CPA Life Rewind: Getting Your Time Back and Making More

Geraldine Carter coaches CPAs and accounting firm owners to help them get down to a 40-hour workweek without giving up revenue. Geraldine hit upon her calling after encountering CPA after CPA who had the enviable skill of storing a Google’s worth of tax code in their brain and an incredible knack for puzzling through complex tax solutions, yet no time to offer more valuable services to their clients.

Having earned a Bachelor’s in Civil & Environmental Engineering from Cornell in 1998, Geraldine applied her problem-solving acumen to finding a solution to this problem. She stresses specialization and niching, value creation, and shifting your firm and marketing focus to problem solving, rather than just delivering rote reports.

Geraldine hosts the Business Strategy for CPAs podcast, boasting over 350 episodes, and which is ranked in the top 2.5% of podcasts by Listen Notes.

Transcript:

Thanks for tuning in to CPA Life Rewind, where today, we look back on the highlights of John Randolph’s two-part conversation with Geraldine Carter. Geraldine shares her experience in coaching CPA firms to create value for their clients, reduce their hours while increasing their income, and get away from the trading time for money mindset endemic to the profession. Welcome to CPA Life Rewind!

Welcome to another episode of the CPA Life Podcast, where we spend time talking to firm leaders and industry insiders who are disrupting an industry that has been run way too long with a “we’ve always done it that way” mindset. And today, we’re going to be spending time talking to Geraldine Carter, who has built a very successful career over the last few years as a business coach, consultant, and advisor to firm owners who are looking for ways to get their lives back—work smarter, not harder—while doing something that they absolutely love to do. Geraldine, welcome to the show.

Thank you, John. I’m happy to be here.

I’m looking forward to digging into a lot of things that you’re pretty passionate about in the industry, and hear your perspective on some of the issues that are impacting today’s accounting and advisory firm owners. For those that may not be familiar with your background, give us a little bit of a snapshot of how you ended up in this space.

So, I was trying to distill this into four discrete pieces, because I’m 47 and I’ve had a long ride. And the main pieces are that I have an engineering degree from Cornell University, because I did not know what I wanted to be when I grew up, and I figured an engineering degree would be a safe thing to have in my back pocket. So that turned out to be really wise. But I knew that I didn’t want to be an engineer. I did know that I wanted to lead bicycle tours in Europe after I graduated, so I went and did that, and that turned into a 10 year stint as a guide for a luxury adventure travel company. I went all around the world.

And then when I got back to, I moved back to the U.S., after 10 years of not living in the U.S. and with a friend, I co-founded a company. And because of my engineering background, I immediately fell into the operations and the money role, managing all the finances and everything. By our fifth year, we had more than a million dollars in revenue, and I was about 35, and I thought, what? How is it possible that I’m responsible for this amount of money? And it was quite scary. And so I made all the classic mistakes of, you know, the accidental business owner. And I had a bookkeeper who made a mess of things. So then I hired an accountant who knew what she was doing, and she came in, I paid her two grand to clean everything up and fix our payroll and all the rest, and a CPA who was like super arm’s length.

And our accountant had all the classic symptoms of the accounting space: billed by the hour for way too little, working way too much, running around like a crazy person with her hair on fire, first in, first out, I could never get ahold of her. And I was trying to deal with a million dollars and trying to figure out, you know, how much we had for payroll and how much we could afford to grow and could we hire and when could we hire? Could we not hire? And if our numbers did this, could we do that? And if they didn’t do this, did we have to cut things? I spent a lot of late nights inside the spreadsheets, which I enjoy doing because I’m an engineer and I love tinkering and figure things out, but I also didn’t want to be spending, you know, 8 to 11 p.m. every night working on modeling financial scenarios.

Right.

But she was nowhere to be found, because she was too busy charging $55 an hour. At the same time, two separate main street CPAs reached out to me and said, “Hey, you know, I’ve heard you’re doing some coaching and we’re wondering if you might be able to help us.” And I really scratched my head. I thought, why is it that CPAs are reaching out to me, thinking that I could help them? Don’t they understand everything about business? They’ve got a roster full of business owners. Don’t they learn everything they need to know through osmosis from their clients? And it turns out that of course the answer is no, right? CPAs are business owners just like every other business owner. They’re excellent at their craft, but just because you’re excellent at your craft doesn’t make you a good business owner necessarily. It’s an entirely different skill set. And that’s how I got into the journey of working with CPAs, for CPAs, trying to help them get their hours down while flatlining their revenue, right? So, it’s been a super fun journey, and like I said at the top, I’m really grateful for all of it.

