Practice Success Podcast

Sean Duncan on the Transformation of Traditional Accounting and Role of Technology Adoption

• Canopy • Season 1 • Episode 2

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Sean Duncan, founder of SMD Consulting & Accounting, talks about how he navigated the challenging terrain of transforming a traditional accounting practice into a future-facing firm. We'll dive into the importance of aligning personal and professional goals, and discuss the game-changing role of technology adoption in achieving work-life balance.


KC Brothers:

Welcome to another episode of the Practice Success Podcast brought to you by Canopy. In today's episode, we learn how Sean Duncan, founder of SMD Consulting and Accounting, navigated the challenging terrain of transforming a traditional accounting practice into a future facing firm. We'll dive into the importance of aligning personal and professional goals and discuss the game changing role of technology adoption in achieving work life balance. Prepare for an enlightening conversation that could transform your own perspective on practice success. I'm KC Brothers, and I'm here with Sean Duncan, who has quite an introduction. We could talk about accounting and all of your hobbies, but why don't you give everyone. You're professional.

Sean Duncan:

My professional. So not my nerd version. Okay. Um, so I'm Sean Duncan, the owner of SMD Consulting and Accounting, but I also own a company called Chief Proactive Advisors, which is supposed to be for the purpose of teaching other accountants how to have better time, uh, better, better lives, more spending more time with their family, be more profitable, the positioning of moving from compliance to advisory. We have a miserable profession. And I was just as miserable as everybody else was. While successful on paper, I was miserable. And that's where this weird idiosyncrasy about our profession is. It's like, well, in order to make money, you gotta work 90 hours a week.

KC Brothers:

No. Lies.

Sean Duncan:

I know, but that's what we were trained. I mean, I was trained that if you worked less than 80 hours, you were lazy. And so...

KC Brothers:

Did you start with public accounting?...

Sean Duncan:

I started in corporate accounting. So actually, I'll roll back. I only am an accountant because I was going into the FBI. So the only reason I got a master's degree was I was going to go to the Bureau. But in 2003, I turned them down. Now, at that point, I was building a resume. I had five years of free time. corporate accounting and I had a few years of public accounting and I was building a skill set that made me attractive to the Bureau. 2003, I have my final interview scheduled. I'm going to go to Quantico in three to six months just once I pass everything. I mean, I didn't do drugs, didn't have tattoos. I worked out like a maniac. I took Kung Fu. I shot with a 40 instead of a 9 because that's what they carried. So I did everything I could to be a great candidate. And then I turned them down and I turned them down because it dawned on me if I was going to go hostage rescue team and be the agent I wanted to be, I wasn't going to be present as a husband and father.

KC Brothers:

Which could still have been the case if you'd continued forward in this more traditional accounting reality that has been painted for so many.

Sean Duncan:

So what's interesting is I still slipped into that. So I was lost for two years trying to figure out what I wanted to do. Started my firm in 2006. By 2017, I was successful on paper in every way we can all describe, you know, every KPI, every metric profitability, scaling and growth. I was the biggest firm in town. However, perfect example, Sunday afternoon, 75 degrees out, beautiful sunny day. I'm sitting there at two in the afternoon in my corner office, and I'm just pounding away tax returns. And then my phone buzzes. And it's a picture of my wife and the kids at Six Flags. And so this was that. Wait a second. I turned on the freaking FBI for kids I didn't have and here I sit, not with the kids I do. And it really was a big shoe that dropped that said, okay, this has got to change. Um, oddly enough to scaling new heights in Orlando is when I made the decision that I'm firing all the tax returns. 30 days later, we fired all of our tax returns, took two thirds of my revenue, threw it out the door and said, we're an advisory services firm. And it was partially for... just for me. I needed, I needed that. My employees needed that. They were miserable too. I was losing good employees. So I had fallen back into the trap of the whole point of not doing this and said, okay, we've got to reinvent reinvented, screwed up a lot. And part of the mission of chief proactive advisors is to teach other CPAs how to do it without the couple of years of screw ups to give them a leg up on my system and my process. And so those are the two main companies. I have some real estate companies that I invest. I do some real estate investment. I have an RIA cause I'm securities licensed, but the main is SMD consulting and accounting and chief proactive advisors.

KC Brothers:

A big thing there being risk and change like risk evaluation and then taking or making the change necessary to. take that risk or whatever it might be. Um, when you decided to fire all of your tax return clients, um, what was that like and, and what, how long did it take you to Get back to and then I'm assuming surpass the level of profitability you had before.

