S02 E03: How this firm owner made bookkeeping management easier and more efficient through a creative approach

Roman Villard
What’s up everyone? Welcome to the accounting flow podcast brought to you by Financial Cents. This podcast is dedicated to taking a deep dive into accounting firm workflow and processes. Each episode, we will spend 20 minutes interviewing actual accounting firm owners just like you uncovering specific processes that firm owners and operators encounter on a daily basis and discuss ways to improve them. Let’s go.

Welcome to another episode of accounting flow. today. We’ve got Alexis Sadler, CEO of Accounting Therapy. Thanks for joining.

Alexis Sadler
Of course. Yeah, I’m happy to be here.

Roman Villard
Now, I’m curious, is the kind of therapy the only thing you’re doing right now? Or do you have multiple things happening? Because a lot of people we talk to you have a lot of things going on?

Alexis Sadler
So I do I run a couple of roundtables that I do most of the I don’t really do that for revenue, I really do that for helping other business owners and stuff like that. But my main focus is definitely kind of therapy.

Roman Villard
Okay. A lot of the entrepreneurs that we do talk to that have their own firms tend to get really excited about that, and then start to branch into other things. So I was curious about that. And we also had a chance to talk a little bit about the types of services you offer, which we’ll get into. So I’m really excited about that. But the title of this episode is how this firm owner made bookkeeping management easier in a very creative way. So I’m excited to jump into that topic. But first, before we do that, Alexis, would you mind giving us a quick elevator pitch on who you are and what you’re doing?

Alexis Sadler
Sure. My name is Alexis Sadler, my company is Accounting Therapy. We are based out of Los Angeles. But we are a fully remote company. So I’ve basically employees in every time zone, which is pretty helpful. And basically, we help small businesses find financial sanity, we help them do the things that they need to do and make the decisions they need to make.

Roman Villard
Okay, financial sanity, that can mean a lot of different things for a lot of different people. And I know that QuickBooks is a big focus for how do you help people feel more sane when it comes to their finances?

Alexis Sadler
The biggest thing is when business owners are asked questions that they don’t even understand the question, let alone being able to provide the answer to who’s asking that question. So that’s a big part of what we do is help them answer those questions, but also understand those questions. So whether it’s running reports for loans or you know, partnering with somebody and having to determine, you know, values of business, or whatever it might be, so we kind of try and educate and create sanity through making them a little bit smarter with their numbers.

Roman Villard
Okay, so as an example, I received an email from a client today, we’re recording in early February for reference, that said something to the effect of, hey, I received a request from a vendor for a 1099. And we didn’t do that come to find out, they never responded to our email to help them with that process in December. But is this something I need to do? And that was something that made them maybe a little bit insane when they got that email? And so these are the types of things you’re helping clients aware of? Understand?

Alexis Sadler
Yeah, yeah. There’s so many acronyms, and so many form numbers and things like that lady, you know, they can’t keep kept keep up with all that stuff.

Roman Villard
No, no, they can’t. But you can. And I’m curious as to how you do that. And like how you got in into that? How did you become kind of this QuickBooks icon expert go to for what effectively is therapy for all of us?

Alexis Sadler
Well, my mom actually started the business when I was 17. And I joined her I’m sorry, she started when I was 15. And I joined the business with her when I was 17. So this is really all I know. And I’ve always loved just we used to do a lot of face to face and you know, on site before the pandemic, and just when you walked into that business, and they were like, Oh, my God, my Saviour is here, like that. That’s really what kept me here, and kept me learning more and getting better and gaining the knowledge. I need to, you know, get that that happiness from them. That’s really what it is.

Roman Villard
Yeah. And so when you started, and you were in office, going to the client site, were you operating desktop at that point in time, paper checks, you know, were you instilling process with clients at that point in time? Like, how did that start for you?

Alexis Sadler
Process started, I took a little sabbatical for mom, because you know how teenagers are and I ended up working at a bank, and their processes were so messed up that I couldn’t I didn’t know what I was doing. So I worked with management to basically build out the processes of their loan division. And then I was like, hmm, this might be good for what mom’s doing. So that’s when I ended up coming back. And that’s really what But what it’s always about I mean, the more processes you have, the better you are, the faster you are the least expensive, it costs you to do whatever that is. So yeah, that’s kind of the way that I’ve lived it.

Roman Villard
Interesting. And so what’s the typical, like Target Market or demographic or type of company that you work with?

