Earmark CPE

Earn CPE Anytime, Anywhere

Blog – Full Posts

Balancing Efficiency and Quality: How One CPA Firm Transformed Their Tax Season

· ·

For many CPA firms, tax season means long hours, stressed employees, and a frantic rush to meet deadlines. But Marcus and Rachel Dillon, owners of a family-run CPA firm and hosts of the Who’s Really the BOSS? podcast, have found a way to break that cycle. 

In 2024, the Dillons filed 165 tax returns before April 15th while maintaining a strict no-overtime policy and growing their recurring revenue by 10%. How did they do it? By leveraging innovative tools, adapting their team structure, and fostering a culture of continuous improvement.

The Dillons’ journey wasn’t without challenges. Heading into the 2024 tax season, they faced significant changes:

• Their full-time tax director had left to start his own firm

• They had downsized by three full-time employees

• They had exited about 35 family-client relationships

To address these challenges, the Dillons made several strategic moves:

1. Implementing Innovative Tools

The firm rolled out Canopy software, replacing its existing practice management system. This improved internal project tracking and time management. More importantly, it enhanced client communication through automated tax status updates.

“What we did build out and tested during tax season was tax status updates being sent to the clients through Canopy,” Marcus explained. “It’s essentially the Domino’s Pizza tracker.” This system provided clients real-time updates about their tax returns without requiring additional staff time—a perfect example of technology improving efficiency and quality.

2. Adapting Team Structure

Rather than hiring a new full-time tax director, the Dillons hired a “tax director of counsel” on a flexible, as-needed basis. This arrangement allowed the firm to maintain high-quality tax services without the overhead of a full-time position.

They also hired a Director of Operations, Amy, who took on many administrative tasks previously handled by the tax director. This freed up other team members to focus on client work.

3. Fostering Continuous Improvement

When the Dillons identified knowledge gaps in their team, particularly for those without strong tax backgrounds, they implemented weekly training sessions. Marcus personally reviewed tax returns with team members, using actual client work as teaching material. This hands-on approach allowed team members to learn in real-time and improve their skills.

The Results

The Dillons’ strategic changes paid off. Here are some key metrics from their 2024 tax season:

• 165 tax returns filed before April 15th (down from 224 in 2023, but with fewer staff)

• No overtime or weekend work required

• Maintained half-day Fridays throughout tax season

• 10% increase in recurring Client Accounting Services (CAS) revenue

• Overall revenue on track to reach $3 million for the year

Perhaps most impressively, they achieved these results while maintaining a 36-hour work week for most employees. This focus on work-life balance starkly contrasts the grueling schedules often associated with tax season.

Lessons Learned

The Dillons’ experience offers valuable insights for other CPA firms:

  1. Embrace technology: The right tools can dramatically improve both internal efficiency and client communication.
  2. Be flexible with staffing: Consider alternative arrangements like fractional or on-call experts to fill skill gaps.
  3. Invest in continuous learning: Regular training sessions can quickly address knowledge gaps and improve team capabilities.
  4. Prioritize work-life balance: It’s possible to maintain high standards without sacrificing employee wellbeing.

As the accounting industry evolves, firms that can balance efficiency and quality will have a significant competitive advantage. The Dillons’ story shows that with the right strategies, it’s possible to thrive during tax season while still maintaining a healthy work environment. For more tips and tricks, listen to the full episode of Who’s Really the BOSS?

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, DBA | FIRM, supports and guides accounting firm owners and leaders with free resources, education, and operational strategy.

Is the Secret to Solving the US Accountant Shortage Hiding in Argentina’s Economic Turmoil?

· ·

In a recent episode of The Accounting Podcast, we stumbled upon a surprising solution to one of the biggest challenges facing US accounting firms today: the talent shortage. Believe it or not, it’s coming from a country known more for its economic struggles than its accounting prowess. 

I’m talking about Argentina, and if you haven’t considered it a source of accounting talent, you might want to think again. The strategy here is called “nearshoring” – a close cousin to offshoring, but with some key advantages. 

