Episode 05: CPA Edition: How to Improve Your Business


Tom has prepared a special show for CPAs (that really applies to anyone who owns a business). Find out how to better serve your clients and grow your business. Tom shares hard-earned wisdom from over 35-years running his own firms, working for corporate firms & teaching at the university level. Tom also invites CPAs to join him at the WealthAbility™ training center for a free educational seminar.


01:00 – How Do You Find Clients Who Value Your Business?

02:55 – Why Is Confidence Valuable?

09:59 – How Do You Build The Right Team?

13:21 – Why Are Systems So Important?

20:26 – How Do You Create The Right Identity?

This is The WealthAbility™ Show with Tom Wheelwright. Way more money, way less taxes.

Hi, this is Tom Wheelwright. Welcome to The WealthAbility™ Show, where we learn how to make way more money and way less taxes. We have a special addition today, that is specifically for CPAs. That's right, if you're a CPA, you're going to want to listen to this show. If you have a CPA, please share this with your CPA, this podcast. If you know a CPA, if you have a friend who's a CPA, a neighbor, whatever. Please share this with them because, what we're going to talk about is how to run a more profitable practice basically, in the next 20 minutes or so.

Think about this, if you're a CPA what if you could stop chasing money from clients who don't appreciate you? Now, if you're not a CPA, hopefully you're not one of those clients. But, CPAs we do have clients that don't appreciate us. What if instead, we could have a higher caliber of clients, I mean we have an amazing caliber of clients at our practice. And a more profitable practice. So, what we're going to talk about is, how to create a higher caliber of clientele, a more profitable practice, stop chasing money. And really stop having those clients who really don't appreciate you.

Special to this, is at the end of the show I'm going to tell you how you as a CPA, can join me for three days, June 21st through 23rd in our offices here in Tempe for a free continuing education. Free education, where I share my secrets on how to stop chasing money, how to have clients who really appreciate you and how to really, have a more profitable practice. Really without charging any more money to your clients. So you don't have to charge an arm and a leg I mean, we're right in the middle in how we charge our clients. But we have a much more appreciative clientele and I think it's because of a few helpful hints that we use on a regular basis. And I'm going to give you the four of them, okay. There are four things I'm going to walk through. So, if you're a CPA, listen up. If you're not a CPA, you want to share this with your CPA but also listen if you have a business, this is going to play to you as well.

The first one is, we're going to talk about training and education. We're going to talk about team. We're going to talk about systems, and we're going to talk about your mission, your identity. So, those are the four things we're really going to hit in order for you to stop chasing money, have a higher caliber clients and a more profitable practice. I've found over my career that, one of the most important things we can do is, have a high level of confidence in what we're doing, okay? If you have a low level of confidence, your clients feel that. If you are confident and very confident in what you're doing, your clients feel that as well.

Let me tell you how this translates, financially. So when I was first starting out, my very first year was kind of a tough one. I went from two clients to four clients and eventually, I bought a practice but I got really, really busy after the first year or two. I actually had to bring in another partner and, he was somebody I'd worked with at another CPA firm and he came in and the very first thing we talked about was billing rates, okay? Well, after we'd done our deal, right? We talked about billing rates. And he wanted to charge $130.00 an hour and I said. “Okay, that's fine. That's what you're comfortable.” He said. “Well, what about you?” I said. “Well, I'm going to charge $300.00 an hour.” He said. “Well, how can you do that?” I said. “Because I'm worth $300.00 an hour. I'm going to deliver $300.00 an hour of value to my clients and I'm confident that I'm going to deliver that value and I'm confident that they're going to get that value. And because, I'm confident that I'm going to deliver that value and they're going to get that value, I'm not worried about them paying for it.”

Now over the years, what we found was, is that my collections, I had a much easier time collecting than he did. Even though, I charged more than twice as much as he did. I think that's the level of confidence and the question is, okay so, how do we gain that confidence? What is it that creates that level of confidence? Well, I'd spent … You know, I had an advantage. I spent three years in the national office of Ernest and Young, their national tax department. I spent four years as in-house tax advisor for a Fortune 500 company. I spent seven years overall with Ernest and Young, and at the time when I started my practice, I was a Professor, an adjunct Professor, at Arizona State University. So clearly, I had some experience and some education that a lot of people don't get. But because of that education, what I was able to do was, I was able to deliver information and advice to my clients that my partner couldn't deliver or didn't feel comfortable in delivering.

