Ep.03 – 8/26/2024 – How can tax practices use systems and automation to enhance client experience?

Jamie Gruol: Welcome back to this week’s episode of Diary of a Tax Practice Owner. And today it’s a solo episode with Jessica and I, I guess it’s not really solo, but you get the dynamic duo here. And what we wanted to talk to you about today is what are systems and automation?

And we want to break that down for you as a practice owner, or even an employee at a practice, because understanding what systems of automation are at a foundational level is going to help you ensure that you’re actually implementing that. So Jess, I would love to start with you on the term systems, and then we’ll get to automation.

But I think we need to get the foundation of what systems are. And once we understand that, then we can talk about how automation can help us in those systems. So what in your terms would be a system in a practice?

Jessica Smith: So I look at it kind of like an ecosystem, right? Like in an ecosystem, you have all of these components that work together. to build life, right? You’ve got the ocean and you’ve got the forest and you’ve got the animals and every single component of this ecosystem performs a job to keep it all moving as where it’s supposed to go. And systems and technology are the exact same way. have a, ideally, a centralized platform, sometimes it’s multiple platforms, but all of these systems, components essentially work together to, in our case, and what we use with tax dome is help tax practice owners provide a service to their clients. And , I really learned about like what systems truly are. I, if you had asked me this four years ago, I probably wouldn’t have had any idea what you’re talking about, but systems have been part of our workforce for many, many years. Okay. The Microsoft suite is a system. It’s something that is designed to all work together so that all of your work can somewhat communicate with itself. You know, you’ve got email for communication, you’ve got spreadsheets for maybe tracking and calculating things. You’ve got Word documents to be able to, you know, develop letters and all that kind of stuff. So systems have always been a thing. I think recently as what I’ve seen systems develop into is a way for business owners to keep all their work in like a centralized location.

So it’s easily accessible. And in the case of where automations play into things now, a lot of these systems, they, they do things on their own, which is really, really cool. With, someone who is trying to make sure I can maintain this, standard level of service, having to do those things manually was incredibly uncomfortable and difficult and systems realistically were Something that I was really happy.

I learned more about because I think that if we’re looking at like this ecosystem, right? It helped me really take that experience that I wanted to get my clients to a totally different level

Jamie Gruol: Yeah, I love that. And I think too your idea around like how Windows is an ecosystem, what that’s a lot of standalone stuff, right? It wasn’t designed to automate a spreadsheet to go to this email to go out, right? And I think what technology has done over these last couple of years and being from the IT side of things is called SAS, software as a service.

What software as a service has done for the industry is previously to get automations and to get systems that would work within a practice, it was very expensive. You had to have IT teams that could one, run your servers. You had to have Developers on staff so that you could create software that would do the thing you wanted it to do.

And it was all very customized to the practice that it was being designed for. And so that meant big dollars in order to get the level of systems and automation we can get today because of these SAS products that are available. And when I’m talking SAS product, we’re looking at things like tax dome, of course, the one we love, but also like financial sense carbon canopy.

All of those are SAS products. So somebody took the, a platform and created a platform that had different integrations of systems within it. So now what’s happened over the last five years is that that’s become available and mainstream to the smaller practices. And that wasn’t available eight years ago.

So what you’re going to find is now we have tools like tax dome, which we know and love. Uh, we have financial sense. We have, um, carbon canopy. All of those are software as a service providers. And what used to be available 10 years ago is these platforms that were much larger.

They were more expensive. People were spending 20 or 30, 000 a year for a platform that would work for them, but it was very complex. Expensive and hard to scale. What soft, what SAS software does is that it is very scalable. It’s typically very affordable and it provides enormous amounts of efficiency because it’s all in one.

So when we’re talking about systems, that is the direction that we’re going in now. So as Jessica was talking about, it creates the ecosystem all within one place. And so you’re able to send your emails, you’re able to send communications to your clients, to the secure portal. invoicing managing your tasks and your daily to do’s through the task management system, client management.

So you have a beautiful CRM type functionality that allows you to filter and edit and manage your clients right in one place. There’s no more hunting down email addresses. It’s all right there and right at your fingertips. And so, you know, when we’re thinking about systems, that’s the trajectory that we’re going.

