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The Modern Firm

QuickBooks Connect San Jose 15 – 17 November 2017

Darren Root, CPA, CITP, CGMA CEO, Rootworks LLC

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Copyright 2017 Intuit, Inc. All rights reserved.

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Table of Contents

Table of Contents .................................................................................................................... 3

About Your Presenter .............................................................................................................. 4

What Comes Next ................................................................................................................... 5The Modern Firm ........................................................................................................................................ 6What Does Modern Mean? ....................................................................................................................... 8The Modern Firm Framework ................................................................................................................... 9Culture GPA Components ....................................................................................................................... 13Business Model GPA Components ........................................................................................................ 14TouchPoints GPA Components .............................................................................................................. 15Rootworks Grow™ Platform – The Modern Firm GPA Tool ................................................................ 17Executing on The Modern Firm .............................................................................................................. 17Technologies that Power the Modern Firm ........................................................................................... 18Working ON the Firm ............................................................................................................................... 19Working IN the Firm ................................................................................................................................. 19Working WITH Your Customers .............................................................................................................. 21The Path to the Modern Firm Begins Here ............................................................................................ 22



About Your Presenter

M. Darren Root, CPA, CITP, CGMA, is the CEO of Rootworks. He is the coauthor of The E-Myth Accountant, and Youtility for Accountants, as well as his own title, The Intentional Accountant. In addition, he has written scores of feature articles and columns for periodicals. Darren has consistently been recognized as a top thought leader in the accounting profession, having been named to the “Top 25 Most Influential Thought Leaders” and “Top 100 Most Influential People” lists by industry trade journals.

Darren Root, CPA, CITP, CGMA CEO, Rootworks LLC



What Comes Next

Several years ago I started writing about a concept I called the Next Generation Accounting Firm® (NGAF). The idea was, and is, about a choice: Do you want a business that supports the life you want to live, or a business that consumes your life? The answer seems obvious when put in these terms, but considering the number of accounting firm owners who feel completely devoured by their businesses, it’s clearly not easy to make that choice. The majority of firm owners I talk with are still consumed by the firm they’ve created. Whether you choose to be an NGAF or not, chances are, you will still survive in the tax and accounting profession, at least in the near term, because you are willing to struggle through. In other words, you can continue to operate a business that consumes your life and it will probably pay you well.

Anyone that knows me knows I admire the genius that was Steve Jobs. One of his most inspiring speeches was to the graduating class at Stanford University in 2005, where he said:

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

Then and now, I feel his quote speaks directly to me. There is a dogma that is the accounting profession. You might not be able to recite it chapter-and-verse, but you know it and feel it with every deadline that passes and ill-fitting client that you try to serve.

My goal is for you to see you have a choice — that you don’t have to be trapped. To embark on such a monumental shift in thinking, it’s important for you to understand what’s at stake. Consider this:

• Freedom — Do you have the freedom to work and enjoy life the way you desire?

• Relationships — Are you able to embrace and enhance relationships the way you want to?

• Creativity — Do you have the time and energy to be creative in designing your business?

If you feel consistently limited in any or all of these areas, then you understand what’s at stake.

It’s important to understand that you have a choice: You can choose to build your business as A Next Generation Accounting Firm.



A NEXT GENERATION ACCOUNTING FIRM IS…

A business built on focused intention with unmitigated entrepreneurial spirit that enables you to have the life you want.

It’s a business model that supports an environment where you can be present in all aspects of your personal and professional lives to have the greatest impact on family, staff, customers and community.

It is a business that operates independent of you, creating a better working culture for your practice, offering security through recurring revenue, fostering creative thinking, evoking excitement with each new stage of evolution, inspiring the next generation of professionals and built for transition to support the phases of your life.

That’s the firm you can have. That’s the choice you get to make.

