Every couple of months, I’ll go through a phase where I read business books and attempt to siphon out some inspiration for my own business, Hash Basis. I just wrapped up Shoe Dog by Phil Knight and Building a Sustainable Accounting Firm by Blake Oliver, with Zero to One next in the queue. I was inspired to write a book review and general thoughts about Building a Sustainable Accounting Firm because it’s literally my life - I spend 8-10 hours a day doing accounting work, cooking up schemes to make Hash Basis better and talking with clients. I was excited to learn what the top notch accounting firms are doing and how I can work less while delivering more value to our customers. I started Hash Basis when I was 25, with barely three years of work experience under my belt. I had no clue what I was doing, so this book was a helpful benchmark to see if I was on the right track. As it turns out, I discovered Hash Basis isn’t so shabby after all. 🙂

For this review, I’ll be breaking down the biggest topics Blake discusses and my most salient takeaways from them. The distinguishing part of this book was that it’s not a boring manual or lifeless “how-to” guide (believe me, a book about accounting firms could totally turn out that way). Rather, it incorporates lessons and dialogue from other firm owners that Blake has interviewed on his podcast. The book reads less like management and ops theory and more like an entrepreneurial diary of dos & donts.

The #1 biggest takeaway was that Blake really hates the billable hour (i.e. charging customers after-the-fact for the hours you worked. Revenue = hours worked * hourly rate). It feels like the first third of the book was dedicated to this diatribe against the billable hour. The foreword was even penned by Ron Baker, the king of the subscription-based pricing model, which is supposed to supplant the outdated hourly model. The idea is that you offer customers a menu of services at a flat monthly/quarterly/annual rate. There’s no hours to track or utilization ratios to calculate. You simply deliver agreed-upon services at the same price every month, turning your customer from stale AR into an annuity. Clients love predictable billing and accounting firms love that efficiency gains are pure profit. Win, win right? Unfortunately, it seems like there is strong resistance in the accounting profession to adopting the subscription model because it’s tough to switch, brings up uncomfortable conversations about scope creep and is just a different way of doing business. I think that’s why Blake spends so much time harping on this point.

Lucky for me though, I started Hash Basis right when Ron Baker released his seminal book, Time’s Up!: The Subscription Business Model for Professional Firms. With the exception of a few one-off clients, we are a fully subscription-based company, with most clients paying a flat monthly or quarterly fee. Since we’re over three years into this model, I have some strong thoughts about it:

• Having one flat fee makes forecasting way simpler on our part. I can know with reasonable certainty what my revenue and profit will be for the year.
• The efficiency gains and accrued experience is where the profit lives. Most of our clients have been with us for years, so their monthly close now takes a third of the time it used to - but since we’re on a flat fee, our revenue has stayed the same (or increased since we periodically increase the flat fee). I can literally make more revenue and work less; plus the margins are insane and make the company an attractive acquisition. 
  
  • However, these gains didn’t happen overnight. It took me about 2-3 years to see the full benefit of the pricing model.
• Tracking hours is still useful; I need a sense for where my team members and I are spending our time, and I do calculate some rough numbers on where our hourly rate lands per customer. If a customer is below our internal average, I’ll raise their monthly fee.
• Scope creep is uncomfortable and raising prices is never easy. In the early days, I didn’t write my contracts and SOWs so well. They were loose and too all-encompassing. I’ve definitely given away free hours where I shouldn’t have…but at the same time, I’ve learned from those mistakes and my service tiers are more defined and narrow now.

Even though I skimmed through this section, there is one area we can definitely improve upon. I’m still sending QBO invoices on the first day of the month and waiting for our customers to pay us via wire or stablecoins. Most clients are quick and will pay by the fifth day, but there are others we need to chase (and chasing AR is the worst part of any business!). I’d like to switch to a more automated payments solution like Anchor, where the customer’s card is charged on Day 1 automatically, no chasing and no awkwardness. Still, to date we’ve only had to write off $845 worth of AR so it’s not a terrible process (especially since the firm is tiny still).

