Episode Transcript
[00:00:08] Speaker A: Hi there, and welcome to the podcast. I'm your host, Meryl Johnston. The lifestyle accountant show exists to help today's accounting firm owners build successful firms while also living a healthy, happy life without sacrificing sleep your weekends or time with loved ones.
Um, I've got producer Elle here with me today, and we're going to be trying something slightly different in the podcast for the first part of 2024, where we have a little bit of a chat about what's happening before we get into the interview episodes.
Elle, great to have you behind the mic instead of behind the editing screen.
[00:00:46] Speaker B: I know. I'm very excited to be here and feeling the pressure a little bit, actually, you do this all the time.
One of the things, Meryl, that I love about hanging out with you and getting to be in your world is your year in review and your goal setting process.
So this is one of my, I don't know, questions I would love to ask you is what has been your summary of your 2023 year in review? What have been the highlights and low lights, perhaps?
[00:01:14] Speaker A: Well, 2023.
When I set the goal at the end of 2022, I wanted my theme for the year was ramp it up. And that was because 2022, I was surprised by a breast cancer diagnosis, had surgery, and that year kind of was derailed for me. And 2023, I had my final surgery in January, and knowing that, that I would have some recovery from that, but then I should be feeling fine. I really wanted to ramp things up in 2023, go hard, figure out what the next move in my career was, get fit and healthy, and also be a great partner, parent, and friend.
And so I did a lot of that. But my main takeaway from the year after saying yes to lots of different things, having a lot of travel, both with work and with family, was that I had too much up. But I ramped things up a little bit too much. And particularly on the work side of things with travel and also with early morning calls to the US, which impacted some other important areas of life.
My theme for 2024 is going to be less. So saying no to more things, less projects, just less everything.
[00:02:39] Speaker B: See, that's so interesting, isn't it? Because you had that goal of ramp it up and now, because literally, until this moment, I didn't know what your sort of theme was or what your focus was going to be for 2024. So isn't that so interesting that it's ended up sort of swinging back in the opposite direction? But I guess you also have to do it to find out.
So I guess. Which of the are there certain areas? So, still focusing on 2023 for a minute before we jump to looking forward, were there areas where you were really happy with how much you ramped it up? Because I guess you have areas across all of the different sort of facets of your life. It sounds like maybe you ramped a little too hard to do with work, and then did your other areas suffer? Did you also succeed in that kind of ramping? Or. I guess. Talk to me about the balance.
[00:03:26] Speaker A: Yeah. So there's a few main areas that I focus on each year. So there's career, family, health, fitness, learning, and adventure. So they're my six categories. And so, career, I went a little too hard across. I felt spread thin across too many different projects, because even though I'm only one day a week at Bean Ninjas, that still takes up headspace. That's my primary source of income. So I had that. We launched the lifestyle accountant podcast, which I love doing, but tell me more about that.
[00:03:55] Speaker B: That sounds amazing. Leave five star review, please.
[00:03:59] Speaker A: It's a lot. By the time you plan an episode, schedule the session with guests, prep them, do the research, record it, edit, and then publish and distribute. That's a lot to try and do that to a weekly cadence. So I really enjoyed that. I got involved with team up and as an investor initially, but then came on as a part time brand ambassador. I had a lot of events and speaking, so there was a lot happening in the work space. And you asked, well, was there anything, did that detract from other areas? So I'd say adventure, definitely. I normally try and do a multi day trip with my dad and my brother every year, and we weren't able to do that this year. In 2023, we did do a day trip, but it was just too hard to fit in around family and work commitments. And then the other, I'd say, is fitness. So I worked really hard after my surgery in January to get back into surfing. So I had a specific routine with a cancer physio, which went for three months to really get strength and mobility back into my chest. And so I worked really hard at that.
And that had a very clear goal of some specific movements I needed to be able to do before I could surf again. But once that happened, then strength and mobility for the rest of the year kind of really dropped off. And fitness is an important part of my life and my identity, and so I was a bit disappointed with myself there that, yes, I went to the OD spin class. I still kind of exercised maybe three times a week. But I'm trying to exercise every day and I turned 40 in 2024 and I want to go in really fit and I don't feel like I hit that goal.
[00:05:38] Speaker C: Right.
[00:05:39] Speaker B: Yeah. It's so interesting, isn't it? Because I guess one of the morals of the story, perhaps, is that we can't always do every single area of our life perfectly or maybe to the level that we'd want. So with those reflections, I guess, in place and having an understanding, I guess, of what you went through last year, also, apologies if people can hear my little baby in the background. This is what we're about here at the lifestyle accountant is looking forward to 2024. You've said your theme, is it less just as one word? Yeah, it is.
