Hi Stuart! Can you tell me more about you and your firm, 542 Partners?
We’ve been in business for last six years. I am one of three directors, and we have 12 staff. All directors came from PKF. We saw it as a good opportunity to set up on the back of the automation wave coming through the industry. It’s products like Xero and Receipt Bank that got us here. These products allow us to do our job.
Have you had a lightbulb moment at 542 Partners?
Our lightbulb moment was starting the firm. From there, it’s been an evolution to get everyone on the cloud, enjoying valuable client services with efficient communication. We also quote upfront fixed pricing. This improves our cash flow compared to a time based billing model, and encourages clients to actually interact with us.
But, we refine our processes every year, particularly around automation & process. We don’t rest on innovation. We are constantly looking both internally and externally for innovation wins. Internal wins free up our time to do something else, which generally then results in an external win.
The market is moving at a pace that ensures we cannot rest on our laurels!
What results have you seen since?
The biggest result is that our clients are able to understand the philosophy of what we’ve implemented. They understand that through automation, we can reshape our services to help them grow their business. There are a lot of smaller internal process changes but automating our compliance work is one of the biggest. We wouldn’t be where we are today without it.
If you could give one piece of advice to other like-minded founders, what would it be?
If they’re like minded, they are probably already doing this. Yet, for those a little further back on the adoption curve, don’t rest on what you’ve achieved. It is easy to sit back, and think that you’ve implemented a process, or adopted a new software, but the nature of the market and of technology is that it won’t be enough to rest on this achievement. You have to keep pushing, keep innovating and keep adapting to the changing landscape
What habits do you find yourself challenging the most?
One of the biggest frustrations with time based billing is that clients are disincentivized to contact their accountant. If you’re going to make a big business decision and are scared to contact your accountant, then that presents a problem. You aren’t getting the advice you need.
We have the structure in place and the real-time information needed to empower clients to make decisions on demand. It’s a mutual benefit. They ask us to do more which creates more work for us, but ultimately they are able to get more value from us.
What client relationship do you strive for? And how are you building your service to meet this?
We’re looking for relationships where clients feel comfortable and empowered to contact us when the need arises. These are clients who believe in the team, not just the directors. We want them to be comfortable speaking to anyone on the team, knowing they can trust us all.
For this, we encourage clients to use technology as a form of communication (Zoom, Receipt Bank, even Dropbox). For the most part, everyone is on the same process. But of course, we have a few that are not.
Why do you believe this relationship between accountant and client is so important?
I think because we are the most trusted of all advisors. New business owners may not have an advisor other than an accountant in their network. So they rely on us not only for regular accounting services, but because they trust us. That means they might ask us to be put in touch with a lawyer or broker. Often times, if you have a mom and pop shop small business, you’ve got a situation where they don’t have any other professional network and we are their biggest resource.
Looking forward, I think client relationships are going to head in a more consolidated approach. We could end up providing many of those additional services under our banner. We traditionally refer out for lawyers or home loan mortgages but there is an opportunity to offer that under our service structure, or at least facilitate this on behalf of clients, in an attempt to offer a seamless one stop shop for clients. At the end of the day, we are in the solutions game.
And finally, where do you see the future of cloud accounting?
In Australia, we are in the early stages of what I think will be a broader strategy to automate the compliance side, on the back software and its increasing use by tax authorities as well as industry. There are big things happening around payroll at the moment, where it is automatically reported/filed. There will be more instances where our government will request to access this sort of information directly from software and in turn, the end user. This will take some of the compliance work away from accountants because software will be taking care of it. So it puts more pressure on the firm to make up the revenue elsewhere.
As above, I see the consolidation of accounting firms in terms of those that can deliver information in a way that’s productive and efficient. Firms need to have the scope and systems in place to be prepared for that evolution.
Anything else to add?
Ultimately, you’ve got to believe in what you’re trying to implement. If you don’t actually believe you will shift to advisory, it’s going to be very difficult to implement advisory services. You have to fundamentally believe it and want to drive that part of your business model.
There is always a solution. Where you think you’ve done things 80% of the way, don’t rest - keep trying for 100% . That last 20% comes with a lot of effort. And that effort can come from clients. So rather than have a separate process for that last 20% of your client, either push them towards technology or push them away.
The classic example is Receipt Bank. If you just implement it and send them on their way, half of your clients will get it, half won’t. So rather than just sending them on their way, spend 20 min with them, follow up in a week and see how they’re progressing. It’s new for them and not always easy straight away. But once it’s understood, the real benefits can be seen.
Visit receipt-bank.com to book a demo of Receipt Bank and make this year your most productive yet.