Sean Duncan:

So first on, how was it? It was every emotion you can imagine. I mean, it was terrifying. It was exciting. It was fulfilling. It was dread. Um, there were multiple times where I thought I need to, I need to go back and do this again. Because when you see your revenue just suddenly go bottom out that you have a panic, but then you meet that jerk client again and go, Oh yeah, that's right. That's why I don't want to do this. And. But I knew, and this is a central part to everything about my planning, my process. I know where I'm going. I know what I want to achieve. And so when I know what the destination is, I know there's multiple paths to get there. It could have been continue to do tax returns, and I tried variations.

KC Brothers:

I would even say in those instances, As you were saying that, I was like, but what if people don't know what they want to achieve, but you can't take the risk if you don't know. And you've got to pause and, and think about that and, and know fully, or at least, you know, have it vaguely outlined and a little squishy. But if it's not just there, if it's non existent, taking that risk is too risky.

Sean Duncan:

You could be going left when you're supposed to go right. Yeah. And it really, and that's what happens too often is people will start their businesses and go, well, I just want to have a business. Why? Like I. I like money. Don't get me wrong, but I don't need all the money because I've realized that all the money means, by the way, here's a simple trick. If you want to make more money, work more. That's dumb. That can't be the answer, but that's the answer we've been given. So I've, I've gone through that journey and, but knowing generally what I want. My plan changes all the time. I mean, right now, I am much more clear that I think I'm going to live overseas in within the next decade, if not within the next five years. That didn't exist five years ago. So you will keep moving it. Honestly, every time you climb a mountain, you see the next mountain peak that you have to get to. It adjusts, but it all starts for me I want to be with my family, I want as much as I possibly can, I want to do my nerdy personal stuff that I really, really enjoy, and I love to travel. Really, that's the core? And it starts kind of in that order, is my family is first, then me, selfishly, and then we as a group, we go do and see and experience the universe. The business is supposed to support those goals. And then as I get more clarity, what does it mean to spend more time with my family? Because as my, my oldest is 16, it's different than when he was 10. And so we're just, it keeps flexing, but I know those are important to me. It's actually why my program starts with. What are you passionate about? It's not, what is your business plan? The last step of six is what is your business plan?

KC Brothers:

You have to have that why right, like right in front of your face as you're making those business decisions so that you can ensure that your margin of error goes down a lot.

Sean Duncan:

It does. At least. Because you can steer. If you're just wandering off and go, Oh my gosh, I've screwed this up. I mean, I did. I, Oh my gosh, I've screwed this up and I had to do something dramatic and you didn't have to. I could have sold the firm and done a different thing. I just fired everybody because I needed this massive rudder change and get. Um, I had the, I had the blessing of knowing a lot what was important to me, but when I'm teaching classes, it is, it's unfortunate the number of people that don't have a clue and it's not that they're bad people, they've just never thought about it. Introspection is not how we're trained. And I want you to have a bucket list. I want you to know what's important to you. I want you to start there before we even start talking about pricing models and subscriptions and fixed fees and goals.

KC Brothers:

Okay. So with that. Your locus of control at, at the center of it, would you say when people only, and hopefully they don't have to make that big shift.

Sean Duncan:

Not everybody does.

KC Brothers:

Right, right. Not everybody. But, um, would you say that there's anything central that's like, okay, this is something you should evaluate first when it comes to change and, and getting on the course you need to, or is it not that simple?

Sean Duncan:

It's really what's important to you.

KC Brothers:

Well, sorry, I mean like, not just their, their guiding star, but rather like internally in their firm. If you're needing to make changes to, to reflect and guide you towards this path that you're wanting to be on, are there go to ones that you recommend, or is it just, it just depends on the phase and... Context of their firm and what's messy and what's not messy or whatever it may be.

Sean Duncan:

I've coached several organizations going through this exact change and I found every single one is different. But the common thread and it's going to be, this is really general answer because it ends up not being specific. What is causing you the most pain? What's driving you nuts? Because quite frankly, while I want you to move toward what you create joy, sometimes we have to get rid of the thing you hate, this albatross. And so a lot of times we're having the conversation is like, okay, what's killing you, man? Like, if I could get rid of this today that would make you immediately lift the weight off your shoulders. Let's start there.

KC Brothers:

What has been an example of one?

