Business Innovators Radio - Interview with Lee Knoll Managing Partner of Knoll & Company -Next Generation CPA Firm Discussing Simplifying Tax and Accounting

Episode Date: July 11, 2024

An experienced CPA, Lee has worked in the accounting profession for over 30 years advising clients in small businesses, estates, and trusts and being an Advanced QuickBooks Certified ProAdvisor, QuickBooks Online Certified, and Bill.com guru. He has advanced expertise in working with businesses in the real estate, transportation, legal industry, and professional services industries.Learn More: https://www.knollcpa.com/License#16945Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-lee-knoll-managing-partner-of-knoll-company-next-generation-cpa-firm-discussing-simplifying-tax-and-accounting

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Lee Knoll, who's the managing partner of Nolan Company, next generation CPA firm, and we'll be talking about simplifying your tax and accounting needs. Lee, welcome back to the program. Hi, Mike. Glad to be back.

Hey, so, you know, certain, from a marketing standpoint, certain words just kind of set people's minds at ease, like easy and fast and simple. So I think it is so interesting that you're going to talk about simplifying your tax and accounting needs because probably when people hear the word tax and accounting, their stomach starts to nod up. So talk a little bit about what you guys do to simplify people's tax and accounting needs? Well, we like to think we're kind of more on the cutting edge of technology where it comes to for accounting and tax. I'm trying to come up with the latest technology to deliver our services,

whether it's on the tax side or the accounting side. that's really where the next generation comes from next generation C-Pay firm. It's just simplification because what's the alternative of that? Is people being really confused and complicated, right? Exactly. And bringing in shoeboxes of paper and old handwritten ledgers that you can't read and stuff like that. So why is it that people still do that

when there's some great tools out there? Probably because it's hard to change. People do not like change. Over the last couple of years, we've had an increase in the amount of people that have, for example, they've got on board with client portals and are more comfortable uploading documents to us than they were a couple years ago.

And I think the pandemic had a lot to do with that because they were literally forced to do that. And now they're like, why wasn't I doing this before? Right. Because they didn't realize how easy it is. And it really is easy to upload documents to us. now. And that's really what we try to make it. And as easy as possible to get us documents,

easy to ask us questions, keep it all secure. So all the communication is in one spot. You can find it easy. We don't use email anymore, for example. So we just try to use the late, latest technology is basically what we try to keep up on. Yeah, so let's talk about that because I think when people hear technology and you're talking about, you know, you kind of mentioned tongue-in-cheek shoeboxes, but probably there's people that

still bring receipts in the shoeboxes, which that's a whole other story. But I think those kind of people that are used to just doing things a certain way, or here's an Excel file or, you know, let me send you this, you know, email or whatnot, when they hear the word technology, that kind of is a concern for them. So talk a little bit about the tech that you guys use and how you show people how to use it and then how that will actually help ease their stress in dealing with their taxes and accounting and what that does for them. So what tech are you using? For all clients, we set up a client portal, which our platform we use is called Lysio, which is basically clients can upload documents.

We deliver tax returns, financials, anything we prepare for the clients, and we also communicate to clients. We send them tasks while we're missing on tax returns, questions, and so it's all trackable. And they also automatically get a reminder every Wednesday if they have not. got us the information yet. Hmm. Okay. So it kind of keeps everyone on on track anyway. For sure.

Well, and I think that's a, we can get annoyed at tech because we all do. Or we can allow it to help nudge us along. And I really like that point that you bring up about reminders because sometimes people are really, really, really, um, interested in getting reminded because life gets so busy. So those reminders are so huge. That's really, really powerful. Talk a little bit about that client portal that you mentioned. How does that work? And what are the benefits to the client? Well, all documents that in any file that they ever give us, or we prepare is stored in online. so we can give them ready access no matter where they're at in the world as long as there's an internet connection

and they can communicate with us and there's also a and there's an app for your phone so they can actually literally just take a picture of a document and it gets transformed into PDF and uploaded to our website and we get notified that there's a document that's been uploaded it. Oh, no, that's really powerful. So taking a picture of something and then having it automatically upload is just really, really cool. Yeah, it is definitely, it's one of my favorite things.

And the clients they use it, they absolutely love it. And especially turning it into PDF, it's not a JPEG because JPECs can be hard to read. The PDF, turn in, the PDF is really valuable on our end. Yeah, that's more usable. So the client portal that keeps you from having to use email. Now, the easiness is, I live on email, so I want to send emails back and forth. But the negative of that could be what you're sharing with your accountant could potentially be sensitive data. And you don't want to have that exposed.

