Earmark CPE

Earn CPE Anytime, Anywhere

Advisory Services

The $450,000 Worth of Clients DBA Walked Away From on Purpose

· ·

In 2010, Marcus Dillon sat down to hand-write more than 50 letters to retiring CPAs, asking if they’d be willing to sell their practices. One of those letters launched Dillon Business Advisors, a firm that grew from a $400,000 acquisition into a multi-million-dollar advisory practice by strategically reinventing itself every five years.

On a recent episode of the Who’s Really the Boss? podcast, Marcus and Rachel Dillon celebrated the firm’s 15th anniversary by sharing its origin story and the evolution of DBA. In the first of a two-part series, they walked through specific revenue numbers, margin targets, acquisition details, and the personal sacrifices behind each phase of growth.

The Foundation: High School Sweethearts to Business Partners

Marcus and Rachel’s story started long before DBA. They met in driver’s ed at 15 and 16 and have been together ever since. By their first wedding anniversary, they had a one-and-a-half-month-old daughter, Kinley. That young family shaped every business decision that followed.

Marcus came out of Ernst & Young’s audit practice, where travel demands didn’t work for family life. He landed at a smaller Houston-area firm with around 15 employees and under $2 million in revenue. The owner took a chance on a 23-year-old kid to build an audit practice from scratch.

“I was able to get paid 45% of my effective billings, including write-ups,” Marcus said. “So I learned really early on how to price things so it was acceptable to clients.”

At his peak, he was billing close to $400,000 a year and taking home up to $180,000. But Rachel noticed a problem. Marcus had to match the owner’s hours, and he would stay at the office until 11 p.m., midnight, or sometimes 1 a.m.

“I didn’t want to be a single mom,” Rachel explained. “I was a teacher getting off at 4 p.m. and wondering, where is my husband and the father of my kids?”

DBA 1.0: Building Through Acquisition (2011-2016)

The Dillons prepared carefully for acquiring a firm. They paid off every debt except their mortgage. Rachel kept teaching for a steady income and benefits. Then Marcus wrote those letters.

One landed with Bob, a CPA in his 70s or 80s, who recently had a health scare. First Command Bank financed about $320,000 of the $400,000 purchase price. There was a 10% seller note, and Marcus brought 10% cash to closing.

Unexpectedly, clients followed Marcus, despite his non-compete agreement with his old firm. He fully honored the agreement, paying a third of the collections back to his former employer for three years. But the client migration pushed DBA from $400,000 to about $700,000 almost immediately.

The first office wasn’t glamorous. Marcus inherited a lease in what he calls a Class D building right off a major Houston interstate. “It had the old school atrium, and it just smelled like crap whenever they brought new mulch and plants into that atrium,” he recalled. He worked alone until 9 or 10 p.m., and his was often the only car in the parking lot.

Rachel’s first day at DBA in 2013 was moving day. “I remember doing a couple of collection calls on the floor as we were packing up,” she said. “I was not coming to work with you at the other place regularly.”

By then, they’d built their own 2,500-square-foot standalone office, figuring, if they were paying rent, they might as well pay it to themselves.

From the start, the Dillons prioritized same-day invoicing. Returns would flow to Rachel for client delivery, then straight to Marcus for billing that same day. “That’s something that was always a priority to get done immediately,” Rachel noted. “I hear some people spend days doing billing and invoicing, sometimes months after the fact.”

That diligence paid off. By 2016, DBA reached $1.5 million in revenue. The Dillons had paid off the acquisition loan and bought a lake house. They were successful, but as Marcus observed, “Every time someone wished me success, it was because I had just gone into debt.”

DBA 2.0: The Merger That Taught Them to Let Go (2016-2020)

In 2016, Marcus had breakfast with his mentor, Tom, who was winding down his practice. Marcus asked a question he now admits was the wrong way to evaluate an acquisition: “How would we be worse off by coming together?”

Tom brought about $400,000 of work, pushing DBA past $2 million. On paper, it looked perfect. In practice, it was a disaster.

“Tom’s clients loved Tom,” Rachel said bluntly. “Tom’s clients hated us.”

These weren’t just any clients. They were survivors of three or four rounds of exits, and they stayed for Tom personally. Plus, Tom’s service model was completely different. He offered every client two in-person meetings during tax season. DBA didn’t operate that way.

Meanwhile, the Dillons built a 12,000-square-foot office building: 7,000 for DBA, 5,000 to lease out. Marcus describes it as having “an attorney feel with wood wainscoting and leather-bound books.” It was supposed to be their forever office.

