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the disruptors
with liz farr
what would an accounting firm look like if you had never worked in public accounting? because nicole davis, cpa, and jw davis, a registered investment advisor, didn’t follow the traditional path to firm ownership. they reimagined what a firm could look like, starting from a blank canvas instead of the regimented, structured, paint-by-numbers design of traditional accounting firms.
more podcasts and videos: dawn brolin: grow your firm by shrinking it |jason blumer & julie shipp: move leaders out of client service | james graham: drop the billable hour and you’ll bill more | karen reyburn: fix your marketing and fix your business | giles pearson: fix the staffing crisis by swapping experience for education | jina etienne: practice fearless inclusion | bill penczak: stop forcing smart people to do stupid work | sandra wiley: staffing problem? check your culture | scott scarano: first, grow people. then firm growth can follow |
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nicole is the founder and principal of butler-davis tax & accounting in the atlanta area, while jw is the ceo.
like many disruptor-led firms, jw explains that ”one of the really big things we focus on was work-life balance.” nicole adds, “if your culture is one of stress and long hours, then you really need to rethink your business model.”
one way their approach is different is in their hiring. nicole explains, “we aren’t necessarily looking for the skilled hire, we’re looking for the hire that’s going to be a good fit for our company.” they find these candidates by rigorously following a four-phase interview process adapted from a book by geoff smart and randy street: who: the a method for hiring.
new hires are immediately plugged into a two-week training program, which they must pass if they want a job when the two weeks are up. nicole and jw are essentially creating their own pipeline by “giving up the idea that we had to find a skilled person or a cpa or ea” and hiring recent college graduates who will do well if they are properly trained. another overlooked group they have found are bank tellers, who make great hires for payroll or bookkeeping.
small firms like theirs can be agile, while making changes at bigger firms means first getting buy-in from the partners so you can “show them a better way to do things and still make the same amount of money, but you’re working a lot less hours,” nicole says. but staying in some of those firms may take patience. “sometimes, you gotta wait them out. sometimes you gotta wait till they die.”
14 more takeaways
- when you try out software, get your team’s feedback. will this be better for them? better for the clients overall? or will it create more of a burden?
- your niche may find you when you start doing work for the same kinds of businesses and getting referrals.
- if you want to work with clients who bring you joy, look for yellow and red flags in your discovery calls with prospects. anyone who exhibits any of those warning signs is not a good fit.
- if a prospect can’t invest in your minimum service offering, they are not a good fit.
- develop a formal onboarding process for clients so nothing falls through the cracks. onboarding at butler-davis includes a kickoff call, a welcome package, training the client, cleanup work, and internal setup. all phases are tracked through their practice management software, and clients can also see where they are in the process.
- if working with a client doesn’t spark joy or if your team has a difficult time with it, release that client.
- block out time on your calendar for times you won’t be available for client calls so you can focus on working on your business.
- reduce task switching to improve productivity. make sure you reduce task switching both for yourself and for your team.
- stop trying to do everything. leading a firm can mean choosing between talking to clients all day or doing the work. delegate work to your team so you aren’t the bottleneck.
- if a team member is unable to perform, moving them to a different position will most likely not help motivate them to do what they need to do or to improve at their assigned tasks.
- set expectations when you work with businesses with more than one owner. if they get into a fight, let them know you can only work with one of them or neither of them, not both separately.
- think about how you want to be treated as a client or employee of your firm. ask yourself, would you hire you? why or why not? if the “why not’s” are more than the “why’s”, you probably need to reevaluate how you operate.
- ask someone from outside of accounting to look at your firm. what we think is the norm for running a business isn’t the norm for all businesses in terms of taking care of clients or employees.
- accountants tend to want to be technicians. but firm owners need to be more than technicians. they need to treat their firms as business owners, as entrepreneurs.
more about nicole davis, cpa
nicole davis stands at the helm of butler-davis tax & accounting, bd payroll, and groundworx contractors as their founder and ceo, directing a dedicated team of 26 professionals. with over 20 years of expertise, she offers extensive knowledge in accounting, tax, financial oversight, and advisory services, catering to diverse clientele from various sectors. she possesses a unique prowess in tax strategy and is adept in small business accounting, notably within the construction, independent pharmacy, and service-oriented business industries. prior to establishing butler-davis, nicole’s professional journey was rooted in corporate accounting for prominent fortune 500 entities. she initiated her career at conocophillips, a leading oil and gas enterprise located in bartlesville, oklahoma. holding memberships with the american institute of cpas and the georgia society of cpas, nicole’s educational accolades include an mba from the university of tulsa and a summa cum laude bachelor of
science in accounting from grambling state university. currently, she serves as the vice chair of the aicpa practitioners planning committee and is a committee member for the professional and personal liability insurance programs of the aicpa. furthermore, nicole is an active participant in both the rockdale and newton chambers of commerce.
