Latest / The Accounting Podcast / Heather Smith on going from management accounting to cloud accounting, to one million views on YouTube
Transcript
- Blake Oliver: Welcome to the Cloud Accounting Podcast, a show for accountants using technology to make their jobs more strategic, and impactful. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: Our special guest for this bonus episode is Heather Smith. She's a chartered accountant, business and technology writer, author of eight books, including the popular "Xero for Dummies." Her educational YouTube channel has over 800,000 views, and her [00:00:30] Cloud Stories podcast is one of the top five accounting podcasts, worldwide. I personally have followed Heather for many years, ever since I began my journey as a cloud accountant. It's wonderful to have you on the podcast, Heather. Thanks for joining us. Heather Smith: Thank you for that wonderful introduction, Blake, and hello, David. Thank you very much to both of you for having me on the show. Blake Oliver: It's a pleasure. I should state for our listeners who don't know who Heather Smith is - shame on you - you are down in [00:01:00] Australia, and where, exactly? Heather Smith: I am based here in Brisbane, Australia. For listeners, I'm about one hour north from Steve Irwin's zoo. No, I'm one hour south from Steve Irwin's zoo. Blake Oliver: Got it. Heather, we were just talking before we started recording, and I actually didn't know this, which is ... I can't believe it, but unlike a lot of folks who are out there talking about cloud accounting, you don't have a background [00:01:30] in public accounting. You actually started in management accounting, is that right? Heather Smith: Yeah, I absolutely did. I started in management accounting, when I graduated from my degree. The next day, I flew out on a plane to the UK, and I started a job in the UK, working for Kraft General Foods, which is a Philip Morris company, a big American company, based in the UK, in Cheltenham. I worked as a business analyst, and management accountant on their private-label brands, which private label ... I'm [00:02:00] not sure, do you use that term? It's the home-brand label. Every single product that they sold but labeled for different shops. Blake Oliver: Oh, yeah, yeah, we have that, yep. Heather Smith: Yes, I'm sure you would have it, but I'm not sure what terminology you would use. We call it private label. Blake Oliver: I'm not sure what we call it, but definitely, definitely have that, yep. Heather Smith: I would have to do forecasts, and [00:02:30] analysis, every single month, on every single product. Yes, it started really strongly in the management accounting, and that's primarily where I have stayed, as a management accountant. Traveled a lot. I spent three years living in Toronto; spent three years living in Singapore, and then, came back to Brisbane, still very much focused on management accounting. Blake Oliver: How [00:03:00] did you make the transition, then, from doing that to becoming a trainer, a speaker, an advisor? Heather Smith: Interestingly enough, I was training. I was actually- the day I almost arrived back in Australia, I met up with some friends, and one of them said, "Look, why don't you go, and take over my job at the university," which was an accounting tutor at the local university. I then started up tutoring accounting at both the local universities, [00:03:30] which was probably a bit naughty of me to do at both of them. David Leary: It's called entrepreneurial, right? Heather Smith: Then, I spent about three years, and I was just doing accounting training from lots of different training organizations, all over the place. Then, I was sitting there, and I was training people, beyond accounting, into small business. I was sitting there, going, "Why am I training these people in small business? Why am I teaching them how to write business plans, and financial plans? Why [00:04:00] aren't I doing this myself? I should start my own small business." I'd come from originally working for a Philip-Morris-sized company, and couldn't possibly comprehend starting up my own business, but, eventually - it was probably about an 18-month process - I launched into my own business, setting myself up, just as myself, and I've pretty much remained as a solopreneur for this whole time. The first [00:04:30] thing I did, was I made up a calendar, with all the business days on it, and I worked out my availability, and my non-availability. I sent that out to all the organizations, who I thought could possibly use my help, and they would then ... I would send that out at the beginning of the month. This is before we had a lot of the technology we do. Sent it out at the beginning of the month, and they would fill in when they would like me to come in, and I would go in on those days, and do training for them. Initially, [00:05:00] it worked really well. Being a trainer, you get a really deep understanding of the different problems people are having, and you're able to bounce around from one aspect to another, and that, I really loved. I would grab every- I read every single training book that was available. Here, in Australia, initially I was primarily training NYOB, and it was such a big achievement to be able to train that efficiently. [00:05:30] Any book that comes out, I read the details ... Excel, all of the Excel training books, all of the Xero, or the QuickBooks ... Just read them, so I could actually deliver them efficiently. Then, with that, what I have done, on from that, is I've gone on develop the YouTube channel, and try, and train people on a mass scale. It's interesting, cuz that blurb that you read out - 800,000 - it's just [00:06:00] about to hit a million views on the YouTube channel. Blake Oliver: Wow, congratulations. Heather Smith: Yeah, it's pretty exciting. David Leary: You do books, author books. You're a trainer; you're a podcaster; you're a YouTube star. Then, I think I saw on one of your flyers, you still do meet-ups, and face-to-face events. Heather Smith: Yeah, I do. [crosstalk] There's this facility called www.meetup.com, and it's a really easy facility to actually co-ordinate a group [00:06:30] of people to meet in a particular area. It does a lot of the reminding, the grouping, and the interface, and the set-up for you. I say that so if anyone else is thinking of doing it, to use that as something to leverage you doing it yourself. Now, initially what I did was I went through one of the professional associations, and I facilitated their meet-ups for about three, or four years. Then, I decided I [00:07:00] need to understand more about the cloud-app solutions, and I'm going to conferences, but I'm not getting enough detail from them. I need to really deep-dive into them, and I want to be open to asking them lots of questions and having access to them. We have a coworking technology hub, here in Australia, called River City Labs. This was founded by a gentleman by the name of Steve Baxter, [00:07:30] who is one of our Australian 'sharks.' We have four sharks in Australia, like I believe you have in the US. This was actually before he was even a shark. This was when he was actually just this amazing business person, and he founded that. They said to me ... I went along. I said, "You need mentors," and they're like, "Why? Why do we need you?" I said, "Because I'm female, and you have no female mentors," and they're like, "Okay ..." So, I started as their female mentor there. I then sort [00:08:00] of tried to work out how I could contribute to that organization, while doing what I was interested in, and I eventually hit on I would run a monthly cloud accountants, and advisor meet-up. I've now done that for five years, which is amazing. I consider it to be a community event, in that I welcome everyone to come along to it. River City Labs very kindly give me the space for free, and I invite anyone [00:08:30] who's coming to the area, who's got something of interest to the community, to come in, and to speak to the community, but be prepared to answer the detail question. It's not a sales presentation, whatsoever. Most accountants, and bookkeepers don't want to be sold to. They want to know the detail. They want to know how it connects with the solution, and they want to know what they need to know to get their client on-boarded with it, and whether it's gonna be a [00:09:00] smooth transition, or whether there's things that they need to consider. Yeah, so that's been going on ... I now have about 520 members of that group, and I very much encourage people to participate the way they want to participate. What is great about having those meetings is that it's open invitation. I pretty much run it for free, and you get pizza, and you get alcohol. Don't ask of me how I managed to do these things. Small businesses will come [00:09:30] along, accountants will come along, bookkeepers will come along, developers will come along, other people from the ecosystem will come along. You end up with this Q&A session that is a really 360-degree vantage of the solution. You've got the small business owner asking one question, while the accountant's saying, "Well, I need it to do this, and I need the information to come out like this." The bookkeeper is wanting the detail, and wanting the information to come out like this, and the small businesses owner is saying," I want [00:10:00] the interface to look like this." It's really interesting for us to connect and see the flow of the cloud-app solution, and how it is important to everyone there. I also find, as with these things, it's a really great networking opportunity, because people can see who knows about these solutions, and who they can work with. That has also been interesting. I primarily work from my home office, here in Brisbane, with [00:10:30] my dog, Charlie, at my feet. By having this cloud meet-up, it's my excuse to get out the house once a month and see people in real life. Many months will go by, and I just won't ... I'll go out, and see social people, but I won't go out, and see accountants, so this is my opportunity to go, and see accountants once a month. Blake Oliver: I guess this seems to be a feature of the cloud, or SaaS, in general, now is that there is a lot more interaction going on between the users of these applications, and the developers. There's a lot of feedback-. Heather Smith: Yes. [00:11:00] Blake Oliver: It's really fun to be a part of that, right? Heather Smith: Yeah, absolutely. That is one of the reasons it's exciting to get on board with a solution, in its early days, to give it that feedback. I think it's really important for accountants, and bookkeepers to remember they love supporting small business. Well, they love numbers, probably first, but they then love supporting small business. A lot of these cloud-app