But the cultural problems didn’t solve themselves. So DBA started strategically shedding clients.

They spun off about $100,000 to their friend Julie, who mentioned she wasn’t as busy as she’d like. “She made that mistake of telling us that,” Marcus joked. Another $100,000 went to a CPA closer to Tom’s office. The next year, they went bigger, spinning off $250,000 along with Tom’s office location.

In total, DBA shed about $450,000 in client work. Yet they never dipped below $2 million in revenue. “That was definitely a consideration,” Rachel explained. “We never wanted to dip below $2 million.”

By 2019, things had stabilized. The team was mostly part-time working parents who arrived at 9:30 and left by 2:30 to match school schedules. All work happened in the office.

Then came January 2020. At their annual team retreat, Marcus asked, “If you could do anything in this life and not fail, what would you do?”

The leader of their audit practice answered, “I would be a stay-at-home mom.”

“When you have a leader in the firm respond that way,” Marcus reflected, “it’s like, okay, this is likely not going to be the person to help lead that aspect of the business.”

By March, the COVID-19 pandemic sent the team home, and they never came back. DBA funded home office setups and kept the physical office available. Nobody used it.

The audit practice spun off during 2020. Tom pursued receivership work full-time. And DBA hit $1 million to the bottom line for the first time, maintaining 40-45% margins before officer compensation. That’s a target Marcus has carried since his days at his old firm.

But remote work didn’t mean balance. “We did the kids’ routine of dinner, activities, bath, and bedtime,” Rachel said. “And then we just went straight back to work again for the next three or four hours.”

The Hard-Earned Wisdom of 15 Years

Looking back, Marcus is clear about what drove their early success. “We were successful because we put the hours in. We weren’t necessarily working smarter. We just worked more than others around us and said yes to others around us, which doesn’t work anymore.”

Other firm owners likely recognize patterns in the Dillons’ journey:

  • Financial preparation matters. They eliminated personal debt and kept Rachel’s steady income before taking the acquisition risk.
  • Invoice immediately. Same-day billing became a cornerstone cash flow practice. You have to send out the invoice to get paid.
  • Not all acquisitions are equal. When clients survive multiple rounds of exits, they’re bonded to a person rather than a firm. Tom’s clients proved that.
  • Set a revenue floor and defend it. DBA shed $450,000 in work but never went below $2 million because organic growth and price increases filled the gaps.
  • Listen when people tell you who they are. One honest answer at a team retreat revealed the future of an entire service line.
  • Hours aren’t everything. The model that built a $1 million firm through sheer effort won’t build the next phase.

Growth isn’t just about what you build. It’s about what you’re willing to walk away from, whether that’s clients who don’t fit, service lines that aren’t growing, office space you no longer need, or the version of your firm that got you here but can’t take you further.

This is just the first half of DBA’s 15-year story. In part two, Marcus and Rachel will share how the firm evolved after the pandemic, what they’re seeing in today’s market, and where they believe the profession is headed. For now, listen to their full conversation in Part 1, including all the specific numbers, deal structures, and decision points.

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, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.

IPA Survey Data Reveals What Best of the Best Firms Actually Do Differently Than the Rest

· ·

“I can’t wrap my brain around how we’re going to utilize technology and make our work more efficient. How do we bill that if we’re billing by the hour? Are we going to start having reduced fees on their invoices? No. So what does that look like?”

That question from Chelsea Summers, Executive Director of Inside Public Accounting, captures the paradox facing the profession right now. Two-thirds of accounting firm revenue still comes from hourly billing, even as AI promises to slash the time it takes to complete work. Something has to give.

On a recent episode of the Earmark Podcast, host Blake Oliver sat down with Chelsea to dig into firm performance data heading into 2026. Inside Public Accounting has been benchmarking accounting firms since 1987. Its latest survey includes over 600 firms, from Deloitte all the way down to firms around $6.5 million in revenue. The numbers tell a story that’s both reassuring and challenging for firm leaders.

The reassuring part is the playbook for outperformance isn’t complicated. Top firms charge what they’re worth, leverage their staff better, and embrace offshore teams. The challenging part is the profession’s attachment to hourly billing might be the single biggest barrier to capturing value from technology investments.

The Best Firms Don’t Work Harder; They Work Smarter

Every year, IPA identifies its “Best of the Best” firms based on 30 different operational metrics. These firms are profitable, but they also have low turnover, succession plans, marketing strategies, and overall organizational health. “Operationally, you’re a high performing firm that’s going to succeed,” Chelsea explained.