You know, it’s interesting that you talk about the hours perspective, because we were talking about it a little bit before. The other side of this business is a recruiting firm, and we work strictly with small to mid sized CPA firm owners. And about six months ago, we were introduced to a client that was looking to hire a manager, senior manager, that would kind of be the heir apparent, for one of the partners who was retired, it was two partners. And when I sat down and met with them, the older partner was talking about how he really wanted to reduce his time to part time going into the ’23 tax season. So logically—maybe I’m too simple—logically to me, part time to me meant that he was looking to work about a thousand hours. And I said, “So you’re looking to reduce your time down to about a thousand hours, you know, 20 hours a week ballpark for the year?” He said, “Oh no, no no no. Last year I worked almost 4,000 hours.”

Goodness gracious.

“I’d like to get that down to 2,000 hours.” And this is a partner that’s in his mid-60s, that’s still putting forth that type of effort in their business.

Yeah. So this is classic time equals money thinking that is endemic in the accounting space. Whether they’ve moved from hourly billing to flat rate or something else or not, even the ones who have moved to flat rate billing still think that time is what creates money. And it looks that way because you do work for your client, and you write up the invoice for the deliverables, the tax return, the P&L, the month end close, all of it. You send it to the client, and the client sends you money. So it looks like money comes from clients for time spent doing work. But that’s not where money actually comes from. Money comes from value, and the creation of value for clients. And most often clients value access, they value expertise, they value guidance, they value fast response times or reasonably quick response times—they value intangible things like that. But as linear thinkers, we tend to get stuck in the concrete, and if we can’t touch it, or feel it, or smell it, or hold it, it doesn’t exist. And that’s a hindrance to growing your business and actually having time to live the rest of your life if you’re caught up in that kind of thinking. So we need for the CPA to understand value and what it is for their specific buyers, learn how to create it for their buyer, learn how to create it repetitively, and learn how to capture it with prices. And when you do that, that is how you get out of working all the time for your clients.

It’s one of those ugly cycles that never stops. It just perpetuates itself. It just continues to feed the beast, so to speak. But I also want to talk about what are some things that, that you’ve seen that firms are doing right and doing well. What would you say are the two to three biggest challenges facing the majority of today’s firm owners?

So it depends on where they are. For the firm owner who is working 60, 70, 80 hours a week, the challenge is usually like we’re just talking about the mindset that work equals money. And because they have amassed a client roster that is well beyond capacity—and when I talk about client rosters beyond capacity, I’m talking about the 747 that only has 400 seats on it. There’s no known universe in which you pile 900 passengers onto that thing and shoot it into the sky. That is not a good idea for anybody. Yet many CPA firms are operating this way, with far more clients than they have seats for, but they’ve developed relationships with their passengers and they love them and they’re like, “I can’t kick Sally off the plane! She’s got to go to a wedding in Paris! That would be heartbreaking!” And you’re like, we’ve got to unravel the personal relationship nature from the business and just be objective about it without being cold hearted—we do this in a way that is considerate. But we have to look at the business and the capacity of the business and say, here’s what we have capacity for. Like, just moving through the discomfort of letting go of clients who have become friends over time.

I think at the core of much of this is mindset. Mindset touches so many things in your business, but leaving money on the table is a requirement as a business owner. You have to learn how to leave money on the table. If you run around trying to pick up every single dollar on your table, your business will be totally unfocused and you’ll be all over the place. I think a lot of CPAs, there’s a tendency to think that every dollar is a good dollar and all dollars are created equal. That’s not the case. Where I help my clients go is to focus on not just clients who are going to be great, but go in the direction of clients where you love working with them, you can provide a ton of value and you can get really efficient. The efficiency piece comes when we focus on a niche or an industry, or we get super specific about who we work with. If you can’t learn how to leave money on the table, you will suffer and you will create problems for yourself that you do not need to have.

It’s an analogous situation to, to our business and our industry, it’s one of the things that I constantly deal with our staff, because inevitably there’s somebody that reaches out to somebody they know that needs to hire. You know, a controller at a manufacturing company and getting them to understand, look we’ve got a lane that we drive in. That lane that we drive in is locally owned CPA firms. That’s who we deliver for. And the nice thing about it is that the candidates that we talk to are candidates that want to be a part of a CPA firm environment and culture. If we start looking for controllers and financial analysts and AP clerks and payroll managers, that vision starts getting blurred, and then we’re having to recreate the wheel so many other times, versus staying in our lane and doing what it is that we do. The reality is you don’t have the marketing dollars to compete with the larger firms across the street or in the world we live in today, five states over or a country over. They’ve got more dollars to throw at it from a marketing perspective than you will ever have as a small business owner.

