Stop Managing Ghost Tasks: Lera Kooper on Capacity and Hard Calls

---

Luke Frye (00:05) Welcome to the Practice Success Podcast by Canopy. I’m your host Luke Frye, CPA and Accountant in Residence, here with our friend Lera Kooper, who is being featured in a five-part mini series. We’re right smack dab in the middle, and we’re going to be talking about time and staff.

But just for anyone who hasn’t heard yet, tell us a little bit about you and why you’re here.

Lera Kooper (00:28) Sure. So I’m Lera Kooper, owner of Accountability Services and currently the CEO. We are not geographically limited by any means. We have team members across the country, clients across the country, and we’re growing pretty aggressively through M&A.

Luke Frye (00:52) Awesome. I love it. So with that in mind, we’re going to be talking about time and staff and some of the hard calls related to that. I’ll give us a bit more of a primer on the topic, we’ll talk about the questions, and then we’ll go into predictions.

Lera Kooper (01:08) Perfect.

Luke Frye (01:10) All right. So capacity isn’t just an operations problem. It’s a leadership one. Every time you say yes to one thing you’re saying no to something else, and you’ve developed a decision-making framework for those trade-offs. That’s what this topic unpacks.

So I’ll start first with question number one. How do you decide which clients or projects get prioritized when your team is at capacity?

Lera Kooper (01:38) Very formulaic. There’s obviously going to be more nuance to this.

But when we talk about tiers of clients, platinum, gold, silver, however you want to name it, typically the variables are going to be revenue of the client group that is being brought into the company. So revenue. Tenure, how long has the client been with us. What are the associations or relationships, how highly leverageable is it.

And so having a system of basically platinum, gold, or A, B, C helps when we’re needing to prioritize. Hopefully we’re capacity planning in advance so that we don’t get to a bottleneck where we have to underserve some clients, or serve some at the expense of underserving others.

That’s always been top of mind. I want to make sure the machine is built so then we can grow capacity incrementally with workload, to make sure that we keep our promises to clients regardless of what their revenue level is.

Luke Frye (02:44) I love it. I just need to stop saying I love it to every single answer.

Lera Kooper (02:50) You just love it, I think.

Luke Frye (02:52) I just love it. All right, next question for you. What does your staffing model look like, and how do you decide when it’s time to hire versus when it’s time to optimize?

Lera Kooper (03:05) Good question. So obviously we want to use as much of our team’s capacity as we can before we’re hiring. Because if you hire a hundred thousand dollar person that’s supposed to be producing three times that, really you need three times that for it to justify the hire. And so there is a point where you kind of ebb and stretch capacity a little bit before you’re able to make that next leap.

But in doing that, oftentimes that means prioritizing time within the team better, so then the capacity can be created. That might mean fewer meetings during a certain season of the business. It might mean saying no to some good ideas because of the timing. Is it right? We can’t do it all at once.

And that’s always my, I’m trying to grow a company, but I also want our team to love what they do. So the focus in giving them a sustainable work environment means being aware of capacity, managing capacity, and then what the drivers are, what’s draining it. So then we can quickly decide, these three things can be tabled until we have more capacity.

Luke Frye (04:22) Got it. And how do you have the conversation with the client when you’ve taken on too much? If capacity is a problem because of scope creep, or even just scope that you actually agreed to that you subsequently realize was not right for us. Maybe you had somebody leave, or maybe you just realized that it’s not a big priority to serve that.

What does managing expectations look like in that situation?

Lera Kooper (04:48) Good question. I think because we do have a growth mindset, and that is our intent, we continually bring on new work and expect that we’re going to have to either shift around capacity priorities or hire as needed. So it’s a good thing if we have more work than we can handle, because we can very quickly hire or shift priorities.

If there is something unexpected, say someone changes jobs or someone got sick and something was postponed, communicate, communicate, communicate. Clients like you, you like them. Transparency, I think, wins a lot of conversations.

And so saying something as simple as, I just got past 4/15 but I do want to have this conversation with you, can we do it next week after I take a few days off. I think just communicating goes a long way, and it gives them a peek behind the curtain that you are also a human who also has a business that also has the same constraints that they do, just in a different industry.

Luke Frye (05:58) What’s the trade-off you made that surprised you the most? Where saying no to something big turned out to be the right call, but felt wrong at the time.

[Recording break — trim in edit. Lera pauses to check her notes, the question is discussed, and Luke reframes it. An off-mic voice asks whether the recording is still running. Reframed question resumes below.]

Luke Frye (07:20) What’s something that you said no to recently in your business?

Lera Kooper (07:26) There’s a lot of things that are exciting to do in the business. Like even marketing, for example. It’s really exciting to get into marketing, get into organic growth, new clients.

I have a whole client base that probably has not been optimized. And so instead of spending my resources on marketing and trying to attract new clients, I have a client base I need to make sure is taken care of first. Which obviously upsells mean revenue, just like new clients do. But I want to make sure they’re taken care of first.

And so even though social media, which I started to do for a second but then got inconsistent because priorities shifted, marketing spend, Google Ads, it takes so much thought for your marketing dollars to be worth it. And I didn’t want to waste it. And I also didn’t have the capacity to do it well.

