Welcome, everyone, to the first ever episode of the Escaping the Accountants Trap podcast. So what is the Accountants trap? Well, that's exactly what we're going to talk about in this episode. Not only will we discuss the accountants trap, we're going to talk about how to escape it. So if you're an accountant, CPA, a bookkeeper, or an enrolled agent, this episode is for you.

My name is Adam Lane, and I'm one of the co-founders of the CFO project. The CFO project is a program that trains accountants and bookkeepers on how to offer an outsourced CFO and business advisory service. And on today's episode, I'm joined by Jeff Prager, the other co-founder of the CFO project. Jeff. Welcome to the show. Hey, great.

Great to be here, Adam. Yeah. So I'm really excited. This is our first ever podcast. And, you know, it was just be fitting for both of us, the co-founders of the CFO project, to get on a episode and just talk about what is the accountants trap? Because the accountants trap, as you know, you and I both know, is there's a lot of bookkeepers, a lot of CPAs, a lot of, rule agents, a lot of accountants are facing this trap.

So, Jeff, what how would you describe what the accountants trap is? Very simply, if we want to make more money, we have to work harder, get more low value clients, and or work more hours. It's a never ending cycle, and we just spend our whole lives working. Yeah. So, I mean, you you know, I've obviously I've known you for a long time, but for everybody listening, you know, what is your background and when when you first realized that, that you were in the accountants trap.

Well, let's go way back. I started my career with a big eight from, it was Touche Ross. They eventually merged into Deloitte, but what I found is the the hours and the control over my time and the never ending changes perpetrated by the government or the AICPA. Just, I had no life. And when we had our first child, it really became apparent that I.

I couldn't do it. So, it was just in an it was just a hamster wheel. And I realized that being a traditional accountant would lead me into that hamster wheel for the rest of my life. And as I talked to my fellow accountants, I realized we're all stuck there. Yeah. And, I didn't want to be.

I didn't want to be because it became very obvious very early in my career. The only way to make more money is to work harder and longer. Yeah, and that's just not tenable. I like the where do you use the hamster wheel? Because, I mean, like, think about a hamster. They're they're spinning, spinning, spinning. But the hamster is actually not going anywhere.

They're just working a lot and harder, but they're actually going anywhere. And it's like an I felt the same way when I was an accountant. It's like this trap that you're you're the only way to increase my income was to work more hours. And I just don't have any more hours to give, you know, and then also the, the, the work that I was doing was not really inspirational to me.

It was just it was transactional work. It was compliance related. And I wanted to help the business grow. And it was like, and it was just I felt like I was in this trap and, and, and it's no way to make a living. I agree with you. And that correlates with what happened in my career.

I would be on audit and because I've always been entrepreneurial in nature, instead of trying to understand the numbers, I tried to understand what drove the numbers. Oh, man, that's great insight. Started talking, you know, even as a junior accountant and I went up the ranks fairly quickly. But even as a junior accountant, I was talking to the comptroller or the CFO or even the business owner saying, well, how do you market and what made you get into this business and what were your dreams?

And what was really funny? Even as a junior accountant, the clients were asking me to come back on their audits year after year, and the managers and partners could not understand it. But it was really simple. I was really interested in what made the business tick, not the numbers. The business, but it's evidenced by the numbers. So why do you think those clients asked you even though you were a junior auditor?

Why do you think they asked you? You said this because you you want to understand what the business took. But how did they realize that? What about you showed them that? That you cared? Well, it was my interest. I would either go out to lunch with them or meet with them. That was asking them, you know, an auditing question and and just saying connect the dots.

How does that relate to how you run the business? And they realized that I was looking beyond the numbers. And a lot of times I would find, recommend donations for them that had nothing to do with the numbers that would enhance their business. And I'm talking about bigger businesses, hospitals and and professional sports teams. And they just loved the fact that I was really interested in listening to them talk about their business and what made it tick.

That makes sense, because that's what business owners want to talk about, is their business and how to grow their business. Business owners don't want to talk about the numbers all the time, because they know that that's boring to them. No, but but to build my case, I could show them the numbers. There are a lot of things I found out that had nothing to do with numbers.

While I was doing the audits, but it was only because I really wanted to understand the entrepreneurial nature. I mean, you look at a hospital, they're not entrepreneurial, but they are in a way. They are competing with other hospitals and other services to make sure they're providing the best. And and you want to find out how do they differentiate what led them down that path?

How did they make their processes more efficient? Yeah. And it gives you insight that you carry from one client to another in and pretty soon they don't care about the numbers. They do care about the bottom line because they've been told over and over, you've got to care about the bottom line. Yeah. But then when I started transferring the conversation to how does that affect cash flow?

How does that affect where you want to go. Made a huge difference. What what's sort of ironic is that by you giving your clients what they want, which is somebody that just cares about them and their business, you're able to get what you want, which is escaping. You know what we're calling the accountants trap? I mean, it's a it's a win win situation.

Well, the more the more perceived value you add, the more you could charge. Yeah, absolutely. It's really that simple, isn't it? And the more you can charge while offering a service that helps your clients, the more you're able to get out of the compliance and tax transactional work and really scale of business. That was my whole goal. Yeah.