You couldn’t be more on target about this, and I couldn’t agree with you more. As a small business owner, you do not have the same firepower behind you to run a complex business. And you talked about the fear of the unknown. And what I can say is what we know about accountants who niche is that their margins go up. I know this because I talk to my CPAs about their margins and we splice their service lines by monthly accounting that is non niche, monthly accounting that is niche, tax returns, we do margins on all of those things and the lowest margins are on tax returns and the highest margins are on niche monthly accounting.

So we know that it is higher revenue, higher margin. We also know that when we ask CPAs who have gone in the direction of focusing on who they work with and what they do for their people, and/or they have become tightly niched, we know when we ask them, would you ever go back to being a generalist? They say, “Heck no!” because they see how much easier it is. They feel the relief. They feel their business float much more easily instead of being tied to the ground and tied to their desk. So when we talk about mindset, fear of the unknown is absolutely right in there. The way in, the strategy for getting your name out there when you are niched is to be hyper-focused and to put your dollars right on a very narrow audience, so that they see your message, and so that your message lands with them. And when you’re an expert in your niche, you know what they deal with, you know the challenges they deal with, you know how they talk about their problems, you know what they want instead. So when a potential buyer in your market sees your message, they think, “Oh! That CPA understands me exactly.” And that’s what makes your phone ring and you end up with better clients, much better clients, who are pre-qualified and fall nicely in your niche. It’s the best thing that you can do for your business.

I’ve got a client in the Austin marketplace that is very niched in the medical space, and he’s been looking to grow his advisory service line. You know, he made a great point. He said, “John, I don’t need somebody that can go sell. I can sell. We’ve got another guy in our firm that sells really well. But I need somebody that can look for leveraging value within our customer base.” And I said, “Tell me what you mean.” And he said, “Well, we’ve done some pretty cool projects for clients over the past two to three years without a dedicated advisory piece to our business. But as we look to grow this advisory piece, I need somebody that can look and see that this client has a very similar footprint to this client, that we just worked a project with and brought some value to—let’s set up a lunch and let’s go talk to these guys that maybe we’re doing their tax return, maybe we’re doing their outsourced accounting. Let’s go talk to them about the value we’ve been able to provide to a company very similar to theirs, that may be a stage or two ahead of them, and it’s only a matter of time before they start encountering the same problem, and let’s get ahead of it, and let’s create some value for this particular client.” And I thought, you know, if more firms thought that way, that workload becomes a lot more easier to manage, and the stress becomes a lot easier to manage because it’s not reactive, it’s proactive thinking.

Yeah. And I think that this is coming. There are changes afoot in the accounting space for sure, and with more people beginning to niche, with more and more people moving off of hourly billing onto tiered pricing, flat rate pricing, more and more people are understanding value and creating value for their clients, and as business owners, we come up through the ranks doing work for our bosses, and we get paid for it. So it’s understandable that we think when we hang our shingle, that if I just do work, but now the work is for me, that I’m going to make a lot of money because my boss isn’t taking the cream off the top.

But the transition that we need to make mentally when we hang our shingle is that now our number one job is to delight our clients. It’s no longer about us and the work that we’re doing. It’s no longer about keying in the data, it’s no longer about getting the work done, moving the work through the pipeline. Now, our number one job as business owner is to delight the client. So when you think about it that way, and you ask yourself, how can I delight my clients? What are 50 things I could do that might potentially delight my clients? Suddenly you get much more creative about how you can create value for your clients in order to delight them. And I think CPAs sometimes think of themselves as numbers people, and the word “creative” with “accounting” doesn’t go well together. But I think that when, as business owners, we give ourselves latitude to be creative, that is when we create value for our clients. That is when we set ourselves apart. That is when, like you were saying at the top, we make a decision to be better than anybody around us.

And that doesn’t mean that I’m winning and you’re losing. It just means that I’m going to take my unique genius, and I’m going to look at my clients, and I’m going to find and create solutions that nobody else has done before because only my brain works the way my brain works. So I think for CPAs, I think there’s movement, change, afoot that CPAs are beginning to see that as business owners, as firm owners, that there is so much value for them to create, we just need to get them their time back, divorce it from time being money so that they feel safe using their time to be creative thinking about value for clients.

I think you’re so right. I want to change the subject just a little bit and get your thoughts on something you touched on when we first started talking and that is capacity. That’s something that I’ll never understand in the traditional public accounting firm model. Especially in the world that we live in today, we’ve got people in a firm that, you know, someone’s out selling it, bringing it in, and then you’ve got people that are generating that work if you have staff. The way that I liken it to is those people that are doing the work are kind of on a treadmill and they’re running as fast as they can to crank the work out.