Sean Duncan:

Idiot clients. I know that that's actually, that's a fail safe. I've had the simple fact that they, they believe themselves to be a martyr. They, this sacrifice they're making is for the good of their clients. And of course the clients will appreciate that. The clients. Don't and it's real. Some do. I'm not saying everybody doesn't, but some, some don't. And they, but we carry this burden. We're people pleasers. We want to create value. We want to make, make a bet the world a better place, but I'm sorry if you're doing a tax return for 200 for 6, 000 clients, I'm, I'm telling you, they don't appreciate it. And so, so much of it is it. How much of you carrying a weight for your clients that you shouldn't even bother carrying? Sometimes it's time, sometimes it's efficiency, sometimes it's they like to complain. There's a, I can't fire them, they're, oh, they're friends, they've been clients for 20 years. And they're charge, you're charging them an equivalent of 20 an hour. If they really care about you, they want you to be successful too. If there was the most common, it's looking at how our CPA world is interact, or bookkeepers or any accountant is interacting with The client base, what shift has to happen there? I mean the simple thing we go to seminars, raise your prices and you'll lose half of them. And that's true. I, I've done the same thing. Doubled my rates and you lose half your clients. Congratulations, you make the same money with half the work. You have to be willing to handle the consequences. That's when my big change was everything. I had people that were happy for me, people that were angry. Um, you know, who do you think you are is to, I'm so proud of you that you're making this move. It's, there's no one answer. But you have to do it for yourself.

KC Brothers:

Well, and that's not to say to you that when you do make that change, whatever it might be, whether it's firing clients, um, consolidating softwares, uh, hiring new talent, um, it all comes with change. Um, and there's always going to be a period. Where you're, you're feeling the pain of change, um, how do you get through that? I mean, do you just remind yourself of what's on the other side? What, what do you recommend there?

Sean Duncan:

You, you have to know why you're doing it. You have to remind yourself over and over again why you're doing it. It's, it's. Any, particularly software changes. There's an implementation phase, there's a learning phase. If you're not willing to commit to that moment, knowing that you're going to be better at the end, one, it's not going to work, and then you're just going to prove that it's not going to work, and it's just going to be sort of this death cycle.

KC Brothers:

Self fulfilling prophecy, almost.

Sean Duncan:

We implemented Canopy. It took months to migrate all of our data, and change all of our clients, and I'm telling you, it's not easy. You're changing your entire... Practice management for a company that's been around since 2006. That's a lot of work, but we knew it was going to be good. And we, and we proved it once we got to the end of it.

KC Brothers:

Yeah. Um, in that process too, do you, uh, advise or did you even take the time to? Because no, no system is the same. Just like English is not the same as Spanish and they're not going to translate directly. Um, what do you recommend to in those instances when it comes to evaluating processes and operations?

Sean Duncan:

You have to know what they are.

KC Brothers:

Seriously.

Sean Duncan:

How many of us just just kind of fly by the seat? Well, that's just the way I've always done it. Have you ever written it down? Yeah. One of the most common, and this is really silly, but I actually have lots of clients do this. A very simple advisory project for your clients. Say, I'll do a process documentation engagement. Let me help you write down your processes, client. And you write those processes, or processes, depending on how fancy we want to be. It's like when we say niche, niche, depends on what our day is. But when you go through this and you write this down. Every single time, you're going to find something to do it better. Well, why don't I do that step three times? I mean, you don't even know you're doing it. So we do that for clients, which then, by the way, leads to a second project of the process improvement opportunity. The same thing applies to us. Just actually write it down, and you're going to go, Oh my gosh, I have emailed myself 17 times just to get me the same, myself, like we had people that were emailing themselves information before we started implementing processes and I'm like, you're emailing yourself? Well, I needed a reminder. Oh my gosh, that's what software is for. There's ways to do this. Yeah. But it is shocking how many times you write your steps down, you go, Oh, that's kind of obvious. But until you look at it, it's like looking at your P& L. You can look at your bank account and decide if you're profitable or you can actually look at the P& L and it's the same logic. If you don't take a moment, but then once you have the processes written, the technology tools can support the way you're doing it. And that's where we, we gain the biggest advantage. I don't tend to choose software just because it's neat and shiny. It's, is it going to make us better? In fact, I was doing a panel at AICPA Engage on tech stack and I first had to say it out to everybody. I am not a technophile. I am, in fact, actually my team tells me to get the heck away from the computer. I specifically approach, approach technology as a business owner. In fact, I will break it if I touch it. That's just me. I'm just, and sometimes it's from anger. Sometimes it's from incompetence, but what I'm evaluating is, does it make us better? Does it save me time? Does it make me more money? Does it make us more efficient? Whatever it is. So I'm stepping back because. I know when I go to attend these classes on technology, I'm intimidated. That, that guy or gal up there is constantly evaluating tech and they like to tinker and they, they try every app. I ain't got time for that. I got, I'm busy. So it's gotta make sense.

KC Brothers:

You can get lost in the weeds so easily too, when so much of it can be in your control, just by taking a step back, evaluating your processes and operations, refining those, and then figuring out how to execute on them within whatever software you're using.