solutions are actually small businesses. We need to recognize them as being small businesses, [00:11:30] and we need to talk, and communicate with them and help ... Sort of consider it a partnership to go along on the journey with them. Two things there. First of all, I find that these cloud apps, if you can give them a case study for why you need a feature, they will recognize that, and if they have the capacity, will build that in. The second thing I'd also like to say, I think it's really damaging to publicly vent on social media, if something's not working for you, if you haven't [00:12:00] gone through the appropriate channels, because a) that's a small business, and you're really hurting a small business, and you could be influencing a lot of people not to buy from them. The other thing, it actually looks bad on you, if you're venting publicly that way. It's like, well, what if I encourage you to use another solution, or what if I encourage you to go, and help my client with this, and that's the way you publicly treat them. That's something- one of my [00:12:30] pet peeves. I really do enjoy partnering up with these cloud-app solutions. I know one- there's one in New Zealand, called PocketRent, who does rental properties; helps you do those rental properties. They built in a feature, overnight; honestly, in 24 hours, when I requested it, because the client wanted-. Blake Oliver: Oh, that's awesome. Heather Smith: Isn't it? I was just like, "Wow!" I find that the people who are really close to their product [00:13:00] will want to know the case study. That's been my learning is they want to know the case study. Jared Armstrong, founder of MinuteDock, he's been repeatedly asking me ... Someone asked for something; he's been saying, "Okay, what does she want? Why does she need it? How is she going to use it?" They're gonna go, and look back at their solution, and see if there's a way they can incorporate that. Because, sometimes, it's a matter of the client, [00:13:30] or the end-user will come along, and say, "I want it to do this," but it does do that; it's just gonna do it in a different way, which is completely fine. If you understand it's not doing that, can we build that in, can we add that as a feature that we can then promote to people? They want features. They don't know what everyone needs out there, as do we. We don't know what everyone wants out there, or how they're gonna use it. David Leary: Yeah, I think that's a good lesson, maybe, for our listeners, here. To just go to Facebook, and start some rant, and then, 40 [00:14:00] other people in that Facebook group pile on this rant, whatever it is ... It could be QuickBooks, this week. It's TSheets, next week. It's some other app ... There's always somebody complaining about something about an app, but it's not very ... It doesn't help anybody. Heather Smith: No. David Leary: It just stirs up negativity, versus, like, "Hey ..." Give them a real suggestion. Give them the use case. Give them why you need this to work, or why your client needs this to work, and they will listen, and they will implement. You gave that example of that app that fixed something the next morning. I was at Clio's Law Firm Conference, two [00:14:30] years ago, and, as they got feedback from their lawyers, their customers at the conference, they actually took the feedback, and they had their engineers sitting in the office, back in Vancouver, fixing these items. The next day at the conference, on the main stage, they'd say, "Hey, just to let you know, three of you were complaining about this. We fixed it ..." Standing ovations. Yeah, I think it's a ... It actually will happen. Developers in these apps will fix things for you, but [00:15:00] you kind of have to serve it in a different way. Just these gripe- you see these on Facebook, these gripes. I think, if everybody follows Heather's policy, we'll be better. Heather Smith: Yeah. It's just recognizing that we're in a community, and we're in this together, and we're all trying to help each other. Blake Oliver: 100 percent. Heather, given your ... I guess you're like an OG cloud accountant. Heather Smith: An OG ... What does that mean? Blake Oliver: You're an original- Heather Smith: Oh, okay. I was thinking maybe orange girl, or something ... [00:15:30] Blake Oliver: No, no, not that, yeah. Although, there's that, too. Heather Smith: Yes. Blake Oliver: No, you see, you're an original. You've been doing it pretty much since the beginning. Heather Smith: Yeah, I was doing it since the beginning, and I actually did remote desktop, prior to that. I was actually connecting, and I'd worked out how to do remote-desktop connections. Honestly, the reason for that is, if you're interested in knowing, is I'm a mom. I had school-aged kids. [00:16:00] I could work between 9:00 and 3:00. I could potentially work five-ish hours, and if I was spending an hour of that, or two hours of that, traveling, I was reducing my fee of what I could earn. I, then, focused on high-end fix-ups to increase my hourly rate. It was a matter, as a mom ... Accounting is a wonderful career for a mom, because it's very flexible. As a mom, I had five hours to work, and I [00:16:30] wanted to maximize the amount of money I could return. It's just sort of basic accounting, in why I adopted remote desktop, and then, jumped on the cloud. Very much - probably someone that you know - Wayne Schmidt, he kind of gave