In theory, as a leader, your job should be to slow that treadmill down every now and then to let those people breathe, to be able to continue to perform at the level that they were performing at before. But instead, in the current model that we have today, where a partner or a manager or a senior manager has a business development quota, they’re standing on the side of that treadmill—not slowing it down, they’re making it go faster—because they’re dumping more work on that person that’s already putting forth 50, 60, 70 hours. And so it never is ending as a firm owner, as a leader. How can someone better manage the capacity that is in their firm and understand what they’re doing to their staff?

So there’s two questions in one there, and I think the first one is around if that person has a quota, I would question where the incentives are. Because if that person is getting paid, per sale per new client or has a financial incentive to bring in more business, they’re going to bring in as much business as they can, and they don’t care about what happens downstream.

Absolutely.

So we need to look at financial incentives inside our business and how we’re paying our employees and how you are paying them, what that incentivizes them to do. One of my favorite quotes is Upton Sinclair’s, “Man cannot see that which his salary depends on his not seeing.” So for firm owners, you’ve got to look throughout at how you’re paying your people and how that might be creating adverse incentives that are not good for your business.

And the second piece as the firm owner is the buck stops with you. So, if you want tired and worn out staff who end up quitting that you’re going to have to replace and train, then, you know, keep throwing money at your sales guy and you’ll end up with that result. But if you want staff who are happy and productive and calm and not stressed out and don’t bark at each other, then it’s your job to figure out how to create staff that work together, and it’s your job to figure out how to manage the pipeline and their workload so that they’re not always running six minute miles on the treadmill and they can’t keep up.

We’ve got a client that we work with that all in expected administrative time, three weeks PTO, vacations, holidays, everything they run their business on a 2,200 hour metric. Nobody in the firm works more than 2,200 hours per year. And that’s all-in. The utilization is significantly less than that. And their mindset is kind of similar to what you’re talking about. When I was talking to the firm owner, two years ago, we started working together. One of the things that she talked about is “We’re not perfect. We’ve got things in our firm that are broken.” And she said, you know, “We’ve gotten to 30 plus employees, I don’t see everything that’s broken. I can’t. So if I don’t create space for my people to be able to work on those things and communicate about those things that aren’t effective, that aren’t efficient, then all we’re doing is continuing to drive the car down the road, and eventually the engine’s going to blow.” And I thought that was a great way to look at it to give your people space to understand that they’ve got to have some breathing room, not only for their mental health and sanity, but also to help your business run more effective and efficient.

In my first business, we had six employees. I never managed anything about their time, I never had them full up to the brim ever—I told them what outcomes I wanted. I said, “Here’s the end result. I want it to look like this. Make it look like this. What questions do you have?” And they would go get started, and they would, wherever they got stuck, I’d say, “Spend 15 minutes figuring it out. If you can’t, then go to your compatriot, see if you can figure it out together. And then if not, come to me. But I want it to look like this. And if you’re done at three, then go home. I don’t care how long you work. In fact, I would rather that you not be here until five, because your brain doesn’t work as well when it’s tired.” We know this, the brain science tells us this.

Yep.

And we know that when people work long hours they make mistakes and when you make mistakes it’s twice as long to figure it out and correct it because you have all the mopping up to do and then you’ve got to do it again. We know that when people work long hours, it’s inefficient and wasteful. And yet there is a culture that supports a 40 hour work week. And there’s an accounting industry that worships at the altar of working long hours as if it’s some kind of competition where we get medals around our necks at the end of our lives for how many hours we put in. I think this is insanity.

We wear it like a badge of honor.

It’s total insanity! It’s not the work that creates the money. It’s the value that creates the money. And I think as accountants—although this may be in other industries too—there’s so much fear of not having enough revenue that there’s a tendency to live in the space of scarcity: “Not enough time, not enough money.” And when we live in the space of scarcity, our brains are not as creative, they’re not as effective, they don’t think of interesting solutions, they don’t allow for new ways of doing things. And what we perpetuate when we start from a place of scarcity. is ongoing scarcity.

So true.

If you think about scarcity all the time, you just perpetuate more scarcity. So this has come up a couple of times with leaving money on the table. And this whole fear about leaving money on the table is something that perpetuates never having enough money. This is so detrimental because the money people, the accountants and the CPAs are the ones leading the business owners. But here we have the accountants and the CPAs who are leading the business owners who are themselves caught up in money scarcity and time scarcity. And the messaging out on the ethers is to encourage accountants and CPAs to be advisors, and I’m going, “Holy smokes! I want the accountants and CPAs to be advisors, but we need to get them out of money scarcity, time scarcity, and that time is what creates money, before we shoot them off to being advisors for business owners!” Sorry, that was a little edgy!

