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TfP 013. When Purpose Meets Innovation · Transforming: Tales of Business Evolution

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Voice: Welcome to
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"Transforming: Tales of Business Evolution",
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where we delve into the dynamic world
0:10
of business transformation.
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Each episode is designed
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for firms of any size and scale,
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exploring both innovative long-term planning
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and day-to-day operating practices
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that help organizations adapt
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to a changing landscape.
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Join us each month
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as we hear from leaders in
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the public accounting profession
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sharing their experiences
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of reshaping their business models and
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inspiring you to explore new ways
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to evolve your own organization.
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Let's dive into this month's conversation now.
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Erin Hartman: Hi. I'm Erin Hartman,
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Senior Manager with the Firm Services team,
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and I'm happy to be here with Argel Sabillo,
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founder, owner, CEO of HeyApril.
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We're at Engage,
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and we were able to take a few minutes
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to have a conversation.
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Thank you for joining me, Argel.
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Argel Sabillo: I'm happy to be here.
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Erin Hartman: I've been wanting to talk to Argel
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for a while now.
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I met him probably about a year ago
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at one of our networking group meetings.
1:04
He was new to the group.
1:05
We had a conversation about AI
1:07
one night at dinner,
1:08
and I thought Argel is the future.
1:11
He is utilizing AI and understanding AI
1:15
in a way that a lot of us are just
1:18
starting to think about what is going on,
1:20
so I know our audience
1:22
will love to hear from you,
1:24
so thanks for being willing to talk to us.
1:26
If you want to start just telling us
1:28
about HeyApril,
1:29
how it started and your whole journey.
1:31
Argel Sabillo: Sure. First, HeyApril is an accounting firm
1:34
for startups.
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We're about 800,000 in revenue today,
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and we have about 20 employees.
1:41
We have offices
1:42
both in LA and in the Philippines,
1:45
and we primarily work with,
1:47
basically, the startup economy,
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including all the creative agencies
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that are supporting those startups.
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We really have to look at
1:56
our business model very differently,
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because startups have very different needs,
2:00
especially at the early stages.
2:02
They want high-quality support,
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but they also want accessible pricing,
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and so we can dig deeper into
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how we tried to solve that
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with our offshoring team
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but also how we're using technology and
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everything I've learned at Big Four
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to build what is HeyApril today.
2:18
Erin Hartman: High-quality and accessible pricing.
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Argel Sabillo: That's a hard to do.
2:22
Erin Hartman: It is hard to do, but you've done it.
2:24
We like to talk a lot about firms of the future,
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I keep using the word future,
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but this is the transforming podcast.
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We do like to talk about
2:32
the traditional firm is
2:34
very volume and deadline-driven,
2:37
which creates the "I'm working 80 hours a week
2:41
because there's no other way to do it.
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I need to keep all these clients
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because each of them themselves
2:47
is not that profitable."
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I think you've solved a lot of that.
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You do not have what I would consider
2:54
a traditional accounting firm.
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I'd love you to talk about your journey.
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I know you started at Deloitte
3:00
at some point, got experience there,
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but if you decide where to start,
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I want you to start back in the Philippines,
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how you got here.
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Argel Sabillo: When I think about
3:09
what we're trying to build,
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it's coming from my own pain point
3:13
that I want to solve.
3:14
That's why it's always been non-traditional
3:16
because, obviously, if it was solved,
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then I wouldn't have the pain point
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that I've had.
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That pain point goes way back to
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when I graduated from high school.
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As you alluded to, I came to the US.
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I was 15 when I did that,
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so I was in high school.
3:31
Right after I graduated from high school,
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I was growing up with a single mom,
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and we were evicted in our apartment,
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and so I acted quickly,
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and I bought her a house,
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where she's still housed today.
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I'm very proud of that.
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I had to work three jobs to do that.
3:48
One day, I got a notice from the IRS,
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and I didn't know anything about
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what I'm looking at.
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I was scared. I was 19.
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Erin Hartman: In the US.
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Argel Sabillo: I was in the US with three jobs.
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I thought I was already overpaying my taxes.
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A lot of it is really just
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lack of education on my end,
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but there was no access to that for me
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at that time.
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That moment for me really changed.
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Erin Hartman: The silver lining of that moment
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was your mission.
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Argel Sabillo: That's when I made a personal mission
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that I'm going to learn and master the system.
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What I did after that was,
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really, I quit my job.
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Erin Hartman: What you mean in mastering the system
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is really being able to offer
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tax advisory services.
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Argel Sabillo: Not at that time.
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I was 19.
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I wanted to learn everything I could
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about taxes and
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how rich people can take advantage of
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saving money on taxes
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that I felt like I didn't have access to that,
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so I wanted to pursue that,
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and I wanted to learn not just for me
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but people in my community,
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so that became a personal mission for me.
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That's when I was, like,
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I want to work for the biggest and
4:59
the best company in the world.
5:01
I didn't even know Big Four at this time.
5:03
That's when I got serious,
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and at this time, I already had traded
5:08
those three jobs with a job at the post office,
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so at age 20 or so, I already had a career.
5:15
I was already making pretty good money
5:17
that I could retire as a postal worker.
