In this episode of the CFO project podcast, we answer your questions around building an efficient practice.

Welcome to the CFO project podcast. Today we're talking all about how to build an efficient practice to help me with the discussion, I've invited a partner in Bhatia and Bhatia accounting firm who also dubs himself the ballot CPA, which I want to dive into really quick. Nick, welcome to the show. Thanks for having me. So, so you're a partner in your firm, which is, in a new Jersey based accounting CPA firm called Bhatia and Bhatia.

But you also dubbed yourself the balanced CPA. Why? Why the play on words? Why balance? CPA? So I think every accountant likes to be balance. We like our books balance. We like our life balance. And I kind of the brand is a little bit about having a balanced life more than just balancing your books. So it's why the why is that?

Why? Why do you feel like it's important for you and for other accountants to have a balanced life? I mean, I'm assuming it's based on the fact that a lot of accounts just simply don't have a balanced work life balance. Yeah. I mean, is that why? Yeah. No. Exactly. So I've been in this doing this for about 12 years now and, grown my legacy firm that inherited from my father.

And he didn't have a balanced life at all. Everything was work, work, work, work. And seven days a week, you know, working hard and making money. But then as I evolved our firm and using technology, I got a lot of my time back in a lot of my life back. So now with my free time, I'm doing things like volunteering, charity work, spending time with friends, vacationing, and then even when I'm going to accounting conferences, meeting other successful accountants who are, you know, maybe building great businesses, they might be making a lot of money and they're still stressed out.

So it's like there's there's such a range. And balance is different for every single person out there. So you may be making a lot of money and then you're still stressed out. So and you can't go on vacation with their families do this and do that. So it's like to me that's not really a balanced life or not spending too much time with your your wife, your kids, things that are typically very important to someone.

And they kind of lose track of that, and they get so ingrained into their businesses and lose sight of, you know, other things that really make them happy. And they're passionate about, well, why do you think that is, especially in the accounting industry? Why do you think a lot of CPA firm owners and bookkeeping firm owners and road agent for homeowners, why do you think they lead such an unbalanced life?

I think it's the perception of the industry. So typically when you as a non account end or someone who might be interested in coming into the accounting industry, the reason people aren't coming into the industry, like I don't want to work 1,000,000 hours. I don't want to just be crunching numbers all day. I don't want to get no recognition like people want to feel, you know, appreciated for the work they do.

So a lot of people aren't seeing accounting firm owners as that type of person. So I don't think people are coming into the industry because of the old perception. But when you meet a lot of newer accountants who are, you know, building modern firms, they're starting to really add a lot of value to their clients, and they're making a big difference and it's fulfilling.

Yeah, that's a good point because I was reading you know I mean we all know that that a lot of college students are less college students are entering the accounting profession as compared to even a decade ago. And I graduated accounting school. And in their major accounting in 2005. And a lot of the people that I went to that majored with went into, you know, one of the big accounting firms and they grinded.

They worked a lot of hours, and I went to private industry as an accountant. I didn't work as near many, as many hours as they did. But I mean, I don't think I could have handled that if I actually started my career at sea because, you know, I went to Penn State, top of my class. You know, the prestigious thing to do is go work for the big four.

So I started with W and exactly like you described. I worked 1,000,000 hours. I'm working late at night every night and on the way home from work, you know, ten at night. I'm calling my dad, who, you know, started our practice, and he would just be like, oh, well, you know, that's not really how all accounting firms are operating.

Even though he was working a lot, the big four just really grinds it out. It's, you know, people wanted on the resume. But I just think that is the perception of the industry and people understand, like working for a smaller firm, midsize firm is a totally different lifestyle. And, you know, really what I want to talk to is the business owner, because the business owner is thinking that's the norm.

They're going to burn their employees out. It's going to really be hard to retain good, good people. Yeah, totally. He's all about the practice owner. Yeah, absolutely. 100% agree. Plus, if you are grinding, I mean, if you're if you're working so many hours doing compliance work, you have less time to spend helping your client business owners improve their business.

I mean, because, you know, they want to talk to you about that kind of stuff. All right. So I this is a great, great set up for this episode because I do think we need to talk about how we can build efficient practices and have a balanced life. So let's dive in. What's our first question? What do you consider to be an efficient accounting practice?