The Modern Firm

Have you ever experienced that point in your life where you feel or felt stuck? By stuck, I mean behind the times, locked in a bit of a time warp. I can remember two such significant times in my life. The first was when I was in my mid-30s. I vividly remember being in the Levi’s store on Michigan Avenue in Chicago. My two oldest kids were at or near middle school age. I was looking for a pair of the typical high-waisted jeans when my kids both said, “Dad, you’re dressing like an old man. Please try on the lower cut jeans.” I had worked in a high-end men’s clothing store all the way through college; fashion was my thing. But it had slipped away, and I had gotten stuck, not just in fashion, but in life.

Fast forward almost 20 years; my kids are all grown. I realized once again that my mindset was not keeping up with the times. I would listen to my kids talk about wearable technologies, blockchain, cryptocurrencies and how they get their news from sources I’d never even heard of, I realized once again that I had gotten stuck. It wasn’t jeans this time, it was the lost excitement of embracing modern times. It was being too comfortable in an ever more rapidly changing world.

The Modern Firm is about relevance. It’s about not being stuck during a time of great change. A Next Generation Accounting Firm is about a choice, but The Modern Firm is about survival. It’s not a choice. In my college days at Indiana University, we were using punch cards for my computer programming classes. When I started my career at Deloitte, we had one personal computer in the office, which was used for word processing. In my 30+ year career in the tax and accounting profession, I’ve seen sweeping technological changes on an unprecedented scale. And I’ve seen the impact on the profession.



Still, I’ve never seen a time that I believe will cause greater change, challenge the relevancy of more firms and cause more disruption than now. We are seeing the intersection of three significant changes happening all at the same time:

• Vendors are changing — The technology solutions on which firms built their practices and operated them for the past 20+ years are all getting ready to change. Every vendor in the tax and accounting industry has launched or is launching completely new, cloud-based solutions. I know you are already accustomed to cloud computing, but is your firm ready to shift every solution that is used inside the firm in a short period of time? Change can be hard.

• Staff is changing — There are more millennials in the workplace today than any other demographic. This is not a bad thing, it’s just different. It’s not just the millennials that are changing the landscape in accounting firms, however; it’s the technologies that are empowering a new way to work. We are connected, able to work from home, expected to be available 24/7 and looking for a different work/life balance. Staff are looking for performance-based instead of time-based outcomes.

• Customers are changing — Customer’s expectations are shifting, they expect less friction in their business transactions. They expect instant access to information in their pockets with real-time precision. But not just any information; only the information that adds value to their management and decision-making processes. The same old financial statement and tax returns with no context or narrative is no longer acceptable.

These shifts are taking place all around, as a result nearly every facet of life is changing for nearly everyone. And these shifts are happening at breakneck speed. We need to swiftly acknowledge them and find a way to adapt.

One of my favorite magazines is Fast Company. Its editor and managing director, Robert Safian, is my favorite among their writers. In a recent article, he wrote:

“We are living in an era of historical upheaval. The pace of change, globally, has never been more rapid. It’s unsettling to some, enticing to others. Either way, it is unavoidable.”

Unavoidable. It’s not a choice. We, as entrepreneurs, have to be enticed by the changes that are upon us. We must embrace becoming a Modern Firm.



What Does Modern Mean?

According to Dictionary.com, the word modern means, “characteristic of present and recent time; contemporary; not antiquated or obsolete.” You know it when you see or experience it in other businesses or people. There’s something alluring about these kinds of businesses in a way that makes you feel like you want to do business with them. Think about it for a moment, businesses like Amazon with their modern One-Click to purchase, or Apple with their end-to-end attention to detail and the user experience, or Starbucks with their app that allows me to easily place my order with a simple click as I leave my house, and my order is ready when I get there.

When I think of a modern business, I think of a business using technology to its fullest advantage, thinking outside the historical box, being creative, and making end-to-end experiences easier for their team and their customers. According to a recent survey by Gartner Research, 89% of companies now expect to compete mostly on the basis of customer experience, versus 36% only four years ago. Technology, because of its convenience, is clearly a key driver for enhancing the customer experience. Oh, how the world has changed in just a few short years!