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I was doing that for three years,
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and I finally got serious.
5:22
I quit that job,
5:22
and I moved to San Francisco and
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put myself to school.
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I grew up in Sacramento.
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I still had to work part-time.
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I was working at Wells Fargo.
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Erin Hartman: That was a leap of faith.
5:34
Argel Sabillo: I had multiple leap of faiths in my career.
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Erin Hartman: I see that. That's a trend.
5:39
Argel Sabillo: It started there,
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take a leap of faith,
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and basically work part-time at
5:45
Wells Fargo because
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I was still supporting my mom at this time.
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I went ahead and graduated cum laude
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at the University of San Francisco.
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I started internship at Grant Thornton,
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and then I started my job at Deloitte.
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I had an offer a Grant Thornton in San Francisco,
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but my wife, who at that time was my girlfriend,
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had her career start in Los Angeles.
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I couldn't transfer to another GT office.
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I asked but that wasn't something
6:13
that they had available,
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and so I took another leap of faith,
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and I rescinded my offer in
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the middle of the financial crisis.
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That's when I was lucky enough
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to land a job at Deloitte
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because of my mentor.
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Okorie's mentee is Erick Bell,
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who was my professor
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at the University of San Francisco,
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who invited me to go on
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this volunteer opportunity to mentor
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high school kids from underserved background
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to learn about accounting and see the Big Four,
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and that was life changing for me.
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From there, I was able to, at least,
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get an interview with Deloitte,
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and then I got it.
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I always try to pay it forward
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to the profession. That's why I volunteer.
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That's why I'm here right now.
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This profession has given so much to me,
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and every day, I just want to pay it forward.
7:01
Erin Hartman: Networking is just going back
7:02
to that whole high school.
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It starts then getting to students
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younger than their junior year of college.
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I think that can be very helpful,
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and you definitely are paying it forward.
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Argel Sabillo: I agree. I think if we start early
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in the profession to show them the application,
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how this could be useful in the real world
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and not just the number.
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Erin Hartman: Not the stereotypical accountant
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that people think of
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sitting in a dark room by themselves,
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crunching numbers and
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miserable from January to April.
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You seem so excited.
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You're such an entrepreneur,
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Argel Sabillo: but you're so excited,
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Erin Hartman: and people seeing that,
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they want to emulate that.
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They want to do that.
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That's exciting.
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Argel Sabillo: To me, I found out that there
7:48
are others like me who are stressed about,
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whether it's their business or even
7:54
working for someone,
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and then they owed so much money
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at the end of the year,
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so it really just became a passion for me
8:01
because so many people
8:02
are so afraid of taxes that I'm, like,
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hey, one, I'll always have a job,
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and two, it's just fun to be the one
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that you go to for tax advice and
8:12
unlocking $20,000, $30,000 in savings.
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That feels good as a profession.
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Something that I took a class on
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or I went to school for, got my license,
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and got my experience
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is directly impacting someone one-to-one.
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They feel much better about their business.
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That's why when I left Deloitte,
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this is when I started my first startup.
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Erin Hartman: You left Deloitte because
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you were going to start this.
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Argel Sabillo: It's because, I always said,
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I am going to bring it to my community.
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At that point, I was five-plus years in.
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This was between 2012-2014.
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If you remember, at that time,
8:47
there was so much pushback to
8:49
corporations are corrupt,
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and everyone felt like, what can I do?
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That actually makes a difference.
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That's when I left Big Four.
8:58
During that time, I was working for
9:00
anywhere from startups
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all the way to Fortune 500 companies.
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I was getting a lot of exposure,
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but I thought it was time to leave
9:08
and democratize this.
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That's when, with my first startup,
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I created a way to
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automate bookkeeping and taxes
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for the gig economy.
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This is also around the time when
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Uber started, Airbnb started,
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and as you can tell,
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it was really complicated
9:25
to try to run your books
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when you're self-employed
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and to do your taxes.
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Erin Hartman: It's a whole another job.
9:32
Argel Sabillo: It's a whole another job,
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so that's what we were trying to solve
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at that time,
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but at that time, we were experimenting
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with large language model,
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with machine learning,
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and that was 10 years ago,
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so the technology wasn't there yet.
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That's when I decided to pivot,
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and that's when HeyApril's basically
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[inaudible] from there.
9:53
Erin Hartman: HeyApril was born,
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and it's not your typical accounting firm.
9:58
Argel Sabillo: Yes. The pivot basically was, like,
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we didn't fail because there was no need for it.
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We failed because the technology was not there yet
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of what I'm envisioning what a tax optimization
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that's also doing your bookkeeping is.
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When I pivoted, I was, like,
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I'm just going to set up an accounting firm
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so that I can learn so much about the industry.
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I can learn so much firsthand on why is it so
10:26
hard for firms to deliver value to their clients?
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Why is it so hard to have a working workflow?
10:32
Why is it always breaking?
10:34
All of these issues that firms are facing,
10:36
I wanted to learn firsthand because
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I left Deloitte and then started an app.
10:41
I really didn't have firsthand experience
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on how to run a firm.
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Erin Hartman: Then hopefully,
10:45
while you're figuring this out,
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technology will catch up
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to what's going on in your mind.