[00:06:08] Speaker A: So it's one word less, but that means just in all areas of life, trying to get focused about what moves the needle in all areas and staying focused on that and not trying to do so many things.
[00:06:22] Speaker B: So then how does that fit in? So you're not doing less fitness? Because I know I'm hearing from your reflection from last year that maybe you wanted to do more in that. So then I guess if you're wanting to ramp that up, are you then doing less, perhaps in that career space? And is that how you're trying to, I don't know, moderate at all?
[00:06:44] Speaker A: Good question. So even with fitness. So I want to do mountain biking, I want to surf, I want to do ocean swims, I want to do adventure races, I want to do spin classes at the gym and yoga.
[00:06:54] Speaker B: Sounds like.
[00:06:57] Speaker A: To me I need to get more specific. I don't have time to do all of those things. So rather than in dabbling in all of these areas, I just need to get specific. And I don't really enjoy strength training, but I think I need to do it. Especially now I'm going to be entering my forty s. I should be doing that. I should be doing mobility. I love surfing and mountain biking, and I think I just want to pick one race for the year and train for it. So that might not sound like less, but in terms of all the thing, I was playing pickleball, indoor soccer, I dabble in lots of things. So to me, even with fitness, is about having less and then owning less equipment. But I might be going off on a tangent here, but I think the more stuff you own, the more you need to maintain it, look after it, store it.
[00:07:42] Speaker B: I agree with that, actually. I totally hear you.
[00:07:48] Speaker A: Part of our regular cleanouts involve depositing baby things over to your.
[00:07:53] Speaker B: Oh, yeah, like the toy that I think I just gave Meryl some level of perhaps, like, flashback nightmares with before that makes this repeated sound that Jack is now playing with.
That makes sense, though, when it comes to now, I understand that framing, I think for less when it comes to that fitness realm and just being a lot more purposeful, specific.
So then, what else does it look like for you for 2024? Talk to me about, say, family and career and what big adventure are you thinking of for this year?
[00:08:25] Speaker A: Well, let me start with family, and there's probably a topic related to that that you asked me. So I think family went well, and I make that a real priority. And so I think that went well. In 2023, I wanted to take each of my kids on a one on one trip, and I try and do that every year, and I did do that in 2023. We went on multiple family trips, probably four or five during the year, and spending time and trying to get home in the mornings and evenings so that I'm there for breakfast and there for dinner most days. I did that apart from my work travel, but it's the friendship side that suffers. So I put family and friends kind of in that same bucket of relationships. And in 2022, again, I prioritized family, but felt like, oh, it's just really hard to fit in, seeing friends and maintaining those relationships. And exactly the same thing happened in 2023.
I did do one monthly dinner with some business friends through the DC group that I'm part of. But outside of that, by the time I get to the end of the day, the last thing I feel like doing is calling a friend for a chat on the phone after a day in the office.
[00:09:30] Speaker B: Totally.
[00:09:32] Speaker A: So that was an area I felt like I neglected in 2022 and in 2023. So that doesn't necessarily fit into the theme of less, because I think I probably need to do more in making an effort with friends and those relationships and with family, I was pretty happy with how the year went, and so I'm not planning to take things away, but again, just figure out what's important. And to me, being there for breakfast and dinner pretty much every day and trying to do less business travel is something that I'll be doing to spend more time with family. And I think those trips that we do make memories and so not planning to do less of those either.
Awesome.
[00:10:11] Speaker B: And so when it comes to, I guess, the same way, I think that you were beautifully, I guess, clarified. What does less mean in terms of that fitness area?
[00:10:20] Speaker A: I guess, is there a way that.
[00:10:22] Speaker B: You'Re wanting to envision being more, I don't know, I guess, present in that friends way. Have you had any thoughts? And it's clearly something that's very important to you as it's been a goal on your list consistently for a few years. So I don't know what are your thoughts or learnings around that from the previous years? And one idea, perhaps for you, not that you're here asking for ideas, could you combine, say, some of the fitness things with some of the Friends things?
[00:10:48] Speaker A: Two birds, 1 st. That's the only way it happens. So for me, basically, the only time I see friends is if we're meeting up for a surf or meeting up for a mountain bike ride or something like that, because I've already prioritized that and scheduled it. And it's funny you say that seeing friends is important, and I think it is in my head, but my actions aren't showing that because I haven't been prioritizing it.
But I think that's the great solution. It means I only see friends that do those activities or do some kind of activity that I want to do.
I've had friends complain of that. Can we just meet up for a coffee?
[00:11:26] Speaker B: So if you're listening and you want to be friends with Merrill, go and buy a mountain bike, people. There you go.
