EP83: Louie Prosperi - Why You Should Consider The Proactive Business Bookkeeping Model

The Institute of Certified Bookkeepers USA (ICB USA).

It promotes and maintains the standards of American bookkeeping as a profession through the establishment of relevant qualifications and the award of grades of membership that recognize academic attainment, working experience and competence.Our return guest, Louie Prosperi is the CEO of ICBUSA and his organization is helping its members by introducing The Proactive Business Bookkeeping Model to improve their success.

It's a program that ensures bookkeepers are consistently valuable to their clients and are running their businesses more efficiently.

During this interview, you'll also discover...

  • What are the 3 pillars of The Proactive Business Bookkeeping Model

  • The importance of having a 100% capacity to be successful

  • Focusing on what to do with your system and technology

To learn more about ICBUSA, visit here.

For ICBUSA's Facebook page, click here.

For its Facebook closed group, explore here.

For Louie Prosperi's Twitter, discover here.


Michael Palmer: 01:19 Welcome back to The Successful Bookkeeper podcast. I am your host, Michael Palmer, and today's show is going to be a great one. Our guest is the CEO of the Institute of Certified Bookkeepers USA or ICB USA for short, which is a different kind of association that is forward-thinking through its development of certifications, education, resources, and tools for its members so that they can be the bookkeepers of the future. Today he will tell us about an exciting new initiative that will be a game-changer for many of its members. And I'm sure you the listener, it's called the proactive bookkeeping business model and we're looking forward to hearing more about it. Louie Prosperi, welcome to the podcast.

Louie Prosperi: 02:02 Well, thank you very much, Michael. I'm very happy to be here and, uh, I, I really enjoy your podcast. I've listened to it many times and it's, it's a really good podcast for professional bookkeepers around the world, so

MP: 02:16 Thank you, Louie. I appreciate it. Yeah, I appreciate it. And you, and you're not a first-time guest, you've been on the show before, so I'm sure some listeners would have heard from you and learned about you. And so before we, we get into this conversation about the proactive bookkeeping business model, just share a little bit about yourself and the ICB and we'll go from there.

LP: 02:42 Well, a little bit about myself is that I've been in um, uh, proactive and pun on words. They're a person with regards to getting a bookkeeper's recognized and being recognized as the professionals. They are a through d associations that I've been involved with. Ah, one of the key focuses for us is certification. Uh, and making sure they recognize that that level. Now with regards to ICB USA, our tagline is bookkeepers of the future. What does that represent? Well, basically what ICB USA is trying to do or is doing is doing this in three different levels. One is the certification level. What I mean by that is a professional exam is constantly revised and updated so that every two years we make sure that when people take the program, it's not obsolete. So the individuals that are coming through our certification process are ready, enabled to meet the requirements of the customers that they're going to see today and tomorrow.

LP: 03:51 It also allows our professional members that already written the exam to make sure that their certification still has value by making sure that that is always forward-thinking. The other component is we redesigned our levels to be more comprehensive and to reflect the current technology challenges. For example, our, our, our entry-level was used as a certified bookkeeping technician is designed to acknowledge that people who take software who have been certified in software programs are basically recognized at a technician level because they can process and enter information. Our next level is where you've had education, uh, training and so forth, uh, through, uh, through a program of some sort. And our professional level recognizes what a lot of our professionals have learned through, which is through experience a lot of our professionals have learned their, their knowledge through hands-on. And that's what we've done with our professional levels.

LP: 04:54 So that's that component. The next component is to develop programs like the proactive business bookkeeping business model so that our members are able to get the tools and resources and be ready for what's to come. And the third is our is our communication or a community component, which is to develop communities through Facebook and other things that we're going to be developing, meet up groups that's going to be happening in the future so that our, our bookkeepers can collaborate. The great thing that we have that's very unique is we also have a global perspective because ICB is globally renowned. We have associations around the world. So our bookkeepers not only get the advantage of what we do in the u s but also, uh, what's happening worldwide. Absolutely. And ICB is the world's largest association for bookkeepers. Who's it? Not I, yes, it is. Uh, we have, um, over 150,000 members in over a hundred, in about 110. And we have, I think right now, 12 associations in 12 different countries, like the 12 separate associations.

