5 Tips on Starting Your Own Bookkeeping/CPA Firm
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This slide was presented at the CPA The ONE National Conference. The presenter was Bob Wang, CPA, CA. He is the President at Legacy Advantage CPA, one of the fastest growing "start up" CPA firms in Vancouver. His dream is to build the most trusted and competent bookkeeping company in the world.
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5 Tips on Starting Your Own Bookkeeping/CPA Firm
- 1. Bob Wang CPA, CA President Legacy Advantage CPA Ltd.
- 2. Thanks to Intuit & Quickbooks Online
- 3. I grew up here
- 4. Cooking Class in ChiangMai, Thailand
- 5. Tried a new look… Didn’t work
- 6. Came back from vacation to found out that I got on the Honour Roll White Black
- 7. Elizabeth @ 1 Month
- 8. When you find a mistake or something isn’t reconciling
- 9. Legacy’s VisionTo become the most trusted and competent bookkeeping company in World.
- 10. Opportunity #1 People have hard time finding a good bookkeeper. Why not create a bookkeeping business that creates a win-win-win partnership between accountant, bookkeeper and business owner? Two Opportunities Opportunity #2 Create a world-wide bookkeeping brand that is built on trust and competence.
- 11. 5 Awesome Associates Half a Million in Sales
- 12. Intuit’s Canadian Firm of the Future - Runner Up Half a Million in Sales
- 13. Lessons I have learned on this journey so far Some were VERY EXPENSIVE lessons
- 14. Focus
- 15. “ “There are riches in niches”
- 16. Focus Do Don’t do Anything elseCloud Accounting
- 17. Focus ×Fully explore QBO functionalities ×Integrate applications ×Add tremendous value to clients.
- 18. Case Study #1 - Video Production Company × Problem: “I’m operating my business blind” × Solution: QBO × Send digital invoices in real time × Bookkeeping on a weekly basis × View reports anytime, anywhere, even if he’s on the road.
- 19. Case Study #2 - Painter × Problem: “I’m spending way too much time on admin” × Data is everywhere in all forms × Solution: QBO × Estimates > Invoice > Job # × Job cost reports are all in one place. × No duplicate data entry
- 20. Focus × Ways accounting firms can focus ×Breweries דCreative” firms ×Law firms ×Etc ×Add value to clients in those industries in a way that no one else can
- 21. “ “Go an inch wide and a mile deep.”
- 22. Book Recommendation: Blue Ocean Strategy
- 23. Tip 1: Focus
- 24. Hire for Fit, Train for Skill
- 25. Hire for Fit, Train for Skill ×Mistake: hired for skill because I thought I had no time to train new associates ×Cost me >$15K… no small change for a start up ×Remedy: Don’t waste time! Fire them right away
- 26. Book Recommendation: TopGrading - Brad Smart
- 27. Hire for Fit, Train for Skill ×Four awesome hires in a row ×Sofiya ×Ukraine, Super Hard Working, Overcomer ×Her proudest moment was when she just “figured it out!”
- 28. Our Team
- 29. Tip 2: Hire for Fit, Train for Skill
- 31. ““Leadership is influence, nothing more, nothing less” - John Maxwell
- 32. Lead yourself Lead your staff
- 33. AssociatesYour most important assets in your business is your people!
- 34. ““You can buy a person's hand, but you can't buy his heart.” - Stephen Covey
- 35. Book Recommendation: 5 Levels of Leadership - John Maxwell
- 36. Tip 3: Lead; Don’t Manage
- 37. Stop Being a P****
- 38. … Perfectionist!!!! ×There are areas where perfection is necessary, and failure is not an option. ×Innovate ×Have the mindset and confidence that you’ll figure it out! You’re CPA’s!
- 39. Book Recommendation: Screw It, Let’s Do It - Richard Branson
- 40. Tip 4: Stop Being a Perfectionist
- 41. Get Involved In Your Community
- 42. Get involved in your community ×Shared office space ×Volunteer as a Board Member ×Get to know your competitors ×Get to know your suppliers ×Get to know your customers
- 43. Tip 5: Get Involved In Your Community
- 44. × Bob Wang × Email: bwang@legacyadvantage.ca × LinkedIn Reach out if × Have questions about QBO, or anything I have said today × Want to grab coffee × Have clients that need an awesome bookkeeper! Let’s Connect!