No, I think that sounds really good. And look, I always think you are very hard on yourself, which is a beautiful quality. But as well, we can't always do everything perfectly all the time. And I think even if you achieve, say, half of the things that you're setting out to achieve in 2024, which I'm sure you would probably be appalled with, but I think that would still probably make it a phenomenal year.
[00:11:54] Speaker A: So, yeah, I'll add something in there, because as a fairly new parent, I've been a parent for coming up on five years, I hadn't really factored in sick kids. So I have my schedule and I've optimized things. But we had sick kids. I would say of the twelve months, three months of the year, we had not all at once, but across the year, we had someone home from daycare. My kids go to daycare twice a week. We had someone home. Or we had kids not sleeping through the night because they were sick. And so that really impacted things from having to change schedule last minute often just not getting a good night's sleep. Having kids wake up at four or 05:00 a.m. So there's not time to exercise in the morning. It really kind of threw the schedule, whereas with one kid we were able to adjust for that, but with two, I suppose I'm still getting used to that. And that wasn't something that I had factored in.
[00:12:52] Speaker B: Yeah. Look, as a parent that's only been a parent for what, seven months now. Yeah. The sleep deprivation, that is real. The fact that you're achieving anything at all with two kids, I'm extremely impressed with. So well done to you. So then I guess from this point, I suppose we were hoping to do a more regular update with you, say, at the beginning of the podcast about these different sort of goals and areas. So before we come back and we record next week's intro, is there anything, I guess, what is on your radar for this upcoming? Maybe just one week? What are you kind of thinking of? What are you focusing on? We would all love to know.
[00:13:31] Speaker A: I'm trying to focus on habit stacking. So building one habit at a time rather than trying to make all of these changes and work on all of these goals all at once. So the first thing I'm doing is focusing on mobility.
Just my body is aching after a week back in the office and I think that's an area I need to focus on. So I've been doing yoga with Adrian, which is on YouTube. Her free.
She has lots of free videos, but she's fantastic. Yeah, awesome. She's got a 30 day challenge at the moment, so I'm on day three of that. And so that's nice. It's a sequence where it builds upon the skills that you're practicing and learning. So that's my current focus is to make sure that I do all 30. I think it's 30 of those videos to try and get back into a habit around mobility. Got some other things, but I think probably one thing at a time is the habit stacking mentality. So that is one of my focuses at the moment. Awesome.
[00:14:28] Speaker B: Well, we'll look forward to hearing your yoga update and yeah, see what other things come up over the course of the next little while. But yeah, that is a fantastic overview of last year. Jack's really excited as you can hear about it in the background. He's very excited for you, Meryl. And we'll all be looking forward to following along with how all these goals go this year because I do think you are probably the most focused and I guess disciplined as well when it comes to always doing your year in review, setting up for next year and everything like that. So I think we can all learn a lot from you there. So yeah, that was lovely. Well done.
[00:15:08] Speaker A: Oh, good. Yeah, it was fun doing it with you.
[00:15:11] Speaker C: All right, well, we will talk to you soon.
[00:15:13] Speaker A: Bye, Jack.
[00:15:15] Speaker C: Bye.
[00:15:19] Speaker A: And now onto today's main topic. I'm talking with Tyler Kasky from the bin counters. Tyler was previously on the show, talking about why he'd turned down a director role at a big four firm to start his own firm. That was season two, episode nine, if you want to check it out. As well as being an experienced CFO and accounting partner, Tyler is also a great leader and communicator and someone who is living a full life. We're covering a range of topics today.
[00:15:45] Speaker D: Q a style it's super important understanding value and profit. Know I think sales is obviously sometimes overpaid, especially in accounting and law firms and professional services firms, because it's seen as the hardest. It's not the hardest. Delivery is always the hardest, but it is the most niche. And only a few people in those industries can do the sales to the quality that resonates with the client base.
[00:16:11] Speaker A: Some of those topics include Tyler's perspective on business partners in accounting firms, how transparent to be with your team around the financial metrics that you share, whether or not he has an executive assistant, and why. And we do more of a deep dive into time and materials billing. That was a topic we touched on in Tyler's earlier episode, where there's a trend for value based pricing or fixed fee pricing in the accounting industry. And that raised a number of questions, so we go into more detail about that topic as well. All that and more coming right up on the lifestyle accountant show.
[00:16:47] Speaker E: And now a word from our sponsors. This podcast is brought to you by team up, helping you to recruit top filipino accountants without the ongoing monthly fees. They can source accountants with experience working at us or australian firms who are familiar with tools like Xero, QBO and Dext. They can also recruit specialist roles like bookkeeping, team leaders who have leadership experience.
[00:17:11] Speaker A: And australian tax specialists.