more about jw davis
jw davis is a seasoned investment advisor with over 11 years of experience in the financial industry. throughout his career, he has helped dozens of high net worth clients achieve their financial goals by crafting tailored investment strategies that align with their risk tolerance and long-term objectives. jw specializes in retirement planning and wealth preservation. with a keen eye for identifying growth opportunities and mitigating risks, jw is dedicated to providing comprehensive financial advice that confidently empowers his clients to navigate the complexities of investing.
transcript
(transcripts are made available as soon as possible. they are not fully edited for grammar or spelling.)
liz farr 00:00
welcome to accounting disrupter conversations. i’m your host, liz farr from cpa trend lines. and in this series of episodes, i’m talking to accounting firm owners who are operating firms differently than your father’s and your grandfather’s accounting firms. my guest today are nicole davis. and who is the chief hello officer and j. w. davis, who’s the coo. and they are at butler davis tax and accounting. welcome to the show, nicole and j. w. thank you, lisa.
jw davis 00:47
yes, thank you for having us.
liz farr 00:50
i’m so delighted i could have you too on here. you know, i see nicole up on the stage all the time at the conferences. i see jw there in the audience. and i wanted to have both of you because you are the powerhouse couple of accounting.
nicole davis 01:06
how are they to that to the audience like liz is like the best supporter you could ever have. whenever i see her in my audience, my whole presentation, just brightens.
liz farr 01:18
thank you, thank you so much. well, i just want the good people to do better. now now, before we get started, can you tell the listeners a little bit about your firm? where you are, what services you offer? what kind of clients and things like that? yes.
nicole davis 01:37
so i would say we are a firm composed of three different separate divisions, we have accounting and tax. we have payroll, and do we also have financial planning. right now we have a team of 14, that’s 11. in house, we have one remote person and then we have two offshore, we saw about 300 plus clients across the payroll accounting and tax and financial planning divisions. let’s see we’re based on covington, which is a really small town in georgia. we just moved into our new office about a week and a half ago. and we primarily serve independent pharmacies, pharmacists, construction companies and service based businesses.
liz farr 02:20
that’s correct. correct. that’s great. now the traditional path to firm ownership usually includes a stint in public accounting. but neither of you followed that pathway can can you tell listeners a little bit about how you got to where you are?
jw davis 02:39
well, for me, i’m not an accountant. so i’m an investment registered investment advisor. so my path it was first i went through corporate america through i was in retail for a few years, before i got into the investments as an agent with a broker. and so i’ve been doing that for about a year now. it will excuse me for going on 12 years, but i’ve been independent myself to having our own firm for about a year. so i’m definitely not an accountant. so i have a different point of view from nicole. so
nicole davis 03:22
i will say i so i’ve never worked in public. so for me, i have no point of reference, i cannot relate to any other means when people are posting about their public experience. i can’t relate to any of the trauma. public accounting. so for me, i think going in, i’ve always had a very optimistic outlook on running the firm. and because i mostly worked in industry mostly worked in corporate accounting, i will say corporate accounting has its own level of trauma, but it it wasn’t what it allowed me to, i guess, build my firm my way. and i will say that when i first started my firm, which is now a public accounting firm, i i tried to imitate other public accounting firms or traditional firm because again, i didn’t know what i didn’t know. and i figured who better to look to then these firms that we’re, we’re doing all the things i want it to do. and then most people realize i feel like that so i pull it back and just reimagine how i wanted my firm to be and that’s why we are, i guess, representative disruptors in the industry, just because we do things differently from most traditional public accounting firms.
liz farr 04:35
yeah, well, that that’s great. you know, you’re not carrying the baggage of how it should be, you know, you weren’t taught like i was my first day on the job. what you sell is your time. and so you’ve got to keep track of your time in the six minute increments. that is what we sell in public accounting. and so the most important thing you can do is track your time. we don’t sell anything else, we just sell our time. so you don’t have that. so instead, you know, it seemed like you, you can focus on the value.
nicole davis 05:18
yes. so, yeah, so for us, i, when we were preparing for this interview, i was giving jw analysis versus because he again, he’s never worked in public. so he that he has no clue what goes on in public accounting. whoa, i was like, it’s more like, well, you have two pictures, right, you have two blank canvases. one is a paint by numbers, where it tells you where to put the colors. and then you have a blank canvas, i consider it like that public accounting, a traditional path to be paint by numbers, it’s very regimen, it’s very structured, they tell you exactly what to do, how to do it, what colors to use, versus the blank canvas, it’s more so hey, you can create whatever you want, use whatever colors you want. paint as be as vividly imaginative as you can. so that’s how the i tried to try to describe the two worlds to jw. and that’s how i describe it to the rest of the world as well. so for me, it’s definitely more so i’m building my firm my way, but we’re still figuring a lot of things that because again, we don’t know what we don’t know, especially from a public accounting world. but the good thing is that we don’t do any assurance services. i think that’s a big part of public accounting, right? but i knew, right? from the beginning, i didn’t want to do any assurance services. and that’s actually why i never went into public accounting, because i did not want to do assurance services, or any audits as part of my career.
