and I’m getting rewarded for doing that, then I’m good.”

Additionally, flat fee projects, value-based billing projects, the mindset shifts from, “The more of these I do, the more efficient I become, the more of them I’m going to have to do, because they’re just going to keep loading them onto me.” And now it’s, hey, if we have some sort of production-based compensation package or bonus program, then that employee starts to develop the entrepreneurial mindset, and the mindset of the business owner, which is, “The more of these whatever they are I can do, the more money the firm makes, and in turn, my compensation is tied to that—we’re aligned, so the more money I can make,” and then everybody’s happy. Clients are getting efficient, correct service, the firm’s making more money, the employees are making more money, everybody wins.

And that ultimately, really is the end game in all of this, right?

Absolutely.

Everybody wins. And I’ve said this several times in past episodes, in talking to people—I’ll flip it from a statement to a question. Have you ever had a client get a bill—and I’m talking about in a subscription model—have you ever had a client get a bill for their tax return and say, Hey, Mike, before I pay this, how long did it take you to do my tax return?

Uh, no, I don’t think I’ve ever been asked. And I don’t think anybody cares.

I was gonna say! And from a consumer perspective, I don’t care. I just don’t!

Well, Geraldine Carter—you had a couple of recent interviews with her. She’s one of my kind of accounting heroes, someone I look up to a lot, and I got to meet her at this last conference. But one thing I remember her talking about is, hey, let’s go to a car dealership, and there’s a red car and a blue car. And the salesman, you know, speaks to the customer and says, hey, here’s two cars. They’re identical in every way except for the color. But this car was handmade. And this one was factory made. They’re the exact same quality, but this one we spent hundreds of hours on, whereas this one was generated by machines. They’re the same product. Nobody cares! Nobody cares how long it took to make the car. All they care about is am I getting the car that’s going to work for me, and is the price right? Is there a perceived value that I’m getting value for what I’m paying for?

Yep. And that is, again, from my standpoint as a consumer, purchasing services from a CPA, is the value in alignment with what I’m getting in return? And to me the value of hey, I don’t ever have to deal with a phone call again, of, “Hey, John, we just need to let you know your taxes are done, and here’s how much you owe the IRS and how much you owe us”—the fact that I don’t have to deal with that phone call ever again in my life. As far as where we sit today. There’s almost—I don’t want to go as far as saying, because my CPA may be listening. I don’t want to say it’s priceless, but it’s pretty stinking close to it!

Yeah. If I had a client ask me that question that you proposed, that would be a very good sign that that was a client I don’t want to work with.

Yeah.

If they asked me, “How long did it take you to do this?” Who cares? It doesn’t matter.

Absolutely!

Unless we’re talking about getting a massage. I care how long that takes. That’s important.

Yeah, exactly!

But we’re not doing that here.

And that’s exactly right. I think it’s important that there’s value attached to what it is that customer is getting, obviously. But at the end of the day, when it comes to their tax return, or their bookkeeping, I think that placing a time value on that, like is done in most firms, is really a recipe for disaster in the world that we live in today when you’re trying to attract people.

There’s a young man that I talked to recently out of a top 25, 30 firm leading into Labor Day who was frustrated because, you know, two weeks before Labor Day, he was told by his manager, we’ve got to be at a minimum of 65 billable hours from now until October 15.

Oof.

He’s supposed to be doing Labor Day weekend with family at a family reunion. But he said, John, “why am I going to spend money”—that was in Arizona, he was in Dallas, but he’s gonna fly to Arizona for the family reunion—he’s like, “Why are we going to drop three, four hundred dollars on a ticket to go to Arizona to hug my family, and then go sequester myself in a back room, because I need to have 65 billable hours this week? No, I’m not going to do it.” And I think that in an environment like you’re talking about, the value is placed on let’s get the work done, not how long it’s going to take us to do it.

Yeah, absolutely. That’s exactly what we’re trying to focus on. Is the client happy? Is the work getting done? Are we billing market value for our services? And are our employees happy? Are our team members happy? That’s it. That’s all matters. Everything else is just a distraction.

You know, that’s a pretty broad statement, “are our employees happy?” How do you go about ensuring that your internal customer—your people—are getting what they’re looking for, from a service, that service being a career opportunity at BOSS Advisors?

Yeah, I think you just have to ask them, John. I think you, you need to understand, just like you do with clients, you need to understand what’s important to them. That requires open, honest, vulnerable communication, and regular communication.

