Dominic Piscopo Navigates Compensation and Pricing in Accounting

Dominic Piscopo, founder of Big 4 Transparency, discusses his efforts to promote salary transparency in the accounting industry. He shares insights on addressing wage stagnation, the shift toward better work-life balance, and the importance of modernizing workflows to retain talent and improve profitability in accounting firms.

Transcript

KC Brothers: 0:06

Welcome to another episode of Canopy Practice Success Podcast. I am your host, one of your hosts, Casey Brothers, and I'm here with Dominic Piscopo, who is the founder of Big 4 Transparency. Um, the name in and of itself kind of gives a teaser, but why don't you introduce what you do, Dominic?

Dominic Piscopo: 0:27

Yeah, absolutely. Um, so yeah, I created big for transparency about three years ago. It's a crowd source database of accounting salaries. And essentially, the idea behind it was just why don't we all come together and kind of create this great resource for ourselves. To be able to use and figure out how much we should be getting compensated in the market. So this is really a tool from a CPA built for CPAs and accounting professionals at wide, not just CPAs. I'm trying to iron that bit out. But, um, and this was really kind of meant to scratch my own itch from when I was, you know, Working in a big four firm where I thought it was extremely difficult to understand what the compensation curve looked like, when I could expect to start making some real money. Um, I'm based in Canada, so some of the like starting salaries are a little bit lower here as well. Um, and just like understand, like, what am I working so hard for? What am I signing myself up for? And I think it's also just really valuable for people to be able to advocate for themselves. So. Yeah, basically instead of having all these like broken up discussions online, I figured why not have a tool where we could kind of centralize all of that and build this database. Uh, and yeah, it's been used by a quarter million accounting professionals to date. We've got over six or nearly 16, 000 unique records. Uh, after cleaning, we've we've We've had a lot more submissions in that, but there was some data problems in the early days and stuff like that. Um, and yeah, it's like pretty much anyone in North America, you should be able to find out exactly how much you should be getting compensated using this. So, um,

KC Brothers: 2:06

yeah. And we're not talking just big for any more than two, right?

Dominic Piscopo: 2:10

No. Yeah. The name was like, it was like a bit of a pun, like being big for transparency. It was also like a, I don't really know SEO that well, but someone told me it would be a really good SEO play. I think I'm top of Google for big four salaries. So it kind of worked, but it's like, it is, it is absolutely not meant to be just the big four. Um, and the data is representative of that. There's a lot of people at small and medium firms as well, sharing their salaries. So

KC Brothers: 2:38

Yeah, so curious because a topic I see floating around all the time are conversations around pricing, pricing of services, whether it's price points, pricing strategies, um, how much you work, how much you earn, revenue, profit, all that jazz, um, and there seems to always be. A little bit of a sense of like, I, I can't, what am I worth? Maybe imposter syndrome there. Um, how do I do this? How do I communicate it? Should I do it? Um, what, if anything, maybe I'm asking the wrong questions. If you, if I should be asking a different question, let me know. What, if anything, does your data tell you about, um, the, the way. Accounting professionals value themselves in terms of their salary, their income.

Dominic Piscopo: 3:37

Yeah. I mean, I think it all ties together. Like I think compensation and pricing should be kind of part of the same discussion to a certain degree. So I think for a long time, like there was absolute, just like a ton of wage stagnation. Um, which is what I think sort of. Is that the root of a lot of this frustration from the compensation perspective and the way that I kind of understand the two working together is that as a business owner or like a firm operator in this case, you essentially you're building a machine that makes money, right? Like you, you need to be. Able to create something where with a given amount of inputs, you can generate outputs where it makes sense to operate this business. So this is kind of the way that I think compensation and pricing tie in where if you can't afford to, you know, stay competitive with the compensation market and pay. Your accounting professional staff, what they should be getting paid in the market, that might actually be a little bit of a function of some issues in your own accounting firm as well. Right. Where you can't just kind of point at the market and say, Oh my God, it's unfair kids these days. Um, where actually it really is like. Compensation is what it is. And especially now with like the talent shortage that we're seeing and increased competition to get, you know, talent through the door, you need to be able to kind of like operate your business in a way that is still profitable with what it costs to acquire and retain talent. Right. So I do think that, yeah, like. Pricing and compensation, like go hand in hand and, and accountants need to be able to essentially just advocate for themselves on both sides. Right. And I think for, for many that's been missing, which is maybe where kind of some of this wage stagnation over the last decade or so came from. Where I think, you know, there's a lot of stereotypes about accountants that I would challenge, but I would say in general, this is not a super conflict. You know, seeking population. I think people are relatively conflict averse, which again, like from the from the job standpoint, people maybe don't stand up for themselves as much in terms of like the compensation they should be asking for. But then from a firm standpoint, that then trickles down and enables. Bad pricing where just as much as it's difficult to have a conversation with your employer about, Hey, I'm behind the market and I need to be compensated for what I'm worth. The firm that needs to basically carry on that conversation with the client and basically go, Hey, we've been under billing you for three or four years. We keep doing all this out of scope work. And that now needs to become a conversation because I need to be able to operate my business right. So it's kind of like this whole chain of events where like. Really for the industry to move forward and for firms to still be like an attractive business model, both things need to be happening, right? Like you need to attract and retain great talent, but you also need to be pricing accordingly. Otherwise you're just going to have no margin left once you're paying to market. Right.

