Does your bookkeeping business earn enough profit?
Our returning guest, Universal Accounting Center President, Roger Knecht, who co-wrote the book, In the Black, helps small business owners grow their operations successfully.It helps owners understand how they can run their businesses more profitably and also speaks to the importance of the accounting role in the success of the company.
It is filled with principles and concepts that you can use immediately to enhance your expertise and wisdom in business decision-making.
During our 100th episode, you'll learn...
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The importance of being efficient
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The tools you can take advantage to help your business
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The major functions of business
EPISODE TRANSCRIPTION
Michael Palmer: 01:23 Welcome back to The Successful Bookkeeper podcast. I am your host, Michael Palmer, and today's show is going to be a good one. I'm excited to have today's guest back on the program. He's the president of Universal Accounting Center. Since 1979, UAC has worked to help accounting professionals excel in their careers. He's an expert in helping people launch and grow highly successful accounting and bookkeeping firms. Roger Knecht, Welcome back to the podcast. Roger Knecht: 01:59 No, it's a pleasure. Thank you. I appreciate this. MP: 02:03 Yeah. Well, I'm really excited about today's interview because you're actually talking about profitability and more specifically about a book that you actually co-wrote cold in the black. Roger. What had you write a book about profitability?
RK: 02:12 Well, basically what it was is Ellen Bostrom at the time was dealing with the fact that his father was retired and was in a situation where he was growing older and he wanted to pay kind of an homage to what it was that he had learned from his father who had originally started universal accounting center who is a health Bostrom. And as the two of us spoke, Al Allen and myself, we decided that there was a good opportunity here to really put some, some, uh, paper to what it was that we had experienced as a company in our growth. And what were some of those maybe presuppositions, if you would, that we were using to run the company successfully. And so we sat down and started to go through what were those lessons that he had learned from his father and how were they applying to the company today.
RK: 02:55 And so as we wrote, the book in the black became kind of this, this catchall of what were those things we were doing from a marketing, accounting, and production point of view. They were leading the company to be successful. And it was at that time that we were achieving such awards, his inc 500, we were recognized five years running as an inc 5,000 company, uh, where our corporate headquarters are in Utah. We were recognized as a Utah 100 company for five years running. So when those accolades started coming and coming, we wanted to record or document what we felt were those things that were helping us achieve those successes. And most importantly, it was in an essence and homage, as you recall, two alphas father who originally started the company, Universal Accounting Center. So with all that in mind, we started to really put some energy and effort to really kind of write a book that would kind of help small business owners everywhere, see what it could be that they could use as a template to grow their businesses and be successful.
MP: 03:56 That's great. And now having written this book and haven't gotten it in the hands of probably quite a few different people in businesses, what have you learned about people's reaction to the book?
RK: 04:09 Well, it's in its seventh edition. And so I can honestly say we've seen a number of people take and read the book and apply it in their companies. So, because I know so many of your listeners are accountants, let me just mention that we have a number of people that were aware of that literally use the book not just as a marketing tool, but oftentimes they'll hand it to all their clients as they're onboarding them or perhaps at a holiday period of time where they're able to kind of give this out as a gift. And it's all with the premise of first and foremost, it's for every business owner to help them understand how they can run their businesses more profitably. But the underlying tone of the business is really kind of a subset or a secret little message that comes through that really speaks to the importance of the accounting role in the success of the company. And so for the accounting professionals, this is kind of like a nice pat on the back that helps all the clients understand as business owners that the, the accounting is essential to the success of the company. It's not something that is an afterthought or an unnecessary thing, but truly it is an integral part of the success.
MP: 05:11 Yes, such a fantastic concept Roger actually to to be giving your clients a gift that actually it's a gift but it also leads to a potential really awesome gift, which is more an increased profitability in their business. And I think anytime you're giving something away, it does a great deal for relationship. But in this case very consistent with what a bookkeeper or accountant as is all about is about building and helping businesses be more profitable.