me the call, and he's like, "Heather, you need to know about this." I actually met him at a cafe, at our local shops, and he explained it to me. Blake Oliver: Given your expertise, and given how you've seen this massive change that's happened over the last decade, where do you [00:17:00] think cloud accounting is headed in the next 10 years? Heather Smith: Cloud accounting, in the next 10 years ... I think we're going to ... I think it won't be a question of if, it will be we'll all be on cloud-accounting solutions. I think they'll be connected very closely with our tax, or revenue offices, and the data will feed into the revenue offices. I think we will have auto- Blake Oliver: They're already starting to do that, I think, in the UK, [00:17:30] right? Heather Smith: Yes- Blake Oliver: With a new initiative. Heather Smith: They do that, here in Australia, with payroll. You have to click a button ... Every payroll you process, you click a button to acknowledge that it's gone to the Tax Office. They are connecting, and I think that that will be very, very much more connected than it is today. Blake Oliver: I have a hard time imagining, in the United States, the IRS having a direct connection to any accounting software. David, and I were just [00:18:00] talking a couple months ago about a new initiative the IRS ... I don't know if you're aware of this, but the Internal Revenue Service in the United States is still operating on mainframe computers from the 1960s. They just got the budget to modernize, after the tax filing system went down on Tax Day, for an entire day. Yeah, this past ... They're starting to ... Basically, we have to move off of mainframe systems, onto modern [00:18:30] systems that, hopefully, will ... We won't be too far behind you, in Australia, and in the UK. Heather Smith: Don't they see it as a way to gain extra revenue, if they do adopt a modern system? Blake Oliver: Well, I think, politically, there's a lot of politics involved in taxation, here, but the idea is to limit taxation, by starving the Internal Revenue Service of the ability to collect revenue. Heather Smith: Oh, okay. Blake Oliver: Yeah, it's [00:19:00] kinda crazy. It's a crazy concept, but that is what some people in Congress are trying to do. Heather Smith: Okay, okay. That is interesting. It is interesting, though, because I find people who are proud to pay tax, because the tax contributes to the roads, and the schools, and the libraries. They're very happy to pay tax. I'm not gonna jump in on the argument whether we should pay tax, or not, but- David Leary: What planet are you on? Blake Oliver: Yeah, this just sounds so [00:19:30] strange to me, right now. [crosstalk] David Leary: -States, exactly. Heather Smith: Okay, I guess that's a whole other argument, but that's what pays for the infrastructure of our parks. I don't know how you get them paid for, etc. Blake Oliver: I'm not arguing with you, it's just hard to imagine anyone making that argument here. Heather Smith: Yeah. Well, you know, but I think one of the things people say to me is they're very stressed by what their tax bill will be. Blake Oliver: Right. Heather Smith: If they're connected, and it's [00:20:00] just being absorbed on a monthly basis, that's being built into their cash flow, so they're dealing with it, so that, actually, the stress on that is a lot less. It's being hit with, once a year, a massive sum of money; that is very stressful. That's why I think the connection of cloud accounting to those big-data sources, but again ... Okay, so that's kind of slightly, maybe, the negative side of it, but I think the positive side will be a lot of trigger alerts. You will be rounded [00:20:30] up, in the industries that you're working in, with KPI alerts saying, "The wages that you're currently paying, based on your revenue, are too high. You perhaps need to look at efficiencies in your business." You will go, "Okay, I've got this trigger. It's just being built in from the KPIs, because I'm using the fathoms, or the spotlights of this world," which are packages, or some other trigger-alert solution, "and I can bring someone in [00:21:00] to address that issue, and deal with that issue, and get me in a better place." I think we're going to have ... Because we really, as small businesses, struggle to get really good, comparative metrics. There are some big, high-level ones out there, but I think by having cloud solutions - we've got the big data; we've got this integration - we're going to be able to, at a certain blind level, be able to do a lot better comparisons. If we're too high on our wages, are we making errors, [00:21:30] or do we need to review how we employ people, or do we need to relook at our scheduling solutions? The payroll-management solutions, which you probably have some similar, over in the U.S., can make a massive difference to your profitability, because of the way they manage the staff, and the way they highlight the costs that are involved there. I think we'll be leveraging big data to better manage your business and using comparative KPIs. [00:22:00] David Leary: Now that you've told us what's gonna happen in the future for cloud accounting, what about Heather? What's next up on your plate? Heather Smith: Good question. Good question. I'm planning on probably doing ... I'm doing a lot more podcasts. I'd like to do more education. I'm really into the education on the area and