Alternative Compensation Models
I studied and taught economics in college and in grad school.
You could say that discipline is kind of the lens through which I view the world.
But bookkeeping is how I make my living, even though I never worked for any bookkeeping business or in any in-house accounting role before starting my own firm.
To be clear, the pathway of coming to this industry from the outside when I was 37 years old has both pros and cons. Not all sunshine and rainbows.
But I would like to point out one “pro” that I think my non-accounting background has given me.
I have the ability to think “outside of the box”. Shoot, I was never even “inside the box” to begin with. If you pay attention to all of my “Kate Builds In Public” parts of this newsletter, you’ve probably gathered that my bookkeeping firm doesn’t look like a lot of other ones out there.
(Note: please know that I did understand Debits and Credits and the 3 financial statements from some classes in school)
Bringing it back to Econ 101, it reminds me of a economics concept called Comparative Advantage.
Very loosely, it just means understanding the advantages a player (country, state, business, individual) has compared to their competition in the marketplace. If you search the internet or AI, most examples are more macro economic examples (why Mexico might produce more avocados than Sweden, say).
But Comparative Advantage trickles all the way down to the most granular level in the economic landscape, which is you and me. The individual participant in the marketplace.
So when I did the recent live stream with Jaime Campbell asking her to teach us about the unique way she pays her bookkeeping staff (hint hint…it is not hourly), my inner economist was doing a little dance.
Well, that inner economist was also doing a dance because I think her compensation structure helps address what is known as the Principle-Agent Problem, but let’s stick with how she made me think of the concept of Comparative Advantage.
And I kept thinking, “Golly, she sure seems built to run her firm in this unique way and it really seems to be paying off.”
When you listen, you can hear it.
My point is that I think you should think outside the box of the “normal” bookkeeping firm and distinguish yourself by doing the things that you can do relatively better than the competition. Your life and skills add up to an endowment that only you have. Use that as a super power.
Advertiser time: It’s me.
I keep an updated Bookkeeping Course Comparison chart in a Google Sheet. It might help you decide from among many of the programs out there if you are looking to accelerate your bookkeeping entrepreneurship journey. Let me know if you know of other programs that would be good to include on the list. Not all the links in that evergreen chart are affiliate links. Some are. The occasional affiliate sale helps keep the Bookkeeping Side Hustle Community free.
💰 5MB Academy is gearing up for a spring sale. Take a look at the entire library here. You can use code spring15off for 15% off the entire store, including these popular courses:
The QBO Paid Diagnostic Review System
The Complete QBO Cleanup System
The best selling Paid Diagnostic Review + QBO Cleanup System BUNDLE!
Sales Success Toolkit Bundle
Mastering Engagement Letters
💰 Get a lifetime membership and $200 discount on the QBO Gym* with code GymTime. The coupon code is valid through 4/15/26. If you are exhausted by monthly subscriptions in your life, lifetime memberships to education is the way to go.
💰 GrowCon told me they would extend the code for $200 off conference tickets through April 15. Use Kate200.
Please always send me any news of deals that you hear of that others might benefit from.
Items with a “+” are hosted by me. All these events can be viewed and registered for in the DESCRIPTIONS of each event on the Bookkeeping Side Hustle Calendar.
📅 +April 15: Behind The Hustle: Amy Loveland. Take a break from Tax Day and listen in as Amy Loveland shares her bookkeeping journey. SUBSCRIBE to the YouTube channel so you don’t miss it!
📅+April 22: Digits Demo with 2026 Updates. Digits will be sharing new updates and giving us a live demo.
📅 May 4-6: GrowCon tickets can still be snagged. Anyone one else feeling a bit of YOLO and want to make last minute travel plans to Utah in May for GroCon?Use code KATE200 for $200 off.
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🌶️ Eric A. is in a bind. A client owes him a substantial amount of money and is refusing to pay. He asked for advice about any recourse he might have.
🌶️ Melissa O. asked for everyone to share their Top 3 Tech Apps for a bookkeeping business. She got lots of feedback.
💪 I bestow upon thee Alternative Compensation Methods for Bookkeeping Firms with Jaime Campbell. Come on into the comments and offer a rebuttal if you disagree with her.
Don’t be scared off when you hear her explain her tracking methods. Her way of compensating staff does involve some slightly complex tracking because her firm is 7 figures. But in the interview I also share my way, and it is like a “lite” version of what she does. My firm is much smaller (I told y’all how much my firm made last year here) and I’m do not have a comparative advantage at the admin side and excel spreadsheet side of things like she does.
💪 If you want to learn more ways firm owners are thinking outside the box and building businesses based on their Comparative Advantages, there is still time to get a ticket to GrowCon in May. I am speaking at a panel session called “Outside the Box”. The whole point of that panel is to highlight firms that are doing things a little differently. I am sharing about my group membership service for businesses that use FreshBooks. I don't know what the other panelists are sharing, but they are doing something funky. Accountants getting weird, y'all.
💪 If you or your staff need help with basics (accounting fundamentals and detailed QBO practice in a QBO demo company), you can snag a lifetime membership to the QBO Gym* with discount code GymTime. If you are reading this after April 15th when the lifetime deal has expired, reach out to me and I will try to connect you and get you hooked up with a different discount from them. I will always go to bat for folks who are wanting to become excellent at the technical bookkeeping/accounting skills, y'all.
