Becoming an Entrepreneurial Crypto Accountant with Patrick Camuso from CamusoCPA

Episode 75 - Becoming an Entrepreneurial Accountant with Patrick Camuso

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[00:00:00] Patrick: We want a full list of the company's wallets, but also we want a full list of other wallets that they're interacting with. Right. But they're going to be paying employees. I want to get that wallet list from them because it's just less open questions that we're going to have to ask them during the accounting process.

[00:00:16] Patrick: Cause if you picture like their wallet is sending funds to an employee. If we have both of those wallet addresses, we can categorize that without any input from the client and any related vendors that they're paying on chain. We want all of that information from them. 

[00:00:29] Umar: Welcome to The Accountant Quits podcast, where we help accounting and finance professionals, learn how to manage a business using crypto.

[00:00:37] Umar: Today's topic is on becoming an entrepreneurial crypto accountant. If you're a technical accountant, who's also bringing a new business through your company, I have to ask. Why haven't you started your own firm yet? Yeah, the idea can sound terrifying at first. You're stepping out of the cozy safety net of a guaranteed paycheck.

[00:00:58] Umar: But here's the thing. Running your own firm isn't just about your technical skills anymore. You'll have to become a jack of all trades. Sales, marketing, operations, IT, you'll be doing it all. But if you've got the grit and the guts to be an entrepreneur, why keep waiting? Sure, it's a lot of hard work, but in the end, it's worth every ounce of effort.

[00:01:21] Umar: It's the satisfaction of creating something that's truly yours. Being a crypto accountant is an emerging career field. And I'm excited to talk with someone who took the leap of faith when it was still brand new eight years ago. I'm talking about Patrick Camuso, a well respected and recognizable voice of the Web3 industry.

[00:01:43] Umar: He's the Founder of Camuso CPA, a full service firm specializing in tax, accounting, and advisory services for web3 businesses. Patrick started his career working for five years at Deloitte as a tax consultant, and he didn't just walk out of Deloitte and stumble into success. He made mistakes, lots of them, but he pushed through and is now one of the leaders in crypto accounting.

[00:02:09] Umar: He's also the host of the Financial Frontier podcast. Published a book on navigating the NFT Sales Tax Maze and is a prolific content creator on all things related to web3 accounting and taxes. Lastly, if you're new to this channel, I'd really appreciate your support to help us grow by liking this video and subscribing to our channel.

[00:02:32] Umar: Now enjoy my conversation with Patrick.

[00:02:34] Umar: Thanks for taking the time to be here.

[00:02:36] Patrick: Thanks for having me on I appreciate it.

[00:02:38] Umar: So, like a lot of accountants tuning in you kicked off your career at a large accounting practice in your case, like I mentioned in the intro, it was at Deloitte. You spent five years there as a tax consultant, but then in October 2016, you did something bold, you quit. And just two months later, you launched your own accounting firm, Camuso CPA.

[00:03:01] Umar: I want to ask you what was going on through your mind at that moment? Can you take us back to that time? And what really pushed you to go out there and take that leap of faith?

[00:03:12] Patrick: Yeah, definitely. Well, you know in terms of like what pushed me to go and start my own firm I actually always wanted to start my own CPA firm believe it or not since I was a teenager. So it's always been a goal of mine and that's in my head what I was always working towards. So, I started my career at Deloitte and, I built great experience there.

[00:03:33] Patrick: One thing that I see a lot is oftentimes the experience that you're going to build working with these very large companies in the Big4 it doesn't necessarily translate into your practice. I was really lucky cause I got put in the financial services sector at Deloitte. 

[00:03:47] Patrick: So, what I did working there was working with very large financial data sets of unstructured transactions, not for crypto, but with securities. So, I got a lot of experience just dealing with large financial data sets that we had to normalize, apply tax adjustments to, and then, utilize that information for tax reporting purposes. So I felt like I built up a good core skillset that would translate into crypto.

[00:04:12] Patrick: So, that's what I was doing at the time at Deloitte. And basically then I was also getting into Bitcoin back then. I read the Bitcoin white paper back in 2014 and got in it, involved in it early on, on my own. And then like everyone else that read it back then, I basically told anybody that would listen to it, including, friends, family different people in my network.

[00:04:38] Patrick: So I knew about bitcoin and crypto early on I had this good background and experience and I always wanted to start my own firm And I felt like I built a good enough level of experience at Deloitte to where I stayed there longer I wasn't going to be working towards my end goal of building my own firm at that point anymore. You know, I was just going to be working towards, managerial level and maybe a partner level in the future So I felt like it was the right time to make the jump and that's exactly what I did. 

[00:05:06] Umar: So 2016, yeah, was still very early days for crypto. At Deloitte, were you already seeing clients with digital assets struggling with their tax filing. And you did mention you had already discovered Bitcoin back then, but to start your own crypto accounting firm is quite something. What made you focus on crypto at that time?

[00:05:26] Patrick: Well, like I said, like I just found crypto early on. At Deloitte, they weren't really focused, at least in my group on doing the accounting for digital assets. We were more just working with different types of securities, still financial transactions, just not with digital assets.

[00:05:42] Patrick: I think people that are still in those groups now have shifted to working with digital assets. It just wasn't really too big back then. So, you know the way that I started to learn about Bitcoin was, when I wasn't working, I was just trying to learn everything I could about the financial system and how money worked basically. And I like everyone else I learned about the federal reserve all the money printing got into precious metals and researching all of that. And I basically found the Bitcoin white paper on some forum, I don't ever remember the forum but on some forum related to like where a bunch of gold bugs were discussing precious metals.