10:49
Argel Sabillo: Yes, exactly,
10:50
and that's where I feel like it is now,
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but eight years that I have my firm,
10:55
we experimented many times on
10:57
how to ultimately deliver value
11:00
to startup and that ecosystem
11:02
because I was a startup
11:04
when I started my fintech company,
11:06
and I couldn't even manage the books because
11:08
I was wearing so many different hats,
11:10
like build the product,
11:12
trying to build the team, talk to investors,
11:14
who was assigned to do bookkeeping and taxes.
11:17
This is why we positioned ourselves that
11:19
we are going to be end-to-end to our clients,
11:21
meaning that, when you work with us,
11:23
we can advise you
11:24
on the proper entity for your business.
11:27
We can then also do your taxes
11:29
at the early beginning and
11:30
then graduate to doing your books
11:32
quarterly and then monthly,
11:34
Then now employees, we do the payroll.
11:38
Then you now have to pay vendors,
11:40
so we do AP.
11:41
When they grow up,
11:42
they also need financial modeling,
11:45
so we're basically growing with our clients.
11:48
In fact, we had this one startup.
11:50
They had three people on their team,
11:52
and overnight, they went three to 300.
11:55
They went and acquired a larger company.
11:57
We've supported them in that transition.
11:59
Erin Hartman: That's what I was going to ask.
12:00
Do you still provide service to them?
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Argel Sabillo: They have their own accounting department
12:05
because of the company they've acquired,
12:07
but we still support them in
12:08
the capacity of doing taxes, just like that.
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Erin Hartman: Can you talk a little bit about that?
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It's interesting.
12:13
You hear a lot of people talk about,
12:15
they want to be doing that,
12:17
but a lot of them have started out with
12:18
just random 1040s that they do.
12:20
Individuals, maybe some businesses,
12:23
they try to tie the individuals to a business
12:26
and then do some bookkeeping for them,
12:28
but to really being able to provide
12:31
that end-to-end service, like you're saying,
12:33
it sounds like that's your strategy.
12:35
You're stuck to it.
12:36
I'm sure you've turned a lot of people away
12:38
that are, like, hey, do you do taxes?
12:41
Argel Sabillo: Yes. We really had to niche down,
12:43
and that's the startup and its ecosystem around it.
12:46
We work with tech startups, e-comm companies,
12:49
and the support cast around that.
12:52
The common denominator,
12:53
these are all Internet companies
12:55
because we are virtual,
12:57
and so we're able to service them,
12:59
and we're not being handed boxes of receipts,
13:02
but it's also because we've seen the clients
13:05
from their infancy to their growth.
13:07
Because we know that,
13:09
then we can build the workflow,
13:10
and we know what they need,
13:11
which is what they come to us for,
13:13
to begin with.
13:14
They're not coming to tell us,
13:15
hey, this is what I need.
13:17
They say,
13:18
I want you to partner with me
13:20
so that I can avoid things before they blow up.
13:24
I think that's how firms should think about
13:27
our value to a client.
13:28
It's that they have a goal,
13:30
and we should be the one saying,
13:32
hey, I can navigate you through your goal.
13:35
Erin Hartman: They always come and talk to you
13:38
before they do something,
13:39
not tell you six months later,
13:41
oh yeah, I did this six months ago,
13:43
but we haven't had a conversation since then.
13:45
Argel Sabillo: I think that's why
13:46
you have to own the client.
13:48
We're not just one-off relationship to you.
13:51
Otherwise there are other firms
13:53
that could do that.
13:54
Erin Hartman: You pick the clients that see the value
13:56
in what you're providing.
13:58
They're not, like, why am I paying all this?
14:00
I just need my tax return done,
14:02
Especially smaller firms,
14:04
you hear smaller firms say,
14:06
how do I do exactly what you're saying,
14:08
being able to provide this tax advice
14:12
at a price that they can bear.
14:15
I think when clients realize the value
14:17
that they're providing,
14:19
you can charge whatever you want.
14:20
Do you do subscription billing?
14:22
Argel Sabillo: We use subscription billing.
14:24
There's been a lot of learning
14:25
in terms of pricing because
14:27
we have to be accessible to our clients
14:29
with years and years of data
14:31
on what are their preferred pricing
14:34
and what do they want to scope in,
14:35
but I think one of my learnings is that,
14:38
if we're very transactional about
14:39
how we charge for our services,
14:41
the whole relationship is
14:42
going to be transactional.
14:44
It starts there.
14:45
If you're going to say,
14:46
this is what I charge for a tax return,
14:48
then that's all they're going to need you for.
14:50
Then they're going to ask questions
14:52
throughout the year,
14:52
and they don't pay for it because
14:54
they only pay for tax return.
14:56
I think that's the problem with our industry.
14:57
It's that, when we're pricing,
14:59
we're looking at the services and the tasks.
15:01
Erin Hartman: You're not having the conversation to see
15:03
what services they actually need.
15:04
They don't know what they need.
15:05
Argel Sabillo: They don't know what they need,
15:06
so you wanted to get it out of them.
15:08
It's like, what is the outcome that you want?
15:10
What is your goal?
15:11
That's ultimately what you're going to
15:13
be paying me for.
