The Wize Way

Episode 174: Policies and SOPs That Power Firm Growth

• Wize Mentoring for Accountants and Bookkeepers • Season 2 • Episode 174

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Most firm owners think SOPs are about writing endless manuals. The result? Overwhelm, wasted effort, and documents no one reads.

In this episode of The Wize Way Podcast, Thomas unpacks:

✅ Why SOPs should solve problems, not just document processes
 ✅ The large/medium/small framework that keeps your team out of “SOP hell”
 ✅ How policies like “No Triangles” and “No Bypass” protect culture and accountability
 ✅ The daily huddle rhythm that keeps communication sharp and projects on track

If you’re ready to stop drowning in checklists and start building SOPs that actually scale your firm, this episode is for you.

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SPEAKER_01:

Welcome to The Wise Way, the show for accounting and bookkeeping firm owners who want more time, profit, and freedom in a business that can run without them. I'm Brendan Ward, your host, and each week we deep dive into the real stories, proven strategies, and battle-tested tools from successful firm owners just like you. Our wise mentors want to share their journey of how they've scaled and systemized their way to freedom so you can too. If you're stuck in the grind or you're ready to scale smarter, this is your blueprint.

SPEAKER_02:

Is the team actually following it? Are there things that you need to iterate on in order to uh have them adopt it better? That's all things that we're going to be going through today. So, implementing essential SOPs and policies to form that operational backbone of a scalable firm.

unknown:

Okay.

SPEAKER_02:

So the first thing I want to share is our wise template on an SOP. And I just want to go through the anatomy of this. You don't need to follow exactly the way it looks, but definitely you would need to have these components in there. We highly recommend it. So the general uh idea of an SOP is that you want your senior management team, your executives, to take ownership of their area in which they're heading up. So reflecting on the seven divisions, we have board, marketing, sales, production, quality, admin, and accounts. Each of those seven divisions is headed up by a specific executive. So in accounts, you have a CFO. In admin, you have a C double O. In board division one, you have the CEO. Okay. And in quality, you have your CTO, and that is the chief technical officer. Okay. So concerning tax and accounting technical quality. And we run a corporate structure here in WISE, not a flat structure. So what's the difference? How does this influence this SOP topic? In a flat structure, the way SOPs get made is all the partners get into a boardroom together and they all start having equal takes on how a specific division should be run, how it should be led, what are the KPIs and the metrics. And leadership through a committee isn't really the most efficient way to run a business. But for us, all here, sub-20 million dollar accounting firms, we really don't need that level of executive decision-making overhead. Okay, so we run a corporate structure, and that is a single person could be assigned one or many executive positions, and they would take full ownership and say around how that division should be run. So here, you know, we're all wearing multiple hats. You're the CEO, you're also concerned with the quality of the work. You're probably also concerned with the finances of the firm itself. So you're already wearing three executive hats there. You might have a COO as well. Okay, if you're trending towards that high$1 million,$2 million range, and you might have your own COO there. Um you would take ownership over those three areas, but you would give ownership of the admin and operations to that COO. Okay, you don't want to interfere, you want them to own and accept the failures and successes of their decisions. Okay, so that's the fundamental organizational and executive framework. So that's why here in this SOP template, we have the division identified. Okay, so that communicates what division does this SOP belong to and whose portfolio it is. Okay, so like in government, you have the minister of education, the minister of finance. That's all the ministers I know. Like, okay, so I think I know more executives in the seven divisions than our actual government, but that's the person you put here. That's the person who, if there is anything going wrong with this SOP, if you pick up an issue, if someone complains about something, if something goes wrong, we know who the buck stops with. Okay, so that's the portfolio. Then you want to put in a file location. You want to make it easy for people to actually find where the resources are that back up this SLP. Okay, so that's that's important to put in. And then you'd want to just have a quick sentence on what the purpose of this SLP is. And this is probably one of the most difficult things to get right. Okay, I've seen firms where they'd have like a database of 400 SLPs. And and just ask yourself do you think any of their team members have read through 400 SLPs? Have any of us ever read through 400 SLPs? The answer is no, okay. Um there is a balance to just how granular we want to make this, and a really great mental model to follow is if you have one large thing, it's often made up of ten medium things, and each medium thing is made up of ten small things, okay. And where you want this SLP document to sit is ideally at that large or medium level. Okay, this is like the law where you have the details, okay, the exact details, the how-tos, the step-by-steps, the guides, you'd want to include those as resources inside the file location. You ideally want this SLP to be a broad index or reference showing people, okay. So if you're dealing with this problem, what exact resource do you actually need to go and look for? Okay, that's ideally um uh uh where you would produce this SLP at that level first before going any deeper. Okay, so don't start micro, start large, and then begin to break it down. Okay, and then cover it from there. Otherwise, you'll feel like you're in SOP hell. You're just riding SLPs day in, day out, and it feels really productive. I know. I used to go to the cafe, get my laptop out, and order a coffee and stay at the cafe just way too long. That the that they just don't want me to be there. I can feel it. But then I've written like 10 SLPs that I've never read after that. Uh so keep them high level and then begin to break it down. Okay, so that's the purpose of this SOP. Start large, then go granular. And then we have the status of the SOP. And the status of the SOP usually follows uh you don't you you you want to make the phases in which an SOP needs to go through before it becomes official in the firm appropriate to the size of your business. Okay, so if you're a$10 million practice, okay. It's in discussion, it's drafted, it's reviewed, it's the review points are worked in, it's discussed again, it's trained, it's piloted, all these things. Sure. If you're a sub-1 million dollar practice or a sub-2 million dollar practice, you want to empower the person uh who is heading up that portfolio to push things through and only just stop at the point where it needs to be communicated to everyone else in order to get feedback before it becomes official. Okay? Because you know, you want you want people to actually follow these SOPs. You can't just write a document and upload it into your SharePoint and expect it to uh have the same effect as um downloading a program into a computer. Um, it needs to be communicated to people, and your whole office needs to be bought in uh to what the purpose of this SLP is. Okay, so uh here we have this. You know, what what what stage of approval is it at? Okay, and what date did that happen? And has the manager approved it? Has it been communicated to the team? Has the team been trained on it? Is there an SLP video accompanying it? And have you added it to your uh uh procedures and policies library inside the Wise Hub, which is a great directory. I would highly recommend everyone start putting your SLPs and policies into because in not uh in the not too distant future, your team would be able to start chatting to those documents within the wise hub. So I recommend investing in completing those document libraries now. Um, that would be uh a thing that would be coming in the not too distant future, but yeah, just focusing on this, you want buy-in. Okay, so that's that's that covers the the mechanics of how an SOP is developed as well as the foundational uh org structure and who's accountable for it. Okay, so if you've got any questions there, just ask me. Now I just want to go through a few nuances, a few further nuances that build on that large, medium, small concept in that in that area to help us write good and relevant SLPs. Now, you might find that you're too busy to write SLPs, that there's just no time that you're going to be sitting down and writing out a masterpiece of an SLP. Or you might not find out you have heaps of time. Now it's a lot more harder when you don't have time. So it's important to be able to prioritize what it what ex what exact SLPs should you be writing about? And and exactly when or like when when a problem occurs, when should that warrant an SLP getting created? So I'll go through some essential SOPs that you should implement um after the like if when when I get through this explanation. The best thing to do is write SOPs to solve a problem. Okay, don't write SOPs as a history anthropological exercise on your phone. Okay, so don't just write SLPs for the sake of writing SOPs. If you're short on time, you clearly have a list of problems and issues that you can write down on a single list. You probably get like 20 or 30 of them there. And then just examine this list, okay, and talk about it together with your team and see if you can classify each of those as critical or low priority or medium priority or high priority. Like actually try and look at these problems that are happening and see which of those that are happening are the biggest problems right now. That if what you what you would ask yourself is this I can't just write a large SOP. I don't have the time. One large SOP becomes 10 medium SOPs. I don't have the time to write 10 medium SOPs. One medium SLP becomes 10 small SLPs. I don't have time to write 10 small SLPs to cover a one medium SOP. So sometimes you just need to write, and more importantly, find what is that one small SLP that you can write now that is going to have the biggest impact on your firm? And then focus on that. And then actually try and implement it in your firm. And you're going to find writing was the easy part. Implementing it and seeing people still fall over and then fixing it up is what makes it hard. Okay, so just find that small SOP that you can write. If I translate it into another principle that we communicate here a lot in WISE, it is micro train. Okay, and that's that's the very essence of micro training. When you're micro training, you're dealing with uh developing a micro SLP for a point solution to a small issue first, and then just deal with this. That's it's also how you practice the 80-20 