There’s a book called Radical Candor we’ve adopted as one of our core values at our firm, and the basic premise is, build relationships of trust with your people, so that you can provide direct feedback. Care personally, so that you can challenge directly. And if you don’t invest time into your team, to know what’s important to them, and if you don’t have open meetings where, “Yeah, we have an agenda, but I always know that I’m going to be able to speak my mind and not get in trouble for it,” you’re not going to get honest feedback. You’re gonna get what they think you want to hear.

There’s a part in Radical Candor, where it talks about a specific type of meeting where the leaders of the company intentionally subject themselves to critical feedback in front of the team, just to show that you can accept feedback and still be okay.

Yep.

And to show the team that it’s absolutely safe to provide upward feedback. The Radical Candor principle is that that goes in every direction: peer to peer, supervisor to supervised, and vice versa.

Yeah, I think that being willing to create an environment where people can lay cards on the table is hyper-critical to creating a culture that people want to be a part of, because they know that there’s not repercussions. I mean, obviously, I don’t care what kind of environment you’re in, or what kind of relationship you’re in, you obviously want to do that in a professional manner. But nonetheless, there are firms in their environments, that it’s almost unheard of.

Yeah, and those are the ones where you get employees leaving, and you’re surprised. It should never be a surprise when somebody leaves. I tell this to my team members all the time: “If you ever feel like this is no longer good fit for you, I hope that I’m the very first person you come and talk to you about it.”

Yeah.

I had this happen last week, I had a team member who came to me and said, “Hey, I got a second interview at another company, and I’m considering it.” Like, “Okay, tell me about it. Why would it be a good opportunity, because this would be better for your family? Is this more in line with what you want long term?” And there’s no judgment, there’s no criticism, there’s certainly no repercussions from that conversation. As it turns out, this person went through the second interview, didn’t end up getting the offer, and was just as comfortable coming in and telling me “Hey, I didn’t get the job, but I appreciate your feedback on it, because you helped me kind of understand, you know, whether that would be a good fit for me.”

Yep. That’s, you know, creating a situation where they can be pretty vulnerable and pretty honest about things. You know, I’ve always told my staff for as long as I can remember, I’ve always told them, “Look, here’s my promise to you: I will never terminate you and have it be a surprise. Never. I’ll never pull you in my office and say, today’s your last day,” unless there’s some major egregious situation. “Outside of that, we’re going to constantly talk and I’m going to be honest and candid with you. All I ask in return, is do the same for me.”

Yeah.

“Don’t walk into my office one day and say, today’s my last day, or here’s my two weeks notice, whatever the case may be. I will not do that to you. I ask the same in return. And here’s what we’re going to do to create an environment that allows us to have those communications.”

And I’ll applaud you, Mike, because someone creating an environment like You’re talking about where people are vulnerable enough to come in and know that the repercussion is not going to be, “Well, pack your stuff and leave,” but the ability to have an honest, candid communication. I think was Richard Branson that said something to the effect of teach them and train them like they’re gonna be here forever. But they may not be, you know, or the concern is—

“Treat them well enough that they want to stay,” right?

Yeah, treat them well enough that they want to stay. You know, I’ve always held that the people that got you from point A to point B may not be the right people to get you from point B to point C, and that’s okay—it doesn’t make them bad people. They may decide to leave, you may decide to leave. But if you do it in the right way, whether as an employee, you’re thinking about leaving, or as an employer thinking about letting somebody go—if it’s done in the right manner, you may now be at point C in your organization, three, four or five years from now, that person may have left of their own free will, or you may have let them go—who’s to say that that person is not the right person three, four, five years down the line, to get you from point C to point D?

Absolutely.

The world is getting smaller, and I mean, let’s face it, numbers are screaming at us that the employee pool of talent in the accounting space is getting significantly smaller. Wouldn’t it be an amazing thing if somebody like this that you’re talking about says, “Hey, this is going on. You handle it the way you handle it.” Let’s just say they get the offer, but three years from now, four years from now, they’ve got more skills, better talent, because of what they went off and did. You’re in a position where you need somebody like that—you pick the phone up and call them and they go, “You know what? Yeah, let’s meet for coffee. I’d entertain something back with you guys. Let’s talk.”

Yeah, that happened to me. My very first hire back in 2018, he left a firm, because the owner had told him, “I know you’re considering doing a master’s, but I want you to know, if you start your master’s program, you’re not gonna have a place to work here.” And so it was very selfish advice. And he was a kid at the time—he was referred to me for advice on how to handle the situation, because the guy basically said, “If you start a master’s program, not only are you not gonna have a job, but you’re gonna have to pay me back $10,000.”