MP: 06:05 Excellent. You know, I really love book the Tagline, bookkeepers of the future. What does that represent?

LP: 06:13 That basically represents where we are today. Uh, Michael, the reality is that our bookkeepers can no longer provide services that are backwards viewing or backwards thinking. The, the professional now is always forward-thinking. So what we as an association is we have to be the association for bookkeepers of the future. We have to be for those bookkeepers that gave the tools and resources. A great example is, uh, Ingrid Edstrom, uh, and an ICB USA had been working on the redefinition of what a professional bookkeeper is. Uh, we've looked at, uh, Ingrid's taking the lead on this and then, and we're supporting her 100%. She's looking at seeing if the Webster dictionary can be updated because the definition of a professional bookkeeper is, is no longer valid. It's is based on back in the old days where, you know, you had an advocate and you had paper, uh, Andrew Components, which no longer exists. So what we're doing is making sure that, that, uh, as an association, we keep the terminology and what a bookkeeper is and does a forward-thinking.

MP: 07:32 Beautiful. Oh, I love that. I love that there is associations like yours that are working to make the profession more relevant to small business owners. I mean it's, it really is such an important role to play to make sure that small business owners know that there are great people out there that can help them be empowered around their finances and can build stronger, uh, more fast-growing, uh, businesses. So anybody that is, and I know I've said this before on the podcast, but anybody that's a friend of small business is a friend of ours. And, uh, you're a big friend, Louie, cause you're doing that in so many ways and have been for so long. Well, I love that bookkeepers of the future and we're all working to help bookkeepers a, grow their business and as well help them grow their business so they can help so many more businesses corrodes such, right? It's such a fun thing to be working on, right? Every day is that we're changing the world by helping small business solve the world's problems. And, and uh, I just love thinking about that every day. But let's get into this proactive model of the word proactive. I mean it's, it's about thinking right now about tomorrow in the future in order to be prepared for whatever is to come.

MP: 08:56 But let's hear your perspective. Tell us a little bit more about what it is, although thanks for giving me this opportunity to speak about it.

LP: 09:10 One of the things that's interesting about the reason why we called it proactive is because a lot of business models are reactive. You know, we're, we're always reacting and we're always behind a technology and how it's impacting you indicated very, very, very correctly. The small business community and we are the servicers and providers of their financial aspects, core aspects of their, of their business. They have to think proactive, they have to look future-oriented and they're professionals have to too. So what a proactive model basically goes under where we're basically looking at what I call the three pillars of this model. The, the first pillar is called creative, creating customer value and customer value. If you really think about it, a lot of customers don't really look, you know, the history, it's important historical up to a certain point.

LP: 10:02 But their real value is what can we do going forward. So when they look for services, they're looking for forward-thinking services. So when we create customer value, we're automatically looking at it in a proactive method. The next component, which is very key because sometimes a lot of professionals, a bookkeepers and accountants as well have a really good way of talking and creating value at the front end. But then what you need is to deliver. So, and this is something that we've talked about Michael, with regards to the pure bookkeeping, which is having processes and systems in place to meet those customer expectations. And if you don't have those systems in place, it doesn't matter what you create, the front end, if you don't deliver at the end, it just doesn't work. So that's a critical component. And the third pillar, which is actually the new component that, that I think that businesses bookkeepers have to continuously look at is, uh, looking at the actual services they provide.

LP: 11:10 And making sure that they're creating and developing new services. The reality is technology keeps changing. What we provide and what we should do is be proactive and looking at what's out there and creating new services because that's the way we continue to be proactive. If we create customer value and have great systems, but the services that we're providing are no longer forward-thinking or Dow, they're obsolete or they're not up to date, then you're not completely being proactive. So for me, a proactive bookkeeping business model needs all three of these to be working effectively. They're good individually, don't get me wrong, you need to. But to be a true, proactive professional firm, you have to have all three of them.