rule. 20% of the SLPs you write are going to have 80% of uh are going to be account uh um uh uh uh are going to uh result in 80% of the operational success in your firm. So so conserve your time. One more story. There's a firm I coach a few, I think it was a year and a half ago or two, they were uh going through an SLP drive. Like they were just in this mood to write SLPs, they needed to get SLPs across their firm. So they paid a person about 20,000 USD, they're in America, to write their SOPs. And they go through months of doing this. I didn't know that they were doing this because they just thought this is the right thing to do. And months later, they show me uh what they've done, and I'm like, okay, great, that's incredible. That's a lot of money as well. So they paid a technical writer to do this. So I said, go and show me your SOPs that you've produced from this exercise. And when I read it, it was it was SOPs where it was going through, oh, if you're using this workflow software, this is how you create a job. You click on this, you click on that, you go here, and you go there. And I'm and I said to them, what problem are you solving by writing that SOP? I'm like, well, obviously, you know, we were trying to get everything consistent and reliable. But I said, you're so short on time. What what actual problem are you solving with that SLP? Like, like what problem are you solving that that software didn't already have its own manual on? So you just paid someone$20,000 to rewrite the manual that this app probably already had. Right? And I, you know, obviously, anybody who spent 20 grand and a lot of effort and time developing it, you're going to have this sinking feeling in your stomach that I probably should have just asked almost how to approach this first. Because I would never encourage us to just write SLPs. You want to write it to solve a problem. Okay, I asked Ed this question um seven years ago when I started working together with him, and I knew you know SLPs were the thing. You want to put what's in here out there from your senior team members and everywhere else into one central repository. I said, How detailed is this supposed to be? And he said, when you hire someone, there is there is an acceptable level of skill and experience and capability that that person will have that you can assume that they will do competently. Okay? Like you don't need to write an SOP on go how to go to the toilet. It's not get up off here, these are his words. You get off of the seat, you walk out of the office door, you walk down the hallway to the left, you open the the the store door and you pull down your pants, and like, okay, yeah, I get it. Like, you don't even write that. You don't need to do that. All right, you can you you can assume because life is too short to be writing SLPs on everything. Write SLPs when there are a problem, is my point. Okay. If you start writing an SLP and you cannot say that this is going to solve a problem, then don't write it. If you can't look at a bunch of problems you have and then point to that SOP you're writing, and then argue that that SLP for that problem is the most important problem we should be solving right now, then don't write it. You know, we need we need to be smart. We don't want to just be following rules literally and not using our critical thinking. SOPs are a tool in order to solve a problem. More importantly, SOPs that haven't been implemented or seen in practice yet are just guesses at how that problem is going to be solved. Okay, you you might not feel like it's a guess because you being the firm owner and partner and senior leader feel like you have a really great grasp on everything that's happening in the firm. The truth is, if you're following the wise method properly and you're withdrawing from your firm, you are going to start to lose touch. Okay, you'll simply lose touch. You'll forget how to use the tools, you won't know exactly how the team, through many, many months and years of using the systems you've implemented years ago, are using it today. Okay? They've made all these spot fixes in order to fix things because they don't want to keep asking you every time because you've empowered them. So when you create SOPs, ideally you get the person who is central to that problem into the same room as you and you start asking them questions. Start to brief yourself again on what exactly is going on. Tell me how this works, tell me how you guys have been doing this, and then work towards a solution. Okay. I have that issue now. Six years ago, I was all over carbon. I'm all over ignition. I'm I'm I'm like in and out of the workflow. I know like the to-dos of every task and the statuses and how everything was connecting together. I was all on top of it. Today, we're using different tools, content snare, a different workflow system. We're still using Ignition. But I only got involved in order to make the decision to implement it and configure it. But I wasn't there to actually uh design the granular details. Implementing systems nowadays is me teaching the team how it works, giving them a few ideas and telling them, go for it. Now you know how it kind of works, go and make it fit yourself because there are managers in place who can do that. Okay. And they also have a previous foundation that they can work from. So that's they're not creating it from scratch. It's a little bit of migration thinking, a little bit of trying to, you know, there's the opportunity to create new efficiencies. When those things were implemented recently, and it was this earlier this year. I um from the admin side, they told me that it was very difficult and time consuming in order to sort documents out in SharePoint. So, me thinking that I still know everything going on, I go into Power Automate in Microsoft. I start making this thing I spend all day and night doing, and I was having so much fun, and I implemented it and it worked. I tested it, it worked. A few weeks later, it's in practice, and they go, Yeah, it's great, Thomas. Um, it's definitely getting the documents in there. Uh, but we're having all these other issues and it's costing us time. And so it hit me. I just implemented a solution without properly asking people about what the current state is. I didn't uh put enough energy into proactively following up how that implementation went. And my solution might have saved them time in one area only to create more work in another area. Okay, so that's something we need to be aware of. And if anything, it should feel liberating. It should feel liberating that you aren't the person with all the answers, that it's going to require collaboration in order to get things to work. All right, so let me go through some key SOPs that I've plucked out today. Um, the first one I want to go through here, and they're all found within WISE. The first one is the no triangles policy. Okay, so I want to go through some foundational cultural communication level policies. What is this policy? Policy SOP is um similar-ish. Um, I guess policies communicate um like a behavior that you want uh the team to follow, whereas an SLP gets a bit more detailed, but you can class them in the same category of things. It's communicating your expectations and how you want your firm to perform. So, no triangles, what does it mean? It means when a person has a problem with another person or a process that they do not bypass um you or me. I'm confused who who this is referring to, but you don't go and like talk about another person, about a problem that you're having with them, and they're not in the same room. It might sound like a really obvious SOP that you just go and explain to your team, uh, and then that's it, and call it a day. But this was the one policy that I saw myself having to really remember and apply constantly. And it happens a lot when there is a lot of change happening within the firm. Okay, so I'll get one team member go, I have a problem with this process. They're not blaming someone, but they're saying they're having a problem with a process. And we know in the team structure that that process is owned by a person. I got really tired of trying to just solve their problems. Like I can't, I don't, I can't answer everything. So how I did it was every time I saw I saw that, I would go, all right, can you get into a call with me? And then I go to the other person and I'll go, can you join this call? And then what I'll do is I would just kind of set the scene. Okay, so from what I know at the moment, uh there's this issue happening. It it's clearly affecting this person. It's probably affecting you too. Um, let me help mediate and moderate a conversation around this. And my job would be to um make sure no one gets emotional, that everything always stays de-escalated. And I'll really focus on listening and extracting out the action items from this discussion. Okay? Because I don't know the answer. I don't know the answer to your problem, and I don't want to know how to figure out the answer. My job as a leader is just to bring people together. Okay, that's already hard enough. So start chatting with each other. Okay, you want you're trying to apply communication and create a habit of it in the office, and it only happens because you dragged two people into the same room together. Okay, and you're there to just make sure it doesn't it doesn't derail and go go in a bad way. Okay, so hugely important SOP. I highly recommend uh you uh type no no triangles policy or no triangles or triangles into search in the wise hub to check it out for yourself.