liz farr 06:46
well, you know, audit gets a bad name in and i gotta say, my, my experience in audit was mostly negative, and mostly, like, what the heck are we doing here? and what? how does it help anyone in the long run. but, as a freelance writer, i’ve been blessed to work with a couple of people who have a really different viewpoint of art. so i want you to think, you know, audit is not always terrible. mostly it is. but mostly it is. and now the other thing that i find really intriguing is that you’re a small firm instead of a big firm. yes. so can you talk about how that really helps you out? yes.
nicole davis 07:45
so i think being small, smaller firm, we’re a lot more nimble. so that we can use and make changes on the fly, we don’t have to go through any with tape, we don’t have to get a lot of buy in from partners. at the end of the day, i am the decision maker in the firm, like i get advice, if i get buy in from the team leads from the employees from jw. but at the end of the day, i have the authority to make the final decision, you know, based on everyone’s feedback, but i’m always going to do what’s best for the firm. so i think because we’re smaller than that a lot of things that we talk about a lot of bigger firms probably cannot relate to, because they have so many levels of management that is pretty much impossible, almost to really change things. so i thought about okay, so how can these bigger firms, i guess, turn the ship around, per se. so for me, i definitely thinks it starts with getting buy in from the partners at the partner level because employees are ready to change, right? you cannot go into any firm and ask employees do you want to work less hours? no, it’s gonna say yet no one is gonna say no. i want to work less hours, right? so i definitely think it starts with getting that partner mindset and how they had they been doing things to show them a better way to do things and still make the same amount of money, but you’re working a lot less hours. so sometimes you have to stop and part it’s from what i’ve heard at other firms. sometimes you gotta wait them out. sometimes you gotta wait till they die. i hate it’s true.
liz farr 09:20
and it’s so true, though. yeah,
nicole davis 09:24
you just gotta wait it out. but you still can start putting those plans in place. so that you can start turning that ship slowly
jw davis 09:31
correct. and to for the, you know, small we can with software and different things we can kind of pivot and make a change faster than most big companies who you have to you got a lot of training that has to be done for employees and that nature and things like that. so it makes it for us to to move a lot quicker because of the size. but we are growing so we will probably get to that point where we we have a lot of employees and where it takes a little bit more time. but for now we’re, we’re at a point to where we can make changes really fast.
liz farr 10:09
yeah, and the other benefit of small is that you can try out different tools. yes, yeah, really quickly you can do there.
nicole davis 10:20
that is true, we can definitely do a lot more testing and demos before we roll it out on a larger scale to the whole firm.
liz farr 10:27
yeah. and since it’s just nicole making the final decision, then you don’t have to go through the multiple levels of leadership to try and get buy in from somebody.
nicole davis 10:43
right? again, to account like, my team’s like, perspective, their feedback, but it’s gonna be a better decision can be better for them. overall, it’s gonna be better for our clients overall, or is it gonna create more burden? so demo? i wanted to take their their thoughts into consideration. but end of the day, yes, i do. make the final decision on how we move forward.
liz farr 11:09
ya know, another thing that really sets you apart for most firms is that you’re not just business partners, but you are life partners, and parents to five kids, i can’t believe it. now, can you talk a little bit about how you manage that dynamic?
nicole davis 11:29
do you want to take this? i want to say that we just celebrated our 20th wedding anniversary. yeah.
jw davis 11:35
yes, yeah. yeah.
nicole davis 11:40
all time listen to my shenanigans long enough, but a very unique way how we approached no working together and living together now kind of like jw, do you take the lead because i can talk a lot.
jw davis 11:52
so, in that we, we have a dynamic that we it works for us. so at the office, nicole is the boss, she makes the decisions at the office, and at home, but we still even that we we still communicate very well. so we collaborate on things, but in the office, the final decision, she is the ceo, so she makes the decision. and then home, it’s the same thing. we have the roles at home where the nicole try to make a decision at the office, so she like okay, now at this point, we could collaborate and talk about it, but you make the decision at home. so it’s a it’s a separation, and it’s really has helped us, you know, with that balance, and so we kind of it takes as opposed to one person handling and making all the decision, it kind of balances it out. so one person is not making all of his decisions and dealing with all of that because it can get can become a lot if we don’t balance it out. yeah,
nicole davis 12:55
so we try to stay in our lanes. like jw said, i stay in my lane at the office. i’m the ceo, chief hello officer, and then at home, he is the ceo. he wrangles our whole household so
liz farr 13:11
well, i think everybody should have a husband like jw i kind of do in a way i have a husband who does all the cooking and shopping was he was a school teacher for years and now he’s retired so his his days kind of built around what am i going to make for dinner?
nicole davis 13:35
i love that.
jw davis 13:36
i know that
liz farr 13:40
yeah. and now another something you mentioned when you just started was the the kinds of clients that you work with. now you how did that or come up that you just work with independent pharmacies that work?