MP: 11:53 It's a lot, you know, it at first glance, you know, anybody could look at, at a small business and think, oh, you know, you're just there doing the job that you do. It's a t, you know, you do the technical aspects of a job. But when we stepped back and we look at something like this, there's a lot to think about how you approach your business. And the different components and what I love. You've actually created a a hub and spoke visualization of what, what brings this model to life. Can you speak a little bit about the hub and spoke talk about hub and spoke and why it's so important.

LP: 12:29 Wow. So I guess you were listening to that last presentation I made. That's cool. Okay, so I call it the bookkeeper's business model. I, I've basically framed it into a wheel. And so it's Kinda hard to do this without visuals, but I'll try to do the, the hub, which is the, the center part of your focus usually is an individual or a system. And then the spokes are the domains, which is marketing, human resources, Admin, management, leadership, production. Those are your spokes. And the outer, the wheel component is actually your business. So if your hub is not strong or effective, what happens to your business? You get a work wheel or a collapses on itself, or if the spokes aren't attached to the wheel properly. So that's something that I'm, is very important in you. You need a strong hub. And this is one of the pillars that we talked about.

LP: 13:32 And uh, for me the hub has to be systems and processes. If you have it individually based, meaning that if it's key man and if that's, if that's what you have, whether it's the owner or two or three key employees, what happens if there's a change? They literally take the hub with them when they leave. And you have no, you have a weakened core which can have a huge impact on the success of your business. So would you want to make sure is you have a very solid hub and that should be your systems and processes.

MP: 14:04 Completely agree. And, and this is one of the areas that I absolutely love, have applied and have thought about for most of my life is how to make things run more smoothly, how to have things run better. How, because every time you do that, you're, that hub really is a core investment piece. It takes a lot of time to build system. It takes a lot of time to improve processes. But when you do it, it is an annuity. It's something that you're building. It's a big investment that if done correctly, that investment will continue on into the future.

LP: 14:38 Actually, Michael, what you said was actually very important.

MP: 14:43 I w w the, the core about the hub is that it actually brings value. It's not like a sunk cost. It actually, like if you ever, and I know Debbie has talked about this, which is the founder of Pure Bookkeeping systems, where when you created a, a very strong hub of systems and processes, it actually increases the value of your organization, which becomes an actual asset. So with a service business, it's probably one of the most critical components to add value. So it's not a waste of time, even if you're a one-person show or organization to spend time creating. And I'm a victim of it too. When I had my own practice, I was on my own. All my processes and systems are technically in my head, but it makes a big difference. Sorry for interrupting.

LP: 15:31 No, it's, it really is what, what I think it's perfect and, and it, it, it was, you know, just to speak to that it was all in your head. And, and when it's we've, we all suffer that every single person listening right now, there are components, even in an incredibly well run system driven business, there are still things that remain in the head, but the moment they do get out of the head, they get documented somewhere, whether it's basic or sophisticated documentation, it's now there and it can be improved. And that's the exciting part is that it's like wow, we, we improved by 1e-05% today. Yet that can be improved upon. And so I, I, I constantly could have to step back and go, don't overwhelm yourself wherever for, and this is for the listener, don't overwhelm yourself where you have zero systems or you have lots of systems.

MP: 16:27 The point is, is to think system that like Louis is saying, and I love this while I love the visual, is that that is the core. It's systems and process. If you can just start and improve and build better systems any way from whatever stage that you're at, it will be an investment that will create an asset in your business and a continually improving asset. So it's why I get excited about this to make sure people do. But you and I will, and I know there's a lot of listers that get excited about systems and process.