While offshoring typically involves outsourcing work to distant countries like India or the Philippines, nearshoring focuses on partnering with professionals in nearby countries, often in similar time zones. This approach aims to combine the cost benefits of offshoring with the collaborative advantages of working with a geographically and culturally closer team.

Let’s break this down and see why Argentina might answer your staffing woes.

Time Zone Alignment: The Game-Changer

First, let’s discuss the elephant in the room regarding offshoring: time zones. We’ve all been there, trying to schedule calls at ungodly hours or waiting overnight for responses. 

As Nicolás Villafañe, a partner at South Offices, pointed out in our podcast, “Timezone is a very, very huge challenge when working with Philippines or India. In South America, you’re mostly aligned. You can actually have people working on their daytime and the exact same time as Americans.”

Imagine having your offshore team working the same hours as you. No more late-night calls or day-long email delays. It’s like having a remote team just down the street, not halfway across the world.

This time zone alignment doesn’t just make scheduling easier. As Nicolás explained, “The overlapping of the working time is what gives you that sensation that you actually are building a team the same as if you had them two blocks away.” This real-time collaboration fosters a sense of team cohesion that’s difficult to achieve with traditional offshoring.

Beyond Cost Savings: Argentina’s Secret Weapon

Now, I know what you’re thinking. “Blake, we’ve heard about offshoring before. It’s all about cost savings, right?” Well, yes and no. While nearshoring to Argentina can save you 30-40% compared to US costs, the Philippines offers around 50% savings, and India provides the most significant cost reduction at about 60%. 

However, as Nicolás pointed out, these deeper cost savings come with trade-offs in quality and time zone differences. The real value isn’t in the cost savings. It’s in the quality of talent you’re getting for that price. Argentina’s economic challenges have created a breed of accountants unlike any other. 

As Nicolás explained, “The quality of the professionals in Argentina is actually quite high because of our problems. It’s not that something that we’re proud of, but it’s the outcome. The outcome is that if you if you learn how to navigate through the Argentinian economy, Argentinian accounting, you tend to be very good because you’re you have to reskill yourself every day.”

These accountants have had to navigate hyperinflation, rapidly changing regulations, and economic instability. They’re not just number crunchers; they’re financial ninjas. 

And get this: in Argentina, you need to be a CPA to do any kind of accounting work. Even bookkeeping. That means you’re getting CPA-level expertise across the board. 

Perhaps because of this, accounting is the second most popular profession in Argentina, right after law. This creates a large talent pool for US firms to tap into, ensuring a steady supply of skilled professionals.

Cultural Alignment: The Secret Sauce

Here’s where it gets really interesting. Cultural differences can be a massive headache when working with offshore teams. But with Argentina, that headache largely disappears.

Latin American culture aligns much more closely with US culture than, say, Indian or Filipino culture. This means better communication, fewer misunderstandings, and a team that feels like, well, part of your team.

This cultural alignment, combined with the time zone compatibility, creates a seamless working relationship that’s hard to achieve with traditional offshoring.

Rethinking Outsourced Accounting Talent

So, let’s recap. With nearshoring to Argentina, you’re getting:

1. Time zone alignment for real-time collaboration

2. High-quality, adaptable talent forged in the fires of economic challenges

3. Cultural compatibility for smoother communication and integration

And you’re saving a chunk of change, too.

But this approach isn’t just about cutting costs or filling seats. It’s about gaining a strategic advantage in an increasingly competitive industry. While other firms are struggling with talent shortages and quality issues from traditional offshoring, you could be building a dream team of highly skilled, culturally aligned professionals who work in sync with your US operations.

In a world where finding and retaining top accounting talent is becoming harder by the day, Argentina might be the ace up your sleeve.

Ready to dive deeper into the nearshoring revolution? Listen to the full episode of The Accounting Podcast.

Frustrated with QuickBooks? Here’s How to Make Your Voice Heard and Drive Real Change

· ·

Have you ever been frustrated by a clunky QuickBooks feature or wished for a simpler workflow? You’re not alone, and the good news is that Intuit is listening.