[00:06:16] Patrick: Someone dropped the Bitcoin white paper in there and I was reading it one night. So yeah, I realized it early on and when I read it I really did believe in Bitcoin and you know I like to say like a lot of people back then brag about investing in it, which I did. But I also, you know invested my whole career in it as well.

[00:06:33] Patrick: And it was a risk back then but I really just thought that there was a huge underserved market, even at that time. I thought it would grow more in the future and I basically just made a bet on it and ventured out and did it. And luckily it worked out.

[00:06:48] Umar: The idea of this episode today is also for the content to be a source of inspiration to all the other accountants at Deloitte, other accounting firms who, at some point in time, they've contemplated on the idea, right? To open their own accounting firm. So there's a big difference between being technically skilled as an accountant and launching your own firm, being the founder, right?

[00:07:12] Umar: Where you need to be a jack of all trades. You need to be good in business and the communication as well. How do you close new business deals? What was it like landing your first clients? Do you remember that first client you closed? Any good stories there? 

[00:07:25] Patrick: Yeah well you know, being in crypto was such an emergent field I think the first thing I would point out is that I was my own first client and then my friends were some of my next clients and obviously those weren't paid clients, but that allowed me to basically start to, build out a process for this that I felt comfortable actually taking money from people for.

[00:07:45] Patrick: And I was confident that I could, do this accurately for them. And really after that, it really just came from my network, a friend of a friend that they told to buy Bitcoin, was asking about the tax implications. They get connected with me. I sit down with them and I start doing the accounting work for them.

[00:08:03] Patrick: And it really just spiraled, especially back then. It was rare to have Crypto CPA. So it would be like I get one client I do good work for it. You can get five clients from that just be a referral. So that's really how I got my first clients was just doing good work for my immediate network and then expanding from there and then outside of that, I did start putting out content and start, you know speaking in like the different groups that people are in the different private investment groups and just putting out content online. And that helped to bring even more potential clients. But, my first clients were really myself and my friends.

[00:08:38] Patrick: And then after that, just, friend of friends that also needed tax assistance.

[00:08:42] Umar: Yeah, you are a very articulate speaker, I would say. And whenever you speak, I think it's easy for your audience. It's clear to understand what you're saying. It's quite something to break down complex world of crypto to like digestible content for accountants who are not very

[00:08:58] Umar: technical. 

[00:08:59] Umar: So, you started with tax. Tax planning, filing services, and then later down the line, you expanded into bookkeeping because, obviously individuals would mostly need tax support, but that's just like once a year filing.

[00:09:16] Umar: At what point in time did it become clear that adding accounting, bookkeeping services, it actually made sense. And who are your first clients there?

[00:09:25] Patrick: Yeah. Well, when I was first getting clients, it was always in a combination, I would say of accounting and tax, because most of the time when someone's coming to my firm, from the very first client through till now. They're coming for two reasons. They're coming because they have these transactions that are on chain that they don't necessarily know how to do the accounting for.

[00:09:43] Patrick: They're complex. There's all these data issues. They go and they try to look at which software they should use. They're dealing with this completely fragmented market. So that's a lot of times people are coming just because they can't even wrap their heads around putting an accounting system together.

[00:09:58] Patrick: And then on top of that, there's transactions that are happening on chain where the tax implications aren't clear, even the tax professionals, nevermind, just, a web3 business owner or an investor. So I would say like my firm, the first two services that we really focused on were providing the accounting for on chain, and then also providing that tax advice for the transactions.

[00:10:21] Patrick: And to me, they're indestructibly linked in a way because they do go hand in hand. So I always have had the accounting services as a primary service for the firm as well as the taxes because just like with this nature of crypto it's necessary. Now the tax planning on the individual side is more focused on helping them understand the tax implications to their transactions.

[00:10:44] Patrick: It's much less involved than the tax planning for web3 companies. Especially if they have international components or if they're doing TGE events, depending on the nature of the business, it can get very complicated very quickly. And the need for planning there is much more substantial.

[00:11:00] Patrick: So we do also offer those services. But in the beginning, back in 2016, it was really Individual investors and Bitcoin miners. And those were like the first few types of people I was working with. And, back then with them, we were doing both, we were doing accounting and the tax side and as things have expanded, you know, I've been trying to grow with this industry. And now we're seeing a lot of Web3 companies with much more sophisticated entity structures that are dealing with a more complex regulatory environment and they do need more complex planning now.

[00:11:32] Patrick: And we do offer that to them as well. So I would say in the beginning we started with more with the accounting and more simple tax planning, just because the needs back then were more simple. And now as we start to see more startups in this space and more of a regulatory environment that's in place, we're doing much more complicated planning on that side of things now.

[00:11:53] Umar: I believe for crypto clients, like the onboarding process is completely different than if a client has only like fiat on their balance sheet. I want to take a very practical scenario for the listeners. Let's say there's a DeFi protocol reaches out to you. Let's say they've gained some good product traction.

[00:12:12] Umar: They have a good social following, but the Head of Operations talking to you, he admits, he says: "We've never prepared any financials. We don't have any accounting records in QuickBooks or any other accounting software. We can provide you with our wallets with transaction on different chains for the past one year." This is what he tells you. And I believe it's quite common in web3, right? So

[00:12:36] Patrick: Oh, yeah! I've probably had that conversation 5 times this week already. 