LP: 16:58 Well, to be quite honest, I'm not that excited about it, but it's amazing. Once you have it in place as a sole practitioner or an in you, you don't know how you would have lived with it. It's that important. But it sounded the technically you, you, it, it, it is a process. It is a grind to, to write this stuff out and to put it on paper by the, the, the efforts will be there. I just want to mention one thing with regards to the proactive model compared to a more traditional model. The proactive model is customer-centric. And what I mean by that is that all three pillars are based on customer's expectations. They're not, it's all about creating customer value, meeting customer expectations and creating services that meet their wants and needs. So you're always going outwards to find the answer because customer-centric means that it's external from your system.

LP: 17:56 Uh, the customer is not an internal component. The traditional system model that, that a lot of professionals have is what we call eye pop. Um, and I might get some flack on this, but that's okay. There's going to be a lot of cost accountants out there. Uh, the cost accounting approach or cost-plus model, which bases everything on internal input costs. When we create a service, we base it on how much time it's put in and how much energy, what, what the hourly rates are and so forth. But the reality, none of that is creating any value. So when we look at the services and we look at how well we're delivering our services, right? Which is why we created internally. If we don't look at what the results are with the customer, meaning what's the customer's feedback rather than we delivered on this service and we hit the deadline and all that, that doesn't mean anything when you just focus on the service, which I think is still internal. So the proactive bookkeeping model, business model, one of the core components is customer-centric. It's an external looking model. It doesn't focus on the internals.

MP: 19:13 All right, beautiful. I think it, it, at the end of the day, our customers are what keep our businesses alive in any, any industry. And so it's the right direction and it's a direction that takes more time. It takes more uh, investigation. But again, it's like that asset you were talking about when you do it that way, the longterm effect is incredible wealth creation inside of your business because you're delivering a higher level of value. So I completely love it. Louie, what in your opinion, what systems and processes are important in this customer-centric model?

LP: 19:53 Well, um, for one of the key components is you have to have a system in process to create customer value. Um, I am a proponent of Ron Baker's, um, methods. I read his books. He's a great friend of mine and I and the various ages institute is a great resource for anyone. Um, that system of creating value based on the customer conversation and providing options and looking at what each individual customer is looking for. Because there is no commodity-based system when you're providing bookkeeping services to a small business owner. Because even though you in a bookkeepers and accountants know this, each business is, even though it might be in the same industry, the people are different, that owner's different. The, the structure is different. His, his market based is different. So you can never just cookie-cut and say this is good for everyone.

LP: 20:56 It did so well. You have to do is you have to have a system in place to make sure you're curator. You are actually creating customer value correctly at properly. The second component of the second set of systems, I'm not going to go into each individual, but I'm just giving you the groups for now. The second set of systems, which are really important and this is part of your hub, all of these systems are part of your hub. But this one here is, is meeting those expectations. So I call this your quality control level or a, uh, you know, final product component. So once you've developed the customer values, now you have to literally produce the end result and make sure it comes exactly as the scope was developed and if there's changes that you do, the changes and everything's documented and properly. So that's the second series of systems. The, the third system is basically what you do to run your business. Like, you know, administrative systems, uh, HR systems. And, uh, the, the one that I think everybody, every organization should have is a, is a system to review your, your services and making sure that you're always up to date. Techniques could be a technology slash service system process. But those are probably the three components that I can think of that if you have systems in place for all three of these, I think you're doing quite well.

MP: 22:23 Yeah. You know, speaking of looking at your technology and your systems, let's talk a little bit about technology and how technology has that impacted the profession.

LP: 22:36 Well, if you haven't realized that, if you're a professional bookkeeper, accountant hasn't realized that technology's impacted your, your business a, you probably still using pen and paper, you know, because yeah. Yeah. Because technically if you're on a computer and if you're using software to, to help your, your customers, technology is going to impact you greatly. We know that the cloud now, the cloud-based technology, well that's now already can becoming uh, it's not even future-oriented right now. It's not even current. It's actually past, right? It's something that's, that's already prebuilt into our, our DNA right here. Almost everybody's providing some sort of, some sort of cloud service technology or cloud service functionings and that's to me is already in the back mirror or in the, in the back seat at least. Uh, what's going on now is I'm providing services that are future-oriented.