So that’s something that I recently turned off essentially. In my mind, that’s a later thing, because I have to take care of my own client base. And then through the acquisition process, we’re bringing in so many new clients that are essentially a new prospect, because they’ve never worked with us. They’ve never worked the way that we work. And we probably have a lot of new services to offer as well. So I’m treating each of them as a prospect, building the relationships and then selling as well.

We have, completely left field, but like most firms in our industry, we have also had the opportunity to sell, to be acquired. And I think there’s still so much gas in the tank for us. There are so few firms that are still independent, which we are, and I think that’s kind of cool for one. But two, I think there’s so much gas in the tank for us to increase our own firm’s value before we even consider something like that. So that’s something that we’ve definitely said no to in the past that I still agree was a good decision.

Luke Frye (09:40) So you’ve consciously chosen to turn off some of the marketing, especially ad hoc marketing, but also any really expensive marketing, because you realize that the clients you currently have may not be getting the full value out of everything that you could deliver.

Lera Kooper (10:00) Yeah. And even the ones that haven’t worked. If we’re acquiring millions of dollars of firms a year, that’s millions of dollars of prospects that have probably been underserved or weren’t aware of what services could exist. So I’m treating that like my lead list, essentially.

Luke Frye (10:18) Right. Just because you acquired a firm doesn’t mean that the client list will stay. So you have a lot of diligence to make sure that you make a good first impression, add more value, not just sign a check.

Lera Kooper (10:32) Yeah. And it’s exciting. You love social media, you love, marketing is just fun. I think it’s a good creative outlet too, when you’re so formulaic in a lot of the things that you do.

But it is one of those things where I just had to weigh, is this really the best use of my time right now? And for the sake of the business, the answer is no. Maybe in a year, maybe in two years.

Luke Frye (10:58) Sure. Awesome. I’m going to ask you a question just because we’re on time and staff. How do you think about time sheets and documenting time and fixed fees, and where do those conflict, and where do those work well together?

Lera Kooper (11:16) I think fixed fees are nice because it’s a known for our own cash flow. It’s a known for our clients’ cash flow. So there’s peace of mind there when you’re thinking about financial security. Also good for our cash flow when we’re on a fixed fee model, because it’s billed either monthly or quarterly. So you don’t get these huge cash inflows twice a year. It’s just kind of evenly paced.

As far as time tracking, I think that’s necessary to hold people accountable to their role, as well as to get a measure on firm health. There’s obviously a correlation there between what was billed and realization and average hourly rates. Then you can go down a whole rabbit hole of, if this team member’s doing really well, what are they doing that we can teach others? So that’s a helpful indicator. Or if they’re struggling, is it because the process is out of date? Do they need some training and to be upskilled? Is the client creating friction?

So I think those data points, they’re leading indicators and they’re conversation starters for where you might need attention within the business, or within a department, or a team member.

And then at a high level, utilization, billable versus non-billable, the most classic metric that helps us understand how much capacity do we have, how much can we take on, at what point do we need to start looking for candidates for more. And is our time going to the right places?

Because if someone’s misrecording their time, their utilization also looks completely off. So you have to have some training there for the data to be reliable. But when you start holding people accountable to certain utilization rates for each role, they start caring about how they record their time. And then we have a better gauge on the health of the business.

Luke Frye (13:20) So it sounds like you’re more of a both and rather than either or.

Lera Kooper (13:26) Yes. I think tracking time is very important. Even if it’s not for the sake of billing, it helps you understand where the weak points in the business are.

Luke Frye (13:38) Amazing. All right, last question before we go back into predictions. How do you protect your highest performers from being chronically over allocated?

Lera Kooper (13:50) I mean, the visibility that we have with Canopy, for one, is important and very helpful. Every single service that’s engaged for becomes a task in Canopy that’s assigned with a due date. So there’s no ghost tasks. It does not exist unless it’s in Canopy, in my mind. So it doesn’t exist, it can’t be managed, and it can’t get help.

So if you’re saying yes to things that are not engaged for, it’s kind of on you. And so if you want to get the most out of your role, if you want to get the most out of our systems and support from your team, you have to work within the system.

So even during tax season, we have some really key players on the technical team. I want them doing final review, complex client estimates, talking with the client through complex things. If they have to be calling to collect 8879s or getting documents, it is not a good use of time. And although they’re very well equipped to do that, I don’t want them doing that.

And so if they had a bunch of tasks that they were tracking in Excel, operations would have no idea what they needed help with. But because we’re in Canopy and people use the system, we can filter for what’s with client. Okay, what’s the last note that [team member] or whoever left? Let’s give them a call and see if we can nudge this along. So I think it allows for a lot of proactive collaboration within the team if everyone’s using the same system.

That’s one way of protecting key team members’ time, is that visibility, and then ownership being proactive to help keep things moving.

And then also having the frank conversation with team members that if you need help, you must communicate this. Or if you see a bottleneck coming, you must communicate this. Because we are all working full-time jobs. Nobody’s sitting there and saying, do they look stressed out yet? Do they look stressed out? Nobody has that job.