Now you mentioned, Jessica, that automation gets put into these systems to allow us to take action. And there were three areas that I wanted us to focus on today. And the first one I want us to focus on around automation is first, I guess, if you could define automation for us. Then I want to talk about client experience and how automation can impact that

Jessica Smith: So I think we, you know, you and I discussed it a handful of times and automation is. It’s kind of, it can mean a lot of different things to a lot of different people, I like to describe what I feel automation is beneficial for, because we want to talk about what automation can do for us. Not necessarily like what’s the definition of automation. And I feel like automation, the way that I have embraced it and that I’ve allowed it to help me is being able to. Deliver sets of communication to specific people at a specific time without my own, like, oh, let’s put this on my calendar. And I have to make sure that I email everybody that I completed their tax return. That was e filed today. I got the confirmation back on now what I’m able to do is I’m able to, you know, see that I’ve got acceptance in my tax software for let’s just say 50 clients that would take a lot of time and energy on my part. individually email 50 people. Your return is, even if it was templated, your return has been filed.

Your return has been filed. And now with the system that, you know, with Taxdome, it allows me to mark a task or just click a bunch of boxes. And once those things are marked complete, the system says, oh, this action is now complete. We are now going to do this. And it can send 50 emails in seconds. to all of my

Jamie Gruol: Yeah.

Jessica Smith: it can do so to where it appears that it’s personal because the system allows you to use, to pull from different fields to identify who is supposed to receive that.

So it can say, Hey John, just so you know, your return was filed X, Y, Z. So that’s probably one of the greatest examples I have on what I think does from a beneficial perspective and how I’ve experienced it. automation is also. Able to deliver items to your clients and when those items are returned to you to be able to have other actions take place.

A new task is assigned to a team member so they know to go review this information and also how we’re able to communicate our needs from our clients. I’m no longer having to my client an email and then think oh shoot three days later they haven’t sent it to me. I need to follow up with them again. I’m now able to rely on a system who can say hey we sent you this request two days ago you haven’t provided us these items and completed our request. Our request still shows that we have like an open here. please respond to, our request from whatever date. So there’s a lot of that where it takes like all of the mental load that you think of having either someone there like poke you and like remind you to do those things, or even just having to things that you’ve done.

They’re like, okay, now I have to remember to communicate this. All of that can be replaced with a very carefully planned automated system. And of course, you know, we utilize taxome to do that. And it’s been phenomenal for what it does. But that’s where I think automation plays a pretty big role in a lot of business owners and tax practitioners lives, but that’s how I would define what I think automation is the most beneficial for, Oh,

Jamie Gruol: I think too, one thing that I will add is that a lot of people, they have this idea of the client experience they want to provide. And they’ve never had the tools in order to be able to provide that, right? And so it’s amazing once you are able to leverage automation in softwares appropriately, it transforms the way in which you can communicate to your clients and create an excellent client experience.

And that really is a game changer. Going forward. Cause it takes no extra effort. In fact, to your point, it makes your job easier because you’re marking your things done and you’re keeping track of who needs to be doing what, but then the system’s automatically sending and saying, Hey, we’re just celebrating because everything’s really wrapped up now.

And like, that, that is so weird. Yes. And it reduces your clients. anxiety about the process, right? Like they, they are appreciative. We can’t, I can’t tell you how many people have come into our group and been like, I don’t know, this is a lot of communications we’re trying to do here. I don’t think my clients are going to like it.

And then pretty soon they’re getting emails or messages back from these automations of their clients celebrating the extra level of communication that they’re providing now. And that is only possible with automation.

Jessica Smith: truly, truly.

Jamie Gruol: So the next topic I want to talk about is admin tasks. So you kind of touched on some of the powerful automations that you’re using, such as followups of clients that automatically happen.

I like to call those automated nags because they’re the things that we all wish we could do, don’t have the times to do it. And so those reminders, automated reminders the other thing though, is the power of having a system that contains all of the information about your clients and having everything in one place, how that helps with administrative tasks.

So a lot of people and maybe you can speak to this just, but they come and they have multiple tools that they’re moving information between, right? Whether it’s. email addresses, whether it’s information or they’re having to, you know, request a signature from this tool, but then request invoice from this system.

There’s just all this moving about multiple tools. What in your world has been the most transformative in the administrative efforts that it takes it to run your practice with your small team that has gone away because of automation?

Jessica Smith: Yeah Like a lot of practice owners, when they first start, I relied on Excel and I had this very cute little spreadsheet it had a workflow, right? It was a very simple workflow. This, client was notified this. Documents were received this date. This was delivered that date. And it was completely manual.