💼 FIVE jobs were added to the Job Guide! If you live in Phoenix or Houston - be sure to check it out!
Don’t forget the standing opps on my Find A Freelance Job article. 1099 and W-2 opps.
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🎪 I put a phone-less 14 year old in Uber to the wrong address.
I have fun writing this My Family Circus section. And I hope that it a little nugget buried in this newsletter that helps you realize that I am a real person and that I won’t ask you to read AI slop.
But sometimes I worry that I just share a highlight reel that presents a overly rosey picture of the kind of wife and mom that I am.
So here’s a big fail that I can share now that the scary ordeal is way behind us.
One day last year, when it was time to take my 14-year-old to basketball practice, my car wouldn’t start.
But for several months prior to that (ever since I read the life-changing book The Anxious Generation*), I had been really wanting to put my oldest in an Uber to go somewhere on his own. But I didn’t know when or where.
So when that car wouldn’t start, I had my moment.
I kicked it into action and thought “today is the day!”
I explained to him what I wanted to try. He was willing and didn’t seem panicked. I explained the risks to him. And that even if we feel nervous in our guts about the plan, our logical brains should know that statistically it is not actually a risky thing to do.
Our only problem was that, for Uber’s formal rules, a child is supposed to have a smartphone to officially be able to use the Uber For Teens program. My kids do not have smart devices.
So I hailed for an Uber on my phone anyway and basically my plan was to use persuasion to convince the driver to take him alone anyway.
It was very low stakes because if the driver said “no”, then I would just get in the car with him and then take the Uber back home.
Well, I was especially charming and persuasive to that driver, and the woman agreed to take him as a solo passenger.
And off they went to the address I had put in the phone.
And approximately 15 minutes later, I received a call from my son’s flip phone saying that there was no one at the school.
Practice was at a different gym! Another 20 minutes away from the school.
I was so scared! I felt so helpless!
For some reason, my phone was not letting me edit the location to put in a new address on the Uber route. Possibly because Uber could tell my phone was not in the car. I still don’t really understand why.
But thankfully the driver had a cool head and was very understanding and basically said told me to leave a big tip and 5 stars and she’d get him to the correct address on a regular map and drop him off where he’s supposed to be.
I mean, what other options did I have at that point?
I immediately tipped her very well. And he let me know he had arrived at the right location. But I was holding my breath for 20 waiting for that call.
Lots of lessons learned.
Lots of toughness built.
And a little bit of the stink eye from my son when he returned home later that day after a teammate dropped him off.
As we debriefed the whole situation as a family, we did discuss trying to think rationally about how much danger he was in (again, very little…most Uber drivers want to keep their jobs and are not perverts or serial killers).
We discussed how we all face all sorts of risky situations and we should be always calculating what we would do. Have plans and back up plans. And keep a cool head so you can properly assess risk and make good decisions based on accurate risk assessments.
The chances of this particular Uber driver hurting my child were almost 0%. Not exactly 0%. But we can’t live 0% risk free lives.
Thankfully, this Mom Fail turned out fine in the end.
But I also do not recommend putting your child in an unauthorized Uber with no Uber App on a device. 🙃
🎢 I have a cleanup that keeps on giving. I was engaged with a client for a 2025 clean up. I even did a diagnostic review and got paid $435 for that service that allowed me to feel pretty confident that I knew what I was getting in to.
And then towards the very end of the project, I uncovered that he did not tell his new payroll provider that he had run 3 months of payroll on a different software. 😮
I broke the bad news via a short loom video screen share. I knew it would be so difficult and time consuming to type up a description in words of what he did wrong. With the video screenshare, I was able to share how his 2025 payroll reports from inside his current payroll provider and how his reported wages on his W-2 were about $30,000 shorter than what he actually ran in 2025.
Lessons learned:
Sometimes you miss problems even when you do a Diagnostic Review.
When you notice a large problem, immediately confront the issue and discuss the change in scope. I told him that I’d need to charge an additional amount. I sorta licked my finger and stuck it in the air and came up with $950 increase in price for this project.
Use screen capture and video recordings (you don’t even have to show your face with the tools available today) when there are things that are easier to talk about than to write about.
🎢 Y’all are probably going to be getting updates about softball for a few more newsletter editions! 🥎
One of the added benefits of being accepting the position of a softball coach is that I am forced to spend a couple of hours outside several days a week. 10 of 10 recommend, friend! I’m having such a blast. We’re 3-0 in our official (nerdy) charter school league play, so we keep trying to add more scrimmages with better teams. Winning by large margins over poor competitors starts to feel like a waste of time pretty fast. We want to be a fierce team. Not a wet noodle team.
As you earn your living staring at a computer screen, I hope you are finding ways to be outside. Accepting a position that forces you to be outside is not a bad idea!
⚡Folks are always asking how to get their first client - well, in this video, I share how I got my first client.
✉️ I’m always glad when yall are inspired about the non-bookkeeping sections!
YES! The Family Circus section is the cherry on top. - Amy M.
Fortunately...I got the newsletter in my email...Unfortunately...I haven't had enough caffeine to thoroughly absorb the contents. This reminds me of the game "Fiasco"... Maybe you should start recording those Kate McGill Johnson and keep a log of the Wind of Fortune Saga. - Jack W.
Keep hustling!
Kate
-Chief Hustler-
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