LP: 23:35 So you're providing results-based services. And the thing that I think that a just a couple of years ago when I was talking about this, I said, you know, the next step would be a little keeping an accounting app-based technology is going to take over, right? That was two years ago. I said that. And right now if you, if you know all of the different apps that attached to not only just your, your software but to your customers components and how AI is having a significant impact on how things are being done today, it's what's what I find that, what I find you need to have this proactive model is because the technology actually helps you because it allows you to look at what are the new services that are professional bookkeeper needs to do now. Right? And the technology will give you the, the answers to that and those services. We'll be there. And you, as long as you're not looking only on, on historical related, um, technology or services, uh, you're going to have a very, very fruitful future. I wouldn't be afraid of AI right now because it actually allows me to do a lot of analysis with the information and provide even more information to, to, to the, to the PR, to the small business owner. And as they're getting more complex in their business or they need more information, concise information related to their specific needs.

MP: 25:07 Yeah, I completely agree. And, and you know, come back to the customer-centric is, is, is the continue to go back and, and really the point is to help business owners grow their business. And so as things change, technology change changes, it's changing for them as well. The world is changing. So how do we, but it's not changing. People aren't there to say, hey, how can we make world worse? How can we make things run more slowly? Right? Everybody at now, some of it does not work or it does make the world worse. We could have those conversations, but the intent is to improve, to improve, to bring efficiencies. I mean that's been going on since the beginning of time is how we wake up today and do things better than we did them yesterday. So that's, that's happening today. We would be able to say that it's moving faster, we're able to move way further in a given day today because of technology that we built yesterday that's helping us make today even more improved, improved.

LP: 26:08 So it's, it is, I think it's important for everybody goes, stop and go, okay, yes, this is change. Humans don't like change typically, but I can either decide to embrace the change and say, look, I, I'd rather have comfort, wouldn't we all right, but embrace that this is, this change is meant to improve. It's meant to improve it. For you to listen, listener, it's meant to improve it for your clients. And so I think lily, we would both agree that this type of thought of conversation needs to be part of, of if not a weekly, at least monthly, where you sit back and have a cup of tea and go, okay, what's happening? Where do I need to be putting my attention? What's changes is going on, what changes happening that can help me and leverage it and dip the toe in the pool. It's never going to be like, tomorrow we wake up and we've figured everything out.

MP: 27:02 Um, but I hear so many of our listeners when, when I'm having conversations with them, say, Oh, you know, it's hard to keep up with everything and you know, I have, you know, it's, it's changed and all these things are changing and I'm not sure which way to go, but then I might talk to them months later and they're like, yeah, I checked that out and wow, it's really cool and it's helping my, my business and it's improving. It's helping me do these sorts of things. So any change or anything new it does have, there is a barrier. It's a barrier to take that leap into it. So I think it's an invitation to, for people to say to listener, hey, spend a bit of time, embrace this stuff.

LP: 27:37 Well since we're talking about, um, our professional bookkeepers out there, the, one of the key factors that this is this component that we just talked about and a lot of this is working on your business, not working in your business. I know you've heard that a lot of times. So the interesting thing about working on your business, one of the things that you should always look at is your, your capacity. Because a rule of thumb, if you're at a hundred, 110% of capacity, you'll never be able to work on your business and you'll never be able to develop a proactive model because your capacity you should have about, you should be at 70 to 75% of capacity, which I mean is, is the amount of work that can go through the system. You need that, that extra capacity to deal with emergencies that come up with particularly key customers that need something right away.

LP: 28:36 You know, if you, if you don't have that component, it might hurt your customer base, particularly the ones that needs quick and reliable stuff and you need that capacity. The second component is basically what we're talking about. You have to have that capacity so you can take a breather and focus on what you need to do with your, with your systems and with the technology and all of this stuff we talked about today. If you don't have that capacity, you'll never work on your business and then you'll end up two years, three years later you'll be adopting things because you have no choice because everybody's pushing you along. You're not leading the pack, you're being pushed along because you're always at a hundred 110 capacity. That's, and that's a tough thing to do because we all know at a hundred percent capacity you make, you're kind of making more money because you're charging more or whatever, but short term gain will might hurt you longterm.

