The next round of articles in our Realities of the Automated Practice series deals with the financial and measurement aspects of automation. In this case, HPC founder and CEO Bruce Phillips, CPA explains how this impacted his firm and what he did about it.
Our pivot from being a traditional CPA firm to a virtual, cloud-based firm with remote workers and refinement of the project management process to no longer track inputs (aka time), but outputs were fundamental shifts in the way I ran it.
Setting up an automated firm in a virtual environment required quite a few changes to people, processes, workflows and overall operations, just to create a moderately efficient practice. Here are some of the areas that HPC focused on that could help you in your planning as well:
At HPC, we view manual data entry as a sin and make every effort to automate work. It directly costs our team members time they can instead use to provide advice and support to our customers. We have an innovation team that identifies and mitigates inefficiencies.
We maintain a running list of manual processes that our staff is performing, which we fix and use to adapt our current processes and solutions to eliminate them. This is an initiative that is communicated throughout all of our organization to increase our overall efficiency.
Not only is automating work for our clients a large part of reducing costs, but even the optimization of sharing of information throughout our team is continuously evaluated. From onboarding clients to our client success efforts, information is stored and shared methodically across our organization. Using best-in-breed practice management software, like Karbon, also enables us to convert our standard checklist of these processes into templates and remove time-consuming, repetitive tasks.
Finally, educating our team members on new tools or ideas is imperative to make sure the flow of information is effective. We assemble guides to ensure that new processes or tools are deployed as they were intended, such as custom-built
APIs that we have developed. Beyond that, we are always scouring the application ecosystem for new technology and partnerships that we can utilize for building a more automated practice and ultimately bring higher value to our customers at a lower our cost.
Identifying firm KPIs, having real-time access to them in a central location and developing action plans based on results are critical cost savings strategies for firms looking to reap the benefits of an automated practice. HPC utilizes KPIs to measure all aspects of our firm’s performance and relationships. From implementation and onboarding of customers to our tax and advisory services we rely on these metrics to optimize processes throughout the firm.
Our Client Success team uses Net Promoter Scores (NPS) and direct feedback from customers to give insights on which processes we can improve. Also, developing an internal culture that questions existing approaches is vitally important.
Was the onboarding process smooth? Can we automate some aspects of it to shorten the time it takes to complete administrative work? Our goal is, and we want and need to know when we do, and more importantly, when we don’t and why. So we can fix it!
Although HPC is now a virtual firm, each department still regularly conducts internal performance reviews and ensures that periodic staff meetings are available to allow for an open line of communication. Our leadership carves time in their schedule for one-on-one interactions with team members for aligning employee goals with the firm’s goals. This is also an opportunity to empower our employees with discussing how they can see professional growth outside of their regular duties.
From an operational standpoint, I can’t live without my Revenue per Employee metrics which allow me to evaluate how we are doing, what kind of capacity we have, and help to set up the hiring plans based on our anticipated growth and sales pipeline. Additionally, we have one of the lowest Cost of Acquisition of new clients (CAC) in the industry, based on talking to my peers. So, the payback on our investment in obtaining new clients is less and the payback period for that investment is only a few month’s worth of Monthly Recurring Revenue (MRR); another metric I am fanatical about.
Since we were operating in a virtual environment, it was imperative that we assemble the appropriate technology stack to be an effective team. Here are four of the most important tools we use:
Box — Document Storage. We needed a way to securely receive and store confidential information that our customers sent to us. It also serves as a place for our key internal documents.
Slack — Instant Communication. Organizing ideas, managing workflows, and reaching deliverables can be a daunting task in a remote work environment. By having structured channels, we can communicate on different levels and in different areas while ensuring that everyone is in the loop.
Zoom — Video Chat. Just because we are not physically present at meetings doesn’t mean we should still have face-to-face contact. That’s why our policy is that all of our calls — both internal and with our customers — must be with the camera on for actual face time.
Karbon - Project Management. This is how we track all of our projects across all departments. Monitoring activity, due dates, progress, etc.
The reality of setting up an automated practice is that is it HARD. We started the process over six years ago and have made every mistake one can make. BUT, we have also figured out quite a few things. That means:
1. People - the right type, skill, motivation - and most importantly how to find, interview and hire them!
2. Process - working in a virtual environment requires expert use of technology - that means picking the right tools, educating the people, and making sure the people are using them to be efficient and in the way that is accretive to the company
3. Product or platform – For us, we chose Xero as our ecosystem, along with all of the tools like ReceiptBank, Expensify, Gusto, Hubdoc, etc. that provide useful tools for the people and our clients.
It’s all about providing accurate, timely and meaningful financial information to the clients. This just happens to be the way we do it. Through the use of technology, we (and I) get to live life the way we want, where we want, and when we want.