15:14
It's helping you get to that goal
15:16
and making sure that, on your journey,
15:18
you're not going to get tax notices or
15:20
someone is going to take care of it for you,
15:22
and not you're doing it yourself because
15:23
you're trying to run a business,
15:25
and you wear so many different hats.
15:26
You don't want to be slowed down
15:28
or freaked out about the notice.
15:30
Going back to my first-hand experience,
15:33
I don't want anyone to feel that way,
15:35
and that's why we own that process,
15:37
and we own the back office support for them
15:39
when it comes to
15:39
their financial tax and accounting.
15:42
Erin Hartman: You're doing a lot of
15:43
what we've just talked about,
15:45
not having to do so much volume work,
15:47
providing more work for each client.
15:49
Are you working 80 hours a week during tax season?
15:52
Argel Sabillo: No. Honestly, probably tax season,
15:56
I would work 30 maybe 40,
15:59
no more than 40, for sure,
16:01
and then the rest of the year, I'm at 20.
16:04
Erin Hartman: What about your employees?
16:05
Argel Sabillo: My employees are working 40 hours.
16:07
In terms of my employees,
16:09
they are, basically, as I mentioned,
16:11
I need to solve the problems of founders
16:13
with their pricing.
16:15
For me, the only way I can solve that
16:17
is by using an offshore team
16:20
because of the accessibility in prices,
16:23
which everybody knows this already,
16:25
but if I hire someone in the US,
16:27
in order for the economics to work,
16:28
my staff in the US would have to take on
16:31
so many different clients,
16:32
and that's more than 40 hours a week.
16:34
I didn't want to do that,
16:35
and we wanted to deliver high quality.
16:38
Because I had the experience of Deloitte
16:40
which outsourced to India
16:42
10 years before everybody else,
16:43
so that was my background
16:45
working at Deloitte for about five years,
16:47
and then around the same time,
16:48
I got reacquainted with my childhood best friend
16:51
because I did go to school in the Philippines
16:53
before moving here,
16:54
and he happened to be a head recruiter,
16:57
and so we're, like, let's try this out.
17:00
Most of the accounting outsourcing firm
17:03
are in India,
17:05
and so we were really trying to build
17:06
something in the Philippines.
17:07
We weren't trying to use
17:08
a third-party provider, a BPO.
17:10
We wanted to build something from scratch
17:12
because, again, it's not about scaling.
17:14
It was about learning.
17:15
That's when we started hiring,
17:18
and eight years later, we're 20 people in there,
17:21
and we are growing and thriving.
17:23
Now we are looking at,
17:25
how can we even upskill them?
17:27
Erin Hartman: Can you talk about that a little bit because
17:29
I know you have the connection
17:31
to the Philippines,
17:32
and I know that helps,
17:33
but for a while,
17:35
when we started really talking about offshoring,
17:37
it was an answer to the talent shortage.
17:40
I think you see it as much more
17:42
of a strategic decision and
17:45
where we are just in the world.
17:47
Thinking the other day about COVID,
17:49
and I hate to even say the word COVID
17:51
or the pandemic,
17:51
but what it did allow
17:54
we accelerated so much technology-wise
17:57
during that time to allow us to be able
18:00
to use offshoring as much as we can.
18:02
Prior to that,
18:03
we weren't set up to be able to do that.
18:06
Can you talk about that a little bit,
18:08
because many firms are using it,
18:10
but it's just jointed and hard.
18:12
Argel Sabillo: We were very intentional
18:14
about going offshore.
18:16
To us, it was a more distributed team globally,
18:19
and we were doing that,
18:21
and we were remote since 2018,
18:23
so even before the pandemic.
18:25
When the pandemic hit,
18:26
we grew because,
18:27
most firms tried to retool,
18:30
where we were already prepared for it.
18:33
I think that, like you said, it's more strategic,
18:36
and I'm still very bullish about it
18:38
being strategic going forward.
18:40
One thing we learned after COVID is that
18:42
you don't have to be in the same office,
18:43
you don't have to be in the same state,
18:45
which means you could pretty much be anywhere.
18:47
The dream is to be able to travel.
18:50
That's what I do now.
18:51
As I told you, I was traveling in Asia
18:53
for two months during business season.
18:55
That's because it allows me to work,
18:57
and it's seamless to my clients.
18:59
I think that, in the future,
19:02
same as what's happening with AI,
19:04
it's also not going to be just US.
19:08
It's going to be global.
19:09
It's really allowing our team to train faster,
19:13
to communicate better,
19:15
actually, leveling the playing field.
19:17
If you're looking at AI,
19:19
it's going to solve a lot of problems, yes,
19:21
but there's always going to be
19:22
a human in the loop.
19:23
Why would you pay someone $120,000
19:27
to be the human in the loop?
19:29
There's a lot of good economics
19:30
that comes out of just being open-minded
19:33
about talent outside of the United States.
19:36
There's plenty of talent outside.
19:38
Erin Hartman: I know you're very passionate
19:39
about what the future looks like.
19:42
We talk a lot about the efficiencies
19:44
that AI brings,
19:45
but lately, I hear people more talking about
19:48
the better advisors we can be because of AI
19:51
because we can dig deeper into knowledge.