nicole davis 14:00
right. you know how most people say, well, mike michalowicz, coined the phrase rich, i don’t know if he’s coined it, but he often says there are riches in the niches. so when we started my firm, we really didn’t have a niche. but i had a friend from college. he was a pharmacist, and eventually he started his own pharmacy. and he reached out to me to ask and asked me to do the bookkeeping. at this time, i had no idea how to do accounting for pharmacies. so i had to learn like the nuances of that industry in order to do the accounting accurately. and eventually, his friends started started pharmacies and they refer them to me and then they start referring people to me, so eventually, i just wanted to book a business that were consistent consistent of mostly pharmacies. so yeah, i would say my niche found me versus me going looking for a niche and i think that’s how it happens for most people, your niche sort of find you because you can look at your book of business, you probably can see a common theme or industry that you work with more are there anyone else. and that’s usually how you start niching.
liz farr 15:05
and how does having this particular niche really helped you to provide better value for your clients.
nicole davis 15:15
so i will say pharmacies are a very unique industry in that their margins are really, really tight, because most of their gross profit is eaten up by drug costs. so usually their cost of goods sold is about 80%. so they’re already working with only 20% margins on operating expenses. so for me, it was important to one help them determine how to be more profitable, given that their drug costs were pretty standard and pretty fixed, how they can, how they can realize savings on the drug cost side, because they’re a way for them to bundle packaging, or to use generic or sell more generic drugs to realize more profit, and then also looking at ways like the things they care about. so for us, it was like making sure we were able to deliver on all those things versus other typical industries. so it’s, it’s, it’s allowed us to price more price at a higher price point. but again, it’s a very unique industry, there are not many accountants that do pharmacy accounting, because a lot just to understand all the, i guess all the variables that go into creating a clean set of books for pharmacists, also understand that the software they use, there is where there, there isn’t really any pharmacy management system that talks to any gls. so understanding like how those reports feed into a gl system, or we manually build out an automation that allowed us to pull that data from the pharmacy management system and plug it into qbo, which will use qbo for most of our pharmacy clients so that we could produce a clean set of financials for them. so it’s it has been good to us in that it, it kind of creates a little hole in industry for us to kind of target just those types of clients that we that our ideal clients for one.
jw davis 17:22
absolutely.
liz farr 17:25
it’s still like, yeah, that kind of work, you know, the fact that it is there is this manual kind of process that you had to automate. or you you have to do the brute force method of yes. that that really, that must make you much more valuable.
nicole davis 17:49
yes, i think so. because of the like i said it was, initially we were like, well, we have all this data, there’s no easy way to get it into the gl. and then eventually, you know what, there is a way for us to automate it. so we built this automation out to pull the data, manipulate it, and then have it automatically be sent to the gl.
liz farr 18:12
okay. now, besides tax and accounting, you guys also offer wealth management, and now payroll, because you just bought a payroll company. yes. you know, your payroll is something that most accounting firms say, aha, no, no, no. hell no, get that away from me. yeah. how did how did that come about that you bought a payroll company?
nicole davis 18:44
i will say that was one of those a candidate was like, no, i don’t ever want to do payroll, because sort of a nuisance. i think most accountants look at it. and it’s like one of those things that have to be done. and it has to be done right. and it has a lot of liability attached to it. there are a lot of due dates attached to it. so i just think that most accounting was like, and i’ll just do the bare minimum. and that’s why we have a lot of software companies that do payroll for us, we eventually evolved to the point to where it just makes sense, based on our strategic plan, which goes into why jw started his own ira. and so that was one of the reasons that we invested in a payroll company. because one payroll clients are sticky and also to it was a great way for jw to serve a broader base of clients beyond our current accounting and tax clients. absolutely,
jw davis 19:37
absolutely. so it’s a great segue into everything else that we offer with the payroll clients, you can do accounting with them tax, you can do the investment side setting up the retirement accounts for the the companies who do payroll with you, and in plus we were getting a lot of requests. and so as of was to refer and out someone to, you know, do those services, we said, why not do it in house where we know we could have control over it, we offer the service with excellence, and we know how to handle it, because we had some issues, you know, we refer someone out to, to another adviser or to do at that service, and then they don’t perform, you know, or take care of the client like you would. and so it kind of, you know, leaves a bad taste in the clients name. so we decided, hey, let’s just, you know, make it a part of our plan, going forward, that we would just service the client in every aspect of the financial services industry.
nicole davis 20:42
so accounting and payroll is a very prop has great margins. it does if you have a team that, that that you but a team that is experienced in payroll, and you started getting your book of business and payroll, the margins are phenomenal. and that was another reason i decided to invest in payroll. so,
liz farr 21:02
yes, yes. yeah. and i really, yeah, and i like that idea that it’s all in one house that you have the investment, the retirement plans, and all of that. because, you know, one thing that we always try and advise small businesses to do is the best way to save money and help their employees is set up a retirement plan. yeah, that is one of the number one things we say, you know, and even if it’s a sole proprietor, we say, do you have a solo 401k? well, you should get one. okay, exactly.