KC Brothers: 6:52

Yeah. And I, I've never actually thought about this until you were just talking, but like, I, it makes me wonder what percent of accounting professionals in boutique sized firms have worked at a big four before and how much of this is inherited culture or, um, you know, a lot of those decisions too, with big four, right. Pricing stuff is not in your control as the accountant. With the skills that does the work, but when you're in a boutique firm, it's a completely different ballgame. You're entering an entrepreneur's world. Um, and you're not taught. It's so funny. I, I have mentioned on another episode before how I feel like accountants are the best fit to be. Owners, because you have, you have baked in you the skills to have business, um, financial operational skills, right? You know, concepts of PNLs and all of that, but it's so different when it's. You looking at you and you're like, can I do, or, or taking the time, even slowing down to speed up. That's another thing that like, I'm a big advocate of. And I know I've said before, um, that it's not just about getting in and getting clients. There's, you need to do that reflection and work on the business and not just take, um, culture or operations that you've experienced at a large firm.

Dominic Piscopo: 8:36

Yeah, yeah, a lot of people I think are kind of like shown A way of doing things that's not super great for the longterm and in operating their own businesses. So you need to kind of, you need to kind of figure out a way to find the things that you need to change and refine for your own business and make them work that way. And yeah, like I, I do think that accountants are starting off on a good foot with like, you have this financial understanding, you, you. You know, you're able to interpret results and stuff like that, but there is a lot more to it. I think when it comes down to it, which is, which is, yeah, like you need to have a lot of difficult conversations. And that's something that I think a lot of people are really averse to. And, uh, often like you're kind of shielded from in the big four as well. Like we, So I, I worked in tax for about three years at Deloitte and yeah, like I was never really the one to have the hard client conversation or anything like that. I was, our, our office was like really, was really a good office, I will say. And we were very empowered to like put our hand up and be like, I think we're under billing this client, like someone come take a look at this. But we were never actually like exposed to having the conversation. And I think it was really the partner who was doing that. Whereas again, in some smaller, more boutique places, like you probably need to be ready to do that as early as manager. Right. Um, whereas that's often not really the case in the accounting firms, uh, in the, in the very, yeah, yeah.

KC Brothers: 10:08

And it's funny, I, um, I don't use Reddit in my personal life and maybe I should, because it is fascinating. Whenever I go to learn something about accountants, Reddit is where I go. Um, And it is so interesting to see the comments people make about getting fed up with these institutions and the culture, the hours, um, whatever it might be, and be like, Hey, I'm thinking about branching out on my own. Um, any advice? You know, I, these are common, common posts.