- 45. Basically… Read Books Stick to the Cloud You’re good to go!
Editor's Notes
- First of all, thank you to Intuit for inviting me to speak and share my story. In the beginning, when I first started Legacy, I had to decide whether I was going with Quickbooks, Sage, or Xero, and going with these guys has been one of the best decisions I had made in business. They are a tremendous partner and have supported me and my clients since day one. They have a heart to serve and a passion to challenge the status quo. And you know what? I think that’s why I’m here. They wanted me to share my story so that the entrepreneurs and intrapreneurs here can be encouraged.
- Let’s start with a little about me. Anyone know where this is? Prague. This is the famous Charles’ Bridge. I grew up in the Czech Republic. I moved there because my parents starting a clothing business… selling pajama’s. Anyway, we immigrated to Canada in 2001. I went to UBC, then got my CPA, CA through KPMG.
- My wife and I really enjoy travelling. This is us in Thailand, learning how to cook authentic Thai Curry.
- It was hot, so I shaved my head. That style didn’t stick.
- I took that trip right after the UFE, so when I came back I was surprised that I got on the honour roll.
- A few months ago, my wife and I had our first child, Elizabeth... and.. as a proud new father, I just have to share some pictures with you =) She’s two months old now.
- My wife took this picture and sent it to our team with the tagline “When you find a mistake or something isn’t reconciling”. It’s so true, isn’t it? That’s exactly how we feel M wife officially turned my daughter into a meme.
- What’s Legacy Advantage? We are a CPA firm but we only do bookkeeping. Our vision is to become the most trusted and competent bookkeeping company in the world.
- While I was working at KPMG, I noticed 2 huge opportunities. Opportunity #1 - It was really hard for business leaders to find a good bookkeeper! I wanted to create an awesome bookkeeping business that would create a win win win relationship between the accountants, the clients, and us. The accountants get a win because they get a nice clean set of financials from us. Instead of spending weeks trying to figure out the mistakes, they can just slap a T2 on it, and it's done. This is a win for them because no matter how much work they do, their billing is about the same. If you have to spend lots of time your bill is around $3K. If you don't have any ADJ's your NTR/T2 is still about $3K. So.. why not work with a bookkeeping firm that can give you that level of quality? It's a win for the client because they get better financials throughout the year so they can make better decisions. It's a win for us because we get build a great business because of it. Opportunity #2 - There isn't a name brand that is known for bookkeeping. Most of the time, when people ask for bookkeeping, they usually ask for a referral from their accountants, lawyers, and friends and family. There isn’t a “place” to go to find a bookkeeper. So, we want to be become the brand that people associate with bookkeeping. When people are looking for a bookkeeping solution, I want them to think Legacy.
- Since Legacy Advantage was incorporated in September last year, we're now at 5 full time associates, generating half a million in sales.
- We’ve also been recognized as the Runner Up for Canada’s Firm of the Future Award. I know, it’s a runner up award, but since the winner is somewhere on the East Coast, I think we can call ourselves, the Western Canada’s Firm of the Future. This award recognizes us for our leadership in the use of technology, and the unique value we are able to bring to our client through our cloud technology.
- So, what’s the point of this talk? Intuit has recognized that many of you might be thinking of starting your own firms in the near future, or innovating your current practices and they wanted me to share my story and the lessons that I have learned so far. For those of you that are already managing your practices, I hope you can also learn something new and get a fresh perspective from a millennial By no means am I claiming that I know what I’m doing. I’m definitely not saying that I’m an expert in running a CPA firm. Rather, I just want to share some lessons that I have learned in my short time as an entrepreneur.
- First lesson - Focus
- There are riches in niches. (I usually pronounce it as "niche", but this phrase only works if you say "niches") Choose something very narrow and focus just on that. You'll be known for that skillset and really own this space.