The performance gaps between these top firms and everyone else are striking:

  • Revenue per employee: The best firms generate $272,000 per full-time equivalent versus $220,000 for all firms
  • Leverage ratios: Top performers maintain 17.7 professionals per partner compared to 11.8 for average firms
  • Partner billing rates: Best firms charge $588 per hour while others charge $448

That last number deserves emphasis. Top firms are charging $140 more per partner hour, a 30% premium.

But these high-performers don’t necessarily burn out their people to get these results. “The big myth is that high performing firms push people harder, and that’s why they’re making more money,” Chelsea said. “But in reality, those high performing firms often have healthier capacities because they’re using that leverage and they’re using more specialized roles.”

When IPA compared utilization rates and chargeable hours between Best of the Best firms and everyone else, the numbers were nearly identical. Same hours worked, dramatically different outcomes.

The secret is putting the right people in the right roles. Top firms use more client service staff for production work and keep partners focused on partner-level activities like training, business development, and client relationships. When partners step back into production work and start micromanaging, it hurts morale and growth.

Offshoring Has Reached a Tipping Point

Over half of IPA’s survey participants now use some form of offshoring or outsourcing, and less than 5% plan to decrease it. Nearly everyone else plans to grow or maintain their offshore headcount. This is the new normal.

The performance data backs up the strategy. Firms with offshore teams reported 8.1% organic growth versus 7.5% for firms without them. They also saw a 9% improvement in margins.

“Nine percent is a lot,” Blake noted during the conversation. And he’s right. That kind of margin improvement can transform a firm’s economics.

What’s changed is how firms use these teams. The old model treated offshore staff like a processing center for data entry. Today’s successful firms fully integrate offshore team members. They have branded offices, firm email addresses, training opportunities, and direct client communication.

“Really making that individual feel a part of the team is very helpful in correctly utilizing them and making sure they feel the value of working at the firm,” Chelsea explained.

As technology automates the basic data entry tasks that initially justified offshoring, these team members are moving up to manager-level work, supporting advisory services, and contributing to internal operations. The offshore strategy and the technology strategy work together.

Firms Have More Pricing Power Than They Think

One pattern emerged repeatedly in Chelsea’s conversations with firm leaders: they consistently underestimate what clients will pay. “We have all these D and F clients, we want to cull them so we raise their prices 40%. But they all stay,” she shared.

A 40% price increase, and the clients don’t leave. That should make every managing partner pause and reconsider their pricing strategy.

In today’s inflationary environment, not raising prices can actually send the wrong signal. “When your CPA firm doesn’t increase their prices, then you almost say, are they not very good? Do they not believe in their work?” Chelsea observed.

Blake connected this to a broader pattern he’s seen across firms of all sizes. “We talk a lot when we talk about small firms about how they’re underpricing. It’s the same tendency in the midsize and the larger firms where some firms just don’t charge enough. They have pricing power and they’re not using it.”

The Advisory Pivot Is Slower Than Expected

Despite years of conference presentations about the shift to advisory, most firms still generate less than one-third of their revenue from advisory services. Tax and assurance continue to dominate, accounting for about two-thirds of revenue at the average firm.

“That’s really contrary to all the talk that we’re hearing on advisory,” Chelsea said. “I think it is [the future], but the data just isn’t showing that that is yet the predominant model inside most firms.”

Client accounting services, once positioned as the gateway to advisory, are growing but not explosively. Larger firms have shifted their thinking about CAS. “It seems like a lot of firms, especially the larger firms, have shifted away from feeling like that’s a foot in the door to like, that might be a strategy, but that’s not our only strategy going forward,” Chelsea explained.

For firms succeeding with advisory, a few patterns stand out. They have a dedicated internal champion who isn’t juggling 15 other responsibilities. They invest upfront and accept that returns take time. And they recognize that advisory service lines need different processes than tax and assurance work.

AI Faces Cultural Barriers More Than Technical Ones

When Chelsea asks firms about their return on technology investments, the responses are telling. “They’re like, how do we even do that? What does that look like? What does an ROI even mean?”

That said, firms are finding value in specific areas. Tax research stands out as a clear win. Being able to have AI synthesize complex tax code information saves significant time. Workflow automation, document processing, data extraction, and AI-assisted drafting also deliver results.

But adoption is slower than expected, and the blockers are mostly cultural. Partner skepticism leads the list, followed by change management resistance. “The accounting profession is certainly not known for being early adopters,” Chelsea noted.

