Welcome to the Escaping Accountants Trap podcast. It's a podcast to help accountants, CPAs and bookkeepers escape what we call the accountants trap. It's where accountants are now, getting paid for their value and are forced to work long hours with high demand clients with little pay. Well, how do you escape the trap? One way is the topic of today's episode, and that's why helping accountants solve their talent challenges by hiring US based remote accountants to help move the discussion.

I've invited Jeff Phillips, the co-founder of Accounting Fly, to this podcast. Jeff, welcome to the show. Hey, Adam, it's awesome to be with you. And your audience is going to be a lot of fun. Thanks for having me. Yeah. This is I think this is an important topic to our listeners, because a lot of accountants feel like they are the business.

Without them, the business just doesn't run. And so they would love help. But they would love help that they can trust. So I guess talk to us a little bit about why you started accounting Fly and what it really solves for accountants. Well, I, I think I think the headline is that I hear this phrase and I guarantee you hear it too.

I'm the bottleneck. You ever hear that? Yes, all the time. And and I think I think, what makes accountants so great at serving their clients is also the same. The same things that make them, struggle at delegating and building teams and and managing and hiring and sort of just making that happen. So they do become the bottleneck.

We started accounting fly 11 years ago to be a resource for accounting firms to be able to hire accountants very easily. And through a long and winding process, over the first 4 or 5 years we were in business, we ultimately decided our mission was we wanted to solve the talent crisis for accounting. That was how we got into business.

But we learned so much along the way, like you always do when you start a business. And one of the things that became very clear to us was that accounting firms were not going to be able to predictably and reliably hire people in their market. And this is like in 2015. This is pre Covid 19 pandemic. And so we found that two interesting things were happening.

Firms could predictably and reliably hire talent if they stopped caring where the talent worked. And the talent was increasingly desiring flexible work arrangements. You know, I work from remote and work from home and work remotely. So accounting for I existed to match those two people together that the job seeker who wants a remote job, and the firm who's ready to hire a full time or a contractor, remotely.

And so, that was, you know, we've been in business for 11 years. I mean, last last week we got 1400 applications for just remote accounting, full time jobs. You know, we I always tell you we've learned a lot through trial and error, but we're hiring hundreds of people a year. And so learn from our mistakes so that we can help you make a good hire the next time.

Yeah. And that sort of leads to my next question in terms of how does it how does the accountant or bookkeeper who own a practice know the type of person they should be hiring? You know, I, I have to paint in broad strokes because if I was talking to one particular person, we we might be able to answer a lot of questions.

But I think it starts with, it starts with thinking about an intentional strategy, about who it is that you need. I mean, I think you probably know, oh, I need a tax person. Oh, I need a cash person. I need somebody who's got some experience as a controller. Like, you know what the pain point is in your firm?

So what are you willing to delegate and let go of and, so that you can scale your firm? Then I would be thinking about like, okay, what's my what are my options for hiring locally? What is my strategy? Where do I need to hire somebody who lives in the office with me or works in my city? What could I possibly hire remotely in the US, whether it's full time or maybe it's I bring in a contractor to help me just work a tax season, and I and I had that person remotely.

And then there's other options like when, when would it be appropriate to hire offshore. And there's a lot of economic benefits to going offshore. There's some really good vendors out there. We don't do that. But but I know that games so you know, start with the start with a position and then think about very intentionally and carefully what your strategy should be about local versus remote versus offshore.

And then and I think if I can add one more thing, Adam, it's like there's a mindset shift before you really were ready to do this, you've got to be willing to let go of some of the work that you're probably doing as an owner and be ready to delegate that to somebody else. And if you've never done that before, it's hard.

And, it's actually it's always hard. So so you got to let go a little bit and build become the person that's building the system, that's delivering the services and, and products, rather than being the person that is the service for your clients. And so that mindset shift has to change. Yeah, I, I agree with you. So let's let's just go through an example of account that, that you've helped connect our remote employees with.

What was the accountant doing that they now were able to take off their plate and delegate to somebody else? Oh, that's that's an awesome question. So, I'll preface it by saying, in every situation, we always overestimate how quickly we're going to be able to just delegate and let go of everything. And it's a slow process. So what I always say, it's almost a warning.