In my pocket, anytime, anywhere, has become the expectation. It’s been almost impossible for firms to adapt to this shift in the marketplace. Now we’re talking about artificial intelligence — machine learning, as many call it. This type of technology, just like our mobile devices, is weaving their way into mainstream. Think Apple’s Siri, Google’s Home device, and Amazon’s Alexa.

Yes, these are consumer devices today, but companies like Block and Intuit are implementing the technology in solutions that will impact the typical accounting firm customer. Consider IBM’s Watson: “Hey Watson, what’s the current section 179 deduction?” Or, “Watson, how much can I contribute to my 401K?” If that doesn’t hit home, how about your customer speaking into their mobile device and saying “Hey QB (QuickBooks) would you setup ABC Consulting as a new customer?” And QB, being smart enough to geolocate ABC Consulting, automatically set up all the relevant details, based on information searchable on Google.

This isn’t some pie-in-the-sky dream; it’s all within reach today. It’s going to be disruptive — no doubt. If you’re not ready for retirement in the next couple of years, you’ll have to face it head-on. Millennials not only want this level of convenience; they expect it. As for disruption, consider this: Suppose you’re a millennial with a Fidelity Investments account. Watson or a similar solution will be able to take your age, your risk tolerance, take your initial investment and your ongoing contributions and continually balance and rebalance your portfolio without ever consulting a financial advisor. The question is, why would you pay an investment advisor one percent to manage your assets when technology can do it for free? Our profession is not going to be immune from this kind of disruption.

This isn’t some pie-in-the-sky dream; it’s all within reach

today. It’s going to be disruptive — no doubt.



Being modern today means reducing friction everywhere it’s found inside your business and working with your customers. It means using the tools that are expected by today’s ideal clients, such as mobile devices and artificial intelligence. It also means delivering solutions to customers that add value beyond what machines can do. It means exceeding customer expectations.

There was a time when an accountant could be a really good technician, and that was good enough. They didn’t have to worry about all the other components of their practice, like client experience and culture. But those days are gone. Client experience is an expectation from customers, and without a healthy culture, you’re at risk of losing the team of people that support you in your organization. Modern accounting firm entrepreneurs must consider all facets of running their businesses. With that said, what does a modern firm look like?

The Modern Firm Framework

As we examine what it means to be a Modern Firm, it’s important to first note that, based on the vast amount of change we see across the profession, it’s imperative you embrace the idea of simplicity.

If your practice is complicated, you must first consider a strategy for simplification. In this section, I’m going to walk you through the end-to-end strategy of our firm, RootAdvisors.

We begin with our why. Why are we doing what we do? It’s this bigger why that will set the framework for the pieces that follow.

OUR WHY

“Inspire and empower entrepreneurs and their teams to improve their businesses with focused intention to enrich their lives and the lives of others.”

It’s this why that helps us identify our ideal client(s) and why we serve them. It sets the stage for the everything we do.

From here, it’s important to define what it is your firm values. After all, without a set of values how are you going to make decisions on the changes necessary to set your firm on the path for the future? Our values guide decision making on all aspects of our business, from our staff to our client experience and technologies. Here are the core values we embrace in Rootworks and in our accounting firm RootAdvisors:



WE VALUE

• Elegance — Style, design and simplicity in everything we do.

• Relationships — People and relationships matter most to us.

• Inspiration — We encourage others to be the best version of themselves.

• Modern — We anticipate future needs and create smart solutions.

• Freedom — We aspire to be the best version of ourselves.

• Drive — We are dedicated to be world-class in all we do.

It’s these core values that drive our business model — the solutions we use, how we treat customers and how we treat each other. Our core values also inspire us to consistently improve and to implement the most modern solutions possible, allowing us to work differently than we did in the past and to have the drive to be the best version of ourselves that we can be.

Our why and our values set the tone for everything we do in our organization, but to really move our business forward, we needed a framework in which to organize our efforts. Working in the business only was no longer enough, so we developed what we call The Modern Firm Framework.

WORKING ON

This is the time you spend making your firm better by developing the culture of your organization — the glue that holds everything together. It involves applying leadership to set a clear direction for the organization, a defined brand, an improvement plan, and staff empowerment, engagement and rewards. Working ON your business is the process of creating the environment in which you work.