So doesn't that provide some kind of benefit of protection to the client? client. Yeah, it's really security protection. And some states actually, it's illegal to send sensitive data through email, actually. Colorado is not one of them, but some states it's you can't do that even. Wow. So, yeah, so it helps with that. Yeah, it takes out the sensitivity. Now, if a client does send us a, you email, which is also kind of cool. It actually, we have our Lysio hooked up to our email so we can actually see the email inside Lysio. So it's actually tied to their account inside Lysio if they actually do send us an email. So people can still use email, but it's just within your client portal and that keeps the

protection there. Yeah. If for whatever reason they send an email. We don't get very many that do, but occasionally they do send an email. And the only time that you really need to send any sort of email is if you're like CCing someone that's not a client, like maybe it's a banker that's not a client or there's multiple people being CCed and they're not clients. but we can send that email inside Lysio so it's tied to their account and all that stuff if we need to. But generally, we don't send emails.

And actually, on my email, I got it. I say I don't really accept email. So if you're sending me an email, please call or if you're a client, please log into Lysio. Yeah. And so occasionally I'll get a client that will send me an email and then pretty soon they'll log into Lycio and send me the message. Yep. So we'll figure it out one way or the other. So what's another piece of tech that you guys are using that helps simplify the process? Of course for tax returns we use e-signature you can sign for your tax return right inside LISIO and then it sends us the signed documents right back. We get notified that the tax return was signed and then we can electronically.

So that's huge. We can also get engagement letters signed inside the. So basically all the e-signatures are you, we can get anything signed electronic that we want inside Lysio. So that's another advantage that we use there. Let's see. Another couple other tech would be for on the counting side, we use one called bill.com. And that's really for payable. If the client has a, they pay a lot of bills by check or it could be ACH too, but they could have more than, say, 40 bills a month.

It probably makes sense to use a platform like bill.com to pay bills, which honestly, we don't have too many clients that that applies to anymore because with the proliferation of with debit cards and setting up all the vendors on ACH and stuff and credit cards, that just doesn't happen very often anymore. Everything's paid electronic for the most part. We don't really have a lot of clients that use that platform anymore, at least for the smaller businesses. Some bigger businesses are still using it. But what's nice about is if you get a bill from a client, or if the client gets a bill, they either can forward the bill to bell.com.

And the AI works and it basically enters all the data for you. So it automatically enters it. All you have to do is go in and hit create bill and then approve it. pay it. So you don't have to do, in a lot of cases, a lot of data and entry either. So that's really what's nice about some of those features on that. Yes, simplicity and keeping things easy. I think that is spectacular. So being able to have some of these aspects of communication taken care of as well as bills and invoicing. And back in the day, you know, you'd open up a word document and type up an invoice and drop it in the mail and now it's like click click send and

dropping right into your quick books and that is just so spectacular what about you know like what i was jokingly mentioning before you know like all these receipts people just throw a receipt in a box do you have anything that can help simplify and streamline that yeah that's um that's called dext um and what that that works similar to the way bill dot com does um you for you can forward it to an email and the AI works and if it's a vendor that's been used before it picks it up and you can have rules and it enters most of it. You go in and review it and then you can publish it to if it's a debit card transaction or an ACH transaction or whatever it is, you can publish it to QuickBooks Online and the transaction ends up in QuickBooks Online and the receipt is tied in

there and you can see the receipt and So it gets the receipts so you don't have to save the receipts You can get rid of the receipts right away and there's an app for your phone that again you take a picture of the receipt and you get rid of the receipt Yeah. So you don't have a shoebox of receipts at the end of the year. Yes. Yeah, so that's really nice.

And again, there's no, eliminate some of the data entry points too. Plus, you've got the receipt so you know exactly what it's for. So that's really helpful. And that was Dext doc. And that's called Dext. The E-X-T. D-E-X-T, yes. Yep.