- Right from the get go, we decided that we only wanted to do bookkeeping using cloud technology. We don't do any taxes, audits nor reviews. Ironically, more doors were opened to us because we were doing less. Many accountants wanted to focus on the year-end work and they were willing to refer their clients to us, not only because we did a good job, but because they were confident that we won't take their year-end work. Also, many large firms didn’t want to do the bookkeeping because of independence issues. If they are doing reviews and audits for their clients, they can’t be doing the bookkeeping as well. Again, these accountants prefer using us because they know we won’t take their clients.
- Also, we made the decision that we are mainly going to use Quickbooks Online. We don’t take any clients that want to stay on Sage, or Xero, or Quickbooks Desktop. This specialization allowed us to spend much more time in learning and exploring the capabilities of Quickbooks Online. I'm not sure if you've heard this before, but I often hear that QBO is not as robust as Desktop. To some extent this is true. But most of the time, people just haven't invested enough time to learn it, or come up with clever work-arounds to overcome any weaknesses. Any deficiencies are more than made up in the hundreds of apps that it integrates with. Therefore, we are beginning to be recognized as QBO experts in the Vancouver. We’ve been able to add tremendous value to our clients with this specialization. Here are some case studies.
- Tom runs a video production company. He created invoices in word and then emailed them out. He compiles a bunch of expenses together and gives it to the year-end accountant to do the bookkeeping once a year. The accountant does a great job, but the problem. Tom told me is “I don’t know how my business is doing. I’m operating my business blind. By the time I get my annual statements, it’s already 6 months too late”. We used QBO to solve his problem He now creates invoices directly through QBO and send them out. Clients can click into the email that they receive and pay directly by credit card. He can now track AR in real time in QBO and follow up on them in a timely manner. He now does bookkeeping on a weekly basis so that at any time, he can check and see how his business is doing. Most importantly, he can view real time reports anytime, anywhere, even if he’s on the road, doing a shoot in another country.
- We have another client, Jason. He runs a painting company. He used to create invoices in word, and then email them off. He tracked AR in excel. To him, job costing is super important because he needs to know how profitable each job is. He did that using excel. Every job was its own excel document. There are many problems. It’s very time consuming He is never sure he captured 100% of the cost because those excel sheets don’t reconcile to anything He can analyze profitability for each individual job, but it was hard to do any macro analysis. We used QBO as a platform to solve this problem We set up the invoicing system so that invoices are created in QBO, instead of manually. They can be directly emailed out of the system. Job tracking is done within the QBO system, real time, accessible from anywhere. Now he can view the profitability for all of his jobs on a macro level. He can drill down to see the cost breakdown for each job, or go even deeper to look at the expenses for each expense line for each job. Now, he has the visibility and the timeliness that he’s never had before.
- Now, I know that we are just talking about how cloud based bookkeeping can add value to clients, but this strategy can work even if you don't want to do bookkeeping. I know a firm in the US that just specializes in breweries. Their specialty has give them lots of success. By just focusing on this area of specialty, they were able to get really deep in understanding the brewery industry. They not only understand the accounting for breweries, but understand how the business runs and is able to consult for newer breweries. Now that she is the expert in that industry, and new breweries seek her out.
- Basically, what I’m saying is find your Blue Ocean. What can you do that can make your competition irrelevant? For those of you that haven’t read that book. Please read it. It’s amazing.
- So my first tip is Focus
- Second lesson that I had learned is Hire for Fit; Train for skill. Who’s heard this statement before? Almost all of you. Well, guess what? I heard it before too. Did I follow this advice when it came time to hire? Nooooooo No way! Training people? Ain’t nobody got time for that!
- Huuuuuge mistake! In the beginning I felt I had no time to time to train associates, so I hired 2 “experienced” people. They had all the right credentials. They knew Quickbooks, they had good positions before. They had degrees in accounting, and years of experience. BUT, they didn’t know Quickbooks online, and they weren’t willing to learn. There were very proud and weren’t willing to ask questions. I’m not sure why. What ended up happening is that they made so many mistakes that I had to essentially re do a lot of their work. I let both of them go within 2 months. All in all, it cost me over $15K, because not only had I wasted money in paying them, I couldn’t go out there and network and get new clients. Also, my new hires had to spend time fixing their files. It was a nightmare. A related tip: hire slowly and fire quickly. Don’t hesitate too long. Pull the trigger when you feel it’s the right time.