[00:12:41] Umar: Could you walk us through how you would handle that initial call? What are some of the essential questions you would ask them first to really understand the business? And how do you actually ensure you give them a quote that reflects the true scope of work later down the line?

[00:12:55] Patrick: Yeah, I think that's the most important thing is making sure you scope these services properly and you're able to give a reasonable quote for both sides up front. And that isn't easy because basically like a bespoke service that we're offering each client to a certain degree. They're all transacting on chain, but they're gonna have a different nature to their transactions. A lot of times they're gonna be on different blockchains.

[00:13:18] Patrick: So each client is customized to that degree. The way that we start is with a simple one on one conversation, you know I'll sit down on Zoom or a Google meets call and try to understand their business. I'll ask questions around just like what is their business doing?

[00:13:33] Patrick: Who are they serving? What is their business model? And just try to get that high level understanding of their business. And I think that's the first step to just really get that from a first principle standpoint. What are you guys doing every day? Then from there trying to understand what if any entity structure do you have in place?

[00:13:51] Patrick: And those are really the first two steps. It's just seeing what is this company doing? What value are they offering? What is the nature of their business and then how are they going to be structured from an entity structuring perspective. Then from there I get into more of the granular conversation of what does their flow of funds look like on chain?

[00:14:11] Patrick: What exchanges do they have? What bank accounts do they have? Have they been commingling funds between personal and business wallets or exchanges? What blockchains are they on? Getting deeper into the nature of the transactions. Are they in and out of a lot of complex DeFi protocols? Are they just paying employees and getting revenue, really trying to understand the flow of the funds and just get as much detail from them on that initial call as possible.

[00:14:38] Patrick: But what I find that's usually not enough to really put a full scope on it. And, the next step that we usually take is actually requesting their public wallet addresses and exchange files and, doing just a high level overview on what does their flow of funds look like and, that review, I think helps a lot.

[00:14:57] Patrick: We couldn't scope it with just a conversation or just the review, but both together go a very long way because we're going to get the perspective from the founder, but then we're going to get to see what's going on chain, which, sometimes during that conversation, some stuff gets gets left out. 

[00:15:11] Patrick: So that's usually our process is like doing this initial consultation to really try to get a comprehensive viewpoint on the business and then reviewing their transactions on chain at a high level. At that point, I can usually put a scope on it and send a proposal to them. And then, we'll discuss that further.

[00:15:27] Patrick: And then we start the onboarding process from there.

[00:15:30] Umar: And once they've on boarded now. You've sent them the quote, they're happy with it. What's the process for onboarding a client and maybe a sort of checklist that you'd have, would you then provide the client with a template to fill now all their wallet addresses? What's the nature of each wallet? Things like that.

[00:15:50] Patrick: Yes. Yeah. I don't have my checklist in front of me, but it would be those types of things that we're including on the checklist. We want a full list of the company's wallets, but also we want a full list of other wallets that they're interacting with, right. If they're going to be paying employees.

[00:16:06] Patrick: I want to get that wallet list from them because it's just less open questions that we're going to have to ask them during the accounting process because if you picture like their wallet is sending funds to an employee If we have both of those wallet addresses we can categorize that without any input from the client If we don't have that second wallet address. It's not going to be clear with the transaction.

[00:16:25] Patrick: So we want a list of all their wallets that they're paying employees from wallets of investors that are might be investing in their company. And you know any related vendors that they're paying on chain. We want all that information from them. Comprehensive as we make that process it's going to evolve over time. 

[00:16:42] Patrick: There still is going to be like open questions and wallets related to certain transactions. But if you collect all that information up front, it goes a very long way to where you can reduce any confirmations that you have to ask the clients and then you know these documents that we have are like living documents for these clients because as they add new employees or they add new wallets, we'll continue to update that and keep a running list of everything.

[00:17:05] Patrick: So yeah, we want to request all of their wallets and all the information related to that. We also want to request like all of their organizational documents to look at their full entity structure. But yeah, I would say at a high level, that's the information we're requesting from them.

[00:17:20] Patrick: And then also like sometimes clients do have like contemporaneous notes that they have on certain transactions, maybe if they're a really good client and some transactions are unclear, they have that information. I always tell people the more information they can provide us, the better, we'll sift through it and organize it all.

[00:17:37] Patrick: The more information we get, the more we can make sense of what's going on chain without going back and asking the client. 

[00:17:43] Umar: Yeah. And I believe that's where you would have a lot of back and forth. If there's transactions that's been happening over one year, where would be the supporting like documentation? I don't believe like clients would be 

[00:17:54] Umar: so, um, what's the right word? I don't know. Mindful to send everything up front or you would have to ask them like a hundred times.

[00:18:04] Patrick: Yeah, look, like, I would love to have most engagements be just like clean onboarding, clean categorization, clean reconciliation, but it's almost never the case. Like you sort of hinted at, most of these companies they're startups and when they're trying to get traction the first year, they're not really focused on accounting.

[00:18:23] Patrick: And quite frankly, even though it would be better if they are, they have competing priorities and their time is limited and they're trying to, get their business going. So I don't even know if they necessarily shouldn't be right off the bat. So usually when people come to us. It's on the business side, it's usually, yeah, we've been in business for a year.