Oh, that's a good question. Why? So I mean efficiency is I mean you could be efficient without being effective. But obviously you want to be effective. But but what is efficient mean to you. So for me efficiency is going to be getting the job done in a fast period of time. Obviously, we don't want to be doing with now with technology.

We don't want to be doing, you know, paper tax returns. That's a thing of the past. Everyone's using a tool like, I use personally into it with search product to file our tax returns. People aren't doing a manual, but every tax season also get a new client that brings in a paper file to return from the year prior.

So it's you thinking of efficiency. It's there's the old school to understanding all the tools that could help you become a more efficient practice. But a lot of accountants or practice owners aren't aware of the tools that are available to them. So just knowing how technology leveraging technology could assist your firm astronomically, even when it comes to client communication.

You know, back in the day, some can still mail out their tax returns there. If you're preparing taxes, their mailing in W-2s 1099 and things like that. So you can prepare your return whenever there's tools like a smart ball that we use to upload documents directly to us, we get notified. Now we're saving on admin time. So constantly I'm trying to build our firm and realizing each year what are what are the things that we're doing that's not adding value to our client.

So we're getting typically back in the day, my dad would give clients like a pretty tax return in a in a folder that would basically be, oh, here's this beautiful tax return. Look how nice I organized it. And clients thought that was adding value, where we have a document storage system where we upload the return into their portal that secure that only they could access.

So now on a Saturday when they're calling, oh, I need a copy of my tax return, they could get that instantly whenever they need. So like to me that's a value add to client. So it's explaining clients how things could be efficient, but it could actually benefit both the business owner and it could benefit the client. Not just being selfish trying to benefit our firm.

Yeah, no, that's a good point. I remember getting from my account, it was embossed like like blue or or, like the crimson color account. It, documents with my tax returns. So let me ask you this, Nick, is there a metric that you can measure yourself against to say, my firm is more efficient in this way?

Is it, for example, is it more being able to process more tax returns in a short amount of time or with less staff? Is there something that other firms listening could say, well, this is my efficiency rate. If you know, it's throwing that term out there and I need to improve it by doing this, you know, you know what I mean.

Yeah. Yeah. So I have I have a good kind of example is my dad, once he decided to retire from our business about a seven, eight years ago in 2018, he retired. And then it was like I was able to implement the technology that I was like, this could really change our firm. And once I was able to implement those tools and push out to our clients and explain why you know, the clients don't want to change.

Once I push these tools out to them and they realize how valuable they are, we were able to double our firm. So we went from 700 clients and now we have 1800 clients. Wow. So not that that happened overnight, but without the tools we could have, we could have never done it because we were we were mailing out tax returns.

We were get everyone was dropping off their documents. So now we have to scan them in on the computer. Like a lot of little things, when you have a high volume firm like we do. So we're doing a pretty high value, I would say 1800 clients is a lot. So printing out one return, people dropping off, coming in, having conversations.

Not that like we still want to have that human relationship, but when I have a meeting with the client now, I want to be giving them a value add service, talking about how I could save the money, how we could plan for next year. I don't want them coming in to necessarily talk about their vacation that they're planning in tax season.

When I'm working my butt off and and that's that's that's how it was at that time with our firm. People come and just like talk about something to do, come to your accounts office and chat when we're super busy. So like I was like, as I'm seeing this, I'm like, I want to have these great relationships with my clients.

But it's really they don't understand how many clients we have to serve. So they're coming in talking to us for extended periods of time. Non-Tax. It was not really the best time to have those conversations. So just changing that mindset of how our firm operates. At first, clients didn't not every client loved the change, but we did. We really we doubled our firm and we doubled our firm and we didn't work more.

That's really the most important part. So you took out more clients without adding more hours, and I'm assuming without adding much staff. Right? I mean, you doubled without adding a lot of staff because you were more efficient. So we did add staff as well. So like we hired an admin and then we hired some, some bookkeepers. So like our firm went from you know, it was the four.

It was we had a team of three and now it's a team of six. So not not a huge wait wait wait. So a team of six to service 1800 people. Yeah. Wow okay. Yeah. So so and it was just realizing that you could like had the technology was definitely the first step because it's the easiest to implement.

Yeah. And then and it's very cost effective. But then once you become so efficient now we can handle all of these clients. But now doing all the work then you have a bottleneck. So as like constantly as our firm is evolving. As I mentioned this has been a long journey for us. But as you keep evolving with time, we, we just realized needing hiring the team just allowed us to take on so much more clients with the tools in place.