In a recent episode of the Unofficial QuickBooks Podcast, hosts Hector Garcia and Alicia Katz Pollock explain the crucial role feedback from accounting professionals plays in shaping QuickBooks’ development.

How Does User Feedback Drive QuickBooks Improvements?

Though it might not feel like it at times,  Intuit is listening to user feedback and actively using it to guide improvements to the platform. As highlighted in the podcast, many of the most impactful recent updates to QuickBooks Online were direct responses to user requests and reports.

Take, for example, the new ability to filter reports by inactive accounts and custom fields. This powerful feature allows you to easily track down transactions that used now-defunct entities or slice your data by custom parameters, and it was a top ask from accounting professionals.

“Getting custom field data to flow through to reports properly is crucial for reporting accuracy,” Hector emphasizes. “Now you can filter by those custom fields. So, say you want to run a detailed report of sales by rep. If you have a rep in a custom field or sales by a particular regional location that you were tracking in custom fields instead of by class or location, you can now pull that up in reports.”  

But it’s not just shiny new features that user feedback helps bring to life — it’s also the less glamorous but equally important bug fixes. Hector shares a recent win: “Have you ever been in a P&L, clicked on a drill down for a particular account, and then gone back to the P&L and the P&L doesn’t show complete—it’s filtered by the account you just drilled down to? I’m happy and excited to announce that this particular bug has been squashed. Now, when you go from summary to detail and back, it should show the report correctly.”

From strategic additions to crucial fixes, user feedback guides QuickBooks’ evolution. Alicia notes that she and Garcia each run Facebook groups with over 10,000 members where QuickBooks issues are often raised. Pain points and wish lists shared in forums are actionable intelligence that Intuit’s team is eager to mine. But how can you ensure your input is as impactful as possible? 

How to Provide Feedback That Gets Results

Now that we’ve established the power of user feedback, how can you ensure your input stands out and drives real change? As Hector and Alicia discuss, crafting effective feedback is equal parts art and science. 

First and foremost, specificity is king. Provide as much detail as possible when reporting a bug or suggesting a feature. The more context you give, the quicker the QuickBooks team can pinpoint and tackle the issue.

But persuasive feedback goes beyond just technical details. To make a compelling case, highlight your suggestion’s business impact and benefits. 

Hector shares a recent real-life example of “retainage” for the construction industry: “What’s interesting about retainage specifically is there are some contracts in which you’re allowed to hold back money from your supplier. People always get tripped up on accounting for those holdbacks because it’s not a natural transaction. You have to build workflows outside of QuickBooks reminding you to manage it.”

If QuickBooks could remind you that you have money in retainage sitting there for months, it would eliminate confusion and mistakes for contractors and other businesses that have these types of clauses in their contracts. You want to share that kind of detail to build a persuasive argument for prioritizing this improvement.

Finally, provide input early and often. Participate in beta programs and user research initiatives to give feedback early in the development cycle. The sooner you flag issues or suggest tweaks, the more likely QuickBooks is to address them. Supercharge your feedback’s impact by combining specificity, business context, and proactive input. 

Building Bridges: Forging Relationships with Intuit’s Team

One more way to maximize your influence: cultivate direct relationships with Intuit’s team. 

Industry events and conferences are golden opportunities to connect with Intuit’s developers and product managers. These face-to-face interactions allow you to put a human face to your feedback and forge personal connections that can pay long-term dividends.

But your relationship-building efforts don’t have to end when the conference does. Consider volunteering for customer advisory boards and user groups to establish an ongoing dialogue. These longer-term connections provide a platform to share your experiences and suggestions, learn from your peers, and gain insights into Intuit’s priorities and plans.

