@patrickdichter
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Provide quality bookkeeping, tax, and QOE nationwide. Inspired Or Acquired Podcast host. Acquired 3 firms. Fly fisherman and small business geek. NH and CO📍
Joined April 2014
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Updating my bio for new followers - I’ve acquired 3 accounting firms. Appletree provides bookkeeping, tax and consulting to small businesses nationwide. Previous background was sales and advisory. Dad of 3 boys.
The top 5 causes of bookkeeping train wrecks:
1. CRM integration botched
2. Transferring money between companies
3. Personal expenses in the business
4. Too many credit cards and accounts
5. Inventory not tracked properly
Production pay feels like a magical unlock as a business owner - solves incentives, alignment, results based culture. But I think there’s some industries where it’s very very hard to track and implement - like residential landscaping
We killed our employee incentive program
Spent over a year trying to make it work. Felt like we had traction sometimes... hard to tell. Ultimately pulled the plug.
The program:
Revenue share over a certain percentage. Every day gets a baseline labor rate. Beat it, and you split the savings with us.
In theory it incentivizes guys to drop below a target labor rate. (guys to get faster underneath it)
Some guys got it. Some didn't.
Here's the thing: we could never explain it cleanly or get them feedback fast enough.
Lessons:
- It has to be simple. Easy to explain, easy to adopt. Too many penalties. Math problem was confusing.
- Feedback has to be FAST. Phone pings the second you make more money, you do that again. Next day is okay. Two weeks later is useless.
- They have to know why. Which actions actually made them money.
We were a few days to a week behind. By the time they saw the number, they couldn't remember what they did to earn it.
So it felt like funny money. "Cool, I made more." Or "cool, I didn't."
My dad has always said he doesn't believe in incentives below the foreman level. I get it now. Not sure I agree.
I still think the ideal is to push it as low in the org as you can, with feedback as fast as you can. We just haven't found the tool yet.
Anybody actually made crew-level incentives work? What did you use?
$631 face value for the cheapest ticket, not even resale. Wowzers
Once you’re under LOI to buy a business there’s a sliding scale of due diligence:
Naive Nelly - trusts the seller on everything and doesn’t check anything, just wants to close.
Interrogator Ian - turns over every stone, finds new stones to turn over, drives the seller insane, loves spreadsheets.
The right balance is somewhere in between. Nelly might file for bankruptcy because they overpaid or got fleeced.
Ian might never close because he finds every reason not to a deal, and if he does close the seller hates him and won’t help with a transition after a nightmare diligence period.
I meet more searchers who are the latter and we try to get them to see the big picture but they’re sometimes impossible to reign in. Try to strike the balance in between.
When we launched financial planning services alongside our accounting firm, I set a BHAG goal of $100M AUM in 5 years.
We're only 3% of the way there after 5 months but I'm absolutely certain we'll hit the goal. Why? I see the early momentum and have experience with a flywheel in the accounting firm. I'm a more seasoned operator now and know if we just keep plugging away, keep learning and providing good service it'll happen.
In our monthly staff meeting that lasts 30 minutes we’ve been taking 5 minutes to highlight someone who’s built something with AI or automation. They share how it works, how it helps the client or makes us more efficient.
No BS or AI over hype nonsense. Just real life use cases other staff can copy.
Facebook seller marketplace economics: you make $1 for every time you have to answer: “is it still available?”
We’ve done a couple bookkeeping cleanups recently referred to us by business brokers before they tried to sell a business and realized the books were a mess.
The root issue in both deals was owners sending invoices in QuickBooks for projects that wouldn’t start for 4-6 months. So revenue is overstated, the balance sheet isn’t accurate, and lenders wouldn’t give credit for accounts receivable over 90 days old. Plus they’d send some invoices that never signed - so sales are massively overstated on that piece.
Went to Garth Brooks concert last night. And then went line dancing and closed down the bar. My Garmin body battery 9/100 today feels about right.
I presented on two webinars last week. One to a group of franchisees on how to understand their numbers and improve their accounting, the other Do’s and Dont’s for business buyers.
Would you be interested in a webinar on one of the topics below or anything else?
33%Tax planning
33%Due diligence
27%Accounting KPIs
7%Webinars are dumb
15 votes • Final results“No need to worry my accountant handles that.” as Biggie would say…
Sir you took distributions in excess of basis and haven’t paid any quarterly estimates. You should be more worried.
You feel that? That’s sales cycles magically speeding up as everyone’s kids go back to school and people get back to work. Happens every year like clockwork.
Monarch budgeting app alerts me to new recurring merchant in case it’s a subscription I don’t want, which is nice. But now it thinks I have a Dairy Queen subscription….not good. 😂
I just signed up for coaching for our financial planning division.
I also pay for 2 accounting industry community groups (PASBA and Realize), 1 CEO peer group and coaching (Kathadin), and this year an EOS implementer (after 4 years of self implementation).
It’s all a big investment but my thought is if I can glean one big takeaway per year it’s worth it considering the compounding effect on the business.