That’s okay, because I think that we’re both passionate about this—similar reasons, some different reasons. But it’s something that people have got to get their heads around because like you said, it’s not something that you can flip a switch and it’s going to change overnight, but it is something that has to be addressed, it is something that has to be looked into, because the current model that’s in place in most CPA firms isn’t working. One of the biggest reasons it’s not working from a mindset standpoint with staff is the generation that’s currently in the workforce, generations that are currently in the workforce, they are not going to buy into what the guy that’s running the firm did to build his career. They’re not going to put in 60, 70, 80 hours a week. And so finding a firm and finding a leader that understands how to better manage capacity, finding a firm and finding a leader that understands the value of having some breathing room in there for his staff is hyper-critical if they’re going to continue to move forward and build a successful business, and I think you’re right, if you want to create a business advisory type situation, then you yourself have got to begin to understand what it is that you’re advising your clients to do. You got to drink a little bit of your own Kool Aid.

Mmm hmm. And I would say for the younger generation that we so often smear because we think they don’t have a work ethic and they don’t want to work hard, you know, and they’re coming in and they’re not going to want to crank out the 70 hour work weeks, I say, thank God. Thank God there’s a generation that is coming in, that is just not going to put up with the lunacy of believing that 60 and 70 and 80 hour work weeks are somehow a noble thing.

It’s something that they’ve got to let go of. Respecting the position and the stance of the younger employees coming up in the industry, it’s not that they don’t have a work ethic. They want to work. They have no problem working hard. They just need to understand why are we doing it this way, and the answer of, well, we’ve always done it this way, and I did this for my career, that’s no longer a sufficient answer.

Yeah. And I think, you know, they have a work ethic and they also have a life ethic. Not all of life is meant for work. And what I think is so exciting, because we can get kind of down on the problems and the challenges, but I always look for the opportunities. And I think there has never been a better time to be a CPA, either as an individual or as a business owner, because there is a shortage of CPAs and there is a lot of demand. So it’s, if you’re in real estate and it’s a seller’s market and you’ve got a house to sell, you’re psyched.

Right!

So it’s easy to get caught up in the negativity, but I think look at the opportunity. It is a seller’s market right now. You have infinite demand. So you can take the pick of the litter, work with the kinds of clients that you want to work with. You can do the kind of work that you want to be doing and none of the stuff that you don’t want to do. And now, thanks to COVID, CPAs are online. Finally. Now you can get out of your zip code, right? It was only 2008 when I had my business and we were just, we were kind of early birds on QuickBooks Online and getting off of desktop, so it hasn’t been that long, right? 15 years, 17 years is a blink of an eye. But now, CPAs have every opportunity to get out of their zip code, to have clients who look exactly like each other in industry, in a single industry, or just a couple industries, or however you want to focus and niche, have clients all across the country, but look just like each other.

And you have automation that, you know, I understand that it’s not the be all end all, and there’s been a lot of hype about, you know, this is gonna make our lives and our jobs so much easier. But the technology takes out so much of the sort of low level labor intensive work. And if you can figure out how to piece together your technology so that your systems are optimized, efficient, and automated everywhere possible, it is entirely possible for you to work a 15 hour week with margins in the 70s and take home six figures. And if you don’t believe me, you can just have your listeners go listen to my podcast where I interview my clients and they do those very kinds of things, because they are intentional about who they work with, they figure out where the value is, they understand exactly what they need to provide, then they figure out what the workflow and the system needs to be, they figure out how to automate it, and they just push buttons and monkeys do the rest, and it’s not because of the hours they put in. And for the firm owners who don’t want to understand this, they’re going to fall behind and they’re going to drop off the back. But for the firm owners who are excited about this, they’re the ones who are going to speed ahead and do amazing things and have great businesses.

As a customer of a CPA firm that switched to a firm about four years ago that is a value priced model, there’s a part of me that always wonders, “Where did I ever think it was okay to speak to my CPA firm once a year, get a five figure bill for taxes that I owed and I owe them now?” Why I ever thought that was okay, in my mind, I don’t know, because I can tell you in the last four years, I’ve never once said to my CPA, “Hey, how long did it take you to do my taxes?” I’ve never asked that question. I don’t care how long it takes them to do my taxes. What I do care about is as we’ve grown over the last four years, I want to be able to call or send an email and say, “Hey, I’ve got a question. We’re looking at doing this. What are the implications of that?” Having a monthly and quarterly conversation with him to talk about our business. It may only be 15 minutes, but to know I can do those things and a clock isn’t getting flipped on the minute that conversation starts. All of those things, I am willing to pay for on a monthly basis, and have no issue with it, and again, like I said, I just got my tax return that we’ve got a file that signed off on it the other day, and when I responded back to him with my e-signature, I didn’t ask him, “Hey, how many hours did you work on this?” It doesn’t matter! I don’t care!