Everybody listening. If you haven't already, sign up for our five minute weekly email with practical tips for accountants and bookkeepers to escape the accountants trap, go to the CFO project.com/newsletter. Wow. Okay. Yeah. Awesome. All right. So what's our next question? What did you do to improve the efficiency of your accounting practice. All right so this is what it goes into the last question.

You know what was considered efficient practice. What did you well like what are the steps that you implement. So you said you took over from your dad in what, 2018 running the practice. So what. Talk us through what you did to make it more efficient. Yeah. So the first tool we implemented was was we needed a document management system.

We had paper files for all our clients. And obviously that was just looking for a file is not really an efficient use of time. So we we implemented smart ball because it actually integrates with the CERT. So our tax software. So once we implemented that it automatically created all our folder structures for our 1800 clients. Obviously back then it was let's say was 900.

And each year as we if we got an additional 100 clients in a tax season, 200 clients, it would just automatically sync those folders. We didn't have to build them out manually. So that was a huge time saver. And then Reese more recently, like a year ago, we didn't really have a workflow management tool because as our team grew, it was when your team's small, everyone kind of knows what they have to do.

But then as a team grew, it was harder to manage who was working on what clients and things like that. So we implemented a workflow management tool. There's a bunch of great tools out there. We personally use financial sense, and that has been a game changer for our firm. We actually only implemented a year ago, so we're still building out the software, but now we have every client with all their tasks needed built out.

So anyone could we could have a new hire come in and they could basically see this client needs these five tasks to be completed. And in the task we might have a loom or loom video link that shows you exactly what to do. So it makes the onboarding new people and completing projects so much faster. So what do you use the loom video for to train other employees?

Exactly. So like a lot of our tasks are like very repetitive. So, you know, if you're doing bookkeeping or doing a tax return or really any process doing like let's say an S Corp, election, we can record the task being done. And now we put that into our project template. So now when a new client comes in and says, hey, I need an S Corp election or I need bookkeeping done, someone can just watch the loom video to say, oh, this is how it was done previously.

So it might not be exactly step by step what you need, but it gives you a pretty good sense of where to start on that specific project. Okay, if anybody listening loom is just a software that you can use to record your screen and your voice, so you can create quick videos just to record, I've used loom for a long time, so.

Okay, so smart Vault, you got everybody in the cloud essentially. And then you use financial sense as the software to to manage the CRM itself, the whole process. What else what what else did you do to improve the efficiency. Yeah. So then I'm sure a lot of accountants could relate that they might be doing their billing at the end of tax season after they finish their return, because they don't know how to how to quote them where they don't know if things change.

So we did that for as long as our biz has been around, let's say 45 years. And this past tax season, we actually decide we're going to bill our clients in advance using, billing software called anchor. So we use anchor and it's actually an engagement letter and it's a billing system all in one. So basically tax season began.

We send out 1500 1800 agreements basically saying, hey, tax season 23 is here. We want to file your tax return. This is going to be the price based on last year's fee. If you sign up, you don't get any price increase. And that basically eliminated our billing, which was awesome. So the year prior we'd be doing collections all summer.

What percentage of your clients do opted in to pay before with the discounted price? A pretty high percentage. I would say within the first two months we had, I think, 50% of clients. Wow. Okay, so you have some that you still bill afterwards, but you just charge them a higher price. Exactly. And and then it was actually nice because then what I like the way our workflow with tax returns go is are they would upload their documents to Smart Vault.

We get notified, we'd begin preparing the return. And before I did my final review, I would. If the client wasn't paid, I would just say, hey, before I do my review, you have to pay. And I had zero push back on that. So there really was no collections after the fact. So and now even like our recovery, that that was great for taxes and even for a recurring bookkeeping.

Now we have them in, in a system where every quarter, their bill is automatically generated and their payments are automatically paid. So we really don't have to do any collections anymore. So that's that was a huge that was a huge time saver. So and this is also a recent thing we implemented this last year as well. Hey there Adeline with the CFO project podcast.

Are you an employed accountant or bookkeeper that would like to start an advisory service on the side? Well, we have a free training for you called Side Hustle CFO, where we'll show you how to start a business on the side, offering CFO and advisory services to small business owners. We conduct this training every Friday at 3:00 pm eastern and 12:00 pm Pacific.