And so that’s where leadership and accountability comes into play, to say, this is my role, I’ve been asked to do these other things. Does one of them replace a priority here? Can it be punted? Can I get help? And then that’s how you start to train leaders as well.

Luke Frye (16:05) I love it. Awesome.

So now let’s go into predictions on time and staffing. In your opinion, which will matter more to firm profitability in five years, how good your accountants are, or how well your firm uses technology?

Lera Kooper (16:25) Both. I think we’re an and again.

I think profitability is making the best use of your resources. So you have human capital, you have technology. The better that you leverage technology, the more skilled your people get at advising and working with clients, because they have more opportunity to do that. So they exercise the muscle more. I think both lead to profitability.

Luke Frye (16:52) It’s a puzzle. I think we touched on this prediction in a previous segment, but specifically I want to think more about time and staffing.

So when it comes to having a talent shortage in accounting, which I think is somewhat rebounding but still a big problem and a big opportunity for firms like yours, do you think technology is the answer? Or do we need to do something different as a profession in order to draw more people in?

Lera Kooper (17:35) As an industry, the more opportunity we give people to upskill, the more interested they will be in working there. Because if you go work at a firm and all you’re doing is kiddie 1040s for a year, there’s no joy in that.

But if you start there, and then start joining tax planning meetings, and then you start helping the lead prepare for them, and then you start leading them and they shadow you and support, I think everyone wants to progress and that’s satisfying.

And so again, if we have the ability for technology to take away some of those boring tasks, the ones that don’t require professional judgment, then that gives people the opportunity to develop and exercise professional judgment faster, and then they’re happier. And then they can work on becoming good leaders.

One challenging thing about technology is you don’t prepare the 1040 for a year straight and get super experienced at it. And then maybe developing professional judgment is hindered a little bit. But that’s where the mentorship comes in, the shadowing and all those other things.

Does that answer your question?

[Minor seam — optional trim. Luke restates the question before Lera’s answer below.]

Luke Frye (19:05) For sure, yeah. We were just talking about the talent shortage in accounting, and whether technology is the answer, and how the profession is going to have to reinvent itself fundamentally.

Lera Kooper (19:20) I do think technology is the answer to not burning out. Because you will, if you don’t leverage technology, you’ll have to just work more and more and more to hit baseline.

Luke Frye (19:34) Right.

In this context, what does a genuinely modern accounting firm look like as a business? Not just in terms of tools, but in how it’s structured, priced, and run.

Lera Kooper (19:50) I think clarity. Even with us, you start small and everyone wears multiple hats and you’re trying to figure out what the definition of good is.

I think the modern firm will just be able to move through that quicker, and define success very clearly. And then you have the technology to support achieving success. You have the metrics to define success. I think everyone feels good when they achieve something.

So if you have clarity across the board, and then like I said, the tools to support them through it, I think a modern firm will again make use of all the resources at hand.

Luke Frye (20:40) Sure. So say a firm owner is listening right now and they have not seriously invested in cloud, let alone AI. Where do you think they’ll be in three years?

Lera Kooper (20:55) I think they’ll be burnt out, or maybe finding it hard to find candidates within the company.

But I will say, if you haven’t done anything with technology yet, dabble in it. I don’t think you need to jump in and trust everything it produces and not give it a review. Think of it as a new hire that can take some things off of your plate. And typically with a new hire, there’s some added attention because you’re training, and then it peters off and they become self-sufficient. And then you just keep going through those paces with more features as you’re comfortable.

Luke Frye (21:49) Very good. All right, last one for us.

“I’m too small to need this,” something like a practice management platform or an AI tool. The most dangerous sentence an accounting firm owner can say right now.

Lera Kooper (22:10) I think so. I think even if you can do everything, you shouldn’t.

If I could trust that AI would take away 30% of my workload, and I trusted its product, I would love to have 30% of my time back to go mountain biking or hiking. So even if you’re a small firm, why wouldn’t you want more time, even if you’re not growing? So I would say, why not. Be prepared to be surprised.

Even last night after my flight here, there’s a firm that we’re looking at, 2,700 clients that I have in a spreadsheet. And my job is to grade them by client group revenue, opportunity, what service lines do they have now, what service lines do we think there’s opportunity for. Like 15 minutes with Copilot.

Chatted a little bit, and obviously it’s secure, it’s all within our tenant, which is always the concern. And I ran a couple of things through Copilot, let it sit for like five minutes, and you see it go, oh nope, that didn’t work, maybe it’s this, maybe it’s that. You can see it thinking through it in real time. And 2,700 lines just like that within 15 minutes. Would have taken me an embarrassing amount of time to do that myself, and to make sure my formulas were right.

So I would just say prepare to be surprised. You can’t be too small to be more efficient.

Luke Frye (23:20) For sure. And I think that just really ties things nicely in a bow. How do we think about time? How do we think about staffing and technology?

So that was our third segment in the five-part series we’re doing with Lera Kooper. I hope you stay tuned for part number four.