S02 E13: The Process to Achieve More Freedom in Your Accounting Firm with Geraldine Carter

Roman Villard:
All right, we should be rolling live here. Welcome to another episode of Accounting Flow. This is the first live episode of Accounting Flow. We did the Workflow Roast with Kelly Parks last week, which was a ton of fun, bringing in commentary from Facebook groups, LinkedIn, and Twitter on workflow and processes and trying to figure out how to distill that and create some action and change in that process. Today, we have the pleasure of talking to Geraldine, the Queen of the 25, who may have a 15-hour work week. Carter. Geraldine, welcome.

Geraldine Carter:
Thank you, Roman.

Roman Villard:
Absolutely. I know a lot of the audience, particularly in accounting flow circles and firm ownership circles, know who you are, but for those who don’t, can you give us a brief introduction of who you are, where you’re at, and what you do?

Geraldine Carter:
Sure. I’m in Idaho, and I work with accountants and CPAs, particularly single owners, to help them reduce their work hours to 40, 25, or even 15 hours a week without losing revenue, and without necessarily hiring more staff.

Roman Villard:
Okay, but how can you do that without hiring? Don’t you need more people to handle the workload?

Geraldine Carter:
No, you don’t need more bodies to make money. Bodies don’t make money; value makes money. Also, hours don’t make money. P&L reports, month-end close, and revenue recognition make money. You need to figure out what your clients value and package that up with a price tag upfront. This way, you avoid billing by the hour and chasing clients down for accounts receivable. It’s all about figuring out what your clients value.

Roman Villard:
I love that, and I want to dig in a little more as we move forward. Before we do that, I know your backstory because I listened to your podcast on business strategy for CPAs. However, I think it would be helpful for the listeners to understand how you got into this space. Are you an accountant yourself?

Geraldine Carter:
Fair question. No, I’m not an accountant or a CPA, and I never wanted to be one. Tax gives me hives. I have an engineering degree from Cornell University that I sensibly never use. I traveled the world for ten years, and when I moved back to the US, I co-founded a company with a friend. I fell into the finance role, managing a million dollars. My accountant was nowhere to be seen, charging by the hour and not providing the support I needed. This experience, along with dealing with multiple accountants, bookkeepers, and CPAs who were hard to get what I needed from, led me to help others avoid these issues. Because I’m not an accountant, I can provide a perspective similar to your clients and help translate accounting jargon into regular English.

Roman Villard:
It’s interesting that you got an engineering degree, naturally jumped into an engineering role, and then moved to finance.

Geraldine Carter:
I’m one of those people who like to go in all kinds of directions. The idea of having a traditional career was never something I aspired to. I just wanted to do interesting things and solve interesting problems. When I started coaching and working with business owners, I had a couple of clients who were CPAs. They talked about working 60 hours a week, chasing down accounts receivable, and dealing with difficult clients. I wondered why smart people who are great with math and money were struggling with their businesses. That problem piqued my interest, and I started digging under the hood.

Roman Villard:
We have a great mutual friend in your home state, Erica Goody, who has presented a phenomenal outline on how to accomplish what we’re talking about. Have you worked with her in the past, or are you both running down similar paths?

Geraldine Carter:
Erica found me about four or five years ago. She was listening to my podcast and reached out when she wanted to take on more clients. We worked together for about six months to shape her approach, and she’s taken it and run with it beautifully. It’s great to see.

Roman Villard:
I admire her so much. It’s inspiring to see how she lives the life she wants, focusing on her family and things she loves. Now, is there any particular size of firm you typically work with?

Geraldine Carter:
Most of my clients are in the mid to early six-figure range, around $200,000 to $600,000. They’re small enough to turn the ship quickly but established enough to know what they’re doing. They have enough raw material in terms of clients to reshape their business in a few months. Clients above a million still do the same work, but it takes longer because it’s a bigger ship.

Roman Villard:
I started in public accounting, like many in the industry, at a firm that had 150 employees. When I left, there were about 300, working 80-hour busy seasons. At what point does firm size become a barrier to implementing these changes?