You're going to have to invest a little bit more at the beginning, and then you will be able to let go and let the new hire do the work. So, I, I think about an, an owner of, of, of a firm in Ohio that we helped not, about a year ago. And that owner, was essentially running a $1.5 million tax and accounting practice.

And, he was doing all of the tax review himself. I mean, there's hundreds and hundreds of returns. Not he hired a recruitment agency locally in Ohio to try to fill a tax manager role. Man, he was he was looking for 18 months. And the local search firm could not find anybody. No big surprise there. And so he was able to hire a remote tax manager, CPA who had been running a tax practice at a fully remote firm.

And that person was on the other side of the country. I think they were in, in new Jersey. So it was it was challenging because the owner of the firm is it was a it was a it was a, you know, detail oriented high performer who wanted to get things right, you know, so it was tough in that off period.

But over time he was able to let go of, you know, hundreds of hours of work during the busy season, the busy seasons, and then, and hand off a lot of the just that managing of the tax program to this manager. So now what the owner is getting involved in is more tax planning, more tax strategy and going upstream with his clients, getting more revenue per client.

And and and it's it's a happy ending. It's it's hard at first but and it's messy but it he's very happy with the result now. Yeah I mean it sounds like in this example he was able to delegate a lot of the lower, lower value work and he was able to then take on a higher value, higher paying.

Yeah, higher value client client work in a critical part of his firm. I mean, it's it generates 6,070% of his revenue. But, he was able to delegate that critical piece, but he freed him to work on something that was very important to the firm. Like that hadn't been built yet, building out a new product. And it's all about how can you generate more revenue per client.

I feel like part of the accountant trap is we're getting too little revenue per client, and that that does trap us in overwork. And, so we try to flip that. Yeah, absolutely. Hey there. Adam here from the Escaping the Accountants Trap podcast. I'd like to personally invite you to a free masterclass that we're conducting this Thursday called How to Start a CFO service.

To register, just go to the CFO project. Com and click Free Training at the top. See you then. You brought up a good point that earlier you know, increasingly accountants or people that want to work in the accounting industry, that want a job, they love to work remotely especially, you know, since Covid is, you know, a lot of people want to work from home.

But I'm assuming that there's a lot of accountants who want to hire and they're hesitant about hiring remote. What would you say to those that they're just hesitant about? They just for years and years, they've always had somebody sitting at the desk next to them or in their office. How do you help them overcome the quality of the service and the service delivery and managing somebody's remote?

I think you have to start with the, the the highest trends that we have. We it is so incredibly difficult and challenging to make a higher in your market that you're now essentially sacrificing quality to, to be able to hire where you live. So if you're in Tulsa, there's like there's 560 CPAs in Tulsa, if you're hiring for a CPA and making that number up.

I'm just trying to give an example here. So they're all employed. We are at almost 0% unemployment for accounting and auditors. Wow. That means everyone has a job. And so in order to in order to get someone to move from one employer to you as an employer, it isn't as simple as just posting a job on Monster.com and and.

Oh, yeah, sure, I'll apply. We've got to do something drastically different because your pool is much smaller. You're in Tulsa, your pool is very, very small. Small. And how are you really differentiating so much? Are you are you going to offer 50% more pay? Yeah. Are you going to offer 50%? Is greater flexibility? Probably not. So it's we're they looking at you.

They're looking at you as a commodity. Now zoom out and pretend that you're your candidate. Opportunity is the United States. So now we have a candidate population of 670,000 CPAs who increasingly are demanding work from home opportunities. And even saying that they will they will leave their job if they're required to work in the office full time because because the cat's out of the bag, so to speak.

We're not going back into that traditional office environment, and we need to talk about how to make this work. But I guess my point is you don't really have a choice here that that this this labor trend has happened. You've got to go with it rather than swim upstream against it. It is in your best interest to do it, and the data is is clear to us.

I mean, it's a wider candidate policy can find the best available candidate for the position. You're filling jobs in 40 days as opposed to two years. I think we can agree that is a win. And you're giving candidates a, what they value most, what they value most in this profession is the ability to have flexibility and work life balance.

And it is out of balance. I'm not saying the office is wrong. The office is going to go away. Keep your office. If you can hire somebody in your market, hire them. But you got to think long term about the hiring strategy of your firm and understand that if you do get lucky in Tulsa the next time, you won't be lucky in the remote.

