Xerocon 2019 - Interview Pack

A curated episode list by David Leary
Creation Date December 13th, 2019
Updated Date Updated December 28th, 2019
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All the interview episodes of the Cloud Accounting Podcast recorded LIVE at Xerocon 2019 #Xerocon
#Xerocon San Diego: What the heck is advisory anyway?
Sponsors  Halon Tax: http://cloudaccountingpodcast.promo/halontax TOA Global: http://cloudaccountingpodcast.promo/toaglobal LivePlan: http://cloudaccountingpodcast.promo/lpbootcamp  Show NotesWe asked the question - What is Advisory? See the responses below in the transcript! Connect with Some Respondents! Melissa Mullett - Veem | LinkedIn Patti Scharf - Catching Clouds | Website Wayne Schmidt - TOA Global | Twitter Brooks Wheatley - System Six Bookkeeping | Website Nury Saenz - H&R Block Franchise Owner | LinkedIn Aaron Berson - VRTL | LinkedIn Elliott Brown - OnPay | LinkedIn Christine Walsh - Walsh Accounting Solutions, LLC  | LinkedIn Liz Farr - Farr Communications | LinkedIn Andy Burner - Xero | LinkedIn Stephanie Holt - Cloud Accounting & Consulting, Inc | LinkedIn Scott Scharf - Catch Clouds | Website Chris Rogers - BookWerks | Website Gonzalo Alvarez de Toledo - Contabi Alliance | Website Jay Kimelman - The Digital CPA | Website  Joel Lacayo - ATAX | LinkedIn Matt Donaldson - Rippling | LinkedIn Guy Pearson - Practice Ignition | Twitter | Website | LinkedIn Brooke Roberts - ProfitSee | Website | LinkedIn Jose Zavala - ZTX Advisors | Website | LinkedIn Thomas Casey - Xero | LinkedIn  Sasha Hryciuk - Loft47 | Website | LinkedIn Tracy Simmons - Loft47 | LinkedIn Dan Shively - Spotlight Reporting | Website | LinkedIn Dan Young - Xero | LinkedIn Kelly Bistriceanu - CollBox | LinkedIn Jeff Phillips - Accountingfly | LinkedIn Jason Staats - Brenner, LLP | Website | LinkedIn Brian Hershman - Buck Stops Here Accounting | Website | LinkedIn Ranica Arrowsmith - Accounting Today | Website | Twitter Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptBlake Oliver: All right, David, we are about to walk the floor at Xerocon.  David Leary: This is perfect. We have to be careful. We have cords ... We've never done this before! Blake Oliver: Yeah, this is a little awkward, because we don't have a wireless setup. David Leary: I'm gonna throw this drink away. I'm gonna [cross talk]  Blake Oliver: Yeah, let's try not ... Pick that cord up so we don't trip. David Leary: We're just gonna randomly ask some people what advisory means. Blake Oliver: Is that still the plan?  David Leary: It's the Summer of Advisory, so we'll find out what it means. We kinda started to record too early. I didn't realize the hallway was so long-. Blake Oliver: That's okay. I can cut out all of this stuff. David Leary: Or just play it really fast.  Blake Oliver: Yeah, exactly. David Leary: Zhooooooooop ...  [00:00:30] This episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners prefer virtual advisory services? Did you know that the number-one thing they want from an expert advisor is strategic planning and review? This is even more than general-ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N. Blake Oliver: All right, David, we are live, here on the floor, at Xerocon San Diego 2019 in the beautiful convention center. David Leary: It's really cool because I feel like I'm kind of outside, but not outside. It's a cool convention center.  Blake Oliver: Yeah. Reminds me of the Denver [00:01:30] airport, right, with the ...? David Leary: Oh, yes, the- Blake Oliver: With the tent. David Leary: The tent, exactly. It does look like the Denver airport, but there's tech companies here instead of a food court. Blake Oliver: That's true. David Leary: Should we go around and try to find some random person and ask them what advisory is? Blake Oliver: Yeah, let's walk. Let's see if we can solve this question - what is advisory? David Leary: We can ask Melissa here from Veem, a former sponsor of the podcast. So, Melissa, it is The Summer of Advisory, so can you please define what the word advisory is to you? Melissa Mullett: Oh, [00:02:00] that's a great question! I think it's getting that knowledge base, having a solid foundation, and then taking your subjective opinion and applying that with what can be helpful, but making sure it's kind of data-based and well-researched. Things like going to sessions and then being that advisor who's well-rounded. So, make sure you're multifaceted. Blake Oliver: Patti Scharf of Catching Clouds. Hello, Patti! You're on The Cloud Accounting Podcast, and we're asking folks-. David Leary: In the Summer of Advisory, which we're in, can you please define advisory? Patti Scharf: Nobody can define [00:02:30] advisory! The other day I was thinking about it. We were talking about all the different things, different insights, and things that we would tell our clients. We would talk about the different apps that they should use, fixing the different problems that they had. Honestly, just whatever clients don't know about accounting, or their tools, or whatever that you can fill in the blanks for them, that's advisory. David Leary: I don't know ... Where do you wanna go?  Blake Oliver: Wanna go over to TOA to see of Wayne's there? There's Wayne ... Wayne Schmidt. Wayne Schmidt: Hey! How we doin'? [00:03:00] Blake Oliver: All right. Wayne Schmidt: Hi, how are we? David Leary: Wayne, it is The Summer of Advisory. Everybody has a different definition of the word advisory. Can you please tell me your definition of advisory? Wayne Schmidt: Business advisory ... Well, this term didn't exist before you had a number of software apps, who, basically, their business model is getting accountants to use their software on clients. So, all the sudden, this is a new term. I actually don't think accountants are skilled for doing business advisory. They haven't been trained. A business advisory requires you to have some sales skills, because all of a sudden, you're gonna have [00:03:30] to start going and selling. That's no reflection on an accountant; it's just because they haven't been trained enough. It's the reason why I think they're gonna struggle with business advisory services.  Yet I still think the industry that's got the best growth potential is compliance. Compliance is here to stay. The government is going to keep making it harder. It's gonna make it tougher. They just love playing around with the legislation. Every year, they're gonna play around with it. They change legislation all the time, so compliance gets- it’s getting harder. The [00:04:00] only thing you're finding is compliance is getting commoditized. So, yes, products that are cloud- all the cloud-accounting products are making the cost of compliance lower. Hence, the reason why you've been looking at how do you lower you ... The biggest cost for an accounting firm is your staff. That's it. That's your biggest cost. That's when you come into companies like TOA Group, which allow you to have an offshore team, so you can straightaway have a 60-percent saving on your bottom line. David Leary: Thanks, Wayne. Blake Oliver: Thanks, [00:04:30] Wayne! Great talking!  David Leary: Excuse me, sir. Hey, Brooks. David Leary. We're with the ... Oh, you're with System Six [cross talk] Jeremy; you're with Jeremy. System Six Bookkeeping. Okay, so this is great, great, great. Can you please define what advisory is? Brooks Wheatley: To me, advisory is basically taking all the financial and non-financial information that you kinda know about how businesses operate and run and being able to give your clients the stuff they need to make their businesses successful. We know how businesses work. [00:05:00] We know how they operate. We have access to so many types of businesses across the whole spectrum, and we have a lot of advice to give about how to operate and run a business. To me, that's advisory is just getting people to ... Being able to transfer that knowledge to your clients. David Leary: Awesome. Perfect. Thanks a lot, Brooks! Blake Oliver: Thank you!  David Leary: Have a good one! Let's see, anybody else- Blake Oliver: All right, what's next? What's next? David Leary: There's a guy eating his food over there with a spork by himself-  Blake Oliver: Well, maybe let's not bother people that are eating.  David Leary: Yeah, food could be bad ... We gotta be [00:05:30] coordinated, then, when we turn here.  Blake Oliver: I know, we have to work together [cross talk] we're tied together here. Okay.  David Leary: There we go. Physically tied together. How about this lady right here? Blake Oliver: No, she's [cross talk]  David Leary: Those two guys are weird. Blake Oliver: Yeah- David Leary: She's like, "I'm outta here! That's enough of that!" Hi. Excuse me. We're with The Cloud Accounting Podcast. We feel like this is The Summer of Advising. Your name? Could you pronounce that for me?  Nury Saenz: Nury Saenz David Leary: Nury, could you define advising? Nury Saenz: Let's see ... Just [00:06:00] helping somebody to make decisions, per se?  David Leary: Short and sweet. Awesome. Thank you very much. Nury Saenz: You're welcome!  Blake Oliver: Thank you!  David Leary: We could ask this guy, right here.  Blake Oliver: Mr. Aaron Berson. Aaron Berson: What's up? Oh, my God, I'm attacked by mics. What's going on? David Leary: Can you please define advisory for us? Aaron Berson: I'd say it's really just helping your clients understand their business in a way that they already have thought about, but not really paid attention [00:06:30] to; kind of just going above and beyond, interpreting their numbers and not just handing them financials and actually having conversations with them and drilling down into everything about why they're doing and how they're doing. Elliott Brown: How's it going, guys? I'm Elliott Brown from OnPay. Just wanted to say hi!  David Leary: All right, Elliott, no, we got a question for you, though. Elliott Brown: Yes. David Leary: This is The Summer of Advisory. So, can you define what advisory is? Elliott Brown: You know, I think, first of all, it's anything going above and beyond the role of a traditional accountant. So, it's trying to add more value to your clients, [00:07:00] understand who they are, and what they need, and give it to them in the way that serves you best. Fortunately, because there is no specific definition, I think that means that can be whatever you're most comfortable with. Some people here are talking about it being everything - just being a business consultant - but I think it means just moving a little beyond like what's inside the box to come closer to where they are. David Leary: She's eyeballing us. She wants to be interviewed, right here. You can't stare at us when we walk by and us not come over to ask you some questions [cross talk] Chris Walsh: -made eye contact. Don't make eye contact! Blake Oliver: All right, hi. What's your name? Who are you? Chris Walsh: Chris Walsh, Walsh Accounting [00:07:30] from Pennsylvania. David Leary: Can you define the word advisory? Chris Walsh: I would say, for me, advisory means just kinda helping businesses understand their business and help them grow. Blake Oliver: Liz, you wanna get in here? What's your name? Liz Farr: Liz Farr. Blake Oliver: And you are with?  Liz Farr: I am on my own. I am a freelance writer and a CPA. My business is Farr Communications. Blake Oliver: We've been asking everybody - what does advisory mean to you? Liz Farr: Advisory [00:08:00] means giving your clients what they need from where they are. Maybe that's just a tax return, right now. Maybe that's just bookkeeping. But maybe it's succession planning and making them think about things that they've never thought about. David Leary: Let's ask this guy who has this purple jacket on here.  Andy Burner: Hi, I'm Andy Burner. I look after people in business operations for Xero Americas. David Leary: Can you please define advisory? Andy Burner: We use that word a lot. We use that word a lot at Xero, and the industry uses that [00:08:30] word a lot ... You heard us talk about it on stage. You've heard a number of things. When I think about advisory, I really think about accountants, or bookkeepers, or business partnering; spending their time helping small business owners, who love what they do, understand how to do more of it, and do it better, and serve their customers better. That can mean a raft of things. It starts with the numbers, and it moves up the value chain into the business. That's what I think about!  David Leary: Let's see. Here we go, right here. We could ask some of these people here. Stephanie Holt: Stephanie Holt, and Cloud Accounting & Consulting in [00:09:00] Jacksonville, Florida. David Leary: I recognize you; I think. Stephanie Holt: Yeah, we Twitter a lot ... We have a little tweet thing going.  David Leary: Twitter, yes, okay. Stephanie, one question, very easy ... This is The Summer of Advisory. Define advisory. Blake Oliver: What does it mean to you? [cross talk]  Stephanie Holt: No, I'm just kidding. For us, it means really being engaged in the client's processes, and their business, and understanding their cash flow needs, and their capital needs, and really just kind of being an extension of their team. That's what advisory services mean to us. David Leary: This [00:09:30] is great. There's so many different answers for advising.  Blake Oliver: Yeah.  David Leary: We're just proving that there is no answer. Blake Oliver: It means anything to everybody. David Leary: Look at these two in their sunglasses. Kathy Gregory: Have you figured out what advisory is yet? David Leary: Not yet.  Kathy Gregory: Have you been told yet?  David Leary: We have 25 answers. Kathy Gregory: 25 answers? I cannot wait to hear the answer on the podcast. David Leary: What podcast? Kathy Gregory: The Cloud Accounting Podcast-  David Leary: Perfect. Kathy Gregory: Really the ONLY good accounting podcast, right? This episode of The Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff, and finding staff is getting tougher every day. This is where TOA Global could help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building a global accounting team, you'll be able to take away the time-consuming, process-oriented work from your local team, while building a cost-effective team offshore. As people experts, TOA Global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional development tools. To learn how to build out your world-class team today, head over to CloudAccountingPodcast.promo/toaglobal. That is Cloud Accounting Podcast dot promo forward slash T-O-A-G-L-O-B-A-L. David Leary: Hey, you guys wanna be on The Cloud Accounting Podcast? I'm just gonna ask you one question, that's it [cross talk] Your name is Scotty?  Scotty: I'm Scotty. David Leary: Okay, Scotty, this is like The Summer of Advisory. Can you define the word advisory or what it means to you? Scotty: It means, I guess, taking a client and leading them [00:11:00] towards a financial goal, maybe?  Blake Oliver: That's great. We're closer to a definition. Thank you. David Leary: Yes, yes, yes, we're on the mission. Let's see, this guy has a pink shirt, so let's see what this guy says. Hold on, sir, c'mere, c'mere, c'mere.  Blake Oliver: Excuse us. Would you like to be on The Cloud Accounting Podcast? Dan McCarthy: For what?  David Leary: We're gonna ask you one question, that's all. What's your name? Dan McCarthy: I'm Dan McCarthy. David Leary: Dan, nice to meet you. So, this is The Summer of Advising. All the conferences are advising, advising, advising ... Can you please define what advisory is to you? Dan McCarthy: Advisory, to me, is making [00:11:30] sure that you're providing the strategic advice that your clients need at the time when they need it. I think it's looking out into the future, helping them understand what's around the corner and what the financial impact is. I think that's different for each client, but [we] believe it's making sure that the information, and financial data is in a place that they can understand it and that they can make actual decisions on it. David Leary: Excuse me, Carolyn? Hi. Would you like to be on The Cloud Accounting Podcast? I'm just gonna ask you one question. Carrie Williams: Hi, Blake. It's [Carrie] Williams. I'm with [Seashore] Numbers. Actually, [00:12:00] I'm trying to figure that out right now, because it's a service that I want to add on, whether it's app advisory, or its deeper advisory with cash flow, or just helping them to figure out where they wanna go in the future and the growth of their business. So, I'm still trying to work that out myself, but it's somewhere in between that; I'm just not sure what it is yet [cross talk]  David Leary: Well, this is like that marriage test, where they ask the husband the same question they ask the wife, to see if they have the same answer. Scott Scharf: No, she's right. David Leary: Okay ... All right, so, Scott- [00:12:30] Scott Scharf: Yes-  Blake Oliver: So, first, name and rank ...  Scott Scharf: Scott Scharf, co-founder of Catching Clouds. David Leary: Can you define advisory? Blake Oliver: What does it mean to you? Scott Scharf: What does it mean to me? Helping the clients at a higher level - with their business - meet their goals and whatever falls under that, that's what it is. David Leary: How about this guy right here?  