[00:18:40] Patrick: We just reached some milestone of growth in the company or possibly funding. And now we need to go back and we need to clean up all this information. So, yeah, we're constantly going back in time. It's even more severe with investors. Every single week, we're still going back and doing the accounting for investors in many cases to 2016 to 2017.

[00:19:02] Patrick: We just completed one for an investor a week or two ago. We had to go back to 2014 so you can imagine, coming back that far in time, they're not going to be able to give us all of their wallets. Or even all the exchanges, sometimes they're defunct so they don't even have access to them. So we have to navigate all those issues.

[00:19:20] Patrick: And there's an element of this where you're almost acting like a forensic accountant to where, it's like a puzzle piece that we have to put together and try to narrow down exactly where the gaps are in data and frame this to the client in a way where they can actually give us some input that we can use to, help build out a audit trail and substantiate their cost basis. So there's always data gaps. That's sort of part of the game as a crypto accountant, I think, at least for now. 

[00:19:45] Umar: Yeah, you definitely have to become like a data scientist or a forensic accountant with crypto.

[00:19:51] Patrick: One point on that actually is like a big part of that. And one thing that I focused on, since the beginning with this. And this goes back to, I think my experience at Deloitte being a financial accountant is the due diligence process. One thing I've seen overlooked for years.

[00:20:07] Patrick: I think people are catching on more to it now, it's more historically speaking was people that were just, self-calculating or even a lot of times, like a lot of firms were not comparing the calculated ending cost basis to what was actually held across their wallets and exchanges.

[00:20:25] Patrick: And so a lot of people will come to us without doing that due diligence and try to like work with us on a subsequent year. And we'll quickly look at that and realize stuff has to be reworked. 

[00:20:34] Patrick: So, you know, there's several due diligence steps to doing the crypto accounting, but one thing that we focus on that really helps to ensure, full accuracy and completeness of data is doing that last verification step because, you can have all the gain or losses calculated to where nothing's unmatched and it appears to be correct, but maybe, you're missing a wallet where they purchased 25 Ethereum and that'll come out in their ending basis and you'll realize then you have to start adding more data.

[00:21:02] Umar: Yeah, I also want to touch on your approach to pricing. So given that crypto accounting is a niche market. I always believe that offering crypto accounting tax services that should command premium pricing. Not many accountants have this expertise. So early on, Of course, you would be willing to underprice to onboard new business, but then as you keep growing, as you grow in confidence you would probably increase your prices.

[00:21:30] Umar: I want to ask you. For the listeners looking back now, what pricing mistakes have you made along the way? Have you refined your approach to pricing now as you've grown? 

[00:21:42] Patrick: I think pricing is difficult for all firm owners, whether they're starting out or whether, they've been in business for a decade. And I think that it's something that's constantly evolving in most firm owners. Probably don't feel like they have it right even today. It's difficult, but I would say in the early days, I've made several mistakes with pricing probably most of the mistakes that you can make.

[00:22:06] Patrick: I would think the two biggest ones though were underpricing my services in the beginning, just because, I came as a strong accountant technically, but sales and pricing and all these other aspects of running a firm I had to learn the hard way basically. So yeah in the early days, you know severely Undercutting the pricing on both the accounting and the tax side.

[00:22:29] Patrick: I think that's the biggest issue I would say like another related issue is scope creep because obviously. We do price up front to clients and there can be a lot of changes in the scope. Going back to you know these issues that come up with missing wallets, missing exchanges, other sorts of data issues.

[00:22:49] Patrick: So I think the two biggest things that, I've made mistakes on in the past would be underpricing my services and allowing too much scope creep.

[00:22:56] Umar: Are there like examples where maybe you offer like specific client some sort of bundle, like for accounting tax. where it's easier for them to stay with just one service provider to do both.

[00:23:09] Patrick: Yeah, so we've always offered both the accounting and the tax services, but one thing that I think I've done right is that we don't bundle them together as one service. Like if you want to do the accounting with us, you know you're gonna pay for the accounting. And if you wanna do the tax preparation with us, you're gonna pay for that separately.

[00:23:26] Patrick: So. I think bundling them together, especially the tax services can create some issues for firms because picture. Especially if you're doing monthly accounting for someone or quarterly accounting picture, if something happens and they don't want to continue with the accounting services, but the tax services is tied into that, are you still gonna, file their taxes six months from now?

[00:23:49] Patrick: With the accounting that maybe they did incorrectly or are you gonna refund a portion of that bundle that you offered them? So, we've always priced each service separately, but also stressing to the client that, bringing everything in one place is gonna be, the most manageable way for you to do things. 

[00:24:06] Umar: All right the next topic I want to speak of is scaling an accounting firm or crypto accounting firm. So you've been running your practice for eight years now. Like I mentioned in the intro as a founder, you have to wear many hats and balance client work with running the business side of things. I want to ask you what are some strategies over the years that allowed you to scale? What's worked in the short term, what's worked in the long term?

[00:24:30] Umar: In the early days, there should have been a point where in order to onboard new business, you had to bring more hands on deck. So if we start with hiring, what's been some of the learnings you've gathered on onboarding new team members? 

[00:24:46] Patrick: I've definitely made some mistakes with hiring in the past and, like many things had to learn the hard way on that. 

[00:24:51] Patrick: I think the two biggest challenges with hiring, especially as a small firm, are some people want to just come into the firm, especially with crypto because it's so nascent, learn from you for maybe six months and then go start their own firm sometimes, which obviously, that's not what I'm trying to do to train people for six months.