The next section of the book was all about staffing and how to attract and keep talented, happy people. My favorite section was about offshoring because we have a small international team at Hash Basis. The team is awesome, and we all work remotely - it’s a wonder of technology that I can make a Loom video for one of my accountants in the Philippines, and she can complete the task efficiently on her own time. Hash Basis started as a remote firm because it was the only work mode I’d ever known. While I had a few in-person internships at Deloitte in college, I hated it and found the commute, the stuffy/smelly dress code and office politics dreadful. I was considering giving up on accounting, but then covid happened and my first big-girl job was remote. Suddenly, I could avoid driving, be comfortable in my home clothes and be a productive wizard because no one was bothering me or talking loudly on a headset. That was back in 2020 and I’ve been an at-home remote warrior ever since.

Like the subscription-based model, I fell into a remote firm because I was in the right place and at the right age. However, almost 7 years later, I do wonder what it would be like to travel to an office and see coworkers in person…I often romanticize my husband’s office downtown and the camaraderie with his peers. But the grass is always greener, and I do love my flexibility. I don’t think I’d give that up for anything.

After staffing, Blake moved on to discussing opex and the actual costs involved when building an accounting firm. The first discussion, of course, was talking about your tech stack. I skipped this section because we’ve been on cloud solutions since Day 1. Our current stack includes:

• QBO and Intuit Proconnect
• Google Drive
• Double (practice management solution)
• Perplexity AI
• Docusign
• Mercury/Brex for banking
• Notion

Blake also discussed the value of having a niche, since serving the same type of client greatly simplifies your tech stack. As he writes, “Standardization is the key to low-cost, high-volume service.” As everyone knows, Hash Basis is a crypto accounting firm and we established ourselves as crypto experts since the beginning (and to this day, we’ve never worked with a non-crypto client). I’m so grateful for this niche and even though crypto is in a bear market right now, it hasn’t affected our profitability or reputation. If anything, I can charge premium prices because of our niche.

However, the one drawback with crypto accounting is that it’s tough, if not impossible, to standardize it, as Blake is claiming. Even though we’ve mainly limited our crypto subledger vendors to Koinly and Bitwave, that doesn't mean client workflows are identical and we certainly can’t have high, cookie-cutter volume. Each client is doing different activities on-chain across a wide spectrum of blockchains. This uniqueness is what makes the work interesting, but it also means standardizing isn’t practical. 

Although we can’t standardize the transaction types, we can definitely strive towards setting the same quality standard across the board. The chapter on quality management and quality control was my favorite part of the book, and although the writing was somewhat confusing, I got the gist. As a firm owner, I need to establish our goals and then align incentives and standards around that. It’s important to write down what your firm standards are and then compensate team members based on that. This past weekend, I brain-dumped into Perplexity for about thirty minutes, rambling about all the quality improvements and ideas I wanted to put in place - and then Perplexity organized my thoughts and created a quality management framework and bonus plan for me. It was brilliant! Our framework goes something like this:

As you can see, our standards relate to accuracy and efficiency. Perplexity also helped me build Reviewer and Preparer checklists that I’m integrating into Double so all accounting workflows live in one place. I’ve been able to run Hash Basis without a written quality framework before because I was the final reviewer on everything - the quality standards lived inside my own head. But now that I’m looking to delegate more work and hire a dedicated manager, it’s imperative to get my fussy standards out of my head and into Notion.

Blake also talked about automating your client onboarding process, which was less relevant for us because we don’t have the high volume he’s talking about. Our onboarding is still manual and bespoke, but due to our limited number of clients, it works for us. Related to manual onboarding is the topic of sales and marketing (which gets new clients in the door in the first place). Blake’s argument is that marketing should be envisaged as capex, not as opex (i.e. not literally, but you can think of it as capitalizing marketing spend on the balance sheet and amortizing it over the lifetime of the client, not just expensing it in the period incurred). I agree wholeheartedly with this sentiment because if you’re running your firm on a subscription-based pricing model, that just makes sense. You’re spending money to acquire a customer that’ll likely subscribe for a few years, so marketing spend should be matched to revenue during that time period. Like many small accounting firms, we don’t have any actual cash marketing spend at Hash Basis. Sure, I spend time writing articles, making YouTube videos and recording my podcast, but it’s mostly because I enjoy those activities and not because I’m trying to get new business. Nearly 100% of our new business comes from referrals, and I’m embarrassed to admit it, but I rarely check our Airtable intake form for new customers. Oops. 🫣