Sean Duncan:

Of course, the common response or pushback from every CPA, I mean, I, the number of classes I've taught and workshops I've done, it's just, it's ridiculous that they're almost always says, I don't have time for that. Why don't you have time for that? Because you're inefficient. And you've got if you, if you get caught in this death cycle of all these crazy things that you're doing that don't make any sense, one piece of technology that frees up 10 hours of your day, which, by the way, is not the full day sometimes for all of us, because only 10 hours a day. Some of us are working 14 and 16. If we free up two hours a week, you suddenly have time to evaluate differently and you actually start recapturing. So this. Misconception is like, well, I just got to clear an entire week to do it. It's not always practical. But if you steal slivers and get efficient because of the right tool, the right process, you then gain momentum and can implement more and get much more efficient. And that's how we end up recapturing so many of people's lives. I leave every day by four. But what's funny is I've been traveling so much last week. I worked till six. Oh my God. My family's like, are you okay? Are you coming home? Everybody in my household is so trained that I'm home by four ten every day, sometimes earlier. It depends on how the day goes. When I was there till six o'clock, I was meeting with a client one day and they had forgotten. It's been three days in a row, and you've been there till six, and it's like, I know, I'm so tired. It's the worst in the world. But looking back at what used to be, it would become, I'd come home at midnight and 2 a. m. on circumstances. Now six is this, oh, oh, I'm so tired. It's pathetic.

KC Brothers:

Give me a damp towel.

Sean Duncan:

Yes, and that's actually when running multiple companies. Quite frankly, if I weren't doing the speaking, and it weren't such a passion that I committed time to, I would be leaving it too.

KC Brothers:

Well, you make it look easy and this is, it's so encouraging though to see that there are ways and approaches to enjoy your life, your job, your family, your hobbies. Um, and not run yourself into the ground while trying to support those other very important things

Sean Duncan:

It's a transitionary phase. Right? It's nothing happened. None of this happened overnight. I mean, I started it. I, I started the research in 2015. It wasn't till the signature moments in 2017 that I pulled the plug in a dramatic way, which is not what everybody can do. I screwed up for two solid years on building a model because nobody was doing this. Nobody was really doing a subscription. I mean, you've heard, we've all heard people say, go do a subscription. What does that mean? How? Yeah. And I kept taking classes and going to webinars and doing seminars. Nobody would actually tell you how. What is advisory? How to do advisory? How do I know what I want to advise on? I completely disagree with the AICPA's definition of client advisory services that they pushed out. It's wrong. because it's so limiting and intimidating. And so I wanted to figure that out for myself and then screw it up for a couple of years. And then once I really started hitting my stride, uh, I found that others were asking me how I did it. And in fun moments, uh, I'll just, I'm full of stories. I'm not going to go there. I'm not going to nerd stuff. I was at scaling new Heights. It just thematically happened to be scaling Heights. I was in Fort Worth. And this lady ran up to me, she's like, I'm so glad you're here. Oh my gosh, you changed my life. I can't thank you enough. I'm doing advisory. I'm making more. I get to hang out with my kids now. I can't, and she's just almost on the verge of tears, just thanking me for all the help I gave her. And, and she goes, I saw you in Utah. It was so amazing. He said, ma'am, I didn't speak at the Utah one. Salt Lake City scaling. She's like, Oh, I know we had lunch. And then I remembered I had sat down over lunch and we were swapping stories and she was sitting next to me and asked like 20 or 30 because I didn't know who she was at the moment. It was like, I'm trying to figure out where this person came from. And we talked for 20 or 30 minutes and I give her some tips and actionable items. Three years later, she identifies me walking down the hall and is on the verge of tears on how I changed her life with a 20 minute conversation because it gave her actionable tips, but empowered her to make the choices that she kind of already knew some of them that really kick started like, okay, I need to do this for real. And then when you walk into firms and you're helping them transition and she didn't do anything dramatic, it's just gave her the tools. To pull this off and have that time and I can't tell you how fulfilling those moments are to have stand in one one room and it could be everybody's asleep. It's a 745 in the morning class, but one person walks up and goes. Holy cow, I'm going to do this. That one person, if you're doing advisory, I'm not just helping them. I've now just helped one, two, five hundred thousand clients. Because if I can teach them to be an advisor, I have just created value to those people. And while my mission is to help a half a million accountants move to advisory and experience better lives, what I'm really doing, the multiplier effect, is how many people are they then helping? Whether they help other CPAs or they just help a nail salon, it doesn't matter. It's this multiply, multiplying legacy that I get to do. So when we get to mission, uh, it's, it's a lot of fun, but it's having those moments. I know that wasn't directly to your question.

KC Brothers:

No, it's great.

Sean Duncan:

I can go Star Wars if you want to as well.

KC Brothers:

We do love, you mentioned in your intro, you said to explore the universe. And I thought of all of your other hobbies and interests in those universes as well. Well, thank you for being here, Sean.

Sean Duncan:

It's been my pleasure. Enjoyed the heck out of it.