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Your Practice is Busy, But Are You Actually Making Money? | Medical & Dental Practice Finances · The Resting Stitch Face Podcast

• Sarah Harding: Hello and welcome back for another episode of the Resting Stitch Face Podcast. I'm your co-host, Dr. Sarah Harding, along with Erin Sheffield: Doctor Aaron Sheffield, welcome back. Sarah Harding: Hello, welcome back. So, Erin, why does no one ever say, my God, I love my CPA? You have to use them. We recommend our hairstylists, our doctors, contractors, restaurants, tacos, coffee, but some people seem almost resigned to being mildly dissatisfied with their accountant. Why is that? Erin Sheffield: That's why we're here. Sarah Harding: And that's why we're here. Erin Sheffield: And that's why we're really excited to be talking today to Tomir and Ares. They are brothers and they are the founders of Lucid. And we are really excited to talk to you guys today. Tell us a little bit more about how you founded this AI solution for medical doctors and their practices. Erez: awesome. Thank you for having us. So, really, we started out just building what we believed is the 10X solution for finances in general. We realized AI was the way to really deliver value in the next few years, back when we started. And the first platforms we built were were generalists. Like we built them for businesses in general, and then Very very early on we realized that medical practices were both our favorite clients and where we were able to deliver the most value just because we understood their pain points really well, just working with the clients. and that way, basically the entire company became focused on the medical space ever since. So yes, and we love it. I guess like the the secret benefit there being that we love working with the doctors. So yeah. Sarah Harding: Well thanks. We like that. Yeah. Erin Sheffield: That's really nice to hear. And it really resonates because as doctors, we get very little training and anything on the business side. And many of us are thrust into the business side of practice ownership. I know a lot of our listeners, maybe that was our goal all along, and maybe they went to school for business and they planned it all out. But I think Mo like Sarah. Most of us, I think, kind of found ourselves accidentally in this business where maybe we had a partnership fall upon us and we were weren't quite ready, or you know, sometimes you end up starting a practice because the one you associate with didn't work out. And so sometimes it makes you feel really uncertain and and unconfident in what to even do. So what are some of the biggest things you guys recommend or that you see that we as doctors are missing? In our business strategy, especially when it comes to tax and finances. Erez: Awesome. So in one word, I would say visibility. the the the key thing that is missing is the ability to actually control your finances. And that issue becomes bigger and bigger the more the bigger the business is. So when you have one entity or two entities, it might be manageable to some extent, but not not even. once you cross that threshold or start having multi-million dollar operations, it becomes completely unmanageable. Now For most single owner practices as well, just having their books in order and their taxes is a cumbersome experience to do on their own. so having a partner that actually understands medical finance and can take full ownership of the whole process is invaluable. It basically frees up the owner's time, which lets them work on what's really important to them, which is treating the patients. and and I guess that's Sarah Harding: And spending time with their family at home afterwards, right? Because that's what we find, right? Is that most people do the bookkeeping Erez: Yeah, for sure. Sarah Harding: on the weekends and do all of the all of the paperwork on the weekends. And so it's taking time away from family. Yeah. That's right. Erin Sheffield: Or at night, yeah. mine that he's working on, that's fine. Erez: Yes. Es especially Tomer by the way. Tomer is is big attack. Tomer: Tends to happen, yeah. Erin Sheffield: huh. so why do you think the conversation, at least for me, ends up with my finance person being at the last minute, like okay What do Tomer: Mm-hmm. Erin Sheffield: send me all the stuff now and get this done? What's Sarah Harding: Yeah. Erin Sheffield: a better strategy? How do we set up those systems in our lives or practice or business so that we don't have that panic moment come tax, you know, the day two days before tax day, or that our CPA doesn't. Sarah Harding: Yeah, surprise you owe eighty thousand Erez: So Sarah Harding: dollars, Tomer: Yeah. Erez: So so I think you're touching on a key point here, and that is that I I mean doctors don't want to do specifically taxes. Like they do them because they have to, like the rest of us, right? and so having a kind of partner that actually monitors it and works proactively puts it off your plate and makes you not panic, comes comes IRS day. You know, like the the idea that you manage it on your own in general. You know, like you start off a business, you do most of the things on your own, right? Like you do much of the marketing, much of the everything that's related to actually promoting the business. and finance is just one more department that you need to manage. and so it gets pushed back behind actually making sure that the business is successful, which makes sense to an extent. Like th this is a very reasonable way of actually, you know, approaching business where you're trying to make sure that You know, there is a business to actually manage first before you're thinking about paying the government. But what happens then is that you get to that day and you know, everything becomes critical. So I guess having a partner that is fast, affordable enough to actually, you know, operate in the background while you don't need to mind it, that would be, you know, the ideal for a single owner just starting out and and going forward, yeah. Erin Sheffield: That resonates so much with me right now. I think Sarah Harding: Makes sense. Mm-hmm. Erin Sheffield: my taxes are due on October fifteenth. And I started another business outside of my clinic. And you're exactly right. I'm like worrying about all the other things, getting everything in line. I just got my trademarks approved like this week after Erez: It makes sense. Yeah. Sarah Harding: Right. Erin Sheffield: 18 months. You know, there's so much other stuff that I'm working on. And I'm not really a numbers person. I don't enjoy math. I don't like numbers even when it comes Sarah Harding: Mm-hmm. Erin Sheffield: to cash. I just am like Hoping it's working out. And I Tomer: Ha ha ha Erez: Ha ha ha. Erin Sheffield: am suddenly like, no, Sarah Harding: Yes, I sure hope I have my stuff together. Erin Sheffield: because like we actually had money coming through the business this year. And so it's like, my goodness, now am I in trouble? Like that panic moment of like, okay, we've got like a week or two to figure this out. Am I in trouble? Is something bad going to happen? And then on the flip side, Sarah Harding: Mm-hmm. Tomer: Okay. Erin Sheffield: Since I'm not really paying attention, I didn't know my business was doing well. And I just got an email from Kajabi, which is my like hosting platform website. And they just said, we want to interview you because you are a Kajabi successful hero. Sarah Harding: Mm. Erez: my goodness. You don't wanna miss that for sure. Tomer: Mm-hmm. Erin Sheffield: You are one of our top 200 and you have one of our top 280 Sarah Harding: That's right. Erin Sheffield: new businesses on Kajabi. And I was like, What are you talking about? So there's both sides of Erez: Wow. Wow. That's wonderful. Erin Sheffield: not. understanding though like wow maybe I'm actually doing better than I thought, but also Erez: I would say I would say that's for sure a rare occurrence. Like I I've I've never, you know, I I don't first I've I've I'm getting familiar with Khadrabi, but generally speaking, that's a very rare experience. Usually they come in with with the critical news. So you're an anomaly. Like the most positive positive anomaly in the market, for sure. And congratulations, by the way. Yeah, it sounds it's Sarah Harding: That's right. You're delinquent. That's right. Yeah. And so I guess. Yeah. And so I think the funny Erin Sheffield: Well, I'm glad for that then. Sarah Harding: thing with that is is that, you know, we don't what what I think is my biggest issue with my CPA, all of the financial stuff, taxes, everything, is that there's literally no communication, right? Until it's immediate. And so I think that's the thing, right? Because like there's always stuff going on. Like there's no reason why Aaron Should be surprised that she's doing well or not surprised that she's doing well, or you know, Tomer: Hehehe. Sarah Harding: whatever it is, right? Because I think that that's the thing is we don't always have this