Latest / The Accounting Podcast / #Xerocon San Diego: Ben Richmond, VP of Business Growth at Xero
Transcript
- 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. 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.