Hello and welcome to The Unique CPA with your host Randy Crabtree. Today Randy concludes his conversation about community building with “The Dancing Accountant,” Nancy McClelland. They focus on collaboration between bookkeepers and tax professionals, the Ask a CPA community, and more. The Unique CPA is brought to you by Tri-Merit, the specialty tax professionals.

My point is that without creating systems and expectations and shared resources—like the things that actually make collaboration possible—it doesn’t matter where you’re sitting. It doesn’t matter whether you’re in the same office. Everyone needs this. The first step really is in understanding why you should even bother.

Intentionality. Have intentionality. Moving the desk, that was not really intentionality. And this is culture, really. I mean, it’s creating a culture where we’re sharing ideas together and where we’re communicating and where we’re getting to know the people, as you said.

Yeah. It goes back to everything that we were talking about. I guess it’s not a surprise when you look at how I came into this industry in the first place, and how I grew my firm, and then how Ask a CPA came out of this. Again, if I look backwards, the path is quite obvious. I just couldn’t see it because it grew very organically right into this. But it is. It’s about personal relationships. I mean, there are lots of reasons to collaborate, and when I gave my talk at Financial Cents WorkflowCon, I went through the list of, you know, your common client’s best interests are the end goal, it’s easier for everyone if we set clear expectations and execute them before busy season, successful collaboration leads to future work with the good ones, right? The responsible partners, the ones that we want to work with, not the ones who don’t care. But my runner-up to go along with what you’re just saying, which is that work is just more enjoyable when we remember that the other person is human too.

Yeah. Be nice. You’re working with humans. And have fun. 

Yes. Exactly. 

Alright, I got it. I was going to say “good story,” I don’t know, the chair, the desk moving story, it was a good story, but it’s a learning story. So, but we just said intentionality, getting to know the people that you work with, and vulnerability—all these things I think that you’ve said are so important. But how do we start to put this in practice then? I mean, “Ask a CPA,” so you’re talking about the bookkeepers, but now we need to also get the CPAs or the EAs, the tax advisors to be, you know, a community collaboration.

And by the way, this is very Bridging the Gap of you, because when people ask me what I love so much about Bridging the Gap, I say you’re getting both theory and practice at the same time. Like, why should we do these things? Why are they better for us? And then how do we do them? Like Nayo’s presentation on how to take a vacation during tax season, which actually happened this year, which was just amazing.

Nice.

It was only two days, but they were two beautiful days. So I would argue that we need to take a three-pronged approach. And I’m trying to do this in my own life. It’s a big burden and so I would say to you and to your listeners, I need your help.

I’m there. Tell me what you need.

You’re so supportive. I love it. You’re so nice and fun, Randy. So first off, we need to show small business owners the need, right? We need to show small business owners that they have the authority to set the culture and the expectations that the tax pro and the bookkeeper are going to function as a team. I did a podcast with Hannah Smolinski from Clara CFO on this. I did a podcast with Jaime Staley on this. I think that we need more client-facing education, because if they really own this relationship, and if they recognize that it’s going to fall into their lap, at the end of the day, if this relationship goes sour or never fully is realized, it affects how accurate their return is, it affects the insight that they can have into their numbers and what story those numbers tell, and the advisory. Like, bookkeepers matter. They really matter. 

The data that is going into the books, how it is categorized, the technology that’s being used to sync the various pieces of software that the client is using in their business, bookkeepers have to be really good at all of this stuff and make sure that it is showing up in a way that simultaneously allows the tax pro to trust those numbers and just plug them into a return, but also to provide the advisory together, to provide the advisory services that these small business owners need in order to stay vibrant and give back to their own communities and make the difference that we want to see them making in the world, right? The bookkeepers matter in this relationship. They’re essential. But the small business owner needs to know that. 