- One book that I read during this time is called “Top Grading”. It was a tremendous book that outlines a framework on how to hire your A players. Here are some main things that got out of this book A player means different things to different companies. Define what an A player means to you. This requires a lot of self examination to see what type of a culture do you have and who do you want on your team? Once you know who you want, it’s a lot easier to find it. Use a multi-stage interviewing process that includes the Threat of a Reference Call. What that means is that you want THEM to arrange a reference call with their previous employer. In the form that they fill out, I ask them. Are you willing to arrange a reference call with your previous employer? Yes/No/Later. If they answer anything but Yes, they are not an A player. Because only A players are willing to call up their old boss and arrange the reference call for me. Always involve more than one person. After this book, we revamped our hiring process. Next time around, I hired for fit. Of course, they needed to have an accounting degree so that they are proficient in debits and credits, but my ideal associates are those that are hungry to learn and are willing to adapt.
- Since then, we have hired four awesome associates. One of our super stars is Sofiya. She comes from Ukraine. She’s super hard working, very involved in the community, and I would classify her as an “overcommer”. We had a non-profit client that had a SUPER complex accounting process. It starts with having 10 donation sources. Cheque, cash, paypal, stripe, Chimp, Canada helps and various others. There were so many nuances, and multiple funds. Both Jerry and I scratched our heads and we had no idea how to streamline their process and take them to Quickbooks online. We were ready to give up and reject this client, but Sofiya said. Nononono, let me try. She spent a full week on-site learning and documenting the flow of money, and came back with a proposal that could make things work! We agreed and began implementation. Now, the bookkeeping process takes about half of the previous time. It’s more accurate, more timely. Most importantly, the client saved thousands because they didn’t have to hire another staff. Why did we choose Sofiya? She embodied our value of “Entrepreneurship”. She took ownership of the file, and when Jerry and I told her that it’s impossible, she said there had to be a way. And she found it! She just “Figured it out”
- This is the rest of my team. My super awesome associates.
- Tip 2: Hire for Fit, Train for Skill
- The third advice I would give is learn about leadership. There just isn’t enough great leaders out there. So what is leadership?
- John Maxwell defines it as influence. Leadership is influence. Nothing More Nothing Less? Who here thinks they have influence at work? Who here thinks they have influence at home? Who here thinks they have influence in your social networks like Fbook, Twitter LinkedIn? If you have followers you have influence. As you see, most of you have influence. Thus most of you are leaders.
- So how do you increase your influence? You first have to start with yourself. I won’t go too much into the detail here, but just begin by asking yourself. Are you the best you can be? Are you worth following? If not, why? Do you know where you are going? Do you have an inspiring vision for your personal life? Often times I go back to UBC as an alumni and one of the most frustrating things is that lots of these students don’t know who they are; where they are going; and what they want to do with their life. We’ve been taught in business school how to come up with a vision, mission and values for our companies. But I think it’s even more important the each and every one of us needs to know the our vision for our lives and the values we want to live by. Therefore, as a leader, the important step in becoming a leaders is discovering who you are, what your values are and where you are going. Only then are you fit to lead other people.
- If you have a team, or you plan on having a team. Listen up. Your most important asset is not your clients, your proprietary software, your location. Your most valuable asset is your associates. You can always get new clients, but it’s super hard to grow and keep a good team.
- Stephen Covey said: You can buy a person’s hand, but you can buy his heart. How do you buy his/her heart? Give them a cause to believe in. Millenials like me are hard to manage. We are often seen as entitled. And you know what some are, but I would say that lots of us are idealists. Give us a dream and a vision worthy of our energy, and we will give it our all. We need to be inspired, and not managed.
- A book that I would highly recommend is the 5 levels of leadership. This book is fit for leaders of all stages. Essentially it talks about how to move from a leadership based on position to leadership based on your personhood (or what you represent). … I know .. what does that mean right?.. Read the book.
- Tip #4 - Stop being a….
