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Blake Oliver

Work Smarter, Not Harder: The 3.3 Rule for Accountants

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Want to 2x your productivity while working way less? Sounds like a pipe dream, right? According to CPA John Briggs, it’s not just possible – it’s the key to thriving in accounting.

I recently chatted with John on my Earmark Podcast, and he explained his game-changing “3.3 Rule.” This approach challenges the traditional 70-hour workweek and billable hours model that’s been burning out accountants for decades.

John says the 3.3 Rule is the secret sauce for boosting efficiency, reclaiming work-life balance, and improving profitability.

So, what exactly is this magical rule? And how can you implement it in your firm? Let’s dive in.

Understanding the 3.3 Rule

The 3.3 Rule is based on cognitive science research showing that the average office worker is only truly productive for—get this—2 hours and 53 minutes in a typical 8-hour workday.

John takes advantage of this natural productivity pattern by structuring work in focused bursts of up to three hours, followed by strategic recovery periods.

As John puts it, “The rule, simply stated, is the most efficient workday consists of working up to three hours at a time, followed by a 30% recovery period.” So, if you crush it for three hours straight, you’ve earned yourself a full hour of downtime before diving back in.

The beauty of the 3.3 Rule is that it adapts to different work styles:

  1. 🏃‍♂️ “Sprinters” who work in short, intense bursts (think 60 minutes of work, 20 minutes break)
  2. 🚶‍♂️ “Joggers” who can maintain focus for 1.5 to 2 hours
  3. 🧘‍♂️ “Zen masters” who can work for the entire three hours straight

The key is to know your rhythm and match your work style to the task at hand. As John says, “If I feel like I’m losing focus after an hour, that’s totally fine.” It’s all about working smarter, not harder.

Implementing the 3.3 Rule

So you’re sold on the 3.3 Rule. But how do you make it happen in your firm?

First things first: mindset shift. John emphasizes the importance of self-awareness. “If I feel like I’m losing focus after an hour, that’s totally fine,” he says. The key is to match your work style to the task at hand.

By implementing this methodology, John’s firm has maintained an average of just 42 hours per week during tax season for the past three years. You read that right – 42 hours. In busy season.

So, what’s the secret? Two words: value pricing.

John advocates for setting prices based on the value provided to clients, not the time spent. “I don’t necessarily think billable hours is actually a great way to bill in general. I like value pricing or fixed pricing,” he says.

Value pricing complements the 3.3 rule by:

  1. 💸 Allowing firms to benefit financially from increased productivity
  2. 🙅‍♂️ Removing the pressure to “look busy” during less productive hours
  3. 🎯 Focusing on outcomes for clients rather than inputs from accountants

But wait, you might be thinking – how do you measure productivity without billable hours?

John’s firm uses job descriptions and result-based metrics. For example, they might track the number of tax returns completed or the complexity of clients managed. They use a weighting system where complex clients are equivalent to multiple simple clients, ensuring fair workload distribution and accurate productivity measurement.

Implementing the 3.3 Rule isn’t always easy. It requires a fundamental shift in how we think about work. But the payoff? Happier staff, better work, and a healthier bottom line.

What Happened at John’s Firm

What’s it like to implement the 3.3 Rule? John shares his journey of transformation:

“When I started my firm, I said, ‘I refuse to put my team through the same crap that I had dealt with,’” he recalls. For John, that meant hiring more staff to ensure everyone could work at about 80% capacity, allowing room for those crucial recovery periods.

And the benefits? They go way beyond just happier employees (though that’s a huge win in my book!).

John notes, “When you work, you work.” Those focused work periods lead to higher productivity and fewer errors. Plus, this approach helps retain top talent in an industry where competition for skilled professionals is fierce.

The 3.3 Rule doesn’t just benefit your team – it benefits your clients, too. You’re delivering real value by focusing on outcomes rather than hours logged. And when you’re not stuck in the weeds of busy work, you have more bandwidth for the high-level strategy and advisory work clients crave.

Of course, implementing the 3.3 Rule isn’t always a cakewalk. John recalls, “When I introduced it to my team, they were weirded out. They’re like, ‘Is this a trick to get me fired because you’re going to catch me not working?'”

Leadership buy-in and clear communication are crucial to overcoming these challenges. You’ve got to walk the walk and lead by example.

The 3.3 Rule, combined with value pricing, offers a blueprint for firms to align their work practices with human cognitive limitations and client needs. By focusing on outcomes rather than hours worked, firms can achieve the holy trinity: increased productivity, improved work-life balance, and enhanced profitability.

It’s a win-win-win for accountants, their firms, and their clients. And in an industry long overdue for a shake-up, that’s something to get excited about.