[00:25:09] Patrick: So I think that's one challenge. But the bigger challenge is making sure that during the interview process. Your employees are screened properly to ensure that they have like a base level that you can train them on. My approach has been so far, and this may change in the future as we grow larger, but my approach so far has been to not just like take a regular accountant off the street that has never, seen a transaction on the Block Explorer. And put them into our workflows because then I have to bridge this whole gap of not just teaching them crypto accounting, but teaching them crypto in general.

[00:25:47] Patrick: So, that's what I've learned in terms of screening employees is trying to just screen them for this basic skill of reading the Block Explorer and just having a basic understanding of crypto. So in the early days, when I would interview employees, I would just ask them questions about it, which is a lot easier. Sometimes they can answer the questions without the full knowledge that I'm looking for.

[00:26:08] Patrick: So I put in like a stronger screening process, I think during the interview process that sort of mitigates some of the risk of us hiring someone and they come in and they're just not going to work out because that basic skill level isn't there. So during the interview process we show the accountants, transactions on the Block Explorer. And ask them to, interpret the nature of the transaction in real time.

[00:26:32] Patrick: And, that's like the base level. If I can get someone that has like a basic knowledge of crypto and can look at a Block Explorer and not even have to be an expert in it, but at least, know if a transaction, if you're providing liquidity or is this an NFT purchase, is this a transfer, is this just a swap?

[00:26:49] Patrick: Just having that basic level of knowledge. Putting those filters has made all the difference for us scaling because now it's really helped us get in better quality hires that when we do invest in training them. We get a return on that investment and even with those filters, it takes several months to really get someone trained up to be like a strong crypto accountant that can, manage a client, from start to finish in terms of like doing the accounting and reconciliation.

[00:27:18] Patrick: So I would say just really filtering and making a stronger interview process was the biggest key for me with hiring. 

[00:27:25] Umar: Okay. That's very good. So I always say, so Block Explorers is the gateway into crypto accounting. So having them read Block Explorers, yeah! You know, there's no bullshit then, right?

[00:27:38] Patrick: No. And, it's funny because for every crypto accountant out there that I interview, it's just only a small percentage of them that can read the Block Explorer. And that is something that has always shocked me because like you said to me, that is the basic skill, reading the Block Explorer.

[00:27:54] Patrick: What I think happens is a lot of the newer accountants, they're getting just thrown onto clients. They don't have like strong training processes, maybe in the firm they're at. And they're just relying on a software a lot of times. And they're just going through the motions with the software, producing the reports with the software.

[00:28:10] Patrick: And a lot of them can't read the Block Explorer. I don't want to put a percentage on it, but when I interview a potential accountant, more often than not, they're not, even if they say they can usually, cause we also don't even interview them unless they check a box that they can read the Block Explorer, but most still, when, you know, the rubber meets the road.

[00:28:30] Patrick: Cannot read a transaction put in front of them. And that is a huge issue because if you're going to have to teach them from that level, that can add potentially months on and you don't even know if they're going to really make that jump basically. So yeah, it's the filtering the employees for that.

[00:28:46] Patrick: That's important. And then we do have a strong training process within my firms we're not just like hiring people and putting them on a client and expecting them to perform. We bring them in and we basically put them on mock clients or test clients that we've done in the past and they'll go through those clients for a couple months and ask me questions ask usually like a staff that they're assigned with questions and really get to like take their time and go through everything methodically. So when they are working on a client, they went through a pretty strong training process.

[00:29:19] Umar: I noticed you're hiring an accountant right now. So for people listening, if you're interested to work with Patrick, that would be a great opportunity. Now, this role is based in the Philippines and I spoke with a couple other founders like yourself. And I'm hearing a lot of them are tapping into this growing talent pool of crypto accountants in that region.

[00:29:42] Umar: What's your take on it so far? Has your experience been with working with talent from the Philippines? Is anything working? Is anything like pleasantly surprising you? 

[00:29:55] Patrick: Yeah, I think it's great You know, I look at the members of our team. We have team members both in the Philippines and in Pakistan. And we are hiring more like right now that role that I have will hire either out of either of those countries, really. And it's been great so far. It's the same issues with hiring anywhere else.

[00:30:13] Patrick: You still have to have a good interview process, filter your employees and train them properly. But there's really good talent in those countries and there's very motivated people. In those countries as well. And I think my firm has like a unique benefit that we can give them of putting them through our training process and giving them this crypto experience within a US firm. So it's been great for us. You know, we have great employees in both of those countries that perform very well for our firm and you know, we look at them as any other team member in our firm. So I think it's great and I do plan to hire more over there, too. 

[00:30:51] Umar: When you recruit people from abroad, how do you ensure that they fit into the culture of the company? If people have not worked remotely before and they've been in an office to be able to communicate something clearly just on like Slack, it's a skill to develop, right? 

[00:31:09] Patrick: It is. It is a skill to develop. Culture is something I do think I still have to work on, but I think that we do have a good culture and I think that it starts from the top with me. So, when I bring in a new employee, I view , their success is my responsibility and I still work very closely with new hires. 

[00:31:28] Patrick: So, I'm able to I think, set the tone a lot within the company. We're still under 10 people right now, so it's not like it's a mega firm so, I think, through my interactions like in the leadership position where a lot of times people are going to take cues from me and, they're going to follow suit.