It doesn’t matter! That is so great. I love that we’re talking about this because it’s so easy to get caught up in the thought, “This didn’t take me very long, so I shouldn’t charge very much for it.” Oh, those returns, they only take 30 minutes. I feel guilty charging $795. Your client does not give a second thought to how long it took. They do not care. All they care about is that they don’t have to do it because they can’t do it.

Thank you!

And they don’t want to spend a Saturday snapping No. 2 Ticonderoga pencils because they can’t figure it out. I’m paying my CPA for my time back. I’m not paying her for her time. I don’t care about her time. I mean, I care about her time, but I don’t really care about her and her time. I just want to do something else on a weekend. I also want to know that it was done well. I presume that it was done well and properly—that is table stakes. And there are all kinds of ways when you get out of the thinking, “It only took me a few minutes, therefore I shouldn’t charge a lot of money for it,” and you understand that what your buyer wants is their whole weekend back. Then your life and your business gets so much better.

Yep. It’s understanding that your client wants to do what it is that they do well, what they’re passionate about, what they enjoy doing outside of work, because the reality is that they’re going to be doing this outside of work—they’re not going to be doing taxes Tuesday afternoon at two in the afternoon. They’re going to be doing them Tuesday night at two in the morning is when they’re going to be doing it. And I think it’s a mindset that you just have to get your head around because there’s so many times in our business where we’ll put one candidate in front of a client and they will hire that candidate.

And so many times, you know, I’ll have to talk to some of our recruiters—and at times I have to talk to clients about the fee that we’re charging for that one person, and getting them to understand, “Look, there’s things that went into finding that one person. There’s time, there’s effort, there’s energy. You’ve been looking to fill this position on your own and you’ve been reviewing resumes for three and a half, four weeks, an hour to two hours a day. That’s an hour to two hours per day that you’re not bringing value to your customer. That time is worth something.” And I think that flipping that around and getting that owner, that firm owner to understand that and see that on their side of the business is hypercritical to be able to get them to move forward in their business and not get stuck in that time billing mindset.

Yeah. You have to be thinking about your client and where their time is best used, and that is what they most value, is their time and their sanity. We’re paying you because you have put in the time—the blood, sweat, and tears—to become the expert at the thing that you do, and that’s what you do. What I, as the buyer, am paying for is the time and the expertise that you’ve developed.

Yeah, because my other option as the customer is YouTube videos and that takes time to go dig through YouTube or for tax advice, there’s also TikTok. I can go to TikTok and Instagram for tax advice.

Yes.

And again, hey, you get what you pay for. So I’d much rather pay for the value that I’m getting as a customer from my CPA.

I, too, would much rather pay for the value that I’m getting from my CPA. So when you think about your customer, your client, imagine what they’re up against when it comes to bookkeeping and accounting and understand where your client is with that. If you’re a main street CPA and you have main street business owners as clients, they might be trying to do their books on their own, they might have a spouse who’s doing it and that, you know, that could get ugly, or they might not be doing it at all. And it’s just a pile of electronic receipts stuffed in their Gmail, along with a couple of envelopes that are overflowing with actual paper receipts. And that’s a really painful situation to be in as a business owner, because you don’t know what’s happening with your money: You don’t know where it went. You don’t know why it went there. You don’t know how much you have. You can take a guess at how much you have, but you might well be wrong. You look at your bank account balance and there’s 50 grand in there, but you don’t know how much of that money is yours to keep and how much is due to vendors and how much is due to the IRS.

So business owners are in a precarious position if they don’t have their finger on the pulse of money and that it’s also accurate, right? ’Cause they could be doing it and it could be totally inaccurate and they would have no idea. And as the accountant, when we can communicate to the business owner, just how much they’re missing out on by not having their finger on the pulse of their money and how it flows through the business and understanding it and being able to use that understanding to make better, more effective business decisions, just how much time, sweat, and stress that’s costing them? That’s what the accountant, the CPA is offering, not just month end close, not just a P&L and a balance sheet, not just payroll. It’s what all those things do at the end of the day. What’s the business impact of having all of those things done—well done, buttoned up—and clear to the business owners so that they can think about other things?