[00:17:13] Speaker E: I recently came on board as an investor and advisor to teamup and I love their ethical approach to the offshoring industry where they look after both the accounting firm and the filipino accountants. Make sure to check out the team up newsletter for more content on building top tier accounting teams in the Philippines. That's at hiyateamup.com hireteamup.com.
[00:17:40] Speaker C: Tyler, welcome back to the show.
[00:17:42] Speaker D: Thanks very much. Good to be here.
[00:17:45] Speaker C: You were on last time talking about some of your own career journey. This time we're going to be talking about a range of different topics and I know you've got multiple businesses on the go. You mentioned a side hustle there with the demo sales training, and I thought it would be interesting to talk about your views on having business partners, the pros and cons. And I think a commonly asked question is around how to structure compensation between the business partners to get alignment.
[00:18:14] Speaker D: Yeah, it's a topical question for myself right now. I currently own 100% of our business, the bean counters. And I've got a business partner, Dan, who, he's worth every penny of 50% of the business. I know this, he knows this. He's been around for about a year.
He's been a CFO in large multinational businesses with manufacturing or lion and all these types of other businesses.
And so we've started talking about it at length. But I think my experience came in really early when I moved into law firms and I was about 27, and I got like a financial controller role of a 400 people law firm down in Melbourne, which was like a pretty big role, but we had 40 partners and we had 22 equity partners, and then we had 18 salary partners. And I quickly learned about the difference between control and responsibility, and I really saw the difference there between what the equity partners would work on versus what the salary partners would work on. And I saw that model be very strong.
I think, especially in the accounting world, having salary partners is a really smart incentive.
I do think you've got to be very cautious giving away equity in a business, because equity creates a voice, it creates control, it makes all the admin so much harder as well. But what I like to start with, I've known Dan since like 2014, and I know he's a trustworthy human. He works just as hard as I do. He's incredibly smart. And I know that long term, I'm going to be very comfortable working with him for the next 30 years, or however long I last. So we've kind of gone through the time.
If I'm in an accounting firm, I'll always try to bring on someone with a zero equity to start with. I'll be doing salary plus bonus, because all equity does is create money into your bank account. And you don't necessarily need control and shareholder control or trust capital control to be able to earn the money you need to. So for all our team, I know I've mentioned it before, but our entire team's casual and everyone gets a bonus. Dan gets a bigger bonus because he's a partner. And long term, he and I are definitely going to have a discussion around equity.
But what I've been really cautious on is around buy in and dollar value and those types of things. And I actually like the zero dollar buy in model.
I've seen law firms have $60,000. I've seen other law firms have $600,000 buy ins for minor businesses.
And I really think we are all just small businesses in our own right. If you're a partner, you should effectively be selling and delivering your own projects and running your own team. And as long as you can measure your own team, I think that's very important. So you've got a profit per team, which should effectively create a distribution. That distribution can be salary or bonus. It also can be dividends or trust distributions as well. So internally, for partnerships, I think that's where I sit. But then on the side businesses, this is my favorite part, because Lauren and I, we work side by side on our sales business, and she just invoices me for her time, and it works out really well. But the other business I work in is called only firms. And we are assistors, four of us, accounting, helping accounting firms improve the way they do accounting. And that's really just a marketing. But we all work together under one of the umbrellas or one of the businesses. One of the four businesses. If we've got a client, it might be my business, and then everyone works under my umbrella. But I've found that utilizing the strength of other people for marketing, but also for solving complex problems. Because you'll know this as soon as you get to a business of about 100 people. Plus, the problems are not easily determinable. So you've got to really slow down and think about, can I solve this by myself? Should I pull in other people? And then not only can I solve it, I always find the hardest part is, can I actually deliver this on time and to a high quality? I can by myself. We'll do it. But if we need another team member or more expertise, that's definitely when I bring in other people. What do you do? What's your opinions on, especially accounting firm ownership?
[00:23:40] Speaker C: Yeah, I mean, I've tried some different things. I'll come back to you, but I want to ask a follow up question, because I was really curious when you said that you prefer the zero equity or the zero buy in or the lower buy in compared to the higher one. So before I forget, I was really curious when you said that, so I wanted to get you to expand on that.
[00:24:00] Speaker D: Yeah. So our business, we're a project business, and I think all accounting firms are worth zero. Like, literally nothing.
[00:24:09] Speaker C: Sorry, guys.