So he came to me, like, “Hey, can he do that, and what are my options here?” And I said, “Well, why don’t you just come work for me instead? Because I will absolutely support you in going to pursue a master’s degree.” And I did. He worked for me for about a year and a half. I told him two things: number one, this is an investment in yourself and you can’t invest enough in yourself. So go get your master’s degree. But number two, if you want to be a great candidate, and if you want to go work for a big firm, start your CPA exams and get a couple of them done before you’re done with your master’s degree. You’ll stand out so much more than candidates who haven’t passed any of the exams. If you get two or three parts of your CPA exams done before you even apply to work at big firms, you’re gonna be lightyears ahead.

And so he ended up getting a job with Deloitte, left our firm, and it was a happy departure. There was no bridges burned. And I my first employee by self-sabotaging basically, because I basically coached him out of my firm. I said, “Hey, you have one chance to get into a big firm. If you work at BOSS Advisors for your first three years, people don’t get into Deloitte and EY from small firms. The take off point is from your master’s degree, you naturally walk into that.”

And anyway, fast forward three years, he ended up coming back, and became a great senior tax preparer for us. He had put the work in, got his master’s degree, went and got a few years under his belt at Deloitte, and then was thrilled to come back because he said, “Really, all I want to do is work with S corp owners, small business owners. I don’t want to do any tax revisions, I don’t want to do any of that stuff we had to do at the big firm, and I want to work with the clients that I started my career working with.” But now he had this couple of notches on his belt, couple of tools in his tool bag that will never go away. He can always say “I was a Senior at Deloitte,” he can always hang his hat on that. I completely agree with you on that.

Yes, I think that the tongue-in-cheek scenario, where I always give people is, I want to be able to run into you at Walmart, and you not feel like you got to hide in the middle of the clothes hangers. You know, let’s shake hands, hug each other’s neck and, “How’s life? How are you doing?” The problem is that we live in a world today where there are so many organizations and managers—and I use that word specifically: not leaders, but managers—that don’t really understand what they need to do to sow into the next generation coming up. And it sounds like you guys are doing a lot of things right along those lines.

You’ve obviously built an amazing infrastructure and are continuing to evolve and grow your firm into a more modern-minded, people-centric firm and I applaud you for that, Mike. You guys have done a great job. If there are folks interested in learning more about you, your journey, possibly joining your firm as an employee, or if there’s another firm owner that scratching their head wondering, “How can they do some of the things that you’ve done at BOSS,” what’s the best way for people to get in touch with you?

You can find me on LinkedIn, Mike Payne, JD – CPA. Or you can just go to our firm website and submit a form to get in front of me, and we’ll have a scheduled time. That’s BOSSAdv.com, like BOSS Advisors. Happy to talk to anybody in either of those situations. I think one of my favorite things to do is to mentor other people. I had such great mentors myself when I was a young accountant, a young lawyer, that I’m always happy to give back, and don’t expect anything in return—I’m just happy to help. So I’d love to talk to anybody listening that wants to dig in further on any of the topics we discussed today.

I think there’s a lot of people out there that are scratching their head trying to figure out how do I walk this road—especially potential new firm owners. I probably talk to one to two every month that are somewhere in the midst of year one of either, “Hey, I bought a firm and I’m trying to make it grow,” or “I’m five years into a firm and I’m trying to do some things different. Do you have anybody I could talk to?” And the conversations that a lot of those folks have had with people like yourself have—just the ability to have somebody say, hey, don’t do this turn because there’s a pothole there. Ask me how I know? I hit that pothole six times in year one. I think it was Solomon who said in Proverbs, or excuse me, in Ecclesiastes—“there’s nothing new under the sun.” Having somebody that walked that road is a huge thing.

So Mike, I want to thank you again for spending time with us and sharing a lot of the vision of what took you down this road and where you guys are. So congratulations, and here’s to a bigger, better 2024 for you guys.

Thank you, John. I really appreciate your time.

And for those listening today, I want to thank you guys for giving us a little bit of your time and investing into learning more about what is needed in today’s CPA firm world. And if you don’t want to miss any future episodes of CPA Life podcast, hit the subscribe button so you’ll be notified every time that we drop a new episode. Until next time, you guys have a great day.

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BOSS Advisors

Mike Payne on LinkedIn

Beyond Billable Hours: Building for the Future with Mike Payne

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