Chris Rogers: Chris Rogers of BookWerks. So, can I define ...? David Leary: Advisory. Chris Rogers: Advisory? Blake Oliver: What does it mean to you? Chris Rogers: Value-added interpretation to what's going on in your books [00:13:00] and in your numbers. David Leary: Hello, hello. Hey, how's it going? Blake Oliver: Would you be interested in being on The Cloud Accounting Podcast, Gonzalo?  Gonzalo Alvarez de Toledo: My name is Gonzalo. I'm from Argentina. This is my second Xerocon. I think I'm the only guy that listens to your podcast in Argentina.  David Leary: Thank you very much. Thank you, thank you!  Gonzalo Alvarez de Toledo: We just formed an alliance, Contabi Alliance. We want to help Latin American accountants to adopt [00:13:30] technology like Xero, and other apps. It seems that it's the same for accountants all over the world that it's difficult to change, and to adopt technology. Advisory, for me, is help small, and medium business clients to grow their business. Blake Oliver: Ooh, there's Jay Kimmelman. Let's see- let's get Jay. David Leary: All right. Blake Oliver: Jay!!!! Do you wanna be on a podcast? Yes! He said yes!  Jay Kimelman: Jay Kimelman with The Digital CPA. Advisory, to [00:14:00] me, is giving advice to my clients to help them make changes to their business. The key, though, is knowing what advisory we're already doing and not charging for and actually making that change and actually charging for the advice that we're giving. David Leary: Excuse me, ladies, would you like to be on The Cloud Accounting Podcast? I'll ask you one question. That's it. Ashleigh Hendrick: Ashleigh Hendrick, Violet, Inc. is the company. What advisory means to me is [00:14:30] providing an extra value to clients where they might not know that they need the extra value and being kind of a partner to them, advising them on how to do different things, like grow their business, or make certain financial decisions that they might not know that they need. David Leary: Oh, this guy right here. Joel.  Blake Oliver: Joel!  David Leary: Joel [cross talk]  Joel Lacayo: -hear me, because I lost my voice completely, but yes- [00:15:00] David Leary: I can hear it, yes.  Joel Lacayo: Joel Lacayo, ATAX Franchise.  David Leary: Can you define what advisory is? Joel Lacayo: Consulting to a business, in order for them to better understand aspects that are not related to bookkeeping or bookkeeping and finances. I don't know, man. I think everybody else has like a definition, like an amalgamation of something that's important. But, in the end of it, to me, where I come from in the sales business, it's just a matter of consulting to make sure that they [00:15:30] have everything that they need or what they're missing in terms of their business. So, whatever that implies - financially, BD-wise, sales-wise, marketing-wise. Blake Oliver: Matt Donaldson-. David Leary: Matt Donaldson, c'mere, Matty. C'mere.  Blake Oliver: C'mere, we need you on the podcast. So-. Matt Donaldson: I'm gonna be famous! I'm Matt Donaldson, or Donny, and I am with Rippling. David Leary: Can you define- what is advisory to you? Matt Donaldson: I'm still unsure of what advisory is to me, at this point. Advisory is being able to make recommendations in some form or fashion. David Leary: I [00:16:00] think we should interview Guy Pearson. Blake Oliver: Oh, yeah. Where's Guy?  David Leary: Guy's over here.  Blake Oliver: Let's do Guy. Should we sneak up on him from behind? Guy Pearson: Guy Pearson. I'm the janitor at Practice Ignition. David Leary: Can you define what advisory is? Guy Pearson: Oh, wow. Ultimately, it's helping your clients achieve a better outcome. Hopefully, that means understanding their financials better so they can make better decisions faster. If I was to give one tip on how to do that better, it'd be to target a vertical; understand that vertical, so you know all the benchmarks, KPIs, OKRs, and things [00:16:30] to measure to help improve, as well as the trends going on in that industry. Brooke Roberts: I am Brooke Roberts from ProfitSee. To me, being an advisor is all about creating future opportunity for your business clients; things you can do to help them protect against risk, plan for growth, and really grow their business. Jose Zavala: Jose Zavala, ZTX Advisors, and I came to kind of check it out, because I've heard from Will Lopez, and everybody else [00:17:00] how awesome Xerocon is, so I had to come check it out for myself. For me, advisory is moving beyond the books. So, it's not just your after-the-fact bookkeeping. It's actually helping your clients understand the numbers, and understand what the numbers mean, and how to use those numbers to help them grow. That's kind of my definition of it. I could be way off. I could be on point, but that's kinda how I see it, and it's helping at least my clients, so far. They've been happy with it. Especially with all these apps that are out there, I've been able to kind of integrate, which makes it easier [00:17:30] for us to look at the numbers and present it in a more easier fashion to them than just, "Here's a P&L, you figure it out" kinda thing. Thomas Casey: Thomas Casey with Xero. That's a pretty complicated, simple question, in that it depends on who you talk to. There's a lot of ways to look at it. At the end of the day, it's really a matter of you having conversations with [00:18:00] your clients in a way that allows them to understand where they're at and where they're going and, really, turning it into storytelling in a way that the clients can then grow their business. In other words, taking that transactional information and compliance work and making it real life for the client. David Leary: How about, Blake, right here? [00:18:30] Sasha Hryciuk: Sure. My name's Sasha. I'm the founder of Loft47. I'm here with the head of sales from Loft47, Tracy. Advising, to me, I would say it's rather than getting in the work- getting into it, and doing the work for somebody, it's advising them how to best do it. So, hopefully, they have some insights that you wouldn't find just in your average everyday day-to-day operations. Tracy Simmons: I'm Tracy with Loft47. Blake Oliver: What is advisory to you? What does that mean to you? Tracy Simmons: Advisory, [00:19:00] to me, means having an informed opinion about the advice you're giving. Hannah: Hannah with Avalara. I define an advisor as navigating the client to the right resources, helping them navigate the pathway of business and what comes with it, giving them the right tools for success. Dan Shively: Dan Shively. I'm with Spotlight Reporting. Advisory is creating a relationship that's meaningful with your clients and delivering advice to them that [00:19:30] helps them succeed and the community succeed. Mike: I'm Mike [inaudible]. I'm here with Gusto. There is 75 answers to this question, right? Really, from my perspective, advisories are simply adding additional value for the small and medium business owner, and that means doing more beyond just bookkeeping and accounting. Shanu M: I'm Shanu [inaudible] from [inaudible]. Advisory, for me, is a value addition. So, I think everybody [00:20:00] sees that it comes out of passion, but, I feel that if you are good at something and you spend 10,000 hours doing it, you become great at it, and then you reverse-attribute it to a value. A lot of value creation, without the direct way of seeing it, and seeing the things from the top, that's advisory to me. Dan Young: Dan Young, Xero. Advisory is basically adding more value than just accounting, letting your small business know how [00:20:30] to succeed, how to nail it. Blake Oliver: We're coming for you, Dave!  David Amerman: David Amerman, and I'm here with Xero. Advisory has to do with taking a look at how you help your clients in different ways that are not always necessarily financially sourced and really actually trying to find a best-in-class solution for how they actually can run their businesses. Advisory is bigger than just numbers. It's about quality of life and how you build a better [00:21:00] business with your small business owners. David Leary: Watch it. There's a crouton there. I didn't know what I was stepping on. Kelly? Kelly?  Blake Oliver: Hi, Kelly!  David Leary: Kelly, c'mere. C'mere, Kelly ... Kelly, c'mere!  Kelly Bistriceanu: Kelly Bistriceanu. I'm here with CollBox.  David Leary: Can you define advisory? Kelly Bistriceanu: Not really. I think advisory is very different depending on the firm that you work for, your target clientele, your goals for your business, the type of the firm, the type of accountant that you want to be ... It's gonna be different for each [00:21:30] individual practitioner. I don't think it's my place to define advisory, or our place, necessarily, but I love hearing from our partners what they think it is and helping them get closer to that. Jeff Phillips: My name is Jeff Phillips. The name of my company is Accountingfly.  David Leary: Can you define advisory?  Jeff Phillips: I can't define it, but I know it's the future, because everyone's telling me that it is at these conferences.  Jason Staats: Jason Staats. I’m with Brenner, LLP.                 Blake Oliver: Nice to meet you,   Jason.  David Leary: Jason, this is The Summer of Advisory. Can you define advisory? Jason Staats: Everything [00:22:00] but tax and bookkeeping. It’s what I've learned. Brian Hershman: My name is Brian, with Buck Stops Here Accounting.  David Leary: That's a great accounting firm name [cross talk]  Brian Hershman: -account. Yes, thank you. I think of advisory as the word coaching, helping … I was a former coach, so it's helping people get to the next level and cutting off their learning curve, basically. Advisory is helping shorten the learning curve of a business’s process through your experience. Simon: Simon, and I’m from [00:22:30] Stem.ai. It’s really about getting away from the clerical task and looking at the financial of your clients at 30,000 feet view, and really get the step back that the client doesn’t have on its own financial information. Ranica Arrowsmith: Ranica Arrowsmith, and I'm the Tech Editor for Accounting Today, a magazine in New York. Advisory is everything that goes beyond keeping books. So, accountants sometimes don't think of themselves as creatives, but I think the move … I [00:23:00] think they are creatives, and I think the move of the industry is moving them towards becoming creative providers of higher-value services, like forecasting … And there's technology for all of these things, too. So, it's not like an accountant has to be sort of bereft. They have tools that they can use to become advisors. David Leary: Perfect. Thank you very much. Blake Oliver: Awesome. Thank you! David Leary: Cool. Sure ... This episode of The Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax, and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing. Now, Halon Tax is working with bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. Their even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to CloudAccountingPodcast.promo/halontax. That is Cloud Accounting Podcast dot promo forward slash H-A-L-O-N-T-A-X.  
#Xerocon San Diego: The Jamies of Hubdoc (acquired by Xero)
Sponsors  LivePlan: http://cloudaccountingpodcast.promo/lpbootcamp  Halon Tax: http://cloudaccountingpodcast.promo/halontax TOA Global: http://cloudaccountingpodcast.promo/toaglobal  Show Notes 00:57 – Meet one of the Two Jamies - Jamie McDonald, Executive GM, Product, Accounting and Global Services at Xero 01:44 – Jamie M talks career, and his new promotion 02:45 – What’s ahead for Hubdoc? Jamie M discusses the acquisition, some of Hubdoc’s newest time-saving features, and plans for building a more powerful platform  05:10 – Jamie M talks about Hubdoc’s global positioning and how working across multiple time zones is maybe his least favorite part of his job  05:57 – Touching on the Xero-Stripe integration – one more way to save time and eliminate headaches 07:31 – Keys to being successfully acquired – show up everywhere, listen, really listen, do lots of stuff that adds value, repeat  10:14 – The other Jamie, Hubdoc Co-Founder and Co-CEO, arrives!  11:00 – Has fetching docs (Hubdoc’s forte) become a new pain point for accountants and bookkeepers? 13:15 – Do we really want to live in a world without bank feeds? Why said feeds and fetching soar above the manual-entry alternative 16:15 – Jamie M talks about the potential for new business with the plethora of US banks and how Hubdoc is focusing on building an innovative, powerful, and reliable API that targets the accounting, bookkeeping community  17:58 – Jamie S pontificates on how the new Wow moment – machine learning – is helping offset some of Hubdoc’s challenges with fetching  19:14 – Here’s to another 10 years (and more) of success!  Connect with Jamie McDonaldLinkedIn: https://www.linkedin.com/in/jamiemcdonald/Twitter: https://twitter.com/jamiemcdonaldConnect with Jamie ShulmanLinkedIn: https://www.linkedin.com/in/jamieshulman/Twitter: https://twitter.com/JamieShulmanGet in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptThis episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners preferred virtual advisory services? Did you know that the number one thing they want from an expert advisor is strategic planning and review? This is even more than general-ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N. Blake Oliver: Welcome to The Cloud Accounting podcast. I am Blake Oliver. David Leary: And I'm David Leary. Jamie McDonald: And I'm Jamie McDonald. I'm the co-founder and co-CEO of Hubdoc, along with the other Jamie - as we're known, [00:01:00] The Jamies - and now, the executive general manager of product for the core accounting platform at Xero. David Leary: Since this is an audio podcast and there's two Jamies, can you say which Jamie you are, so people are clear? [crosstalk]  Jamie McDonald: That's a good point. I'm Jamie McDonald. The Jamie M. The Product Jamie. David Leary: You're the tall one? Jamie McDonald: The tall Jamie. David Leary: The tall one, okay.  Jamie McDonald: Old Jamie, Grumpy Jamie. All of the unpleasant names for Jamie. Blake Oliver: I was so excited to see when you ... Not only the Hubdoc acquisition, or [00:01:30] the Xero Hubdoc acquisition. Congratulations. But also, now, that you're doing product for Xero. Was that part of the deal? How did that come to be? David Leary: Yeah. There's a major promotion. You know you got a major promotion when there was a press release about it. Blake Oliver: Yeah. Jamie McDonald: I guess the first thing to say is thank you. How did it come to be? I think I was meant to do this job, and I've been training for it for the last five years from when I chased you guys down, when we entered the space in 2014. I've [00:02:00] been spending my whole time thinking about how to build the small business ERP on top of the QuickBooks platform and the Xero platform, and now being part of the Xero family ...  You guys know Hubdoc. The whole core point of the application is data automation and building a collaboration platform between accountants, and bookkeepers, and the small businesses they serve. It's just a logical extension of the work I've been doing with the product and engineering team at Hubdoc. I just feel so lucky to get to work with some of the designers and [00:02:30] engineers who have built Xero, which is a product I love so much. We're gonna build some good stuff. Blake Oliver: Can you give us a sneak peek? Jamie McDonald: I think I did yesterday. The roadmap story is pretty clear. I think we wanna build more data automation into the platform. I gave that 'find and recode' example yesterday. It's a simple feature that saves people a boatload of time at the end of every month, correcting errors. It's like, "How do we just do that 10 times and [00:03:00] make the core application just really, really powerful?" Then, all the stuff that Craig talked about and Nick, this morning, about the platform. Those are our big bets on the future of business recordkeeping, and I think ... Just super-duper exciting. David Leary: Because we do have some developers and app developers that listen to the podcast, how was this journey of being acquired? Jamie McDonald: What we always say is everything in life starts with people. Jamie and I are big on our relationships [00:03:30] with our team and our customers. The values that we've blogged about at Hubdoc are around just building authentic human relationships, being transparent, and giving a shit; kind of a sense of craftsmanship around product and delivering amazing experiences for our team, so that they say, "This is the best place I ever worked" five years from now. I think what's been great about joining Xero is just a giant overlap in values, and culture, and the focus on [00:04:00] being human and authentic. That's been great. Working on a platform where 1.8 million customers are going to be using the stuff that I collaborate on building, that's pretty amazing. I think the work that we are doing ... There's another decade of SMB cloud adoption ahead of us, and I just feel lucky to do it. There's stuff about being acquired that's different. I'm learning to operate in a bigger company again. I've done that- [00:04:30] Blake Oliver: Yeah. Where were you before Hubdoc? Jamie McDonald: I was at Expedia back in the early 1.0 days of the internet. Blake Oliver: Yes. Yes. Jamie McDonald: I saw a company explode in scale, hiring crazy, and winning in the market. That was that early career experience for me that I say ... Worked with the smartest people; built a product that won in the marketplace; had fun, and just grew a ton professionally. I think bringing some of those skills, relearning them, inside [00:05:00] Xero, which is one of the best SaaS companies in the world, it's tough not to be excited about the opportunity. Blake Oliver: Hubdoc grew up in Toronto. Jamie McDonald: Yeah. We're in Toronto. Blake Oliver: Are you still in Toronto? Jamie McDonald: I still am in Toronto. I think we're moving from thinking of ourselves as Hub Dogs to thinking of ourselves as Xeros. Toronto's gonna be a big engineering hub for our company on a go-forward basis. Blake Oliver: That's great. Jamie McDonald: We also developed software, obviously in New Zealand. In Auckland, and Wellington, primarily, and then have a big office in Melbourne. [00:05:30] I've got teams in Aussie and New Zealand who I work with closely now, as well. Blake Oliver: Got it. Those time changes are making for some fun meetings- Jamie McDonald: Let's not talk about the time change, Blake. That's the one bad part of my life. Blake Oliver: Yep, understood. The big news yesterday was the Stripe partnership. For our listeners who couldn't make it to the event, why is that a big deal? Jamie McDonald: I just think it's pretty obvious and pretty awesome, [00:06:00] which is like, when you send an invoice, wouldn't it be great if your customers could pay it? It's like let's ... I joke with Craig. "It's like you built a Pay button. What's the big deal?" I think that's awesome. I'm also a Stripe customer at Hubdoc.  