[00:24:13] Speaker D: Obviously you've got ar or monthly recurring revenue and annual recurring revenue, but you can just as easily lose a client as you can win a client. It's probably easier to lose than it is to win. So the best thing I've seen is, and it usually comes from if you've got a salary partner that have proven themselves, and let's say they're making half a million, but they've been earning a million dollars in net profit, so they've kind of been contributing 500 grand into the pool is the best way to put it. I almost see that as their buy in. So if they can continually do that for a period of time, then when they want into the business, I think it's just, let's say if you've got 100 shares, here's ten of the 100 shares at one dollars, so they've got a $10 buy, whatever it is. I know that doesn't play very well because everyone's looking to sell business and sell recurring fees, and it is different. Like I am looking at, we are a project business, but I'm really interested in relationships and quality of delivery and solving problems is what creates value. Just passing clients from left to right is not that valuable to me. And I've also found, like, I found that clients now are looking at audits and tax returns and financial statement preparation as commodities. So that's why the price has gone down. And I really think that's because the reliance on financial statement accuracy has considerably dropped from share price value. So back in the day, share price used to be completely tied towards annual or six monthly financial statements. So therefore audit and financial statement preparation was incredibly high value. But now, if we look at the value of a lot of tech businesses, it's got absolutely nothing to do with their balance sheet, because I don't think fris or gap or any of those topics have a strong approach into valuing intangible assets, because intangible assets are just so hard to value. So that's where I've seen the commoditization move down bookkeeping, mandatory has value. Tax returns. Mandatory has value. But that's why I think the change of the market has happened. Businesses are valuing compliance less because it doesn't create shareholder value for them.
[00:26:43] Speaker C: Yeah, that's a really interesting way of looking at it.
I hadn't actually thought about it from that perspective, but I could see how a partner who is already contributing value, how you could argue, well, that actually is their buy in. I see the challenge is probably for the exiting partners who want to believe that what they've built is worth something and to get a payout on the other end.
[00:27:05] Speaker D: Yeah. And I remember working at a law firm, I won't say their name, but they had equity partners, just got back the exact dollar that they put in. So they used to put in 600 grand. And then when they walked out, they said, thanks for my 600 grand and goodbye. And I love that method because law firms like, yeah, you've got some recurring clients, but it's all about what you're doing now. And that one, I think it may have stuck with me for the last almost 20 years, so I might have been tainted in 2007 from that.
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[00:28:29] Speaker C: What we do at vinages. So originally I had a co founder, so I had a 50 50 business partner. And then 18 months into the business that didn't work. I've recorded a whole episode about that and lessons learned. If anyone wants to go back to that, I'll hook it up in the show notes. But I was lucky that I went into business with a nice, honest guy. We were not meant to be business partners, but he was still a good guy. And we had some terms in an agreement about how we would handle an exit and a buyer. And so we followed the process that we agreed to and I was happy with how that went. And then I thought, oh, no, business partners for a while. And then I changed my mind. And so the way I've structured things is similar to what you talked about with a partner having a client book. So we've got Wayne in the US and Tom in the UK, and Michael, who built a separate business outside of the beanages brand, and also Tracy when she was doing beanages Australia. And they managed a portfolio of clients and a team. And so you could see pretty easily the outcomes that they were generating for their portfolio. So that's how we've structured it and then that's great for the profitability of their team. But then I had to work hard as the leader in getting alignment for things like marketing, which is across the whole firm. So it's like a shared resource. And so that was something that I spent time, well, I still do spend time thinking about.
[00:29:58] Speaker D: It's super important understanding value and profit creation because I think sales is obviously sometimes overpaid, especially in accounting and law firms and professional services firms, because it's seen as the hardest. It's not the hardest. Delivery is always the hardest, but it is the most niche and only a few people in those industries can do the sales to the quality that resonates with the client base. But it's the right topic to have.
I've got two friends that are trying to open a gym up in Byron. One of them's going through a divorce and they're like, we're about to open a business. And I was like, is this a 50 50 business? And they were like, yes. And I was like, is your other shareholder currently going through a divorce? And he's like, yes. And I was like, you should right now get legal assistance on how to structure this agreement. Because every time you go into a new business, you've really got to consider, as you mentioned, buyouts in the other end of that, which can happen if someone leaves, especially if marriages occur. You've got to be really smart and simple about that. That's where I think lawyers are worth their weight and gold is the shareholder agreements and those types of things, especially for small to mid sized businesses.
[00:31:24] Speaker C: Well, we've got time for two more questions, so I'm going to pick my favorites here. The first one is whether you share what level of information you share with your team about the performance of the business. So whether it's revenue, whether it's more than that, KPIs and how you think about that?
[00:31:41] Speaker D: Good question.
This one is hard, but I've had a complete transparency model from day one. My base salary to everyone else's base salary plus bonus model to the profit of the business and anyone's additional bonuses. So everyone in our team knows every dollar of the business, from net profit to gross profit to revenue. We even talk about cash balance and those types of things.