nicole davis 21:43
i think so. because they we cannot work all our lives that we have to start thinking about, how are we going to live after we, you know, had a long career and whatever career in whatever field we choose, like, we don’t want to end up and haven’t worked this great career, and at the end, we have nothing to show for it. and we have to go back to work. right?
liz farr 22:04
yeah, that’s right. that’s exactly right. you know, and, and so many people, you know, that’s just, you know, they just don’t have anything. i worked with a bunch of solopreneurs when i was a cpa, and, and they just have nothing. so you know, what is what is your plan? what are you going to do? yeah, so i think that’s, that’s a great way to really serve your clients is to get them thinking about that and to take care of their own employees at the same time.
jw davis 22:43
yeah, in the same process. exactly.
liz farr 22:48
yeah, talent has been a huge challenge for accounting firms for years. you know, we think it’s really bad now. you know, it’s been bad for a long time. just finding the good people. now, it’s just finding enough people.
jw davis 23:07
i know.
liz farr 23:09
but from listening to nicole, speak, i know that you guys have developed a very rigorous hiring method, relying on one of my favorite books, the who method, i love that book. great method, can you can you walk us through how that works? yes. so
nicole davis 23:29
i read the who method, by geoff smarts, who the a method for hiring and pretty much is it gives you a framework to hire the best talent, or hire someone for the right seat in your company. so it’s pretty much four phases of interviews. there’s the screening interview, the who interview, the focus interview, and then the reference interview. so first, it starts with a scorecard. and it’s pretty much an internal document that says, hey, this is the position we’re hiring for it. this is the mission of that position. these are the competencies we’re looking for. these are the outcomes we’re looking for. so no scorecards is saying for any particular job. right. so we start with the scorecard. and then based on the scorecard, every candidate is measured against that scorecard because, again, we’re trying to find the right person for the right seat for a particular job we’re hiring for at the time. so for us, it’s a very lengthy process, and that you’d want to find someone right away like you will literally have to go through every interview step because we made the mistake of not when we first started using the who method. i made the mistake of not doing one of these steps as i outsource one of these steps to a recruiter. and it was the reference step. huge mistake right? because in the end, the employee was not a good fit, and i probably could have saved myself a lot of time and money. if i would have conducted or had someone like jw conduct the referencing to view instead of the recruiter, we trusted the recruiter and republish it. and yeah, so for us, the that method has worked really well. and then from there, we have a very rigorous training program as well. and that every candidate that we that, before we hired, we’d let them know, hey, you have to go through a two week training class, based on their area of focus. it could be accounting, tax, or payroll, then they go through a two week training program. and it’s a learning management system that we licensed from a cpa firm out of florida, that says, hey, if you don’t pass this, this training program, within two weeks, you will no longer have a job. so i just think, oh, enable to being able to like, make sure you find the right person for the right seat. but then we take it one step further to say, hey, we think you’re a great fit for the position for the company. but you still have to go through our training program, because we aren’t necessarily looking for the skilled hire, we’re looking for the hire, that’s going to be a good fit for our company, but also one that’s able to be able to come in with little to no experience like recent college graduates, and then plug them into our training program, see how well they do before we plug them into any client work and that works extremely well for us. so now we focus on hiring recent college grads, interns that work for our company, people that are looking to switch careers that don’t really have a lot of experience in accounting tax, just because our training program has been phenomenal and getting up to speed on what we need them to do.
liz farr 26:31
absolutely. that’s, that’s a really smart approach. i think. i think i’ve heard ed mendlowitz, he’s an old school cpa, he does the same kind of thing. he likes to hire brand new people who don’t know anything who haven’t developed bad habits, and who haven’t decided that their way is the best way to do it.
nicole davis 27:01
yeah, so it does allow us to kind of mold that person into the until a skilled or expert in the company. so
jw davis 27:11
exactly. and it makes it easy, you know, have the untrained someone that they’ve bad habits they’ve learned, we’ve been through that. it’s not it’s not fun. yeah.
nicole davis 27:22
we only started using the using the who method maybe two years ago, maybe two years ago. so like we’ve been in business we’ve been we’ve been in business about almost 10 years now. so let’s just like that just says it took us eight years a lot of failing, trying to determine before we found something that really worked for us, before we gave up the idea that we had to find a skilled person, or a cpa or ea, and realize that the recent college graduates who did well will will do just as well if we properly trained them.
jw davis 27:56
yeah. and with the payroll side, we noticed that bank tellers are great payroll employees are so used to that, you know, system of making sure everything balances, and they’re really detailed because at a bank, you know, you have to balance at the end of the end of the day. so with that skill, that translates into payroll by making sure that payroll is done every time correctly, and on time. and so they are great employees. and so we…
nicole davis 28:30
bookkeepers, they also tell us, are great hires. if you’re looking for a bookkeeper or a person, and you can train them to do the work.
jw davis 28:38
absolutely.
liz farr 28:40
well, this is this is great. i mean, i think it sounds like you’re just bypassing the whole pipeline issue. and the 150 hours that most cpa firms are struggling with it, they can’t find people.