If you've ever reconciled revenue inside of Stripe, we've had to use third parties building all rules ... Making that pain go away will save 10 hours a month for somebody in our company, which is awesome. Then this [00:06:30] recurring monthly invoice that just goes out, and you can set up the payment automatically - it sounds so elementary and obvious, but it's just an example of digitizing analog workflows, getting rid of the paper, getting rid of a check in mail, and making it all happen. The good news is SMBs get paid faster, which is what we're trying to do. Blake Oliver: How big is Hubdoc these days? Jamie McDonald: What's the definition of big, Blake? We're huge! Blake Oliver: How [00:07:00] many Hub Dogs are there? Whatever numbers you can share in terms of customers, that sorta thing ... I think people are- well, if you're a developer, you're interested, and you want to have an exit strategy - where do I need to get to get there? Then, if you're an accountant - sorry to throw two questions at you - They're wondering, "What's gonna happen to Hubdoc now that it's a Xero company?" Jamie McDonald: Yeah, for sure. There are two questions there, which is: "If I wanted to get acquired as an app developer, what would I [00:07:30] do?" I think the Hubdoc formula was stolen from David Leary. I teased him about sushi lunch five years ago, in Toronto, when David came and visited us. We show up, which is really ... It sounds stupid, but we showed up at the Twitter chats. We showed up at the trade shows. We talked to people, and we listened. David Leary: You have to play the game [cross talk]  Jamie McDonald: Then we went back to our office, and we built software for them. We said, "Does this work for you?" By [00:08:00] building that community of advocates that we were solving problems for, they told Intuit, and Xero, and Bill.com that we existed and were important to them. That's how we showed relevance. Then you drive your API connections up, which means that you're growing on the platform and people noticed that. Blake Oliver: I wanna highlight how much you guys really did show up, because the Two Jamies were at every conference. You guys were at the booth, yourselves - the founders of the company talking with people all [00:08:30] day long. How did you ... That takes amazing stamina. Jamie McDonald: Yeah, I just think it's ... That's like entrepreneur camp. We always, I wanna say, laughed, but remarked on the leaders of other businesses who would show up with their wheelie bag, give a talk for an hour, and then leave the show. We make a point of staying for the whole thing, and taking customers out to dinner, and meeting with partners, and listening, because that was the way we could get better. The [00:09:00] only reason I'm in this job now is because I understand the workflows in the same way that you've gone from being a bookkeeper to a software person. You understand the workflows. That's the only way I can do it. David Leary: I think we have another guest we could bring on. Believe it or not- Blake Oliver: Oh! Do we have a special ...?  David Leary: The other Jamie has arrived. Let's try to give him headphones here ...  This episode of The Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff, and finding staff is getting tougher every day. This is where TOA Global could help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building and global accounting team, you'll be able to take away the time-consuming, process-oriented work from your local team, while building a cost-effective team offshore. As people experts, TOA global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional development tools. To learn how to build out your world-class team today, head over to CloudAccountingPodcast.promo/toaglobal. That is Cloud Accounting Podcast dot promo forward slash T-O-A-G-L-O-B-A-L. Blake Oliver: All right, we're back. David Leary: Jamie, the other Jamie is here. For our listeners that don't know what you look like, so they can differentiate, please describe yourself. Blake Oliver: This is like a dating profile or something? Jamie Shulman: I'm affectionately known as Jamie S., and I focus [00:10:30] on customers. I think we look quite similar, David. David Leary: The Nice Jamie? The Younger Jamie? Jamie Shulman: No, we're both nice. Yes, younger by a bit,  David Leary: Okay.  Jamie Shulman: Thank you. David Leary: I'll jump in, because it's interesting, now that you're both here. Something went off for me. I was at another conference yesterday. It's all getting gray now. Recently, I was at a conference ... Because Hubdoc always was- you guys were the fetchers. You fetched documents all over the internet. Two comments from two different bookkeepers. They're kind of getting sick of [00:11:00] fetching, because security, the logins ... Fetching is difficult. They're finding like, "I'm just gonna ask my client for the paper bank statements, because I control that process." Can you guys speak to the evolution of fetching? I would argue, you two might be the experts on fetching. Jamie McDonald: Yeah. I think we can definitely claim to be. People have worked on the problem for a long time. I don't know that there's anybody who could be called the expert in fetching, except for maybe the people who go after Ticketmaster [00:11:30] on the day that Rihanna starts a concert sale. The message we give to our customers is the nature of our technology is such that it doesn't work all the time. Websites change. There's two-factor authentication from banks. The feedback that we get from our customers is, "At the reliability levels that you deliver on, it works for us. It's maddening when it breaks." It's exactly like a bank feed breaking inside [00:12:00] of QBO or inside of Xero. It's like, "Wow. This is frustrating. I wanna do my job right now." But the idea of not having a bank feed is so horrible that you would never go back to that prior universe. I think people want the documents that we get for them and find value in them. I think reliability is a constant battle for us, and we're spending more, and more money on how to scale that infrastructure. We don't have all the answers. It might not work. But one thing we [00:12:30] are, always, is transparent to our customers about the challenges with the technology, and the reliability of the service. We tell the truth about here's what to expect. Yeah, some people find it easier to ask their clients to get the documents, themselves, but if you've got more than 20 clients and each of them has four or five banks, it gets time-consuming. Jamie Shulman: David, I was at Scaling New Heights with you in Salt Lake City, there, and I talked with a lot of our customers - the accountants and bookkeepers - about this topic. Hearing [00:13:00] Jamie mention bank feeds, it's interesting ... They're connected - bank feeds and the fetching of the documents - because one of the reasons we hear from customers - who we have historically, and still today - is why they still very much want the bank statements in North America; checks, as well, with the bank statements. It's because of the lack of reliability on the feeds.  Perhaps, there'll be a day in the future where bank feeds will actually come in and be totally reliable, and accurate with no duplicates, or omissions. Then maybe the bank statement need will go down, but right now, more than- as much [00:13:30] as ever, we hear people still wanting them. Despite, as Jamie said, the ability to get them isn't what one would maybe want, in terms of 100 percent getting in the documents - the rights ones at the right time - even when it's less, it's still much better than having to go do that all themselves, manually- David Leary: Across the board-  Jamie Shulman: Yeah. David Leary: -because not every feed you have is gonna all break at the same time. It's odd bank here ... I think us insiders, if you wanna say this, we get it. It's the bank's fault. It's somebody else's fault. It's not Hubdoc's fault that a feed didn't work, but I think the frustration for a lot of accountants and bookkeepers [00:14:00] is two-factor authentication, this breaks; they have to go back to the client, "Oh, I need your new password." They're forcing you to ... "What was your favorite pet's name?" You've gotta do all that dance. You look, as an accountant or bookkeeper, kind of scattered to your client. Some of them are reconsidering, like, "Well, why don't you just give me paper?" Blake Oliver: You know what I see this as is a part of a bigger problem, which is probably the greatest challenge, I think, for cloud adoption and accounting is the ... It's not 100-percent reliable, the way that you used to get that paper bank statement [crosstalk] [00:14:30] David Leary: Don't say that, because now we're gonna get ... You can't say cloud is not 100-percent reliable, because now all the desktop people are gonna come after us [cross talk] Jamie McDonald: "We told you, Leary!" Blake Oliver: Stuff breaks. These connections break. Integrations break all the time. You've gotta go figure out what went wrong and how to fix it. That's frustrating for people who like consistency, where it's the same every month. That was my biggest challenge, early on, at least. Maybe it's gotten better now, but 10 years ago, when this whole thing was really new, I was dealing with [00:15:00] apps changing all the time and APIs breaking. Jamie McDonald: Yeah, I think part of it is the nature of software development, which ... Platforms ship new features. Things change. I use the language, "We're building this small business ERP that's connected by API, and 700 apps on the Xero ecosystem who are pumping in data to that platform." I'm proud of the reliability of that. It generally works, right?  Blake Oliver: Yes. Jamie McDonald: It's so much better than the universe we existed [00:15:30] in before. It isn't enterprise software that's nine nines, or whatever it is, and bulletproof, but I would just encourage people listening to give it a shot. It works pretty darned well. Blake Oliver: Yeah.  David Leary: I think Xero has ... There's what? Six banks in Australia. There's six banks in Canada. You can work really closely and have deep API relationships with all of them, right? Do you see the opportunity for ...? Because there's 10,000-20,000 banks here in the States? Blake Oliver: It's not that many, is it? It's like 3,000.  David Leary: It's a ridiculous number- Blake Oliver: It's still a lot, right?  David Leary: It's a [00:16:00] lot. Do you- Blake Oliver: You probably know how many there are ...  Jamie Shulman: It's thousands-  David Leary: It's the opportunity for two or three banks to really pay attention to small businesses, pay attention to accountants, pay attention to technology. They could actually just steal all small business, because they become the reliable bank. Jamie McDonald: I'll take a crack at that one. I'm excited about our relationships with some of the big banks in North America, both Canada and the US, and our opportunity to get direct feeds from them. But like you said, getting an API relationship with everybody, it'll take forever. We've [00:16:30] opened up a banking API, which I think is pretty innovative and cool, so that the neobanks ... We made an announcement today about Novo publishing to our API, and there's a couple others in the pipe that are exciting.  They're gonna go to the accounting and bookkeeping community and to small businesses and say, "Hey, we've built a feed that works reliably, that's enhanced, that's a different way of doing small business banking." It'll be a tough sell at the beginning, but you look at what Monzo's done in the UK, in [00:17:00] terms of scaling their base. I'm bullish on that opportunity for our ecosystem, because it'll make the whole banking industry get better. The second answer to your question is we hear, all the time, from accountants and bookkeepers that, "Yeah, my clients asked me to recommend a bank, and I say, 'Let's go with these guys, because the feeds work pretty well, and Hubdoc works well with them'" type of thing. Maybe there's an opportunity, but I don't know ... David Leary: Yeah, I think I've talked to accountants and bookkeepers who were like, "I move every client to this bank, because [00:17:30] of this." Usually, it's the bank-feed fetching. It's reliability, yep.  Jamie Shulman: An interesting observation ... This is a little bit different, but on the topic of the fetching of the bank statements, early on, when we started, that was the big Wow moment. People said, "Wow, it's magical that if we just have the credentials of our clients, we can magically just have these bank statements." I found - in the last couple of conferences, where I really get a chance to talk to hundreds of customers and prospects, including the Scaling New Heights one, and the one here - is that the new Wow moment I think I'm hearing more of is the machine [00:18:00] learning piece of our product, which isn't bank statements, but it's the pulling in of the transactional documents - the bills, receipts, et cetera. The machine learning Wow is something that we're hearing more of. It's just interesting. Now, we've got these Wow moments. One we're probably more challenged with on the fetching of documents, but the machine learning, extracting of documents, it's ... I'm hearing more about that being a Wow, which is nice, because it helps offset some of the challenges we're having. David Leary: Yeah. The pain's shifted. The fetching is now the pain, but what you do with them, once [00:18:30] you get them is the Wow. Jamie McDonald: I was joking with David before the pod and taking a picture of this microphone. I can post the Achievement Unlocked moment for Jamie and I. We've finally made it onto The Cloud Accounting Podcast. David Leary: You guys have had an amazing year. Jamie McDonald: What else is to be done? I'm sending the photo to my wife and just running a victory lap. Thanks for having us on the show. Blake Oliver: Thank you. If people wanna reach you online and find out what you're up to, where should they do that? Jamie Shulman: JamieS@Hubdoc.com. On Twitter, I'm just Jamie Shulman, my name. Jamie McDonald: Yeah. On Twitter, I'm @JamieMcDonald - easiest [00:19:00] place to find me. We'd love to hear from the people listening to the show. Blake Oliver: All right, wonderful, and-  Jamie Shulman: I was going to ... I want to just reiterate what Jamie said, because it is ... Maybe it sounds a little crazy, but we've been at this together, and we've been working with the two of you for years now. It's great to see the acceleration and what you guys have done with this. It's impressive. Blake Oliver: Well, just think where we've come in 10 years and where we are going in 10 years. It's amazing. Jamie McDonald: Yeah, there's gonna be a great decade ahead of us. Blake Oliver: All right, well, on [00:19:30] that note- Jamie Shulman: Thanks.  David Leary: Are we okay to sign off? Blake Oliver: Yeah, thank you very much. David Leary: Thanks, guys.  Blake Oliver: Bye, guys.  Jamie Shulman: Cheers. This episode of The Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and a first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing. Now, Halon Tax is working bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. They're even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to CloudAcountingPodcast.promo/halontax. That is Cloud Accounting Podcast dot promo forward slash H-A-L-O-N-T-A-X. 