Alexis Sadler
Honestly, we don’t have a niche. I mean, I guess we technically have a niche, or niche really is companies that are dynamic. And they really are into technology. And they want to kind of allow us to help them, there’s a lot of, I’m sure you’ve experienced this, you get in with a business owner, and they know all the right things, they just want you to do it. But we really want those clients that are willing to take advice and listen to it and, and implemented and kind of let us lead the way but have them kind of make the big decisions, if you will. So those are kind of that’s our target market, if you will.

Roman Villard
Okay, so it’s more of like leadership team or CEO target in terms of how they think about bringing you on board, the type of support you can offer, and then the willingness to kind of step into how you want to work with them. Absolutely. So when you think about process, as you talk about helping clients with their accounting with their QuickBooks processes, are these the type of clients that you’re coming in? And you’re creating something new from scratch? Are you bolting on to what is existing? Or how are you coming alongside of them in their journey of building better processes?

Alexis Sadler
So honestly, most businesses have some form of processes, it’s a matter of like, how efficient they are, you know, are they opening up, you know, drawers to dig through papers, are they you know, that kind of stuff. So it’s, you know, I never want to take a business and flip them on their sides, because that just creates more work, stress, you know, money, all that kind of fun stuff. So what I like to do is take what they’re doing and say, what if we tweak this a little bit, and then this a little bit more, so it’s kind of like we do it in stages to not freak them out. And, you know, have them run because accounting therapy is making me do things I don’t want to do. So we kind of do it little pieces at a time, you know, whether it’s maybe just implementing estimates to give them a little bit better reporting and you know, little things at a time.

Roman Villard
Got it. Okay. So I suspect to in a client onboarding process, you are taking kind of the the holistic business and saying what processes can we improve in order to create a better outcome or a higher, like, prioritise type list for the client to say this would impact their life positively more quickly than this project?

Alexis Sadler
Yeah, absolutely. I mean, a lot of the times, what we’ll do is we’ll kind of figure out what their current processes are, like, tell me how you do this, like, what is the process for receiving money? You know, that’s an easy one to fix with, you know, there’s a lot of companies out there still receiving checks, you know, so finding out those little things, and then saying, Okay, let’s just turn this one thing on, and maybe, maybe they will integrate payroll, maybe you know, that kind of stuff, and start with the little things. So they can see that, oh, wow, this really does make it easier. Maybe they got more things, and then we can start getting into the big stuff, you know?

Roman Villard
Yeah. Interesting. So when Accounting Therapy comes in, and you’re going through your prospecting, it’s really doesn’t make it easier. Maybe it’s really doesn’t make it easier, maybe do you require a specific set of systems that your client works within? Or is at least open to? Or do you work within what they already have?

Alexis Sadler
Well, it depends. I mean, I 100% QuickBooks, we don’t do anything but QuickBooks, but on top of that, we will work within their systems if they know the ramifications for working within those systems. So if they’re working with an app that we don’t necessarily like working with, or maybe doesn’t integrate, well, we’ll say, Okay, we’ll use this app, but it may cost you an additional three hours of time each month. So you’re going to not only be paying for this app, but you’re also going to be paying for the time that it’s going to take to do this or you could turn on this other app that will do it all for you. And we kind of let them make the choice.

Roman Villard
I like that a lot. Because then not only are you educating them on how to make a better decision, but also you’re positioning it in a way that can help your internal team become more efficient in servicing them. And ultimately, you don’t want them to have to pay more for something that they don’t need to pay more for. And if they could be in an efficient, more scalable tool. It’s a win for them. It’s a win for your team, and everybody is happy.

Alexis Sadler
The other thing with using those apps that they just are determined to stick with is it just makes my team better because it’s putting them in more apps. And they’re learning more workarounds and you know, more troubleshooting and things like that. It’s getting them to think outside the box instead of having just one system one process that we do for everybody.

Roman Villard
I think it’s a really valuable point too, because you could niche down you could serve the same segment of customer you could use the same tools for Then ultimately, from what I’ve seen, teams are generally going to be a little bit less fulfilled in their roles, because it’s just kind of cookie cutter, rinse and repeat. Yeah. And that becomes really difficult when you want to have an engaged team with a vibrant culture and you know, people who want to kind of take that next step and learn and grow. And so there is a lot of value to and having different tools for different clients.