Dominic Piscopo: 10:46

Yeah. Yeah. I, um, the accounting Reddit, I think is incredible. Um, I have, I have a good friend that I work with who is in engineering and he, like, he browses the accounting Reddit. He's like, this is so fascinating. Like the culture you all have and like. I think we actually like we have some kind of special there. It's a really, really, really good group there. But yeah, a lot of people on there are very kind of sick of the status quo. Um, this is a conversation I've had with a lot of either firm operators or heads of companies. People in culture over on my own podcast as well. So, um, we, we've had a lot of conversations around this, where it just seems like the, the existing model that's in place, which is kind of sacrifice, sacrifice, sacrifice, and then one day you'll become partner. Um, it's just not a real incentive for people anymore. Um, so even people like myself, like there was, there were a few issues that kind of led to me leaving, but like one of them was, you know, Yeah. Seeing the lifestyle of accounting firm partners. And I was just like, I, this isn't super interesting to me. And like, I think a lot of people have kind of reevaluated their lives. Some people say COVID helped with this and kind of push this. And I think that there is that. I think there's also just a bit of a generational shift, but a lot of people have evaluated the path that they're on. They put their head up. They look at the lives of partners and they go, you know what? That's not for me. Yeah. And as an accounting professional, you have very lucrative opportunities ahead of you. Like you can go to industry and do super well. You can do your own firm. You can go to a smaller firm that'll respect lifestyle. And so I think a lot of people are kind of making the, the determination of like, I would rather make two to 400, 000 a year working. Very reasonable hours than to make seven or 800, 000 a year and never see my kids. Right. Um, so I think that that's like a big thing that the industry is facing and a lot of people are, are really kind of like coming about that and making that determination for themselves. And you know what, for some people, the big four partner track is perfect. And that's fine. And that's good for them. Um, I just think an increasing number of people are, are kind of finding themselves going like, I don't think this is for me. And I don't think this is what I want to pursue. And so like enter kind of the, the lifestyle first firm, like I'm having a lot of conversations with people like Brandon Hall or like Yuri, um, like as a sole practitioner, but like people who are just saying like, hold on, we can do things better. We might have a slightly lower margin. Or maybe honestly, maybe even not, maybe your margins will be just as good. And we'll just do this thing without overworking everyone. And we're just going to put lifestyle first. And we're going to have great employee retention. And, you know, and we're just going to try taking a crack at this differently. And I'm sure at that point, like the promise of partner, like you might make 100, 000 less a year, but like, to most people, I think that that's way more appealing.

KC Brothers: 14:00

Yeah, I think especially we're seeing this in younger generations from millennials on down this. Unwillingness to participate in these odd bad badges of honor.

Dominic Piscopo: 14:17

Yeah.

KC Brothers: 14:17

You know, I only get so many hours of sleep and it's like, great. Don't put in a blue ribbon on your chest. Who cares?

Dominic Piscopo: 14:26

Are you,

KC Brothers: 14:26

you're sacri you're risking your mental health. I only, or I'm, no one would say this out loud, but, um, I'm 50 pounds overweight.

Dominic Piscopo: 14:35

Yeah.

KC Brothers: 14:36

You know, like all these things that like really do affect. Life satisfaction. Um, you mentioned kids, you know, I only spend an hour a week with my kids. These are not badges of honor that anybody claims to have, but somehow they still pin on their chest willingly. And it's not. Necessary. I don't think it was ever necessary, to be honest, but

Dominic Piscopo: 15:04

I

KC Brothers: 15:04

think people are finally realizing that they have the power to push against it.

Dominic Piscopo: 15:08

Yeah. Yeah. And thank goodness. Cause even like some coworkers who were, yeah, like in the millennial generation, like just a couple of years older than me kind of thing. Would make those comments. Sometimes when I was at the big forest, just like, Oh, early night a, Oh, it must be nice packing it in early. And I'm leaving at like 9. PM. And I'm like, I've done my work. Like this doesn't have to be miserable. Like there's no reason to, and some of these people are just on their phone all day anyways, right? Like, it's like, There's, there's really, really no reason for that. And yeah, I'm, I'm so happy that people are kind of like moving past that a little bit. Um,

KC Brothers: 15:44

yeah,

Dominic Piscopo: 15:45

so,

KC Brothers: 15:46

so what do you say? Um, we do still see a lot of people in their near retirement ages. Um, uh, not a big four. We're just talking local firms, no matter the size.

Dominic Piscopo: 16:02

Yeah.

KC Brothers: 16:03

Um, still in partner, still influencing the culture and maybe still carrying this badge of honor culture that we were just talking about. How do you talk to them or how do you talk to the people at the firm to help? In this shift to say, I mean, do, do they have to give up? Do they have to, um, sacrifice their margins? You've talked about that. Do they have to sacrifice their compensation? I mean, you had, you did say like, okay, maybe you're making two to 400, 000 less a year to gain back some life. So like what, what's on the chopping block and what actually isn't, what might be some myths here?

