Welcome to the Escaping the 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 not getting paid for their value and are forced to work long hours with high, demanding clients with little pay. Well, how do you escape the trap? In one way is the topic of today's episode, and that's by creating five star client experiences that keep clients coming back to help you with the discussion.

I've invited Chris Farrow, the CEO of SEO and Accounting Software. Chris, welcome to the show. Adam, great to be here. Thanks for having me on. Yeah, I'm excited for this conversation, because you were an accountant who advanced to the rank of CFO, and now you started a software helping accountants. So tell us about how you sort of went from full circle there.

Well, I'm clearly I'm in the accountants trap. Right. I was starting out accounting. Accounting major, you know, got out of public accounting, got out of industry, still making software for accountants. So it's a profession I very much know and love, but, Yeah, it's, it's a passion project. Really. So. Oh, sorry. Where did you start? Just to.

Just to make sure. Where did you start your accounting Arthur Andersen journey. So Wayback machine. Right? 1993, mainline audit. And, you know, a lot of great clients. But we were always, really kind of out in the field with them, and we were spending a ton of time administratively just getting documents. Okay. So, I guess this is sort of a leading question, but why did you not enjoy that as much?

Why did you feel like you were in essentially this accountant trap? Sure. So it's funny, I when I graduated from accounting with my accounting degree, when an industry, the one thing professors never told us right out of your experience is any different. But they said if you go into public accounting, you're not going to do a whole lot of accounting, right?

You're going to do a lot of standing by the copier, a lot of, you know, running out to get things from clients, staying on top of them all, that kind of thing. Yeah. And the first couple of years, we do a couple of things like, you know, reconcile and make sure the reconciliations are right and that kind of thing.

But you're not going to do a whole ton of accounting until you're three, right? And so it was one of those deals where I think when we when you start there, everybody puts in their time, does a big grind. You know, for a big future payoff at some point ten years down the road. So I left the industry, as most people do within a couple of years.

And I say, I mean, people are leaving the accounting profession at a, at a alarming rate. I mean, I've read just last week this giant article on, I can't remember where it was. Why do you think that is? Oh, Bureau labor statistics. Right. Said 1 in 5 accountants. Changed jobs in the last two years. Really? 20% turnover in the last two years.

Wow. And I think, you know, it's a pretty strong signal, right? The profession, the AICPA has been warning about this for years. Far fewer people are coming into the profession in the first place. And many more, particularly at the mid-level, are leaving in droves. And people have choices, people that people have a lot more choice today. I think the labor market is much more fluid.

There's high demand in industry. Yeah, and public accounting is having a harder time holding on to really great talent. So we just had to pay attention to, you know, kind of really what do people are doing to vote with their feet? And I think it's happening because, you know, as you and I were talking about before the program, we tend to do things the same way we did in the last year.

Yeah. You know, and I think a lot of people are, you know, business owners, etc., we're, we're used to grinding. We're used to giving it our all. We're used to putting it all on the table for our clients huge hours, huge efforts, etc.. Yeah, but people, not everybody's going to want that. And I think we're seeing more and more of that today than ever.

Yeah, I agree, I agree. I mean, I, I left the accounting profession just because I thought it was not exciting. I thought the, the actual job of recording the past to me was just which is boring. I wanted to have a bigger impact on the business. And that's that essentially is what got me into doing CFO work. But how did you get in transition from from where you were at Arthur Andersen to becoming a CFO of a company?

I so that's what I loved about public accounting was the fact we get close to the business, right? We have a chance to go out there and work with a lot of super great people. Yeah, and get a chance to understand their businesses. We get a chance to see a lot of different patterns. It's like we're managing a portfolio of businesses to a certain extent from a financial perspective.

Yeah. Which is, you know, that broad industry base, allows us to add a lot more value. So, I spent a few years there, and I had an opportunity to go join a semiconductor company that was doing extraordinarily well. So just take a look across, you know, a hundred different firms and say, wow, this company wants to hire me.

It looks like they're going to do really well. I went over there, ended up being a divisional controller and then their global corporate controller and I left as interim CFO. It was a great company. Did super well, but I think it was the idea that because I was an accountant, because I was able to see so many different companies, you could kind of pick which one you want to really be involved with and pour yourself into.

Yeah. And I found that. And when in industry, what would you say the biggest differences were between your experience as an accountant versus your experience as the CFO? CFO is operational, right. The thing about, you know, being a corporate controller, it was you get really a great perspective on everything historical, but you spend far less time looking ahead.

And so at the time, out of interactions with a lot of the other people in the business, a lot of other, you know, divisional heads, etc. but comparatively speaking, the CFO gets all the fun stuff, right? Because people want to talk about the future. I don't think people want to see anything close. 2023 how many of us want to go litigate 23 again, versus how many of us have made plans for 24 and said, let's go, this is what I want to do.