#Xerocon San Diego: LivePlan's Sabrina Parsons, CEO, and Kathy Gregory, Director of Strategic Development
SponsorLivePlan: http://cloudaccountingpodcast.promo/lpbootcamp Show Notes  00:31 – A personal word of thanks to our sponsors  01:00 – Sabrina and Kathy define advisory from their perspective   03:05 – Finding the why - Asking the right questions to help build a strong advisory service  07:01 – Another model of combining bookkeeping and advisory - former guest, Kenji Kuramoto  10:22 – Worth repeating: Bookkeeping is not what creates value in the mind of the business owner   11:37 – Adapt or die ... Stop fighting AI and get creative   13:29 – Sometimes Kool-Aid is good. Sabrina breaks down the myth that strategic planning is not a small-business imperative 15:14 – Want to take your client-advisory skills to the next level? The LivePlan Client Advisory Services Boot Camp is just what you need!   16:41 – For small businesses that don't have the budget for CFO-level help, there are endless opportunities for accountants skilled in strategic planning and advisory  19:10 – When you've got the 'who, what, where, and why,' LivePlan gives you the 'how'   19:53 – Kathy shares the inspiration behind LivePlan and describes some key features  22:08 – LivePlan is launching a new QuickBooks Desktop Beta. If you're interested in taking part, visit LivePlan.com/strategicadvisors to learn more 25:16 – LivePlan offers tools that remove the complications and make it easy for small business owners to work alongside their accountants  27:15 – Why Palo Alto transformed from desktop to cloud, and how they found the method to their madness within their own method - LivePlan   31:53 – How does Palo Alto Software stay profitable, and continue to reinvest in its own growth? Strategic planning   34:07 – Sabrina give a brief glimpse into her side gig - advocating for working moms and working families and how it took her to the White House more than once Connect with Sabrina and Kathy  Email: accountants@liveplan.com Website: LivePlan.com Twitter - LivePlan: @LivePlanSA Twitter - Sabrina: @mommyceo LinkedIn - Sabrina: https://www.linkedin.com/in/sabrinaparsons Twitter - Kathy: @KathyGregory1 LinkedIn - Kathy: https://www.linkedin.com/in/kathy-gregory-821525112/ Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.  Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast, I'm Blake Oliver. David Leary: I'm David Leary. Kathy Gregory: I'm Kathy Gregory. Sabrina Parsons: I'm Sabrina Parsons. David Leary: Sabrina and Kathy, where are you guys from? Sabrina Parsons: We are from Palo Alto Software, makers of LivePlan and also Outpost. But I think, for today, it's really makers of LivePlan, because we're here to talk to you guys about all kinds of things related to LivePlan and advisory. David Leary: There's the word - advisory. We're in the Summer [00:00:30] of Advisory. We were talking about this last night- Blake Oliver: Yes, yes ... Oh, and before we get into that, though, thank you so much for sponsoring and making this whole event possible for us. Sabrina Parsons: Oh, absolutely. Blake Oliver: We appreciate it!  Sabrina Parsons: We love Cloud Accounting Podcast. David Leary: Thank you. Blake Oliver: So, yeah, let's dive right into it. Let's do it. Advisory. David Leary: It's everywhere. We actually had an interview earlier today, where they're starting to ... People are getting scared by the word advisory, because it's like- Kathy Gregory: Being overused.  David Leary: Do advisory or die! What does it mean to you two? [00:01:00] Kathy Gregory: To me, you can't advise a small business or client. You can't advise your client unless you're doing strategic planning. For me, right away, you better be doing some planning, and broad-level strategic planning should be included and then the follow-up to the planning, but it can't be just ... I've heard people talk about advising on IT solutions, and advising, obviously, on tax. I completely understand that, and I think all of that can be included, but you're not gonna help a small business get [00:01:30] to where they wanna be - either grow or retain where they are, or even scale back ... Sometimes a business is trying to slow down, and a person's trying to retire out, or they're trying to just take it down and end it. Whatever it is, whatever the plan is, you're not gonna be able to do that unless there is strategic planning involved. David Leary: There's no plan, there's no map. What are you advising? Kathy Gregory: Right. Sabrina Parsons: Exactly, and I think that's ... I know, people get scared about it, and I think 'The Summer of Advisory' ... They're hearing all these things. There's a lot [00:02:00] going on right now, but I think the reason they get scared is because it is so undefined, and people define it in so many different ways, and it feels overwhelming. But, at the end of the day, really what you're doing ... What we all say by advisory, we all mean helping small businesses. That's what I like to kind of reframe and help people understand that it doesn't have to be this big, scary word that means 500 things. Really, what you're doing is helping a small business client. [00:02:30] How do you help a small business client without understanding their strategic roadmap, and where are they going, and really interpreting their financials for them? Because if they need IT help, maybe they'll come to you, but they're already there with you because you know numbers. If you're an accountant, that's why a small business client is with you. I think sometimes I see that disconnect, where, sure, you can learn IT, you can advise on IT, but your [00:03:00] strength as an accountant is your- the way you know numbers and embrace them. Blake Oliver: One thing I see, and I'm guilty of this, is people will ... When I was in practice, they'd come to me and they'd want a service. They'd say, "I need bookkeeping." Then I would just jump in and start doing that for them. Or maybe they would need some controller-type services. It was always best if I stopped for a moment, and I asked why. Not just "Why do you need my services?" Which I got better at asking that ... From a sales perspective, that's really important. But also, it's like, "Why are you in [00:03:30] business?" Sabrina Parsons: Yes.  Blake Oliver: We fail to stop and think about that. It could be, like you said, for strategic planning, Kathy. Maybe they wanna sell the business; they wanna retire, or I don't know, maybe it's just like they wanna quit their day job ... Everybody has a different reason, right? Financial independence- Kathy Gregory: I think, in the accounting industry, and in the public accounting industry, for so long, because of compliance-based services, a public accountant can literally sit back and wait for the client to come to them, because [00:04:00] they need whatever compliance-based service they need. But if you're going to work at a higher level with a client and help them grow their business, or help them achieve their goals, you have to lean forward, and you have to ask those questions that are different, and new, and more broad. Then, know how to apply that information. If the client tells you, "I'm trying to really just make enough money to send my kid to college," or, "I'm trying to purchase a new piece of capital [inaudible] company," or whatever it is, all of those are [00:04:30] business goals, and you have to be able to translate those into whatever financial plan that will help them achieve that. It's just it's a different type of work. Blake Oliver: Yeah. How do we get comfortable with that as accountants? Sabrina Parsons: You know, I think the first place is to also realize - and Blake, I don't know how much- whether you'll agree with me or not - but I feel like if you ask those questions to a small business, "Why do you need the bookkeeping?" I feel like we hear a lot from small businesses. We work directly with them. We started, and still [00:05:00] to this day, more than 80 percent of our revenue is direct from small businesses. We interact with millions of small businesses ... When they have the money to hire a bookkeeper, they don't understand what bookkeeping means. What they think to themselves is, "Whew ... I finally made it. I have enough money for somebody else to do the financials.". Blake Oliver: Right.  Sabrina Parsons: They don't understand that bookkeeping is literally compliance, and you're not helping [00:05:30] them analyze what's going on. You're just recording what happened. I think that's part of the disconnect. When accountants are afraid of advisory, because they don't know how to sell it, the biggest message I want them to hear is you don't have to sell it. You just have to do it, because that's why a small business owner is coming to you. I think it's a huge disconnect-. Kathy Gregory: And be able to know what the right price is for your firm and your ecosystem for that, too. Make sure you charge for it. But [00:06:00] yeah, just do it, because they expect that. Blake Oliver: Yeah, a lotta times, we give it away, right? Kathy Gregory: Yes!  Blake Oliver: We charge for a tax return, but we're doing a ton of advisory that's way more valuable to the owner. David Leary: And the owners will pay for it, because they'll understand the value- Kathy Gregory: If they understand it. Yeah, and I think that seems to be the next step for the accounting industry as a whole is to decide what it is, and then be comfortable with systematizing it, because I think it's ... I hear two things said a lot at conferences and at places, that advisory is knowledge [00:06:30] work. I hear that a lot. It's knowledge work ... It is, 100 percent, but you can still systematize knowledge work. You can still do that. You can set up for yourself a process and a system. Then, once you have that, then it's defined, and then you know what you're doing, and you can train your staff on it, and everybody knows what their piece of it is. Then, you can price it easier, and you can market it easier, and you know what that is. They need to embrace both - the fact that it's knowledge work, but that you can also make it a system. David Leary: Yeah. I think, this summer, a couple things I've [00:07:00] observed is Kenji ... Say Kenji's last name for me.  Blake Oliver: Kuramoto.  David Leary: Kuramoto ... Who was actually at The Accounting Salon. He was ... If you go back a couple episodes, listeners, you can listen to his interview. It was interesting, because he started 100-percent virtual CFO advising only. He's worked his way backwards into bookkeeping, because he realized he can't do any advising if their books aren't accurate-  Kathy Gregory: Oh, yeah. You've gotta have that.  David Leary: What's interesting, you guys have an app, LivePlan, and that connects to the accounting systems, but then also helps do the advising, right? There was a slide last week on Twitter. It was at the AICPA, and somebody was ... It was like, "Stop [00:07:30] doing bookkeeping and do advising!"  Kathy Gregory: Oh, boy.  Blake Oliver: Oh, yeah.  David Leary: How is that possible? Kathy Gregory: No, it's not possible.  David Leary: How do you do advising if you don't have good numbers? Kathy Gregory: No, no, you gotta have good numbers and a very clean month-end, or at least having it happen quickly. Sabrina Parsons: And if you can control that ... Kenji working his way to bookkeeping and understanding that, then your advising is gonna be better, because garbage in is garbage out. If you've got terrible charts of accounts and someone isn't doing the bookkeeping correctly, it's gonna be really, really difficult. But there's [00:08:00] an opportunity there, whether you wanna do all the bookkeeping or not. This is also where I think people have to not be afraid of what technology is bringing to the table.  I know a lotta people are afraid of all kinds of online services now, including Intuit, that are offering bookkeeping, right? I really want an accountant to look at that and say, "Okay, is that work that I wanna do - that work that's commoditized that I [00:08:30] can no longer charge as much for, because it's so easy for people to go online, and find services, and package services at ridiculous rates?" If it's well done, and you can then do the advisory, the value is not in the bookkeeping.  At some point, it's even gonna be ... I mean, technology, automation, IA, is gonna continue to work on the bookkeeping side and continue to make that an automated artificial-intelligence [00:09:00] process. That's fine. Let that happen, and use that, and then build your advisory services. Wouldn't you rather do super-interesting work, help a business grow, or sell, or add a partner, or add a location? Really be that entrepreneurial catalyst for your small business. That's so much more invigorating. You can bring passion to that. Don't be afraid of all the online services, because there's only gonna be more, and more, [00:09:30] and more of them, and that's okay. Kathy Gregory: You get to keep playing with numbers, too. It's not like you don't get to keep playing with numbers. You just do them in a different way; you analyze them in different way. Knowing that each metric that comes off of your standard P&L balance sheet and cash flow ties back to something going on in the operation that's working, either well or not well? That's a super-fun job. I nerd out over that all day. I think it's so fun to dig into those metrics and try to figure out [00:10:00] what's happening in a small business operation that's working, or not working, then asking the right questions of the business owner. There's nothing more fun than that, and there's nothing more fun than seeing their eyes light up, when you hit on something, you've uncovered something. They go, "Yeah ... Yes, that's not working right, and I don't understand it, but I didn't get the numbers to be able to know it." You know what I mean? It's like these two brains coming together. It's so fun. David Leary: Something you said, Sabrina, and I think this is the problem ... People hear some of the sentences, but maybe not the whole conversation. You said bookkeeping is not the value, but I [00:10:30] think people hear that, like, "Bookkeeping is not valuable," but you can't do the valuable stuff without solid bookkeeping. Nobody's saying bookkeeping is not valuable. Blake Oliver: Well, it's not what creates the value in the mind of the business owner. David Leary: Correct. Yes. Blake Oliver: It's essential to do the work, right? Sabrina Parsons: Exactly. Exactly. I think that's exactly right. Blake, you should repeat that again.  Blake Oliver: It is not what creates value in the mind of the business owner. Sabrina Parsons: Exactly. You also can't fight ... I believe you shouldn't [00:11:00] fight that technology battle. You should embrace it. I don't mean that bookkeepers aren't smart, that they aren't doing valuable work, that what they do today is somehow lesser. I just mean this is the reality. This is what's happening, and they can't stop that. Right? It's the same way where, if you're a taxi driver, at this point, you've probably stopped fighting rideshare, right?  Blake Oliver: Yeah, probably. Sabrina Parsons: Ten years ago, it didn't exist; five years ago, taxi [00:11:30] drivers fought it; at this point, they've given up fighting it and they've either joined or moved on to do something else-  David Leary: We've talked about that on the podcast, in the past. There were some articles, because we brought this up ... There's taxi drivers, and taxi associations, in taxi people that are doing very creative additional services. It's forced them to step up their game. Blake Oliver: Yellow Cab, I think, created their own app now. They are being forced to improve, I think, and the same thing's happening in our industry with these software plus a service type of offerings - the Botkeepers, the ScaleFactors, the- [00:12:00] David Leary: QuickBooks Live-  Blake Oliver: QuickBooks Lives. That's forcing us all to up our game, but it's also creating a bigger market for these services. Now, people are aware, "Hey, this is not just a niche thing. I can get this." Sabrina Parsons: The other part that I think, to Kathy's point of this can be exciting work, is that we've lived in an environment in the U.S., where small businesses understand they need bookkeeping. As soon as they can afford it, they want somebody else to do it. They've understood [00:12:30] that they can't run a business without bookkeeping software. That's why you've got all these big players and lots of players in this market. They embrace that. They know that. But they're still failing. If you start a business in five years, 70-percent chance that you're outta business. 60 percent of the ones that fail were actually profitable. They ran out of cash. They're not managing their business, and this has been for years, and years, and years. What I think is the super-exciting [00:13:00] opportunity is that if all of these services online and all of this technology really pushes bookkeepers and accountants to innovate and to be really thoughtful about what they bring to the table and bring real value with their experience, their knowledge, their human mind that technology can't do, we actually have a chance in the U.S. of changing the economy. Small businesses drive the economy, and a rising tide lifts all boats. I [00:13:30] know I sound like I'm dispensing Kool-Aid, but I find it to be super-intriguing to look at those numbers and think about could we really affect the economy by getting accountants to do this sort of advisory work? It is good for small businesses. Intuit does strategic planning. Xero does strategic planning. All public companies do. When we know and we see all those reports from Wall Street ... Did [00:14:00] Google make their numbers? How's Microsoft doing? How's Intuit doing? What they're talking about is their forecast, and what they're doing is saying, "Here's the forecast, here's the actual. Did they make their numbers?" Startups do strategic plans.  Small businesses are kinda told this myth that business planning is for startups only, and for raising capital, which is a total myth, because even large [00:14:30] private companies, they do planning, and they have a board, and the board has to approve the plans, and they look at it every month. It's almost this myth that small businesses have been told, and then accept, because strategic planning is hard, that they don't need it yet. Yet, everybody else that's successful and bigger does it. Kathy Gregory: Even without the board, even ... I spent years in a fairly large engineering firm, and we did it just for middle operational management, pulling data [00:15:00] out of the accounting system, because the accounting department wasn't doing that; massaging it in a way that made sense, building forecasts, so that operations managers could make decisions; could make strategic decisions. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. This has been The Summer of Advisory. Everyone at every conference, and every session is telling you to become an advisor, but the fact is, a 50-minute CPE session at a conference does not make you an advisor. [00:15:30] Some of you even took to Twitter to vent about this fact. Well, I have some good news for you. Believe it or not, Twitter led to the creation of a three-day course, or should I say a boot camp on advisory? Yes, that is right. You can now really become an advisor by attending the LivePlan Client Advisory Services Boot Camp on October 2, 3, and 4, 2019. The three-day event in Eugene, Oregon, will include deep learning, and hands-on workshops to learn the LivePlan method for strategic advising, and how to market, sell and deliver this vital client [00:16:00] advisory service to your small business clients. To learn more about attending the LivePlan Advisory Bootcamp, head over to CloudAccountingPodcast.promo/lpbootcamp. That is Cloud Accounting Podcast dot promo forward slash L-P-B-O-O-T-C-A-M-P.  