I’m going to again, switch subjects on you just a minute. You had a post on LinkedIn that really had a lot of humor to it, but a lot of, it was a point that was very well driven home by the question that was asked, and that was, “Why do you buy eggs?” Talk to me about where that came from and what the thought process was behind that.

So there was a whole egg kerfuffle a few months ago, you know, with bird flu and a few other things going on, and the price of eggs went to like seven bucks for a dozen. And I was standing in front of the array of eggs at the grocery store, and I was looking at the prices that ranged from, I think it was three bucks at the cheapest, up to 12 dollars. And I was like, how is it that the same product, a little brown oval, can be three bucks for a dozen over here in the lower right corner, and it can be 12 bucks over there in the upper left corner? Like, what is going on?

So I just stood there and looked at all the different kinds of eggs, and a couple things popped out at me: That you have your cheap eggs, people who are buying eggs basically purely on price, they don’t care, in a little cardboard container with no marketing, nothing snazzy, and nothing about the hens. It’s just 12 eggs. And then in the middle, you have this like kind of healthy, happy hen egg that’s free range or grain free or omega 3 or, you know, hens who roam or whatever. And those were like five bucks for a dozen, more or less. And then at the top end, you have eggs for 12 bucks that come in a carton where there’s like a Monet painting on the carton. I don’t know if you’ve seen these, but there’s like artwork on the carton. And I thought, “Huh. So people are making decisions on at least three things: price, the quality of life of the hen, which has nothing to do with the egg itself, or very little to do with the egg itself, but they’re buying the quality of the life of the hen, when you buy the cage free ones. And then there are the people who are buying 12 a dozen eggs, who just want the most expensive eggs and they find the artwork pretty, and they don’t care about the eggs.”

But then you also presumably have this subset of people and the response on my email list was, “I only buy duck eggs because they’re way better for X, Y, Z reasons.” And I thought, huh. And somebody else chimed in with, “I only buy this kind of egg because they’re much better for baking.” So it just made me wonder, there are all these different kinds of eggs and you have all these different kinds of buyers who are buying for very different reasons. But at the end of the day, the egg is almost universally the same—it’s everything else on the outside, your carton, if you will, that helps your buyers decide where they’re going to spend their money and which kind of eggs, which kind of P&L, which kind of accounting firm they’re going to work with.

So I wrote that series of emails simply because when we do our own craft, it’s hard to imagine the marketing of our craft because we think people just understand what we do. But nothing could be further from the truth. Not only do people not understand what you do, they don’t care about what you do. So, we need to talk to them about the things they care about. And there are people who care about price, so we put those eggs in a carton for $2.99. There are people who care about the quality of life of the hen, so we put those eggs in a carton for six bucks, and there are people who just want the most expensive, and we put those eggs in a carton for 12 bucks. And when you can see examples like this that are not your own business, I think it helps you be more objective in looking back at your own business to go, Oh, wait a minute. When people see accounting, what is it that they’re actually buying? Because accounting is just the eggs in the carton. So what do I need to put on the carton so that they want to pay me $12.00 for my carton of eggs, or six bucks, but I want to get out of being the $3.00 for a dozen egg provider.

It’s so true. And again, that mindset really crosses multiple industries, because as I read through that, and I looked at that, it was again, one of those aha moments in our business to sit there and go, okay, are we a $3.00, $6.00 or $12.00 carton? We had some internal discussion about that post because it really did drive home the point of who’s your customer, who are you selling to, and how are you selling to them, because you need to understand what’s important to them.

This is back to, it is a wonderful time to be a CPA. There couldn’t be a better time to be a CPA. There’s so much opportunity out there. There has been so much price suppression for so long with main street CPAs who have felt guilty about raising prices to the detriment of their clients, to the detriment of their staff, and to their own detriment. There’s so much room to go up and there’s so many business owners who are looking for more than a McDonald’s hamburger, which has historically been what has predominantly been on the market when it comes to hamburgers, right? We didn’t used to have brew pubs on every corner 20 years ago.

Right.

Right? They’re kind of a new thing. And now that they’re here, we love them. And it’s the same with Starbucks. You used to only be able to go to Dunkin Donuts and get a cup of coffee for 49 cents, but now you can pay seven bucks for a cup of coffee, and it’s awesome! I’m on my way after this podcast to get one! Because it’s delicious. It is so good, and I love the experience and I’m happy to give them seven dollars for it. And I’m so glad that there are people out there who have figured out that there is demand for a higher quality product and that there are many of us who are willing to part with dollars for the higher quality product.