Secondly, educate the bookkeepers. Right? That’s what we’re doing at “Ask a CPA.” It’s what Andrea McDonald and Megan Genest Tarnow are working on in their small group cohorts. We need to educate the bookkeepers. I do hear the complaint, and this was something that at #TaxTwitter Retreat folks came up to talk to me about afterward, that there are some bookkeepers out there who don’t want to learn. This is true. Let’s not focus on them though. They’re in the minority, and over time, they’ll learn that getting good clients depends on them wanting to learn to do better. The good ones, whether you’re a tax pro or a bookkeeper, the good ones want to work with the other good ones, right? And this is how we get there. We’ve got to educate the bookkeepers. Let’s not focus on the ones who don’t want to learn because that would be like the bookkeepers focusing on all the CPAs who don’t want to treat them with respect, or all the CPAs who literally cannot be bothered to pick up the phone or respond to an email or anything like that. 

I had somebody in Ask a CPA last week who said that they have not been able to get any information whatsoever to or from, like there’s zero communication, with the tax preparer and they got in touch with the small business owner about it, and the small business owner said that they could fax the CPA. That was the best way to get in touch. I was like, really? Are we kidding? And so over time, when I’m teaching the bookkeepers, the bookkeepers will fixate on the bad tax pros, right? The non-communicative ones or the ones who are clearly not doing a good job. The tax pros will fixate on the bookkeepers that don’t want to learn or they feel like, can’t be taught. But let’s set those aside because if we’re all doing our jobs well, then what I teach in my tax-ready bookkeeping course is, you know, you find yourself a new dance partner.

Ooh, dance.

Yeah, I’m bringing it back to the dance. It’s like Fred Astaire and Ginger Rogers, right? Like one of them calling the shots, creating the choreography, getting top billing, and the other one is dancing backwards and in high heels, right?

Yes.

So it needs to be more collaborative, and I do think it’s important that bookkeepers learn what they need to learn from a technical side, and that makes them feel more confident in actually having the agency to say to the client, we had a big win last week on our “Ask a CPA,” we have twice monthly Q and A’s, plus lots of guest folks, you know, coming to speak and bonus panels and things like that. Oh gosh, Randy, I would love to have you come talk with them. That would be incredible. Did you just volunteer?

I did.

Alright. It’s not a paying gig dude, so…

That’s alright. So monthly Q&A. So everybody, they submit their questions in our Circle community, and then I answer them in Circle, and then I pick the ones that I feel are most illustrative for the group, and we do those. And actually, one of the things that’s so wonderful about it is that not only do we record every one of these sessions, but we actually, you know, my husband’s a software developer, and he goes through and he parses each of the questions separately and he posts them with the recording with a timestamp that’s a hyperlink to that question in Circle and our database—they’re both searchable. Let’s say you have a question about how benefits should show up on a W-2. You can type in “benefits” and you will find the answer in Circle, you will find the answer in the recording, you can click on that hyperlink and you can just watch that part. You don’t have to attend every single one of these live. You don’t have to watch the entire recording. It’s one of the things that’s very special about the community is that you really can focus on the parts that you want to learn the most. And then there are people who come to every single Q and A just because they always learn something. 

So last week I had had a one-on-one because another thing with Ask a CPA is they get a 25% discount on one-on-one sessions. So I had had a one-on-one session with this person who was having trouble with a potential client, and she had come and said, “I don’t feel really good about my books. I’m not so sure about my tax return. I want this to be done right. I don’t know how to tell if it’s being done right or not.” There were a lot of things that this bookkeeper saw that were not good in both the books and on the tax return, but she didn’t trust herself because she was like, “Well, what do I know about taxes? I’m just a bookkeeper.” I try to teach everybody to get rid of that word “just.” I put it in air quotes because there’s no such thing as “just” a bookkeeper. Bookkeepers are essential. They matter. They count, right?

Yep.

Ooh, bookkeepers count. I love that. Bookkeepers count. I’m making a sticker. Bookkeepers count. Ask a CPA.

I like it.