It can be confronting at times, especially if you've got new people in the team. I've had the mentor since I was 22 and I got my first contract at KPMG and I signed it for $31,000 and I was over the Moon and I told my friends, and from that moment, I've been transparent about my salary and our business's profit from day Dot. And every now and then it's created some resentment, maybe within the business, but also sometimes in salary times. Some people found it like I was bragging or maybe I wasn't performing or getting enough pay and I should change industries because a couple of my friends were over a million dollars of Take Home salary per year because they were accounting Firm partners. Others were on $100,000. So there was a big range in our friendship groups.
But I've always found transparency is the best option.
It does get more confronting, though, when you have new staff, it's really hard. But I love sharing salary and bonus models because I think it's motivating. And also I talk to people about their future. I'm like, if you keep doing X, Y and Z and could add this to your arsenal, then there's no reason why you can't be on 500 base.
[00:33:33] Speaker C: Plus, yeah, I love it. So we are into transparency advantages, and I used to write income reports back in the early days, but we've never shared people's salaries. And I think the main reason that we have it is because it's hard to go back from that. So I've never felt ready just to try it, because once you try it, it feels like you're walking through a door that you can't go back out.
I do. I like the idea of transparency and just being really clear about things. So have you had any problems with team members thinking that, well, hang on, Jane over there. I think I should get paid more than her because my output is better or why isn't that bonus? They got that and I got this envy or just misalignment between people's belief of how they performed and your view of that.
[00:34:23] Speaker D: I love those conversations. I had those conversations a lot as a CFO rather than now as a business owner, because most people are on pretty much the same model, but with different bases based on their charge out rate. So if you can improve your skills to get a higher charge out rate and you can start running your own projects or taking control of your own projects, I don't have to be involved in every meeting, then we can increase the rate.
And if your quality is high enough, you can increase the rate. So as your rate goes up, your bonus goes up because your bonus is directly correlated to how much you bill.
And the conversation then moves from, I've had one conversation in the business about base and then when someone moved from a full timer to a casual.
But it really came down to if you work hard enough and I break it down to if you do x, Y and z, really simply if you start to run your own zero flip projects, if you start to run your own payroll improvement projects, then I can start charging you at x. Therefore your salary will go to y.
And also, I've always come back to quality. Our business is nothing without quality. If I've got to fix up things, then it costs myself time, usually at night, and also the client time as well. So that keeps the rates kind of low.
But in CFO land I've definitely had staff being like why is he on more? Why is she on more? And I want people to have those conversations. I encourage them to do it and I start those conversations with them and I will go into bat for them at the remuneration committee or the CEO or chairman level to make sure everyone's paid equally. I think that's the part of leadership that you've got to take is looking after your team, making sure they're engaged and happy and well paid for the work they do. And if you don't, I think you're probably missing 20% to 25% of your leadership requirement. But you're also risking losing some really good team members just because all you've got to do it might just be ten grand pay rise and you'll keep them for another year.
You've really got to look at it from a selfish and selfish view on keeping them in the team, but also a view of helping them out in their business.
[00:36:43] Speaker C: Renumeration could be a topic for a whole episode. There's so much there.
[00:36:52] Speaker E: Is managing your advisory services sometimes like herding cats, prepping for a client meeting means gathering notes, financials, goals that clients have shared with you, often which are stored all over the place.
[00:37:03] Speaker A: There is a better way.
[00:37:05] Speaker E: Brief is a simple tool that enables you to deliver structured and meaningful advisory to all of your clients. Prior to the meeting, clients are sent a questionnaire via the brief portal. It's easy to send the questionnaire by tailoring the templated questions within brief. This makes meeting preparation easier and means you can spend more time discussing important topics during the meeting rather than gathering that information from the client during the meeting. All history, notes and action items are easily accessible within the brief portal. So if you're interested in delivering meaningful advisory services to your clients in a scalable way, then check out brief that's brief. Side note I am an angel investor and really appreciate the team's approach to business and also love receiving their regular investor updates.
[00:37:57] Speaker C: I've got my one pet question around executive assistance, so we'll move on to that and then it'll be time to wrap it up. I've been writing about this a little bit on LinkedIn, trying to understand whether people have executive assistance and then what they do. Because my view has in the past been I prefer to hire a different role because I think they would provide more value because I think I'm fairly efficient at setting my appointments and doing the thing, booking, travel, that kind of thing.
[00:38:27] Speaker A: But I've had a lot of admin.
[00:38:28] Speaker C: Come around recently, so now I'm reconsidering, but I still haven't made up my mind. So I'm curious about you and whether you have an executive assistant.
[00:38:36] Speaker D: I don't at the moment. If I was double the size. So we're a team of eight as of this week.