Alexis Sadler
Variety makes you happy, right?

Roman Villard
It can, it can for accountants, I don’t know, there are a lot of accounts that are like I just like doing the same thing. That’s interesting, okay. So from what I’ve learned, you have two different services, one where you will manage your clients, books and processes in house and you will become their outsourced accounting department. And then you will also work with clients and you will help them set up their own systems and processes and then teach them to run it moving forward. Is that right?

Alexis Sadler
Yeah, a lot of the setups that we do are migrations from other accounting platforms. So usually the net suites of the world, the larger accounting packages of the world, they usually have their own accounting team. So we’ll get them converted into QuickBooks get their, you know, app or software’s set up to kind of be what it was in that other package, and then train the team on, you know, the AP operations, the air operations, whatever, you know, details they need for that specific industry or business or business owner desires.

Roman Villard
Yeah. And are they typically coming to you saying, Hey, we know that we’re going to be switching to this new system switch into QuickBooks, and we need help with that? Or are you prospecting with them and saying, Hey, this is what I would recommend, and then an opportunity comes out of that.

Alexis Sadler
We don’t usually get that’s not i Let me rephrase, they, we don’t usually get a lot of customers that are coming to us saying, Hey, we have this product that is non QuickBooks, and we want you to help us with it. Most of our people that come to us are, hey, we have this product, and we want to be on QuickBooks. But we have had a few people that have called and said, Hey, do you guys support this product? And then, you know, once they get to know us and get our vibe and who we are, they almost want to switch to be able to stay with us and how we work and you know, our personality and teams and all that.

Roman Villard
Yeah. And that’s a huge part of it. The therapy, I suspect it’s a layer beyond just the systems that you’re using just the process. It’s the team, it’s how you communicate, it’s how you interact with clients. Kind of moving moving on in the therapy side of things. I’ve heard a lot about creativity and how you’ve maybe done things differently than other firms. Let’s say like on the recurring services side of things, what are some creative ways that you potentially manage processes differently or run your team internally that would differ from the firm down the street.

Alexis Sadler
So I believe that our team is very different from a lot of other accounting firms. We are very colourful, we’re very fun. We’re very goofy. I mean, if you go to our website, we have superheroes on our website, like we’re not the typical, you know, accountant, if you will, we try to keep it fun. And we try to be real people that somebody’s not afraid to come to us and ask us that silly question that, you know, they they need help with. But with the team, I mean, we implemented EOS A while ago, the Entrepreneurial Operating System. And we do a lot of like quarterly spirit rallies where we get together and each team will kind of do some goofy skit or game or something like that. So we try and like get that keep us all together and in the same culture and happiness, and you know, all that kind of stuff. So it just exudes out into our customers. And they get to experience the happiness and the fun and you know, all that kind of stuff in working with an accountant, which isn’t generally fun.

Roman Villard
This, this is true. This is true. That’s not generally an experience that clients are like, hey, you need to talk to my account because they’re awesome. That just doesn’t come up. For me how big your team is.

Alexis Sadler
So there is eight of us now.

Roman Villard
Okay, so eight folks on the team, and you’ve implemented EOS. And so amongst the eight, eight, folks, how does the accountability work? Is there a core leadership team where l 10s are occurring? That then disseminates downward?

Alexis Sadler
Yeah, so each department has their own meeting. So we have our marketing team, our sales team and our operations, which is basically our doers, our bookkeepers and project people. And then so each of those people meet or each of those teams meet and then they report up and then we have a leadership meeting, and then it will go up to our visionary and integrator, myself and Taylor will get together and you know, make all the decisions of the world.

Roman Villard
Yeah, you make the clock tick. You know, I want to hone in on that a little bit on the Eos front. Because I don’t know if you know Chad Davis. But Chad and I had a great conversation around EOS and US implementation on accounting flow late last year. And so it’s fascinating to me to see this large corporate governance structure, oftentimes of an EOS type methodology being ported down to smaller firms. And you’re starting to see that more and more often with smaller firms of taking formal management structures and layering them into the rhythms of a small firm, it’s a very creative way to manage. And it requires a lot of discipline. But what’s interesting to me is that you lead the conversation with Hey, we implemented Eos, but then immediately shifted into culture, and doing skits and doing really fun things. How do you how do you manage the culture aspect of it? Within the rhythm of Eos? Do you have rocks? Do you have L10 scorecard items as it relates to culture? Or how do you think about that, as it relates to culture?