nicole davis 28:58
we are creating our own pipeline in a way. so if they’re like what we had one employee, she had worked in ap most of her career, she wanted to transition to accounting, she wanted to get her cpa license. so we pretty much hired her like she had little to no experience in bookkeeping, other than she was the ap specialist. and we pretty much are pretty much trained with her one on one because she was like one of my first hires as an accountant, you know, she worked extremely well. and eventually she she worked for us about two and a half years, she sat for a cpa exam, she got licensed and i signed off. so in some ways you have my motto is make it happen. like i’m not gonna sit and wait for things to happen. i’m gonna make it happen. so in a way we are creating our own pipeline. we are making a pipeline for our firm, especially by not relying on whatever everyone else is doing. exactly.
liz farr 29:50
yeah, you know, you’re not you’re not going to the college career fairs and trying to compete with the big four the big reach no firms?
nicole davis 30:02
no, that’s the thing. we can’t compete with them. so for us, it’s all about, okay, how can we make our firms attractive as possible, knowing we cannot compete with a bid for other regional firms. so first, it starts with a decent base salary, like you have to make sure your salary at least competitive doesn’t have to be as high as the big four. but then get creative on everything else with the compensation package. so for us, it’s all about the culture, it’s all about what making their lives one that that is that they enjoy, right versus no, always complaining that, like, we don’t want an employee, they wake up in the morning and be like, hey, i gotta go to work again, like, that’s a problem for me. but we want to make sure that they’re happy to come to work that they enjoy working with us and the clients. so i think most firms that if you’re looking for to pretend like you definitely got to get creative with your compensation package to to attract what you’re looking for. yeah.
liz farr 30:59
yeah, and it’s not always about more dollars. but, yes, it can also be about, you know, you’re not going to be working a million hours.
jw davis 31:11
three really big things we focus on was work life balance. so that’s really attractive, specially now to the employees that are coming out of college coming out of high school. they, they their lifestyle is very important to them. so they’ll forego money, just to have a better work-life balance.
nicole davis 31:33
so or like harmony, more flexibility. so that is something we definitely focus on in our firm making sure that no one works more than 40 hours a week, unless it’s according according to our assumptions, because we just have a lot to do at the end of each quarter. but that’s not our culture. like, i always say that if your culture is one of stress, and long hours, then you really need to rethink your business model. versus there are times where things will be hectic, there will be some stress, but that shouldn’t be the norm.
liz farr 32:05
right? that’s, that’s perfect. you know, i wish i would have come to work for you guys. my first year out of out of school, you know, i came to accounting kind of late in life. i was about 40 when i got my first public accounting job. and i remember that first tax season, one of the managers would ask me how i was doing every morning. and i remember, for weeks on end, my answer was always i’m tired. oh, and she just kind of go, yeah. oh, no. yeah. and that’s that, you know, when when you have that kind of a culture, there is just something wrong. yeah. but that was just the way it was. yeah. yeah. yeah. and now i’ve also heard nicole, talk about your process for accepting and onboarding clients. what is that like? first start with the, let’s start with the accepting, because that’s kind of important.
nicole davis 33:25
because before you onboard, you got to figure out if you even want to work withwant to work with the client. so everyone in my opposite in my office knows i have a very, very low patience. clearly, i have certain red flags here, the yellow flags that i look for are on discovery calls for clients. this was when i was doing a discovery calls, and i even let our new business development associate know like, these are the yellow red flags to look for, if they if they display any of these immediate look, no, you’re not a good fit for us, right? because again, we want to work with those clients that bring us joy. so if a fit over your shoulder, not gonna be a client of ours, so our acceptance, we start with a b fit form. it’s, it’s like an application that we gather basic information about the client, we it allows us to let it lets us know if they can invest in our services. because again, if you can’t invest the minimum that we offer, then you’re not going to be a good fit for us. also, we actually talked about this today, my business associate. so there was a client that a prospect that she’s been nurturing over the last few weeks, however, the client has not completed the b fit form. and we’ve asked her to complete it. and they want she told me that so you know what, that’s the yellow flag. so that tells us when we start when she becomes a client, and we start asking for information from her that she’s going to drag her feet providing it that’s not a client we want in our firm. so that’s one of the ways we weed out those non ideal clients. once they become a client, and once they sign the engagement letter, and once we collect their payment information, then we take them through a six to eight week onboarding process. and it’s all tracked in our practice management software, to where we, and the client can see where they are, as we onboard them over the next six to eight weeks. so we start with a kickoff call, we have a welcome package that goes out one through email and also went through the physical mail, we also have a status where we’re doing the internal setup, where we have a setting status, where we do the training with the client, if there’s any cleaning work, cleanup work, there’s also a period of time that we do that. so again, it’s very robust to make sure that nothing falls through the cracks as far as onboarding when we bring on new clients, because we did have issues to where we find a new client, but he fell through the cracks. and that is not something that we want to be known for. so we put more processes in place. we built a formal onboarding system, so that things like that don’t happen.