David Leary: I suspect small businesses do wanna make plans, but they get caught up running their business, and that's where partnering with somebody who could actually come in and just ... In a way, it's advising- just [00:16:30] holding them accountable a little bit is just gonna help them. Sabrina Parsons: Also, if the accountant does the advisory, because the small business owner is doing a million things ... Really, it's like Kenji being a CFO for hire. That's what they need. They just, they can't take on that role. They don't have that knowledge. They don't have the expertise. They need that value from somebody else, and they will welcome it. Once you do it correctly, they'll be addicted. They are not gonna drop you. Your [00:17:00] retention with that client is gonna be as long as they have their business. If you're charging them $2,000 a month, you're not getting a CFO for $24,000 a year. That is not happening. You can't get that sort of strategic level of experience for that sort of money. So, if an accountant can do that, there is room for thousands of dollars a month that are still completely doable [00:17:30] for a small business, and the value is there. Blake Oliver: So, I'm an accountant. I'm ready to make this leap. I want to get started in advisory, but I don't know where to get started - that's the classic problem. I wanna do it ...  David Leary: You just go to conference. There's lots of sessions. Blake Oliver: How does LivePlan create that starting point for me. How does it work?  Kathy Gregory: From soup to nuts, if you do it [00:18:00] all, you would start with a broad conversation with your client to understand their big goals and begin doing real strategic planning with them that would include everything from looking at their market, and looking at how they're selling, and who they're selling to, and why they're selling it, and having a fairly deep discussion with them about that. Then translating those things into a forecast. There are simpler ways to start, if that is work that is new to you. In our software, you can dive into those- yes, I'm sorry?  Blake Oliver: Sorry, I'm just trying [00:18:30] to picture it in my mind. I'm creating a strategic plan. It's like a business plan. Am I thinking the same terminology?  Kathy Gregory: Yeah, we call it a Lean Plan. Blake Oliver: Lean Plan, okay-  Sabrina Parsons: I will just interject, before Kathy describes it, because you asked how LivePlan helps. I think the number-one thing, to David's joke of just go to conferences, because they have all these sessions, is that I think part of the problem for accountants is they all get talked at about why, and they [00:19:00] don't need that. They already bought it. They know why-. Blake Oliver: This is the classic problem of conferences, all high level. Sabrina Parsons: Exactly.  Blake Oliver: "You need to do this." Then you go home, and you wonder like, "Well, how do I do it?" Sabrina Parsons: Exactly. Exactly. This is what we've learned over the years. Our tool is a tool for small business owners. It is a platform and a system for accountants, and it's two different things. What we've really understood that what accountants needed is not to be convinced. They're convinced. They buy it. They [00:19:30] nod their heads. Then they go home, and they don't know what to do. What Kathy's really built, and then I'll let her describe it, is the 'how,' and in a way that makes sense to someone who's been doing tax and compliance work. It is a system and a process with tasks that you can learn how to do. We've really gotten into the weeds to show accountants, and train them- Blake Oliver: Yeah, we like checklists, so this is-  Sabrina Parsons: Yes, yes-  Kathy Gregory: It is a checklist. Yeah, my background is in a lot of things, but business process design [00:20:00] is one big piece of it. So, it was realizing- it was coming to these conferences, when I first came to Palo Alto Software, and realizing, oh, this industry doesn't have a business process for this, and that really is what's needed. Then, once there is a master kind of business process, then firms can adopt that in whatever way makes sense depending on the things they focus on, or the skills they have. If they focus on only bookkeeping, there's pieces of it you can do. If you're sort of CFOs for hire, then it's different; but you have to have the master plan first and then be able to [00:20:30] pick apart pieces of it you like- Blake Oliver: Got it.  Kathy Gregory: -and deal with capacity planning, and resource allocation, and all of the things that you have to think about when you roll out a new service. Blake Oliver: So super-high level, just overview for those who are not familiar at all with LivePlan ... I think I used LivePlan actually, myself, as a business owner. Kathy Gregory: Great. Blake Oliver: I don't know if you know that. When I started my firm, I created my business plan, that one-page pitch to get an investor with LivePlan-. Sabrina Parsons: That's awesome. Blake Oliver: Now, of course, I was bad, and I didn't follow through with the forecasting, and the [00:21:00] budget-to-actuals, and any of that-. David Leary: That's because he was a bookkeeper, and he was too busy. Blake Oliver: I was too busy. So, that I'm familiar with. I could create that business plan and try to get investment or just really distill in my mind what it is I'm doing, which is actually just a great exercise. Can you explain your business in like-. Kathy Gregory: Isn't it great? Blake Oliver: -in one sentence? Kathy Gregory: And how it limits you to those characters? Blake Oliver: Yes!  Kathy Gregory: Because it seems like a nothing thing, but it's important, because you strip out all the words that don't matter, and you get down to the words that ... It really is powerful. Blake Oliver: So that part I did. Then, if I had actually continued, I would then [00:21:30] create a financial forecast? Kathy Gregory: Yeah. Blake Oliver: I wanna hire employees; I wanna expand ... It's building out a forecast. Kathy Gregory: Yeah, and then really thinking through the things to forecast. That's a critical piece of it. The software helps you think through that. If you already have maybe a chart of accounts with a ledger, you've got codes already, but the things you wanna forecast should be strategic to your business, and they should roll out of that Lean Plan. Blake Oliver: Got it. Then, once I've created that, I can pull in the actuals from my accounting software. What GLs do [00:22:00] you support? Xero, obviously, because you're here at Xerocon. You're also doing ...?  Kathy Gregory: And QuickBooks Online-  Blake Oliver: QuickBooks Online. I pull in those numbers ...  Sabrina Parsons: We are also going back to ... We used to support QuickBooks Desktop. The Sync Manager went away. We were hesitant to build our own sync manager, waiting to see what Intuit was gonna do; but it's clear that QuickBooks Desktop, at this point, still has a lotta usage, and it isn't [00:22:30] going away. So, we are launching our beta for accountants next week. If anyone is curious and they want to be part of the QuickBooks Desktop beta, they can contact us. If they just come to a LivePlan.com/strategicadvisors, they can find the information, but we are back to supporting QuickBooks Desktop.  Blake Oliver: All right. Well, the folks who are signing up for Right Networks, for their Always On feature, which claims to make QuickBooks Desktop just as good as QuickBooks Online, now [00:23:00] they've got LivePlan integrating with it, too. Sabrina Parsons: We are actually using Right Networks, their ...  Kathy Gregory: Autofy.  Sabrina Parsons: They just purchased Autofy, and-  David Leary: Yep, yep, that's what we were talking about [cross talk] Sabrina Parsons: Autofy is who's actually doing our Desktop integration-. Blake Oliver: You don't have to be logged into as a user, too, for the sync to work, all that stuff?  Sabrina Parsons: Exactly. Exactly.  Blake Oliver: We oughta talk about this more, David. I'm actually more bullish on hosting than you might think. Yeah, yeah. Well, that's great. Okay, now it's kind of making sense in my mind. Kathy Gregory: Yeah, so you [00:23:30] connect the accounting solution, and then LivePlan's dashboard is going to present you with the metrics - each individual metric. It was built, remember, for small businesses. That's the cool thing about it, for accountants, that they don't have to now reconstruct and build reports that makes sense to small businesses, because they're already built; they're already done. Blake Oliver: Got it. Kathy Gregory: Then it shows me very clearly the difference between plan and actual; really simply, like with green arrows up mean good, and red arrows down mean bad. [00:24:00] Again, it's cool for the accountant, because it's a talking point. Have you ever been in an advisory meeting or any a meeting with your client, maybe at month end, and you've got the talking points. You know what you're gonna tell them, but your brain just breaks down in the middle of the meeting, and you kind of forget the points? This is nice, because it helps guide you through- Blake Oliver: It's that agenda for that meeting.  Kathy Gregory: Yeah, it is. Then our business process that's outside of LivePlan comes with meeting agendas, and scripting, and all the other things that help you- that support you. Sabrina Parsons: Initially, if you're [00:24:30] afraid, or you don't know, the scripting is great, right? We kind of prompt you with, "Here's some questions you should be asking." When people actually start doing this, then they build their own questions. They get more comfortable. They understand their style and the style of the client. It goes back to that whole idea of everybody gets the why; How? How?  We've realized that getting down to even providing you with scripts really helps people get over that hurdle and that fear, because the other part that I think is really vital, and [00:25:00] I would say is a competitive differentiator for LivePlan versus other reporting analytics apps, is that we didn't build this first and only for accountants, who then put stuff together and presented to clients. That's fine, and other people have chosen to do that, but we built it so that the small business owner works with the accountant; so that the small business owner's also using the dashboard, and so that the reports make sense to the small business owner, because what we heard from accountants [00:25:30] is they stop using a lot of these other tools because they send stuff to their client, and the client never responds, doesn't look at it month, after month, after month. They don't, because it's too complicated, because it wasn't built for them.  David Leary: And essentially, because you guys have a 25-30 years’ experience servicing small businesses, and you attacked it from that direction. It reminds me of Intuit; years ago, in my career at Intuit, with TurboTax. They, at one time, hired an editor from People Magazine to basically go in and change all the text in TurboTax, because it [00:26:00] was easier to use then, because it was written with all this accounting language, and nobody could understand it. It's kinda the same thing. If people are coming from the accounting dashboard side, trying to push down the other direction, you're probably not gonna communicate to the small business owners. You guys already had that DNA in you, and then came the other direction. Sabrina Parsons: Exactly. We actually started working with the accountants because they came to us. We got to a point of critical mass of having LivePlan out there in the marketplace, that the small business owners were taking LivePlan to the accountants. We started hearing [00:26:30] from accountants saying, "What is this? Do you have trainings? How do I use it? My small business clients have it, and now I have to learn how to use it." We really were pulled by the accountants to come into this market because of our DNA with small business owners and the fact that the small businesses were already using it, which I think was appealing to accountants. They don't have to position, or sell, or market this other tool or these other reports. David Leary: Could you speak to ... It's [00:27:00] not really advisory related, but I think it's a cool story, because everybody's in this transition still, constantly - desktop to cloud. We just talked about desktop a couple seconds ago. But, tell the history of LivePlan, and Palo Alto software, because it was a desktop company, and now you've changed it into a SaaS cloud company. You've made the transition yourself. Sabrina Parsons: Yes, we have. I took over the business in 2007, and we were basically a Windows desktop company. Our flagship product was Business Plan Pro. A lot of people have used it; millions of entrepreneurs. [00:27:30] But the writing was on the wall, and we understood, as a software development firm, what the cloud had to offer in terms of usability, in terms of development, getting away from that Golden Master, and installations, and the support side; also, the ability to iterate more quickly and really bring customers what they want consistently and not once a year with this big release. We started, [00:28:00] at that point, planning. I think what is interesting to me is for people to understand that the way LivePlan was born was really saying, yes, we've gotta go in the cloud, but also recognizing that Business Plan Pro wasn't doing the ongoing management the small businesses needed. We were using Business Plan Pro. Every year, we'd create our strategic plan, and every month, we would compare plan, versus actual, versus previous period, versus previous [00:28:30] year, because those data points tell you a lot. If you're a retail store, and you're looking in January, you look at previous period December, and the numbers are not gonna look ... You're gonna look, like, "Oh, my God, I'm doing so much less ..." but that's obvious, right? Seasonality. You want previous period, but you also want same period last year, because that tells you even more. That was the way we managed Palo Alto Software every month, but it entailed exporting from Business Plan [00:29:00] Pro, exporting from Accounting Solution, massaging data, and so- David Leary: Because you were using your own product, you realized all the things it sucked at.  Sabrina Parsons: Exactly. Exactly, and the ongoing small business management ... We built LivePlan, and the methodology that's behind that process and system that Kathy has built for accountants is what we used to build LivePlan. There is a management methodology to LivePlan. When you take a company and you switch it from Windows development [00:29:30] software to cloud, you have to have whole different developers. There's a lot of resources there, and there's a real big push on cash. All of a sudden, you need to hire all these other people for a product that's not bringing you revenue yet. We changed technologies. That's hard. It can be very difficult for a company. We also changed business models. We had a piece of software that we were selling, and it was more transactional. You bought it ... Yes, we got some upgrades, but you bought it, and you didn't [00:30:00] keep paying us, right? You bought it, and, on average, we were making 160 dollars from every user, because we had a couple of versions - $99, $199 - different things that you could buy, but we were getting all the money at once.  So, not only did we have to switch from a resource perspective and hire all these new developers, but we also, all of a sudden, were in a situation, where we were gonna be getting $20 a month ... We didn't know, were we only gonna get $20? Were we gonna get $300? Were we [00:30:30] gonna get $160? Were we gonna get more people but less money? That's kind of a scary thing and a huge cash flow implication, because all of a sudden, we're getting 20 bucks, and it's taking us over a year to get to that average transaction that we already had.  The only way we were able to do that is using the LivePlan method. That's exactly how we used it, right? We forecasted. We understood our cash. What [00:31:00] we did is that we saw our runway, and we slowly introduced LivePlan, while still selling Business Plan Pro, so that we were able to really strategically ... But there's no way we coulda done it without managing-. Blake Oliver: You did a cross fade. Sabrina Parsons: We did ... Obviously, I'm proud of it, because I love LivePlan, but I also want people to know it's how we manage the business. We are privately owned. No debt. Cash-flow [00:31:30] positive. We've never taken on an investment, and we continue to grow. We've done that, and we're able to do that because we eat our own dog food, because we do strategic planning, because we don't spend money we don't have. Blake Oliver: That's interesting. That's kind of a rarity. You are profitable, cash-flow positive, and not interested in taking on investment money?  Sabrina Parsons: No.  Blake Oliver: Are you planning to stay private, and just ...?  Sabrina Parsons: You never know what happens in the future, but it works for us, and we don't need it. We've built up cash that we can [00:32:00] reinvest. We've built up enough cash that we've launched a whole 'nother product. We've been able to invest in that product. We have a team of 20 people and that product is just barely launched. We've done that all with using our own revenue and profits from our existing product line, but it takes a lot of super-careful planning. Blake Oliver: That's very refreshing. David Leary: It's very hard for companies to get off the desktop model to a cloud model. We actually did an interview last week with Shafat from BQE- Blake Oliver: Similar [00:32:30] story. David Leary: Similar story. Instead of how you cross-faded it, to take Blake's term-  Blake Oliver: He did a hard cut off. David Leary: He just stopped. The second it was done, it was launched. You couldn't buy his desktop product anymore. He went for it. Maybe he didn't use LivePlan. He just jumped right in.  Sabrina Parsons: Maybe he had a credit line, or he had some investors. You have to have some cash to do that, right?  Blake Oliver: You've got to have a lotta cash to take that kinda risk. David Leary: I think it was private, but, see, they were an existing desktop app that had an established base for a long time. Blake Oliver: If people wanna find out more about LivePlan [00:33:00] and connect with you, and your company online, where can they do that? Kathy Gregory: If you're an accountant, the best way is you can email us at accountants@LivePlan.com. That's the first way. Our website is LivePlan.com. Then, in the upper right-hand corner, it'll say Solutions, and there's a dropdown, and you can pick Accountants. That'll get you to the site that has all the resources. There are tons of resources on our site. Blake Oliver: Are you two on the social medias? Do you like the Twitter- Kathy Gregory: Oh, yeah, I'm on the social medias. My Twitter handle, I'm supposed to know that, right? I think it's @KMGregory1. I [00:33:30] believe that's what it is. Yeah, that's what it is. I have fun on Twitter all the time with accountants, but I can't recall ... [cross talk]  Blake Oliver: It's like knowing my own phone number. Kathy Gregory: Yeah, right, but I do have-  Sabrina Parsons: Kathy also helps manage our LivePlan Strategic Advisor Twitter, and that's @LivePlanSA.  Kathy Gregory: Yeah, @LivePlanSA, and there's a blog that I think is fun and good on the site.  Blake Oliver: All right, great.  Sabrina Parsons: And my Twitter handle is @mommyceo Blake Oliver: I love that. And as always, I am @BlakeTOliver. [00:34:00] How about you, David? David Leary: I'm @David Leary. I think this is interesting, because I don't think we've had anybody on our podcast that has spoken to a president before. Sabrina Parsons: In my spare time, I do a lot of advocating for working moms and working families. I have been lucky enough to be invited to two summits during the Obama presidencies, and, yes, was able to have some really cool experiences because of that and speak at a White House summit-. Blake Oliver: Wow. [00:34:30] Sabrina Parsons: -and bring two of my three boys to come ... One of them was has been too young to also be able to experience that ... Being a CEO, woman, working mom in a technology software company, there's not a whole lot of us. I am hoping that 20 years from now, that's different, but I am definitely a big advocate of working parents, and working moms, and try to do a lot [00:35:00] of political advocacy to actually make change. David Leary: Nice.  Blake Oliver: Wonderful. Thanks so much for joining us [cross talk] Yeah, great to talk to you.  Sabrina Parsons: Thank you.  Kathy Gregory: Thanks so much. It was really fun.  David Leary: All right, bye.  