conversation that's ongoing. It's like this every once in a while thing. And so I think what's interesting is like the what you guys are doing, because you're blending financials and taxes and all that stuff with AI, which is we can all agree where everything is heading, right? But what What we really want is more human interaction, right? And so what you're doing signed kind of sounds like a contradiction, right? Because it's like, well, how how is it Erez: Sure. Sarah Harding: that we're using more AI so that we can have more human interaction? Like, can you tell us a little bit about how you guys have have made this so that that is possible? Erez: Sure. so so I guess what you're saying right now is like a key element of of looping in AI to any of the financial workflows we actually do. and I think the way to think about it at its core is understanding that AI automates a lot of manual repetitive labor. when overseen by very good financial professionals, it's done correctly. And so it gives them more time to actually deal with the human element. frees them up to actually give better service, be more responsive. the then normal traditional accounting experience we get, you know, like when we get a new client telling us about what they experience is they have someone that talks to them every month or every few months. so it's a very, very hands-off experience. And I think. when we set out to actually build our product and really go to market, we were thinking not only of the technological advancement and actually getting in platforms that are cutting edge and doing everything to the best, but really what is the experience for the person on the other side, like in terms of responsiveness and our ability to actually deliver results? and I think both of these lean heavily also on the relationship they would have with the dedicated accountant that they have with the team member. So we put like great emphasis on that. and in general, like I I guess if we think about it in terms of principles, if we had real-time financials through our platforms, we were thinking about real-time support, which is which is kind of the the approach we took there. Sarah Harding: Yeah. I like that. I think the hard part about dental practices, and maybe I guess medicine is probably this way as well, is that you guys talk a lot about real time financials and stuff. And I feel like in our practices, nothing is real time. Nothing, except for the patient demanding our time. And so because you know, we are, you know, we get a loan to pay for this big equipment or whatever it is, and then we do procedures and then we File the insurance and then we wait. Do we get paid? Do we not get paid? Do we have to ask again? Right. Tomer: Yeah. Erin Sheffield: Yeah, and it could be ninety days or more sometimes. Sarah Harding: And so I think that's where, that's where we, I think a lot of times get stuck in this, in this conundrum of bookkeeping and taxes and all of that stuff, is because we get so burnt out on that day-to-day part of it where we never really know what what the books look like, because it's we do what we do. But then we wait for other people to do what they're supposed to do and they may or may not, right? And so I think that's the Erez: Yeah. Yeah. Sarah Harding: that's probably a big part of why these medical practices desperately need somebody reliable, right? That will help out with this stuff. Tomer: Yeah, definitely. Erez: Absolutely. And I think not only that, but also having a practice that actually knows medical practices specifically. I was actually hearing you talk about that. I was thinking Tomer probably has something interesting to say about that topic. Tomer: Yeah, I I this is really like the top problem for every medical practice. Like if you're a practice owner or you're treating people, you know that you have you have no idea when income is coming, right? Because thirty percent is paid by the patient, thirty percent is paid by the first insurance, and about the secondary insurance paid the further forty percent, and when is gonna be paid? Is it ninety days like terms, is it sixty days? I it's it's something very hard to track. Sarah Harding: Right. Are we gonna have to argue with them? Yeah. Erin Sheffield: Yeah. Tomer: And and you need to fight with them and then you call the client, you call the insurance, and and you have no idea when is it coming. And that's one of the biggest problems that every practice owner is has. And actually having someone that knows that problem and knows how to ingest that knowledge into your books, because that's not even something that's simply put into regular accounting software. You need to understand how to set it up to let you have Sarah Harding: Right. Tomer: that correct knowledge and ability to see your accounts receivable and that. respect. You know, so it's a different ball game, yeah. Sarah Harding: Yeah. And because the everything shifts, right? And so it's like, well, what is your estimate estimated quarterly taxes? And you're like, I don't know. Right? Erin Sheffield: Ha ha ha. Sarah Harding: Like, I don't know. We seem kind of busy this month or the like this quarter, but I don't know. You know, what are our collections? And so it's just like Tomer: Ha ha ha. Erez: That's that's actually so prevalent. Like what you just said, like we get on calls and we try to to gauge what is the expenses for for businesses. It's like a first step to understanding the business, right? And Sarah Harding: Right. Yeah. Erez: and I guess you know, like it becomes such a hurdle even so early on because they have zero understanding of what's happening right now and zero handle on their books. So yeah, I I guess, like, yeah. Sarah Harding: 'Cause it's so variable. Right. Erez: The the many medical practices are flying blind. Yeah. Sarah Harding: We sure are. Erin Sheffield: So how do we what do you recommend for someone, whether they work with you or if they're working with their CPA back home? What are some strategies you guys recommend to help doctors kind of take the reins on that, like understand, see, keep it under control so they don't feel like it's this big terrible looming specter over them when it comes on tax day? Erez: Yeah. so t Tomori, wanna take that one? Tomer: Sure. I think one of the first steps is ha actually like getting out of the shoebox full of receipts and getting that into your accounting software. It's it's under the bed. But but eventually like Sarah Harding: I love my shoebox. Erez: You gotta let it go, Sarah. You gotta let it go. Erin Sheffield: It's a implant box, okay. It's a strawman box. Tomer: you can't really project any t any any financials on your business and eventually you need that like on the Yeah. On on the the day that you try to actually get visibility, that's the way to get visibility. Besides that is, you know, and that's the next step is getting a proper revenue cycle management with your patient management systems, like having that correct system, sink all of that information into your accounting software, if it's QuickBooks or whatever. is the the the main problem for cash flow for medical practices. So if you have those two set up, then you're you're pretty much good to go to see that it's actually integrating. And if you don't have those two set up, stop listening to the podcast and go set it up right now. It's a problem. Don't don't wait. Yeah. Erin Sheffield: Don't send people from the podcast, okay? You guys can wait a little bit of time. Listen again. Erez: Ha ha ha. Sarah Harding: So here's an interesting little tidbit though. And I think that this is stuck with me and I need to get rid of it because it's clearly not advisable by you guys. But on one of the little mom doctor groups that I'm in, somebody said that they have all of their receipts in a huge bin. And so one time they got audited and the auditor came to their house, which is their, you know, like office, like their corporation office. And she had like three little kids at the time. And the kids were all running around going crazy, going wild, and they just handed them this big tub of receipts. Tomer: Ha ha ha. Sarah Harding: And the auditor was like started to look through it and then was just losing his mind because these kids were bouncing off the walls. And he's like, you know what? I think we're good. I think I think we're good. We'll be okay. And and so ever so that's why I love my shoeboxes. I'm like, if it ever comes to that. Right. My horrible tactics. Erez: Yeah. Tomer: That's a good strategy, that's new, I like that strategy. Maybe maybe keep the shoebox. I I take it back. Erin Sheffield: Yeah, the chaos strategy. Erez: As a Erin Sheffield: The problem is, is when she needs to go through the bin, also though, it's also chaotic and crazy for her, right? Yes. Sarah Harding: Yes. Yes. That's true. That's very true. Erin Sheffield: So I wanna say, as someone again who doesn't really like the number side, I wanna just hire someone to take care of it, right? I just want like my office manager or like my brother-in-law