unknown:

Okay.

SPEAKER_02:

Um go to the next one. Another critical policy, the no-bypass policy. We will have already heard about this, but it's actually extremely difficult to follow. It might be easy for some firm owners to follow, but you might find that staff members already in senior leadership positions are going to find this extremely difficult. They're going to feel like they've lost control of team members that they could just freely go to whenever they wanted to. And now there's this layer in front of them: the senior production manager. You're going to have accountants or senior production managers who used to be able to just go straight to the client in order to make a query in order to get their job done. But now they're having to go through the senior client manager. And the senior client manager would then be the person to collaborate with Division Six in order to help them communicate with the client and follow them up. But it's so critical we are strict with this flow of authority and who is allowed to do what, because it's what keeps the team organized. Right? So the client managers are the only individuals allowed to talk with their portfolio of clients. If a production manager needed to, they might have enough trust with the client managers. And if especially there would need to be medium and small sized SLPs in place to cover this larger or broader SLP, I guess you can call large SLPs policies. On when is it okay to contact the client? Okay, and what what are the procedures you need to follow? For example, you always need to CC me in. When you write the email, you must always say on behalf of this person so that the client doesn't get confused, that they're getting palmed off to another accountant. We don't want them to feel like they don't know who to go to. The client must always feel like they have one point of contact. Likewise, the client manager can never just go straight to the accountant and start giving them instructions, no matter how annoying and how much stress and anxiety that client is giving them. Do not allow the senior client manager to go and instruct the client. If you are that senior client manager, do not bypass your senior production manager. Every time you do it, you will set this person back in terms of their self-esteem and confidence being a production manager of their team by a year. You'll be setting yourself back from withdrawing from your firm by a year. You bypass them and they'll go, maybe I'm not good at this. Maybe, you know, maybe I didn't do it right. Or, you know, I I don't I don't have the confidence that I can take full ownership over this team if this person just keeps coming in and like stepping in. I I don't want to invest energy into that. I'm just gonna just gonna stick to my work. Okay? And it takes a long time to come back from that. So accept the imperfection in the beginning. If there's ever an issue with this senior accountant, always have that production manager in the room. And better yet, talk to the production manager first and ask them would you be able to handle this problem on your own? Or would you like me to be in the same room with you and then mediate it? Okay, so let them make the choices. Otherwise, you're just going to be making every single choice. So withdrawing from your firm into a higher strategic leadership position in your firm where you can look out into the future and be that person who mentors the team is a second-by-second conscious mindset choice. You must never forget it. You just you just gotta resist. It's you have to resist. I have uh firms I um I've seen where for years now they still go, oh, just this job, I'll do this tax return. Like I I'll just do this tax return. Oh I'll I'll you know, I'll explain it to the accountant. It's always an exception, it's always in their mind an exception, a small exception. But then when you step back, those exceptions were like 60 to 70% of the work. But you never notice it. You think it's a small thing, you're only tricking yourself, and now it's everything. So this is the no bypass policy. Highly recommend going to modules 16.2 to review it. Okay. And make sure you do not violate it and make sure you teach your team about this. One last thing I'll say on this policy is that often we'd ask ourselves, but I don't have a good senior production manager. They can't review the work. They're not good enough. They don't have enough technical ability. The only thing I'd be worried about is if they're making people upset. But then, you know, everything can be coached. Otherwise, they just might not be meant for that position. Okay. And they might be resisting it in some way. But how you train a senior accountant who has never had any experience managing anyone else, okay? The smallest step that you can get them to take is to start identifying problems in the team and then talking to them about it first, and then bringing that person into the room and then coaching them through solving it with that person without you taking over. Okay. It's just it will feel slower. It will feel slower, but that is a balance sheet move because they'll get better at it. You can always solve something fast. It's look, sometimes it's necessary. Sometimes you've just got a problem. You don't have any time at all to actually just like let it, you know, let things take its course because it's it's truly high stakes. Like that client might end up in an audit. That client might end up in an ATO penalty. Things like this, sure. Step in if it's high stakes. But otherwise, if it's low stakes, allow yourself to solve problems through people. And even with your clients. Don't just pick up the phone and start solving problems with your clients. See if you can talk to the client manager and coach them through solving it and how to solve it. Okay. When you work through people, you're helping them build new habits with your consciousness. Right? Okay, so Joy, um uh, you know, I think we're just gonna be here in the breakout room. So uh did you want to just unmute yourself and um verbalize it? Uh your question for everyone in the room.