And I’m so glad that there are CPAs who are out there, who are seeing that there is demand for a higher quality product, and they’re willing to figure out how to go create that higher quality product, and they have no compunction about charging a lot of money for it, because it is good for the client, and it is good for the CPA, and it is good for the community, because the business owners do better, they’re more successful, they have more to give to their community, they support Little League, and they support their little hockey teams. It’s better for everybody when CPAs can feel wonderful about charging high prices for high quality services, experience, and expertise, because it lifts business owners, and when we lift business owners, we lift our communities.

I’ve mentioned this story a couple of times on past podcasts. I had a client coming out of COVID that was not in an amenable geographic location in the Dallas area. And it was just tough to find people for him in general. And then we went through this whole dynamic shift of remote work. He was a little older, my age, mid-50s, and just couldn’t get his head around the whole remote work dynamic. He and I talked about it for over a year and a half, and he kept pressing back and pressing back, “No, no, no, no, no.”

Finally coming out of the ’22 tax season, called me and said, “Hey, I’ve given this whole remote thing a lot of thought, and there’s only one reason I can come up with that we don’t do it.” And I said, “What’s that?” And he said, “Because I don’t want to.” He said, “But here’s the follow up to that, John. I’ve realized that’s not a good enough reason. So I need you”—and I told him I would do this—he said, “I need you to put me in touch with two or three firm owners that you work with that have migrated towards a remote environment. I’d love to talk to them and figure out what have they done right, what have they done wrong, if they had to do all over again, what would they do different? They’ve already, you know, trotted some of this ground rather than make the mistakes that they made. I’d love to talk to them and figure out how can I make this work for our team?” It was a risk, but he was at least smart enough to figure out “I don’t want to do this” is not a good enough reason for us not to do it. And that’s the only reason that he said he could come up with.

And, you know, “I don’t want to do it” can be a good enough reason if you want that to be your reason, because it’s your business and you get to decide what you want to do with it. But it sounded like “I don’t want to do it” is not a good enough reason for him. And kudos to him for recognizing it and for going out and finding the resources that he needed in order to help make those changes. Because I think that, you know, when the internet comes for your business and your business model, there’s no stopping that tide. You can only dig against the incoming tide for so long before it’s just not going to work anymore. Even though it’s effort, we will benefit the most when we recognize where the tide is headed, and the more time we have to get ahead of it and stay ahead of it, the better off we will be. It doesn’t mean you have to like the tide, but denying that it’s there is not going to suit you.

I think that’s a great way to put it. There’s a lot of things, I think if any of us look back as business owners at the changes that we’ve gone through in business, I think it’s safe to say there are a lot of those things that we didn’t like. There were a lot of trends that thankfully we saw coming before the tsunami hit, maybe some water was already washing up on the shore, but we recognized those trends were there and we made that change, and again, as you said, there’s a lot of things that I didn’t like that I had to change, but accepting the fact that it’s inevitable is a big step in the right direction. I think that’s something that every business owner needs to get their head around, especially in a CPA firm world that is ever changing, dynamically moving, and not sitting stagnant like it did for a hundred years.

All the more reason that there’s just, back to the top, so much opportunity for CPAs. I can’t imagine a better time to be a CPA. There’s so much great work to be done out there and to have a fulfilling practice that you enjoy with clients you love at prices that you’re both delighted by.

Absolutely. Geraldine, I want to thank you for spending your time giving us all some things to think about when it comes to running a more efficient, effective, profitable, and scalable firm that doesn’t run you. If someone is interested in learning more about your services, perusing some of your valuable content, or listening to your podcast, what is the best way for folks to reach you?

Yeah, so they can find my podcast, just google “Business Strategy for CPAs.” They can find my website, it’s GeraldineCarter.com, and I’m pretty active on LinkedIn, which is, if you search Geraldine Carter on LinkedIn, I believe I’m pretty easy to find.

I think you’re really easy to find if you just plug in Geraldine Carter. It’s right there with a ton of valuable content for anybody absolutely that’s in the CPA firm space and just business in general, there’s a lot of things parallel to a lot of different industries, so a lot of valuable content.

I want to thank you again for spending time with us and for those of you listening, if you like what you hear, leave a comment below and hit the subscribe button so that you don’t miss any of the conversations that we have coming up in the future with other industry insiders, like Geraldine, who are really giving us a little bit of a glimpse of what CPA Life could be like. Until next time.

We hope you enjoyed today’s episode. Be sure to subscribe on your favorite podcasting app, leave a five star rating, and visit our website for links and show notes at CPALifePodcast.com. We’ll see you next time on CPA Life!

CPA Life Rewind: Getting Your Time Back and Making More

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