has been doing my bookkeeping and thank goodness for him. And I just wanna forget about it and l have someone just like present it on a platter to me. But even if we find someone Fabulous and amazing to do that. There's a big problem with things like embezzlement and people taking advantage of you because you aren't paying attention. Is this something that you guys see? And what do you recommend protecting yourself against this? It seems to me like you have to have some kind of finger pulse on what's happening with the numbers so that you can catch something like this or prevent it. Erez: I guess you know, you're you're talking about radical cases where we actually flag something that is is not is deliberately not categorized in the way it should be, or there is some activity within the business that is illegal. Erin Sheffield: Mm-hmm. Erez: I w I I I'm not talking about like client business that that we see. but I guess a good way to get a handle on anything that is happening in your business is to get visibility and what's happening in the numbers because the numbers speak volumes, right? Like you can literally see the. The amount of product you sell, for example, if you sell physical items or if you give sessions, it's very easy to see then and calculate what your bottom light line should actually look like. And so once you have that, for sure, yes, it's absolutely easier to actually take care and monitor any of these activities that happen. I I on a personal level, like I'm I'm an optimistic person. and I I want to believe in the good nature of people. So by and large I believe that what we've seen in the businesses is is not of that nature. Sarah Harding: That's good. Erez: but it exists like anything else bad in the world, right? Sarah Harding: That's right. There's always gotta be a bad apple. Erez: yeah. Sarah Harding: Yeah. What are some things that you guys have seen? So a little bit of your backstory. Both of your parents are CPAs. Is that correct? Okay. Erez: Mm-hmm. Tomer: Yeah. Sarah Harding: And so then and you guys are, I mean, essentially tech bros. Right? Erez: Yeah. Tomer: You got it. You got it, yeah. Erin Sheffield: Literally. Sarah Harding: Yeah. And so how did Tomer: Okay. Sarah Harding: you get how did you get to this Erez: I'm still trying to convince Stormer to get his Tesla. So so we're we're completing the package. But yes. Erin Sheffield: Mm-hmm. Tomer: I'm staying Sarah Harding: That's come on, yeah. Come on now. Tomer: with the cheap cars, I don't believe in it. You know, it's it's gonna crash, it's gonna cost so much. Yeah. Erin Sheffield: Ha ha ha ha ha. Sarah Harding: Yeah. Yeah, but right. Erez: He's he's like Jeff Bezos. He's like Jeff Bezos writing in his old Hyundai, you know, Erin Sheffield: Mm. Erez: that's the Sarah Harding: Yeah. Well my Tesla's paid off and I don't have to pay for gas, so it's incredibly cheap Erez: There we go. Sarah Harding: now. Tomer: But if someone scratches Erez: Yeah. Tomer: you in the driveway, you're like, my God, my test line I'm like, Scratch away. Go ahead. Do you wanna smash it? Erin Sheffield: When you have kids, yeah. Sarah Harding: That that's fair. Erin Sheffield: I definitely have a scratch Sarah Harding: That's fair. Erin Sheffield: and dent cart now with my kids, that's for Tomer: Yeah, she's Erin Sheffield: sure. well, just it's fine. Sarah Harding: Yeah. Yeah. So then how did you guys get into this? Was it really exhilarating growing up with two parents CPAs and you just couldn't wait to get into accounting and finance? Tomer: Ha ha ha Erez: Yeah, so I guess one like yeah, like accounting was in the family for for for a long time. our mom still runs a big CPA office. and I guess numbers always felt very natural. looking back at the you know, my childhood, like I had like a a a period of time where I was, you know, after classes, I would go to my mom's office while she was working and, you know, hang around until Sarah Harding: Mm-hmm. Erez: she finished working so I can go home and watch cartoons or something. So Sarah Harding: Right. Erez: I have this image that I was playing with marbles, like over there, playing with marbles, and I I built this huge labyrinth with these these thick taxes books, you know, thick, thick books. And Sarah Harding: Yes. Erin Sheffield: The tax code. Erez: And anytime she had like a meeting, I would I would have my moment at that minute. She would stop everything, like everybody would stop and look at me, and I would take a marble and put it on top of the labyrinth and it would just go all the way in the maze that I built into a cup at the end. That's the that's my my j Yeah. So I I Tomer: was a very impressive view. Mm-hmm. Sarah Harding: You were the entertainment. The distraction, yeah. Erez: guess yeah, I guess what I'm trying to say is that, you know, numbers and CPO offices just came naturally to us, just like growing up in them. And so when we really looked at where we can actually deliver value in the market, going for or helping people with accounting, where most people are, you know, terrified of even like approaching them seemed like a very natural thing for us. just because we we knew we could. So yeah. Yeah. Erin Sheffield: I love that. Sarah Harding: Yeah. Erin Sheffield: I love people who bring passion to other work. And I don't Sarah Harding: Mm-hmm. Erin Sheffield: feel like I've met very many. I do know one CPA. There's one CPA I know that says he's the well, what does he say? He's like Superman of accounting. He's very confident in his skills and all Erez: It's big. Erin Sheffield: of that. But I don't usually hear people speaking with, you know, enthusiasm about tax Sarah Harding: Wow, good for him. Erin Sheffield: codes, et cetera. So I think that really makes Sarah Harding: Yeah. Erin Sheffield: a difference. And how did that play in building your business? How did you guys Start this from scratch. Erez: So it was quite big. I guess today is should I talk about it or not? Erin Sheffield: Ooh, spill the tea, that's what we're here for. Tomer: Mm-hmm. Erez: So today's the 7th of October. And Sarah Harding: Mm-hmm. Erez: actually we started our business beforehand and we crash crashed like right into everything that was happening back back home. So I guess it's been a a rocky road at the beginning because of it. but we were so fortunate to have amazing, amazing investors that supported us throughout the way from the very get-go. and were in a Facebook innovation program where we met one of our, you know, biggest investors, who was the group product manager there. And I guess we we collected people that really supported us through the process and helped us get to a point where we're able to actually go to market, which is which is not it's not a given. You know, like being actually able to build systems throughout, set an operation, get get to the market and iterate until you have something valuable that makes sense is is a big deal. and yeah, I I guess that's the that's the feeling you know I get Sarah Harding: Yeah. Erez: from it. It's kind of hap happy to have that opportunity to really go there. Yeah. Sarah Harding: Yeah. It's it's so interesting too because you're bringing bringing that up and it's it's never easy to start a business, right? Ever. It like the first little bit is always this, you you have this great idea, you've been thinking about it for years, and you've got all of your systems in place that you think that you need to start it, and then you start and then it's like, ugh, usually, right? I mean, it's just like slow, you know, you're waiting for waiting for customers, waiting for interest, waiting for all the things, Tomer: Right, yeah, you need to grind it out. Sarah Harding: and then to add global uncertainty on top of it. And you know, everything that everything that is coming along, it's just terrifying, right? And so bravo to you guys for pushing through and building something great, even in the midst of a lot of uncertainty, right? Erez: It's yeah, I I mean it's challenging as is, and and given everything that's been happening in the past few years, it's even it's a whole other level. But I guess it kind of gives you like the the drive, the internal drive to actually go and and accomplish and create something good. Like you wanna build something that actually has meaning Sarah Harding: Mm-hmm. Erez: in the world and I think just makes makes it all all all that much more better or like the conviction is higher, I guess. so yeah. Sarah Harding: Yeah, I love that. I like that a lot. And so how did you guys get into AI? Is this something that you've adopted early? Because we, Erin and I, are kind of like AI grandmas, we like to say. Tomer: Yeah. Sarah Harding: And Erez: Mm-hmm. Sarah Harding: you know, like when I was growing up, I remember teaching my grandma how to send an email and she wanted to print it out and she wanted to put it in an envelope and to send it. From the post office, and I feel this way about AI, and I'm trying really hard to get into it. No, we don't wanna be. Erin