About a year ago I found myself in a place I never thought I’d be: co-founder of a Simple IRA software company (WealthRabbit, www.wealthrabbit.com). Over the past year I have found several takeaways from the software business that can be applied to running a CPA firm.
Build with Scale in Mind
Most CPA firms are built around a traditional time-based model: clients need services, and the firm provides them on a one-to-one basis. This model works, but it limits growth because revenue is directly tied to hours worked.
In contrast, software businesses focus on scalability—developing products that serve many customers without proportional increases in cost or labor. A CPA firm can apply this mindset by:
- ▪ Developing advisory services that rely on standardized, repeatable processes rather than just hourly billing.
- ▪ Creating digital resources (checklists, templates, courses) that provide value without requiring direct involvement for each engagement.
- ▪ Leveraging automation to handle repetitive tasks like bookkeeping, payroll, and compliance filings.
Thinking like a software entrepreneur forces CPA firms to evaluate how they can grow without being constrained by billable hours.
Solve Problems, Then Scale
Tech startups don’t start with a product—they start with a problem that needs solving. Entrepreneurs identify inefficiencies, pain points, and bottlenecks, then build scalable solutions. As a CPA, I saw that there was no good digital solution for my clients to set up and maintain Simple IRAs. That’s where the idea of WealthRabbit came from.
CPA firm owners should ask themselves the following:
- ▪ What problems do clients struggle with? If small business owners always ask about tax planning strategies, would an automated tool or guide streamline these conversations?
- ▪ What firm processes are inefficient? If too much time is spent on engagement letters, could an automated workflow improve efficiency?
- ▪ Can technology help meet clients’ expectations? Clients increasingly expect self-service portals, real-time data, and proactive financial insights.
By shifting from a service mindset to a problem-solving mindset, CPA firms can enhance efficiency, improve client satisfaction, and identify new revenue streams.
Embrace Automation (But Keep the Human Touch)
Software businesses thrive on automation, removing human bottlenecks wherever possible. For CPA firms, this doesn’t mean replacing accountants with AI, but rather leveraging technology to enhance efficiency and free up time for higher-value services.
Practical ways CPA firms can integrate automation:
- ▪ Use bookkeeping software to handle routine transactions while CPAs focus on advisory services.
- ▪ Automate client communication through CRM systems that send reminders, newsletters, and follow-ups.
- ▪ Leverage cloud-based tax preparation tools that integrate seamlessly with client data.
That said, the biggest mistake software businesses make is losing the human touch. Clients don’t want just an algorithm—they want trusted advisors. Successful CPA firms will find the right balance between automation and human expertise.
Test, Iterate, and Improve
Software businesses operate on constant iteration. They launch a “minimum viable product” (MVP), gather feedback, and release improved versions. CPA firms often resist change because they feel they must get everything perfect before implementation.
Instead of waiting for the “perfect” solution, adopt a test-and-learn approach:
- ▪ Pilot new services with a small group before a full rollout.
- ▪ Collect feedback early and often to refine the offerings.
- ▪ Use data to make decisions—track which services clients engage with most and double down on what works.
This mindset helps CPA firms stay agile and adapt to changing client needs.
Marketing and Branding Matter More Than You Think
Software startups invest heavily in marketing because they know even the best product won’t succeed without visibility. CPA firms often overlook this, relying on referrals and word-of-mouth.
There are ways to build a sustainable firm brand:
- ▪ Develop a strong online presence—an up-to-date website, optimized for search engines (SEO), with valuable content.
- ▪ Leverage thought leadership—write articles, host webinars, or start a podcast.
- ▪ Invest in client education—CPAs can create financial literacy content that establishes trust and credibility with clients.
A great product (or service) only succeeds if people know about it.
First Principles
Starting a software business and running a CPA firm may seem worlds apart, but the principles of scalability, efficiency, problem-solving, and innovation apply to both.
By thinking more like a software entrepreneur, CPA firm owners can:
- ▪ Build scalable, high-margin services.
- ▪ Automate repetitive tasks to free up time for strategic work.
- ▪ Test, iterate, and improve client offerings.
- ▪ Invest in branding and marketing to stand out.
- ▪ Stay agile and pivot when necessary.
I have taken what I learned from my experience building a digital Simple IRA platform that makes retirement planning easier for small businesses and started applying startup philosophies to my CPA firm. I believe that what I have learned can make any CPA firm more efficient and profitable.