Is how do I scale without working? You know, continuously. Yeah. So speaking of that, why do you why do you think accountants and bookkeepers today struggle? Like, what are they struggling with today? Well, I think it's the same thing that we were dealing with when I entered into the profession. And obviously I'm older and entered a lot longer, a long time ago.

But what I think is, is killing accountants and why big accounting firms can't recruit today is because of the uncontrolled deadlines. In other words, they're being perpetrated by us, by the government, by me. And, you know, SEC or other the banks or whatever it is, it's all these deadlines and the rules. The country, the landscape of our profession is constantly changing.

New software, new tax laws, new revisions to generally accepted accounting principles. And basically the owners don't really care what they want is help growing their business. They don't want to be, relegated to have you recording what happened in the past. That's not what they're looking for. That's a necessary evil to comply with the bank requirements and the IRS requirements, or if they're audit audited with the audit requirements.

But that's not what they want. It's a necessary evil. It's what they need, no question about it. But it's not what they want. Right. Which that's why a lot of accountants cannot and bookkeepers can't charge more for their services. And which is another way they're still stuck in this trap is because in order to make more money, they have to either work more hours or, or for, or get more clients.

But they can't charge more because just like you said, their clients don't see the value in what they do. Even if they did see the value, they know that there's thousand other accountants or a thousand other bookkeepers that produce the same, and their mind will produce the same exact result. So why are they going to pay you more than the other accountants and bookkeepers out there?

I'd like to take it a step further, if you don't mind. Of course. Bottom line, Adam, is I wasn't in control of what I want to offer and how I offer it. And as a CPA, my training never showed me how to provide real help to my clients. And that's something I developed on my own. Yeah. I think another thing that a lot of accountants, a bookkeepers are struggling with today is that their clients are asking them for advice because, like you said, most business owners want help.

And who better to get help from than their numbers person in their lives, right. But they're asking them for help. But a lot of accountants of bookkeepers don't know how to provide the help that their clients really need. And that's a struggle. Yeah. And and there's a lot more to that, too, is clients. Don't know how to differ accountants.

The struggle is we do not know how to differentiate ourselves from the other, providers of accounting help, if you will. Yeah. In, in we talk about how we could save our money on taxes or how we could do a better job of bookkeeping. Your clients actually don't know if you're doing a good job, or I don't know if you're doing a good job or bad relate to.

So you can't differentiate yourself on those grounds. Yeah. How many people go and say, oh, I go to this doctor because he's mediocre, right? Right, right. So so you, you know, you you want to be able to bill what you're worth, but the client has no measurable way of seeing what you're worth unless you could help them grow their business.

Right. Which means if you can't, if you cannot show them how you're differentiated from everybody over all the other accounts of bookkeepers, then you're just relegated to being a commodity, right? Your bookkeeping service or your tax service is just the same as everybody else's is. You know, if you're driving. Yeah. Go ahead and check if you're driving down the street and there's two gas stations right next to each other, one's a dollar more per gallon.

Which one do you think most motorists are going to go to? They're going to go to the cheaper one because they don't see the difference in the two qualities of gasoline. And I'm sure there is a giant difference between, you know, different, different gasoline manufacturers. But that's how our clients, business owners think of accountants and bookkeepers. They don't see the difference between a good accountant and a bad one because, like you said, they don't know how to know what the difference is.

So they're just going to think, I just need somebody to do the necessary compliance or transactional work. Just close my books, whatever that means. Do my taxes. However, that gets done, just do it so that I could focus on my business. And that's a great way to show that you're a commodity. And that's a trap. It's a trap because you're you're in the minds of your clients, potential clients.

You're seen like all the other accountants and bookkeepers out there. And that is a trap, because the only way to make more money is just to increase your volume. And that's a recipe for burnout. Yeah. And not only is there the burnout, but the clients aren't appreciating what we do, no matter how much work we put into it.

But here's something else I found out while I was working as a CPA. And then I went into industry, and then I went back to running my own practice. But business owners are not asking you, how can I run a business? Better business. But that's what they really want. Yeah, and accountants aren't answering the question of how they could run a business better a better business.

Yeah. So as a consequence, we are not able as a profession to build out what we're worth. Oh that's good. That's that's true. There's no appreciation. We're not getting paid for the value and the time. And I'm sure, you know, most accountants would say they're really good accountants or most bookkeepers will say they're really good bookkeepers. But are you really getting paid for that?

I mean, did we we did a study, a while ago. Jeff, the for the listeners, the average salary of an accountant is around 77,000 a year. That's crazy. For the amount of value that we know that that the accountants know they're providing. But their clients don't appreciate it. Which is why the average salary, the average earnings of an accountant, is so low, right.

It reminds me I used to go, now I'm a retired CPA. That's a technical designation. But even when I go to the seminars on the latest tax laws and stuff like that, I would look at the, my fellow CPAs and, and I'd say, how many clients do you have? They go 870, 550. 1200 doesn't make any difference what the number is.