Sheffield: We don't wanna be the AI grandmas. We wanna at least be the Tomer: It's it's a it's a it's a common problem. It's Erin Sheffield: aunties. Tomer: it's it's a known I I I can diagnose you as the as the tech doctor in the room, we can swap places for this discussion. Sarah Harding: That's right. Erez: Yeah. And let me add to that you don't know you do not look like grandmas. Like this is not you can call yourself whatever you want, like we approve, but Sarah Harding: Thank you. Thank you. It's all that all that Tomer: Ha ha ha. Erin Sheffield: Good skin care. No. Sarah Harding: time spent under fluorescent lighting and not going outside, Erez: Mm-hmm. Erin Sheffield: Right. Yeah, Sarah Harding: right? Tomer: Yeah. Erin Sheffield: exactly. Fifteen years in a classroom. Yeah. Erez: but AI. T Tomer Tomer was a a whiz in AI in his his degree, you know, like he came out, it was clear and I think we identified it together. Both of us are coming from engineering backgrounds. But Tomer, speak about AI a little bit. Tomer: Yeah. I'm I'm I've been playing with it before it was the cool headline on the on the news. and And adopting it is hard, you know, people have a hard time adopting it. It's like it's a different ballgame and and you you I I personally can't like I'm not touching any dashboard anymore. I'm not willing to log into my email or to any platform that does not connect directly to my agent because I won't I'm like this Erin Sheffield: Wow. Tomer: is the this is how it should work from now on and and honestly like the it's more than anything a mental transition and to to believe this thing can actually help you out with what you're doing. And I'm guessing every like everyone in any type of industry that's working in front of a computer, doctors as well, you guys get a lot of emails and receipts and chargebacks from customers and who the hell knows who still owes me money, right? I I have no idea. And honestly, download your you know preferred AI agent desktop app and start building your project and connect all your integrations and and then you can become young ladies of AI and not grand like after a while. Erez: Yeah. Sarah Harding: That's right. Tomer: And it's a mental transition that just you just need to decide okay, I'm doing this and it's gonna happen and it's gonna be very, very uncomfortable for two weeks and then it's gonna be a different weekend. Erez: He meant younger ladies, by the way. Sarah Harding: That's right. Yes. Yeah. Erin Sheffield: and that's not often a promise that we are given. So that sounds amazing hypothetically, but the other AI grandmas and I are wondering, like, how do you even get started? Like sometimes that part's so overwhelming. How do I even know how to set up an agent? How do you learn those things so that I can I don't even know what AI we've had other conversations. I don't even know everything AI can do for me. So how do you start finding the answers to those very basic questions? Tomer: Awesome. So I would adjust it to be in the mental model of anything, let's assume anything I'm doing on the computer, probably I can create a AI workflow for it. So if it's replying to my emails, ca classifying invoices, creating a recurring schedule of pinging people. All of that totally doable. And the the way I I would I would start is download the desktop software of your preferred provider if it's claw, chatchpd, doesn't really matter. And then start connecting. There's a connectors page usually or integrations page, connect your email, connect your Slack with limited permissions, of course. And then start trying to ask it, okay, pull all my invoices, give me a breakdown of what happened in my email the last week. Let's create a skill that kind of breaks down everything happening in my email and automatic reapplies and actually the one of the things I recommend is just recording because we we're usually easier on talking blurbs rather than writing and recording really lengthy unorganized information about me and everything I do and all the things I I do like normally and pushing all of those into the AI so you can have a mental model of me and then iteratively making it better. That's the way to start. Erin Sheffield: That's so helpful. And what do you Sarah Harding: I get that. Yeah. Erin Sheffield: think about all the suspicion around AI? Because that's a big part. There are a lot of people like us who we like the idea of using it. When I use it, it's wonderful. But there are a lot of people who are very anti AI, privacy, stealing your identity all the way to like doomsday and nuclear, ending the world type of things. And Tomer: Yeah. Sarah Harding: Goodness. That turned dark. Thank you, Erin. Tomer: Yeah. Erin Sheffield: I know. Well, I'm just speaking to it. These are the things I'm always hearing people say. So that might be something that maybe I'm very interested in using a product like Lucid. Like, yeah, let's use AI to harness the power of this system without having to pay a person to be doing it all day. Like that seems Sarah Harding: Mm-hmm. Erin Sheffield: great that we get that one on one care always without having to pay however many hundred and fifty dollars an hour, you know, for whatever. But Ugh do I wanna hook in all of my finances? Like do you see people being worried about that? And what kind of securities do you think are in place? What things are valid concerns and what things are, you know, maybe just overblown? Erez: Sure. So so I guess like less than you'd imagine. Like that that would be my go-to because I would think that everyone would have some concern over like you know transitioning to an AI, but I think today like the the kind of public opinion matured to a place where everybody's searching for it. Like we realized how valuable and how you know it it became paramount to doing new things. Doing things with AI versus not with AI, everybody understands it's 10x, 100x better. And so when I'm getting new clients coming in, new new calls, literally what I'm saying hearing them say is we know we need to get AI in. Like they're deliberate about wanting to jump into it. and I think for us, if if we're look talking about like mitigating any risk, I guess. That you know, is involved with using AI for finances, et cetera. What we kept along in the entire way is a principle of human in the loop, which basically means that we have a CPA that actually approves any changes and work being done on the account. and he's in charge and is responsible for everything happening throughout. So yeah. Sarah Harding: Okay. That was gonna be my next question. Yeah. So like what happens if there's this big something that the system the or software recommends and it ends up costing me eighty thousand dollars? You know, who at that point is responsible, right? Is like, you know, yeah. Domer That's right Erin Sheffield: Tomer. He's a guy. Erez: Yeah. We we want him to buy the Tesla. We we can't Tomer: Usually what happens, you know. Even it's usually n never my fault, Erin Sheffield: He changed his mind. Tomer: but I always get the call with Sover. Sarah Harding: Ha ha ha Erez: Yeah. so I guess it it never happened to us like having something like that. but I would say anything like that is usually monitored and caught, even if it happens, it's usually monitored and caught by the CPA. now th there are very easy ways to monitor these things on the bottom line. So I I hope that we would never get to a position where we actually face anything like that in the future. Sarah Harding: Yeah. Erez: But I would say, you know, if you think about it on the other way, the books that we're actually getting from clients coming in are managed by people. And so the amount of human error that happens in them is insurmountable. You know, like Sarah Harding: Mm-hmm. Erez: the if we compare even even if we compare just the work of an AI with without a pro professional CPA, but a trained AI with a platform that is dedicated to do the work. in accordance to that specific client, it usually surpasses the ability of the human by itself. but when Sarah Harding: Amazing. Yeah, because I was just Erez: we add this yeah. Sarah Harding: I was just talking with one of my girlfriends who I went to dental school with. She lives in Tennessee and she had bought a practice Seven years ago, we'll say. And then it she grew the practice. She bought a big building and renovated the building. And it's this beautiful, wonderful place. And she's doing great. And she is on her third or fourth CPA in the last couple of years because she thought that the first one that she had was doing great. And then all of a sudden, she She gets notification that she owes all of this money that there's some something. And she's like, this just doesn't seem right. And so then she went and took her stuff to somebody else. They looked at it. They also missed some things. And then she took it to somebody else. And she's like, I just don't understand. Because it's like what we find is that our CPAs are never being proactive, right? It's always like, last