talking globally about the different solutions. I think my goal - and I sat [00:22:30] down ... I actually talked to Wayne about this - was to become a digital nomad, and just travel anywhere, and work from anywhere in the world. He beat me to that, slightly. I currently can work entirely from my handbag; everything I need fits in my handbag. I've been doing short travels to various destinations and continuing to work there. By that, I mean I [00:23:00] can be anywhere in the world. My clients can be anywhere in the world, because I'm a management accountant, not a tax accountant. The intersection is where my expertise can help them, and I can just sort of jump online, and help them with that. I can help them that way, but also, on the mass scale of education. Trying to do as many YouTube videos as I can do; trying to write as much as I can write. I was going to write ... I'm considering [00:23:30] writing a book on being a digital-nomad accountant. Oh, and, of course, I'm hoping to one day, potentially, write fiction accounting book. Blake Oliver: Oh! What would be the plot of that? Heather Smith: Well, Blake ... He would be this young- Blake Oliver: Is this a preview? Heather Smith: I won't give you a preview, but I think there's a lot happening in the industry that would make for an interesting book, and an interesting storyline. [00:24:00] There's a lot of different personalities happening in the industry, and rivalries. There's so many law TV shows, and there's so many medical TV shows. I think it's about time we had an accounting one out there. Blake Oliver: Well, when they make the film out of the book, can you make sure that somebody really attractive plays me, if I'm in it? Heather Smith: Was that Brad Pitt you wanted playing you, or ...? Blake Oliver: Well, [00:24:30] hopefully I'm not that old by then, but, yeah ... Whoever the star is, of the moment. Heather Smith: Okay, okay, I'll [crosstalk] Blake Oliver: Well, Heather, on that note, we're about out of time. I just wanted to say, for our listeners, who are looking for another podcast, do check out Heather Smith's Cloud Stories podcast. Search for that. It is one of the top accounting podcasts you can listen to; definitely in my top five. Heather, [00:25:00] where should people go, if they want to connect with you online, and find out more about what you're up to? Heather Smith: Thank you for that, Blake. I would encourage you to jump on and subscribe to my newsletter. I try to put out a bi-monthly newsletter, focused on education around cloud apps. You can get that at HeatherSmithSmallBusiness.com/newsletter, and you can subscribe there. I'm on Twitter: @HeatherSmithAU, and I'm on LinkedIn, and, I'm on Facebook, at HeatherSmithAU. I'm [00:25:30] typically in a lot of Facebook forums, so you can always say hi to me there. Thank you very much. Blake Oliver: David, if our listeners want to get in touch with you, and suggest a story, or ask to be on the podcast, where should they go? David Leary: The easiest way is to use Twitter. I'm @DavidLeary. If they wanna get ahold of you, Blake? Blake Oliver: I'm @BlakeTOliver. Thanks everyone [00:26:00] for listening. Heather, thank you for being our guest-. David Leary: Thanks, Heather. Blake Oliver: -and David, I will talk to you soon. Heather Smith: Thank you so very much. David Leary: Bye, everybody. Heather Smith: I used to work in Singapore, in a construction company, and I was the auditor in the construction company. Most of the people in the office spoke Mandarin, so I really didn't understand [00:26:30] them, but they spoke English, as well, so, when they spoke their English, I did understand what they were saying. I was reviewing what was happening on site, and I didn't always- the communication, I didn't always understand what was happening. Someone came, and asked me where the scrap metal income was, and, I was like, "What scrap metal income?" They said, "The scrap metal income ... When the person, the purchasing officer, sells the scrap metal, where is the [00:27:00] income going?" I was looking, and I couldn't work out where it was. I asked around where it was, and where I could see on the profit-and-loss sheet. I couldn't see it anywhere, and I asked everyone I could think of. Then, they said, "Oh, you need to go, and ask the purchasing guy," because he, on-site, gets the scrap metal, and just sells it for cash to people coming by, and they buy it off him for cash. I went along, and I asked him. Suddenly, he couldn't [00:27:30] speak English to me anymore, but he kind of told me to go away, and come back the next day. The next morning, I came in, and I went up, and I asked him the question, again. He had one of those old-time desks, which had one of those really massive deep drawers. He opened up the drawer, and in it was scrumpled-up pieces of notes, of currency. It was absolutely full. We [00:28:00] had to take this ... We had to take this drawer out, and they had to count the money, and it was like over a hundred-thousand dollars of cash in this drawer. The bookkeeper was so upset with me, because every single piece was really dirty, and she was like ... Every single piece, she'd count, and she'd slap, and she'd look at me with evil eyes as she had to straighten that out and count it all. Yeah, that was one of my surprising accounting uncoverings. [00:28:30] That got the cash scrap metal income line added to the profit-and-loss sheet.