19:54
I know you get excited about this topic.
19:56
I remember being in the room with you
19:58
when somebody said,
19:59
AI is probably going to take over our jobs,
20:02
and I looked over at you, and you were all excited,
20:05
and you're, like, no, this is the best time.
20:07
Never has there been a better time to be a CPA,
20:10
and you were excited about AI,
20:12
and I'd love to talk about that.
20:14
Argel Sabillo: First, I want to admit that
20:16
it could be pretty scary that AI is coming,
20:19
and the marketing behind it is that
20:21
it will take over your job.
20:22
I think differently.
20:24
I think it unlocks a lot of our true potential,
20:27
and it's regardless
20:28
where you are sitting in the world,
20:30
but I do think that, in our industry,
20:33
one, I want to acknowledge that
20:34
there's so many tools available out there,
20:36
and just being at Engage
20:38
and going to the exhibition hall,
20:40
you'll just be amazed at
20:41
all the improvements that have happened.
20:43
Also the competitiveness in the space
20:45
gives us better technology,
20:48
which we didn't have good technology
20:50
just five years ago.
20:52
I think one of the issues now is,
20:54
how do you know
20:55
this is the right technology for you?
20:57
What should be your tech stack?
20:58
How can you discern from the marketing
21:01
and the true capability of the software
21:04
that you're using?
21:05
I think right now is the time to really explore
21:08
and pilot and try out these different tools,
21:11
but keep in mind that none of these tools
21:13
is going to solve your problem
21:15
if you don't have proper workflow,
21:16
if you don't have the right people
21:18
on the right spot
21:20
and having a team
21:21
that is working together cohesively.
21:24
Erin Hartman: It improves all the time exponentially.
21:27
If we have Engage three months from now,
21:30
the technology in there would be different
21:32
than it is today, which is incredible.
21:35
Can you talk about tech stacks?
21:36
There's so many different pieces of software
21:39
that you need that some of them work together,
21:42
some of them don't work together,
21:43
like an antiquated archaic system for CPAs,
21:48
even incredibly large firms.
21:50
What do you see for technology
21:52
as far as that seamlessness?
21:55
Argel Sabillo: The tools that we have today,
21:57
I think we need to use them
21:58
in order to get used to how to use them
22:00
because one thing to think about is that
22:03
our workflows and how we do work
22:05
is 30 years old.
22:07
In the future, where AI is going to be
22:10
the main tool or the central tool
22:12
that we're using,
22:13
how can we actually think about our workflows?
22:16
Something that right now takes 20 steps,
22:19
how can we boil that down to four steps?
22:21
I think the only way you can unlock that
22:23
for your firm is by trial and error
22:25
and see what fits for your firm.
22:27
I can talk about specific tools out there,
22:29
but if you don't have the right people
22:31
and the right workflow for it,
22:32
it wouldn't work.
22:33
You could be using the big box software tools,
22:37
and they're coming out with their AI version,
22:39
you have to see whether it is really AI,
22:42
or is it just like an add-on to their products,
22:44
so it's really just looking into your workflow
22:47
and looking at, how do I deliver great quality
22:51
to my clients at the fastest way possible,
22:54
the cheapest way possible,
22:55
and that my team has work-life balance?
22:58
I think that needs to be
22:59
the first thing you have to do because,
23:01
otherwise, you'll just get overwhelmed
23:03
with all the tools out there.
23:04
I encourage everyone to demo the products,
23:08
see what the LLMs can do
23:11
and how you can integrate that to your process
23:13
and how you can deliver great quality
23:16
for your clients.
23:16
Erin Hartman: What are you most excited about?
23:19
You seem to always have something on the horizon.
23:22
Argel Sabillo: Right now, we're using LLMs
23:24
as an internal brain,
23:25
the large language models.
23:28
Someone told me yesterday that,
23:30
in the future,
23:30
there won't be any more practice management.
23:32
It will just be the AI who's doing all the work.
23:35
Now that might be a little bullish for AI.
23:38
I don't know if that's ever going to happen,
23:40
but at least you can augment
23:42
your OpenAI and your Anthropic.
23:45
You can build something so that it is,
23:47
basically, one storing memory safely, securely,
23:51
and that you can then inquire for things
23:54
about how to do things technically.
23:56
This is where you can start training the models,
23:59
and this is where you can have your team upskill
24:02
and also have a knowledge base that they can use.
24:05
The thing I'm excited about is
24:08
what we're building next at HeyApril,
24:10
which is, basically,
24:11
if you think of accounting firms,
24:13
we hold years and years of data about our clients,
24:17
everything from the tax return to
24:19
all the email communication to all the videos.
24:22
There's so much data there that we own.
24:24
As a firm, as a profession,
24:27
we should try to own them because,
24:28
otherwise, someone else will,
24:30
and so we're taking a step towards that,
24:32
but right now what we're building is that
24:34
we want to build an application layer first.
24:37
That application layer allows us
24:39
to collect the documents that we need
24:41
from our clients at the right time
24:43
at the right format.
24:45
We can then use that for
24:46
what we ultimately wanted to do.