WORKING IN

It’s your business model for customer accounting, tax, payroll and any other solutions you might offer. It’s deciding on ideal customers, how you onboard them, the service offerings you sell, the technology solutions you use and how you manage your practice.

WORKING WITH

These are all the touchpoints you have with customers and prospects. It’s your digital, mobile and online experience, as well as the feeling people experience when they come to your office. It includes your onboarding experience, your website clarity and functionality, and how your marketing and social media feels. Here’s how it looks when you imagine it visually:



As an entrepreneur, you are facing significant changes and shifts in the marketplace. The goal of the Modern Firm Framework is to help you organize your thinking in a way that best maximizes your ability to embrace these shifts.

The remainder of this guide is designed to be much more tactical to help you execute on each of the three components. With that in mind, the next step is to assess your current Modern Firm status — a “balance sheet” of sorts that describes where you stand on critical aspect of the Modern Firm Framework. We’ve done this by creating, what we call, your Modern Firm GPA. That’s right, GPA (Grade Point Average)!

Think back to school days: The quality of your scholarly performance was measured by your GPA, measured on a scale of 0.0–4.0. (Although I didn’t always get a 4.0 it was certainly my goal.)

Why a GPA? Because it’s a mechanism designed to measure progress, and that’s what you should be working towards inside your firm. Progress is not measured by a binary choice of yes or no; progress is measured by continual improvement. This will make more sense as you read on.

The Modern Firm model comprises three areas of your business: Working on your firm; working in your firm, and working with your clients. Each has its own set of strategies, activities and tech solutions.



The Modern Firm Framework is designed to organize your thinking into three big aspects: working ON your firm, IN your firm and WITH your customers. The Modern Firm GPA is designed to measure how well you’re doing in each of those areas. As you will see in the illustration below, working ON focuses on Culture, working IN is about your Business Model, and working WITH encompasses your firm’s TouchPoints:

The Modern Firm is not just about modern technologies, although that’s important; but rather it’s about how your Culture, Business Model and TouchPoints come together to create an overall modern organization.

Now let’s take each of these and break them down into measurable subcategories — components of your business that you and your team can score on a GPA scale of 0.0–4.0, with a 4.0 representing “world-class.” How you define world class is subjective, but don’t get hung up on that fact.

The objective is to create an initial reference point and track improvement over time. When I think of world-class I think of Apple, Amazon and Starbucks. I want to measure myself against the things they are doing really well. After all, this is the frame of reference our clients have when they think of world-class companies.

Your Overall GPA is calculated by taking the average of the parts: Culture, Business Model and TouchPoints. Each of these is, in turn, made up of the average of its own parts. Let me illustrate: Your Culture GPA is the average of the following individual GPA’s. On each component below rate your firm on a scale of 0.0–4.0. (See worksheet on page 15)

Working on your firm is about developing your firm’s culture. Working in your firm is about the architecture and operation of your business model. Finally, working with your clients is about delivering a superior client experience each touchpoint or interaction.



Culture GPA Components

1. Clear Direction — How clearly and accurately you’ve defined and communicated to staff your firm’s mission, vision and value statements.

2. Brand — Strength of your current brand strategy, including the implementation of a clear and accurate brand promise and brand statement, educating staff on each, and ensuring staff execute on both at every level of client interaction.

3. Improvement & Training — Firm’s commitment to offering ongoing education opportunities to staff, and employees’ understanding of their given roles.

4. Staff Empowerment — Degree of staff engagement in providing feedback for improvement to leadership, as well as level of empowerment among staff in solving issues on their own.

5. Staff Engagement — Degree of staff engagement in supporting the firm’s vision, mission and value statements to consistently deliver a rich client experience every time.

6. Rewards — Effectiveness of staff incentive-based programs in meeting firm goals.

7. Office Environment — Firm’s overall environment in relation to comfort, amenities and modern feel, as well as a positive, competitive-free work culture.