I went in and I would just plug in the little date when these things took place. And when you have to 50 clients. No problem, right? There’s no problem because that’s not a significant undertaking. You’re not having to maybe juggle all 50 of those clients all at once. So that little spreadsheet served me. Was it accurate all the time? No. Did I have to sometime neurotically go back and check, oh no, I did receive this and make sure that the date was on there properly so that my, my, data was correct. So it was really difficult after a certain point in time to be able to Maintain that when You’re just trying to get returns out the door And so it’s very easy when you’re just trying to get returns out the door skip steps had mentioned this at the conference that we are at lately you get into the time period between like April the 1st and April The 15th and you are just throwing all the processes out the window.

You’re just trying to get things Trying to get people communicated with you’re trying to get extensions prepared. You’re just trying to get through the war zone at that point And it’s very, very difficult to keep up with all those processes because your clients do feel disconnected from the process a little bit.

If your clients are having to continually ask you, like, where am I in the process? Something as simple as sending an email they are, as opposed to, oh, hey, I got your documents. And then several weeks later, oh, here I am, you know, on the Here I am in this process. Let’s book your appointment.

I mean, sometimes that time frame is just a long time and to not hear from somebody when you have this like looming deadline can be very scary. So being able to

Jamie Gruol: I

Jessica Smith: those status emails automated is going to make a really, really huge impact on where your clients feel in the support level that they’re receiving from you. so that’s been. probably a really huge one for me. Also just the collection of the information. We’ve learned over the last couple of years, like where people typically are going to forget to provide things, whether that be documentation or answers we need to follow up with. And we’ve been able to create a very thorough document intake policy now where our margin of follow ups is significantly reduced.

And we wouldn’t be able to do that if we didn’t take the time to. in our case, create this organizer to gather this information based on, Hey, we see like these things are commonly missed or even just having a good intake process to say, Hey, here’s what the client told us. They, that occurred this year and comparing it to what they actually provided to see that we had enough documentation to move forward with the return. So there’s been a lot of that. And my client, I can tell you my client satisfaction has improved. Tenfold people are happier with the way things happen, and I believe some of them think that the messages are still not automated. They’re thanking me for things, you know, coming through and again, your clients just want an acknowledgement in many cases.

Hey, I received this from you. Thank you so much for doing all of this work to, so we can move things along. There’s been a lot of that. That I’ve been experiencing more recently. And that I think is just, again, a game changer when you’re looking at embracing automations and what the capabilities are.

The admin for like examples like that have been, have made the biggest impact because no longer am I sitting up in the middle of the night, forgot to tell someone I filed the return, forgot to tell somebody that their appointment has to be, scheduled. Just set it and forget it.

Right. It’s, it’s an easy button and it’s been a very helpful tool.

Jamie Gruol: think to the other side of that is lower payroll for your team, right? They’re not spending their time doing, you know, basic processes. They’re able to, like you have, you’ve, you’re, she stepped into a client services manager, right? Like she’s now going higher level. She’s not just data entry and managing those day to day tasks.

She’s now Interacting with people and helping you on follow up and the more value based work. So

Jessica Smith: Yeah.

Jamie Gruol: huge.

Jessica Smith: She has a much more meaningful role now, I believe, in the firm which is wonderful because, you know, your admins do a lot like a really strong person with great admin skills. you It’s truly a blessing and I’m happy that we have been able to transition her into a more client success role because that’s where that extra little help really needs to come into play.

The automations are amazing. We accomplished so much through automations, but now since her time is not consistently following up with people because people are getting those automated reminders and they’re being, appreciated. nagged, as you mentioned,

Jamie Gruol: Yeah. I love that. I love that.

Jessica Smith: she’s making fewer touch points to those clients who need like an extra little step.

And it can be more supportive because she can say to this client, Hey, I understand you might be struggling to do this. How can we help you to get this stuff to us? And it’s that still giving that personal touch point without having to also bog her down with of those other, like minor touch points that have value to the people who are receiving them. But just eat up a lot of our time and getting the work done on time.

Jamie Gruol: I think those are all excellent examples, Jessica, about what automation can do, especially with your team and helping them level up. And I love what you’ve been able to do with yours. You’ve really expanded their roles, which is powerful for them, keeps them around longer too, right?

They don’t get tied into this like admin always, all the time work that gets, exhausting, frankly. So the last one I wanted to talk about was the power of systems and automation on the cashflow of the small practice. Cause we know money is like cashflow is your bloodline, right? Like if you don’t have cash coming into the practice, then this is a huge problem.

And I know a lot of practices say we’ll just save for next year’s payroll. What about automation has improved your cashflow in your small practice that has really been the biggest impact for you?