year, this, this, this. So We got we did this, so then this next year we'll make up for it by doing this. And then it's like I if I if it was the same, right. If it was the Erez: Yeah. And then you're playing catch up. Mm-hmm. Sarah Harding: same, it would be like, I'm so sorry. You know, we didn't really we didn't look at that tooth. And so we Tomer: Yeah. Sarah Harding: you know, it had a small amount of decay then, and but now, Erez: Yeah. Sarah Harding: it's been a year and now that I'm looking back at it, shoot, I've It's it's it's it's toast, right? that right, it's gonna have to come out, you know, and it's like that's right, it's like, but that's your job. Erin Sheffield: Least we get to do a implant, yay! Erez: I mean i yeah. A golden implant, that's what I'm thinking. Tomer: Mm-hmm. Erin Sheffield: Yeah. Sarah Harding: Your job was to look at the tooth in the first place, you know, and not let it get to this point. And so I think that's the biggest thing is that we're always we're it's almost like we're conditioned to believe that we need to be reactive in this scenario. We're all afraid of being audited. But if we did it all properly the right way in advance. An audit is no problem. Everything's squared away, Erin Sheffield: Who cares? Yeah, exactly. Sarah Harding: right? And so it's just like these inspections that we have in our clinics and our hospitals and things. If you're doing the right thing all the time anyway, then it doesn't matter. You just keep going as business as usual and everything's fine. And so how Erez: So Sarah Harding: do you guys address that? Erez: So so it it really like it brings me back to the the first point that I said. Because I guess the difference between looking at the mouth and knowing something's wrong to knowing something's wrong with your financials is literally visibility. sometimes maybe smell, but you know, specifically specifically visibility, right? So Tomer: Hehehehe Sarah Harding: Fair. Erin Sheffield: Pare your breath, you never can unsmell that. Erez: your ability to actually see that something is wrong is Is close to zero if your books are not in order. Now, I guess the the biggest the biggest thing I would say to the listeners is make sure that you have visibility of your financials. make sure that you know what is happening and you have a handle on what is happening, and it makes sense to you when you actually look at the reports because that is the important part. once you have that, you can go on and improve a ton of other things. for example, turnover times and 247 support and getting systems that actually do things in real time. So a lot of things can be improved. But the first and foremost you need to actually have a handle on what's happening in the business. think about it like finding really a rotten tooth in the business. That's actually a great a great yeah for sure. Erin Sheffield: He's gonna use that now for all his sales calls. Sarah Harding: You're welcome. Erez: Thank you. Tomer: I would add that probably obviously doctors are not finance professionals and there's it's totally right, look at your books and make sure they make sense too. That's the baseline. But after that there's the extra line where you need to have some knowledge of the tax situation you're in, you have a building like your friend, you have multiple entities. Even if you're you know, you're with your CPA, you don't want to go anywhere. Have a deep chat with an AI model, giving him your full information about how the business is operating, how it's structured, what kind of entity is it, a S-Corp, an LLC, and try to check maybe something's missed, maybe something is not structured correctly. And even that simple, you know, proactive action from you, and then sending it to the current person managing your finances could probably save you a world of trouble. Sarah Harding: Yeah. Erin Sheffield: And Erez: Yeah. Erin Sheffield: cost too at their hours maybe. Erez: Well I would say that it's just an indication, yeah. Tomer: Mm-hmm. Of course with a grain of salt we're using AI eventually, but it's it's like a bit of safety over there maybe could probably save you lot trouble. Sarah Harding: Yeah. Yeah. Because you know, they didn't even look at the what is the thing called when you have a building or land or big piece of equipment where you can depreciate it, but there's like some analysis that you can do. Yeah. Tomer: A depre like a a depreciation schedule on an asset, basically, yeah. Sarah Harding: It's it's some yeah, there's some like three-word thing that they come in and they l survey the building or whatever and they do this, I forget what it's called. but like it's shocking to me that they didn't bring this up or they did it incorrectly, or they didn't even offer this as an option for her when she did that. And then they rolled some other loan into the balance sheet of the business and something else was like off, right? And so I think the big thing that bugs me the most is I what I want out of my bookkeeping, my CPA, all of this stuff is something that I think that you guys offer. correct me if I'm wrong, but it's a little bit of like forecasting, right? And so it's like this hey, it looks like your books are here and it looks like we're on this trajectory. In order to mitigate or minimize your tax burden, are is there any equipment that you need to buy? Where what things have you bought that we can depreciate this year? Because the tax code is always changing, right? And so it's like, how can I minimize the amount that I have to pay, but also be able to maximize my business? In a way that I can continue to grow and not just give away all of my little bit of profit that I have back into taxes and not reinvesting that back into my business. Is that something that you guys is that is that what the forecasting bit is? Erez: so so forecasting specifically is to create a budget for the business and be able to actually have actual financials next to the budget. and with that be able to predict any scenarios that the business might run into. For example, in what what happens when you increase the marketing budget? What happens when you hire more people? What Sarah Harding: Okay. Erez: happens when you change anything in your bottom line? now take all that and multiply that by the amount of entities you have. You have, you know, 10 times more financial data to actually analyze and having it done automatically and in real time is a huge, huge advantage. Now, specifically to what you discussed, was there are all kinds of financial packages and financial opportunities that you can find in any business. The amount of tax you know, tax work you can do for a business is probably indefinite. you can keep on finding opportunities. So I guess the most important thing is to find a professional that actually knows your space. Because if they know your space, they are able to actually offer you things that are relevant for your space. For example, specifically, one of the things we provide is tax credits, which allows us to actually look at the business and then cover different activities that you do. And according to them, apply for tax credit studies. that might get you, you know, between thousands and tens of thousands of dollars back every year. We actually use a model there that is l literally like no upfront cost. which is I guess kind of the approach we took with the business coming in. Like we wanted to make sure that the tax packages that we offer are accessible, which is the hard part for small businesses, right? Sarah Harding: Mm-hmm. Erez: Like you start a business, you don't have $6,000 to gamble on a tax study. You don't know if you're even gonna get anything back, right? Like that's the that's part of the hurdles. So Sarah Harding: Yes. Erez: so we yeah, absolutely. So we build things in a way that are actually gonna make it accessible for for the practice we work with and it's all for their benefit. the idea is that I guess more than anything in that field is that you need to find someone that you trust to actually find those activities. I absolutely agree with you, like those specific activities that would be relevant for your sector and your business. then yes, a hundred percent. Sarah Harding: What are some interesting credits that you guys have found? Like what is stuff that we wouldn't even realize could benefit us? Erez: Sure. So one one easy one is RD tax credits. and there you basically look for any research and development activity that you have within the business that you can accredit those expenses to RD. and that way you prepare a study where you can rebate those credits from the IRS. Sarah Harding: Okay. Like an example for an oral surgeon. I know a few of them. like what would be what would be what would fit Erez: So it really Erin Sheffield: She's talking about me. Sarah Harding: in what would fit into that category, Erez: Yeah. Sarah Harding: I guess. Erez: So it really it really differs from business to business. So for example, I I was just on a call right now. and what they said was they're