Give yourself a score on each of the items above, add the scores and divide the sum by 7. How did you do? What’s your Culture GPA? Now ask each of your staff members to do the same.

How different will their scores be? This exercise will give your staff a voice in making your organization better and will provide you a window into that voice. Do you see areas for improvement? A Modern Firm is a great place to work because we know staffing is an issue, and not having enough of the right team members will continue to be one of the biggest threats your firm faces.

Alright, you see how this works? Let’s continue and calculate your GPAs for Business Model and TouchPoints. When you finish those, you can calculate your firm’s overall GPA. (See worksheet on page 15)



Business Model GPA Components

1. Ideal Customers — How clearly you’ve defined your ideal clients and how effectively you’ve communicated this to staff. You will also assess the firm’s process for vetting ideal clients.

2. Service Offerings — How clearly you’ve defined your products and educated staff on each. You will also assess your process for moving existing clients into your product set and your pricing model.

3. Practice Management — Effectiveness of practice management system staff training, and leadership’s ability to manage firm performance and profitability using practice management solution.

4. Technology Infrastructure — Level of IT knowledge on staff, staff access to proper hardware to effectively perform assigned tasks, and effectiveness of firm’s security policy and staff education and enforcement of security policy.

5. Software Solutions — Effectiveness of the firm’s internal solutions, firm client solutions and external client solutions in supporting standardized workflows and collaboration. You will also assess the firm’s solution vetting process.

6. Onboarding — Effectiveness of the firm’s client onboarding process in relation to standardization across clients, visibility across internal departments and roles, and assignment of a dedicated onboarding team in place.

7. Client Accounting Model — How clearly you’ve defined the firm’s client accounting strategy, level of digital environment to support strategy, and how well you’ve defined client and staff roles.

8. Tax Model — How clearly you’ve defined the firm’s tax strategy, level of digital environment to support strategy, and how well you’ve defined client and staff roles.

9. Payroll Model — How clearly you’ve defined the firm’s payroll strategy, level of digital environment to support strategy, and how well you’ve defined client and staff roles.

10. Other Models — How clearly you’ve defined the firm’s [OTHER] strategy, level of digital environment to support strategy, and how well you’ve defined client and staff roles.

It’s time to total your scores and divide by 10. What’s your Business Model GPA? Do you see any places for improvement? Which area needs the most attention? Let’s do TouchPoints next.



TouchPoints GPA Components

1. Website — Effectiveness of the firm’s website in relation to ease of navigation, client collaboration, available tools and resources and use of multimedia.

2. Marketing Communications — Effectiveness of the firm’s communications strategy in terms of consistency of communications to both existing clients and prospects and accurate, brand-effective messaging in all collateral.

3. Social Media — Effectiveness of the firm’s social media strategy in terms of consistency of postings, presence in multiple channels, and brand-effective content.

4. Digital Experience — Effectiveness of the firm’s digital experience strategy in terms of client service within all communication channels, ease of use and ease of information delivery within all channels.

5. On-Premise Experience — Effectiveness of the firm’s on-premise experience in relation to offering a clearly marked office location, office accessibility via parking area, and the overall on-premise client experience.

6. Product Offerings — Effectiveness of product offerings in terms of client ease of use, ability to self-select by clients and consistency in branding.

7. Onboarding — Effectiveness of the firm’s client onboarding process, as well as method for signing engagement letters and client information delivery.

Let’s add your scores and divide the sum by 7. What’s your TouchPoint GPA? Do you see any places for improvement? Which area needs the most attention?

Now add all of the components of the Culture, Business Model and TouchPoints GPAs, and divide that sum by 24. This is your overall Modern Firm GPA. It’s okay to score low, chances are you wouldn’t be going through this guide if you weren’t looking for improvement.

The real power in the exercise comes when you can look at the world through other people’s eyes. Ask your staff to do the exercise as well — it’s an eye-opener.