There’s also a timing problem. Many firms shelved their AI discussions in December for tax season. When they picked them back up in May, there was different software, different models, different capabilities. “You’ve missed all of that research time and possible adoption time just because you’re too busy doing tax season,” Chelsea explained.

We Can’t Ignore the Billing Model Problem Much Longer

Throughout the conversation, Chelsea kept returning to the incompatibility between hourly billing and efficiency gains from technology.

She actually expected the 2025 data to show movement away from hourly billing. Instead, it went slightly in the other direction. Two-thirds of revenue still comes from billable-hour models, and much of what firms call “fixed fee” pricing is just hourly billing in disguise: time estimates multiplied by rates, presented as a flat fee.

Blake shared his own experience to illustrate the problem. When his CAS firm adopted cloud technology early, efficiency gains were 80%. “We couldn’t bill hourly or we’d lose all our revenue,” he said. “We were forced to switch to fixed fees.”

If AI delivers even half those efficiency gains for tax and audit work, firms clinging to hourly billing will face the same reckoning. Except unlike CAS, which was easier to start fresh with new pricing models, tax and audit are where hourly billing is most entrenched.

For firms evaluating technology investments, Chelsea recommends asking three questions:

  1. Does this reduce manual work in a measurable way?
  2. Does it integrate with existing workflows?
  3. Will it free staff to do higher-value work?

If the answers are yes, the investment probably makes sense, even if you can’t calculate a ROI yet.

The Clock Is Ticking

The IPA data paints a clear picture of where the profession stands today. Top performers are executing on fundamentals. They charge appropriately, leverage staff effectively, and embrace offshore teams. Meanwhile, the broader profession remains tied to hourly billing, is moving slowly toward advisory services, and is largely waiting for clearer signals on AI.

For firm leaders, this creates opportunity and urgency. The playbook for better performance isn’t complicated, but the window to adapt might be narrowing. Firms that figure out how to decouple revenue from hours worked will be positioned to benefit from technology investments. Those that don’t may watch their revenue shrink as efficiency gains eat into billable hours.

“I’m crossing my fingers that 2026 we’re going to see some change,” Chelsea said about the billing model evolution. Given what’s at stake, the entire profession should be crossing their fingers with her.

For a deeper dive into these insights, including specific benchmarks on compensation trends, capacity planning, and technology adoption, listen to the full conversation between Blake and Chelsea on the Earmark Podcast. You can earn free NASBA-approved CPE credit for listening.

The End of Data Entry and What It Means for Your Tax Practice

· ·

Elizabeth Beastrom left public accounting 30 years ago because she was sick of rekeying data into tax returns. Now, as President of Tax and Accounting Professionals at Thomson Reuters, she works to make sure no accountant has to do that mind-numbing work ever again.

“I was a lazy CPA,” she admits with a laugh during this episode of the Earmark Podcast. “I didn’t want to spend my time doing work that I didn’t think was necessary.”

In this conversation with host Blake Oliver, Elizabeth and Kirat Sekhon, Thomson Reuters’ Head of Technology, map out their vision for automating the entire tax workflow, from gathering documents to delivering returns. They want listeners to know that AI-enabled firms are going to outcompete everyone else, and the shift from compliance to advisory isn’t optional anymore.

Why Tax Firms Can’t Keep Doing Things the Old Way

The numbers tell the story. Fewer people are taking the CPA exam while more accountants retire every year. Meanwhile, tax complexity keeps growing, which means more demand for services with fewer people to do the work. Throw in private equity firms buying up practices and pushing for efficiency, and you’ve got a perfect storm.

But it’s not just about headcount. The new generation of accountants expects modern tools that actually work together—not the clunky desktop software their predecessors put up with.

“They expect to use intuitive and connected tools,” Kirat explains, “so they have a better experience while they deliver value to their customers.”

So why has tax software stayed stuck in the desktop era while cloud accounting tools have taken off? Kirat points to two reasons. First, tax calculations are hard to get right, and once you build something that works, nobody wants to break it. Second, accountants themselves haven’t pushed for change. When you’re working 80 to 100 hours during busy season, the last thing you want is to learn new software.

“The term SALY—same as last year—still comes through,” Elizabeth notes. “You found a way to do it and you like to replicate that. Change is hard, especially when you have to introduce that to the firm when you’re working 80 to 100 hours a week.”

But resistance to change is becoming dangerous. Elizabeth’s own exit from the profession 30 years ago shows what happens when the work becomes too tedious. Back then, she discovered she loved the advisory side, including talking to clients, understanding their businesses, and making recommendations that actually helped them improve. But she was stuck doing data entry.