And they go, how many do you have? Jeff and I go depending on the year between 10 and 15. And they would look at me wide eyed and say, hey, how can you live on 15 clients? And I go, how much do you take home? And I was usually 5 to 15 times higher than those accountants. It's because you're charging for your value.

I'm charging for my value. And I developed a relationship where I truly became a trusted advisor or but more importantly, somebody that would listen to them, their therapist, if you will. Yeah. And and they'll pay for that. Oh my goodness. Yes. I remember one of my first CFO clients several years ago. I remember meeting with them. It was a husband and wife.

They owned a fairly large, construction and mitigation business, and we sat down and for the first we talked for about an hour and a half, and I just asked questions because I wanted to learn more about their business. But afterwards, I'll never forget what he said as we were as I was getting ready to leave, he said, this has felt like a therapy session and I needed this.

And yeah, and he didn't use in that entire sentence. He didn't use the word numbers or financials or profit or cash flow. He said that this was a therapy session, which means he doesn't have, like many business owners, somebody to talk to that gets it. And that really cares. And and let's face it, most business owners are isolated.

There's nobody they could talk to their spouse, their employees, their banker, their lawyers. They don't really understand the life of a business owner. Yeah, like we do. We are the only people other than the business owner that looks at the whole business. So they're isolated, they're stressed, they're frustrated. They're worried about what's next week going to bring what what am I going to do?

How am I going to survive? And how many more years am I going to work like this? Just like us, we get burned out if we work on a lot of low paying, low value clients. They have the same problems we have. And and go ahead. Oh go ahead, go ahead. That's a great. And when when we relate to them as a human, as a fellow business owner, but somebody who uses numbers to drive decisions, they relate to us and they're willing to pay for that.

You're right. People want somebody that they can trust to tell them what to do. And if you come across as somebody that cares about them and their business, they're going to want to listen to you and they will pay you handsomely for that, because they there's like you said, there's not that many people to turn to. I mean, you can't turn to your employees, you can't turn to your employees for help because they don't really understand.

They don't get it. They don't. They're not carrying as much risk as you are. You can't bring home more baggage to your spouse, you know, because the spouse, even though they care, they just don't get it. You know, you can't bring you can't talk to your friends. They don't understand. There's not that many people. But that's what makes us as in their financial profession, so perfect to be a CFO or a business advisor to small or medium sized businesses, because we care and we want to provide value, but we also understand the numbers.

And you have to be able to understand the numbers because you know, as we all know, a business leader lives or dies on generating consistent positive cash flow. And and if we can help our clients do that while providing them a high value impact of impactful service business advisory service, they're going to stick with us for years and years and years because we're somebody that they can trust to just tell them what to do, and they want guidance rather than compliance.

Yes. Oh, man. They do. Absolutely. So, Jeff, to somebody listening, we're almost out of time. But to somebody listening what what should be their next step. What would you recommend to somebody who's an accountant, CPA, bookkeeper are listening or watching this? And they are like, yes, I need I want to escape the accountant trap and I can't go through another tax season or I don't want to just keep on getting, you know, low value bookkeeping clients.

What do you suggest me do? You tell them, well, I want me personally, and I know you share this with me, Adam. We want you to be in control over our time and how much we make. Yeah, and we wanted to create a scalable system that gets our clients results. But we also didn't want to be reinventing the wheel on each client or feeling like we got a new part time job with each client.

Yeah. So what what we've done, I've done it for many years, and Adam and I hooked up and we both had a very, very, very similar philosophy and we merged it into a scalable system. Okay. So that with each client, it's not a new part time job. You don't have to reinvent your skills for that client. And it's not a job at all.

It's a relationship. Yeah. So my longest client has been with me for over 25 years. Adam still has his first client. Yeah. Why? Because we're practicing what we preach. We give our clients the the guidance, we give them a scoreboard, we give them objectives, and we help them devise the next steps so they can have a success for business based on the way they define business.

So when you have a high retention rate and low client turnover, think about all the marketing. You don't have to do so. If you really want to learn more about what we're doing. Adam and I hosted a free masterclass every Thursday called How to Start a CFO service. So all you have to do is go to the CFO project.

Com, the CFO project.com, and in the right hand corner click on start a CFO Service Training. And it's an hour long training that Adam and I do. That will show you exactly what we're talking about and how we help our clients. No obligation on your part, but just join us and find out more about what we're talking about.

How so again, that's the, CFO project.com. Click on the right hand side at the very top, start a CFO service training. It's free. Absolutely. And if you're a CPA and you need CPA credit, we're certified by Naspa. And you can, get, some credit when our credit. So, Jeff, thank you so much for being with us here on our very first podcast of Escaping the Accountants Trap podcast.

Thank you so much. Oh, I'm looking forward to not only getting this, rolling, but some of the guests we have lined up are going to be incredible. So, so please, if nothing else, keep coming back to our podcasts. Absolutely. And to everyone listening or watching. Thank you so much for spending the last few minutes with us as we discussed how to escape the accounting trap.

Make sure you check out our training that Jeff just talked about. How to start a CFO service. Just go to the CFO project.com as THG, CFO project.com. And of course, make sure you subscribe to our podcast so you never miss an episode. All right. Bye for now.