Geraldine Carter:
It’s more about mentality than size. Larger firms require more people to get on board with changes, making it more challenging. Single owners can make decisions quickly and implement changes fast. The larger the firm, the bigger the impact, but it takes longer.

Roman Villard:
You brought up value pricing. I want to dive into that because pricing can be difficult to nail down as a small and growing firm. What’s the journey look like for pricing models, and how do you balance pricing with firm growth and your time?

Geraldine Carter:
Pricing doesn’t have to be a mysterious black box. The first thought people have is finding the right price, but there is no such thing as the right or fair price. All pricing is just decisions. You choose a number you like for reasons you like, and you test it in the marketplace. Your price should be higher than your cost but lower than the value to the buyer. Understand what the buyer values, and price your services so that both you and the buyer are profitable. Mutual profitability makes it easy for clients to buy without hesitating about the price.

Roman Villard:
As a consumer of coffee, I don’t value a $6 latte. I get the same joy from $1.50 gas station coffee. How do you get to the point where you can understand the value equation for prospects?

Geraldine Carter:
You can ask your buyers questions like the home run question: “If we were to hit a home run, what would that look like to you?” They will tell you what they want and value. The magic wand question: “Three years from now, if you could have anything you want, what would that be?” helps them identify what they want without worrying about how to get there. Also, ask the train wreck question: “If we worked together and it was a total train wreck, what would that look like?” This information helps you understand what your clients want and how to deliver it.

Roman Villard:
Do you recommend firms have an internal value equation analysis for consistency in pricing, or should they interpret value variably based on each prospect?

Geraldine Carter:
It depends. A calculator for your costs can be helpful, but calculating value can be tricky. Standardizing your pricing becomes easier when your clients are similar, which is one reason we focus on niches. You can design packages with tiered pricing, like bronze, silver, and gold, to standardize pricing without having to custom price every time.

Roman Villard:
I fear that medallion pricing might anchor prospects to a lower price, making it hard to justify higher prices later. Any thoughts on this?

Geraldine Carter:
Instead of using “starting at” pricing, use a range. This way, you avoid anchoring prospects to the lowest price. Provide a range for each package, and try to come in somewhere in between. This approach sets better expectations and avoids the feeling of being manipulated by a low anchor price.

Roman Villard:
I agree. Let’s shift gears to niching. How can someone move their existing practice with a variety of clients to focus on one niche? It seems impossible.

Geraldine Carter:
If you have existing knowledge about a certain industry, it makes it easier to focus on that niche. Even if you don’t have clients in that niche, understanding their problems and needs is key. Focus on deepening your understanding of their issues and your ability to deliver solutions. This way, you can move into any niche effectively.

Roman Villard:
One example I know is a firm that serves high-end restaurants and even named their firm “Prefix,” which reflects their fixed-price menu approach. Everything they do is tailored to that niche. It’s impressive.

Geraldine Carter:
When you work with clients who are similar, it makes everything easier. You can create value more efficiently, standardize workflows, and improve the client experience. Niching drives up value and prices while driving down your hours. It’s a win-win, though it can be scary for some because they fear putting all their eggs in one basket. But diversification is an investment strategy, not a business strategy. Focus on a niche to increase value and expertise.

Roman Villard:
My fear of niching is boredom. I like variety and learning about different business models. How do you address that?

Geraldine Carter:
I understand that fear, but even within a niche, there’s plenty of variety. My clients are all different, despite being in the same niche. The work becomes more fulfilling, and you can create scalable products. The time spent learning new things for

each client as a generalist is time you can’t reuse. As you focus on a niche, you’ll realize how much more efficiently you can operate. The time you save can be used for other interesting pursuits, whether personal or professional.

Roman Villard:
You mentioned that niching takes about two years. What does that journey look like, and how do you handle existing clients who don’t fit your new niche?

Geraldine Carter:
It’s a gradual process. You start by acquiring more clients in your niche and letting go of the least fitting clients over time. It’s important to focus on deepening your expertise and building connections within the niche. The more you focus on your niche, the easier it becomes to attract the right clients and deliver higher value. It’s a journey, and if you keep moving in that direction, everything will fall into place.