Go to the CFO project.com and click on free trainings to register. Yeah. Wow. Okay. That's awesome. Now I have let me ask you when you when it comes to dealing with making your practice more efficient when talking to clients, do you do a lot of. So come in and you talk to them in person if you do zoom or something like that, or yeah, great question.

Because my, my goal for my, the future of our firm is to not have in-person appointments. We've been here a long time. Some of our some of our legacy clients, they love coming in. They love coming to me, so bad. But I always let them know that we could just do a zoom call. That's what I prefer, because even when I do do a zoom call, I could record it with like a, a transcription app.

So now I actually it's more valuable than having in-person meeting, because now I can record the meeting and have any actionable steps to follow up. So clients typically are using zoom to have meetings and in previously we used to not really have an efficient way to bill for our time. So this is something I'm also definitely working on, is we used to just have calls for free.

You're a client, you could call, you could ask a question, no problem. So changing that model from the legacy firm we inherited has been a little bit difficult. But now clients now if they want to book an appointment, they usually book right through Calendly, which is, you know, electronic calendar app. And they actually pay for the appointment in advance.

So that solves or. Yeah. So that solves for the pain point of having to do collections make bills. So so then it really that one thing alone implementing calendly and making appointments paid saved me. I can't even count how many hours because now clients, when they try to book an appointment like, oh, I have to pay for it.

What? What's going on? Okay, well, I'm our business is growing so much I can't offer free appointments anymore. Otherwise I can't serve the clients who really need the appointment. So someone who's willing to pay for the appointment really needs help. Where someone else might be like, oh, I don't feel like paying, I just Google search it. And so either way, I win because I'm getting my time back there.

I say, okay, very cool. So we talked about efficiency. From from operations, from the delivery. Service delivery. What about client acquisition? How did you go from 900 to 1800? What were the things that you did that were efficient in client acquisition? Yeah. So I think surprised it I guess not really too surprising. I'm sure every account gets this all the time.

Who's looking to grow their firm? Every client that we that reaches out to us through either. You know we have a really good Google. We have tons of Google reviews, all five star reviews. So we always ask our clients leave a review if you have a good experience. So with a large client base, when people look us up in the area, we have, you know, ten x what any other firm has a five star review.

So that's helpful. But also like when clients reach out, our responsiveness I think is the most important thing. Like we're getting back to clients within 24 hours and they're blown away because they're like, I can't get I can't get Ahold of my account for three weeks or months, or they just don't respond at all. So I feel like just being responsive is the most important thing to acquire new clients, because that's how you establish a rapport with your client.

You're answering right away. You're and you're answering their questions, and they see that, you know, you're running an efficient firm. No one's going to want to come work with me if I'm not checking my emails and, and like when I talk about balance, I love to travel. So if I go away. I went to Bali for two weeks, so I had an out of office that said, hey, I'm at this date, I'll be back.

This date I'll get. And then I'm responding back to every email that we come back. So I think that's important. Okay. Do a majority of your clients in the, the your local area has this, has that essentially what you're saying. Because I look you up on Google. Yeah. So that's that's one way. But actually we have clients across the country and we actually and just networking with other accountants in the industry, some some accounting firms don't want to do tax and they actually will refer their clients to me.

But okay. So let's say let's just say I don't do audit. I want to have someone in my network. When someone comes to me, hey, Nick, you know, and I go, no, I can't, but I have the right person that will take care of you. So like, I actually get a lot like, now, like, built over the years of building my, like, you know, my name in the industry now, a lot of other accountants actually will send their tax clients to me because they're either a not a good fit or whatnot.

And then so that's really a great way for us to grow. Awesome. Well, Nick, this has been a fantastic discussion. Before we close out, is there anything any final words you would like to share about how to build an efficient practice? Yeah. My last thing I like to say for anyone out there, there's probably people out there who are already doing the things I'm doing, and then there's probably people who are out there who are not, and they're like, this seems overwhelming.

Just start somewhere. I definitely and the picture perfect example, I had a really old school firm. We weren't very efficient and year by year just trying to make little changes. That's that's all you could do. So if you're like trying to strive step by step, you can make a huge and use change in your firm and your life's going to be so much better.

Awesome. Well, Nick, thank you so much for coming on the show today. Thank you for having me. Yeah. And not everybody listening or watching. If you haven't already, sign up for our five minute weekly email where we show share practical tips for accountants and bookkeepers to escape the accountants trap. Go to the CFO project.com/newsletter. See you next time on the CFO project podcast.