24:49
If you remember
24:50
why I'm doing this in the first place,
24:52
it's that I want real-time insight.
24:55
I want to give that to my clients,
24:57
and so the only way we can do that
24:59
is utilizing the data that they have,
25:01
using augmenting LLMs, and
25:04
then delivering that to them in a real time basis.
25:07
That's basically what we're working on next.
25:09
It's very exciting because
25:11
I feel like it's possible now versus
25:14
when we were trying to do it 10 years ago.
25:16
Erin Hartman: What advice would you have for
25:18
a brand-new CPA or someone, maybe a student,
25:22
who can't decide because they're hearing,
25:24
I don't know if I should go into this or not.
25:28
Argel Sabillo: I think it's the best time
25:29
to be in accounting
25:30
but not as a traditional accounting.
25:32
I don't know if there's a name for it.
25:33
I call it accounting tech,
25:35
and I think that someone starting a firm
25:37
should think about,
25:37
how do I build an accounting technology firm?
25:43
Basically, we're a tech firm that happens to do
25:46
bookkeeping accounting and taxes.
25:49
If we think of it that way,
25:50
then we lead with the product first.
25:52
We're not leading with services.
25:54
I think in the future,
25:56
where a lot of the AI and agentic workflows
25:59
are solving the day-to-day,
26:02
we can no longer charge hourly.
26:04
We can no longer be service-based.
26:06
We're not going to be
26:07
a true service-based company.
26:08
We're going to be a data company.
26:10
How do we surface that data and
26:12
give it to our clients?
26:13
That's where we should be going as a profession,
26:16
and if I was starting my firm today,
26:18
I would focus on outcome.
26:20
You can only get that outcome
26:22
if you organize those data,
26:24
so we have to think of it that way,
26:26
and guess what,
26:27
as a consequence of doing all of that,
26:29
it spits out tax return.
26:30
It spits out bookkeeping.
26:32
It gets those transactions that the clients need,
26:35
but then you're giving outcome
26:37
not just having a transaction.
26:39
Erin Hartman: It solves the problem of people
26:41
working too many hours and
26:43
too condensed a time,
26:44
and your cash flow not being consistent
26:46
throughout the year,
26:48
and a lot of traditional concerns.
26:52
Argel Sabillo: This is why I also think
26:54
niching down is very important.
26:56
When it comes to niching down,
26:58
how do you choose which one you should go after?
27:01
I remember, with my first startup,
27:04
we were solving it for the gig economy.
27:07
The gig economy could be Airbnb,
27:09
it could be Uber drivers,
27:11
it could be independent contractors or realtors,
27:15
and I started going to those different groups.
27:18
Some groups I vibed with, some groups I didn't,
27:21
and so really look at
27:22
what you're passionate about and then go deep.
27:26
If you can go deep,
27:27
then, one, your client understands.
27:29
You speak the same language as your client.
27:32
They can tell that your passion
27:34
is just pouring through,
27:35
and you're just excited about the space.
27:37
Three, you're solving their problem,
27:39
and you are in the best position
27:41
to solve their problem because
27:43
you're already very technical in accounting,
27:45
technical in [inaudible] .
27:46
You know more than they do,
27:48
and you happen to also be passionate
27:49
about what they're doing,
27:50
so you know how to solve their problem.
27:52
That is truly the only way
27:54
that you can be consultative.
27:56
You could be advisor that is outcome-driven.
27:59
Erin Hartman: Then your clients know people
28:02
in their industry who then want the guy.
28:05
This is his niche,
28:06
and this is what he does and specializes in.
28:09
It's interesting you talk about that,
28:11
and I can tell by just talking to you
28:14
that you're good at that.
28:14
A lot of people talk about,
28:17
if I have a niche,
28:18
am I cutting down on my business?
28:20
They're scared to do that,
28:21
to go from having every client
28:24
that's ever come in their doorway to now
28:27
because there is so much work out there.
28:31
It is a great time to decide
28:32
what type of firm you want to be,
28:34
but it's scary to be like,
28:36
I'm only doing this type of work.
28:38
Argel Sabillo: Let me touch on that.
28:39
I think, traditionally,
28:41
accounting firms are brick and mortar.
28:44
You basically take on
28:45
whoever comes through the door,
28:47
and we were confined with our geographical region.
28:51
You can only really do, back then,
28:53
advertising in your area,
28:54
and of course, you will take anyone,
28:56
but now everyone is online.
28:59
If I'm looking for services, I'll look online.
29:01
On top of that, all these algorithms,
29:05
this is why something like TikTok is so popular
29:08
because you could be
29:09
TikToking about being a farmer,
29:12
and you're touching so many different farmers
29:14
in the whole world.
29:16
I don't think we should be scared about
29:18
niching down.
29:19
I think what's really hard is saying no
29:22
because, ultimately, we just want
29:24
to help everybody that come through the door,
29:26
but we're not helping them
29:28
if we're not niching down because
29:29
you're not giving them your full attention.
29:31
Erin Hartman: You can't be everything to everybody.
29:33
I think that's so hard for people to realize,
29:35
but do remember and just to stick to that.
29:37
This is what we're doing.
29:38
These are the boundaries or parameters,
29:42
and we're sticking to that.