Now eventually, he learned from me and was able to deliver that, we were able to raise his billing rate because he gave more value, okay? So, I know some of you are clients and you think. “Wait a minute. Am I getting the value?” Well, I want to make sure you are getting the value. And frankly, if I'm the right asset, okay? If you're actually, as a team … As one of your team members, is your tax advisor, if I'm the right asset, then you're happy to pay my fees because, I'm delivering value to you. But why am I delivering value? Why can't I be confident in that? Well because, I have so much more knowledge about the tax law than most people do, okay? I've just spent the time learning it. I've found that if we have a small amount of knowledge, then anything that we do that's outside of our knowledge base, we find to be very aggressive. And we're uncomfortable with it and our clients are going to be uncomfortable with it. And they should be uncomfortable with it.

If we know a lot about something, then anything that we're talking about that we really know about, we're going to be very comfortable with and the clients can sleep at night. One of the questions I get from new clients or people that are at a seminar, they're always asking. “I don't know if my CPA knows what he's talking about.” That sounds to me, like that's a confidence challenge. I actually … Don't have that challenge. I don't have people wondering, do I know what I'm talking about. And it's not because I fake it till I make it. No, I don't have to fake it at all. I just spend the time to learn it. But, I'm pretty narrow, okay? I don't talk about … For example, I don't talk about tax reorganizations, that's not my expertise. Now, if you have a deep partnership question, I'm all over that because, I am the expert in that. If you have a question about multi-state income taxes, I taught that at ASU for 14 years so yes, I'm an expert in that. I'm very confident talking about those things. What I find is, is that most of the advice that we're giving is common.

Our clients tend to be business owners and investors, that's who our clients are. Now, your clients may be employees. But, my guess is you know more about taxes than they do and there's a lot you could give them that you're not giving them right now. That may just be a function of confidence. See what happens when we get education … This is why we're doing the training, okay? We're actually … Our goal is to revolutionize the CPA industry, that's our goal. Right out there, our company WealthAbility™ is out there to revolutionize the CPA industry. We are taking on this huge task I know, and I know it sounds like. “Wow boy, he's got an ego.” You know what? We're going to learn together but, I think we can do it. And here's why.

Because what I've learned over my career, and I've been doing this for 35 years. The better my education, I can charge more fees, I can charge higher fees because I'm creating more value. I will retain my clients longer because, they know that I'm creating the value and they're feeling the value. There's other things, you know? We have to have communication with them. There are other things and we'll talk about these at the three-day, but you talk about how to retain a client to me, it's about education. What about risk? Well, the more education we have the lower our risk. So, we can actually have higher fees and lower risk. I don't think these things are … I don't think we have to have more risk to get higher fees. I Think that's a huge mistake. That's where we get into malpractice. That's where our clients are unhappy. That's where they leave.

If we are confident because we have the education, we can actually generate higher fees because we're creating more value. We can retain our clients for a lot longer. We reduce our risk and while we're doing that, we're reducing our stress. To me this is a key to what we're doing as CPAs. We are the most trusted advisor for our clients, or we should be. So, we'd better feel like we're educated. We'd better feel like we have the information, we need in order to be worth our fees … You could be charging $100.00 an hour and your clients don't think you're worth it. Or you could be charging $500.00 an hour and your clients think you're worth more than that. So, it's really a matter of what your education … What have you learned and what can you impart and what kind of confidence can you generate for your clients? Because, here's what your clients want.

They do not want to be afraid of an IRS audit. They want to be confident, that when you prepare that tax return or you prepare those financial statements, that it's accurate. That's it not just accurate but it looks good to the people who are looking at it. You know the bank or the IRS. They want to be confident … If you're not confident in it, they're not going to be confident in it, okay? So, generating this confidence is something we'll talk about in this three-day and this is about … A lot about training and education.