[00:31:45] Patrick: So I just try to really lead by example, I would say. And really make sure that I'm investing my time in the employees. And I think that they feel that after a while working in the company and it increases their commitment to the firm. And yeah, we know we get a good rapport and flow going between me and all of our employees.

[00:32:03] Patrick: I think just by like me doing that I haven't really formalized it much more than that. But as we grow, I think that we will have to.

[00:32:11] Umar: Yeah. I was speaking to you before we started recording. I was saying that I'm really impressed by Patrick's appetite and longevity to create content. If you go on his YouTube channel you. Yeah, you will just keep scrolling and keep scrolling, and there's just going to be content on Web3 accounting and taxes.

[00:32:30] Umar: So it's great to see other accountants creating content in the Web3 accounting space. For the listeners, I mentioned this in the intro, but Patrick is the host of a podcast on Web3 accounting as well. It's called the Financial Frontier Podcast. He's launched a course on crypto taxation. He contributed to numerous guides.

[00:32:49] Umar: And very regular voice on socials. I want to ask you as a content creator have you been able to measure the ROI when creating content and what's your secret to staying so consistent? 

[00:33:02] Patrick: The ROI, I believe is large. It's tough to, directly measure it, like when I get a new form submission via my website, a lot of times, it may be, it just came from Google. They had to probably heard from me somewhere or saw me somewhere to search that. So you can't really measure every single lead, but many leads do come directly from content where they'll say: "Hey, I saw this video that you posted online.

[00:33:28] Patrick: And that's why I reached out." So, the content for me, I don't think my firm could exist the way it does without doing the content. I think both of them are integral and I think that's really true for any business nowadays. 

[00:33:40] Patrick: If you want to exist and be top of mind for people in your industry, you need to be putting out content.

[00:33:46] Patrick: So, the content does have this direct ROI where, I put out content and I get leads. But on top of that, another big resource is getting referrals from other professionals in the space and just other clients that we work with. So I think that there's two benefits with it there too.

[00:34:03] Patrick: Number one, me putting out the content not only gives visibility for me to like other investors and Web3 business owners, but also other professionals in the space. So someone may see my content on LinkedIn and they own a accounting firm in France and they have a client that is setting up a Delaware C Corp And it's going to be operating in the US and they become a client, we've had scenarios like that.

[00:34:27] Patrick: So, you know the content creates like direct leads it creates referrals but then also if just, I get a random referral, a client refers me another client, that client goes and tries to look into my firm, I'm putting out all this information that demonstrates my knowledge in this field that I can demonstrate way better than I ever could on an hour long phone call with them.

[00:34:49] Patrick: So, to me, the content's extremely important because it gets direct leads, but also it just adds to your overall credibility and brand whenever any lead finds you. And on top of just creating my own content, I have also found that going on podcasts like your podcast and going into like private groups of founders or investors and giving presentations there has also been very beneficial.

[00:35:13] Patrick: So to me, I'm just trying to amplify my voice as much as possible and get as much branding and distribution and just. Be known as The Crypto CPA. So to me the content is extremely important. 

[00:35:26] Umar: I completely agree. And you never know where the client comes from, like listening to your content or consuming your content. I've had someone joining the course last year who told me he had listened to an episode two years ago and that was insane.

[00:35:42] Patrick: Yeah. I have that same thing. People will say they saw a video from years ago and it's crazy, this stuff lives out there forever. So it's extremely valuable to anyone watching. That's like on the fence about making content. I would definitely encourage them to do so.

[00:35:56] Umar: Now, when it comes to scaling, you can only go as far as your accounting software and your tech stack. There are traditional let's say, Web2 tech stack, like practice management software is like Karbon is one, Ignition is one. They're used to handle project management, how to track billable hours, keeping your budgets in line, managing documents. 

[00:36:17] Umar: And then there's the Web3 stack, the subledger, and the Tax Tracking Tool, which I believe are the best friends of the Web3 accountants. So, starting first with the Web2 tools, Patrick, could you share what your tech stack looks like? How do they make your life easier? 

[00:36:33] Patrick: Yeah from usually a project management standpoint I haven't went and jumped on these Karbons or Ignitions yet. I've seen a lot of them come out over the last couple of years and, we're contemplating leveraging one of those. 

[00:36:46] Patrick: Right now for project management purposes, we use ClickUp. It's not just like an accounting driven CRM. It's just more of like a general one, but that's what we use to track assignments and track time.

[00:36:57] Patrick: And basically that's our project management tool. For sharing data between clients where we use our client portal for that we use ShareFile. I would say those are probably our two biggest Web2 tools outside of like Slack and stuff. 

[00:37:12] Umar: Okay. And following up with the Web3 tools, do you tend to stick with only one subledger and tax tracking tool? And yeah, what advice do you give accountants starting to onboard these tools.

[00:37:22] 

[00:37:23] Patrick: Yeah, look, I would love to only have one subledger and one accounting tool, or maybe just one for all of it. But that's just not the way that it really is right now. It's very fragmented. The accounting technology industry related to Web3. I'm sure you're aware of this as well.

[00:37:41] Patrick: So, it's even a struggle for clients to figure out like what is going to be the best tool for them to use. So, right now I would describe our firm as software agnostic. Meaning that we don't rely on any one tool or sub ledger, and we use many of the different sub ledgers that are out there.