developing all kinds of methodologies with Zapier. Now, even if you go to a more basic understanding of technology and what you develop, even if you have methodologies you use within the practice, for example, new methodologies you adopted, new methodologies you developed. a new tools you you created, a website development that you did. any of these activities can be attributed to a tax credit study. And so it's it's worth checking out. Yeah. Sarah Harding: Yeah. Cool. Any other ones? Erez: Yeah. Tomer: It it could be things that are Erin Sheffield: Tell us all the secrets. Tomer: It could be things that are related to setting up the retirement plan better, so you're basically Sarah Harding: wow. Tomer: pushing some money into a different fund that rel relieves it off your tax liability for the year. It could be things that are related to employees that are with your company for a long time. So you got employee retention tax study. There's a lot of things, you know the tax Sarah Harding: Wow. Tomer: scale isn't huge, but it's just a few examples, yeah. Sarah Harding: Huh, never even heard of that. Imagine that. Erez: Ha ha. Erin Sheffield: Yeah, that imagine that we know nothing about taxes. You don't have to imagine very Erez: Yeah. Erin Sheffield: hard. Sarah Harding: Yeah, it's fair. That's fair. Erin Sheffield: we don't wanna encroach on any privacy or anything of any of your clients, but do you have any like success stories or someone where you've been able to really help them kind of transform their practice or their life with getting on board with what you guys offer? Erez: Sure. So so just recently, literally, I think it was last week, we had a client come in. He said he went to multiple CPAs, and they offered him. He has an MSO, which means he has multi-entity practice. and he he went to a few firms, and most firms just don't understand medical businesses or their structures or how they grow. So he again and again, you know, hit some wall, and they appraised the work that he needed to do to actually make sure to clean up and set up everything in six months. and then he came to us, and I explained to him everything about Lucent. And he said, like, my goodness, like this sounds too good to be true. Like this spits too well. and then about a week and a half in, he said, Listen, guys, like this is everything and more. you managed to do in two weeks. what I wasn't able to do like with others on the plan in six months. so we offered to even, you know, post us on on Facebook to his other other friends and, you know, like that's always, always meant welcome. So we were Sarah Harding: Yeah. Erez: so happy. Sarah Harding: Yeah. It is really interesting because while we all think that we're all very special, it medical practices certainly are a different, it's a total it's a different entity and it's a different beast to tackle and it doesn't scale like a regular business does necessarily. The hardest part I think for us is that w if we're as so like as neural surgeon, if I'm not there, the business doesn't run. Right. Like with other with other types of businesses, you know, you can take vacation and it still goes. But with us, it's like if we're not there, it doesn't go because we're the we are the product. Right. And so Erez: Yeah. Mm-hmm. Sarah Harding: I think that's the interesting part of it is that we can't even detach from it in order to put our finance hat on. because we always have to have the doctor hat. And so I think when talking with business people, corporate type people, they're like, you're not a you're not a business owner. You're just a tradesperson. And I'm like, I mean, kind of. Yeah, I get that. Right. And so because you can't scale me, you know what I mean? And so I think having the understanding of Erez: That's also something, by the way, what you're mentioning right now, because that is literally what what practices do. They do scale you, but it's just you can't scale your specific work. you can scale your methods and your reputation. Sarah Harding: Mm-hmm. Mm-hmm. Erez: and so you just make sure that the other practices live up to the standards that you know you can deliver. And so you you yourself become the brand. That is true. Sarah Harding: Interesting. I like the way I like the way that you said that. Hm. I like that. Erez: Yeah, I I mean that that's literally what I observed in the market. So th Sarah Harding: Right. Erez: that that is the way the the medical practice is actually Tomer: The the Sarah Harding franchise that we wanna look at. Erez: I mean, you know you already have Sarah Harding: As if there needs to be more of this. I don't know. That's Erin Sheffield: Doc Harding DMD. Yeah, I mean, I always Sarah Harding: right. Erin Sheffield: say I never wanted to be the person that was the strip mall that just said dentist. You Sarah Harding: Yeah. Erin Sheffield: know, like I always wanted to be more than that. I wanted to make a name for myself and I wanted that to mean something, not just be that plug and pull, whoever's there, the dentist, you know. And I I think that that's what you're kind of talking about is building that brand and Yeah, that's interesting to think about how Sarah Harding: Yeah. Erin Sheffield: you can expand that. And that's part of the reason why, you know, we're on social media and doing this podcast and things. We're getting our brand out there in other ways and expanding our knowledge. For me, that's why I love being here, is because in my practice I can see one patient at a time. And while you can touch one life at a time, that's amazing. But I want to have more of a global opportunity to help people, to serve, Erez: Impact. Yeah. Erin Sheffield: to share my message. And so You know, I think if we can unload some of these heavy things we carry like a tax burden, uncertainty, all of that, it just opens up so many more opportunities so we can do things like maybe expand our practice or expand into some other adventures or hobbies or spending more time with our families. Sarah Harding: Yeah. And I think just like we have a farm, right? So we have a CPA that does our personal stuff because they understand all of the farm stuff. I think it's super important to hire somebody that understands medical practices, right? Because I think that in doing so, you specifically pay more attention to those tax credits and those tax laws that apply specifically to what we're doing in medical practices, right? Okay. Erin Sheffield: about people Erez: Okay. Erin Sheffield: who maybe they aren't the practice owner, maybe they're just working in a clinic and working as a employee. Is this is your product still something that's helpful to them or is it really more for that business owner? Erez: So I guess it alleviates the the the pains of the business owner most. That's for sure. but A healthy business functions better and it betters everyone in the business. So you know, like on the very fundamental level, like if you boil it down to like the elements, what we provide, all the technology, all the workflows, all the professionals, what we provide is speed, and quality and affordability. That that is what the business actually sees. and I guess that translates internally. To a better run business. and I nobody wants to be in a failing business, right? So, you know, so it it they benefit from it, from the fact that the business benefits from it. But maybe to your question, directly we do have an opportunity for them to be on the financial platforms that we have. but what I observed was, you know, most people you know, they hate the the financials and they want someone to help them with it. So Sarah Harding: It's perfect. Erez: That's the that's just the reality we need to accept, you Sarah Harding: Yeah. Yeah. Erez: know. Sarah Harding: All right. I think we're gonna we're gonna end with a couple of rapid fire questions. What do you think? Does that sound good? And then we'll Tomer: Let's go. Sarah Harding: bounce back and forth. You guys can defer to one or the other, but otherwise we're just gonna bounce back and forth. Sound good? All right, Tamir, we're gonna start with Tomer: Okay. Erez: Yeah. Yes, yes, that's yeah. Sarah Harding: you. What is the biggest red flag when hiring a CPA? Tomer: You as errors, right? Erin Sheffield: Mm-hmm. Erez: What? Tomer: You're the you're Sarah Harding: Who's gonna start? Tomer: you. biggest red flag when hiring a CPA when he has a really hard time to collect all your data. It's like really an AI grandma, I would say. Sarah Harding: Fair. Erin Sheffield: He just called us bad CPA, Sarah. Erez: Burn. Sarah Harding: That's fine. Call away. Yep. All right. what eres, what is one question everyone should ask their CPA this month? Erez: what are my financial reports? most you know, half of the businesses we see just don't have proper, clear financial reports. It's crazy. It sounds so s so basic, but they don't have it. So Sarah Harding: What are the most important financial reports? Sorry, I know I didn't say I was gonna do follow ups. Tomer: I would say Erez: so Tomer: mm-hmm. I