Number two is, team. Now, I have learned over the years … Now, I played individual sports growing up. I was a swimmer. I was a golfer and I was a tennis player. Very individual sports. It's actually been since I started my business that I really began to understand the value of a team because what I found was, is that I can't know everything. And I know some of you are thinking. “That's right. I don't know everything either.” And that's why you lack some confidence. But what I lack in knowledge myself, I know that I have team members who have that knowledge and they are amazing at what they do. For example, I have my partner Ann. To begin with, she's the smartest person I've ever met, okay? Ann's amazing. Any of you who have ever met Ann or heard her when we've done educational training together, know that she's brilliant. But, she's brilliant at different things than I'm brilliant at. She's brilliant at systems. We're going to talk about systems in just a minute because, she's the brains behind the systems, I'm not.

She's brilliant when it comes to putting things in a … Putting down a process. Writing down a process, okay? I remember the very … One of the very first things we did when we hired her and she was one of my students at ASU. And we hired her away from KPMG. And, one of the first things we asked her to do was. “Could you put together tax return procedures for us?” Because, we never had … We had a firm. We had about 10 people in our firm, and we never actually had written procedures on how to do a tax return. Well, she comes back like, three days later with 20 pages. And I'm going. “Oh my heavens.” I mean, I was expecting like 10 bullet points, right? No, she puts together 20 pages. So that's how brilliant she is. And you know, we're going to share how to create systems at this three-day in June. So, we're going to create … We're not necessarily going to give you our systems but, we are going to show you how to create your systems. Because, you're going to want to do things slightly different then we do. But be able to create the system is amazing. That's part of my team, okay?

I have Clarissa. Clarissa's our Operations Officer and, she's just good at coordinating everything. I mean, that's what she does. And she's fearless. She will talk to anybody. She will … She has no fear of anybody and she'll just coordinate things. She's very process driven, you know? She can put things in order, I can't do that. I'm not good at that. And then I have my partner, Karen. She'll be at the three-day. Karen is … She's actually, a lot like Ann. She's really good at systems. She runs my CPA firm. Karen runs my CPA firm. And, you'll get to meet her. But, my point is, I have an internal team. I have several internal teams. I have one at WealthAbility™, when my CPA firm [inaudible 00:12:44]. I have another team where I'm developing a software project. But, what I found is, is that as CPAs we're very much about us. We're very much self-employed, right? We're solopreneurs. We are super stars. And, the challenge is, is learning how to work with that team and develop a team both inside and outside your CPA firm, is I think, the most valuable thing I could ever teach you. And we'll talk about how to develop a team when you come in June to our three-day, okay?

Next thing, I mentioned Ann and systems. Why are systems so important? Systems do a number of things for us. Number one is, they create consistency. So, from one tax staff to another … We're talking about growth, right? A lot of you as we've kind of been talking about our Tax-Free Wealth Network™, a lot of you told me that what you're really looking for is the higher caliber clients, the more profitable practice. And the most important thing you can do of course, is to have people who deliver for you, right? If you're going to grow your practice, we'll show you how to grow your practice. To me, that's the easy part. We'll show you how to grow your practice at this three-day. If you're going to grow your practice, you've got to have people to serve that practice. And, you want to make sure that they're delivering the same quality that you would deliver personally.

Now, I've worked with literally, in my lifetime, hundreds of CPAs and taught them how to create the system so that you've got this consistency. Here's something that's pretty understandable, that we can get consistency with tax returns, right? I mean … Or financial statements. One financial statement is not that different from another. One tax return is not that different from another. It's got special things to it, right? But, we're going to get the same information. We're going to K1s, we're going to get W2s, we're going to get 1099s, we're going to get 1098s. We're going to get the same type of information from each client. So, it's really easy to conceive of, having a procedure to prepare a tax return. And the reality is, you have a procedure, you may just not have written it down. Well, one of the advantages of writing it down of course, is that when you hire that new person, either to replace somebody who left, hopefully not. Or just because you've expanded your practice. When you hire that new person, how are they going to know how to do things the way you do them?

