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How One Firm Won a New Client Who Was Happy to Pay More

Caleb Newquist Editor-at-Large, Gusto 
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Today, I’d like to I’ll tell the story of an advisor-advisee relationship from both sides.

On one hand, there’s a small business paying for a tax return when what it really needs is compliance, guidance, strategy, and someone to explain tax strategy to its lawyers. It’s receiving a steady stream of notices from state and federal agencies. 

And on the other, there’s an accounting firm that went remote before it was cool (or required),  and entirely reformed its business around advisory. In the owner’s words, “We’re now charging a price that’s attached to a relationship, not a service.” 

I’ll explain why these two were such a terrific match, and what other firms can learn from them—like how when you have a niche, the right clients are sold on the very first call.

(Full disclosure: Jason Blumer, CEO of Blumer CPAs, is my friend. His client is a Gusto customer. In fact, I introduced them. I don’t fancy myself a matchmaker, but I’m glad I was able to help them both out. I’ve changed the client’s real names at their request.)

Meet a service business with an overstretched founder

Let me explain the client. “Eraserheads” is a writing and design studio that specializes in uncommonly clear content for tech companies. It employs writers, designers, and a few others—a mix of full-time, part-time, and full-time equivalent international contractors. 

The founder’s challenge was this: He had an accountant. That accountant filed his taxes each year, and the price was great. But the relationship wasn’t defined anywhere except in a somewhat vague scope of work. Repeatedly, Eraserheads would receive notifications from the IRS or state agencies asking for forms the founder, who I’m calling “Chris,” had never heard of. In addition, LegalZoom would send notices for things he’d also never heard of, specific to New York State. Chris had the expectation these were things his accountant could or should be responsible for, but when he’d ask for help, he never got a clear answer.

“Everything was a surprise. It was always a surprise. I’d forward things to our accountant and he’d say either ‘No problem, I’ll handle it,’ or ‘No I don’t do that,’ and I never understood the difference. It felt like we repeated this over and over,” Chris told me. “Then we hired lawyers, and they had us form a second LLC so we could offer employees profit share interest. Our accountant approved the new paperwork, and I just always suspected that approval came a bit too quick.”

The accountant may have read it, but he certainly didn’t grok it. Chris’ suspicions were raised further in the next tax season when his accountant announced he’d already begun preparing the company’s returns. And Chris thought, wait, won’t our accountant need to ask about our investments? Or charitable donations? When Chris offered this, his accountant said yes, please forward those over.

Meet Blumer, a firm with a niche, that refuses to track time, and instead, charges for value

Enter Blumer CPAs, run by CEO Jason Blumer. When Jason inherited his dad’s firm, the first thing he did was delete the time tracking software, close the physical office, and let clients know they could either follow him into the cloud or find another accountant. 

“A lot of people that had worked with my dad said, ‘Your son has lost his mind. How am I going to drop off my tax stuff? You’re actually closing your office? I can’t bring you my paperwork anymore?’” says Jason.

Part of Jason’s vision was to disentangle the hours the firm spent from what it charged. He was reading people like Ron Baker and Peter Block and asking himself how the firm might expand beyond its ZIP code, and serve clients from anywhere, so he could support the businesses he found most interesting.

“We want to go deep with clients. For lots of accountants, it’s just transactional. They don’t want to get into how your business works, but I do,” says Jason. “I think that if you want to become an expert, and charge for value, and pick who you work with, you have to take a risk and go narrow. You should choose clients, clients shouldn’t choose you. We’re not for most people, but the ones we are a good fit for, we’re a really good fit for. I want to find more of them.”

Blumer’s approach involves a lengthy, some might even say, trying, onboarding process where they talk about their philosophy, make mutual promises to the client, and record everyone’s expectations. They go deep. They are all about a relationship and doing what’s needed, not what’s scoped. In fact, their scopes are somewhat vague. They want clients who trust that if they work together, the Blumer team is going to interpret the agreement generously, and do what’s needed. 

A great match

It ends up, Eraserheads’ taxes had been misfiled for two years. Chris’ pay, and that of his employees, had been miscategorized. Incoming accountants are always careful not to disparage their predecessors, but there was a lot of fixing that needed to be done. 

“Jason and team had me on the first call when they said it was about the relationship,” says Chris. “It was the first firm I’d talked to where they weren’t telling me what they offered and leaving me to fill in the blanks, because I’m not an accountant, and I’m busy. I just don’t have the capacity. Nor am I big enough to hire someone full time. But unlike others, Jason and the team said, ‘We hear you and we can do that.’”

And of course, where there was smoke, there was fire. The prior accountant had been doing exactly as asked—filing the company’s taxes as if it were a pass-through LLC, but it was no longer a pass-through LLC. That new legal structure from the lawyers which the accountant had so readily approved had actually converted Eraserheads over to a partnership. Two partnerships, in fact. Two companies that owned pieces of each other, and employees that owned pieces of one of the LLCs. That was the source of many of the notices Chris was receiving, and Blumer CPAs had to pull in a new law firm they knew to get it sorted out. 

Eraserheads is paying a lot more for accounting this year. But in Chris’ thinking, he’d been trying to pay someone to do this work for a long time. 

“Every month, I now pay our new accounting firm what we used to pay the old one in an entire year,” says Chris. “And it is well worth it.”

Updated: June 1, 2022

Caleb Newquist
Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.

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