MP: 05:41 Of course now this is something that I know you're going to resonate with. Um, e-myth is a phenomenal book that I would suggest every business owner read and liked to it. And I'm obviously biased. I think in the black is a great compliment. It essentially just kind of takes that business to that next level and for a small business owner, I think it really does address the three things that they need to be aware of in their company as they're wearing a variety of hats in their company to run the business and be effective and be profitable. But the nice part of it is it's all with the focus, the intention of being profitable. It's not just let's talk about marketing and sells or let's talk about fulfillment and production. It's really, let's do all these conversations in the context of how can we ultimately be profitable as a company.
RK: 06:26 In the book, we speak to it as mapping the business. When we talk about mapping the business, we're trying to say there are three core elements that exist in every company. No matter how large or small, no matter how old or young, every business is made up of marketing, accounting, and production. With those three things in place, it's the business owner's responsibility to go over each of those three and pull them together and within those find the profit of the business. And so the book does a phenomenal job of helping the business owner understand of all these things that they're juggling. All the hats that they're wearing. There is in fact a nice systemic way that you can intelligently, proactively, deliberately run the business to ultimately find the profit in the company.
MP: 07:13 Beautiful. Well, let's talk a little bit about that. I'm, I'm really curious to get into a little bit about about the book and some of the concepts, because I know our listeners, not only is this a great opportunity to muscle up in terms of their understanding of what should be happening for their own business, but as well to be able to consult and advise their clients when they're working with them. Sure. There's some great angles to go out from that perspective.
RK: 07:39 Well. Yeah, I'd love to share with you a few of the things that or if anything, themes of the book and try and kind of help everyone understand why the book would be helpful for their own companies as you own and operate your own business, but at the same time, how it can be helpful to the clients that you're working with and ultimately have a full circle benefit to you as you have. Have them read it. So I've introduced, obviously mark are mapping the business already making up the business, being marketing, accounting and production. Well, within each of those three areas of the company, they each have their own three elements that need to be addressed and prioritized by the owner. So obviously with there being three areas, marketing, accounting, production, and three subsets in each, there's a total of nine principles for profitability, which is the subtitle, if you will, of the book in the black and those nine areas.
RK: 08:34 What we need to recognize is as an owner, there are short term things that you need to be doing, things that need to be done now that are immediate things that need to be top of mind. And those three things. Each one exists in one of those three categories. So in marketing, the very first and preeminent thing that exists for every business owner is nothing happens until you make a sale. One of the things that I like to share about this is the fact that as a business owner, if you were to make yourself akin to a, uh, an ex excellent athlete, let's say, uh, a phenomenal baseball or football or, or basketball player, a golfer, that's great, wonderful that you're phenomenal at your, at your skill, at your ability. But unless you're playing a game, unless you're actually on the court with another team, with an opponent and your playing, does it really matter that you're as good as you are?
RK: 09:26 So in the accounting world, what we're trying to do is obviously go out and acquire clients because if you're not working, if even if you're a great accountant, bookkeeper, tax repair, if you don't have clients, it doesn't matter where the rubber meets the road is when you take on your clients and get paid for your services. And so first and foremost, we want to make sure that we're not being caught up with some of the things that I think we sometimes consumer time with organizing the office, learning a software, getting on top of something that needs to be done and it's when those things are organized, we feel comfortable to move forward and go out and market and meet or our potential clients. We're in first, first and foremost, what we've got to do is put the priority word needs to be, which is nothing happens until you mega sell. Once you make the sale, then we can go back and figure out some of the particular so that we can competently do the work. But it all comes back to, unless you're making the sale, what does it matter?
MP: 10:22 Absolutely. I agree with that and I often think, you know, people, uh, use the catchphrase. If you build it, they will come in and it's actually not the way you want to think about it when it comes to sales.
RK: 10:35 Yeah, very true. Yeah. I think sometimes we be garl ourselves that the better and better and better we build a mousetrap at some point a mouse is going to come along well we've, let's go find the mice first, find the mice that we can build the trap to catch.
MP: 10:56 Absolutely. And you know, I think for our listener too, this is something to be thinking about in their own businesses, which is often the selling part is not that which comes naturally and therefore it can be easy to procrastinate, pull it off because there are so many other things that do look important to be, to be getting prepared or to work on. But yet really the most important piece is that making sure that things are beginning sold.