Has to be a part of the strategy. Has to. Yeah, that that makes sense. What are some what are some tips for managing a remote employees to get the most out of them? Yeah, it's it's hard at first. Yeah. Because there's, there's two main concerns. One is I can't see you. I don't know if you're working, and the other is you're not in my office.

And so how could I possibly have culture if if you're not in my office? Those are the two biggest pieces of pushback I get. You know, there are there are probably now hundreds of accounting firms that are fully remote, and they're so fun to watch them be entrepreneurial and experiment their way into success here with people. So, you know.

Sorry, I know we're editing this, but I just had an alert go off. Sorry for, I got a I got a silence that I thought I saw everything. I'm so sorry I turned. I do not disturb. Okay. Won't happen again. We can just jump back right into it because. So I, I'd start out where there's, there's two there's two issues here.

So I think it starts with one understanding that this next hire that's going to be remote, it's going to be totally different experience for you. And you're going to have to be uncomfortable. We have a saying ready, fire, aim. Yeah. You gonna have to get into this. But you've got to have the technology. You've got to have a let's say if you're if you're doing tax returns, you've got to have an ability to log in remotely to your tax software, to your accounting software, you know, it's best to do a lot of those on the market today.

A lot of them are the great right. And absolutely and good chat products teams. Slack, you and I are chatting over, over a video chat product. But, you know, we like zoom. We like teams. Yeah. So just get these basics. But what I would the best, the best firms that we see have this, this kind of nice combination of on of, in-person and remote, air travel is not very expensive right now.

And if you have remote employees, but you have an office, fly them in, for training, then then flying once a month, then after three months, move it about once a quarter. And then, you know, they're getting together, their mentor or the owner or their team, and they're this this kind of answers, this second question that I propose, like, how do you extend culture, how you meet weekly online, how you have one on ones, which is on zoom, how you do team meetings.

None of that changes because someone's in another city. So have a system of getting them in front of their team periodically on, in person and have recurring meetings on video. As far as quality of work, that's going to require a change of mindset too, but I think it's for the best part of letting go. And and I think escaping the trap is trusting other people to do their best work.

You know, you don't just let it all go and hope for the best. Yeah, this is what a great project management software can can help you run a firm with remote talent. There are products out there that help you understand that the work is getting done. We care about the results. You know, I know a firm, that we hire for it is it is 100% female owned and employed, and they, every single one in this firm is mom and they have just thrown the rulebook out the window.

There are no rules around when we work. It's fully remote, 100%. The expectations are we get our work done, we're available for team meetings and client meetings as needed. And then I don't care because you have a sick kid, you got to go home. Fine. We'll cover for you. You know, you got to handle something at the house.

We cover for you, and we're not asking questions. You don't have to put it on the calendar. We don't have. We're trusting you to get the work done. And by the way, I mean, like, if you if you really didn't trust somebody that's sitting next to you in an office to get the work done, I question your judgment of hiring that person in the first place.

Yeah, that's true. You. So you can have effectiveness. In fact, I think the nature of the accounting work, once someone's trained the nature of accounting work is it's best done remotely because it requires long periods of uninterrupted work where, where, where, you know, that's not happening in an office anymore. That's happening in a private office in your home.

How about the, the female owned accounting firm? I bet their retention rate is nearing 100 through the roof. And in a time. So the actual retention rate of firms under 25 million in revenue is about 20%. And I said retention. What I meant to say is the turnover rate of funds is about 20%. Okay. So that means every year a firm with under $25 million in revenue is losing 20% of its accounting staff.

That's a lie. During a time when when finding qualified talent is that is the top three issues of firms in that size range. So you've got to and and we're all growing at them. I mean like the whole industry seems to be growing. Demand is through the roof for our profession. So you've got to deal with the back hiring of the 20% that you lost, plus the the gap you need to grow your firm and prevent overwhelm the staff that you have so I would be doing everything I possibly could to keep people and and have a clean strategy around that.

Yeah. Make sense? I was reminded me of an article. This conversation reminds me an article I read a couple of weeks ago that said a lot of people that have returned to office, then actual physical office since the pandemic, they find themselves still having pretty much all their meetings online, on zoom or and chatting with their coworkers who are just in the office next door because it's just there physically there doesn't mean that they still don't need on, you know, on zoom and whatnot.