SPEAKER_00:

Um uh yes, um, I'd like to ask, I used to work in a in a bigger form, which is got a different team structure. So as a senior accountant, there's a different level of a senior accountant. We work on the file, we know the file inside and out, right? Sometimes we may get an intermediate accountant to assist some basic work for senior accountant. So usually senior accountant is the find contact point, right? Because so many clients also contact different senior accountants contact. But in in this team structure, which we involve senior production manager and a senior clients manager, well, I feel like it's a big waste of time if seniors accountant, intermediate accountant work on a file, senior accountant maybe work part of the file, then have to pass on senior production manager, senior client manager, too many layers of the kicking balls. So I was wondering um maybe just get a senior accountant, contact client directly, and then copy senior client manager, senior production manager into the procedure, make it work faster, or how does this process work? I'm just not familiar with how these work here.

SPEAKER_02:

Okay, so I'll answer these in two parts. Okay. The first one is as you can see here, this um beige green and blue, right? Um each of these colors, these client managers, production managers, and uh production team, they have a different focus. So with a client manager, their focus, their goal is to develop the client relationship, to be able to listen to their goals, their pain points, their priorities. And it's not just to deliver the work, but to be able to grow the engagement, right? Uh, and often what happens here is that the client manager would actually not be tasked uh with um uh production work if we can help it. Because when we allow them to spend time in front of the clients, the firm will grow. Okay, so there's a general saying if you the if you want your firm to grow, spend more time in front of your clients. The wise firm, because we're withdrawing from things and delegating it, we've created this client manager role. With the production manager, they're the sort of production person who is, you know, like the sort of person who is really detailed and slow. Okay, like if you want something done quickly, you won't give it to them. But if you want it done right, that you give it to them. So this production manager is that type of person. Okay, they're slow and extremely detailed. Whereas in the production team, the senior accountants and intermediate bookkeepers, their main focus is from getting the job started and to 90% as quickly as they can. It doesn't mean that they're reckless, but they're all about like speed and getting through the work and then handing it to the production manager to review, to produce review points. And then the production manager wouldn't fix up those review points. The production manager would send it back into the team to go and fix because they're too slow, but they're careful. Right? So it's like it's a central place where you want quality to meet a consistent standard. Now, in your example with the intermediate accountant and the senior accountant, the senior accountant can in fact work underneath an intermediate accountant. Okay, like they can work together on a job. It's possible that work assigned to a senior accountant can be divided to an intermediate accountant. If this person has any technical queries, they would go to the senior accountant first. And then if that person had any queries that they couldn't answer, they'll go to the production manager. But what what as you can see, what we're trying to do here is we're literally trying to protect the client managers from the production um work itself. Because at the end of the day, what is what is the outcome that we're trying to achieve as a business? It is to it is to grow and then to do so profitably, right? If we if we do not have a framework around what role does what type of work, a senior accountant could be doing a low-fee job, but then they're getting paid a salary of like$110,000 a year. Like they could be doing a job that an intermediate accountant could do. So, what this does is it gives you a framework for push work down to the lowest cost resource so that you won't end up in the write-off. So you that's that ensures that the firm is profitable. And at the same time, that your client managers ideally will never ever have any in-progress work surface to them. Uh, and that the only work that they would ever get is from the production manager that they've approved, so that they can just spend time trying to draw out any strategic insights and value from the work done and have those meaningful conversations with the clients. I'll add one more point. Ed would say it's not about efficiency, it's about effectiveness. So it's very efficient to get the work done and just send it to the client and they sign it and then they give it back to you and you lodge it. That's very efficient, but it's not effective because looking at it from the client's point of view, they'll feel like, hmm, you know, my work is sort of like a commodity. Um, I need someone to be able to like I had all these questions I wanted to ask. I wanted time to actually, I had like I'm planning all these things. I'm buying a property, I'm thinking of like giving this to my kid, or I'm starting a business, or I want a super fun. And those are all great opportunities if we can uh spend time to actually hear the client out and listen to them and not assume that just because they're a C or D client or low-fee paying client, that there's until unless we actually know their goals, pain points, and priorities, you you can't classify them as A, B, C, and D. Okay. You could have an A client who is today a C client, but they're ambitious and the business is growing quickly. Okay, you want them to be supported by the most expensive person on this team, the senior client manager. I think in Sydney right now, this person will get a salary of about$140,000,$50,000 a year. This senior production manager is the second highest per paid person on the team. They're in Sydney about 100 to 110,000 or 20,000 even a year. And an assistant client manager gets paid similarly to a senior accountant. So like around that 80 to 100 mark, and then the intermediate is um um 80 and below. Uh I know I went through like a few different areas there, and I said in two areas, but I think I said five. But um uh were there any um questions from there, Joy? Did that make sense?