Dominic Piscopo: 16:47

Well, I think one of the biggest things is like. I think there is a bit of a breaking point and it'll happen at different times for different firms, but like some of the stress that flows up to partner essentially just comes from like not being able to like retain good talent. Right. So, because again, if you're underpaying people, they're going to leave, like, especially right now when like, there's a super hot market for accounts. So like, as you fail to retain people, well, like the buck stops with the partners. Like, that's the thing is like, if there's a client issue and the manager who would have dealt with that just left and the new manager has no idea, like, what's going on in that file left or what's going on in that file yet, like it's. It's the partner who's going to have to figure it out at the end of the day, right? Or they're going to lose that piece of business. And that might happen anyways, at this point, because them having to step in, like they probably don't have time to do the whole client interaction thing in the way that it should have been done. Right. So at a certain point, like, I think. Just more and more and more and more gets pushed up on the partners if they're not doing a good job of keeping their people happy. And at a certain point, it becomes like the sound business decision from like a purely capitalist perspective of like, Hey, we need to make this a better place to work, right? Because at the end of the day, like you're losing business, you're losing clients. And you're getting sleepless nights. So it goes a little bit beyond just like them having to make the decision to improve their own lifestyle. I think it is at a certain point, it becomes about profitability again. Like it kind of goes full circle where you've tried so hard to squeeze out everything out of this business that it is now like backfiring and you're kind of losing people. Right. So. It's, it's hard to like say exactly how that's going to go down for them. Like, you know, cause these people still exist and some are more stubborn than others and right, like some people might hold out for a really long time. And, um, all I can do from my side is, you know, try to have some of these conversations with people. And, um, You know, I hope to be able to kind of share some more case studies in the years to come of firms that I'm working with who have come to me and said, I want to pay near the top of market. And I want to see how that goes. Um, while not overworking my staff, uh, because I think those are going to be really, really positive case studies. And, you know, there's a lot of other people out there kind of With bigger audiences than mine as well, really advocating for this type of stuff. And I think just eventually, right, as more and more people talk about it, it's going to reach more and more, more and more folks. Um, and you know, for the most stubborn firms who really just don't want to adapt, like I think eventually it's just going to become a business thing and they're just going to not be able to grow and they're going to start kind of losing client work because you can't just, you can't do everything yourself. Right. Yeah,

KC Brothers: 19:49

I mean, in this day and age, there's more to scaling than burning the midnight oil. I personally felt that way for a long time, um, that, you know, we're, we're in an industry too, where we have large, and I'm going to go there because I work for a software company. So we have large software companies who have been around for 50 years. Um, and it's tools that people are used to, and I'm sorry, but in 2024 to scale, to break down these cultural misnomers, myths of, um, I've got to work in order to bring in the bucks. Right. Um, It's like, there are other ways to, you can gear, or you can oil up your gears. You can create more efficiencies, all of these different things. And we have so many tools in place available. Um, but the taking of the time seems to be really hard because for so long too, there's just the mentality of time is money. How can I set aside time to. Rework my operations to rethink my tech stack to renegotiate salaries to do all of these things that really will put them in a healthier spot as a firm, not just personally for work life balance, but also in terms of revenue.

Dominic Piscopo: 21:28

Yeah. Yeah. I think like a lot. Comes down to being like willing to kind of make the investment, right? Like I've always been that person who I also like, I hate a manual task. Like I want to spend the 20 hours to build the thing. That's going to save me one hour a month. And I'm like, Hey, over two years, this'll be good. Um, right. And, and like, you do need some people who kind of want to make those investments. And again, like software is coming a long way. And this is where I think people need to be. More excited about progression, uh, and less worried about it. Like everyone's, you know, talking about AI, um, but even outside of AI, just task automation, like workflow improvements and stuff like that. Like, I don't think that's something to be afraid of because if you have this huge population of people who are working nine till seven and you can, you know, wipe out 30 percent of jobs, that might not look like 30 percent of accountants are now unemployed, that might look like. All of these accountants who were working 30 percent too much are now just working. a normal amount, right? So I think that there's a lot to be excited for there. And, and people really, really, really need to like take the time and look at your workflow because often things like they just really pay for themselves, both in terms of the financial investment and the time it took to implement it. And softwares just keep getting better and better and easier to implement. Right. So I think like eventually it's just going to be really like undeniable and it's like, If again, firms who refuse to adapt and are still using paper are just going to go out of business because it's going to cost like so much money for them to be able to get anything out of the door versus someone who's actually like effective. And, um, and like, even from a talent perspective, like, I think people need to be smart about like the leverage for your time. Right? Like, if you have a partner who's doing so much on admin, but thinks getting an executive assistant is too expensive. Like. Guess what? Like the opportunity cost of your time is. It's so much more expensive. And like this other person now has a great job, right? And you're, you've got your life back, right? So I think people really need to be open to what's out there and how they can kind of do things better, for sure. And that's going to be a huge part of it. Peace to like the talent crisis is, you know what, maybe there are going to be less accountants in the market, but like, we can do way more with less, um, when we like improve our workflows. Yeah.