RK: 11:24 Well, you bring up an excellent point and it's something that I'd like to just emphasize a little bit here. I shared earlier that every company is made up of marketing, accounting and production, and in the accounting business when you're offering either accounting, bookkeeping, tax services, one of the things that's actually quite interesting is because of the nature of the work, you're being a bookkeeping firm. Yes, your product, your service, the deliverable you're offering in the production side of the company is the bookkeeping service. But what's Nice is you're able to do your own bookkeeping and accounting. So we're a company is made up of a, of marketing and accounting and production. You just innately have the first two covered. What's not common is someone having been the comfort and the skill level, the competence and confidence to go out and market those services. And so when you talk to the accountant and a bookkeeper, the tax repaired, they're comfortable doing the bookkeeping for themselves and their clients where they're uncomfortable is going out, marketing those services.
RK: 12:23 And just to take that a step further, one of the things that I think is extremely important as part of the marketing is a lot of accountants don't understand that there are two things they have to be familiar with. One is marketing, the other is sales. You could do a great job marketing your services where you go out and you're in the right places, generating the right contacts, meaning the right people, but you're unable to close the deal. And that's the sales. So sometimes people are really good at the marketing side of the business, generating the leads, making the contacts, getting the referrals, and where they struggle is actually selling them, getting them to accept and engage with the client, paying you for your services. And so what we want to do is make sure that you have both the marketing and the sales skills. Some people, it's the opposite. They're really not good at the marketing. They don't know where to find the potential clients. They don't know where to go to get the leads, but they're really good if they can ultimately get a lead to close them. So if they can just get someone in front of them, they're good at closing the deal. Well, there's a difference between marketing and sales and it's important to be good at both have.
MP: 13:27 Absolutely. I just love that. And, and really I think everyone listening is that, that's the opportunity here. And I think we've spent a lot of time on this podcast talking about it and, and we will always continue to bring more information about marketing and sales on the podcast because it's so essential and it's so important to, to everyone's business the, so I love that we're on a great stream and Oh, you know what? I had a, actually a thought I wanted to just before I skip over here, I made a note [inaudible] you mentioned something around bookkeeper's doing their own books, right? So there's marketing, accounting and production and, and sort of they can do the production because they're bookkeeping and accounting, but then they can also do their accounting. You know what's interesting is I've actually spoken to a few bookkeepers that one of the breakthrough moments in their business was actually hiring another bookkeeper to do their own books and their business.
RK: 14:26 Not Interesting. It actually is very interesting and I make it akin to this. One time I had a rental property that I owned and the woman that lived in the home happened to be someone that for a living. She went out to other people's houses and clean their homes, so she was doing kind of a maid service and she spent her entire day going over to other people's houses and dusting and cleaning and doing the laundry. Well, when I would go to her house because I either needed to repair something or check-in or whatever the case may be and I'm checking in on my renter. What do you think the status of her home was? Right. It was horrible when she came home from working all day long cleaning other people's houses. Do you really think she wanted to clean her own home? Unfortunately, no. No, absolutely. What was sad is, is some people describe it as kind of like the cobbler's kids not having shoes type of a thing because it's amazing to me. Um, how sometimes when I'm working with an accounting professional, they're doing so well, but when it comes down to how, you know, are they doing their books? When was the last time they looked at their own financials? When was the last time they looked at or even close the book of business. Uh, it's just astounding to me how many of them actually a forgo that as they're working on all of their clients. So you, you make a valid point. I understand exactly where you're coming from.
MP: 15:45 Yeah. It's an interesting one. And I think for, you know, the listeners too, is I think what had them not do it sooner was that they were embarrassed about the fact that their books weren't impeccable right there, their job was to do packable file for their clients and they were awesome at that. Excellent at it. But yet they were embarrassed because they didn't, you know, it was like the, your, your renter who was, who was, whose probably embarrassed. And I was always, I would also say she probably would have been really specific in particular about it. So you know, it's like, are those people that she hired gonna do the job that she's expecting? So a whole bunch of different emotional and psychological things that go alongside of that. But encourage anyone out there that if that's one of the, they're at the stage in their business where they could, they could handle it and, and use the help, hire somebody else to do your books. Well said. Beautiful. We kind of went off on a little bit of a cha tangent. Let's get back to profitability and dig deeper into these nine principles.