liz farr 36:11
yeah, that is so important. you know, there were so many clients that i worked with that, you know, we really probably did need some kind of process, some kind of screening around, where are we going to accept them? are we going to keep going with them?
jw davis 36:29
yeah, exactly.
nicole davis 36:31
yeah, even when they keep going? we do. we’d have a client analysis we do twice a year. now, my way is the marie kondo way, what if i think my client don’t spark joy, like they usually are gonna get released from my firm, right. but we also have a more formal system when we write clients. and we also give our team the freedom to tell us if they don’t like working with a particular client. so if they come to us that, hey, this has been a very difficult client, or this client said this, this this, usually, most of the time that client gets released, right? because, again, we want to make sure that our team members are happy, and that they are working with clients that bring them joy. absolutely.
jw davis 37:13
yeah. we had to do that the beginning of the payroll company.
nicole davis 37:18
yeah. a few payroll clients.
jw davis 37:23
because they were very disrespectful with an employee, so yeah, we yeah. yeah.
liz farr 37:30
i mean, talent is so important that you really can’t sacrifice your team members for dollar buddy who yeah, no, you cannot. you just cannot. cannot. yeah, no. now now counting firms, they usually know the kinds of things that they need to change. but they don’t always know what, how to do that. now, what is one thing that you stopped doing that made a difference?
nicole davis 38:16
for me, i stopped having my calendar open daily for client meet. because i’ve noticed that when i had my, my, when i had everyday open, there will be contact schedule on monday, one here, one on tuesday, here and there one on wednesday. so for me, it was all it was about, okay, how can i help the client means ensure that they’re getting some facetime with me, but also make sure that i have the time i need to work on the business, what are a lot of task switching? because i’m not sure if most people listening to this podcast know, but task switching. there’s a study that shows that task switching reduces your productivity, right. so if you’re working on something, you’re in deep work, you’re in deep focus, and then all of a sudden, you got to stop to have a client meeting like that, that it takes the time to go back from the client meeting back to what you were doing. so that’s task switching. so for me, i was like, how do i cut down on that, but it’s still ensure that i provide time to meet my clients. so now i meet the clients tuesdays and thursdays. if they can’t find the time that week, then i gotta go into the next week to find time on tuesdays and thursdays and that gave me so much time back. so now i’m able to work more on the business and not just and it’s um i focused my days time block so that again, i’m not meeting with clients every day of the week. also, too i’m not a big talker when i said i was early but i’m really drinks me some time, but i was telling like, i want to be the chief hello officer, but that means i don’t want to also do the work so i got to pick one. i’m gonna do the work. do less talking, oh, i can talk with clients all day and not have to actually do the work.
jw davis 40:07
yeah, also, i think too liz, that thing that we had to stop doing, you know, i was getting that nicole about, you know, relinquishing over the work. so having her to wear because she’s so busy, and she becomes the bottleneck when we let go the work. so luckily, i have, i have worked hard to get her to where she will now let the team leads, download the work and just stop, you know, you know, getting just that release of that work. so, so it frees her up to be high level he can get there and let them handle everything else. so yeah, just stop trying to do everything and just free up to sell we can have the team in, depend on them, and expect them to do well. you know what we know they can do? so yeah, just stop trying to do everything.
liz farr 41:06
that’s, that’s super wise. yeah. and i want to go back for a second about the task switching part. yeah, and encourage for homeowners to look at what their team members are doing to one of my former co workers after i left, the firm where i was, she was getting pulled literally in 1000 directions. though, one day for one hour, she kept a tally of how many times she was interrupted in that one hour. and it was 22 times in one hour. and she said that was kind of typical. but there just wasn’t anything she could do about it. oh, wow. and so you know, she didn’t last there very long.
nicole davis 42:01
i bet that is crazy. we do that what our team has been on our payroll team, because when we bought the payroll company, they pretty much still stuck in the 1990s, very paper focus a lot of manual processes, they really didn’t rely on a software as much as they should have. so for us, it was like, okay, we changed a lot of processes with them so that there wasn’t so much task switching between the payroll specialist and the duties that they were assigned. and that has helped tremendously. it’s all it was all about improving the processes and give them more time back. and because we made those changes, things got a lot better.
liz farr 42:39
yeah, absolutely. yeah. that’s, that that sounds like a winner all around for you all. now, now, accounting firm leaders often make mistakes, you know, that’s how we learn, you know, no, no kid learns to walk, nobody walks perfectly the first time you got to fall down a few times before you walk perfectly. so what is the most valuable mistake you made? valuable in terms of the best lessons? the most money you what ever it was? what’s the most valuable mistake for you while
nicole davis 43:21
i’ll let you go first j.
jw davis 43:26
ah, so i think for us, one of the things that i think that costs us a lot, especially with employees was kind of maybe like moving them around so mistaken that if we move them to another position or something like that, that they would work out. and so we come to find out that that doesn’t, that doesn’t work. nine times out of 10 if they can’t get the position in the position that they’re in and probably not going to work out. and i think we, you know, that kind of thinking you can move someone to a different position or at times create a position for them. just to even think that hey, maybe that will motivate them to to do what they need to do or to get better at the tasks you assign them. but yeah, if that doesn’t work, it does not work at all. no.