KC Brothers: 23:58

Yeah. Couldn't agree more. I feel like there are just so many signals in the industry right now between seeing fewer. Individuals graduating and choosing to go into an accounting firm, a more traditional path and going for in house talent or even finance in general and not necessarily accounting. Um, There are so many trends and things happening right now that I think you said the word adapt several times And that seems to be the key that like you're I love this. There's this thing called the adoption curve where you can be and Early adopter, um, all the way to a laggard in terms of adopting things. And, and there are pros and cons all along that. Right. Um, yeah, it can be very based on your personality, but right now I feel like. We're seeing, we're, we're still at the front of that adoption curve in terms of people making these changes. And sooner or later people will be forced. There will be that huge group of laggards that like, there's no other option now that the industry has moved so dramatically to accommodate for these big shifts that now I'm, I'm. Maybe being left in the dust a bit or having to sell off my firm or whatever it might be, but, um, future proofing your firm now is all of these things, right? It's,

Dominic Piscopo: 25:38

yeah,

KC Brothers: 25:39

helping you retain the talent by re evaluating. I mean, we could go through the laundry list again, but

Dominic Piscopo: 25:46

yeah. Yeah. And I mean, Even when it comes to like exiting your firm, right? Like, yeah, some people are getting kind of pushed to it, but some people go like, ah, like why adapt? I'm going to sell in two or three years anyways and take my retirement. But like, are you thinking about your exit multiple? Because like, I've talked to a lot of people who are like acquiring firms and things like that. And, and like being up to date with the technologies and like your strategies and stuff, like that might. Right. Be like a really busy six months or a year for your firm, but like, you've spent 30 years building this thing. And that might make the difference between a 0. 9 X and a 1. 6 X multiple on your revenues, like. Yeah. Like you, you're getting a 50 percent higher return on that 30 years you invested just by modernizing your firm. Like that's so worthwhile even. Yeah.

KC Brothers: 26:46

I'm so glad you went there, especially if you're talking about things you can do in that last. Stretch before you do exit and in terms of affecting that multiplier, like you think too, if you don't do that, take into account with inflation and all the different things of just like, if you'd be dumb not to modernize your firm before that. And, and in fact, if you can do it beforehand, it creates a better culture. We're, we're getting to the point where, man, I know not everybody's going to watch this. But I'm holding up my phone. We all have smartphones and we all interact with apps that are user friendly, um, and have quick, easy ways to interact with them and do business. Whatever that business is, right. Whether that's a quick text message, a video call, or even something like a door dash, who knows what, right. But we have these, actually, I feel like, um, There was research done a while ago on the effect that Amazon Prime, just the like two day free shipping, had on The economy at scale, that it wasn't just this thing that affected, was a differentiator for them in their, their market, but rather we now all have this thing to compare against our entire life, you know, like, and so Amazon two day delivery, um, makes me impatient in other areas of my life.

Dominic Piscopo: 28:24

No, that's so true,

KC Brothers: 28:26

right? But you think about bringing your firm into 2024, even though you may have an exit strategy, how instantly there, there will always be pains with change always.

Dominic Piscopo: 28:38

Yeah.

KC Brothers: 28:38

Um, but you worked through them and you get to the other side of, you know, being more efficient and you elevate the morale in your firm and, and who knows, maybe Yeah, maybe your exit is way better or acquisition, whatever the situation is, but you've also then contributed to a better, um, workplace, which I think is just a good place to end on in your career to feel so satisfied that you'd built this thing and ended on a high note.

Dominic Piscopo: 29:12

Yeah. Yeah. I love having conversations with people who are like, so conscious of. The experience that they're creating for their employees and kind of like the responsibility that they have to like, make this a positive experience for them. Um, that can provide great lives for them as well. Like I find those people like who have that type of empathy will kind of go the extra mile in terms of doing whatever it takes to kind of provide that. And I think that makes for like great firm leaders. Right. So. Oh, I think one of us froze for a sec. Yeah.

KC Brothers: 29:58

I missed a little bit of what you said. Um, uh, but yeah, I feel like we're just going to see more humanization hopefully. Right.

Dominic Piscopo: 30:11

Fingers crossed.

KC Brothers: 30:12

Only has a better, only has a bigger, better, bigger impact on the industry at large. But Dominic, thank you so much. What a great conversation. Thank you again, Dominic.

Dominic Piscopo: 30:31

Yeah. Thanks for having me on. I really appreciate it. Thanks.