Rootworks Grow™ Platform — The Modern Firm GPA Tool

At Rootworks, we built a Modern Firm GPA Tool as a part of Grow™, our online member Platform. This tool allows you, as often as you like, to open a window for you and your staff to complete the GPA exercise. The data is saved and displayed individually and collectively so you can get a snapshot of your firm’s GPA — a “balance sheet” for your firm’s Culture, Business Model and Touchpoints.

The Modern Firm GPA exercise in this guide is the base-level version; inside our online member platform, we have an expanded version that allows you and your team to measure the various components at a more granular level. In addition, we’ve created learning materials designed to help you improve each of the components of the GPA.

Executing on The Modern Firm

Entrepreneurial spirit is a must-have today if you want to have a Modern Firm. There was a time when the most important component of running a firm was making sure the work was done. That’s still important today, but equally so are the aspects of Culture, Business Model and TouchPoints, including the technologies that power your firm.

You, as an entrepreneur, can no longer be just a technician with a single focus and be relevant. The world is moving too quickly. Running a modern organization is a full-time pursuit.

So where do you start? Let me walk you through a pathway for success:

1. Articulate your vision — Take a day figure out why you are doing what you are doing. Create the why that will inspire you and your team to do great work together.

2. Arrive at your core values — This isn’t easy. Dig deep in your own thoughts and then work with your team to arrive at those keywords or phrases that drive your organization and serve as the pillars that support your decision making.

3. Do The Modern Firm GPA Exercise — The 24 components will give you a well-rounded starting point. Assess where you stand today. And get your team’s input—their participation will also inspire them to be a part of the solution.

4. Create Your Project List — Based on the GPA exercise, build your project list. This is all about working ON your business. What are the components you want to improve to modernize your business today?

5. Assign a Project Champion and Execute — This means just what it says: Follow-up and hold your team accountable for improving. The goal is not perfection; the goal is continuous improvement.

6. Wash, Rinse and Repeat — Every three to six months, repeat steps 3 through 5.



Technologies that Power the Modern Firm

Technology solutions play a central role in powering the Modern Firm. Many of the project improvements that come from your Modern Firm GPA Exercise will encompass investigating and implementing more modern technology solutions. There’s a few important trends that I believe are worth noting that should drive your approach to technology:

• Data Security — The big companies have known this for a while, but it’s now become the hottest issue affecting small tax and accounting firms. Organized criminals have figured out that firms have a treasure trove of information within their less-than-secure walls. They potentially have access to your network via the internet and email. We, as a profession, must change the way we work with customers. Our communications have to become more secure. This shift will greatly impact the technologies we use for communications with customers and the monitoring of our systems.

• Staffing — It has long been considered one of the top issues that accounting firms deal with. If we don’t modernize our firms, which includes our business model and the hours required at various times of the year, we run the risk of not being able to retain qualified staff. I believe we have a leadership crisis in the profession which is causing our staffing issues, we must come to grips with this to succeed. The technologies that power our business model will be a key driver in creating a modern culture that attracts and retains staff.

• Communication — The shift has already happened. We now expect information at our fingertips, in our pockets. Period. Airlines, hotels, banks, and documents are now in our pockets. Driving across town for a meeting when I can video conference is no longer acceptable; we want the personal experience of connecting without the inconvenience of traveling.

• Information Sharing — People no longer want to login to various websites every time they want to access one of their documents. The consumer products have won: Box, Dropbox, Google Drive, iCloud, OneDrive — this is where documents are now stored. Our information sharing strategy must include one, if not all, these consumer solutions.

• Integration — Connected solutions are the future. You should not consider any solution in your firm that does not allow you to connect to other mainstream solutions. The first question I ask of any solution I’m considering is, ‘What is their stance on connecting to other platforms?” If the answer is “they can build it all themselves,” then I continue my search for a different solution.

• Educator at Heart — The best way to sell someone something is to not sell them, but to educate them. I learned this many years ago and it’s just as true today. Instead of trying to grow your practice through traditional marketing, create an education plan to teach customers and prospects to run a more effective organization by using the right technologies. Teach them to organize their digital documents, to use video conferencing in their business and to implement cloud-based solutions for themselves. Become an educator at heart.