You could spend hours and hours and hours sitting with them, teaching them how to do it. Or you could have procedures that they could just follow. That's what we know. Is that, when we hire a new tax preparer. The very first day, they can prepare a tax return exactly the same way as somebody who's been with us for five years. Exactly the same way. It's going to take them longer because, they don't know the procedures. But, they will follow the procedures and they will prepare as accurate a tax return, as completed tax return and consistent tax return as somebody who's been with us for years and years and years. Well, okay that's great for tax returns but what about consulting?

Here's a challenge that most CPAs have. And that is that, man every single client is so different, how do I do this? Well, the reality is and I know a lot of you listening are clients, right? You're not CPAs. The reality is, is that a business is a business from a tax perspective. There are not that many differences from one industry to another. Okay, we have certain differences between a manufacturer and a service provider, absolutely. We're going to have a difference between a doctor and a lawyer. However, about 80% of what you deliver from a consulting standpoint is going to be consistent with what you deliver to somebody else. About 80%. Well, that means that yes, 20% is going to be unique. You're going to have to deal with that 20%. But that 80%, you can actually create a system for it, okay? We've created a system. Our clients know we have a system. We actually have education in a system and they know when they come in that they're getting into a system. That's actually, what's attractive about WealthAbility™, is that we have a system.

That's one of the things that clients come to us for is, they want our system. That's our secret sauce, is our system for delivering tax planning. Because, we can actually … On a regular basis, I can tell you if you are an entrepreneur. If you're an entrepreneur, an investor or a business owner and you come to me., chances are, extremely like, 99% chance, I can reduce your taxes by 10 to 40% in three months or less, and I can do it every single time. And the reason is, because years ago we started developing these systems. Now I have team members. It's education, team, systems, okay? I have team members who help develop these systems. I may have come up with some of the ideas but, they've actually put into writing. They put the process in order, okay?

So, this is something you can do and at our three-day, we're going to teach you how to actually put systems together. We'll talk about the systems. Number four, I think the four thing we're going to talk about here is, so important and it's important whether you're a CPA or not. If you're just a business owner, this is something that's going to apply to everybody. And that is, you must have an identity. Now, I think of that as a mission. What's my mission? What's my mission in life when it comes to my profession? Well, I have a different mission for the CPA firms, right? That we're training. I have a different mission for the Tax-Free Wealth Network™, this is … We're going to revolutionize the CPA industry. That's a different mission than the mission I have with my clients. With clients and people I speak too, I want them to understand that taxes are fun. They're easy, they're understandable. That the tax law is a series of incentives. It's a series of incentives. The government wants you to do these things and the way they get you to do them is to give you tax break.

That's … Now my identity is very wrapped up in this whole idea of Tax-Free Wealth, right? I have a best-selling book, “Tax-Free Wealth”. The whole idea of tax law is a series of incentives. That the tax law can be your very best friend, it doesn't have to be your worst enemy. You don't have to worry about an audit. You can be comfortable … If your tax advisor understands this and this is … I'm going to teach you guys how to do this, okay? When you come to our event. But if you have this real identity, that's how you get these higher caliber clients. Because they're going to come to you because, they want your expertise. And it's not just technical expertise, think about it. If you read Tax-Free Wealth, or when you read Tax-Free Wealth because, I hope you all read Tax-Free Wealth. When you read it you're going to find … You're going to look at this and go. “Well, I know this.” The difference between Tax-Free Wealth and other tax books is really two primary differences.

One is, it's simple. Clients need simple. Clients want simple. They do not want the complexities of tax laws. That's why they hired you. They want simple so, you must simplify it. But number two is, it's positive. I look at the government as my business partner. If I go buy a piece of equipment, right? Under the new law, if I buy a piece of equipment the government … And I'm in a 40% tax bracket. The government is going to pay for 40% of that equipment. The government's my partner. When I earn income on that equipment, the government's going to get 40% of the profits, right? So, the government's providing incentive that I'm partnering with the government. This is my mission, it's not yours. But this is mine. One of the reasons I've been able to do what I've done with my practice because, I've created a very specific identity of who I am. Vis-a-vis the rest … Vis-a-vis the world. Vis-a-vis the entrepreneur world. Vis-a-vis the investor world. Vis-a-vis clients. Vis-a-vis perspective clients. That's my identity. I just grew up a very positive, happy child and I'm just going. “I don't want a negative … I don't want the negative side of taxes.”