RK: 16:44 So let me share the next one that I think would be of interest. I mentioned obviously in the nine principles, the first and foremost is that of nothing happens until you make a sale. And that loves in mapping under the marketing area. So let's move from marketing into accounting. In accounting. The very first thing that we need to emphasize is cashflow, and I'll emphasize it by saying cashflow, cashflow, cashflow. One of the things that's very important here is to understand that for our clients, we first need to distinguish are they familiar with the accrual or the cash form of accounting in which are they leaning towards or do they prefer? But when it comes down to the, the reality of business and the book does a great job of explaining all of this is how, how key and essential cashflow is. And what I love about this is something that I, outside of the book and experience I had where I was attending a conference and it was a panel discussion and in that discussion there was on the panel, someone who had just recently attended a government meeting.
RK: 17:44 This was in the United States and it was at a congressional committee. And there we're talking to these senators and the senators in the committee. We're actually asking economic and business-oriented questions and what stumped them is how a business from an accrual point of view can be profitable but yet from a cash point of view be bankrupt. And it was difficult to explain to these senators how a business can be selling and could be successful and profitable but unable to pay its bills, unable to make payroll, unable to fulfill its financial obligations. And I think sometimes what is hard for a lot of small business owners especially is to balance that. That's why when you hear these statistics oftentimes of businesses failing within the first few years, it's not because they had a poor product, it's not even that they weren't selling it. What it was is poor cashflow management.
RK: 18:40 And so what we want to do is just basically understand that like our clients, we ourselves need to be sensitive to the cashflow management of our companies. And so whether it be lines of credit or what are your, what you're using to manage the cashflow, there are tips and tricks. There are things that you can do that can give you some leverage points that enable you to kind of weather the storms that allow you to get ahead in the business. So we just want to understand that. The second thing that's very key in business is something that I find very few people will argue against. And it's the cashflow situation. Cashflow is king.
RK: 19:23 There you go. So we've got, nothing happens until something gets sold. Cashflow, cashflow, cashflow. Cashflow is king. And I love that conversation of cash flow. And there's so many stories and case studies of businesses that literally had a great business but cash flow wrong and, and lights out. Yes, that is so true.
MP: 19:37 Excellent. What is principle number three?
RK: 19:40 And we've kind of got this, we've got, I guess sales is the Queen and cashflow is the king at Sota. Sex starts to sound kind of interesting because I would agree with that. Like you, the queen can always come back and, and sell something and get cashflow back and track. Right? So, and everyone, what
RK: 20:05 knows? So it goes the life or wife still goes life. So if the Queen Sappy, we know the king's happy. So there you go. So the third thing in mapping the business leads us from marketing accounting to production. So the primary thing in production that is immediate is pouring on the communication. So when you're a small business, maybe, perhaps even a solo entrepreneur, one of the things that you're doing is you're wanting to make sure that the communication between you and the customer is good. And when you start getting employees, those people that are actually fulfilling the orders, the product or sells delivery, that the communication there is impeccable. And what I mean by this is so often in business what we're trying to do is we're trying to overdeliver. We've got some expectation that the customer has that as they've paid for the product or service they expect as part of the deliverable.
RK: 20:57 This is what's going to determine whether or not they're happy with what it is they purchased. We want to make sure that from a sales point of view, we didn't oversell them and whatever was stated in the sales process is deliverable and we want to make sure it's documented so that we know that when we're finished delivering, we've achieved what it is that the customer had purchased. And so pouring on the communication comes at a number of levels. The first being that of the customer are their expectations being met, is everything being taken care of? The second happens to actually be within the company. So there's a number of examples and one that I'll just share from the book. You can read the others, but it's essentially imagine for example, in a company where you know the cost of goods are such that you're able to sell this particular product at a discount.