#Xerocon San Diego: Shawn Kanungo, Disruption Strategist, Founder, and Keynote Speaker
Sponsors  Halon Tax: http://cloudaccountingpodcast.promo/halontax TOA Global: http://cloudaccountingpodcast.promo/toaglobal LivePlan: http://cloudaccountingpodcast.promo/liveplan Shownotes 02:25 – Shawn explains the difference between a linear accountant and an exponential accountant 04:24 – Get stuff done! Embracing the gig economy with a Fiverr experiment 05:36 – Shawn shares some career background - from CPA to disruption strategist 07:37 – Accountants currently have a 94-percent chance of being automated  10:15 – Winter is coming! If your firm doesn’t get with the cloud, you may get left out in the cold 11:18 – According to Hinge Marketing, in accounting, 25 percent of firms are eating all the growth (https://hingemarketing.com/library/article/2018-high-growth-study-accounting-financial-services-edition-executive-summary) 13:45 – According to Shawn, the accounting firms that chase relevance and stay on the leading edge will win the race 14:26 – Blake and Shawn talk about how Xero is breathing some rock-star-level life into the accounting industry 16:31 – If accounting is on the cutting edge of disruption, why are so many firms still using Excel as their primary record-keeping system?   19:12 – How Intuit leveraged disruption to increase marketshare 21:16 – The Xero-Stripe Partnership (https://www.pymnts.com/news/partnerships-acquisitions/2019/xero-stripe-team-small-biz-payments/) 24:10 – The more you build out your ecosystem, through integrations and partnerships, the more value you bring to your clients 27:12 – Ball's in your court ... Are you brave enough to face an accounting world without billable hours?  30:03 – If you want to change the trajectory of your firm and move it towards the cloud, try taking a risk 32:40 – How can accounting bring its sexy back?   34:11 – Shawn shares some secrets to becoming a great storyteller and public speaker Connect with Shawn Website: https://www.shawnkanungo.com/ LinkedIn: https://www.linkedin.com/in/shawnkanungo Facebook: https://www.facebook.com/shawnkanungo Twitter: https://twitter.com/shawnkanungo Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptShawn Kanungo: Well, first of all, if you're a senior accountant, you're listening to this in your cubicle, or you're running on the treadmill, or you're doing the dishes at home, I would say tomorrow morning, or this morning when you're listening to this, walk into your office and try to get yourself fired. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners prefer virtual advisory services? Did you know that the number-one thing they want from an expert advisor is strategic planning and review? This is even more than general-ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. Shawn Kanungo: I'm Shawn Kanungo. I'm really excited to be on this podcast. We've fundamentally removed David from the podcast. He's not on the podcast anymore. Now, I am the Ka-new co-host- Blake Oliver: Oh ...  Shawn Kanungo: -and I think it's gonna be the Blake and Shawn Show. David, we miss you, we love you, but, I'm sorry ... I just wanna say I'm a big fan of this podcast. A big fan of the podcast. Before we start, I just wanna say to the audience, all the listeners there, if [00:01:30] you haven't put a rating and review into iTunes, or Spotify, Stitcher, wherever you can get this, do it now. It helps a lot for the show, because we've gotta get this thing up to like 10 million subscribers. We need to, because what these guys are doing is so fundamental to this cloud-accounting space. They're the only ones that are actually highlighting it. You guys are doing so much for the economy, and for the space. Appreciate it!  Blake Oliver: Well, thank you so much, Shawn. We're here at Xerocon in San Diego, and you just gave a fantastic keynote. Shawn Kanungo: Oh, wow. [00:02:00] Thank you. Blake Oliver: I mean, what, 800, maybe 1,000 people in that audience there. It was called "Strategy in a World of Disruption. Be Bold, Be Brave, Be Experimental: Why Build a Culture of Experimentation?" I loved ... You had this one slide in your presentation. I mean, there was a lot to talk about, but this one slide just is sticking in my mind - Linear Accountant- Shawn Kanungo: Yeah. Blake Oliver: -versus Exponential Accountant. What does that mean? Shawn Kanungo: Linear really means how do we think five [00:02:30] to 10 percent better within our organization? This idea of linear thinking has been literally ingrained - in our organization, in our leadership, in our systems, in our family, in society - that we need to think about things in a linear way. Exponential is actually about thinking differently about business, about processes. It's actually taking a different lens. What we've seen a hundred times out of a hundred ... If you can take an exponential lens, meaning take [00:03:00] a different approach to things, you can actually get a 5X to 10X improvement. I think, especially for accounting, you know this better than anybody, this idea of linear thinking, of risk [cross talk]  Blake Oliver: -risk aversion? Yeah.  Shawn Kanungo: -is literally ingrained in our DNA. The reason why I wanted to showcase the difference between a linear accounted versus an exponential account is ... There are some tenets to it, and I can get into what those tenets are, but I think this is what we need to move, especially now. We live in a world with [00:03:30] all these exponential technologies. We need an exponential mindset! Blake Oliver: That is such a different mindset than, like you said, what we are taught to think in the accounting world, where it's all about incremental improvement. Let's become three percent more efficient, five percent more efficient, and maybe this is ... The challenge I ran into in public accounting was trying to get people on board with disruptive change is really, really hard. You had a great tip for doing that. You ask people do [00:04:00] a small project, right? Shawn Kanungo: Exactly.  Blake Oliver: The example was like a Fiverr?  Shawn Kanungo: Yeah. So, a little bit of background - I spent 12 years at Deloitte, leading their Digital Innovation Group in western Canada. One of the things that we did was I really wanted people to embrace this whole idea of the open-talent economy, the gig economy, because it just makes sense for us not to do everything. There's an entire ecosystem of people that will do things for us. Talent is ubiquitous. So, what I wanted to do was say, "Listen, guys, I'm gonna give everybody five bucks, five bucks out of my own pocket. I'm gonna give [00:04:30] everybody five bucks across western Canada. What I want you to do with this five bucks is go on Fiverr, and just get something done. Whether it's a product, a service, a voice over ... Whatever it might be, just get it done. Then, send me back the product and then we'll talk about it." The difference between talking about all this change and talking about innovation is that when you actually go off and do something and actually get somebody else to maybe even do something - this is a small example, using a gig economy - you're actually doing something. You're like, "Wait a minute! Somebody [00:05:00] else is getting something done for us at a radically cheaper cost. I didn't have to do this."  Blake Oliver: Right.  Shawn Kanungo: It literally flips your brain to say there's an ecosystem of people will do stuff for us [cross talk]  Blake Oliver: What else can we do? Shawn Kanungo: Exactly. That is the whole idea of experimentation, which I try to hammer in. It's like starting with small teams, small problems, small sprints and seeing how we can move the needle ... I think this idea of experimentation is so foreign to accountants. We don't experiment. Blake Oliver: You're a CPA. Shawn Kanungo: Yep. Blake Oliver: Tell me [00:05:30] about your background. How did you get into talking- speaking about disruption? Shawn Kanungo: I started my career at a company called Singapore Press Holdings. I then actually moved into accounting. I worked for Deloitte for the first couple years, got my CEA. Moved into management consulting on the side. My friends and I, we were building apps, consumer-based apps. Some were complete flops; some were more like mediocre successes.  At the same time, I was getting into the Strategy and Innovation Group at Deloitte. We [00:06:00] were early in the game of working the organization when it comes to innovation. We were the first to try things around artificial intelligence, using the gig economy, using drones. We were the first to do all that stuff. Clients wanted to hear about the work that we were doing in digital transformation and innovation. After that, after 12 years at Deloitte, one of things that I really wanted to do was really take equity in organizations. Working for a public firm, you can't take equity in anything. For me, equity was a big deal - taking it in companies and scaling them up. We started a group called Queen & Rook. It's like a consulting [00:06:30] model, but instead of getting paid for fees, we actually get paid in equity. So, I started that. One of our companies as a voice-technology company. We're using artificial intelligence to solve [pre-need] problems. The speaking thing came naturally, because people want to hear about digital transformation and innovation, and here I was, talking about it. You get onto one conference, another conference, and just like the momentum builds. Now, I'm here talking to you and being on The Cloud Accounting Podcast. My life, it's done. This is it. This is the peak, right now!  Blake Oliver: Right now? This podcast is ...  [00:07:00] Shawn Kanungo: This podcast. This podcast is the peak. That's my journey. I've been obsessed about this idea of digital, and innovation, and disruption. For me to bring this message, especially here at Xerocon, to this audience, to the accounting profession, means a lot, because if you look everywhere, a lot of people are saying that automation is gonna take accountants' jobs, right?  Blake Oliver: I like that you talked about that, because at a lot of accounting technology conferences - maybe [00:07:30] they talk about it more at general tech conferences - but you showed a slide ... What was it? Accountants are- Shawn Kanungo: 94 percent-  Blake Oliver: 94-percent chance of being automated. You're not afraid to put that out there that this is a risk. Shawn Kanungo: Totally. Blake Oliver: This is- we need to be aware of this risk. Shawn Kanungo: Your audience knows this, as well. You're highlighting all the movers and shakers that are getting into the space; you highlight all the companies that are AI accounting practices, or they're incorporating [00:08:00] AI. I was listening to a really great episode with Rachel- Blake Oliver: Mm-hmm. Rachel Fisch, yeah.  Shawn Kanungo: -and you guys were talking about this idea of service and how service is still so important. Yeah, there's a lotta of this AI automation piece, but at the end of the day, there is a big piece to everybody's firms, where it's around customer service. There are certain pieces that will never be automated, so, although everybody's saying that automation is gonna take an accountant's job, let's be real. It's not. What I want is to tell people, listen, this is the greatest [00:08:30] time to be an accountant ever. Actually, it's gonna be the sexiest job ever, because- Blake Oliver: Yes, make accounting sexy! Shawn Kanungo: Yeah, because think about it ... If you have all these ecosystems and technologies doing some of the work that we used to do ... To be honest with you, listen, I'm a CPA. There's a lotta work that shouldn't be done by humans. If we can double down on things like storytelling and actual customer experience- Blake Oliver: Talking to our clients? Shawn Kanungo: Totally! That is what an accountant should be. [00:09:00] Blake Oliver: Well, but that's not what it ... I wonder if this is unique in some ways to the United States market. Cloud accounting has penetrated maybe 10 percent, here in the United States. That's just my rough feeling, having been doing it for 5-10 years. Whereas, in Australia and New Zealand, it's like 50 percent. We're way behind, and it's going slow. Shawn Kanungo: Why do you think that is? Blake Oliver: I know US regulations. I studied to be a CPA here in the US, and compliance is a big headache here, compared to Australia, compared [00:09:30] to Canada, compared to the UK, so we can make a lotta money on compliance. I think you mentioned something like this in your keynote - we get comfortable. We're nostalgic. Shawn Kanungo: Yeah. Blake Oliver: You mentioned nostalgia, and firms here ... How do you disrupt a firm where the partners are pulling in 20-percent profit margins off of tax compliance? There are firms in LA that are still doing bookkeeping for $85 an hour, [00:10:00] keying in transactions, and people are paying for it. Shawn Kanungo: Totally.  Blake Oliver: Maybe that will come to an end. Shawn Kanungo: Yeah. I think the organizations that are saying, "Listen, we're not gonna move to this new way of doing things. We're getting fat, rich and lazy doing it this way ...". Blake Oliver: Right.  Shawn Kanungo: The reckoning will come. You know, I started my thing talking about 'Winter is coming.' It is going to happen. People are going to start realizing that these organizations that have not moved to the cloud ... "Wait a minute! My apps are not integrated. [00:10:30] I can't use the ecosystems that these other guys are using." We're moving to a world where, if you're not on cloud, that means you're not actually on the foundation of using some of these innovative apps and services. Listen, all the startups and tech companies that are actually in this space, they're all designing for cloud. So, if you're not part of that, then you're gonna be left in the dust. Right now, it's working fine because of regulation and [00:11:00] all that kind of stuff, but we've seen this throughout history that the organizations to stay nostalgic, they're gonna end up losing-  Blake Oliver: It could be a very quick shift that happens- Shawn Kanungo: Absolutely. Blake Oliver: I see everything's going ... Everything's fine. Everything's fine. Then, like you said, winter is here, right?  Shawn Kanungo: Exactly. Totally! Blake Oliver: It's gonna be interesting to see when that happens. I don't know if you're aware of these stats. Hinge Marketing does some great surveys of professional services firms, and they released a study - I [00:11:30] think it may have been last year - showing that in accounting, it's about 25 percent of all the firms are eating all the growth. Shawn Kanungo: Yeah. Blake Oliver: Does that feel right to you? When you go out and speak, you must meet people from cloud firms- Shawn Kanungo: Sure.  Blake Oliver: -you meet people from traditional firms. What do you think's gonna happen to those traditional firms? Are they just gonna disappear? Shawn Kanungo: By traditional firms, you're talking about the big guys? Blake Oliver: Yeah, well, there are top 100 firms that are still doing things the same way they [00:12:00] used to do things. There's ones that are innovative, of course. Then there's also the small CPA shops. I feel like, at some point, these people are gonna want to retire, right? Shawn Kanungo: Totally. Blake Oliver: What are they gonna do? It's just close the doors, and that's it?  Shawn Kanungo: Listen, I'm not a futurist- Blake Oliver: But you talk a lot about the future. Shawn Kanungo: I do talk about the future. Don't take anything I say as a prediction about the future. I really do see myself as a practitioner and a tactician. This has been my work. [00:12:30] I really think that there's gonna be some firms that certainly win market share, because they always position themselves as leading edge; that they're getting into new spaces, whether it's artificial intelligence or block chain.  It's going to constantly shift. I don't know who's gonna win the game, but what I do know is that some of the savvy firms, some of the top accounting firms ... We could even mention the top four accounting firms - the Deloittes, KPMGs, PWCs, et [00:13:00] cetera. Because I worked at Deloitte for 12 years, I have a lot of love for Deloitte. One of things that I really love about Deloitte is they have this thing called Innovation Cloud; this is what I call it. They have been around for like 150-180 years. The reason why they've been around - they always try to position themselves as relevant. That's why, in Canada, we started in new AI shop called Omnia. To [00:13:30] be honest with you, not that many organizations across the country are adopting AI at scale. It's just not happening. But they always position themselves in this new forward-thinking, next-generation organization, because they're always chasing relevance, and I think that's important. The organizations that will continue to chase relevance, be on the leading edge, the market will see. The customers will see, because customers always, always, always wanna be with guys that were leading edge. They wanna be with the cool, modern [00:14:00] companies. I don't know where it's gonna go, who's gonna win the game, but I do know that the organizations that will win will be the ones that will always be relevant. They will be doing an amazing job at Xero. Here, listen, we're at Xero ... I know this podcast is technology agnostic, and I know David is an Intuit ... He was Intuit guy. He was like their main guy, right? What Xero has done really, really well is, you know, what they've done? They've turned accounting into like a concert. They've turned accounting [00:14:30] into like rock star status, and they've done an amazing job at chasing relevance. It's been a remarkable. Blake Oliver: "Beautiful business software," I think is the motto for Xero these days. Shawn Kanungo: Exactly.  Blake Oliver: "Beautiful business software." You can feel it when you walk into the convention center, and you walk into the Expo Hall. It doesn't feel like any other accounting conference, right?  Shawn Kanungo: Well, you've been to how many? You've went to six Xerocons now?  Blake Oliver: Six Xerocons since the original in San Francisco [cross talk] Shawn Kanungo: Yeah, a great sponsor of this podcast, by the way. Blake Oliver: Thank you, Xero. You can [00:15:00] tell when a company is design-led. That's the way it feels to me; just very thoughtful. Everything is very thoughtful with Xero - with the product, with the events, and the mission.  Shawn Kanungo: By the way, do we have to throw in a Xero ... Like the drop, the midroll? Because this is pretty much the midroll, right now, right? Blake Oliver: Yeah, no, we probably don't have to do a promo message for this episode.  Shawn Kanungo: I wanna get your perspective on this, because [00:15:30] you know this space way more than I do, in terms of the cloud-accounting space. Do you think that it will be a winner-take-all market? You look at other spaces, whether it's in CRM, or whether it's in HR. There's companies that always come up that basically win the game. Do you think that there will be a winner take all ...? You were talking about QBO; we're talking about Xero, Sage, whatever. What is your hot take on this?  Blake Oliver: David likes to [00:16:00] talk about this on the podcast, where, if you look at Intuit in the heyday of desktop accounting software, when it owned 80-90 percent of the US market and it was all desktop, the total addressable market for cloud accounting is 10 times greater than that. There were only something like a few million businesses in the United States using QuickBooks Desktop. There's like 30 or 40 million that could be using accounting software. It's amazing, actually, so [00:16:30] many businesses ... Here we are on the cutting edge of disruption, talking about cloud. There are so many businesses that are still using Excel to do their accounting.  Shawn Kanungo: Actually, every single business is still using Excel in some sort of way. Blake Oliver: Right, but as their primary system of recordkeeping. That is really what I see Xero and any other software developer competing against is that status quo. My hope, and this is why we try to keep the podcast [00:17:00] agnostic-  Shawn Kanungo: Exactly. Blake Oliver: -and independent is that the more voices there are, the more options there are, the better it is for the end customer, for the accountants, for the people working for these companies, when they're competing. We want a competitive marketplace. Shawn Kanungo: Totally. Blake Oliver: There's so much greenfield available. I think it was- Steve Amos was on stage earlier saying that Xero has penetrated three [00:17:30] percent of the total addressable market in the United States. Shawn Kanungo: That's crazy.  Blake Oliver: Right? It's not like Xero and QBO are competing for the same customers. They're actually competing for people switching off of desktop software. Shawn Kanungo: Do you think there'll be a winner? Blake Oliver: I hope that there are many winners. It's gonna be interesting. Now we're gonna get nerdy here. Intuit and Xero are very different companies with very different strategies. I'd love to hear your perspective on this. Xero has been in the United States market for 10 years now, probably, but they've struggled [00:18:00] to gain a toehold. Now, the growth is amazing. There are over 100,000 businesses in the U.S. using Xero; but compare that to 2-3 million on a QuickBooks Online type product. This episode of The Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff, and finding staff is getting tougher every day. This is where TOA Global could help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building a global accounting team, you'll be able to take away the time-consuming, process-oriented work from your local team, while building a cost-effective team offshore. As people experts, TOA Global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional development tools. To learn how to build out your world-class team today, head over to CloudAccountingPodcast.promo/toaglobal. That its Cloud Accounting Podcast dot promo forward slash T-O-A-G-L-O-B-A-L.  