Bonus: Expert Tips & Resources

In addition to unpacking strategies for driving QuickBooks change, Hector and Alicia share some of their favorite recent bug fixes and resources:

  • Grouped reports. Previously, when you grouped reports in QBO, you couldn’t edit the group to change the schedule. That’s now fixed, so you can group multiple reports, like the P&L, balance sheet, cash flow statement, etc., and schedule them to be emailed monthly or weekly. 
  • Price rules. Price rules allow you to increase or decrease prices in bulk. For example, you can assign different prices to retail and wholesale customers or put all your prices on sale for a week. While QuickBooks worked on making price rules available on new invoices, the feature was unavailable on classic invoices for about a week. “Price rules are up and running again in classic invoices, and QuickBooks is actively working on getting them up and running in the new invoices,” Alicia shares.
  • Keyboard shortcuts. Hector shares handy shortcuts built into RightTool for QuickBooks Online for quickly accessing audit log histories (Ctrl+Alt+H) and transaction journals (Ctrl+Alt+Y) from an invoice, check, bill, or purchase order. 
  • Educational resources. Alicia highlights her recent “Tricky Situations” and “Next Level Accounting” classes that cover complex QuickBooks use cases and advanced bookkeeping techniques. Hector also has a series of videos on his YouTube channel focused on QuickBooks for construction and project-based firms.

Find links to those resources and listen to the full episode of The Unofficial QuickBooks Podcast.

And congratulations to Hector and Alicia for hitting 50,000 downloads!

Alicia Katz Pollock’s Royalwise OWLS (On-Demand Web-based Learning Solutions) is the industry’s premier portal for top-notch QuickBooks Online training with CPE for accounting firms, bookkeepers, and small business owners. Visit Royalwise OWLS, where learning QBO is a HOOT!

Work Smarter, Not Harder: The 3.3 Rule for Accountants

· ·

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.

The Horizon Scandal: How a Flawed IT System Shattered Lives and Eroded Public Trust

· ·

By: Greg Kyte, CPA

Picture this: You’re running a small post office in England, minding your own business, when suddenly you’re accused of stealing thousands of pounds. Your life savings? Gone. Your reputation? In shambles. Your freedom? Gone.

Now imagine this nightmare playing out for hundreds of innocent people over two decades, with a trusted national institution as the bad guy. Sounds like the plot of a dystopian novel, right? Nope. This is the very real, very messed up story of the Horizon IT scandal that rocked the UK Post Office and ruined countless lives.

On an episode of our podcast Oh My Fraud, my co-host Caleb Newquist and I dove headfirst into this shocking miscarriage of justice. A lot of people have said that the Horizon IT scandal is one of the worst miscarriages of justice in British history. And remember, the British did colonization, slavery, and the Crusades. That should give you an idea of just how bad this whole situation was.

The Birth of a Digital Disaster

Let’s rewind to 1999. The UK Post Office, in all its infinite wisdom, decided to roll out a new accounting and inventory system called “Horizon.” The idea was to drag their paper-based branch accounting into the digital age. Sounds great on paper (pun absolutely intended), right? Well, not so much.

As Caleb said in the episode, “Almost immediately, subpostmasters started complaining that the Horizon system was shit. Specifically, it was falsely reporting accounting shortfalls, sometimes to the tune of thousands of pounds.” But here’s where things get really messed up. When these subpostmasters raised concerns, the Post Office basically told them to shut up and pay up because the system couldn’t possibly be wrong. 

Spoiler alert: It was very, very wrong.

The Contract from Hell

Now, you might be thinking, “Okay, Greg, so there was a glitchy system. What’s the big deal?” Well, let me introduce you to the contract between the Post Office and these subpostmasters. Caleb read out a particularly chilling part during our podcast: “The operator shall be fully liable for any loss of, or damage to any Post Office cash and stock… Any deficiencies in stocks of products, and/or any resulting shortfall in the money payable to the Post Office Limited must be made good by the operator without delay.”

In plain English? If the system says you’re short, you better cough up the cash, even if you know you didn’t take a penny. It’s like playing Monopoly with a computer that always accuses you of stealing from the bank, and then your real-life savings gets wiped out because of it.