If I was 16 or 20 people, I probably would.
That executive assistant would probably run our payroll, it would run our billing process or most of the billing process. It would do our bookkeeping. But I've been able to with a team of eight. I've automated our business with payroll and using wheel for expenses and cards that I do it all of our bookkeeping on my phone while I'm waiting for my coffee in the morning.
So just using the zero app has been really easy.
Wheel has changed so much of the bookkeeping churn and then also when it comes to travel bookings and those types of things, I'm the one that travels the most in the business. We all work from home, so we're predominantly an online kind of business. We do have someone going over to the east coast of New York early next month, but he can do his own travel bookings. He's a big kid. Everyone on our team is pretty much 30 or 40 plus. So I really encourage people to when they do their admin side of their life is try to make it work for themselves and try to automate it. That's what we do as a business. We try to automate admin. And so when our team members go across he's going to be working in DC and New York next month. I want him to take the weekend off if he can catch an NBA game, dear Lord, do know if he wants three or four days in LA to hang out and shoot some hoops in the know. I encourage him to do that. And if you've got like an admin assistant doing it usually it's a bit more transactional admin rather than trying to do the care admin. But I get it every now and then when it's 09:00 at night and I'm doing billing, because with time and materials, I'm like, maybe I should get someone else to do this. But at that stage, it's still me.
[00:40:51] Speaker C: Well, I'm going to report back. I'm not hiring anybody now, but in the next six months to do a proper analysis.
I'm similar to you in that I want to try and automate things. So booking meetings. Well, you can use calendar, I use savvycal. There's a lot of things that you can use to automate rather than hire somebody. So we will.
[00:41:12] Speaker D: I agree. I agree. Meryl, there is one question I'd like. I know if we've got a couple of minutes left, there's a question I'd love to ask you about on billing. And I know you and I talked a little bit about time and materials, billing versus recurring revenue after our chat, because I know the whole market is moving away to more recurring revenue and fixed fees. Where are you sitting on that now?
What's your thoughts on that?
[00:41:42] Speaker C: Yeah, so before we talked, I was very much value based pricing. If I was doing consulting, where I'd try and assess the value of the deal and how important it was to that person and sell it like that. Then with vintages, I'm not selling, so it needs to be more standardized. So I call that recurring revenue. It's just fixed price billing, direct debits on the first of the month. And then I couldn't believe that someone was still doing time and materials. So after we spoke, then I had to go and think about it, and I thought about project based work and why you might be using it. And that was my conclusion, that for project based work, where it's hard to scope and it's different every project, that's a good way of monitoring and maintaining margins and working with the client to deliver the outcome they want, where the path might be a bit unclear to get there. So if I was doing project based work, I think I would build like that, too. But with the work that we do at Viennas, which is very repeatable and the same thing over and over every month, then I really like having the direct debit. All of them come through on the first of the month. I'm involved in a new business called team up, and that's not recurring revenue. And so you start every month at zero and then have to sell from there.
What are your thoughts? Have you had any more thoughts since we last chatted about it?
[00:43:08] Speaker D: I get asked for quotes or fixed fees every week and my answer is always, I even said it this morning is like quote is a dirty word. In our business, we strive for high quality, and I really push that.
Quality creates automation, quality creates time saving. Quality creates ease of accounting down the path. And so with quality, you need to be able to have the time to think about it, automate it, improve it. And what I found in the accounting world is sometimes we rush. Not sometimes, often we rush. And rushing creates mistakes. Rushing creates time cost for clients or your team down the track.
I really do like time and materials because I will hold quality as our biggest standout achievement. We try to do on each project. And like myself personally, I will hold that. But I'm the same if I'm looking at bookkeeping or if I'm looking at basics of compliance. I really do like the recurring model or the fixed fee model. However, from working in it, I know that most places make low profit in the first six months and then they make more profit later on. And so if I'm paying fixed fee to anyone, I want to make sure that not only are they compensated early, but they are not creaming profit for me in the later months. Because I've seen this in the bookkeeping world, and I'm sure Bean ninjas don't do this, but some bookkeepers will do the bare minimum to keep the books going, and they won't think about issues that they're putting on down the track, like adding fixed assets, attaching invoices to accounts payable. So the audit, or not even the audit, but the tax review at the end of the year goes easy. And so they're doing the minimum to get the GST done. And so I found, like, if I am paying fixed fees, I'm usually a bit more eyes wide open about how much time is being spent to deliver that. Because in it world, we used to even talk about it in the management meetings. They were like, hey, lose the money and then make the money, and then do the minimum to make as much as you can. And I was like, it just never sat with me.