- … Perfectionist!! What.... what did you think I was going to say? You dirty people. This is a CPA conference for God's sake. Of course, take this advice with a grain of salt. There are areas where mistakes cannot be tolerated, such as when you are filing tax returns or doing an audit. What I’m talking about is having a mindset to TRY things even when you are missing pieces of information. For example I’m not sure if QBO is good for my clients. Well, let’s try it on one and see what happens. I’m not sure if we should switch to a new CRM. Well let’s try it one location and see. I’m not sure if we should focus on one industry. Well, try it and see what happens I’m not sure if I should make the leap and start my own practice.. Well, try it and see what happens! You are CPA’s. In addition to knowing lots of rules, I believe the greatest skill that a CPA possesses is the ability AND the network to figure things out. I’m not saying that you shouldn’t manage risk, or you shouldn’t do research. But CPA’s in general are too analytical. Matt, our local Intuit representative and I had lunch and said that there’s a new software called Plooto. It allows non-profit board members to authorize payments from anywhere in the world instead of having to chase signatures. I thought that was interesting so I looked into it. It was awesome! Was it perfect? No. But we tried it. We told a few of our non-profit clients and they have adopted it. They love it!! It totally eliminates a huge problem of having to chase for two signatures. Through innovation, you can find new ways to service your clients and add value to them.
- On this topic. I’d like to recommend Richard Branson’s autobiography. He is a true innovator. He took very old school industries like music production, airline travel, insurance, railways and turned them into exciting offerings. He is the David that fought Goliath.
- Last advice that I would give is to get involved in your community.
- If you are a sole practitioner, get out of your house more. I recommend getting a shared office space. I know it’s going to be a bit more expensive, but you open yourself up to so many more networking opportunities. If you’re in a shared office space, you can run into people down the hallway, in the coffee room etc. When Legacy first started, we were sharing a space with one of our non-profit clients. Not only did we build a very strong bond, our non-profit client referred many other non-profit clients that were visiting our client. You’re not opening yourself up to opportunities if you’re not out there networking. There’s a maxim: “90% of success is just showing up!” Lots of non-profits are looking for competent board members. If you want to get involved but you don’t know how, just let people in your network know. When I started Legacy, I also wanted to give back by joining a Board. I let everyone know that I was looking. Then, a CPA friend told me of an opportunity to volunteer as the Treasurer for the Fringe Festival. I love theater, so I jumped on it. I didn’t know anything, but I figured it out! (See… stop being a perfectionist). It’s super fun to be able to add value to other organizations from such a high level. Get to know your competitors. I use the term loosely because I believe that if you are truly offering something unique, you have no competitors. Nevertheless, get to know them. Reach out and say hello. Tell them what you do and how you are different. One of the first things I did is to talk to all the bookkeeping firms in Vancouver. I introduced myself, and told them about my business. They told me about theirs and how they are unique. Now, when someone asks how we are different than the other companies, I have a real answer because I’ve actually talked to them and I know exactly how we are different. There have been cases where those relationships brought more business as well. Many small bookkeeping firms struggle with the harder jobs. Thus, they send those to us. We specialize in complex bookkeeping. Get to know your suppliers. Did you know that your suppliers actually want you to succeed? They more you win, they more they get to charge you! Tell them your story, how you’re different. Tell them where you need help. Of course, get to know your customers. I find CPA’s don’t do this enough. We are often too busy just doing the work, but listening to your clients can really help you differentiate. I was hanging out with my client and he said that he wanted to track KPI’s so he can reward his employees based on those KPI’s. He’s tried it before, but it was an administrative nightmare. We asked if he’s willing to have us take a crack at it. He was delighted! He didn’t even know that we offered this kind of service. Again this is a new way that we can add value to our clients.
- In summary, just network more.
- So, that’s it! I hope these 5 points will help you get started on the right foot. If you want to connect, above is my contact information. Please reach out if you have questions about QBO, or any other books, software, that I have mentioned today. I’d be happy to show you how we use them at Legacy. Or.. reach out if you want to grab coffee Or.. reach out if you have clients that need an awesome bookkeeper!
- If you don’t remember anything I said… well basically. Read books; Stick to the cloud, and you’re good to go!