It's probably 99 one right now, 89% forward looking. The CFO job is just that, right. And that's where the value is. That's where business owners see it. That's where CEOs see it. Everybody's looking saying, what can I do better now? And that forward looking lens is insane. Only more valuable than the I'm going to go take a look at last year's numbers and break those down again.

Right. So really hard to get some attention on that. So CFO forward looking controller obviously a little more historical. So huge, huge difference in terms of what we focus on, the operational insights and expertise needed and so forth. So big, big step up. I 100% agree with you, and I think I'm glad you brought that up, because, you know, when as a CFO to small and medium sized businesses, which is essentially what we focus on, the business owners would rather you focus on the future because that's where their head is.

Then just being the person that talks about the past, they want to grow their business and they would love for they're the finance person in their life to help them figure out a better future. They love talking about that 100%. I wish I had had a better accountant when I went, here's a here's a crazy story. So my last company built it and we had an exit and I sold the business and started this one.

So when I sold the last business, I didn't have a great accountant. And the accountant I had was focused on on the historicals. Yeah. And what happened was when I sold the business, there was a bunch of tax deductions I could have qualified for, qualified small business stock, etc., which would have made a massive difference on, you know, my balance sheet.

That's just huge. Yeah. And I had an accountant who was more, you know, reactive rather than proactive. I missed out on that. Had I had the right person, the right guide had I had my own CFO and but this is a smaller company. This isn't like a some big multinational, right? This is a small company doing software for accountants.

Had I had the right accountant at the time, or one who had, you know, adapted to where the value in my, in my view, is, I would have come out way better and I would have, you know, that would been a certainly a lifetime partner for me. You know, it's going going forward. Yeah. He would probably brought them to the CEO.

Yeah. Would have didn't unfortunately. But I think yeah, it's one of those deals where, you know, when we look at where the value is and where people get excited, the employee base is more excited. Looking at the future. Yeah, the client is more excited talking to a business partner, you know, at that CFO level, like the whole business makes more sense in my opinion.

Right. And where we are, you know, we do a lot between firm and client. We can actually see the stats of how long somebody opens and looks at financials or how often they even open the financials. You know, and it's frighteningly low percentage. Wow. Yeah I mean it makes sense. Attraction. We've we've mentioned let's see a couple times.

Tell us tell us what Lashoff is. And then I have a couple of questions around that. Sure. We're purpose built this, software just to work between firm and client. So right now, if you're open and you know, an accounting business, you're probably going to start using email. I realize email doesn't do everything. It's not security limitation like a portal.

The, you might have a portal for client services and you need another one for tax. I need something for signatures or something for payments. And, you know, it just goes on and on. Email encryption, something for business texting. It becomes it's an awful lot. So instead of trying to hurt all your clients, we just built a system.

It says, look, your clients are going to be doing things a lot of different ways. Here's a single system to manage them. Just like if you started a sales organization, you'd use Salesforce or something like it. It's basically that you're going to have something that's for your clients. Your clients log into can see everything, get everything. One place, and then as a firm, you can see all the emails.

It kind of sent you all the business texts, all the large files. It's all super organized. Take the admin out of all the silos that accountants have in the business, that's what we do. So it's kind of a unique thing. But but our view is client experience is really where the value is. 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. Yeah, that's a that's actually what I was going to ask you about is, is you're a big advocate for client experience, which obviously makes sense. And so you created a software to help the account. It provide an experience, a positive five star experience to the client. What are some what are some examples of accounting firms that use SEO that, that are providing amazing client experiences, and how has that impacted their firm's revenue?

Sure. So if you think about like the average accounting firm, let's take the average. It's probably 3 or 4 people, right? Yep. And so what's happening right now is those 3 or 4 people used to you be in the office altogether. And so somebody calls in, you can say, oh hey, yeah. You know Bob's here, I can transfer you or, you know, people.

You all for a second? Hey, Bob, do we ever get that? Yeah, we got it. Don't worry. That used to be that kind of fast. Right? But you're sitting in there, you know, present, etc. all of a sudden everything got blown to pieces. And we're all working from home where people remote or people take vacations, etc.. How do you keep everything together and how do you not go crazy?

So we know everybody, business owners, you know many listeners here, we've all worked late. You don't want to call your staff on vacation or in the middle of the night when you're working on something, and people kept on picking up work and putting it down because they do have the answers. So instead of all that we just said, you know, talking and working with our clients like, well, what are your problems?