Get all the details by listening to this episode of the Earmark Podcast.

How an SEC Internship Led to a Thriving Career In Forensic Accounting

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Think working at the Big Four is the only way to make it big in accounting? Think again. Cody Turley’s story might just change your perspective.

On a bonus episode of The Accounting Podcast, Cody Turley, a CPA and CFE currently working at the SEC, challenges the notion that Big Four experience is the only route to success in accounting. He shares his experience to demonstrate that working at top organizations in industry or government can provide equally valuable experience and open doors.

The Power of Non-Traditional Accounting Internships

Cody’s path began with an unconventional internship at the SEC. And it wasn’t that difficult to get.

“So I really liked the show Suits,” Cody recalls. “And at one point they get in trouble with the SEC. And that just kind of peaked my mind about forensics. I should go and look at what that is. And I just applied online, and I got a call back and that’s it. That’s how I got that internship.”

Cody’s internship at the SEC exposed him to high-level tasks and responsibilities, such as reviewing complaints against companies of all sizes. The SEC’s name recognition also helped open doors for Cody in his subsequent career, even years after the internship.

A Government Job Doesn’t Mean Slow Advancement

After the SEC internship, Cody landed a job at the Arizona Corporation Commission. In his mid-20s, he was leading a forensic accounting team. “A year of experience, and I’m testifying, which just doesn’t happen at [public accounting] firms,” he shares.

Leading a team of more experienced employees was challenging but rewarding for Cody, as it provided opportunities to learn from their experience while guiding the team. His age did not hinder his ability to lead effectively, demonstrating that leadership skills and expertise can be developed early in one’s career, even in a government role.

Navigating the Complexities of Government Roles

Cody then returned to the SEC. His current role involves investigating offering frauds such as Ponzi schemes, tracing assets, and reviewing audited financial statements to identify errors. He collaborates with auditors and companies to investigate potential issues, often through subpoenas and interviews.

One of the challenges Cody faces in his role is interacting with large accounting firms. However, he emphasizes the importance of focusing on the learning process and gathering information rather than trying to be “better” than the firms in every instance.

How to Land a Government Accounting Role

For accounting professionals interested in exploring government roles, Cody offers some practical advice based on his own experience. 

He suggests applying online, as hiring tends to be more merit-based than the private sector. This levels the playing field for candidates who may not have extensive industry connections but possess the necessary qualifications and skills.

Cody also highlights the benefits of working in smaller teams within government agencies. These teams can allow for rapid skill development and increased responsibility compared to private accounting firms’ more structured and hierarchical environments.

A World of Possibilities: Future Career Options

Cody’s government background has created many potential future paths, including moving up in government, transitioning to state-level roles, or pursuing opportunities like internal audit at major corporations. His skills are highly transferable and sought-after.

“The biggest company I’ve received an offer from was Disney at one point to be on one of their internal investigation teams,” Cody reveals. This highlights the value that the private sector places on the skills and experiences gained through government accounting roles. His background in investigating financial crimes and navigating complex regulatory environments has equipped him with a unique skill set that is highly sought after by businesses looking to strengthen their internal audit and compliance functions.

The Bottom Line: Finding Your Own Fulfilling Path

Cody’s experience shows that there is no one-size-fits-all approach to building a successful and fulfilling career in accounting. While the Big Four path may be the right choice for some accounting majors, future CPAs need to explore the full range of options available and find the path that aligns with their unique interests, skills, and goals.

Whether it’s pursuing government roles, seeking out industry positions at top companies, or exploring specialized fields like forensic accounting, there are countless ways to build a rewarding career in this dynamic field. The key is to remain open to new opportunities, seek diverse experiences, and never stop learning and growing.

So, if you’re ready to take control of your accounting career and explore the exciting possibilities that await you, listen to the full podcast episode featuring Cody Turley. His insights and experiences are sure to inspire you and provide valuable guidance as you navigate your professional journey.

The Two Metrics That Can Double Your Accounting Firm’s Value in One Year, According to a Top Broker

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What if you could double your accounting firm’s value in a single year? Brannon Poe, a broker who’s handled over 500 firm sales, says it’s possible with the right strategic changes. 

In a recent podcast interview, Poe revealed that firms of any size can transform to maximize value and position themselves as attractive acquisitions by understanding what buyers want. The secret, he says, lies in mastering two key metrics.

We’ll unpack Poe’s road-tested insights on the levers of firm value and see how one traditional practice achieved a staggering valuation increase with clever strategic shifts. Whether you aim to sell soon or build a more valuable business, Poe’s wisdom will show you the way.