nicole davis 44:25
so for me, mistakes. i will say i made so many mistakes, liz, mainly because of because i have no experience running an accounting firm running a public accounting firm. so oh, i’m a very bad mistake. i did learn like i said this one probably was covering my butt as far as working with partners in different businesses. so that was a situation oh, um, several years ago, before covid, where two partners got until they get into a fight, right. and i was sort of the middleman not have permission from each partner to work on each of their behalf. but when they start fighting, i’m thinking that i could still competently work on each of their behalves without, without any consequence. oh, that was a big mistake i made right making that assumption. and it cost a lot of time, it costs a cost me attorneys, just to kind of free myself of that little debacle that they had going on. so for me, it was definitely making sure you cover your butt, you dot all your i’s, cross all your t’s, you know, and just set expectations with each with whoever you’re working with. so that if you’re not if you have two partners, and they start fighting, like have a frank conversation, hey, i can’t work with both of you anymore. like i got to only serve one or neither one of you. right? just to keep yourself out of the middle of all that’s going on between them.
liz farr 46:07
yeah, you know, you never really want to have to take sides, but sometimes you got to, you know, i had experiences with divorcing couples. very similar. yeah. yeah. yeah. you know, there was the crazy soon to be ex wife who somehow got my direct phone number. oh, no. yeah, no, no. so that number up on caller id is like, oh, oh, no. voicemail? no, no, i am not picking that one up, because i knew i’d be on the phone with her for 90 minutes. oh, wow.
nicole davis 46:56
right. yeah,
liz farr 46:57
that was a lot of lot of grievances. and, you know, you know, and, and the sad thing was, she told me stuff about the business that we probably should have known earlier. so that was also kind of a big red flag there. now, now, to wrap up, this has been a great conversation with you, too. what other advice do you have for firm owners, firm leaders who want to create a better experience in accounting?
nicole davis 47:43
i would say think about how you want to be treated as a client or an employee of your firm. and then ask yourself, would you hire you? would you employ you and your own firm and then why or why not. and if those why nots are more than you’re wise, is probably that you probably need to reevaluate how you operate. so i want to leave by saying, hey, change your firm model, change your life. and that’s what i think most firm owners partners need to keep in mind, if they’re looking to make it a barrier, a better experience for everyone involved.
jw davis 48:21
yeah, and i can piggyback off of that, because me as not being an accountant. so i will tell the firm or is to just kind of take a step outside of your business and in looking and just like, you know, nicole said, looking from someone else’s point of view, and, and see, or get someone else’s point of view outside to take a look at your firm and kind of get tell you what they think. and so that way, you don’t get the normal, someone who’s not an accountant, someone who is, you know, in a different industry, that can, you know, take a look at what you’re doing and kind of give you insight because it helps to have someone who’s outside an industry look into your business, because sometimes we get limited to you know, what the norm is in a business, but from someone who, you know, hasn’t been in accounting, so i really don’t know whether it will work or not. so we’ll just try it anyway. let’s just try it and see if it works. because because i don’t know whether it should or shouldn’t so, so i have a different perspective on that. so yeah, i would just tell you know, accounting firms to do that, you know, have someone who’s not in the industry look at their business or give them their opinion on what they’re doing. just to see if it you know, it meets standards or if they’re taking care of the clients and you know, if their employees just any aspect of it, just have someone outside looking that’s not associated with it.
liz farr 49:47
that’s that’s really, really good advice, because i think that accountants tend to forget that we are business owners ours fell. yeah, where, and there are a lot of accountants that run their firm is just kind of this little silo. i serve my clients. i’ve got my little team that does the client work, but i’m just serving the clients. i’m just kind of doing the thing. and they’re not looking at this as the whole business. right.
nicole davis 50:26
100% agree with that. yes. it’s because we’re trying to be technicians, right? because we’re trying to be the technician. that’s our default. so i think when most firm owners realize that you are more than just a technician, now you’re entrepreneur right now you’re a business owner. so definitely start treating your farm accordingly.
liz farr 50:51
absolutely. i think that’s a perfect note to wrap things up on. i’m just so delighted to have been able to spend the last last hour talking to j w and nicole, two of my favorite people in accounting. thank you so much. now, if listeners want to connect with you, where’s the best place to find you?
nicole davis 51:18
so you can catch me and he’s so some social media streaks. that’s why i usually hang out. i am mostly on twitter. my handle is like mom’s cpa. 100
liz farr 51:28
and jw?
jw davis 51:31
yeah, i am mostly on linkedin. so oh, and i had i thought i had my information to post. i don’t know. so i’ll have to get that to live. so you can post that. but yeah, that’s where you can find me and it’s on linkedin.
liz farr 51:51
perfect, perfect. and i want to just thank you again so much, and i hope that you too. have a wonderful day and wish you another happy 20 years together.