“I would spend time talking to my customers,” she recalls. “Some of my best inputs came from the people in accounts payable or accounts receivable. I would get a detailed understanding of their process.” But then she’d have to go back to rekeying tax data, and the contrast was too much.

Building the “Bookends” Around Tax Prep

Thomson Reuters isn’t trying to fix one piece of the tax workflow; they’re automating the whole thing. Their strategy focuses on creating what Elizabeth calls “strong bookends” around their core tax engines (GoSystem Tax, CST, and UltraTax).

The front bookend came through their acquisition of SurePrep three years ago. Practitioners dump all their client documents into the system, and SurePrep automatically classifies them, pulls out the relevant numbers, creates a binder for review, and fills in the tax software. No more manual data entry.

“That’s a huge time savings when you don’t have to spend time doing all of that manual data entry,” Kirat says, “and they can actually focus on the return.”

The back bookend arrived with SafeSend, acquired earlier this year. It handles return delivery, e-signatures, and payment collection, eliminating what Elizabeth remembers as the nightmare of printing, mailing, and faxing documents back and forth 30 years ago.

What’s different about Thomson Reuters’ approach is they’re keeping these tools open to work with competitors’ software too, not just their own tax products.

“It is an open, curated ecosystem,” Elizabeth emphasizes. “If customers find value in part of their workflow, we want to make sure we connect to it.”

Beyond just automating existing steps, they’re trying to eliminate unnecessary work entirely. Take the client questionnaire—that paper organizer Blake’s mom still fills out by hand every year. Thomson Reuters wants to “kill the questionnaire” by using AI to pre-populate information from prior returns and only ask for what’s actually new or missing.

The next frontier is what Kirat calls “agentic AI,” systems that don’t just handle one task but orchestrate entire workflows. These AI agents can use multiple Thomson Reuters products in sequence, making decisions along the way to get a return from start to finish with minimal human intervention.

But everything the AI does needs to be auditable. Kirat stresses that any AI handling tax work must show exactly what decisions it made and why.

“Our customers expect the work product of an accountant to be 100% accurate,” she explains. “Without providing that audit log with the decisions and choices and confidence levels, we’re missing the mark.”

Blake agrees enthusiastically, sharing his frustration with current AI tools that don’t show their reasoning. “I want to know why it matched this transaction,” he says. “There’s an AI conversation for each one of these transactions. Why not give that to us?”

The Shift to Advisory Can’t Wait

If machines can prepare returns faster and more accurately than humans, what exactly are clients paying for? Two-thirds of Thomson Reuters’ customers say they want to shift to advisory services, but most don’t know how to actually do it.

Enter Ready to Advise, launched in June 2024. The tool takes everything from a completed return and analyzes it against potential tax strategies based on that client’s specific situation and goals.

“It will quantify the savings,” Elizabeth explains. “It will ask for more information to get to a range. It will allow you to have that discussion where you can say, ‘Hey Blake, I noticed from your 1120-S filing some potential strategies you should take.'”

Then it walks you through implementing those strategies and produces client-ready documentation. For firms struggling to move beyond compliance, this is huge.

But technology alone won’t fix the business model problem. Clients have been trained to expect strategic advice for free. “I might call my accountant and say, ‘Hey, tell me what this big beautiful bill does for me this year?,’ which is code for don’t charge me for this,” Elizabeth says, capturing the conundrum perfectly.

That’s where Practice Forward comes in. It’s Thomson Reuters’ tool for helping firms understand their worth and develop advisory pricing models. The goal is shifting from hourly billing for returns to year-round advisory subscriptions.

Ready to Advise also solves a talent problem. Traditionally, you needed years of experience before you could offer meaningful tax advice. But with AI assistance grounded in Checkpoint’s content (maintained by over 4,500 subject matter experts), newer staff can contribute to advisory work much sooner.

“That junior associate’s experience, paired with all the knowledge that there is available in generative AI today, is incredibly powerful,” Kirat notes.

Blake shares a personal example that drives home the value of advisory over compliance. His tax preparer advised setting up a C-Corp to potentially qualify for QSBS treatment, which could save millions in taxes someday.

“I can’t even quantify the value of that,” Blake says. “But that’s why I’m willing to pay thousands of dollars for a tax return. It’s that insight, not the return.”

Meanwhile, DIY tax software keeps getting better. Blake describes doing a business return himself using consumer software with ChatGPT open for research. The same process would have taken hours of manual work just a few years ago.

Firms that stick to just preparing returns are going to get squeezed from both ends.