The Two Metrics That Move the Valuation Needle

Want to supercharge your accounting firm’s value? Brannon Poe says zeroing in on two key metrics can have an outsized impact.

1. Cash Flow to Owner  

“I always tell people, I’ve got two metrics. If you focus on these two metrics alone, you will increase the value of your firm,” Poe explains. “Cash flow to owner is probably number one.”

Your bullseye? For firms under $1.5 million in revenue, pushing cash flow to 50% or more of revenue. To calculate it, add your profit, owner compensation, and owner perks. For example, if your firm earns $1 million in revenue and your cash flow is $500,000, you’re right on target. The higher your cash flow margin, the more attractive your firm looks to buyers.

2. Owner Hours

“Owner hours is the other thing,” says Poe. “If you want the owner hours to be lower, lower is better – at least under 2000. But I have seen very well-systematized virtual firms get into the 500 mark for an owner. So you’re creating a real business at that point.” 

Minimizing owner hours reduces key-person risk and makes your firm more transferable. Buyers hesitate to acquire firms dependent on grueling owner hours, but a firm that runs smoothly with minimal owner involvement garners premium offers. 

Poe notes that adopting subscription pricing can drive progress on both fronts. Steady, recurring revenue and systematized work help boost margins while trimming owner hours. 

By lasering in on lifting cash flow and reducing owner involvement, firms of any size can transform into highly valuable, transferable assets. Next, we’ll see how one traditional firm put these principles into action to stunning effect.

From Surviving to Thriving: A Case Study in Strategic Transformation

The story of one husband-wife firm perfectly illustrates how powerful Brannon Poe’s value-boosting principles can be – even for small, traditional practices. 

Starting Point: A Traditional Firm in Need of Change

When the owners first approached Poe, they ran a classic mom-and-pop shop generating $1.2 million in annual revenue. Feeling overworked, underpaid, and unsure if they could keep going, they turned to Poe for help.

The Transformation Game Plan

Working with Poe, the owners implemented three key changes:

  1. Fired unprofitable clients: To free up much-needed capacity, the firm shed about 100 clients that drained time and resources but delivered minimal profits. 
  2. Raised prices: As Poe puts it, “If you don’t like your practice, keep increasing the prices until you like your practice.”
  3. Embraced subscription pricing: Transitioning clients, especially bookkeeping customers, to a recurring subscription model provided a steady, profitable revenue base.
  4. Launched advisory services: The firm created packaged advisory offerings and bundled them into subscription plans, enabling premium pricing.

Stunning Results in Just One Year  

The transformation was dramatic and swift. In just 12 months, the firm:

  • Increased annual revenue to $1.6-1.7 million
  • Expanded margins as new recurring revenue flowed to the bottom line  
  • Reduced owner hours while increasing employee pay
  • Landed an all-cash deal at their full $2 million asking price

The Power of Strategic Transformation

This firm’s journey embodies the incredible potential of Poe’s approach. By lasering in on profitability, recurring revenue, and owner efficiency, they morphed from a floundering traditional practice into a high-value strategic asset – in just one year. 

The Roadmap to a Firm That Works for You

This story powerfully illustrates that transforming your firm doesn’t have to take decades. With relentless focus on the right drivers, even tiny traditional practices can utterly rewrite their futures in under a year.

The key is strategically designing your transformation around buyers’ wants: powerhouse profitability with minimized owner dependence. Adopting the recurring revenue model, shedding margin-draining clients, and productizing premium advisory services are shortcuts for getting there faster.

Poe envisions a future where firm owners don’t have to choose between a profitable practice and a livable life. By architecting businesses that thrive without their constant oversight, owners can boost their bottom lines, free their schedules, and create thriving firms that are valuable today – and sellable tomorrow.

If you’re ready to build a practice that funds your ideal lifestyle now while setting you up for a profitable exit whenever you’re ready, the roadmap is clear – and it starts with learning everything you can from the best in the business. Take the first step now by listening to the full interview with Brannon Poe.

The Accounting Profession at a Crossroads: Adapting to Stay Relevant in a Changing Business Landscape

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The accounting profession is at a critical juncture. Technology is rapidly transforming the business landscape. As client needs evolve and new skill sets become essential, CPAs must ask themselves: Are we keeping pace with change, or are we at risk of becoming irrelevant?

In this thought-provoking Earmark Podcast episode, I explore the evolving role and relevance of the CPA license with Steven Sacks, a consultant who serves professional service firms and not-for-profit organizations, and David Bergstein, a seasoned innovator in the accounting software industry. Our discussion reveals that to remain relevant and valuable in today’s rapidly changing business landscape, the accounting profession must adapt its education, licensure, and skill development to align with the evolving needs of clients and employers.