SPEAKER_00:

I think that you you make it a very um good point. I think it's more more than just get the work done. The senior um crimes manager is it's more about to get more sales from that perspective point of view or expand the service area to identify what is that opportunities there to increase revenue or different different sources, right? It's more about a service space. But production manager, as well as what you said, is more about a technical point, quality control, and try to focus on uh high skill set in that to be able to charge high skill set, maybe identify some more complex tax issue, right? Uh in that perspective. Um, so coming back in reality, not everyone's here, myself, typically myself, it's uh it's the structures here looks, I think from last lesson, is about one million, right? One million team. So I would say from a practical perspective point of view, myself as a business owner, at this point I'll be the senior clients manager if I put my hats on, which is uh engaging clients, see where's the opportunity to increase revenue, marketing, you know, any service we can expand from existing clients. Then it's a matter to find a senior production manager, which is high technical, can solve the problem for the tax compliance and more from that perspective, technical perspective point of view, and then try to get the seniors accountant to do the groundwork, to get the work more quick, fast, more from that. Is that my understanding right? Just from practical point of view, from one minion. I know there's a you know, some people have few minions, team have a different structure, but from one minion, that's what I need to focus on. Is that right?

SPEAKER_02:

You you got it 100%, Joy. You you nailed it. You nailed it. And in fact, you you made that connection that you are the senior client manager, and so the most logical thing uh is to actually hire the senior production manager. Like there's there are there are firms I've worked with in the past, Joy, where I'm spending like two years telling them to hire a senior production manager. And it's just that one thing that they need to do in order to give themselves more time to be in front of the clients. And they're like, but they're not gonna get the work right, you know, like there's all these things, or I don't want to spend the money. And, you know, when you hire them and you focus on the marketing and sales, you'll make your money back in like six months to a year, right? But then spending two years to debate it, that's worse. So you made that connection right away. That's exactly right. If you get that senior production manager, they're going to enable you to um spend more time with the clients, uh uh, and then find out what other ways you can actually help the client. Okay. It's it's you know, senior client manager, you can charge them out at like$270 or even$300 an hour. If you got them to work to like 80% productivity, I don't know the exact numbers. If you got them to work to 80% productivity, you'd end up with like a multiple uh billables to their salary of something like three point something to four. Okay. Call it like four, and like if they're fully working. Realistically, they're not because they're dealing with clients. That's that's not as good as if a production person down here, an intermediate accountant, was from the Philippines getting paid$26,000 a year and they're outputting about$150,000 worth of work each year. Like that's greater than what, like six? Like that's six or seven or something times their salary. Uh so even if this person did do all the billing work, it still wouldn't be the most optimal move. Work should go down. Their increase multiple allows for them to um if if they can if the production manager can make sure that they manage the error rate and then control for the quality, the work will be done profitably and the client managers will be bringing in even more. But yeah, you got it right, Joy. You got 100%.

SPEAKER_00:

Can I um dump here another question? Just just uh expand what you're saying here. Let's say in one minions team, at what uh sales level, say from 400 or 500 or 600, from that point of point, you start to hire senior production manager. Because if you hire too early, then which means as a senior client manager, which is a business owner itself, don't even get paid enough to be equivalent to senior production manager. So I was wondering when the revenue base reaches to that level, you start thinking serious thinking, because at this point you may not be able to afford if you have a couple hundred thousand in revenue. So, would you be able to give me some kind of a guide there?