[00:38:01] Patrick: And it's just by necessity rather than, I don't think that's optimum because I have to train my employees on, a ton of different workflows. But I think this goes back to that core of, making sure that fundamentally these are strong crypto accountants that know how to read the Block Explorers, understand the full process and can like walk into any of these softwares and run that process across any of these softwares. 

[00:38:24] Patrick: So I don't know what's going to happen in the future if there's going to be more consolidation in the future but you know right now I haven't seen it as a good move to go and just marry myself to one of these softwares. Because there's a lot of risk with it, of course. I started my firm in 2016. Back then there was only a couple options for retail softwares and there was really no Web3 softwares out there. And then over time we've just seen this proliferation of different crypto accounting softwares, and then also all of these Web3 sub ledgers that came up.

[00:38:57] Patrick: And I think the market is going to even get more fragmented in the future because I think a lot of the retail softwares are going to come in and try to, build out a Web3 sub ledger as well. So, I don't know where this market's going to go over the next years, but we're not pigeonholing ourself into one software right now.

[00:39:15] Patrick: We'll either take one of two approaches. 

[00:39:18] Patrick: If the clients are already using something and it's serving them well, we'll meet our clients where they're at and we'll, utilize the tool that they selected as long as it's meeting their needs. 

[00:39:28] Patrick: If it's not meeting their needs or more commonly, if they just haven't selected a tool yet, we'll take them through a process to help them arrive at the best solution for them.

[00:39:38] Patrick: Taking into account what type of blockchain coverage do they need? What type of assets are they transacting in? What type of reporting do they want? Obviously taking in pricing considerations as well. So I would say like right now we're software agnostic. We're not sticking to one software. But we utilize many different ones and we're just watching to see how things shape up here over the next few years.

[00:40:01] Umar: Other than subledger and tax tracking tool? So for the accountants launching his own practice, is there any other tools they would need like Web3 wise? 

[00:40:12] Patrick: Starting with the sub ledgers is the most important. And then, it's going to depend like if you're working with companies doing TGE's, you may need something like a Liquifi or something that's gonna be able to help you manage your SAFT agreements and tracking all of those payouts.

[00:40:27] Patrick: I think those are the big ones.

[00:40:29] Umar: We spoke a lot on how accountants can launch their own accounting firm. Now, I want to speak a bit about your firm. Could you provide the listeners an overview of the services that you provide? Do you work exclusively with clients transacting in crypto? Do you have a broader scope and any particular jurisdictions you'd normally focus on? 

[00:40:49] Patrick: Definitely. At Camuso CPA, we only work with people that are transacting on chain. We do work with both investors and Web3 companies. And that's basically been, my approach since I started my firm in 2016. I've always had this crypto focus. 

[00:41:03] Patrick: In terms of, the services that we offer, to the investors and the businesses, they're pretty similar, you know We're going to be able to handle their whole accounting process from setup to whatever they need on a: Monthly, Yearly or Periodic basis. And then on we're able to also assist them on the tax side. So tax preparation and any related tax planning as well.

[00:41:24] Patrick: We're able to assist them with that. In terms of jurisdictions, I would say like we're a US based firm and we work with US clients. With that being said, there's oftentimes going to be an international component to a lot of these Web3 companies. Even if they're US based. 

[00:41:45] Patrick: It's very common to have a Delaware C Corp and then some entity that's going to be in another jurisdiction. Maybe BVI, maybe the Caymans, maybe Panama, where, they're going to be holding IP in that, or they're going to be doing something DeFi related in that, or oftentimes doing a TGE event in that. So, there's international components I would say to a lot of the businesses that we work with although, I'm not out there looking to like get a client that's just like operating in Switzerland and that's it or something like that. So, we're US focused, but they do have international components. 

[00:42:21] Patrick: In terms of the services, we're a full service firm.

[00:42:23] Patrick: So we'll handle both the accounting and the tax side for clients. One interesting service that I'm really just rolling out now. That is like an emerging tax issue in Web3 that I think is going to be a much bigger issue in the future is on chain sales taxes. So, I look at on chain sales taxes, like crypto taxes back in 2016, most people are aware of them.

[00:42:48] Patrick: The market for it is extremely small right now just because there's not a lot of retail transactions like that happening on chain. But, if tokenization really does take hold in the future here, like a lot of people are anticipating, including myself, and there are more goods and products that are sold on chain I think this is going to become a much larger issue and it actually does apply to all of these NFTs that have been sold in the past as well believe it or not.

[00:43:14] Patrick: So, yeah to summarize like my firm is you know Accounting and tax full service US jurisdiction with some international components for more of the complex Web3 companies.

[00:43:24] Umar: Could you give us an example of the challenge with the on chain sales tax that you've encountered so far?

[00:43:33] Patrick: Well, right now is that no one's complying in it. That's why I say a lot of times, it's like crypto back in 2016. Back in 2016, if I would make posts on Twitter about paying crypto taxes, I would get a lot of like, people just hating on my post, believe it or not, just saying like, we don't have to pay tax and crypto and all that type of stuff.

[00:43:52] Patrick: So back then with crypto tax, there's a lack of awareness, but there's also like a hate for paying taxes. And now with on chain sales taxes, I just see a complete lack of awareness. For instance, like I'm sure you've minted an NFT on OpenSea. I doubt that they took any information to even see if there's a sales tax applicable to that NFT.

[00:44:12] Patrick: Now in many States they do apply sales taxes to standalone NFTs, including states like Washington. So, I think there's just a huge lack of compliance right now. And obviously it's going to have to change in the future. So I think that's the biggest challenge with it now. The other big challenge is that there's not many solutions that are out there for people that want to be compliant as well.