Alexis Sadler
No, we don’t have any measurables on that we do have a measurable on teams stress level. So stress level does get too high, we you know, have conversations on how we can make that happen. But no, we don’t have anything necessarily pertaining specifically to the l 10. Meetings and measurables and all that fun stuff regarding culture. But I think EOS really taught us how important culture is and how creating that I’m going to use the word family really does contribute to everybody being on the same page, and having the same goal and wanting to support each other. I think that’s really where that the EOS and the culture Connect for me is that, that, you know, a family goes together, you know, what’s the phrase, if you want to go far go together? If you want to go fast, go alone, something like that?

Roman Villard
Yeah. Yeah. It’s, it’s interesting, because I feel like there are places for having culture driven rocks and goals and things like that. But because it is, you know, a little bit amorphous, you know, it’s, it’s not a tangible output, where you can say, like, oh, culture improved X to Y this quarter. Because these things that we did, it’s hard, it’s hard. That you kind of lead with the parallel of driving culture to things like that, or to the Eos. So when you think about Eos, internally, you have different divisions. does that tie into your your weekly monthly rhythm with clients and client management as well?

Alexis Sadler
I’m not necessarily we’ve talked to a couple of clients about EOS and the benefits of having those kinds of meetings, having structured meetings instead of just that Monday Roundup, where people just throw ideas out there, and nothing really is accomplished. So we’ve talked to customers about that kind of stuff. Not really, I mean, we haven’t really pushed that most of our businesses are pretty small businesses, like we like to work with the little guys that you know, that need need need the help. So I haven’t really spread that up to customers too much.

Roman Villard
Well, how about internally, you know, as you as your team manages the monthly workflows on behalf of the clients? Are there metrics that you’re looking at internally that roll up within these l 10s. That you guys help to manage, whether it’s number of hours, utilisation capacity, those things you’re looking at?

Alexis Sadler
It’s funny you say that, because that’s actually something that we’re working on right now is how do we pay attention to one of the things I really want to pay attention to is like, from the first time I talked to this guy to when they sign on with bookkeeping, what is the number of days can we shorten those? You know, that kind of stuff. But then that’s the other part of it is we are working on capacity with you know, we’ve allocated 100 hours with the team this week for bookkeeping, how much of it? Were they over? Were they under if they were over? Was it because there’s processes broken? Was it because the client added in other things? So that’s actually something we’re working on? It’s funny, you brought that up? Because yeah, that’s a hard thing to do, too. I mean, you can it’s hard to take that and turn it into numbers hours, yes. But it’s a hard one.

Roman Villard
On on the sales cycle side of things, you know, utilising a tool like HubSpot or copper or pipe drive, something like that, just from an opportunity sales cycle. Understanding standpoint, hey, this took 15 days from origination to conversation to close like that, that could be really helpful on that side. But as far as the the team, the capacity the planning side, you know that that’s really interesting to understand, what is the what are the types of reporting that we need? How do we understand deviations from estimated budget on a weekly basis for HOURS allocated to specific tasks? How do we call out the outliers and the Elton’s and then drive action items from the issues that arise? The there’s a process in and of itself that needs to be created utilising systems in order to drive conversation for these leadership team meetings.

Alexis Sadler
Sure. I mean, that’s really true, we actually my integrator built a craziest Excel document. I’m, I’m not a super Excel person, I’m gonna get it. But she’s like an Excel wizard. And she kind of built something out for the bookkeeping team to kind of track hours based on budgets and broke out sales tax, which is quarterly, and payroll, and you know, all these fun things. But it’s still it gives us information, but it’s not the exact information that we need for capacity. It’s like, how do we know? How do we know when to hire? That’s a big one. How do we know when we need more sales? You know, all that kind of fun stuff. So yeah, it’s a tough one to to figure out what what is that number that’s going to create the right conversation?

Roman Villard
Yeah, yeah. And those are the questions that every firm owner is asking, right? It’s, it’s that relationship between clients and people? How do I understand how to fill up the pipeline from a prospect and revenue perspective? And then also, how do I fulfil that demand from people and service capacity standpoint, and I think it was Jody grundon, that I heard on a podcast talk about measuring based on gross margin, and then revenue per employee. So once gross margin starts ticking up to a certain percentage, you know that your team is running, running hot. So you need to hire in order to bring that margin back to a normalised level. I’ve also heard of teams building and redundancies via international hires and producing additional capacity through that or managing just on a billable hourly basis and looking at utilisation. You know, there’s 1000 ways to slice it.