Jessica Smith: Well, I think what I like a lot about the automations process when it relates to cash flow is because I wanted to design, I wanted to make changes, right? Like I had this method for how I receive payments. And again, it was very manual. And when you’re growing, to manage AR is just like the ugliest thing.

I know accountants were supposed to like understand about,

Jamie Gruol: Very emotional.

Jessica Smith: Yeah, we learn about AR and we learn the importance about having, the follow ups to make sure these things get paid, having a significant amount of AR has always been a source of stress because it’s money that I’ve already earned through doing the work, but I haven’t been paid for and it’s scary, right?

Because the client could decide not to pay. So I adopted the when I embraced automations I was really help really appreciative of the fact that there were already like features built in that took me out of, The billing process. So the first thing we did was we decided to implement a deposit process, and this was great because it allowed for, some funds to come in so that, you know, all the outflows that go out, you still have to pay the team, you still have to pay for the software, you still have to pay for all the other things to run the business, and if the time it takes to get, The clients in the door and through the whole process can take a couple of weeks. You know, you’re awake, you’re doing all this work and not receiving payment for it. So we started with a deposit process. And then later we implemented the, for the other half of the fees, we did a lock document invoice, which has been another amazing game changer. Cause now we aren’t having to reach out to the client, remind them to pay, recognizing when they pay to provide something to them because we are now again, set it and forget it.

They pay and the documents are then provided. That has been helpful. We have now moved more to a minimum fee, so we have fewer clients that we are reaching out to at the second half of the engagement to get the remaining balance. Cause our minimum fee has big bulk of our clients already covered.

We have different levels for how we target that, that’s helped tremendously because now there’s almost. Payment in full received up front. And we’re, we’re no longer having to chase people for money. Also because people have skin in the game, they get you things faster because Oh, I’ve paid for the service.

I want the service to be completed. So that has those in combination have been really, really beneficial. And overall, I still have like a little bit of AR because sometimes people get to that stage and then they were like, Oh, have to pay now and I’m not ready to pay now. So it’ll sit there for a little bit, right?

Like no, and I have to remind them, Hey, got this cutoff date. And if you’re unable to, pay the invoice, sign the contract and get documents to us, then you’re not, I’m not saving a space for you. but being able to take the personal process of they are out of the equation was helpful because it’s, when someone doesn’t pay you, it’s like, Why did you engage for service for me if you weren’t gonna pay for it? And it didn’t have to be a negative process any longer and now again seen a lot of other benefits to what people have been doing now that they are Paying saying documents wanting to book those appointments like we just want to get this done We don’t want to have to be lingering You know in the process forever.

I think that’s been a very powerful of A system that has a built in invoicing all the features that TackStorm has, for sure, has been incredibly beneficial. Mhm.

Jamie Gruol: they don’t think about is once that 8879 is signed. Clock has started. So you’re technically supposed to file within that three day window. And if you don’t like maybe you aren’t getting audited now, but that doesn’t mean in the future they don’t find some reason to come knocking on your door for an audit in the future.

And so that really protects you as the business owner. to getting paid and then not having the hard conversation of, well, I didn’t see the invoice, or I keep forgetting. It just, it removes all of that. And systems again, are the thing that allows you to do that. And I think that is one of the, the biggest benefits of implementing technology into your small practice.

Awesome. Those are so powerful. So we talked about client experience, how admin tasks and of course cashflow are all improved thanks to systems and automation. And this is just the start of it, guys. It really, it is so much bigger than this. And once you implement these systems, The first year is the learning curve, right?

You get it set up and then you continue to learn how you can optimize. And I know Jessica is going to talk about this more in the future, but how she has continued to iterate her business. And even this morning we were on a call and she was like, I just realized that I can like reduce my client base significantly and still be making the same amount of revenue all because of these iterations she’s made over the last three years.

And you don’t have to make that long, what feels like never going to happen for me vision. remain there. You can actually pull that forward to you. And by just taking the first step, implementing technology to start working smarter is going to be the biggest step that you can take towards that vision that you have for freedom and flexibility in your life.

That does not mean 80 hour weeks. And grinding half of the year, we want to start looking at how we can have a better work life balance and being able to enjoy our friends and our family and our hobbies because that’s what life is all about. It’s not all about work. So, that is the end of this episode today.

Everyone. We look forward to sharing with you again next time, and we can’t wait to show you more of what systems automation can do for you. We’ll see you then. Bye.

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