“AI-enabled professionals and firms, they’re going to outcompete and outperform,” Elizabeth warns, “because they’re going to be able to do it faster, better and get to this advisory, which our clients want.”

What to Do Right Now

So where should a traditional tax firm start? Elizabeth recommends figuring out what you hate doing.

“What are your pain points that you hate to do?” she asks. “There’s a pretty high likelihood that I or a talented person on my team is going to be able to say, ‘This is how we can solve that for you.’”

The technology exists today. SurePrep can handle document gathering. SafeSend can automate delivery. Ready to Advise can help you identify tax-saving opportunities. CoCounsel can answer complex questions using curated, expert-verified content. The audit logs are there to verify everything the AI does.

The harder change is mental: accepting that the compliance work that defined the profession for decades is becoming commoditized, and the future belongs to firms that embrace automation as the foundation for higher-value advisory services.

Elizabeth even suggests bringing these concepts into accounting education to attract new talent. Currently, tax courses focus on rules and calculations rather than strategy. After all, accounting is still “the language of business,” as Elizabeth was told as an undergraduate. The difference is that AI can now handle the grammar and spelling, freeing professionals to focus on telling the story.

The transformation won’t be easy, but it’s not optional. As Elizabeth learned when she left the profession out of frustration with mundane tasks, talented people won’t stick around if the work doesn’t engage them. The good news is that automation finally makes it possible to eliminate the drudgery and focus on what really matters: helping clients succeed.

Listen to the full conversation with Blake, Elizabeth, and Kirat for more insights on preparing your firm for the automated future of tax.

From Random Acts of Advisory to Strategic CFO Services

· ·

“The darkest times for an industry are the times in which an accountant is most valuable.”

Chris Macksey, CEO of Prix Fixe Accounting, learned this firsthand during the COVID-19 pandemic. While restaurants nationwide struggled to survive, his specialized firm actually grew—not despite the crisis, but because of it. Restaurant owners desperately needed help navigating Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL) applications, and industry-specific relief programs that their generalist accountants couldn’t handle.

In this live recording of the Earmark Podcast from Boston’s Advisory Amplified tour, host Blake Oliver explores how accounting firms can evolve beyond traditional services to become true strategic partners. Joined by Chris and James Erving, Head of Sales, Americas at Fathom, the conversation shows that delivering valuable advisory work doesn’t require advanced certifications or complex methodologies. It just takes a willingness to form opinions and use modern tools to turn financial data into business guidance.

What Advisory Really Means (And Why Accountants Struggle With It)

The accounting profession can’t even agree on what advisory means. James cuts through the confusion with a simple definition: “Being involved in the decision-making process rather than just the delivery of information.”

Chris takes it further. At Prix Fixe Accounting, he treats advisory as completely separate from Client Accounting Services (CAS), even assigning different team members to each. “It’s any of the work that you can’t scope really very easily,” he explains. Unlike predictable bookkeeping tasks, advisory demands flexibility and judgment.

The real challenge is having an opinion. “I have run into so many accountants who just won’t have an opinion about anything other than the accuracy of the financial statements,” Blake says bluntly.

Chris shows what having an opinion looks like in practice. When a restaurant’s food costs creep up from 23% to 28%, he doesn’t just report the variance. He digs deeper. “Is it that something’s changed in the kitchen, or is it just inflation that’s causing that number to gradually rise over time?” That shift from reporting what happened to explaining why it happened (and what might happen next) is where advisory begins.

But not every client needs this level of service, and knowing when to offer it makes all the difference.

Finding the Right Clients for Advisory Services

James identifies three clear signals that a business needs advisory support. First, rapid growth that outpaces the owner’s ability to manage finances. Second, reaching a size where DIY financial management becomes overwhelming but hiring a full-time CFO doesn’t make sense. Third, major events like acquisitions or exit planning.

This targeted approach beats what James calls “random acts of advisory”—the unpaid, unstructured advice many firms already provide without recognizing its value. By identifying specific triggers, firms can systematically deliver advisory services rather than hoping opportunities appear.

The conversation also reveals an important distinction between types of forecasting. James explains that small businesses often need short-term cash flow forecasts to predict cash positions in the next week or two. Larger or more stable businesses benefit from FP&A-style planning with three-to-12-month horizons and scenario modeling.

Understanding which clients need which services allows firms to focus their efforts where they’ll have the most impact, and where clients see enough value to pay premium fees.