SPEAKER_02:

Yeah, 100%. The um a senior production manager on paper is like how we describe today, but then in real practical reality, your senior production manager is going to be your best person. Your next best person who uh like just be like your next best, most technical person. Um, if if that person is more like wanting to be on the client side, at that$400 to$600,000 range, that person might be a hybrid between an assistant client manager and a senior production manager. So it's okay for them to wear two hats, but you just have to recognize that it's two hats and that if they're more of a people person than a quality person, you're gonna have to deal with the fact that the work is just going to be lower quality, but you're still winning because you're able to delegate the C and D clients. So you're take, you know, you were already doing the reviews, but you're freeing yourself up from the C and D clients. If if the production manager is super good, okay, then they can just take out over order production and hopefully you don't do any uh review work, or you're only doing it way less, like 10% of it, which is 10 to 20% is still success. And then you will handle the entire client portfolio between 400 to 600,000 in fees. But because you're the owner, um, it's also good because you would be turning these C's and D's into A's and B's, and A's and B's into even greater ones. So around that range is how it looks. It's sort of a hybrid, and you just gotta like depends on what you know, the hand that you got. You know, everyone's got a different hand, everyone's firm has a different set of people, and you have to play them to their strengths and accept compromises. Uh after 600k, which is the first danger zone, it's the danger zone because now that ACM and SPM really needs to start being two different people. And you make when making that higher at that point, you will notice that your profit will dip. Okay, you'll like you'll you'll end up working harder. It will feel like you're winning more sales and working harder, but you're earning less profit than when you did at like 400k. Okay, because now I have to hire this one person for the future. And it's such a danger zone because the typical staff member here, especially at ACM or SPM level, they they're going to cost like 90 to 100K. And you can't get part of this person. Like you don't want to hire a part-time person. You need to get a full individual to assume that role. And it just feels really expensive. You make less profit than before. You just it's it's it's one of those tests in business, okay? It's the test of running an accounting business. If you can make that decision and stomach it and get through it, uh, because you you understand that it increases your capacity to be able to win new clients and grow the team, you will return to 25% Ibiter in in no time. And then soon you will approach that$1 million mark. And when you start to make future hires from that point on, it won't have such a huge effect on your IBIT, right? So, like there's this one firm I work with that have about 60 employees, they're uh 5 million USD per year. It makes no difference to him if he hires a senior client manager or not. In fact, he will create new teams in anticipation for the growth that he gets. Um, and it will run at a loss. And the other teams will be like propping, like basically me making up for the loss that team is making because it's carrying wages, but it yet, it hasn't yet reached the level of capacity needed in order to uh you know break even or be profitable. But then you look at it a year later, it's back at 25% IBIT, 30% IBIT, and he does it again and again. But it's a lot easier for him to do it because what difference does it make earning a personal income of a million dollars after tax or$900,000 after tax? It doesn't make a difference. But at the level of 400 to 600,000, it makes a huge difference. You know, you're hiring someone who's going to be 20 to 25% of your annual turnover. And it feels like, wow, like I'm I have to see so many more clients. I still sort of have to like review this person and train them up. If you I I would say like there's no easy way to approach it, and it's actually we try to make it as simple as possible by using the team structure. It's a lot easier to when there's a structure because you can see exactly who you're missing. Um, but yeah, does that help, Joy?

SPEAKER_00:

Yes, I think um I think I get uh kind of the idea, maybe starting anywhere revenue from 400. That's kind of a little bit more practical. You can kind of afford it to hire that, which is uh salaries really high, but in the meantime, you create maybe make a bit less because uh you hire one more, but but you create a capacity, you create uh a possibility after you reach in 600. So for four to six hundred, probably that's the idea, ideal way. Um, I'm not quite sure if I'm right, but I think uh based on what you're saying, looks like this is the ideal range when you need to consider to hire someone, hire too early, you it's just give yourself too much financial stress to try someone in and in the meantime walking through the additional revenue to cover that site, cover that wages.

SPEAKER_02:

Yeah, and and look, it's all about what your firm, you know, where your firm currently is. Like, for example, the senior production manager on paper here represents an ideal. If in your firm you have, like, for example, only a senior accountant, an intermediate accountant in your mind, you can start treating that senior accountant uh like a senior production manager in the sense that, okay, you know, I have to still review all the tax returns and financial accounts. There's no choice. Like that person can't do it. But maybe they can review the business activity statements. Maybe they can review the bank transactions, right? Like you can see, like what what you know, what if you, you know, what pieces of a senior production manager can I have that senior accountant start doing? So they start acting. They're basically uneffectively a production manager, but not like, you know, not like in the ideal way we're talking, but you're but it's it's happening, if that makes sense. Um, Mina, I'll answer your question. Like, which team member does online queries, inquiries, new clients get flowed to, and who responds to the inbound potential? Uh, Chris, you said we have our office manager and secretary doing this first, and client managers. Yeah, it looks like consensus around client managers. Yeah, exactly. So um that makes a lot of sense. Client managers, you'd want the person doing that discovery call and fact-finding because they they have the questions to ask. I'm seeing like something interesting nowadays where firms would have like a sales team. Okay, like this, it's this, like this different sales team where um they would be the ones to jump on the lead. Because leads are so important, you you want to call them in like within 60 seconds, right? And then they would go through our checklist and start qualifying them. And it would then they would they their conversion metric would be setting up setting up the discovery meeting. Like, because they have to sell the discovery meeting, and at the same time qualify if that prospect is going to be right. Um, depending on the size of your firm and how you want to play it out, that person doing jumping on the lead and qualifying them might be the office manager. It could be a separate person that the office manager manages. Uh, I guess the point is you you just at least have a qualifying step before it goes to the senior client manager, which would make a great SLP. Okay. That that in itself is an SLP that you would want to create. Like in Wise, we've got leads, prospects, and then clients. A lead is anyone who potentially could be your client. A prospect is someone who's been like it's given a proposal and they have had a discovery done already. So that that that deal flow is extremely important. You want to document that in an SLP. Okay, so I know um uh okay, I'll go through there. There are two okay, I'll go through this one here. I'd say it's more important than this. On these two, you want to have an SOP around how your team conducts their daily huddles. What is a daily huddle? It's a 10-minute meeting in the morning every day, and each team member in a set order is going to answer the question of what jobs are you working on? Okay, what will you finalize today? Like, okay, what's like what's actually going to be lodged or done? And what are you stuck on? Okay, so this is a five or 15-minute meeting. I just want to say the purpose of the daily huddle is not purely just about workflow management. What the daily huddle is for, and why we get everyone into the same meeting together, is it's about tuning your team's communication for the day. It's just like an orchestra before they start playing for an audience. They, you know, all the violinists go, you know, they they they they tune up their violins, they all get in sync and in tune with each other. This is what this is. Okay. If you don't do this, you'll get somebody who goes into the office at 9 a.m. and they start digging into the work. You'll get someone else who goes in at 9 a.m. and they're spending the first 30 minutes going through their email, and everyone is just going at their own pace. This is everyone, let's get together, sound off. What are you doing today? What are you finalizing? What are you stuck on? And what you need to do as a leader is you need to be there. Okay. Because you'll find, um, are they even like like what are they even saying? Are they saying the same job for like six days in a row? Are they bring are they bringing up a job that they're working on that five days ago they said they were going to finalize? You'll never know. So be there. You don't need to participate, but just listen. And I highly recommend, and this was a tip Ed gave to me, just keep a pen and paper and just kind of like put put you know, write everyone's names along the top of the the horror the horizontal um uh you know uh layout of a page, everyone's name, and just sort of jot notes. Okay. And what you want to do is you when you start jotting down notes, you'll find this. Some people would kind of just go, what am I working on today? Oh, this, this, this, and then and it's just like like, did anyone even catch that? Like, what did they even say? Like, okay, so can you can you do that again, but just speak slower? Because I didn't catch that. I don't think anyone else did. Okay. Either you're just trying to like fly under the radar, or like, um, like I need to like remind you that you you you actually need to communicate in a way that everyone's going to understand. So actively participate in your daily huddles and tune your team's communication. Okay. The more, the more involved you are there, the more effective your team becomes, the sooner you'd be able to trust your team to do daily huddles without you ever being there. I I had to be part of my daily huddles for like two years. Even when I got on holiday, I'll tune in to the daily huddle all the time. I'm like, when do I get to get out of this? Like, when can I trust? When can I like at least listen to like 30 daily huddles in a row? And I'm like, they got it. There's no reason for me to be there. Sometimes I get out and a problem happens and I get back in. I haven't been in a daily huddle in ages. You need to be there in the beginning to set the standard. Okay. Um, so this is going over meeting rhythms. It's an important SOP uh to go over. It's the daily huddle, and I don't think we're going to have time to go into the weekly tactical, but then visit this resource in 9.1. Uh, the videos there on the weekly tactical uh go into heaps of details about what this is. The general purpose of the weekly tactical is don't use it to complain about the past. Use it to plan for the future. Okay, just look forward when you do these weekly tacticals. Don't try and look back into the past. Uh and that's basically it. Look, there are some other key ones, I'll just quickly say 16.6 is about communication answering etiquette. You just want to communicate to your team if clients or internal team members message you to reply within 24 hours, or at least tell the person that you get to them later. And another one being around this uh annual workflow scheduling letter. Okay, so that's it's probably too big of a topic to cover now. Uh there's there's heaps of SOPs. I just recommend going through the entire Wise Vault top to bottom. There were when I was going through and selecting out these SOPs to share today, there were like 10 others that I wanted to put in here. But you know, I could either go through them in a shallow way or we could, you know, be able to like deep dive into um some of them. And it sounds like we were explaining concepts inside uh the SOPs. I think it only makes sense why a policy being a large SOP is really 10 medium SOPs. And in each medium SLP is 10 small ones. You can see that, right? Looking at that discussion around um Joy, thank you for that awesome discussion around that team structure. It really is like 100 SOPs. So just start either addressing the problem if you're short on time or uh go to WISE and then take all of what's ever there as the foundation for your large SLPs and then seeing trying to implement it where things don't work or make sense, then add those additional layers. Okay, so that's hopefully that should set the SLP journey for you. You do this, you're going to be able to ensure that your firm does things in a scalable way.

SPEAKER_01:

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