Yeah. So we had a one-on-one together and we went through the tax return, we went through the books, and I was like, “Well, here’s your issue.” I pointed out all of these things that were just blatantly and to me glaringly wrong on the tax return. And she’s like, “Well, I didn’t think that looked right, but I’m just a bookkeeper. Well, that didn’t seem like it could be correct, but I’m just a bookkeeper,” right? So I was like, this is wrong. Here’s the language. This is wrong. Here’s why this is wrong. Let me explain how it’s supposed to be done. And then she was able to go back to that potential client. 

That client, this is what I found out after the fact, last week on our Ask a CPA—she said in front of everyone, this client was so grateful to have these answers that not only did she end up doing an engagement with this bookkeeper to do a full cleanup on years of books that she had been DIYing that were not in good shape, but also, she agreed to use this bookkeeper’s CPA, who she has a great relationship with, who she knows does great work, who is collaborative, and the CPA and the bookkeeper are going to collaborate on this cleanup and filing amended returns for all of these years. 

Nice.

I mean like this can be done. So yes, there are bookkeepers out there who don’t want to learn. There are tax pros out there who you’ll never have a good relationship with. But over time we can weed them out. And then the third approach, the third prong on this is why I am on The Unique CPA podcast today: We’ve got to convince tax pros that collaborating is worth their time and energy. And honestly, I am surprised that this has been so hard and I think you would be too. I’ve spoken at Financial Cents WorkflowCon, my final presentation for theater of public speaking was on this topic, and we did Jeopardy at #TaxTwitter retreat to illustrate—thank you for helping me out with that, that was so much fun—to illustrate why we should educate bookkeepers about tax. Because them knowing how to prepare tax-ready books with work papers and source documents that illustrate to you as the tax pro, these books are clean, yes, the W-2 and W-3s have been tied out to payroll, yes, the draws or distributions are accurate, the tax payments that were for PTE or corporate tax are on the P&L, and the estimated personal taxes are a sub-account of draws. All of these things that drive us nuts—yes, they took reasonable compensation and their health insurance is in box 1, but not box 3 or 5 of the W-2. All of these things that if we only have a touch point with a client once a year as their tax pro, which would be an argument of mine that you should not do that, you should be collaborating year-round. But let’s say that you’ve only got this once a year touchpoint. Don’t you want that bookkeeper to do all the things throughout the course of the year that you would have done had you been checking in? It’s already done for you once it gets to tax season. It’s just like, beautiful. 

So I really think this three-pronged approach of talking to tax pros, teaching bookkeepers, and letting the small business owners know that this is actually something where they need to set the tone, they need to expect it, they need to demand it. I think that is how I would like to move forward in truly making what I think would be a ground swell, like a shift in our industry.

Yep. I think that’s great. When those books are ready, like you were just saying, the tax return’s nothing, I mean the tax return’s done.

Yeah. And then you can focus on how we can do tax planning. How can we improve your margins? Like, how can we do the things that we, as human beings, not as computers, can identify and use our technology to help us come up with what-if scenarios. I mean, we could really make a difference in a lot of small business owners’ lives.

So when are you starting that second community of tax pros? I guess it wouldn’t be called “Ask a Bookkeeper,” but there’s something else there for the tax pros to get on their end of things to bridge that gap with the bookkeeper as well. 

Well, I mean, I would say that the one tiny little resource that I can mention that is out there in addition, so there’s my Financial Cents WorkflowCon presentation from this past year. As a matter of fact, when I send you the links to post with this podcast, one of those links is going to be a page on my website: It’s called Presentations and Podcasts, I think, and you can rewatch a lot of the things that I’ve brought up here. You can watch the podcasts that are client-centered. I encourage bookkeepers to send those client-centered podcasts to their clients so that they don’t have to explain to their clients why this type of collaboration is so important. I can explain it to the client. And also this WorkflowCon that I did for Financial Cents about why and how, because there’s the three-pronged approach, but there are also a lot of really good next steps, like how can you collaborate efficiently because it’s not just about training, right? Training is very, very, very important. But also, you need to create a workflow and learn how to communicate effectively. Technology can really help with that one. You need to agree on where the source documents can be found. So you know, there are a lot of next steps that can be taken, which are very practical. You can find that on my presentations and podcast page. 