29:43
Argel Sabillo: I want to add too because
29:45
I think where small firms would feel like,
29:48
I've hired people,
29:50
now many people are coming through the door,
29:53
I need to get revenue in,
29:55
and that's a real concern that they have.
29:58
Before you go niching down,
30:01
I would say that you need to have
30:02
a sale system in place.
30:04
Line yourself up to get more involved.
30:07
For example, if you want to get involved
30:09
with more realtors,
30:10
become a thought leader in that space.
30:13
Write about that space,
30:14
add value to that space,
30:16
and have a way to sell to realtors.
30:19
You need that pipeline to be going,
30:22
but guess what,
30:23
if you just niche down,
30:24
it's much cheaper to actually find customers
30:29
than trying to just spread it out
30:31
and see who comes through.
30:33
Erin Hartman: From everybody,
30:33
from the population of the world
30:37
versus just realtors or
30:38
whatever you're looking at.
30:40
That's a good point.
30:41
Argel Sabillo: I think, us, small firms,
30:43
we don't invest enough in
30:45
the services outside of being
30:47
an accounting firm.
30:48
We don't invest in sales.
30:51
I think now we're starting to invest
30:53
in project management,
30:55
but we don't have our own IT.
30:57
I think these types of support services,
30:59
including building your own tech stock,
31:02
I think should be prioritized.
31:03
This is what an accounting tech firm future
31:06
will look like.
31:07
Erin Hartman: I find it smart and interesting
31:09
that your client base were Internet companies,
31:12
so they could get you things digitally.
31:14
You knew that they would not
31:16
be handing you a box of receipts,
31:17
basically, is what you said, which is smart,
31:21
catered to the type of client
31:23
that you wanted, essentially,
31:26
and I know you did it the right way.
31:28
You haven't come from that traditional approach,
31:30
but we have a lot of small firms
31:31
that just collected all these clients
31:33
over the years to get to where they are.
31:35
They know now that they could call clients
31:38
and get new business,
31:40
but that's still a scary step.
31:43
What advice would you give for those firms
31:45
that know they need to do those things,
31:47
and they need to do it for themselves,
31:49
they need to do it
31:49
for the people who work for them,
31:51
but it's scary to do, like,
31:53
to go from that traditional firm
31:55
to more of a niche,
31:57
even more of a subscription pricing model?
32:01
Any advice you would have for them?
32:05
Argel Sabillo: My advice is that don't look
32:07
at the firms on your left and right.
32:09
Focus on your own firm.
32:11
Focus on your capability and your growth.
32:13
I came from Big Four,
32:15
so I've seen what they're capable of,
32:18
and I was able to also go into startup route,
32:21
so I was able to piece the two together.
32:23
I have a unique experience,
32:25
but I also have a unique mission.
32:27
It works for me,
32:28
and I can go to work every day
32:30
feeling like,
32:31
this is what I want to do
32:32
for the rest of my life.
32:33
I think that you just have
32:35
to just look internally.
32:36
What are you really trying to build,
32:38
and how are you really planning to help people?
32:40
Always try to be helpful first to your clients.
32:44
I know you go to this conference,
32:46
and they tell you do this and that.
32:47
I'm still trying to rightsize my firm.
32:49
I'm not just going to drop anybody.
32:51
That's just not who I am.
32:53
It is a process.
32:54
You try to turn down as many clients as possible,
32:57
but they could lead to a referral,
33:00
so you have to think about
33:02
what's good for your company that you're building,
33:04
and think about what is the outcome that you want.
33:07
I think many firms who are starting
33:08
aren't really thinking about
33:10
what is the exit strategy for me.
33:12
Erin Hartman: You were mentioning your unique mission.
33:14
You also just have a mission.
33:17
I know the assumption would be
33:18
everybody has a mission,
33:19
but they don't, and a strategy.
33:22
You've said it,
33:23
but also just from listening to you talk,
33:25
you clearly have a strategy.
33:28
You stick to that, and you think about that a lot.
33:31
That makes a difference in the outcome.
33:33
Argel Sabillo: I think every single one of us out there,
33:35
when we said we want to do accounting,
33:37
I think you also have a passion
33:39
on what industry you're trying to solve.
33:41
Maybe you're not thinking about it yet
33:43
because you're worried about getting
33:44
more clients through the door,
33:46
but you're passionate.
33:47
Some clients make you happy,
33:49
and some clients don't,
33:51
so look into those and then talk to them
33:53
and see if they can introduce you
33:55
or you can take them out to dinner
33:57
or go to a conference that they go to,
34:00
and then you're, like, hey, this is my people.
34:02
Erin Hartman: You tend to like what you're good at.
34:05
Argel Sabillo: I would recommend doing that.
34:07
Erin Hartman: That's great advice.
34:08
Argel Sabillo: Just speaking of an exit,
34:11
many people know this now,
34:12
but once you sold your accounting firm,
34:14
that's only one time you're billing.
34:17
You really have to think about,
34:19
what kind of exit do you want?
34:20
If you're trying to put in so many years
34:22
into the profession of owning your firm,
34:25
what is the potential exit for you?