This ties directly into the chapter where Blake interviewed Keila Hill-Trawick, the founder of Little Fish Accounting. I’ve been keeping up with Little Fish since I started Hash Basis because I loved their website, values and overall vibe. Keila said, “From the beginning, I knew that I would have a small firm with a size limit that would protect the time and space of everyone who worked with me.” I resonate with that immensely because I’ve always said Hash Basis was a small, boutique accounting firm. I would sometimes feel bad or behind because I didn’t want to “grow at all costs,” but it’s my business. I often forget that I started this accounting firm to have freedom, flexibility and a chance to make a small dent in this vast universe. So we grow only when it feels right, not because I’m compelled to by outside forces.

The last section was entitled “How to Maximize the Value of your Firm,” which seemed almost at odds with the value of intentionally limiting your firm size in the previous chapter. However, there’s several actions that firm owners can take now to maximize value if the firm is sold:

• Switch to a subscription based model ✅
• Differentiate your firm somehow, either by being a market leader, category leader, niche leader ✅ or geography leader
• Be tech-enabled and digital ✅
• Have your own proprietary technology, in addition to using a normal tech stack ✅
  
  • I love this bullet point; with AI, we’ve been able to build so many custom tools for ourselves and our clients. I was initially building these apps to save time, but I realized they’re also building potential valuation

The expert in this chapter, Charles Bedard, had several useful nuggets to say about valuations and exits:

• “Firms can be valued in one of two ways: a multiple of top-line revenue (or recurring revenue) or a multiple of EBITDA…normal range is between 0.3 and 1.5 times revenue - maybe 2.0 for exceptional firms.”
• “All of the other assets and attributes of the firm - the culture, the team, the quality of the contracts, the quality of the customer base, the amount invested into the IP - are going to influence where they fall in that valuation range.”
• “The two most important things firm owners can do are protect the business and protect/build the valuation.”

The conversation was fascinating because I hadn’t thought about my exit plan or timeline before. I assumed that if I was tired of running Hash Basis, I’d just let it peeter out like a flame slowly suffocating. But I realized now that’s a suboptimal outcome, especially since I’ve poured so many youthful years and energy into this company. My biggest failing so far has been my lack of delegating - I’m still deep in the accounting weeds and I act less like a business owner and more like a cracked-out CPA. I enjoy technical accounting and writing articles, but I’m getting tired of counting my life in terms of month-end closes. This book made me realize it’s time to level up the business again, to create Hash Basis 3.0. My immediate takeaways are:

• Delegate the preparation and review of my work to contractors
  
  • My goal is 5-10 owner hours in the business per week
• Implement a formal quality management system tied to accuracy and efficiency → and tie compensation back to this QM framework
• Switch billing to an automated system like Anchor (eliminate AR)
• Start thinking about how I can build the Hash Basis valuation over the next few years, so when I’m ready to exit, I’ve got a polished jewel

Overall, Building a Sustainable Accounting Firm was a quick and insightful read. Thankfully, we’re already emulating most of the attributes of a modern firm, with a few tweaks mentioned above that can elevate us to new heights. The book felt more like a review than new content because I’ve been listening to Earmark CPE podcasts since I started Hash Basis. I’ve had this alpha on subscription pricing, offshoring, niching, etc for years because of these podcasts, so I’m truly grateful to Blake and his team for that. I’d love for the next book to be centered around implementing AI in your firm - I think this book was written before Claude came out, and my day-to-day has been completely revolutionized by these new tools. I’m curious to see how Hash Basis looks in a few years, when I’m merely the conductor of an agentic orchestra. 🤖🎶