Oh, you can't see Bob's email. Okay, we'll bring it in there, just like Salesforce does. I'll put it in a timeline so you can see exactly what your firm has done with the client. So you don't have to bother each other. You have to back each other to death. CC each other to death, worry that you're not on a thread, worry that there's a tech string on a personal phone, all that kind of thing.

Instead, just create a system where it's transparent. That way everybody can work, you know, really from anywhere, at any time. You can timeshift the work and you can see what's going on and stay on the same page. So if a client calls in, hey, Adam, how's it going? You can see everybody in the firm, what they've done with that person in real time.

Just like a Facebook feed. Right. And so it's the same. It's exactly the same pattern. We do that if I go see my, one of my cousins I haven't seen forever. I know all the kids names. I'm not embarrassed. I know exactly what's going on because I've seen that on Facebook. So it's this that kind of thing.

So it really revolutionizes how clients feel. The firm knows them while also making the job itself much quieter. You know, we're not just blowing each other up on slack and teams all day. Hey, did you get this to do that? Here's another email. I'm going to CC on everything, and the business owners email box has 300 emails a day.

Yeah. So quiet to the client. You seem way more organized because. And you seem like you're on top of things, whether whether you're not, whether you're on top of things or not. At least you seem that way because everything's right there. Yeah, you'll be on top of it because we've all had the experience called airline. What happens? They put you on hold forever and then they have to transfer you.

And how do you feel? Oh, this is the order matter, right? Yeah I don't matter. It doesn't. Oh, this is awful. Why don't get to keep on transferring me. And particularly if you're going to have that partnership right, you're going to have a business partner, a CFO who cares, right? Or a business advisor, an accountant who who knows you.

Then you have to have something that makes the firm experience cohesive. That's funny, even for a solopreneur. Like even solopreneurs have a hard time finding everything in the email stack because it's not organized by business or by job. So you might oh, did I get that? Or is it there's a lot of dumpster diving for documents. Where is it?

I gotta find it. That's not there's no value there. It's hard to build that. Right. And so if you just abstract all of that complexity about finding information and making it easy for your client to find you and find things you sent them, if all that stuff goes away, the job's a lot cleaner. And so one last example there is, as an auditor, we'd have to go get bank statements, and back in the day we'd have to ask the bank to send them.

We have to wait. All right. How much work was there for the bank side on that? Insane. They had all this machinery back there to reissue statements. You talk to most accountants, you know, their clients are calling, saying, hey, can you resend those financials? I'm getting a loan, or can we send my tax return? I can't find it.

If we can make it really easy, we're clients. Can just self-service. Yeah. The jobs quieter and jobs better. Yeah, that makes sense. Especially these days when business when individuals are used to being able to to go online and just get things themselves. A lot of people just don't want to call somebody anymore. They just want to get it themselves.

And this sounds like it makes it super easy, which helps with the client experience. Yeah, client experience is where the value is. I think long term when we look at it, you know, we have so much stuff in the back offices getting automated. We know tax returns. If you have all the data tax returns or we put the data and the tax turn comes out the side, right pretty much instantaneously from the tax software, of course, we have to review it.

But if the gathering and the assembly were automated and the delivery were automated, how much better would the job be? We'd be consulting them on. How are we take those extra hours? We put it in the client, how are we going to save you time? Or part save you money right over the next several years. How are we going to do that?

The conversation changes instead of, hey, I haven't gotten the document from you, right? Right. That's that's this mega shift that is going to fundamentally change how satisfied people are. They have a I got a partner. Yeah, right. I think partner is a great word for that because a partner, somebody that comes alongside you and helps you accomplish your goals, not not the account.

It's goals. And and so you're all of a sudden seen as a modern accountant that is helping the client accomplish what they want. Because now you have more time to do that because you're not chasing paperwork. Exactly. Adam, you've you've looked at this a lot, right? How many accountants out there do you think are truly proactive versus reactive?

Yeah, I would say not that many. I'd say less than probably 15%, honestly. Yeah. So what a great opportunity right, when we can just, you know, today, tomorrow, the next day, move that 15% of proactive to 20, 25, 30, 45, 50. It's going to fundamentally change profession. People are going to love their jobs more clients will love it more.

You know fee structures will make more sense. It's just a huge win for everybody. Yeah. Makes sense. Shifting gears just a second, you've built a couple companies out of software. Accounting software. You're building a CEO. And you've worked with a lot of companies, a lot of accounting firms. That useless CEO, what would you say is sort of the the common denominators for success in building successful businesses?

Yeah. I think there's a couple a couple big things. Number one is having your finger on the pulse of what the client needs. Right. So if we kind of going back to your, your core point here, Adam, if we know the client is thirsting for advice, is thirsting for forward looking planning, how do they know things are right.