RK: 21:43 Let's assume that the inventory is such that you're going to liquidate a particular product. And in doing so, one of the stories that we share is has how a company comes up with the idea of making a cell, doing a cell. The cell works, it's going well, things are going out the door. The salespeople are being commissioned and they're making a good bonus because cells are up in this particular cat category that we're emphasizing because we're liquidating something. But what fails to be communicated is when the product is taken care of, it's liquidated, it's gone. It's out of inventory. And the people in production seeing that they are running out of the product rather than canceling the sale and saying, hey guys, we were finished. We did what we wanted to the cells over, they go out and buy more materials to fulfill the continuing orders coming in.
RK: 22:33 Well, the problem is is that when they bought these new materials, the cogs, the cost of goods sold were actually more than they were originally because it's been some time since they did that order. And you have to remember the, we're doing this as a liquidation to get rid of something that they had already determined that they didn't need to have on stock in stock. Well, the problem is now you're selling something at a loss and nobody knows that. And in this particular example, what happens is the cells continue for some time. Everyone being excited. The salespeople are producing, they're doing well, everything's going awesome. We just love what's happening here. Everyone's busy. And it's basically about three months later that the accounting can come in and actually determine, hey guys, every time we sell this, we're losing money. The cogs are such that we're selling this at a loss and because of the commissions that we're paying the bonuses for the cells, um, every time we sell this, we're losing money.
RK: 23:27 And so what you want to do is make sure that inside of the company that there's communication, that there is this open dialogue that's going on. And in the book we talk about various ways to achieve this. Uh, there are things that you can do where you can sprinkle the communication, you can reign that communication within an organization and you can also flood the organization with communication. And so it's, how does your organization do that? In smaller organizations, it might be certain technologies like apps and so forth that enable the employees to communicate in other organizations that might be a CRM of sorts that they're using to manage the workflow or the product management. In smaller organizations where it's a solo entrepreneur, it's just where you documenting and recording everything so that you can actually see that things are following a workflow and being done effectively and profitably. So a, it varies business to business, but the concept, the principle is pouring on the communication first and foremost with the customer so that we know that their expectations are being met and then internally so that we make sure that we're able to delight the customer and overdeliver. And then lastly, so that we're being profitable so that there's a line of communication to ensure that we're not selling something at a price that we ought not and a, that we're being profitable from the get go. It's been deliberate.
MP: 24:47 I love that. You know, communication I think is, is underplayed and I don't know what card in the deck we could call this one, but uh, there was a catchphrase that I used to and I still think about all the time in, in times, usually in times of where things are, are tumultuous if you will, is everything can be resolved in communication. And so what it says to me is really there's nothing that can't be altered or made better through communication. And, and I love the fact that you've got a couple of different strategies around your communication in the book.
RK: 25:23 Well, if you're choosing to do a card, I'm going to say it's the ace up the sleeve. Your, your clean is definitely the cell's. The king is the cash flow. But the aces, if you can't deliver in such a way that your customer at the end of the day is delighted you run the risk of dealing with frustrated customers, you'd run the risk of having them asking for refunds. You have the risk of getting a social network reputation that is, is not favorable to your business. You run a lot of longterm issues if not done correctly. And so pouring on the communication I think is something that you, you don't want to overlook and get caught up in. I'm selling cash flows good, but I'm not taking care of my customers. Uh, I'm losing them. This is kind of a tangent. We've already gone on one. I'll go on another long story short.
RK: 26:07 I knew someone that was in a state prison. He was in prison because he was an excellent salesperson and he was selling log home kits. What it was is it was pre-manufactured log cabins that people could actually build up in there up in the mountains as a second home. And he was a phenomenal salesperson. And what he was essentially doing it was he was selling the kits faster than they could be delivered and produced. And so he got into a point where he was taking cells and being paid for kits that he couldn't deliver on because the company was behind in their orders. And it got to the point where he was selling so many of these that it got to be a lawsuit where these people wanted their money back because the deliverable wasn't being done. And you can imagine with cabin homes, if you can't build it in the spring or summer, it's not until the next spring or summer that you can install the home.