[00:45:34] Speaker C: I can see how the time of materials creates an environment when you can strive for that quality, because if someone needs a bit more time, then you're still making a profit on that. Whereas with a fixed fee, that extra time is cutting straight into profit. I suppose the counterargument for time and materials is that there's not an incentive to be efficient, because if you're spending 5 hours and then you find a way to automate it and it only takes 1 hour, then there's maybe some accounting firms out there that would go, oh, I need that revenue.
That's not great. It's now taking 1 hour of chargeable time instead of five.
[00:46:15] Speaker D: Yeah, that one's interesting. And I think that's a shift in the accounting market is like, I do see a lot of accountants repeatedly, year after year, doing the same manual processes. That might take them 20 hours, but if they did something for 30 hours in year one, it might take them 5 hours in year two. And that process I've seen in accounting since 2001, just slowing down, taking the time to improve it. And yes, you'll get less revenue. But I've never thought, I can't wait to do the same process again that I did last year. It's never got me out of bed, and I've never been excited to do it. And it happens in all businesses. I remember I walked into AGL and the main bank account, and I'm talking the main bank account was manually getting coded by $150,000 employee at the end of the month.
[00:47:12] Speaker C: Right.
[00:47:12] Speaker D: So they were typing it into SAP, and I was like, why don't we import this automatically each day? And they're like, oh, we've never thought about doing that. And I was like, what do you think you're paid to do?
Your job is to do the compliance, but also try to make things better. If you're over 100 grand, your job is to take something bad and make it good and simple, and then eventually try to delegate it so you can progress and you can start giving people better processes.
And, yeah, I really encourage everyone on that to take the time to try to do things right. And yes, if you're an accounting firm partner and you're worried about your revenue, that means you can have more clients bill them what they should be billed, right. And then try to get more clients. And then also use that time instead of just doing the tap taps on the screen to look at the financials and have conversations with your clients and try to know add value work. That's where I think the real margin is.
[00:48:16] Speaker C: Well, amazing. Tyler, great chat again. Was there anything you wanted to add on what we've discussed?
[00:48:23] Speaker A: And then maybe just share where people.
[00:48:25] Speaker C: Can find you or connect with you as well?
[00:48:27] Speaker D: Yeah, thanks. No, I'm really appreciative to be on here as well.
I like the intent you're putting into the world with I suppose the lifestyle accounting Meryl on my side, I'm a big fan of managing the stress of accounting. Accounting can be very high stress levels or high nerves levels, especially as a partner if you've got lots of things on, but also as a mid level and a junior.
So I think talking about the ways we can do business that can adapt to the world that we live in now, like my team are all casuals and I encourage them to start at 06:00 a.m. Or at 05:00 p.m. Whenever they like and really trying to say let's take the accounting world and make it slightly better and more enjoyable to work in.
So yeah, I'm a big fan of what you're doing here. And yeah, for me, if anyone wants to find me, I'm on LinkedIn under Tyler Caskey or the bean counters would happily connect and don't hesitate to shoot me a message.
[00:49:34] Speaker C: Great.
[00:49:34] Speaker A: Thanks so much.
[00:49:35] Speaker D: Thanks Meryl.
[00:49:40] Speaker A: It was great having Tyler Caskey back on the podcast. Make sure you go back and listen to his previous episode. That was season two, episode nine, and that was about him turning down a director role at a big four firm to start his own. A few parts of the conversation that stood out to me today were Tyler's perspective on business partnerships, but specifically when he's getting started with new team members, why he prefers to start with salary plus bonuses rather than going straight to equity. He's got a unique view on how to calculate buy in price in professional services firms, and it made me laugh when he said that he thinks sales roles in professional services can often be overvalued. And I agree with him that service delivery is much harder than making the sale. Hearing about the level of transparency that Tyler shares with his team around financial metrics, it was one part inspiring, but also scary. I mean, I believe in transparency too, but he is next level. He's sharing his base salary and the bonuses that he's sharing, as well as all of that information across other team members. Net profit, gross profit revenue, cash balances. And it's interesting hearing how he shares that information and why. I'm not sure that I'm going to share that level of information yet, but it was definitely an interesting perspective. If you enjoyed this episode, it would be great if you could leave us a five star review. It really helps the podcast. You can head to ratethispodcast.com lifestyleaccountan thank you to the person that left us this review, authentic discussions and full of practical ideas for the modern accounting firm owner. What a great podcast. I'm up to episode four and I can't wait to get into the car to listen to more great interviews and guests who share their stories, ideas and experiences in an authentic and vulnerable way whilst navigating the modern challenges that face all accounting firms. We'll be recommending this to all my accounting friends and colleagues. Thanks for spending this time with us on the lifestyle accountant show. We'll see you next week.
[00:51:39] Speaker C: You our channel.