Roman Villard:
I’ve got 1,000 more questions, but we should move on to some live reactions. Let’s get your thoughts on some comments from tax Twitter and Facebook groups. Here’s a tweet from Howard Knudsen, CPA: “Typing the words, ‘Currently, I’m not taking new clients’ to a contact feels so good. Just a few years ago, I took every flaming dumpster that rolled in the front door. No more. Now I pick my dumpster battles judiciously.”

Geraldine Carter:
I love the sense of humor here. It’s important to get to a point where you’re not taking on any and every client, especially those who bring more trouble than value. The next step would be to avoid dumpster battles altogether and seek clients who are well-prepared and a good fit for your services. It’s about raising your standards and working with clients who make your work fulfilling and manageable.

Roman Villard:
Great point. Now, here’s a question from Jordan Weinstein on LinkedIn: “My business has developed a natural niche: self-employed owners and solopreneurs. Although it’s not an industry, it’s a specific type of business model. Would this still be considered niching in your mind?”

Geraldine Carter:
Absolutely. Niching is a gradient, and focusing on self-employed owners and solopreneurs is a great niche. You can go deeper within that niche by identifying subgroups, such as creatives, trades, or white-collar professionals. The key is to understand their unique challenges and deliver tailored solutions. It’s about deepening your expertise and providing specific value to your chosen niche.

Roman Villard:
Let’s get another live reaction. Megan Justice on Twitter says: “We need to normalize how much of a toll what we do takes on our bodies, souls, and families. We need to talk about it. I’ll go first. I had a 10-day panic attack towards the end of tax season. I didn’t sleep more than a couple of hours at a time for at least three days.”

Geraldine Carter:
This is a significant issue in the accounting industry. We need to shift the norm from working excessive hours to creating a work environment that values health and balance. The traditional model of 60-80 hour weeks is unsustainable and harmful. We should aim for a business model where revenue comes from value creation, not hours worked. It’s possible to work fewer hours and still be highly profitable by focusing on value and efficiency.

Roman Villard:
It’s true. The expectation of long hours is deeply ingrained in public accounting. We need a cultural shift to value work-life balance and overall well-being. Here’s another comment from Brian Strieg: “Clients can be sneaky about how they ask you questions to get free answers from you. It’s taken a while, but I’m finally training myself to pause and respond with something like, ‘I could get you an answer for that. Would you like me to add this to your engagement?'”

Geraldine Carter:
This is a common issue. It’s important to have a strategy for dealing with clients who seek free advice. Training yourself to pause and offer to add the service to their engagement is a great approach. It sets clear boundaries and ensures you’re compensated for your expertise. Another approach is to offer a paid strategy session for prospects who want your guidance before committing to a full engagement.

Roman Villard:
I love the story about the repairman and the steam engine. It illustrates the value of expertise and the importance of pricing based on the value you provide, not just the time spent. Can you share more about how to effectively communicate the value of your services to clients?

Geraldine Carter:
It’s essential to connect your services to the tangible benefits for your clients. Use phrases like “so that” to link your work to the client’s goals and outcomes. For example, month-end close isn’t just a task; it’s done so that the business owner has accurate numbers to make informed decisions and increase profitability. The value lies in the results and benefits, not just the service itself. Clear communication of this value helps clients understand why your services are worth the price.

Roman Villard:
This has been incredibly insightful. For those who want to learn more and get additional resources, how can they reach you and benefit from your expertise?

Geraldine Carter:
You can find me on LinkedIn, and visit my website at geraldinecarter.com. My book is a great starting point; it’s concise, fluff-free, and packed with valuable information. You can also listen to my podcast, “Business Strategy for CPAs,” for more insights and guidance.

Roman Villard:
Thank you so much, Geraldine. This has been a fantastic conversation. I appreciate your time and insights. Have a wonderful day.

Geraldine Carter:
Thank you, Roman. It’s been great. See you!