RK: 26:59 So people were paying and giving the gentleman money, but it wasn't for two or three years out as I recalled that he was going to be able to fulfill the order and yet he was telling the person upon sale that he could, you know, deliver it pretty quickly. So you could see the, the, the essence of making the sell, he was first things first he was selling, cashflow was good. He was bringing in the money, he was not taking care of the customers and he was doing such a bad job of it. It landed him in prison. So yeah, it, it, it can be that much of a deal-breaker if not done correctly. So don't want to put the heavy on it. I don't want to make this a frustrating, it's just to prioritize and emphasize that as a business you're an owner of a company and you're needing to just make sure that these things are all being taken care of and it's a priority on your part to just ensure that your customers are delighted and happy.
RK: 27:50 And I think the thing that we want to emphasize here is as an immediate need in marketing, accounting and production, we just want to emphasize that first and foremost when we wake up that we're focusing on today, what can we do to bring in a new sale? What are we doing about cash flows and make sure that we're able to take care of our obligations and what kind of cushion do we have in place to kind of help us float when needed. But lastly, is everybody happy? Are we delivering on what we said we would do? Are we able to over deliver and delight our customers? Are the employees working as a team to make sure that we're actually doing this profitably? That's the whole idea of what we're talking about here as we're looking at the nine principles of profitability and the first three that make those up.
MP: 28:32 I love it.
MP: 28:40 What's the fourth?
RK: 28:41 Well now we're getting into, we're about, we're coming up on close to half of these, but let's, let's talk about it. So the fourth one here actually takes us into what's called the mid term goals. The midterm midterm emphasis and so we've just talked about the short term. The mid term is in marketing. A good deal is a good deal if it's a good deal for both parties, so only a good deal when it's a good deal for both parties is I think an important principle to understand because first and foremost, I think when we're selling, there are times when we kind of get a little zealous and eager and we might make concessions that in order to get the sale, we sell the farm and with that eagerness to get the sale, we failed to realize that it's not a good deal. We might be excited about the fact that we closed a deal, but when we look back, it probably wasn't the right customer.
RK: 29:35 It probably was offering too many services or we threw in too many goodies to sweeten the deal and at the end of the day, it's just not a good thing. I'll give you an example. One of the things that we teach from an accounting point of view is when landing a customer, one of the things you don't want to do is cheapen your monthly fee just simply because of the fact that you want the deal so bad that you're willing to concede and offer your services for less. Where you want to concede and maybe help the customer realize that they're getting to get deal is perhaps on the setup fee. The set up fee is a one time fee and in theory if you're going to say that because you're from a friend or a family member or a networking group, I offer to those half price on my set of fee.
RK: 30:20 Well, you gave them a discount and you took a little bit of a loss on the set of fee for the time you're going to take to set that client up. But notice you didn't discount the month to month to month fees that you're basically going to be living off of. And if you discounted that, that's going to be a, a loss that you're going to incur for who knows how long for months, for years. And so what we want to do is just make sure that when we're getting excited about a sale, we're not shooting ourselves in the foot and, uh, hurting ourselves longterm. So the other part of this is from a management point of view, sometimes when we're working with employees, we have to recognize that sometimes they get a little eager, zealous to get the sale. And sometimes we've got to look back at the offers or the packaging or the discounts that they're assembling as they're closing deals.
RK: 31:06 And make sure, well, you know, what did they take a little bit of liberty here and offer more than they should have just to close the deal and get the sell for the day or the week. And we just need to, from a management point of view or an owner point of view, just make sure that those people who are closing deals are doing so within the parameters that are set. So that in fact it is profitable and in fact a good deal for both parties. So that's a, I think one of the key things. That's the second item in the marketing side of things.
MP: 31:35 Beautiful. Makes Sense. And you know, I often, you see, you know, I've, I've, I've known people who have started to increase their prices and it's just like, yeah, hey that worked, that worked, that worked. Eventually, it no longer becomes a good deal or perceived good deal on the other side. So it's like constantly looking at and evaluating is this working for both parties and, and if you have a win win for everybody, I mean a win win leads to longevity in the relationship.