Excellent. That's awesome. So now let's talk a little bit about, you know, simplifying tax and accounting, like the next step. So these are great tech tools and that's wonderful. And I'm sure you've got a way to help explain it to people so they get used to it. But then let's say that you are, or let me ask you the question, are you watching for opportunities to point out to people? Because so many times you don't know what you don't know. And here as a business owner, they don't know how to do both.

keeping your taxes. That's why they hire you. But do you sit down at a point in time where it's doing taxes or, you know, a couple times a year and look at opportunities and say, hey, you might want to consider this? Yes, we, yes, we do. If there's, we try to come up with the basically the most efficient, on the county side, the most efficient way to do something. we're always looking for efficient ways to process that eliminate time and so forth saves everyone time so yeah if there's an app or whatever their problem may be on the accounting side that they need help with whether it's recording sales if they're doing some sort of retail sales or like if they're a vendor booth at a if they have a vendor booth at some fair or something like that

what's the best way to collect collect money from sales at the fair or whatever so stuff like that we're always trying to find a simplified method to do it on the tax side um yeah we look look at the prior return. If, for example, or if they call us up and there's the big one that's coming up lately is if they're buying a rental property, we usually recommend that they look into getting what's called a cost segregation study, which basically allows you to, um, basically come up with the different components of the building and put different lives on the, like the cabinets in the bathroom and the kitchen have a different life than just the

27 and half year life of the building or the 39 year life of the building. And if you can get a shorter life on some of the depressiveable acids, you can write them off quicker, in essence, saving your, saving tax dollars. And accelerate the depreciation, in other words. Yes. And so, yeah, and so in some cases, if you're buying a big apartment building, I've seen cases where the depreciation in the first year has been about $600,000 if it's a big apartment building, if they have had a cost segregation study.

And so that's a huge savings. Because it writes off against ordinary income, and it probably saves them a lot of tax for a few years anyway. But yeah, so that's kind of, that's probably the biggest thing on the tax side. Then if they're, then the other thing is looking at capital gain rates is the, other one that you penny in. And then the other one is, another big one is when to pull money out of retirement. Yeah.

When to start pulling money out or converting it to Roth. So you can get the most bang for your tax dollars. You know, that's a really big, you bring that point up and we don't want to get into the weeds. But I do work with a lot of financial planners that talk about Roth conversions, where hey, you've got money in an IRA that's not been taxed. We know that taxes are the lowest they're going to be in probably a decade, given, you know, the deficit in government spending and all of those things. Nobody knows. But would a Roth conversion work where you pull money out of an IRA that's not been taxed? You take the tax hit this year and you put it in the Roth so it can grow. And again, without talking about that specific strategy, I want to ask you the question. That is something that you can work with that business owner to say, this is. could be an opportunity for you. You know, Lee Knoll and Nolan Company are looking at opportunities kind of looking down the road to say, hey, we should talk about this. We should consider this. And it's the business owner, like we said a minute ago, you don't know what you don't know.

So they don't even realize some of these opportunities that you're able to bring up to them. Exactly right. Yeah, that's exactly how we look at it. well i think that uh is there is there any other kind of like final thoughts on um things that you're looking forward to bring up to them like you mentioned cost segregation but what about even um one thing that that comes to my mind what if you have a lot of accounts payable and they're just piling up and piling up and people are paying on their own sweet time but you need cash flow do you have a way to bring up an opportunity to help close that gap um You mean accounts receivable?

Yeah, I said it the opposite way. Right. Yeah, the business owner has billed a bunch of people. They need the money, but there are people that owe money to the business are taking their own sweet time paying. So is there some way that the business owner can somehow turn those accounts receivables into quicker cash? Yeah, yeah, they can basically more or less sell the receivables. and get the cash today versus waiting for it, factoring the receivables.

So I do have a couple of clients that do do that. But yeah, so we do have a way to do that. If that's an issue, it's usually on the, yeah, it's on the ones that have a large accounts receivable balance that will do that. and it's yes and it and they only usually do it on a few of the receivables they usually don't do it on everything yeah it's do it on the one that they know case by case yeah it's there's not there's never one solution for every business but i think that when they realize that they've got an accountant who is working for them with them providing simple streamlined processes and watching out for opportunities

that sets their mind at ease. Yeah, that's right, Mike. Well, I tell you what, Lee, this has been really helpful. If someone is listening to this thinking maybe they should get like a second opinion, hey, Lee, can you take a look at what we're currently doing and what could you guys do? How could they learn more about Nolan Company and then also reach out and connect with you? They can go to nullcpaid.com. They can reach us at by phone at 303.

3238-9673 or email null CPA at nolcpa.com. Excellent. Well, Lee, thank you so much for coming back on today. It's been a real pleasure. Appreciate it, Mike. Thank you. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, Visit www. www. Influential EntrepreneursRadio.com.