Why Industry Specialization Accelerates Advisory Success

Chris’s restaurant-only focus demonstrates the power of specialization. His firm doesn’t just understand debits and credits; they understand why champagne and caviar became popular during the pandemic, how street construction affects revenue, and when consumers will pay for fine dining versus seeking value menus.

“Right now, consumers really feel a lot of pain in the pocketbook,” Chris explains. “The auto loan default rate is up. Credit card balances among consumers are at their highest levels. Consumer confidence is down.” This economic insight shapes his current advice: forget the $175 prix fixe menu and focus on feeding a family of four for under $75.

The specialization advantage goes beyond knowledge. Chris spent over a decade as a chef before becoming an accountant. “It’s a little bit of a cult industry,” he says of restaurants. “If you’re in, you’re in. If you’re out, you’re out.” This insider status builds trust that no amount of technical expertise could match.

His firm even mandates their approach. “The tech stack is set. There really aren’t any options. And there’s only one price point, it’s prix fixe. And you’re just going to have to enjoy the ride.”

This confidence comes from aggregated data across similar businesses. When restaurants see sales drop 20%, Chris can show clients it’s an industry-wide trend, not a personal failure. “When you can actually see that data and validate it for yourself, you know that no, it’s not you. It’s just the economy.”

The depth of specialization creates value generalist firms can’t match, but you don’t need a decade of industry experience to start delivering meaningful advisory services.

Making Advisory Practical: Tools, Metrics, and First Steps

“Once they actually do it for the first time, they realize, oh, I’m just looking at the last three years. I’m kind of rolling it forward, making an educated guess on what it’s going to be. And that’s really all it is.”

Chris uses this approach to explain forecasting for his team. Rather than treating it as an advanced skill only partners can handle, he involves staff accountants in creating annual budgets. They examine historical data, consider market conditions, gather client insights, like upcoming construction that might impact foot traffic, then make informed projections.

The key is matching the service to the business reality. Chris doesn’t do detailed cash flow forecasts for restaurants because “they have such tight cash flow that you’re off 5% and your cash flow projection’s shot.” Instead, he focuses on annual budgets with monthly check-ins.

Visual presentation transforms complex data into insights clients can actually use. “Our client base is largely visual people, and the financial literacy is usually pretty low,” Chris notes. He spent over a decade cooking before seeing a P&L statement, so he understands the challenge. Charts showing 12-month trends for metrics like food costs communicate far better than spreadsheets full of numbers.

Non-financial metrics add crucial context. For lodging clients, Chris tracks occupancy rates, average daily rates, and rooms sold. These are “numbers that you will not see surfaced in QuickBooks.” When revenue changes, these metrics reveal whether it’s a pricing issue or a volume problem.

James emphasizes the importance of using proper tools. “You don’t have to build an entire Excel model customized to a client to get started.” Modern platforms like Fathom automate much of the work, creating professional forecasts and visual dashboards without custom spreadsheets for each client.

For firms ready to begin, Chris and James offer practical advice. Start with forecasting, since it’s a natural extension of work you already do. Pick one or two industries where you have multiple clients and build expertise gradually. Ask more questions about your clients’ businesses. And remember, clients don’t expect you to know everything. They value accountants willing to connect financial data to business decisions.

Your Path from Compliance to Advisory

The shift from traditional accounting to advisory starts with three elements: forming opinions based on financial data, developing knowledge of specific industries or situations, and using modern tools to make forecasting efficient rather than overwhelming.

Chris’s experience during the pandemic proves the value of this transformation. While generalist firms struggled to help clients navigate crisis programs, his specialized knowledge made Prix Fixe Accounting indispensable.

The firms making this transition today position themselves for a future where their value only increases. Economic uncertainty creates more need for strategic guidance. Industry disruption demands advisors who understand both the numbers and their context. Business owners facing unprecedented challenges need professionals willing to venture beyond historical facts into forward-looking advice.

Listen to the full episode to hear additional insights on pricing advisory services, overcoming staff resistance, and managing the cultural shift within your firm. Chris and James’s conversation offers a practical roadmap for any firm ready to move beyond “random acts of advisory” to systematic, profitable guidance that transforms both your practice and your clients’ businesses.

Streamlining Sales Tax Compliance: Exploring Avalara’s Managed Returns for Accountants

· ·

Managing sales tax is one of the most challenging services to offer clients as an accounting firm.

Collecting sales information and filing tax returns traditionally involves a lot of work. It means logging in to multiple state portals, keying in sales data, and filing returns one at a time. With multiple clients filing in multiple jurisdictions each month, this quickly becomes unmanageable.