it's it's you go Erez: yeah, go ahead, Don. Tomer: P and L balance sheet, go basic and then for specifically for medical practices, they are aging. So you know where's the money sitting and you know. Yeah. Erez: If you really want to go to the next level, you can go cash flow reports and then go custom reports. But the the basic ones also, you know, just have have some clear financials you look at, yeah. Sarah Harding: Yeah. All right. QuickBooks. Love it or hate it. Tomer: I'm okay with QuickWooks. Erez: I'm I'm also okay with QuickBooks. You know, we we we work with it. we we made it a principle not to try to fight QuickBooks. we don't go against it. We no seriously, we integrate into it. We it Sarah Harding: That's right. Yeah. It makes sense. Erez: it's notorious. It's notorious in the industry. I I pretty much every other call I get someone slandering QuickBooks. Tomer: Mm-hmm. Erez: we actually, you know, I got on a call with one of their innovation leadership because they're such an enormous beast, they Sarah Harding: Huge. Erez: move slow. So I mean I'm not expecting them to to get to the to the place we're at fast. but they're n they're reliable. And I think reliability is very important. the way we present it in the business is that they're the numbers database. and it's good to Tomer: Actually i there is so reliable that you can connect it to your favorite AI agent if we're circling back to that. Sarah Harding: See? Tomer: Yeah. Sarah Harding: See that? Step Erin Sheffield: If I knew how to do that, that would be really cool. Tomer: Go to the connector. There's a little connector icon. Yeah. Sarah Harding: one, figure out what an AI agent is. Erin Sheffield: Okay, you're inspiring me. Sarah Harding: All right. Cash in the bank. Is it a useful metric or is it dangerously misleading? Erez: Course useful. Tomer: Extremely useful. Yeah. Erez: Course, yes, a hundred percent. Especially Sarah Harding: Okay. Erez: for a young business. Sarah Harding: Okay. Erez: Cash flow is everything. Cash flow is is the blood the business runs on, yes. Sarah Harding: How much what per s like is there a certain number or metric that you expect somebody to maintain in the bank? Or do you just Erez: No. Sarah Harding: see it fluctuate and you're okay with that? Tomer: have enough for three months of runway b without, you know, running Sarah Harding: Okay. Tomer: out. Sarah Harding: All right. Erez: Yeah. But it it depends on the size of the business as well, right? Like Sarah Harding: Right. Erez: if you have like huge fluctuations, then it becomes much more dangerous, right? and the bigger the operation, the the more runway you need to have because people's lives actually depend on your your business. So yeah, case by case. Sarah Harding: Yes. Yeah. And payroll is generally the largest portion of overhead, right? I mean, at least in our businesses it is. Yeah. And so Erez: Sure, yeah. Yeah. Erin Sheffield: I heard a business from another practice owner where they read some book, I don't know what it is, but they said to pay yourself first. And then they were actually running into payroll issues where they weren't sure if they're gonna be able to pay their staff. And so I thought that was really weird advice. Erez: It should be reversed. Sarah Harding: Yeah. Erez: I I agree. I agree. I think it's I should you should pay your s your staff first. Like the owners get paid last. I that's that's how we grew, you know? It's Sarah Harding: Yeah. Yeah, that's like the main principle, even in the military, right? Like leaders eat last, you know. Erez: Of course. Of course. Erin Sheffield: Well, I just think if I'm not paying my staff they leave and then I can't make any money if they're not there. But it's interesting Sarah Harding: Yeah. Yeah. Erin Sheffield: those advice things that sometimes books get written about, et cetera. So Sarah Harding: Yeah. Well I guess anybody can self publish. Erez: Honestly, you know, like yeah. Erin Sheffield: Ha ha. Erez: If you look at the books and like the literature on business over the last maybe twenty years, much of the the things that we grew on, like in terms of building businesses, growing them, especially in the more innovative startup y space, is outdated because Sarah Harding: Mm. Erez: it's it's more relevant to the early 2000s after the dot com and all all that. Sarah Harding: Yeah. Erez: So I I think for business owners looking to get actual valid advice, I would always go to people that are right now giving advice, that are in touch with what's actually happening and helping other businesses grow, you know? Sarah Harding: Yeah. Erin Sheffield: That's great advice. Sarah Harding: Something that I read recently, sorry, just as a side note, was very interesting when somebody was talking about valuation of their business and Somebody was looking to buy the business and they said, you know, the valuation was X amount and they're, you know, all of their financials were like this. And then but the owner of the business, who let's say it was a plumber, for example, didn't pay himself a regular salary. And so then they said, Okay, well, if we buy the business and you're not there. you know, that totally decreases the valuation because you're essentially Erez: Yeah. Sure. Sarah Harding: free labor at this point, which we're not gonna be able to continue that thing. And so I just think it's it's very interesting because that's definitely an outdated way of valuation. You know, that I don't know. Erez: I I guess you're right to an extent. Specifically, there there are certain places where it's what you're saying is more relevant. the more technological you go, today you're able to actually operate in a much more efficient way in a much larger scale utilizing AI. And so it becomes less and less relevant at that point. That's actually on point, yeah. Sarah Harding: Okay, that makes sense. Yeah, that makes sense. All right. what is the biggest tax mistake that high income doctors make? Erez: Biggest taxes mistake, not filing taxes. That would be the biggest mistake. Sarah Harding: Yeah, I'd say that's a big mistake. Tomer: horribly true. yeah, you wouldn't believe it. Erez: You wouldn't believe how many practices we see that didn't that Erin Sheffield: I believe it. I believe it. Sarah Harding: I would believe it. Erez: didn't file for years, the years, and they come to us already paying fines. And and I mean they keep paying fines. And you know, we're we're very, very speedy, but we end up like chasing them to make sure that things are are aligned. It's it's unbelievable. Do not pay back taxes to the I it's believable. Do not ba do not pay Sarah Harding: It is believable, yes. Erez: p back taxes to the IRS if you can help it. You know, like if you need to get out of it. Just get out of it. It's it's not worth it. I understand like in terms of cash flow, but the IRS starts at a certain point, they start taking a percentage of what you owe. And after that they can put a lien on the bank account, like a bunch of very bad things start happening in the business. So be very aware of that and and just like jump on the opportunity to clean up everything going back. Erin Sheffield: That's very relatable though. Like I can totally see how it happens because you're someone like me and I don't quite know what to do and I don't know who to trust and I don't know who to hire. And so you just kind of pretend that it's okay and it's gonna go away Sarah Harding: Such a Erin Sheffield: and you know you should work on it, you know you should set up your AI agent, but you don't really know how and it's takes some time Tomer: It's gonna go away. Sarah Harding: Yeah. Erin Sheffield: and so you just let it snowball until it's gonna take a million years and then you really don't want to figure it out. And so I see why it happens, but thankfully it sounds like people Sarah Harding: Same same. Erin Sheffield: like you can help. And that's sometimes the hardest thing is just making the decision who can I trust? Who can help me get out of this hole that I have continuously dug myself to China? How do I get out? So Sarah Harding: Yeah. Yep. Yep. Erez: Yeah. Sarah Harding: All right. Biggest bookkeeping mistake. Tomer: not catching up with anything that's not just categorized on P<unk>L. That means missing out on what you said, depreciation, loans, fixed asset schedules, you know, all the extra stuff that you usually don't know how to handle. Sarah Harding: That's me raising my hand for anybody that's just listening. Yes. Erin Sheffield: Me too. Raise my hand too. Erez: Yeah. Sarah Harding: Yes. Is there am I supposed to be doing something at the end of every month with my QuickBooks? Like there's something. Okay, that's a yes. Tomer: Depends on depends Erez: So Tomer: on what you're trying to do. You know, if you want to actually know where you're Erez: Ha ha ha. Tomer: going, then probably I would try to get the, you know, a monthly statement. And there's also, I'm guessing, what most small business owners do is they just, you know, they look at the