Lives in Ruins

The numbers here are staggering. Of about 11,000 subpostmasters in the UK, around 3,500 were affected by Horizon’s “oopsies.” Even worse, 900 of them were criminally prosecuted for theft and fraud. We’re talking about people’s lives being shattered here.

Take Seema Misra’s story. She became a subpostmistress in 2005, and right from day one, she knew something was fishy with the accounting. Despite selling her jewelry to cover Horizon’s phantom shortfalls, she was accused of stealing £74,000. In 2010, while pregnant with her second child, she was sentenced to 15 months in jail. She fainted when the verdict was read out. Can you imagine?

She was imprisoned in the largest female prison in the UK. Actually, it’s the largest female prison in all of Europe, where she was convinced her life was in danger, as was the life of her unborn baby. She was at rock bottom and said that the only thing keeping her from suicide was the fact that she was pregnant with her second child.

But Seema’s story, as horrific as it is, isn’t unique. Martin and Gina Griffiths paid over £100,000 to the Post Office to balance their books, wiping out their life savings. The Post Office’s response? They revoked the Griffiths’ status as subpostmasters. Martin, unable to bear the injustice, took his own life at 58.

Then there’s Peter Huxham, who was convicted of stealing £16,000. He believed the system was right and accused his wife, Jackie, of theft, ending their 22-year marriage. Peter spiraled into alcoholism and isolation. His body wasn’t found until weeks after his death.

The Fight for Justice

These stories are just the tip of the iceberg. But amidst all this darkness, one guy refused to roll over: Alan Bates. When his contract was terminated in 2003 over a £1,000 shortfall, he didn’t just get mad; he got even. He created a website to find other screwed-over subpostmasters, which grew into the Justice for Subpostmasters Alliance.

Bates led a civil litigation against the Post Office, representing 555 subpostmasters. They won a £58 million settlement in 2019, but after legal fees, each person only got about £20,000. That’s peanuts compared to what they lost.

But here’s the awful part: By 2017, the Post Office knew that errors in the Horizon system or remote tampering could explain these losses. Yet they kept going after subpostmasters, insisting there was no explanation besides theft and fraud. That would mean that overnight, between 8% and 30% of all subpostmasters turned evil and started stealing money from the Post Office. 

Those numbers don’t make sense.

The Aftermath and Lessons Learned

A public inquiry in 2021 has since shown that it was the Horizon system’s fault all along. But for many, justice has come too late. Over 60 affected subpostmasters have died waiting for justice, including four by suicide. The British government is now offering compensation, with some convicted subpostmasters potentially receiving up to £600,000. But as Caleb rightly noted, “No amount of money can truly compensate for the years of trauma, lost livelihoods, and shattered reputations.”

So, what can we learn from this colossal screw-up? First, blind faith in technology is dangerous, especially when it’s paired with an institution more interested in covering its ass than finding the truth. We need robust oversight, independent audits, and systems that listen when people say something’s wrong.

Secondly, never underestimate the power of people coming together to fight injustice. This whole mess might have stayed buried without Alan Bates and others like him.

Lastly, and this is something I can’t stress enough: We need to stay vigilant. How many other Horizon-like scandals might be happening right now, hidden from view? What can we do to prevent this kind of systemic failure in the future? And how do we ensure that when injustice happens, the victims’ voices are heard?

The Horizon IT scandal might have happened across the pond, but its lessons hit close to home. It’s a wake-up call for all of us to stay alert, demand accountability, and never be afraid to question authority – even when that authority is a trusted institution or a fancy computer system.

If you want to dive deeper into this wild story (and trust me, there’s a lot more to unpack), check out our full Oh My Fraud episode. Caleb and I break down all the nitty-gritty details, and I promise you’ll find yourself saying “Oh My Fraud!” more than once.

Remember, folks: Just because a computer says it’s right, doesn’t mean it is. Stay sharp, stay skeptical, and for goodness’ sake, if a system accuses you of stealing thousands of pounds, don’t just take its word for it. Learn from the Horizon scandal – sometimes, the real fraud is the system itself.