[00:44:36] Patrick: So, I think it's just a lack of awareness and then a lack of solutions that are out there for companies that want to be compliant are probably the two biggest issues right now. That's why I wrote a book on the topic because I think really right now just making people aware of it and giving them a resource, like my firm where they can come and sit down with me and discuss this and see how does it apply to their company or to what they're selling is really the first step for that.

[00:45:01] Umar: Where can people buy the book?

[00:45:03] Patrick: Amazon.com you could just type in my name or, Navigating The NFT Sales Tax Maze. And it'll pop up right there. Going back to the sales tax thing, there was the Wayfair decision that was a result of the proliferation of the internet. 

[00:45:19] Patrick: The internet proliferated, and then we started to have this whole phenomenon of e-commerce where before people were really just transacting like within stores. So, the Wayfair decision started to be that when people were doing these transactions across state lines, there was the question of did sales tax apply if you're selling in one state to another state.

[00:45:39] Patrick: The Wayfair decision basically said, yes, that they do. And they added all these different types of nexus that apply to it, like economic nexus. So I really view, on chain sales taxes almost as like a Wayfair 2.0. That's the subtitle for the book is Wayfair 2.0 for Web 3.0, because now people are transacting on chain and they think that, this helps them escape, the tax jurisdictions that are applying NFTs or just that the new nature of these transactions.

[00:46:05] Patrick: You can't apply to these old rules to them, but it's been made clear that they are going to apply. And I think that many more states are going to make that more clear in the future too.

[00:46:16] Umar: Perfect. Thanks for sharing. And I'll include a link to the show notes of the podcast to Amazon. 

[00:46:22] Umar: I'm seeing the time. there's a last question that I want to go through with you, which is basically. If you had to share a piece of advice for accountants contemplating to start their own or to launch their own practice.

[00:46:34] Umar: It is very daunting, of course, but I believe it's very rewarding as well. So, if you could start over, what would you have done differently in launching your firm?

[00:46:45] Patrick: Man! Well, I think most of the things I would have done differently are just like tactical things. Like I was I didn't price my services correctly. I didn't scope them correctly. I probably could have marketed myself better. I could have maybe built a better stack of technology to like manage things in the beginning. But I think a lot of those things, you know If you're just sitting at your desk like planning to start a firm you could plan for a month or for a year. And a lot of those things you could plan forever and you're probably still gonna have mistakes that you make related to that. So I think the piece of advice that I would give is that if you're a strong accountant and you're confident in your skills I would you know make the jump and, put good advisors around you if you could find them and obviously, plan ahead just don't do this haphazardly. But I don't think you're going to be able to have all your ducks in a row right off the bat before you start your firm and I think that's you know an important consideration because accountants like to plan and they like details. 

[00:47:44] Patrick: But a lot of this, you're going to have to, from the practice management standpoint, you're going to have to learn as you go along.

[00:47:51] Patrick: So I think that if you're a very strong technical accountant. You have good skills in that regard. And you have the appetite for risk to start your own firm. That you probably should take a jump and realize that. Optimizing your firm and everything that goes into that it's an ongoing process that never really ends.

[00:48:10] Umar: Yeah, I completely agree. It's the very nature of being an entrepreneur. Everything is an experiment. And yeah, the only thing that matters is that you ship your work even though if it's not perfect. 

[00:48:22] Umar: There's a last question that I always like to ask to my guests before we finish the podcast is do you have a favorite quote or a maxim that you live by?

[00:48:32] Patrick: Yeah, it's tough for me to think of one that I live by. But there was one that I heard years and years ago, and I honestly don't remember who said it I think it may have been Tim Ferriss, but it's something like: "Success is directly proportionate to the amount of awkward conversations that you're willing to have." I really I took that to heart and that's why I'm able to put myself out there so much, whether it's in just in sales and marketing or anything else.

[00:48:58] Patrick: And I think that quote also highlights the fact that, wherever in your life you're facing that resistance and something seems hard. You should just basically go after that push through because on the other side of that usually is success. 

[00:49:12] Umar: Yeah that's a good one and I think it is Tim Ferriss. I've heard that one before. 

[00:49:16] Umar: Patrick, thanks a lot for coming in on the podcast today. This was a great topic to prepare. Our audience is made up of accountants, so I'm sure some of them might have contemplated on the idea of launching their own firm.

[00:49:29] Umar: So thanks for sharing your experience. Thanks for creating so much content on Web3 Accounting and educating the rest of us. I will make sure I get a copy of your book as well. I'm the first person who has to get a copy. 

[00:49:42] Umar: If people want to reach out to you or if they want to apply for the position you currently have available, where should people go?

[00:49:51] Patrick: Yeah. The best place to contact me, I would say would either be through my website through to contact us for him on the website. Or via LinkedIn is probably the second best place or Twitter. So, if you reach out to me on any of those places, I'll be sure to respond. 

[00:50:06] Patrick: In terms of how to apply for the accounting position, that would be on LinkedIn. If you go to my profile and click on my profile, it'll have a link to that job posting and you can apply there. 

[00:50:16] Umar: Perfect.

[00:50:17] Umar: Well, thanks a lot again for coming in today, Patrick, and we'll stay in touch.

[00:50:21] Patrick: Yeah, I appreciate it. Thanks for having me on.