Bridging the Gap Between Accounting Education and Real-world Skills

There’s a growing disconnect between traditional accounting education and job market demands. David Bergstein points out, “Accounting education focuses heavily on debits, credits, and accounting standards but does not adequately prepare students with technology skills and business advisory knowledge needed in the real world.”

For example, many young professionals struggle to apply their classroom knowledge to real-world situations. They may have learned how to do t-accounts and journal entries but never touched modern accounting software like QuickBooks or Xero during their education.

Bridging the education-skills gap is crucial for the CPA profession to adapt to the changing needs of clients and employers and maintain its relevance in the business world. This may involve:

  • Incorporating more hands-on, technology-focused training into accounting curricula, such as working with modern accounting software like QuickBooks, Xero, or Sage
  • Partnering with businesses to provide internships and real-world experience for students
  • Encouraging faculty to stay up-to-date with the latest industry trends and tools
  • Emphasizing the development of soft skills, such as communication and critical thinking, alongside technical knowledge

By aligning accounting education with the realities of modern practice, the CPA profession can ensure its future members have the skills and knowledge they need to succeed in a rapidly evolving business landscape.

Reimagining CPA Licensure for a Diverse Profession

As the roles and expertise of CPAs become increasingly diverse, the profession must reevaluate its licensure model to ensure it reflects the realities of modern accounting practice.  

Steven Sacks emphasizes the need for greater clarity around the CPA’s role and definition: “If you really want to increase the pool of CPAs, define what the CPA is, what it means. Define the definition of the practice of public accounting. What is public accounting? What are accounting services? There are a lot of things that are really not clear.”

The disconnect between the CPA license and the day-to-day work of many accountants raises important questions about the credential’s relevance and value. As I point out in the episode, “What does the license actually give us a franchise on or a monopoly over? The only thing is the audit.”

Embracing Alternative Certifications and Career Paths

Our discussion reveals a growing trend of accounting professionals, particularly younger generations, pursuing non-traditional roles and credentials to build successful careers.

David Bergstein shares his observations: “I’m seeing the younger generation not become CPAs and become advisors or accountants. Non-CPAs have tremendous practices out there. They have very lucrative practices. They’re in their 30s and 40s. For the most part, they didn’t pursue an accounting career. They took very few accounting courses. Now, they’re quarterbacking firms and hiring some CPAs, but mainly accountants and non-accountants. They’re doing managerial reports and partial CFO services with a data analytics background.”

This shift in career trajectories reflects a growing recognition that the traditional CPA path may not fit everyone best. Instead, many aspiring accountants opt for alternative certifications, such as the Certified Management Accountant (CMA) or the Chartered Financial Analyst (CFA), which better align with their career goals and interests.

A Call to Action: Shaping the Future of the CPA Profession

Whether you’re a seasoned veteran or a new graduate just starting your career, you can shape the direction and impact of the CPA credential for generations to come.

So, what can you do to help drive positive change and ensure the profession’s continued success? Here are a few suggestions:

  • Advocate for educational reforms that prioritize real-world skills and hands-on learning experiences
  • Support efforts to modernize CPA licensure requirements and create new pathways for non-audit professionals
  • Explore alternative certifications and career paths that align with your unique interests and goals
  • Engage in meaningful continuing education that expands your knowledge and keeps you at the forefront of industry trends
  • Collaborate with colleagues and professional organizations to share ideas, best practices, and innovative solutions
  • Educate clients, employers, and the public about the diverse capabilities and expertise of CPAs beyond traditional audit services

By embracing change, innovation, and diversity, the CPA profession can chart a course toward a brighter future—one in which CPAs are recognized as trusted advisors, strategic partners, and indispensable experts in a wide range of financial and business disciplines.

The accounting profession is at a crossroads, and our choices today will shape its future. By adapting our education, licensure, and skill development to align with the evolving needs of clients and employers, we can ensure that CPAs remain relevant, valuable, and indispensable in a rapidly changing business landscape. To dive deeper into this critical conversation about the future of the CPA profession, listen to the full Earmark Podcast episode.

Earn free CPE for listening to “Who’s Really the BOSS”

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Join me in welcoming the “Who’s Really the BOSS?” show to the Earmark app. Earn free CPE listening!

This podcast by Marcus Dillon, CPA, and Rachel Dillon highlights the joys and challenges of running a CPA firm with your spouse.

In the first course, “The Secret to a Successful Accounting Firm,” Bruce D. Berndt, CPA, CGMA, shares his top two pieces of advice for building a thriving firm focused on exceptional client service and a positive team culture.