There’s also a big risk of making mistakes—if you slip up in one small way, it can lead to extensive notice correspondence and mounting penalties.

During an Earmark Expo webinar, hosts Blake Oliver and David Leary explored how modern compliance platforms such as Avalara’s Managed Returns for Accountants (MRA) allow you to expand your services without substantially increasing staff, risk, or costs.

Introducing a New Approach with Avalara

Avalara’s solutions aim to eliminate much of the repetitive manual work by consolidating data and automating return filings. John Sallese, Director of Strategic Accountant Solutions & Partnerships from Avalara showcased how Managed Returns for Accountants offloads the filing burden onto Avalara after the firm has reconciled the data. 

Here’s how it works:

  1. Data Collection and Review: Firms import or sync sales data from QuickBooks, Shopify, Amazon, or other systems into Avalara. The platform can also recalculate sales tax liability if needed.
  2. Approval by the Firm: After confirming the monthly numbers are correct, the firm marks each return “Approved to File.”
  3. Automated Filing and Payment: Once approved, Avalara files and remits payment on time, assuming responsibility for meeting deadlines, sending confirmations, and handling notices.

John noted that if the firm misses the approval deadline—usually around the 10th of each month—Avalara auto-approves to avoid late filings. 

As an added safeguard, if any Avalara-caused delay results in penalties or interest, Avalara covers those costs under the terms of service.

Two Distinct Service Models: MRA vs. Returns for Accountants

Avalara offers two different models for accounting professionals:

  1. Managed Returns for Accountants (MRA)
  • Firm’s Role: Gather and reconcile monthly data, approve liabilities.
  • Avalara’s Role: File returns, handle payments, and manage notices.
  • Key Benefit: Reduced risk for late filings and penalties, as Avalara takes over once data is approved.
  • Typical Cost: Ranges around $25–$30 per filed return (volume discounts may apply).
  1. Avalara Returns for Accountants (sometimes referred to as “ARA”)
  • Firm’s Role: Owns the full process—import data, finalize calculations, file, pay, and manage notices.
  • Avalara’s Role: Provides the software platform, automation tools, and supports advanced e-filing flows.
  • Key Benefit: Complete control and flexibility over the entire return process.
  • Typical Cost: Generally lower per return because the firm does more of the work.

Many firms adopt both solutions. 

Straightforward filings can go on the MRA model, where the firm approves data and lets Avalara handle the rest. 

Complex cases, such as back-filing multiple years, voluntary disclosures, or clients with inconsistent monthly data, might be better served with the RA model, which grants the firm end-to-end control.

Notice Management and Advisory Opportunities

In addition to filing returns, MRA includes comprehensive notice management. This means Avalara addresses notices from tax authorities and resolves them directly, relieving firms of much of the back-and-forth associated with sales tax inquiries. 

Firms also gain better visibility into potential advisory projects. “You’re not just filing returns,” John emphasized. “If you see clients calculating tax in states where they’re not registered, you can help them register or do a voluntary disclosure.”

Using these platforms can elevate the firm’s role from simple compliance processing to a strategic advisor, offering value-added services around taxability research, nexus studies, registrations, and more.

Implementation Considerations

John shared what to consider when you’re implementing Avalara MRA:

  • Data Integration: Ensure you can connect client systems (eCommerce, accounting, POS) to flow data automatically. This reduces manual entry and ensures more accurate filings.
  • Monthly Workflow: Clearly define who imports data, who reviews it, and when approval is due. MRA’s auto-approval protects against accidental late filing.
  • Client Onboarding: When setting up each client’s “filing calendar,” you’ll specify which returns need filing, the frequency, and any special state requirements. Avalara’s team verifies each setup to confirm accuracy.
  • Pricing Your Services: Whether you pass the per-return fees directly to clients or bundle them into a flat monthly charge, clarify the difference between MRA’s delegated model and RA’s self-service approach.

Elevate Your Sales Tax Practice

Sales tax compliance no longer has to be a necessary evil fraught with manual effort and risk. By choosing the right workflow model—either delegating filings to Avalara (MRA) or keeping them in-house (RA)—firms can scale sales tax services while maintaining appropriate oversight. The key is matching each client’s needs to the best approach.

Want to See a Live Demo?
Catch the full Earmark Expo session featuring Avalara, hosted by Blake Oliver and David Leary. You’ll see a real-time walkthrough of the platform and learn how to seamlessly integrate advanced compliance solutions into your firm’s existing workflow. 

Earn Free CPE

Visit earmark.app to watch the webinar and earn free NASBA-approved continuing professional education credit.