Taxes are only negative when we don't understand them, right? We fear what we don't understand. But, as we gain the education, we build a team around us. We have the systems in place, then we can have … Our mission, we can fulfill our mission. I love being a CPA because of how I can serve my clients. And, I think that's the greatest thing about the CPA profession. I love the CPA profession because there is no other profession on earth that cares so much about their clients, okay? Now, I know if you're a doctor you're going to disagree with me. If you're a pharmacist, you ‘re going to disagree with me. I'm going to tell you, that the CPAs that are listening to this podcast. I have never met a CPA that did not care first and foremost about their client. In fact, they will give up billing. They will give up fees. They will give up time. They'll give up energy, just to make sure their clients are happy.

What I'm suggesting is, I think there's a win/win here. I think clients are happier when we're more confident. I think they're happier when we're more educated. I think they're happier when we have a better team. I think they're happier when we have more systems. And they're certainly happier when they know what they're going to get from us, that's our identity. What do you know you're going to get from Tom Wheelwright? You know you're going to get high level tax advice, really with a positive attitude. That's what you're going to get. It's going to be way more money and way less taxes. I am never going to tell anybody the way to make … Pay less taxes is to make less money. That would be completely opposite of the way I think. I'm going to say. “Let's make more money and pay less taxes.” Because I'm going to be telling you the fastest way to put in your pocket is, reduce your taxes. I'm going to be telling you that the more assets you have, the fewer taxes you pay.

This is a positive message. That's what I'm saying, this is my identity. Your identities different, but what I'm saying is, when you come to our three-day, you're going to actually learn how to create that identity. I'll actually show you how to create that identity. I'm going to show you what types of systems you might want to think about and how to create systems. How to build a team both, inside your business and outside your business. You know one of the greatest things I … Greatest experience I had, was in national tax and the reason it was so great is, because we had CPAs from all over the world, calling us and relying on us to do research they couldn't do. We were able to create training events, that's what I did mostly for three years. Was, I created education courses and taught them to the CPAs around the country. I can tell you right now, we already have people coming to this event that are from outside the US.

One of my good friends from Hong Kong is coming. And, you'll see that being a CPA, whether it's Hong Kong, Australia or Reno, Nevada it's all the same. Clients want the same thing. They want our confidence. They want our training. They want our team. They want our systems and they want to know what our mission is. So, join me June 21st through the 23rd. June 21st through the 23rd, at our offices … WealthAbility™ offices in Tempe, Arizona. I will share with you the innovative ideas that we've implemented over the last many, many years to help our clients be more successful. Because when we're successful, our clients are, the more successful we are. The more they understand, the better the client they are.

So come join us, June 21st through the 23rd. It's absolutely no charge, okay? We're going to ask you for a deposit, which we'll give you back when you come because, we want to make sure you're committed, okay? There's a limited number of seats. We're going to hold it here in our office, so you know there's not a ton of seats. We have an amazing training facility that we created, really with this in mind, years ago. And we're looking forward to having you, June 21st through the 23rd. Go to wealthability.com/event. Go to wealthability.com/event. If you're not a CPA, make sure your CPA knows about this event, wealthability.com/event. Send them an email say. “You've got to come to” … And you know, my training … I mean, it is not typical training so, it will be fun. It will be easy. It'll be understandable. And it'll be life-changing because our goal is transform the CPA profession beginning one CPA at a time.

So, I look forward to having you there. Come join us, wealthability.com/event. Where, even for CPAs, we can make way more money and pay way less taxes. I'll see you then.

You've been listening to The WealthAbility™ Show with Tom Wheelwright. Way more money, way less taxes. To learn more, go to wealthability.com.