Blake Oliver: How does Xero gain market share? How do they ... Because everyone knows what QuickBooks is, right? Shawn Kanungo: Totally. Blake Oliver: That's the barrier. Shawn Kanungo: Intuit, yeah ... They're not a laggard. They are innovative. Obviously, they have a bigger machine than Xero. Brad Smith, the ex-CEO of Intuit, made a critical decision, I think, when he first came on. QuickBooks, a lot of the products were just like shrink-wrapped [00:19:30] products that you could just get off the shelf. He had a pivotal point that changed the direction of Intuit. The reason why they're now continuously doing well in the States is that they changed their product into a platform, just like how Xero is, working with other developers. They actually opened up their platform, so other competitors- third parties, competitors could come onto their product. I mean, that's a very- that's [00:20:00] a fundamental shift around how you think about your organization bringing competitors into the mix. They're not an organization that has gotten nostalgic. In fact, they have disrupted themselves. If you look at some of the best organizations in the world ... Today, I brought up the story of Netflix and how they disrupted themselves. Intuit's not afraid of doing that. Obviously, you're seeing Xero come up. They're the upstart. They're the global upstarts coming in, trying to take a space out [00:20:30] of this company, but I don't see Intuit as ... They're the incumbent, but I don't see them as a laggard. I also see them as innovative. So, I think that the race is not necessarily gonna be about product. I think it's gonna be about ecosystem. I think it's gonna be about who can you add to your ecosystem faster than others? Whether it's Shopify ... Of course, all these guys you're gonna work with ... Probably both companies. But it's like who can integrate and make the ecosystem more seamless, so that if I'm a small business, and I say, "Well, I'm on Squarespace, and [00:21:00] I have Shopify, and I have Workday as HR ..." Who can actually integrate those pieces better? I think that's the game, because a software is a software; it should be seamless, it should be user-friendly. They're both getting to that point. But that's where I think the game is gonna be won. Blake Oliver: Well, we saw that with the Stripe announcement this morning. Shawn Kanungo: Totally. Blake Oliver: Deep Stripe integration into Xero. It's interesting, because it's something that I think business owners will be even more excited about than accountants. For accountants, [00:21:30] we're kind of used to already working around these issues, but for a business owner signing up today on Xero, the ability to just pair it with a mobile card reader and then do recurring payments with invoices and not have to do some other separate processing method, I think that's gonna make a big difference. Shawn Kanungo: It's funny, Tony, the new President for the Americas, came on stage, and he talked about the business owner not caring about the software. They don't. Ask any business owner who's starting a business. They [00:22:00] don't care about accounting. They don't want-  Blake Oliver: They just want a solution, which- Shawn Kanungo: They don't care about the software- Blake Oliver: -I think is a good lesson for all the accountants in the room, because a lot of the folks here, myself included, we make the mistake of talking, I think, too much about the software- Shawn Kanungo: Yes. Blake Oliver: -when we're talking to our clients. We get really nerdy about it. We're like, "Oh, there's this great solution, Xero. I'm gonna put you on it, and these integrations. We're gonna get Gusto for payroll. We're gonna do this with Bill ..." You can see the eyes glaze over. The business owner is ... We're looking at it from our perspective, because we love connecting these [00:22:30] apps. We have fun with it. The business owner, they just want a solution. Shawn Kanungo: Exactly. Blake Oliver: They just want you to take care of it. I learned, when I was in practice, to gradually not bring that out. If they wanna know how I'm doing it, that's great. I'll educate them. But I look at it more from their perspective. Your bills are gonna get paid. Your cash flow's gonna be monitored. Payroll's gonna be taken care of. Then, after that, talk about how we do it. Shawn Kanungo: Totally! Business owners don't go into business wanting to be in accounting or into software. They [00:23:00] go into business selling donuts. That's what they're in business for. This is why I think the game will be won with the people who can take all those ecosystems. You meet a business owner; they're like, "Yeah, our website's on this, and we're using this." I'm like, "Oh, yeah, we can integrate all that. It's all good." That's where the game will be won. I look at a great company like Slack. I don't know if you use Slack.  Blake Oliver: Oh, yeah.  Shawn Kanungo: I'm a big proponent. I love Slack. I mean, Slack is not crazy. It's like WhatsApp [00:23:30] or BBM for business [cross talk] Blake Oliver: We had IRC 20 years ago, right? Shawn Kanungo: Totally.  Blake Oliver: It's just chat. Shawn Kanungo: It's chat- Blake Oliver: But it's ... Something is different ... What do you think is different about Slack that makes it amazing?  Shawn Kanungo: What they've done is they have integrated- they've made it so easy for third-party developers to be on Slack. They've integrated things like ... I use Trello all the time. So, Trello's in there. Mailchimp. All these different things are integrated within Slack, so you don't have to leave the ecosystem. They've built it for it. I look at Shopify, as a [00:24:00] Canadian company, in Ottawa, they've done the same thing. They've done a great job at creating apps and ecosystems. This is ...  Blake Oliver: Well, you said this earlier. This is a theme here. The winners are the apps ... We could even probably put accountants in this group, too - the integrators. The more you connect with, the more valuable you are, as a company, as an app, probably as an individual, too. Shawn Kanungo: Exactly. No, 100 [00:24:30] percent. When I talked about ... Going back to this idea of a linear accountant versus an exponential accountant, things that I highlighted was, number one, focusing on capabilities; things like improvisation, and imagination, and creativity - all those things that build a culture of innovation are most important, as opposed to just jobs, and skills. I think reskilling is great, but we can reskill anybody, but actually having those capabilities will be competitive advantage. Number one's capabilities. Number two is actually automation; looking [00:25:00] at your entire business to say how can we make this easier? How can we automate it? By the way, there's technologies out there that could do that. Number three is ecosystems, which is very important. Number four is really around experimentation. We've been so engineered to think about efficiency - how do we make things better - as opposed to thinking how do we try something new and try something different? The last thing is really around unlearning. That, to me, is the most difficult part for accountants, because we've been ingrained in this idea of what accounting is and what should be - the debits and credits. When [00:25:30] all these technologies in an ecosystem come to play, the tools that you had, being an accountant and the things that you brought up with, with being an accountant, might actually disappear. We have to almost like let go of it. Blake Oliver: I wanna talk to you more about those last two points. You said experimentation and learning. Shawn Kanungo: Unlearning.  Blake Oliver: Unlearning. Unlearning! I love that. Let's talk about experimentation. This was my frustration, when I was at a large firm - there wasn't time for experimentation- [00:26:00] Shawn Kanungo: Okay, yeah.  Blake Oliver: -because I had to be billable. I wanna know what you think. You filled out a lotta time sheets, right? Shawn Kanungo: 100 percent. Blake Oliver: For 12 years at Deloitte. Shawn Kanungo: 100 percent. Blake Oliver: Do you think that is a barrier to innovation in accounting firms? Shawn Kanungo: Oh, my God. Well, don't get me started on billable hours. That's such an archaic way of managing your business. This is why the big firms and medium-sized firms ... I don't know who came up with this idea. The game has changed. Now it's about providing [00:26:30] value as opposed to like, "Oh, I spent eight hours on cash." How do you experiment when your performance management is not linked to experimentation? It's not linked. When do I have time? I'm working on this core stuff already. Blake Oliver: Yeah.  Shawn Kanungo: It's very difficult. I'm not saying it's easy to do, but experimentation ... The whole point of experimentation is that you take something very small - very small problem, very small sprint, very small team - and try to work on something that might [00:27:00] make the business better; it might make your life a little bit easier. It's hard to do. You need to get leadership on side to say, "Hey, listen, we're gonna try some new things. By the way, we're not gonna be billable when we do that." That takes a lot of balls to do and tell your leadership that "We need to go off and do that." The other piece is around performance management. You look at every single- every single firm, the metrics are designed to be around billable hours - maybe like engagement [00:27:30] surveys or whatever - but it's not getting engineered for experimentation. I think your performance management should also incorporate experimentation; meaning how many shots are you taking? How many failures have you tried? That is not engineered into performance management. There are some pieces to make that experimentation happen. Leadership is one and being accepting that people are gonna experiment. Number two is baking that into your performance management, which is really important. At [00:28:00] every single firm, we work in different silos. I was fortunate enough ... I'm from a small city, and we were able to experiment and try new things, because we got paid by clients. At the end of the day, they just care- they just want a solution. They just want value back. We'd get to take a little bit of our funding from our client and start innovating on their dime with things that they may need. Clients never know. I talked about this at the beginning of the conversation - clients [00:28:30] don't know what they need or want. They don't know how to innovate. They say, "We want we want X," but maybe they actually need X, and Y, and Z. I think accounting firms or consulting firms, they have such a great opportunity to innovate, because they're already getting paid, and the client doesn't give a ... They don't care how their value's gonna get delivered. So, I think even taking a small portion of your budget and saying how can we try a new way of doing this, making it faster? I've [00:29:00] noticed that every time we take this approach, we always become under budget. We always help open up their eyes about what possibilities could be, because we took some risk. It's hard. I'm not sitting here saying it's easy, but the organizations that value experimentation will be the ones that win. Blake Oliver: I'm sure some of our listeners are in firms that they are trying to internally disrupt, or they want to. They would love to see change happen, but they don't feel like they have the power to do so. What would you say to a [00:29:30] senior accountant or a manager who doesn't- that is not a partner; can't make that change happen? How do you get that maybe older generation, the generation of the partnership where people are really nostalgic ...? They're holding onto their tools. They don't wanna let go of what works. What advice would you have for me to start- get them on board? Shawn Kanungo: First of all, if you're a senior accountant, you're listening to this in your cubicle, or you're [00:30:00] running on the treadmill, or you're doing the dishes at home, I would say tomorrow morning, or this morning, when you're listening to this, walk into your office and try to get yourself fired ... Basically means try to take a risk that might change the trajectory of your organization or might change the trajectory of your career, because this is what's really on the line is your career. You'll find, 99.999 percent of the time, you're not gonna get fired. Blake Oliver: Right. Shawn Kanungo: You're actually gonna take a risk that [00:30:30] might change the trajectory. So, try to think about how to get fired. The second thing is, I think within ... I talked a little bit about this idea of innovation cloud. If you can show your leaders ... Not tell them something; not ask them to take an idea and do something differently. Don't do that. Actually show them something. Actually do something very small. Say, "Hey, by the way, we tried this ..." I did this on the weekend. I did this on weeknights. I did this with my own money. Listen, sometimes you gotta [00:31:00] put skin in the game. "We tried something very small, and it worked.". Instead of hypothesizing if an idea is gonna work or not, now the leaders are like, "Oh, my God, okay ..." [cross talk] You showed me something. I'm now experiencing a change." Now, you're like, "Okay, let me try more stuff." Now you're building your brand equity around innovation and cloud, and then you can take more shots. That's what happened to me. You start off small; try a little small experiment, and then ... This is what happened to me. I [00:31:30] was known as the innovation guy. I didn't term myself as the innovation guy. It's not something that happened, like somebody stamped it. It's because I took small experiments all the time, and I started to build my own innovation cloud. I think this is the way of doing it is also ... It's a faster way of getting your leaders to trust you. You've gotta take small shots. You do. Blake Oliver: Take risks with your own time. If I think back on it, all the successful stuff that I've managed to accomplish, it's doing it on the [00:32:00] side [cross talk]. Shawn Kanungo: Dude, you're doing this podcast ... Blake Oliver: Nights and weekends. Shawn Kanungo: Nights and weekends for your own passion. You're doing something different. You're doing something creative. You're bringing your community together. Nobody asked you to do this. You don't have to do this. But it's inspiring. I think more people should take this route to say, "Well, I'm an accountant, but I'm starting a podcast. I'm gonna get into the media game." More people should do this. Blake Oliver: You said [00:32:30] something about accounting, making accounting sexy, or accounting being sexy. Shawn Kanungo: Yeah. Blake Oliver: That is not exactly ... Those two words, they don't go together very often. What do you mean by that? Shawn Kanungo: Well, it makes sense, because when you remove all the things that we don't wanna do as accountants, whether it's like copying/pasting between systems, whether it's data entry, whether it's coming up with financial reports ... A lot of the systems are doing that, and there's lot of people that can help us out with that. I think, in the future, accounting is gonna be a lot more about [00:33:00] schmoozing your client; influencing, presenting, engaging, persuading your client to take a particular action. That means that we have to double down on being better storytellers. I believe that a base skill for accountants will be video; a base skill for accountants will be presentation styles and motion graphics. Blake Oliver: What you mean by video? Like being on video chat, or making videos, or-  Shawn Kanungo: Making videos; making videos for [00:33:30] presentations ... Listen, I do a lotta video. I post video every week. Video is the fastest way to gain trust with clients. Blake Oliver: A lot of accountants, you know, aren't comfortable necessarily with that. Did we get into accounting to-  Shawn Kanungo: I'm not saying you necessarily have to be on [cross talk] I agree [cross talk] Blake Oliver: Well, let me ask you this. We hear this a lot that we need to improve our presentation skills. We need to become better storytellers. What if I'm not a very good storyteller right now, but I know I need to do this? How do I learn to [00:34:00] do that? How do I get better at it? Shawn Kanungo: That's a great question. Blake Oliver: How did you get good at it? Because you're obviously a great storyteller. Shawn Kanungo: I appreciate that. I'm just gonna clip that out and put it somewhere ... I think it's just about starting with small projects. Again, it comes back to this idea of pairing something that you really love with the project that you have in mind. You're really great at audio. That is your jam. You can say that you're [00:34:30] one of the best accountants in the world, when it comes to this craft of using audio to tell stories. It's like what is your medium. I don't care if it's video ... I think video is important. I'm not necessarily saying that you have to be on camera, but using video to influence/persuade clients to take a particular path with stats, or facts, or whatever ... Maybe it's not video; maybe it's not audio; maybe it's writing; maybe it's graphics; maybe it's design. Whatever your skill set is, in terms of displaying pieces, just [00:35:00] connect that with your clients. I think everybody has some sort of skill in storytelling. Storytelling is not just speaking. It's not just video. It's not just ... Just find what you're good at and you're passionate about and connect it. I'm really good at connecting different things together. I'm really good at ... Speaking is definitely something I'm good at, but video is also something I'm really good at - not only from being on camera, but also creating graphics. If you watch my presentation, it's all motion graphics. It's all very visual-. [00:35:30] Blake Oliver: Did you create that yourself?  Shawn Kanungo: Myself and my team, yeah ... I try to use my skills, and these are the only skills that I have and apply it to storytelling. Blake Oliver: How did you get into public speaking? Have you always been comfortable with it? Because you seemed very comfortable on stage, and, as a CPA, that's a little bit unusual. Shawn Kanungo: Yep. The magic is that I was in management consulting for a very, very long time. Blake Oliver: That's getting up in front of very powerful, important people- Shawn Kanungo: It's just reps. You're [00:36:00] getting in front of executives - CEOs, leaders - talking about things that you probably just researched the night before. We used to play this game called PowerPoint Karaoke, where you would- and sometimes, we'd do this in front of my client, where you don't know what the next slide is, but you're trying to explain to a client what's happening, what's coming up next. You're building your improvisational skills just by doing that. I think it's a really great way of like ... Just playing PowerPoint Karaoke- Blake Oliver: I love that term.  Shawn Kanungo: -trying to explain things [00:36:30] and doing it in a convincing and a powerful way. I think it's just putting in the reps. For me, the reason why I got into public speaking is that a lot of people wanted to hear about the work that we were doing in innovation, and digital transformation, so we'd go get up and talk to clients. Then I'd get on to conferences; then I'd do keynotes ... The momentum has built. Blake Oliver: It sounds like the lesson is you really just gotta get up there and do it. Shawn Kanungo: 100 percent, 100 percent. A lotta people say, [00:37:00] "Well, how do I start? Where do I start?" You just ... Listen, I did a hundred talks for free, before anybody paid me to speak. You just build up the reps, and just get in front of anybody and speak. I think that's a really important skill set. I think it's ... Now, when everybody is on their phones, being able to articulate yourself and story-tell is gonna be such an important skill set, especially for accountants.  Blake Oliver: Shawn, thanks so much for speaking with me today. Shawn Kanungo: Man, this was crazy. What an amazing podcast. Blake Oliver: Thank you.  Shawn Kanungo: It's an honor. I messaged you ... This is how it happened. I [00:37:30] saw you. Blake Oliver: This is Twitter [cross talk]  Shawn Kanungo: I saw you in the conference. I recognized you from the pod. I said, "Hey, man, I just love your podcast. I'd love to catch up." I didn't have no idea that I would be on the pod. Then, just through Twitter, and then we got to meet up. You're doing so much for this community. It means a lot. I think the biggest favor that you could do is just like go rate, and review, and subscribe. Yeah, man, that's it.  Blake Oliver: So, Shawn, if people wanna connect with you online, find out what you're up to, where should they go? Shawn Kanungo: I [00:38:00] think the best thing is probably LinkedIn. That's my platform. You can connect with me there, Shawn Kanungo. I'm Shawn Kanungo everywhere - Insta, Twitter, Facebook. I have a public profile on Facebook. LinkedIn is probably the best way. Shoot me a note, and we can chat about innovation, disruption, technology, accounting. It's all good. Blake Oliver: Thanks so much for joining me and have a great flight home. Shawn Kanungo: Awesome. Thank you. This episode of The Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing. Now, Halon Tax is working with bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. They're even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to CloudAccountingPodcast.promo/halontax. That is Cloud Accounting Podcast dot promo forward slash H-A-L-O-N-T-A-X. 