Alexis Sadler
Yeah, yeah. And it’s what works for your team and how you want to grow your business and the culture in your business. And, you know, all those kinds of fun things. How big do you want to be? Do you want to stay small? You know, they’re hard decisions with hard questions and hard answer.

Roman Villard
We are they are, do you all manage on a fixed fee basis? Are you all hourly?

Alexis Sadler
We do well, so our projects and our bookkeeping, our fixed fee, and then when we’re doing that, kind of figure it out, create processes, training, all that kind of stuff that’s on an hourly basis, which is fuel for nice. It’s a few and far between. It’s less common than the bookkeeping, in the projects.

Roman Villard
Sure. Okay. Well, I’ll ask two more questions here, as we kind of wrap up one in depth, and then one a little bit more fun. But on on the fixed fee side of things, as far as process goes, in terms of educating you on how to understand what type of fee to propose to a client? Do you have a calculator? Do you have? How do you think about proposals for clients as it relates to fixed fee?

Alexis Sadler
So my, my calculation is a bit archaic, but the very basic part of it is I look at the number of transactions in a month. I’m mill, I figure a minute per transaction, and then I averaged 15 minutes for reconciliation. That’s my very basic, but then I look at like, are we doing, you know, any specific journals that require us to get out of apps? Are we doing app support? Are we, you know, are we onboarding and onboarding employees? Because they have high turnover? Like those kinds of things as well. But my basic is a minute per transaction and 15 minutes per recon.

Roman Villard
Yeah. And then taking that and extrapolating, like $1 per hour based on role.

Alexis Sadler
Exactly, exactly. And then sometimes you get in there, and you’re like, Yeah, but this guy’s got the same transactions every month, you know, it’s gonna be super easy. You know, it’s that’s kind of just my starting point. It’s not my ending number. Yeah, sure.

Roman Villard
Sure. Yeah. That’s always so fascinating to me, because I love the concept of fixed fee or value based pricing. But it can be very, very challenging. And you don’t really know whether or not you’ve nailed it until a few months and post onboarding. And then at that point, you’re like, alright, well, I missed the boat on this one, I need to reset talk to the client or you can miss it high or low. Definitely. But it’s the data side that then can feed back the hours the tracking the understanding of how you’re actually operating, that’ll feed back in is getting it better next time?

Alexis Sadler
Yeah, we usually do not usually we have a process to do the 90 day evaluation, the six month evaluation, and then we evaluate every year just on an anniversary basis. So we are always evaluating that number. We don’t want to I don’t want to overcharge anybody that is you know, that’s I’m in business to make sure that they can stay in business. So that’s kind of the way that I operate.

Roman Villard
That’s good. That’s Scott, I love it. Good. Well, one more fun question for you, and then I will let you go. But I’ve seen you on several presentations and webinars and things like that you seem to oftentimes be wearing a tie dye shirt. Is there something behind that or tell me a little bit about the tie dye and Alexis his life.

Alexis Sadler
So I think a lot of I mean, I’m a hippie at heart, I was, you know, a child of the 90s. But I listened to the 60s music the whole time. I’m a big hippie when it comes to music and, you know, my life. You know, I love all the old mid century modern stuff, all the old things. But the other part of the tie dye is I want to be an approachable accountant. I want somebody to see me and not see me in a polo shirt or a button up or whatever it might be. I want to be unapproachable accountant. So that’s the other part of it, just making us more fun.

Roman Villard
I absolutely love it. And I think I’ve seen you in multiple, like QuickBooks certs and other app partners certs that are all tied to it and closet full of them. That’s great. That is so good. Well, I’m so glad that you were able to join today. Thank you very much. If people want to find you, where can they find you?

Alexis Sadler
They can find me at accountingtherapy.com and all our socials and all that stuff are right on our homepage.

Roman Villard
Perfect. Awesome. Well, thanks for joining Accounting Flow today and we’ll talk to you soon.

Alexis Sadler
All right, sounds good.

Roman Villard
If you’re listening in today. If you enjoyed this podcast don’t forget to share and write a review. This is going to help other firm owners just like you find our podcast and get insights into how to grow their firm. Stay tuned.