RK: 32:03 It's exactly right. Okay.
MP: 32:05 Okay. So, well, I think we're getting into principle number five.
RK: 32:10 We are, this brings us back to accounting. So in mapping the business, we're in accounting and the mid term thing is knowing your business. And I think this just really talks to your example of preparing the financial reports and looking at those in business. What we're emphasizing here is the need that they have as companies, as owners of businesses to really understand what the numbers are. And uh, I think this is kind of akin to what I was sharing at the beginning of how through reading the book they come to appreciate and value the role of the accounting professional in helping them in their organization be profitable. So if you're looking at this from the business owner point of view, this is just simply to say that the language of businesses accounting, you need to know what your company is saying to you. You need to listen.
RK: 32:57 And as you go through this process of becoming more and more familiar with what the financial reports are saying and looking at them regularly, not just yearly, it may be tax time, but perhaps quarterly or monthly as you should be. What it does is it just gives you a greater appreciation for the fact that the numbers are helping you make more intelligent business decisions. Now from an accounting point of view, it kind of comes back to what you were sharing earlier that sometimes this is overlooked or neglected in an accounting firm, that they themselves aren't doing this and so to your listeners, I just challenged when was the last time you actually prepared your financials and light your clients? When was the last time you went through them and looked at the details and saw what the KPIs were for your business, what your average revenue per client is, what your billable hours are, average rate is. It's those types of numbers that you need to be looking at to know how well your company is doing.
MP: 33:51 Yeah, essential, absolutely essential and I think that this, what I can see in so far, we're only at number five. What I can see in this is just excellent conversation pieces and thinking points. Working with clients and being valuable to clients is to, to actually look at and evaluate yourself, where, where are your clients actually standing in terms of these nine principles more specifically around two and five because they're the accounting function and that's where you're likely going to be working with. But it's a a great lead in to give something like this to your, your clients even at on upon a new introduction or you've met them at a networking event and you think that they're very good prospect. This would be a great way to like, here's a booklet. Let's set up a time where we can discuss further. Uh, I think it's great so far, Roger.
RK: 34:47 Thank you. Well, that's one of the things that I really liked about this book. It's something that even though I'm biased, I feel every business owner needs to look at. I think it takes all those things that we're overwhelmed by as we run our companies and helps us at least break it down into three hats that we can the least where and then it helps us realize what, what type of balance can we have between these three and really what is the relationship of profit to the three roles, marketing, accounting, production, where's the profit? How do we find it in there? How do we ensure that we're going to get profit and how do we maximize profit? What are the things that we can do in those three areas of the company to ensure that not just that we're profitable, but very profitable. So, uh, these nine principles that we've spoken over began, uh, they're, they're all relative. I think every business owner will appreciate them. It's just now taking the time to implement and implement them in your company.
MP:35:40 Beautiful.
MP: 35:46 Well, this is great. Should we continue on and take a look at number six?
RK: 35:50 Well, I'm happy to go as long as you do. So. Yes. So number six, improve the internal processes. One of the things that I really feel that this addresses in the production side of the company is the fact that workflow is key to what we do in a company. And that's one of the reasons why I absolutely love pure bookkeeping, pure bookkeeping, helping people recognize that the back office administration, the efficiency of the workflow to ensure that the client work is consistent and being done profitably is so I think tantamount to the profitability of the organization. And so improving the internal processes is just taking what you have and making it better. Imagine if you were doing work today like you did five or 10 years ago. I don't know if any of you are old enough, but I definitely know I'm old enough to remember carbon paper and typewriters.