Right. If they if you know those things and you can say, okay, I know where the cheese is today and I know where it's going to be tomorrow, then spend all your time there. And so for us, it was, you know, when I started my first software company, it was the insight that most firms and when that was a time billing and expense tracking software company, most firms didn't weren't able to tie project data, like where I'm going to go to spend a whole bunch of time out in the field doing a project.

I'm going to record a bunch of hours against it, and I'm up in the field. There's a bunch of direct expenses. Putting that all into a single system made a lot of sense. You're not going to buy one time and billing system and a different expense system. The reporting would be hard to put together. Yeah. So we just did that for for that particular niche.

So that made a lot of sense. We knew what the problem was very closely for this one. The insight was how many billions of dollars of investment money have gone into back office for accounts, tons, bill pay receivables, all the transactional stuff into it's doing it tons. Just tons and tons in the back office. How much how many of those dollars are going into the client?

Almost none. Yeah. So they're like, oh, okay. Well, the client is if you don't have a great client interaction, you're kind of, you know, nothing else matters. A client doesn't care what you're doing in the back office. They care about us, right? For you. That's right. And so it was that insight that we can look, there's a there's a burning problem, a pressing problem here that nobody's addressing.

So let's go after that. And then you just have to spend a lot of time with your clients talking to them. So I have the joy of spending, you know, ten hours a week staying close to what our clients are feeling. You know, and those insights about how the business is shifting for them. Hey look, we're having, you know, an issue hiring people in the US or we're looking to offshore more work.

All of these things have to do with client service. Right. How are we able to how are we going to share sensitive client data with third party vendors? Right. There's a lot of IRS regs around that, etc. those are all problems we help our firms work through. But you have to stay close to them and really, essentially partner with them to meet their evolving needs.

Yeah, that makes sense. And that applies to almost I mean, really every business on earth you've got to provide to your client or customer what they want or not, what you want. And I think that's the problem with a lot of accounting firms, as we mentioned, the majority of them are react, are reactive. They're not proactive. They're providing what they think that they need tax, bookkeeping, etc., to the detriment of and not paying attention to what the client really wants, which is help, because the business owner is not an expert in numbers.

They want you. Who is the expert at numbers, to just tell them what to do, to have a better business, a better future, not just be the recorder in the past. Yeah. Like everybody, everybody's working the same. And let me be. Yeah, probably more precise with this. But many people are doing the same things they did the last year over and over.

And as an auditor, we're always told, you know, don't audit the same way just because we did it last year. Yeah. But it's hard to break. And I think, you know, we've got a gentleman I work with who his dad's accountant wanted his son to be a client. Right. Capture the next generation, make sense. And so every tax year would send him a letter saying I'd like to be your accountant, etc..

And the kid would look at saying, I don't want anything in the mail. Don't mail me anything. Please. You're killing the trees and I'm I'm not gonna work, you know, on that basis. And so the accountant never got him as a client. At the same time, if we look at how most firms are running the same pattern year on, year on year zero came out with the survey right out, if you saw it, Adam.

But they they said that half of millennials, half are looking actively to change their accountant. Wow. I did not see the survey. How why is that? Well, I think, you know, it's funny because it's such a strong signal that they expect a different way of working with firms. And going back to your your point earlier, like if 85% of firms are doing things the same way as, you know, and being reactive, right.

And 15% of evolved, I think we're looking at a generational shift in two ways. One is the generational shift in how people view public accounting. 20% of people left in two years. That's a big problem. Same time you have 50% of millennials. An entire generation of clients aren't satisfied with the old way and are actively looking to change.

That's that's significant. It's not just dissatisfied, it's looking to change. That means that people firms who get it, firms who embrace what the market is telling, you know, what is telling them are going to pick up an entire generation of clients. Wow. Yeah. What a great time to come into accounting. What a great time to come. You know, make a change.

Wow, Chris. Well, I mean, we could go on and on about this. This is fascinating. And and but we're almost out of time. If somebody is interested in learning more about Lucia, where do they go? I guess you always talk to me directly. I'm Chris Atlas yoked me. I love talking to you all. So, and come say just to make sure we're at Lizzie, I owe me.

Yep. Le CEO DeMar. Thank you for that fact. You can also just go to a website, check it us out there. But just a conversation. Also you can find me on LinkedIn and all that kind of thing, but, yeah, just, something we love doing. I can't talk enough about it. And, Adam, I appreciate you're having me on.

Yeah, there's. Thank you so much, Chris, for coming on. This is very insightful, Chris. Thank you so much. Cheers. Thanks, Adam. Thanks, everybody. To everyone, to everyone listening or watching. Thank you so much for spending the last few minutes with us. As we discussed how to escape. We count as travel. Bye for now.