Also, Jason Staats did two episodes on his daily and he gave us a shoutout with Ask a CPA for the amazing work we’re doing in this area. One of them was, “What Do Tax Pros Wish Bookkeepers Knew?” and “What Do Bookkeepers Wish Tax Pros Knew”? A great example to all of the tax professionals who are listening: When you create those tax-adjusting journal entries, please don’t just go into the books and smash those into the journal entries, because a lot of times you’re hitting sub-ledgers like accounts payable or accounts receivable or clearing accounts where there’s actually like a proper workflow depending on the type of bookkeeping software they’re using, and that can really mess things up. The number of things I’ve seen in these one-on-one sessions in Ask a CPA—I wish I could make all of those public. I mean, obviously, we’re looking at real tax returns and real books so I can’t. But I wish I could because you’d be stunned at how many crappy tax returns are out there, really. It’s very, very, very frustrating. 

So don’t just cram everything into a journal entry. Send those tax-adjusting journal entries over to your newest favorite partner, your tax-ready bookkeeper, and they can ask you questions about them and have them book them in the books, and they will use the correct workflow for doing that. I mean, we will cram, you know this, CPAs will cram anything into a journal entry. I’m guilty of it.

Oh yeah. Me too.

I just think, you know, I think in debits and credits, and I go, well, this needs to be this over here and this needs to be this over here. One of the problems is that you can’t toggle between cash basis and accrual basis in QuickBooks. In Xero, there’s a workaround for this, but in QuickBooks, you can’t do that effectively if they’re journal entries, because there’s no way to mark them as cash or accrual. So if you put a journal entry in there and then you toggle and you say, “Hey, these books are on cash basis,” you hit the radio button for cash, and I print out the financial statements, you say, “Well, if these are cash basis, then why is there something sitting in bad debt?” Well, it’s because it was a journal entry because you didn’t do it the right way. So then you need to add that back into revenue. 

If you are collaborating with the bookkeeper and you are doing what they would like for you to do, and they’re doing what you would like for them to do, then like, oh my god, everybody’s life, literally, everybody’s life is better. The biggest challenge, unfortunately, that I have seen over and over, I hesitate to say this, but this is exactly your listeners and the people that they work with, these are the people who need to hear this: Honestly, it’s the condescending attitude and lack of responsiveness from tax pros. That’s the worst. That’s the biggest roadblock that I have seen in making this happen. We need to change it. We need to do better, Randy.

Oh, I agree. Anything we can do better to make this profession more fun and nice.

Nice and fun.

It is going to be great to bring people into the profession. Just a couple of things on what you were just talking about: One, we’re not allowed to mention Jason Staats on the show, so we’re going to have to cut all of that out. That’s just my own rule. 

It’s fine, it’s without us giving him any accolades. I actually got in touch with him when he posted on social media. It was a couple of weeks, I think, after Bridging the Gap, and I had just been talking with him about Ask a CPA, which he knew I was going to be starting because I mean, I realized his group, and we did a whole workshop on how to start a community, right? And so we were talking about what this was going to look like, and then I talked to him about it at Bridging the Gap, although he didn’t recognize me when I first came up because I had that wig on and that crazy outfit on.

Oh yeah.

And the bright purple wig, yeah. He was like, oh my god, I had no idea it was you. So we talked about it, and a couple of weeks later, he was posting on social media, trying to collect information on what bookkeepers wish tax pros knew and what tax pros wish bookkeepers knew. And I was like, “Jason, this is my thing. I just talked to you about this!” And he was like, “Oh, I’m sorry, I’m sorry. I was thinking that your community was for the firm owners.” So he was great. He gave us a big shout-out on both of them, and…

Jason’s great. I get it. He was great. I love giving him a hard time. So as long as I’ve known him, he’s very protective of his cell phone number. And so as long as I’ve known him, I’m like, Alright, Jason, just text me that. And that’s become a big joke, you know?