RK: 36:40 There are just so many things that we would consider to be archaic and if we were doing them today would be so slow. If you were old enough and you were remembering journals and ledgers and to prepare a financial report, you're having to take days to run the numbers and calculate everything. Uh, that's something that today because of technology is so easily done, you're preparing financial reports just by putting in date ranges in your running reports by simply asking for a range and then it produces bar graphs and so forth. It's just amazing what can be done. But if you're not trained and familiar with the tools, the resources that are available to streamline your internal processes, I think you're really cutting into the profit margin of the company. And so what we want to do is we want to look at what can you do in your company to basically take advantage of the technologies, the trends to basically become more efficient and profitable in your organizations. So again, because this is in the production side of the business, it's essentially what can you do to better deliver the product or service that you offer so that it is more easily delivered. It is more easily implemented so that it is better received by the customer. All of this is basically taking what you have and making it better while improving the internal processes of the company. And so if you can just basically recognize that your business needs to evolve and change and improve, you'll accept and be more welcoming to change.
MP: 38:10 That's fantastic. Well, I just, I love that. And as you were speaking, I was thinking of the, the, the, it's so the, the rate of change is so quick. I mean, we think back to the, the carbon copies, the fax machine, I mean, just even between telephones, there was a time where there was a lot of the time in your life where you were not near a telephone. It's like you going to drive somewhere to another city, it's going to be three hours. Well look, I'm off the grid for three hours now. There's none of that. So things are constantly changing. And so I'm getting that. The principle number six is about looking at that. What's changed? How can we make it better? That Chi is an approach to continuous improvement that leads to incredible opportunities for profitability inside of a business and all sorts of other, other wonderful things.
MP: 38:53 Now I think we're getting a little bit out of time and I actually think it's kind of exciting for the listener to go and actually learn about these last three while learn more and deeper about all nine. But go deeper and learn the final three. Roger, you've offered to give this book away for free to our listeners, which I think is extremely generous and extremely valuable in the form of an ebook. Now we're going to have that as a link that they can on this episode right now. Go and get this download. Um, so if you're listening right now and want to to use this and get this out to your clients and use this for your own business, just get down there below the, into the description and you'll be able to find that link. Anything else, Roger, to share about this particular resource and how, how they can get the most value out of it.
RK: 39:48 Certainly. So we at Universal Accounting Center like to pride ourselves as, as to helping the accounting professional get paid what they're worth. And we have a tour that essentially just introduces to the accounting professional what types of opportunities exist for them in their career, whether it's getting a promotion, a pay increase, uh, finding a new job to actually take their career to that next level or start or build their own successful accounting, bookkeeping or tax practice. And for many people it's a, it's basically a combination of both or it's a, uh, consideration of what opportunity is most appealing to them. And so I invite them to go to universal accounting.net and their universal accounting.net. We've got a nice little journey or towards kind of like a choose your own adventure type of experience to give you a chance to see what really is available out there as to helping you improve and take advantage of in the coming year, your opportunities in the accounting world.
RK: 40:43 And one of the things that I think is really key and essential here is the fact that it's endless. Whether you're starting in the accounting profession, whether you've been in doing, in doing this maybe 15, 20, 25 years, there still is a way to make that next year is the best year of your career. And we're happy to help in that process and I appreciate this opportunity, Michael, too, with pure bookkeeping. Look at the, the different things that are basically essential to helping someone be successful in their career with the tools they need to do so. So, uh, loved your podcast. I think this is just amazing. So thank you for the opportunity to be here.
MP: 41:17 Roger, The pleasure is all ours and thank you for generously giving us your time and on behalf of the listeners, thanks for being on the podcast today.
RK: 41:27 You're very welcome and I'll get you that information. You need to make the ebook available to them. I appreciate you that offer being made available to them. I think it's something they'll appreciate reading and I hope that they'll see value in providing this as a gift to their clients, for them to actually find ways to improve the profitability of their companies. And a, again, I hope that the journey is something that they enjoy going through and just seeing what types of opportunities exist for them. So thank you.
MP: 41:53 Okay, excellent. Excellent. All, all our pleasure. And I have to say it's the gift. I really think this is the gift that keeps on giving you help a business be more profitable. That's likely going to stick around for awhile. So awesome, and thank you so much.
RK: 42:07 You're welcome. Take care.
MP: 42:09 That wraps another episode of The Successful Bookkeeper podcast. To learn more about today's guests and to get access to all sorts of valuable free business-building resources, you can go to Thesuccessfulbookkeeper.com. Until next time, goodbye.