Let’s now take a look at some solutions that, today, are a good fit in the Modern Firm. I will discuss these solutions based on where they fit in the Modern Firm Framework we discussed earlier:



Working ON the Firm

There are not many solutions in the marketplace designed to help you work ON your firm. At Rootworks, we’ve developed a solution for just this purpose — Rootworks Grow.™ Grow is our cloud-based application designed to do the following:

• Modern Firm GPA Tool

• Benchmarking with hundreds of like-sized firms

• Education resources tied to each GPA component that will lead you and your team down a path of improvement

• Project Management designed to help you and your staff get and keep your “working ON the firm” projects on track

• Staff onboarding and training

• RW Connect – communications platform to discuss issues with other like-minded firms

• Website Management Tool

Working IN the Firm

This is the area of practice where most tools have been created. Solutions for tax, practice and document management, customer accounting, and payroll. I’m going to focus on a few that support the important trends we discussed above, as well as a few additional that support the growing area of customer accounting and payroll.

NOTE: I’m not even considering solutions that don’t meet one of our core criteria, which is cloud-based architecture. Any modern solution must be accessible anytime, anywhere and on any device.



DATA SECURITY

With 91% of cyber crime initiated via email, solutions that minimize emails have become a focus. I look at emails in three categories: customer emails, staff emails and other. Here are solutions we’ve used to minimize our risk in each of these areas:

• Customer Emails — We moved all customer communications into a product called Liscio. Part of Liscio’s functionality includes a customer communication platform for staff and customers to interact. Liscio offers significantly more than communications, however, and I would suggest visiting liscio.me to learn more and schedule a product demonstration.

• Staff Emails — We moved all staff communication to a product called Slack. Slack is an internal communications tool that is much more effective and secure than email. Not only does Slack cut down on email volume through instant messaging, it significantly reduces the need for meetings by allowing teams to communicate in open channels.

• Other Emails — There will still be emails to deal with, and that means there will still be risk. We implemented an ongoing awareness program to help our staff recognize incoming email that could pose security threats to our firm. We use a training tool called KnowBe4.com.

Although you’ll never be able to completely eliminate risk, you should take practical steps to minimize your exposure. Reducing your email volume by two-thirds is a great start.

CLIENT ACCOUNTING

In this category, I believe there are some clear winners. It’s important to note that customer accounting in the Modern Firm takes full advantage of collaborative access via the cloud. Any product that doesn’t fit this core functionality shouldn’t be considered for adoption:

• QuickBooks — The cloud-based version of QuickBooks is now simply called QuickBooks. The desktop version now uses the qualifier of QuickBooks Desktop. QuickBooks is dominating the marketplace and innovating quickly. This product should be the cornerstone of your customer accounting practice.

• Bill.Com — This premium accounts payable solution integrates seamlessly with QuickBooks. Firms have traditionally looked at Bill.Com as a value-added workflow tool, which it is, but the functionality that can’t be overlooked is its safety and security features. With cybercrime growing every year, we must implement solutions that will protect our customers’ banking information. This takes Bill.Com from a “nice-to-use” solution to a “must-use” solution.

• Fathom — This solution is a dashboard/reporting tool that integrates seamlessly with QuickBooks. The Modern Firm delivers information to their customers in a way they can visualize and interpret the picture painted by the data. Fathom is a tool that does just that.

• Right Networks — This solution hosts the QuickBooks Desktop product. You have, and will continue to have, QB Desktop customers for the foreseeable future. The Modern Firm does not work with customers via backup data files. Remember, collaborative access is a core principle, Right Networks makes that possible for those desktop customers.



PAYROLL

Your payroll solution depends on the model that best fits your firm. I break payroll down into three models:

• Hands-Off — When you want nothing to do with processing payroll, you send your customers to an ADP or a Thomson Reuters MyPay Solution. The most important component in this model is making sure your firm can provide your customers access to their payroll information when they need it.