34:27
Many firms don't think about that yet,
34:30
but if they do on what outcome I want,
34:33
then they can work backward to see,
34:36
then I'm not going the right direction.
34:38
Erin Hartman: Talk about that as much
34:39
as you're comfortable talking about,
34:41
but you're right, especially at your age,
34:43
a lot of people are not thinking about their exit,
34:45
and they think about it
34:46
when they're ready to exit,
34:48
and it's too late to do anything about it,
34:50
so that planning is very important.
34:53
That's part of what we're seeing now
34:55
with a lot of private equity
34:57
and mergers and different ways of
34:59
firms getting capital into their firm,
35:01
especially for retiring partners and
35:03
deferred comp models
35:04
not working the way they used to
35:06
and those types of things.
35:08
Any insight or advice or thoughts
35:11
that you have on that would be well-received.
35:13
Argel Sabillo: I want to focus on small firms
35:15
because I do think that the future with AI
35:20
is going to be just small firms,
35:22
and small firms who are, basically,
35:25
having lifestyle businesses and
35:29
whatever that means for everyone,
35:31
but I think that when we're thinking about exit,
35:33
for me, for example, I can't imagine exiting
35:36
because I don't know what to do with myself.
35:38
Erin Hartman: Because you love it.
35:39
Argel Sabillo: I think it's good to talk to other CPAs
35:44
in the profession who are retiring,
35:46
who has a lot of insight on what that looks like
35:47
and the pain points that they're experiencing
35:49
because then you can line yourself up to say,
35:52
do I want the M&A route,
35:55
do I want to merge with someone
35:56
and get so big that I have to merge
35:57
and then I still have to work for that firm,
35:59
or do I want to grow this into
36:01
a tech accounting firm
36:03
that has better multiples upon exit,
36:06
because you never know.
36:07
Maybe you want to walk away after this.
36:08
Maybe you have an early exit.
36:11
You don't want to be in a situation
36:12
where you're doing things manually,
36:14
you're not niched down,
36:16
and you can't sell your business for 1x billing.
36:20
You're selling it for less than that,
36:21
or worse, you're walking away and
36:24
not being able to sell your business,
36:25
so have a plan
36:27
on what that potential exit would look like,
36:29
and then that would line everything up for you
36:31
and directionally how you should go.
36:33
Erin Hartman: That's great advice.
36:34
Thank you for sharing with us today.
36:37
Is there anything burning
36:38
that you'd love to share
36:39
that I haven't asked you about,
36:40
that we haven't touched on?
36:42
Argel Sabillo: I think we touched on a lot of things.
36:44
I think that I would love to do this again
36:46
to see how we're incorporating AI
36:49
into our practice.
36:50
Again, it's going to be trial and error,
36:53
and see what works, what sticks.
36:55
I'm part of the council,
36:56
so I'm happy to share with anybody,
36:59
or they can reach out to me,
37:00
just thinking about
37:02
how they should position their businesses,
37:04
but I did want to speak on
37:05
what we're trying to do
37:07
being a public benefit corporation.
37:09
In the state of California, as an accounting firm,
37:11
public benefit corporation is reserved
37:13
for a nonprofit,
37:15
so being a public benefit corporation is,
37:17
basically, you are a profitable company,
37:19
but you have a mission,
37:20
and again, it still ties into everything
37:22
that I'm doing, including paying it forward.
37:25
One of our mission and
37:26
what we're doing in the Philippines is
37:28
working with universities,
37:29
working with the accounting teachers there
37:32
so that we can help build the curriculum
37:34
that lines them up with the future of AI
37:37
in accounting.
37:38
Erin Hartman: Oh, wow.
37:38
Argel Sabillo: Everyone is very excited about,
37:40
you mean I don't know
37:41
how to do these things manually?
37:43
I think that's something
37:44
that's going to just flip a switch
37:46
to students learning about accounting.
37:49
They're just technology-savvy [inaudible] .
37:51
We're excited to see that grow.
37:54
We're excited to continue to invest in the people
37:58
in the Philippines and the universities
37:59
to ensure that we have accounting in the future,
38:03
and that these accounts are going to be ready
38:05
for an AI-built future and
38:07
just level the playing field for everyone
38:10
to learn and upskill themselves
38:13
much faster than they used to.
38:14
Erin Hartman: Wonderful. You're paying it forward
38:17
from what someone did for you years ago,
38:19
as you're talking about. That's great.
38:21
Thank you.
38:22
I really appreciate you being here and
38:23
taking time out from everything
38:25
that Engage has to offer
38:26
to sit down and talk to me.
38:28
I appreciate it.
38:29
Argel Sabillo: Thank you for having me.
38:32
Erin Hartman: Thank you for tuning in to
38:34
Transforming: Tales of Business Evolution.
38:37
We hope you found today's insights valuable.
38:39
For more details on this episode,
38:41
check the description,
38:42
and don't forget to subscribe to stay updated
38:44
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38:46
Visit our PCPS,
38:48
Transforming: Your Business Model page
38:50
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38:51
at www.aicpa-cima.com/tybm.
38:59
Keep pushing the boundaries of transformation,
39:02
and we'll see you next time.
39:06
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39:09
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39:11
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39:13
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39:16
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39:18
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39:20
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