#Xerocon San Diego: Ben Richmond, VP of Business Growth at Xero
Sponsors TOA Global: http://cloudaccountingpodcast.promo/toaglobal LivePlan: http://cloudaccountingpodcast.promo/liveplan Halon Tax: http://cloudaccountingpodcast.promo/halontax Show Notes 1:20 - Ben’s view of advisory and where it fits in with compliance 4:36 - What is Ben’s biggest challenge in his role as VP of Business Growth in the Americas? 5:53 - The importance of book-to-tax workflow 8:23 - Ben’s background (how he got to be where he’s at) 10:28 - The problem with going too far into the future with sessions at conferences (thought leaders are scaring firms about blockchain when hardly anybody is using it yet) 12:38 - The biggest barrier to innovation for large accounting firms in the United States 15:10 - What if accountants just focused on their processes? Connect with Ben LinkedIn: https://www.linkedin.com/in/ben-richmond-ca-b8794220/ Twitter: https://twitter.com/benrichmond1  Email: Ben.Richmond@Xero.com  LinksDeloitte's 2019 Global Blockchain Survey: (https://www2.deloitte.com/content/dam/insights/us/articles/2019-global-blockchain-survey/DI_2019-global-blockchain-survey.pdf)Subscribe  Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.TranscriptThis episode of the Cloud Accounting Podcast is sponsored by LivePlan.  Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners prefer virtual advisory services? Did you know that the number one thing they want from an expert advisor is strategic planning and review? This is even more than general ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N. And be sure to check out the LivePlan method to learn how to grow and scale your advisory business. Blake Oliver: Welcome to the Cloud Accounting Podcast. I’m Blake Oliver. David Leary: And I’m David Leary.  Ben Richmond: And I’m Ben Richmond.            Blake Oliver: All right, Ben. Great to talk to you. You are the … What’s your title? You are the VP of growth? Ben Richmond: Yes, I’ve got to growth for the America’s, so that’s all our, basically, predominantly, our partner channel with accountants and bookkeepers; our direct to small business channel, which were the teams across Canada and the US.  Blake Oliver: All right. David Leary: So, Blake, this is your first time talking to Ben. I had just got lucky last night and sat next to him at dinner, and I made him stop talking, because he had some interesting perspectives on … We talk about this on the podcast all the time. This is like the Summer of Advisory. Everywhere you go is advisory, advisory, advisory. Even in the keynotes today at Xerocon, again, advisory is so important. Ben was talking, he has some theories on advisory, the importance of advisory, and I told him to stop talking and save it for the podcast. So let’s just jump in, Ben. Please give us your view of advisory and where it fits in.  Ben Richmond: It’s really interesting as we’ve seen this transformation start to happen in the accounting and bookkeeping space, particularly in the accounting profession, advisory’s become the big thing. The thought leaders have all driven and driven the advisory thing, and I think we’re getting to a point where it’s almost scaring a lot of key partners. We are really passionate about how do we take a whole lot of partners on this journey to doing better advisory, to doing better stuff for small business, but it’s actually not one or the other.  David Leary: Because a lot of the messaging is, “Do advising or die.” Ben Richmond: Yeah. David Leary: Get out of compliance. Don’t do bookkeeping.  Blake Oliver: Compliance is dead. Tax is going to be gone, it’s going to be automated. Accounting’s going to be automated.        Ben Richmond: Yeah, and even in the commonwealth countries around the world, where they’ve simplified their tax engines a lot, we’re still seeing compliance as a great business. We don’t see it as one or the other, we actually see it’s very interconnected. I draw the infinity wheel that we’re all used to, and that’s a bit of a buzzword. If you think about compliance as the foundation, what we’re seeing is if you can help, particularly, practices understand getting their compliance business, as it is today, online, which means they start to connect with the client more regularly and become more efficient, that efficiency frees up time. That connection opens up the advisory opportunity.  Often, they’ll go down the advisory journey without even realizing it, and as you do more advisory, that actually starts to see your regular engagement with the client go up, which means the tax return is not this mess arriving at the end of the year. Actually, it creates a more profitable tax return business. Both of them should spin off each other. It’s very hard to do one without each other. You can do tax on its own, but as you get it online, you’re going to have bigger opportunity to go on to advisory. The second thing, I think, is we’re scaring people with it. I don't know how many partners I've sat with and said, “Explain to me what advisory is,” and we’re making the big black box seem bigger, and bigger, and bigger. Our North American Benchmarking Survey showed if the advisory opportunity is, let’s say, $10 extra revenue, $6.50 sits in what we call the simple advisory bucket. That’s budgeting, forecasting, tax planning, meeting with your client more regularly around growth and things like that.  Accountants know how to do that; bookkeepers have done that, as well. We’ve done it for years. We could only do it with a myriad of spreadsheets in our higher, bigger clients, but using technology, you can now take that across many more clients at scale and right down to the mom-and-dad small business, which is, I think, where we … Together, we can do some pretty awesome stuff for the small business economy.  We’re passionate about that. We don’t believe in this compliance apocalypse. It definitely is becoming more automated; it’s definitely- parts have become more commoditized, but I’ve had a lot of partners say to me, “I feel like I’m a bad person for doing compliance sometimes, when I come away from these conferences,” and then it’s like, “No, compliance is still great, someone needs to do it.” The tax system, particularly, in the United States, is not getting any easier, so yeah. Blake Oliver: Yeah.  David Leary: Somebody needs to make bumper stickers or T-shirts that say, “I care because I do compliance,” or something like that. “I’m important, too.”  Ben Richmond: I heart compliance. Blake Oliver: What’s your biggest challenge in your role as VP of Business Growth in the Americas? Ben Richmond: I think the biggest thing for us is the United States, for Xero, is a significant market. It’s the largest small business market in the world, and I think that opportunity in size can be a really positive thing, but it can also be something that can easily lead you down the wrong path. Our big focus over the last two-and-a-half years has been what’s worked globally for us that we think’s relevant to the United States. I think there’s a lot of things that are … More is the same than is different. The challenges and the things that are on the mind of small business, and accountants, and bookkeepers is pretty much the same.  I’ve spent a lot of time … I’ve been with Xero for seven years. I've been in the New Zealand market for four. I've spent an enormous amount of time over the last two-and-a-half years everywhere across the United States. I’ve been to places in Alabama I can’t even remember the name of. For me, it’s the same things that are top of mind. Now, there are differences, but I think we’ve spent a lot of time going, “What parts of the global playbook are relevant, and then, where are the differences?” It’s focused on those. Getting us aligned around that and not trying to win the whole thing at once.  So, for us, with our partner community, we want to be in the community with them, you know, meeting them across the table, helping them go on this journey of transforming their firm, and also being with them in the small business community. I think, Blake, you’ve spent some time with Jackie in Houston and have experienced those community teams that are out there building that momentum. Blake Oliver: Yeah. Ben Richmond: So, building that out and getting the business ready for scale is our biggest challenge. Yesterday, we talked about book to tax, making sure that our platforms work really well for accountants and bookkeepers, as they have to do that last mile of the workflow. Because we’re super-passionate, but I mean, the business was founded with … As small businesses go running around building technology and accountants saying, “I need your stuff to do your tax return,” and getting together and going, “How do we do this together on the same platform?”  We call that the single ledger. For us, things like book to tax are just as important as the super-innovative features, because it’s helping an accountant do their workflow in the same data set the small businesses … Takes that data friction away and, again, that beautiful Xfinity curve we keep … Infinity,  not Xfinity. Blake Oliver: Yeah. Bringing it back to advisory, you automate that flow. You’re not having to export to Excel and then reformat into those mapping … Is that how it works? That’s the way I understand it. You can map directly to those tax line items. Ben Richmond: Correct. This is the client view, which then becomes the book view, as you do end-of-year adjustments, which then become the tax adjustments to get to your tax view. We want to have that workflow sitting within Xero and then be really agnostic to the tax-filing providers that are out there, so clients and partners using our software can seamlessly flow through into those tax-filing softwares, but they can keep all the data in one place and work together with their client. Probably, going back to your first question, my biggest challenge coming to the US is probably my accent, but I’ve been working on that.  David Leary: This episode of the Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing.  Now, Halon Tax is working with bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. They’re even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to CloudAccountingPodcast.com/halontax. That is Cloud Accounting Podcast dot com forward slash H-A-L-O-N-T-A-X. Oh yeah, Halon Tax works great with Xero and Wave, too.      Blake Oliver: Let’s talk a bit about your background, because you’re fairly young for your role. How did you get to be where you’re at?             Ben Richmond: Yeah, so I grew up in a small business family that had grown businesses all around New Zealand. My mom was a very … She was the salesperson side of the equation. My father was the more engineering side. We had to learn to answer the phone after hours, because you own a small business, the phone’s click back to the house, so we were taught to be professional from a young age. Did some stuff with marketing in this Young Enterprise program that we did in New Zealand, and then made this choice to jump into accounting.  At 17, I joined a large CPA firm in New Zealand, and everyone was like, “What are you doing?” I really wanted to get a foundation, understanding the P&L, and the balance sheet. It was something my mother didn’t quite … She could grow, grow, grow, but understanding a balance sheet wasn’t her thing. I had a lot of fun in public practice. I did five years there. I built our firm’s paper compliance solution onto Excel. Two staff threatened to quit, because they didn’t know what was wrong with our paper version. I experienced the pain of trying to change even the smallest process. Then, from there, I jumped into Telco. I was lucky I was in the only US listed company in New Zealand, so I got to experience things like SOX, and Sarbanes-Oxley, and all that sort of [cross talk]  Blake Oliver: What a lovely opportunity …  Ben Richmond: It was. I got a chance to use the Lean program to try and get us more efficient with it. I’ve had a lot of experience … I met one of the directors at Xero. We were both judging a Young Enterprise thing, and I jumped across nearly seven years ago and haven’t looked back. I do feel like I'm in the same movie again, when I joined Xero in New Zealand. We were like people that were a photocopier company, so-  Blake Oliver: I have to say that when I checked in at the hotel, they asked me if I was here for the Xerox conference.  Ben Richmond: I get really excited about pages per minute. But no … From there, ran New Zealand and the growth there, developed our agriculture vertical strategy, which we’ve actually launched into the Midwest, here in the US, building out a full ecosystem. Then, I was talking to Rod two-and-a-half years ago and got the chance to jump up here and it was fun. New Zealand was taking us from the early-adopter market through to becoming scaled in the mass market, and that was fun. We sort of left New Zealand with the business being the Coca-Cola. It feels like I’ve jumped back up into the movie. Cloud adoption’s starting to happen. People are starting to now talk. We know what the cloud is, it’s more how do we do it?  Back to our earlier conversation, it’s been, for me, getting the teams right, making sure we’re supporting our partners. Actually, it’s not a fast journey, this journey; you guys have been on it for a while, as well. You’ve got to help partners go through this change and the same with small business. I don’t think we need to scare to make people change, we just need to get alongside them and show them those steps. I was talking to David last night, it’s exciting where technology’s going. We’ve seen the discussion around blockchain come out and things like that, and they are going to come. What worries me, though, is are we talking too far down the [cross talk]  David Leary: That’s a good example. You talk about we’re scaring people out of advising, but you said you had served some guy who was in a session about blockchain and he came out … Tell that story. Ben Richmond: Yeah. I want to avoid us being like the … We put someone on the moon before we put wheels on suitcases. This guy came out of a session, and said to me, “I’m super-worried about blockchain,” and I said, “Oh? Tell me about your practice.” He’s 90-percent desktop. For me, it was like, “You’re worried about running a full line, man. We need to get you doing a half-marathon, first. Let’s get you positioned to take advantage of those things as they happen.”  David Leary: I guess it’s a lesson for all the conferences, the talks you schedule, the speakers you schedule - stop scaring people with things they don’t really need to be concerned with.  Blake Oliver: And stop going too far into the future, right? It’s fun to do sessions like that where you say, “Okay, what’s going to be the future of blockchain?” But nobody is using it. You see surveys of controllers and CFOs, and they’re all saying, “Oh, yeah,” maybe four or five percent have investigated it. I think in a recent Deloitte poll, zero percent were actually using it. So, is it really that much of a threat right now, whereas, like you said, there are firms that are still not on cloud, right? Ben Richmond: Yeah, I think you've got to keep your eye on it. We do need to show what the future looks like and show that putting someone back on the moon type thing, but then make sure we quickly bring it back to here are the steps we need to do today, and here’s the biggest impact today. Again, I go back to that advisory thing. If you want to take advantage of the biggest revenue upside from advisory, do budgeting and forecasting in regular meetings with more of your clients. That’s not some new Star Wars things we haven’t done. Blake Oliver: Yeah. Well one of the biggest barriers to innovation at, especially, large firms here in the US, seems to be that they’re so freaking profitable. They don’t actually explicitly say it, but if I talk to a partner at a firm, it’s like, “Why would I change what’s working, when I’m making 20-percent margins?” How do you address that kind of resistance there? Ben Richmond: It comes back to, actually, two things. One, you know, Kodak’s most profitable year was the year before it had the big collapse, but actually breaking it down … So, instead, again, talking the Star Wars things and [inaudible] actually breaking it down with their existing … Everyone’s efficient. If I had a dollar for every firm that said, “We’re very unique. We’re probably one of the more efficient firms you’ve met,” I would be on the beach, probably, somewhere. We actually do a lot more process work with firms now. We actually talk to them. You think about the move to value-based billing. A lot of firms- I grew with up with six-minute units. I’ve got a real hangover from that. We threw time out the window. Actually, if you can still find a way to track time as an input, not bill off it, to understand a better pricing strategy, to understand better where is my process, and efficiencies, and bottlenecks happening, that speaks to those partners, because they are in that mindset. So, you speak to that mindset of “Well, let me see where I can add efficiency into your practice, and then from that, let’s see where we can then start to grow revenue and gross margin.” If you talk more at that, I think you bring those people on the journey. I do think, because there are partners in these large firms that do see the vision and want to drive it, they need to think about how they spread that within their practices. What are the KPIs you’re putting on your people, on other partners? Because a lot of the ways they do that don’t drive a changed mindset. To give an example, we did a big pilot with a big firm, and a lot of these staff that were stressed about change, “Well, we’re heavily KPI-ed on our billing around what’s actual billing that we can bill out, and our productivity, and so I'm’ scared to try something new because …”  Blake Oliver: Innovation is inefficient. Ben Richmond: Yeah. “If I try something new, it’s going to drop, and I’m going to get in trouble.” They have to think about making those KPIs, or just making it safe for people to try and innovate. Yeah, two things, make it safe, think about the KPIs. On the vendor side, on us, as we support the profession, it’s actually speak to that language. Because, you know, going back to infinity. I keep saying Xfinity; I’m not pushing Comcast.  David Leary: But if they want to sponsor The Cloud Accounting Podcast- Ben Richmond: That would be a good sponsor to get. That’s what gets them going and, actually, this stuff does drive a lot of efficiency in a compliance firm without even having to go to advisory. So, you talk to their heart.   David Leary: It’s an interesting perspective, because I’m kind of listening to you talk about this, and instead of accountants having to do something because they’re told to do it, “Switch to cloud; do this; do advisory, do this …” If they’d just focus on their internal processes, and “Okay, this process could be improved a little bit and maybe the answer to that is we need to switch to cloud. Maybe this little process needs to be changed,” kind of attacking it from the process point of view will tell you what to do next, instead of everybody else telling you what to do next. Ben Richmond: Yeah, and I know Lean is a very topical thing across the different thought leaders in the US, and I’ve heard very pro-Lean people and very anti-Lean people and- Blake Oliver: Lean start-up methodology? Ben Richmond: Lean start-up, yeah Blake Oliver: Okay, yeah. Ben Richmond: Even using Lean processes for engineering, the simplest … I used to do a thing with partners, where I’d say, “How are you testing what your customers value in you and how they see you as different to the competitor down the road?” A lot of firms haven’           t got a way to test that, so you get them to start thinking about that, and you go, “Let’s just do a quick process map of an end-of-year tax job. Let’s put each process into three buckets. Is it a value add, which means it’s adding to that thing that your client values you for, or is it one of the two types of waste? Is it necessary waste? I’ve got to do this for a regulatory reason or to comply with professional standards, or is it an absolute waste thing? Ben likes that to be done that way because he’s always done it that way since he started the firm, and that’s absolute waste.” Just that simple thing, it changes their mindset to be like, “Okay, I’ll put that up,” and then, they’ll actually self-regulate, like, “Actually, no, we do need to probably drop that process.” Because then they can go, “Okay, going to the cloud will make us faster there. It’ll help cut out those two things there. It won’t allow us to do that very well, but actually, it’s not a very important process to the customer, and we could probably get away with not having it.” I think those sort of processes do help move the mindset for firms around change, and it’s very analytical, which is how a lot of our brains are wired as accountants. David Leary: Cool.  Blake Oliver: Thanks so much for joining us, Ben. If people want to connect with you, learn more about you, where’s the best place for them to do that?  Ben Richmond: Yeah, so you’ll find me on Twitter. I think it’s @BenRichmond1. It’s the hardest word for me to pronounce, my actual name. At Starbucks, you know, coffee for Ben. Feel free to email me directly, so it’s Ben.Richmond@Xero.com, obviously, Xero with an X. Blake Oliver: Yeah, X-E-R-O dot com. Ben Richmond: That’s it.  Blake Oliver: All right. As always, you can find me on Twitter. I’m @BlakeTOliver. David Leary: You can find me on Twitter. I’m @DavidLeary. Blake Oliver: This was fun. Thanks, Ben. Ben Richmond: Thanks, guys. Blake Oliver: Thank you. This episode of the Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff, and finding staff is getting tougher every day. This is where TOA Global can help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building a global team, you’ll be able to take away the time-consuming, process-oriented work from your local team while building a cost-effective team offshore. As people experts, TOA Global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional-development tools. To learn how to build your world-class team today, head over to CloudAccountingPodcast.promo/toaglobal. That is Cloud Accounting Podcast dot promo slash T-O-A-G-L-O-B-A-L.

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