• Hybrid Model — This is the most interesting model to me today. Over the years, payroll technology has evolved to allow much of the compliance components to be automated. This means letting technology handle direct deposits, tax deposits, tax filings and W-2s. A hybridized approach presents a trade-off between paying more for the technology while reducing staffing costs, because automation is doing much of the work. You’re remaining in control of the payroll process but shifting the risk and burden to the provider of choice. ADP Run Wholesale is an effective solution in the hybrid model.

• Full Service Model — This is the traditional model that accounting firms, typically have adopted to offer payroll services to their customers. This is where your firm handles all aspects of the payroll process. Thomson Reuters Accounting CS product is an effective solution.

There is not a right or wrong model for the Modern Firm. It’s about deciding the model you believe best supports your core competencies and vision for the firm. Once you make that decision, you can begin to analyze which solutions are most effective at powering your collaborative processes.

Working WITH Your Customers

This is the area of practice that has been least supported by vendors in the tax and accounting industry. Working WITH customers has evolved into one of the most important aspect of an accounting firm, and significant gains can be accomplished with some focused intention. Here are four solutions that can significantly enhance working WITH your customers; in other words, shaping the customer experience:

ONLINE PLATFORM

The Modern Firm considers its website as an online platform — a place for customers to connect and do business with your firm. Your online platform needs to be flexible. By that, I mean it must have the ability to integrate third-party solutions as they become available from various vendors over time. For example, being able to initiate video conference sessions, request appointments, make payments to your firm, fill out digital forms and initiate logins to various third-party solutions that make up your business model, such as QuickBooks, Bill.Com, Liscio and Fathom. Rootworks has one of the most brand-positive, comprehensive and flexible solutions available for accounting firms today.



LISCIO

As mentioned in the previous section on working IN your firm, not only does Liscio offer you a more secure way of communicating with your customers, it also adds value by enhancing the customer experience. Liscio includes a mobile application for your customers, giving them notifications when you send them direct messages, when work in process is complete, and even for general info and reminders. Moreover, Liscio changes the way you onboard and communicate with customers. You can securely share documents back and forth, customers can request appointments with their service team and even update basic information in their client record directly from the mobile app.

ZOOM

Video Conferencing may be as good as being there. The convenience alone is worth it to busy customers. Video conferencing offers a much higher level of customer experience over a phone call, if you’re worried about losing that personal customer connection you get from in-person meetings, you should try video conferencing. Zoom is our solution of choice over products like Google Hangouts and Skype because Zoom doesn’t require the customer to register an account — it’s low-friction.

GOOGLE DRIVE

I could also include iCloud, Box, Dropbox and OneDrive. Customers no longer want to login to a portal for every vendor that offers them documents, such as banks, investment brokers, doctors, accountants, etc. We should be training our customers to securely receive and store documents with one click in the cloud storage system of their choice. Your customers will appreciate your insight and help in organizing their digital lives.

The Path to the Modern Firm Begins Here

In the preceding pages, I’ve outlined a pathway to transform your business into the Modern Firm. Remember, the Next Generation Accounting Firm® is a concept predicated on making a choice. It is personally rewarding for me to help accounting entrepreneurs make that choice and embark with focused intention on building a firm to support the lives and lifestyles they desire.

In contrast, the Modern Firm isn’t about choice — it’s about surviving and thriving in the coming era of technological disruption. There’s nothing more heartbreaking than watching firms fade into the oblivion of irrelevance and decline — going out of business slowly, not with a bang, but with a whimper. Yet, when firm owners ignore the shifting landscape and expectations of today’s ideal clients, that’s the path they’re taking.

I’m passionate about helping you make this shift and seeing your firm thrive. I hope you’re just as passionate about creating your Modern Firm. Visit us at rootworks.com to see more.

The Modern Firm isn’t about choice — it’s about surviving and thriving in the coming era of technological disruption.

The Modern Firm - QuickBooks...The first was when I was in my mid-30s. I vividly remember being in...

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Transcript of The Modern Firm - QuickBooks...The first was when I was in my mid-30s. I vividly remember being in...