That’s awesome.

I’m going to make him listen to the show now, and I’ll make him more nervous. I’m like, you know, I’ve told him, you know, Jason very well might have your cell phone now. And I’m going to use it one day. I’ll use it just to let you know. Hey Jason, I’m retiring. It’s nice knowing you.

So I have a story for you, a Bridging the Gap story. The first year of Bridging the Gap, I think, I hadn’t yet met Jason in person. He was chatting in the hallway with Hector—Hector Garcia, who’s a good friend, and you and I think, Paul Hamann from RC Reports, who I adore, and John Garrett and I were chatting, and I was like, “Oh, I would love to get a picture of all of us together,” because I think even though I’ve been friends with these folks forever, you know, I never get to meet anybody in person, or I hadn’t yet, and so I wanted a photo. And I looked around, nobody was in the hallway except for Jason and Hector who were chatting with each other. And I said, “Hey, Hector, come over here. Can you take a picture for us?” And Jason goes, “Don’t you know who he is?” And I said, “You’re right! Hector, I want you to be in the picture. Jason, will you take it for us?”

There you go. That’s a good call. 

I was really pleased with myself.

And the other thing that I got out of that last section is I don’t know anything about accounting, so, which is good. I’m very happy with that. I know some stuff about tax, but, and I’ve said this before, accounting is not my thing.

Accounting is not your thing. Well, luckily we are really good at it, and so are a lot of bookkeepers out there.

Yeah exactly. That’s the important part. 

And I sort of have intentionally been staying away from saying CAS because…

I was wondering.

Yeah, and it’s nothing wrong with the phrase, CAS. It’s just that, if you look at the AICPA’s, they actually have a really good chart about all the things that CAS can be. And I would actually argue it should be called “CAAS” because it’s like not just client accounting services, but it’s client accounting and advisory services. And if you look at that chart, it starts with the data needs to get into the system, and it needs to be accurate and it moves all the way to doing like really complex advisory work and everything in between. And I feel like there is, you know, to go along with this frustration that I’ve had about the condescension we see among many tax preparers toward bookkeepers, I feel like sometimes they’re using the word CAS to sort of distance themselves from the concept of bookkeeping. 

On the left-hand side of that AICPA chart that explains what CAS really is, that’s bookkeeping folks—bookkeeping. We are keeping the books. And it’s frustrating because what bookkeeping is, has changed so much through the years, especially as we are now, we’re looking at a good bookkeeper, they dance circles technology-wise around most tax pros out there. They really do. They have to know so much about technology because we’re syncing so many different systems with our general ledger. It’s absolutely essential that they’re doing the work that they’re doing. So bookkeeping is CAS. They are the same thing if you look at the left-hand side of the AICPA’s sort of definition about what CAS is. So bookkeeping and CAS, if you have a CAS department in your firm, I’m talking to you. That is who these people are. Bookkeeping is necessary and it’s not a question of how advanced it is or not. It’s not like that. We need accurate books in order to do any of the rest of our job properly, whether it’s compliance or advisory. The terminology hasn’t caught up with the fact that the field has broadened tremendously and there are so many different roles that are all under this umbrella of bookkeeping and CAS. And the Venn diagram where they overlap is more than where they’re not overlapping.

Yep. Nope, I agree. And that’s what I, a lot of what I took out is whether you’re working with an outsource bookkeeping or an internal bookkeeping, this is still an issue and this is where we have to bridge that gap and collaborate and create efficiencies for everybody with the client being the recipient of the great service that we all want to give.

Absolutely. And if a tax pro knows somebody who they think has potential, and is excited to learn, and they don’t want to do it for whatever reason—maybe they don’t enjoy teaching, maybe they’re an introvert, maybe they don’t have enough time, for whatever reason—refer them to our group. We’ll do the heavy lifting for you and we will happily invite you to participate if that’s something you’re excited about. We actually did a tax pro panel that was a very popular one, and actually we made that one public, so it’s on my YouTube channel. It was a tax pro panel to illustrate where tax preparers are aligned in our preferences and also where there aren’t standards and we’re each doing it in our own way. It could be, you know, who sets and maintains the capitalization policy. It could be as simple as that. It could be where you want something to be categorized and how you want it to be noted. Those are not the same from tax pro to tax pro and it’s really confusing for bookkeepers. So check that one out as well. If you’re a bookkeeper, curious about how different tax pros do it differently than each other.