LP: 29:31 So take that into consideration. If you're already at a high level of capacity, you might want to look at some of the things. One of the things I would definitely look at if you're already at a hundred percent capacity is your customer base and take a look at, um, what I call the 80 20 rule. 80% of your reasons, resources and time would probably be at 20% of your customer base. And that 20% generally is the generally is that the bottom part of your revenue base? So it's a good way to free up some time is to let go of some of the customers that are at the low end of a revenue stream, but at the high end of your time functions and we can go on, I mean to delve into that, that's, that's an hour session on its own.

MP: 30:26 So, I think that is a, an invitation I'm going to make, I'm going to say, Louie, can you come back because I love this conversation. I'm sure you know the 80 20 and you know that's a whole nother episode and I'm sure that we've piqued the interest and everybody's like, no, no, keep talking about that. Yes, I want to get rid of the customers that are taking up all my time, but not making me any money. So stay tuned, listener. There will be an episode in the future with Louie and we're going to talk about this and we're almost up on time. Louie, this has been fantastic and I just want to say, I think if our listener, if you're listening right now going, gee, I don't know, watch where to start, what to do, you know, all these changes. Look, there's other people going through this and, and the ICB is a place where there's other bookkeepers like you that are preparing for the future and committed to being bookkeepers of the future and to being proactive about how they run their business and build their business. So that's a great place to start, is to go and hang out with other people that are ambitious, excited, passionate about what they're doing, passionate about helping business owners grow. And if those are the type of people you'd like to surround yourself with, then I would recommend that you learn more from Lillian. How you can do that. Louie, what's the best way for them to learn more about ICB USA if they've not already done so?

LP: 31:51 Well, there's ICbusa.org, which is our website. You can go there, particularly if you're interested in becoming certified and being certified with having a certification that's more international because we have certifications all over the world. And also we're the largest organization around. So if you want to do that when you do have over a 20-year history, the other components, you can look at our Facebook, we have two Facebooks, we have a closed group and another fee. And then Facebook. Take a look at that and join those two. And you can also just email our member services, uh, and ask for questions and we'll definitely help you out that if we can help you, we'll try to make sure that we can find someone to help you.

MP: 32:33 Beautiful. Yeah, that's great. And we're going to have links to go and find those groups and find out more about ICB USA. Louie, this has been great. Uh, I know we've already teed up another conversation, which we will, we will do in the future. Uh, thank you so much for, for sharing your time with all of us today.

LP: 32:54 Michael, this was, this was a lot of fun. Uh, you know, just like, uh, when you're talking about your passions, it's not really hard at all. It's what you try to do is not to talk too much. Right. Keep it, keep it central and focused. But, uh, I really enjoyed it then and Michael, just keep up this podcast. I think the success of bookkeeper is, is a great podcast. And I know from my travels to, uh, to the UK, um, there were, uh, there was, uh, a course or, um, a session at the ICB UK conference and they referenced this podcast as one of their sources for bookkeepers. So you're doing a great job and it's not just reaching North America. It's, it's, it's worldwide. So thank you though.

MP: 33:37 Thank you. I appreciate it. It is amazing how the a, the word gets out there and, and, uh, like you say about the passions that, uh, we try not to go overboard, but we try and be as clear as we can. And sometimes when we get passionate, it's still fun lights. So yeah, fair enough.

LP: 33:46 Yeah, as good.

MP: 33:47 So that wraps another episode of The Successful Bookkeeper podcast. To learn more about today's guest and to get access to all sorts of valuable free business-building resources, you can go to Thesuccessfulbookkeeper.com. Until next time,

MP: 34:10 goodbye.