That's interesting that that that has changed the game, hasn't it? I would I would personally prefer to go to an office every day. I, I do I my whole company is remote, but I rent an office in downtown Pensacola where I live because I like I, I want to be in an office. I would prefer, I think being in the office with your colleagues is better than not being in the car, being around colleagues.

However, that it's the answer to your first question is it's it's the toothpaste is out of the tube like because remote work exists and employers are hiring remote, it means that it's like, you can't change that fact so that you have to go with it because you're competing against that. And people can choose that remote opportunity every time the pay rates the same.

Yeah, the flexibility is better. So you're going to have to adapt to this. And it's so easy. Yeah. Makes sense. Let me ask you this Jeff. When you started accounting slide you started helping accounting firms connect. Connect them with remote workers. What is something that, that your, your program did for a client that you just didn't expect?

I actually have something that's that's a it's a question I wasn't prepared for. And and yet there's something on my mind that I, I love. So we were working with a firm in San Francisco who, I love this firm. They've since been acquired. But around 2019, we had made some hires for them in San Francisco, and they were short a tax manager.

And I'm not an accountant. I don't know if I told you that, but I came up through sales. I worked at Monster.com, so I understand, like the hiring world and and I was getting to know the client and understanding the pain that was felt inside this firm as they could not place this tax manager role. So now I understand the pain it was causing for the partners who were playing the role of the manager and the people and the associates and the staff or whoever, and the other, managers who were sort of covering for this role.

So because the manager was not in the, in the, in the chain of command, it was crazy for everyone involved. And this position was open at this downtown San Francisco firm for two years. Wow. This is a $30 million firm. So think about all the chaos that cause they're competing against this. The Silicon Valley hires, you know, at at corporate, they're not going to get this person in San Francisco.

Yeah. Two years I'm just trying to convince this owner and the partner to, give it a shot and hire him at person. And I remember calling it it was in January, right, for tax season. And he said, all right, we want to try it. Our team accounting for I hired a tax manager for this guy in about 18 days.

Wow. But here's the thing. The person we hired was in Philadelphia. So literally on the other side of the continent, and even I was like, oh, I don't know if this this may not work. This this feels wrong. What what how is this person gonna do business development? How is he gonna be a partner? Is it gonna be an on partner track?

Can he really serve these clients and that person to becoming a partner at that firm? And has been there for years now, and it was such a problem. Solve for them. It opened their eyes to remote work. They actually end up exiting. And I think part of the value their exit was because they embraced remote work and could reliably hire people.

And like, did it cause pain inside their firm and the owners? Absolutely. It caused pain to have to rework some systems to allow for a tax manager in Philadelphia. But it was such a success story. It actually, at the time for our business, we were really figuring out our identity. You know, you don't. It takes a lot of courage to make it, to take a stand.

Like we're only going to hire remote people. But we did make that move that year, and that hire was part of the reason why because I was like, I just want to be in this field. I don't want accounting for it to be Robert Half and Phil Jobs in all these markets. I want to hire. I want to find remote jobs for firms and just focus on that.

And so it was a fun it was a fun win for everybody. Yeah. Sounds like it. That's awesome. Well, Jeff, if somebody listening is wants to check out accounting fi what do they go hopefully you'll visit accounting fly.com. And you can book a meeting with our, our head of, have new accounts. Liz Branch, she's our CFO.

Okay. And, you can learn more about our services there. We do full time, and we do contract. And we always tell a client if it's not going to work or not before you. We're not taking anyone's money. If we can't make a hire, it's why we have, like, a 90% placement success rate over the past three years.

Because we will say no, sometimes you can't make the hire, but we have a pretty good feel for it. So check, check out, accounting fi there. And I'm on Twitter at Jeff Phillips underscore the little the little, the one that goes below, that's the underscore. That's my name. And I'm on LinkedIn, too. Awesome. Well, Jeff, thank you so much for being here today, Adam.

Thank you. Man, I love what you're doing I appreciate you. Yeah. Thank you to everyone listening or watching. Thank you so much for spending the last few minutes with us as we discussed how to escape the accountants strategy. Bye for now.