Yep, and I actually saw that on YouTube, I think. Is that the one with Andrea McDonald?

Yeah! Andrea McDonald, Katie Healy, Olivia Henley, Stephanie Steinke.

Yep, awesome. Well, this has been great. I think the idea is great. The community is great. What you’re doing is great. I’m going to say great a lot of times right now, but unfortunately, we have to start wrapping up the show.

We do. We could honestly, apparently, talk all day long because… I think we have already.

We have. Yeah, we were talking for 50 minutes before we started recording, and we’ve been recording for an hour and 16 minutes now, so this might be a record actually.

Oh my god. I think I’m honored. I think I’m honored that you’re just really into what we’re doing, and I appreciate that support so much. The recognition I had already shared with you, that we were going to be starting this CPA community. Oh, I haven’t told your listeners yet how they can learn more about it, but if you go to thedancingaccountant.com, that is my website. There is a tab for Ask a CPA. Just click on that and it’s got all the information, including what is included. It costs $47 a month. 

It’s a deal. 

It’s a deal! We are trying to keep it really accessible. We want it to be something that everybody who’s interested in learning this can afford to learn it. Again, I do think this could be a big part of addressing the pipeline crisis. And you saw that when we initially talked about it, and you said that it was one of the reasons for the Mentor of the Year award at Bridging the Gap, which I’m so truly grateful to you for.

Well, that was an easy one. So I appreciate everything you do and for you being on the show and helping with our conference and everything you’ve done. So, thank you so much.

Absolutely. If there’s anybody out there who is still on the fence about whether they’re interested in signing up to attend Bridging the Gap, I can say it is unequivocally my favorite conference. The reason I’m on the advisory board this year is that I have just talked it up so much the first two years because, as I was saying earlier, it’s very special that it’s about learning how to create, run, and manage a sustainable accounting firm—whether that’s bookkeeping, accounting, tax, advisory, however you define it. It’s about running a sustainable firm. But it doesn’t just give you the “wouldn’t this be nice,” pie-in-the-sky approach. It’s actionable, practical insights. How do I make this happen? And it’s just an incredible conference. So if you are on the fence, get off of it. Just go register already.

Right. And we’ll put that in the show notes too. BTGconference.com. Thank you, I appreciate that. You’re always a great advocate for our conference and I appreciate that. Well, I always have one final question, but I think we already answered it. The final question is, you know, what are your outside of work passions? We talked about dancing, we talked about sake, we talked about the community. I don’t know, is there anything else you want to add to that?

You know whatL I am going to add to that. I love museums. I love museums so much. As a matter of fact, my husband Mark and I have a little group on Facebook called Drink and Learn. Yeah, Drink and Learn is where we post when we are going to, let’s say the Field Museum has a lecture. We’ll get a group of people together and we’ll go hang out at the bar. I don’t know if you know, but the Field Museum has a bar and they have good beer.

Yes, I do. We used to be members there for a long time.

Oh, we still are. I think I’m a member at like almost every museum in Chicago. It’s kind of amazing. I love museums so much. Or when the Shedd Aquarium has their Jazzin’ at the Shedd, you know, we go to that. The Chicago History Museum has a really excellent series of programs there. And these are all places where you can drink and learn, and we love it. So museums, I mean, drinking and learning. Those are two of my favorite things. And dancing. And all of the other things too.

Alright. Well, Nancy, thank you so much. This has been a lot of fun.

Thank you.

Looking forward to seeing you in person here, hopefully in May.

Yeah, happy early birthday!

You too. Thank you. 

Thanks for having me on the show, Randy!