QuickBooks and they hope everything was pulled correctly and the books are fine. But there is a the whole process of reconciling the accounting software with the bank Sarah Harding: That's the one. Yep. Tomer: account. And that's basically Sarah Harding: Mm-hmm. Tomer: matching each transaction and saying, Okay, I am a hundred percent sure that every single transaction in the bank matches the books. And that's kind of the monthly process that should happen once the bank transactions settle. And I understand that a small business owner it's something that's pretty much a headache to do and you wouldn't want to do it 'cause you need to, you know, go on every single credit card transaction that you pulled, if it's going to Applebee's or if it's going to pay your you know, mortgage and take it out of the books and not pushing personal items, you know, it's it it takes some time and that's why probably you shouldn't do it yourself. Sarah Harding: Hmm, fair. That's true. All right. W two or distributions. Which one do people misunderstand more? Like as a business owner. Tomer: think they understand W-2, so distribution is usually how where they don't understand it. But W2 is, you know, you you pay yourself, you think you're an employee, even though it might not benefit you the most. So yeah. Sarah Harding: Yeah. That makes sense. But you've got to do a certain amount of reasonable salary, right? In order to do retirement accounts and all that kind of stuff too. So yeah. Tomer: That's true. Yeah. Sarah Harding: All right. What's one expense business owners think is deductible, but often is not? Tomer: travel, you know, it depends. You you really need to justify travel makes sense. Otherwise it's it's it's gonna go. Sarah Harding: I cannot understand I am this person. I don't understand. Like, how is it that only part of my food gets is deductible? But like, what about the Erez: No. Sarah Harding: I'm going for the C E and so I have to fly to get there. I have to pay for parking at the airport, I to fly to get there. I have to pay for a hotel. I have to pay for food. Whereas like if I'm at home, I'm certainly not gonna eat out for every meal. You know, so how does so so tell me more. Tomer: so you need to tie the expense to an actual business operation. So that means if I take Aries out to lunch, it it really depends. Are we doing it as brothers or as business partners? We need to we need to play a lot of fun. Yeah. So that's true, but eventually that Erez: As business partners, definitely. A hundred percent. Erin Sheffield: It's always as business partners. Sarah Harding: Always. Yes. There's not a day that goes by that you guys don't talk about lucid, so we know that that's you know. Erez: It's actually very true. Erin Sheffield: Mm-hmm. Tomer: Eventually that's the game. That's the game you're playing. Can I tie this significantly and absolutely to a business activity? And that's the that's the discussion. Sarah Harding: So if I'm traveling for C E for a conference, for example, can all of that be deductible? Tomer: So generally yes. there are, you know, exceptions out of that. If you've decided to buy yourself something super expensive at the mall that's not usually that, and then Sarah Harding: okay. Yeah, no. Tomer: you try to tie that out to it, it it it doesn't really go same way. So it it generally yes, but there are exceptions. Sarah Harding: Okay, as always. Erin Sheffield: And when you said that's part of the game too, I think that's an interesting point as well, because we're trying to find legal, accepted opportunities to play the game, not to do illegal things to get away with it, right? Exactly. Erez: You don't need to. That that's the honest truth. Sarah Harding: Yeah. Right. Erez: Like if you understand the game you don't need to you don't need to break the rules. Erin Sheffield: Exactly. Sarah Harding: Yeah, that makes sense. All right, let's see. What is one legitimate deduction people routinely miss? Tomer: so I would say again the whole thing's about like depreciation is something that is missed a lot. Because it's it's huge. You buy huge amounts of property as dental practices, you're buying proper like assets all the time and then if you don't depreciate it, where does it go? Just huge expense. Sarah Harding: Yeah. Yeah. When should you fire your accountant? Erin Sheffield: Today. Sarah Harding: Haha. Tomer: It's a tough one. I I don't want to make anyone you know. I had yeah. Yeah. Erez: I I think we'll we'll do pass on that one. So no, I I guess I I have a good answer to that. So Sarah Harding: You can pass, that's okay. Erez: today I had a a new client come in and they said their accountant it it happens for different reasons, right? So one of the reasons would be their accountant became they're older now, and they're having a harder time actually keeping track of everything that's happening. They're not so responsive and they care less. and I guess those compounding reasons are enough to want to transition. Another client we saw today looking to come in was just looking to get on the AI innovation that's happening, because he wants to have the best in everything in his business. So I I guess those two motivations are the ones that we see leading. But I would say this if you have a good relationship with an accountant you trust that is delivering results over the years, I'm not swaying people away from good professionals that they trust. Like that's that is not the that is not what we do. And it happened to me multiple times that I had people come our way. because we leverage AI so well, our services are also very affordable, especially towards the quality that we bring. and so they come our way saying, we are paying X to our our S C P A. He asked for a little bit more. And I was looking at the account and I was thinking to myself, that's actually a reasonable thing to ask. and so I don't think we would be the best fit for you, like if you're looking Sarah Harding: Yeah. Erez: to to save that. And I think I think you should continue with the services you're having. it's like do not give up Sarah Harding: Yeah. All right. Is it me? Erez: a good professional you're working with. That's Sarah Harding: Yeah. All right. Erez: That's the price. Sarah Harding: I like it. Last one. Ready? Tomer: One. Mm-hmm. Sarah Harding: What would it take for someone to actually say, I love my CPA. You need their number. Erez: Mm-hmm. Sarah Harding: This is a softball. You got this one. Erez: Yeah. So I think honestly, to get like praises, like we were fortunate enough to get a few recently, you need to do a lot. Like I I think people have very high bar for being able to actually deliver. And we're in a very fortunate position where we have a technology that is able to wow people to a point where they're getting to that position. it's really not a given. And I try to remind myself that every time like we get that that response. because it's unusual. it's unusual. most professionals, like you go, you get the service from the professional, you don't go out like, my God, five stars. I want to do a Facebook post, right? Like it's not a it's not a common reaction. So Tomer: Ha ha ha. Sarah Harding: Right. Yeah. Yeah. Erez: yeah. So we we really try to keep our bar high. and I think People feel it like when they give those those five stars, it's exceeding expectations, Sarah Harding: Mm-hmm. Erez: I guess. Sarah Harding: Agreed. It's a lot easier to get a bad review than a good review, as it turns out. Yeah. Erez: Hundred percent. Yeah. Erin Sheffield: Especially when you're an accountant Sarah Harding: All right. Erin Sheffield: or a dentist. Sarah Harding: Yes, Erez: Yeah. Sarah Harding: yes. All right. Any last thoughts from you guys before we sign off? Erez: it's been a pleasure being with you. Thank you so much. It's been such a pleasure. Like we're we're doing a lot of podcasts and I I had a lot of fun. Like it's Sarah Harding: Good. Erez: it's fun, it's been energetic and good. Yeah. I hope it's been helpful to the listeners as well. Sarah Harding: Wonderful. We've enjoyed having you. And I hope so too. I think they'll really get a lot out of it. Thank you for all of your insight and all of your knowledge and the from AI to C VAs to all of the things. I really have enjoyed it. So thank you. Yeah. Erez: for sure. One more thing. So anyone wanting to go check out Lucid, go to www.lucid.now. you have all the details on the site and some of the testimonials that we have. Go ahead and sign up. you'll get to meet me or one of the owners, and we'll do a review of your current financial situation. We'll recommend you what's the best thing to do. happy to have you, even if you're just looking to browse and are not sure if you want to move. Yeah. Sarah Harding: Perfect. Perfect. And we'll link all of that in the show notes as well, too. So awesome. Well, thank you so much, guys. Aaron, you want to send us off? Erin Sheffield: Yeah, thank you so much for joining us on this episode of the Resting Stitch Face podcast. As always, like, share and see you next week.