Integrating technology with the human touch - lessons learned starting my practice with Sam Mitcham

Integrating technology with the human touch - lessons learned starting my practice with Sam Mitcham

Show Video

[Music] welcome to the entrepreneurial accountant the journey to going solo today i'm joined by sam mitchum of sjcm accountancy and we're going to be talking about balancing technology with humanity and how both of those elements are going to be important to the future of accountancy so sam welcome to the show thanks very much mike thank you for having me thank you for being here um before we get into the sort of nitty-gritty of it all i just wanted to pick your brain a little bit on your origin story of sjcm and how you went from client number one back in 2019 to where you find yourself today yeah of course so i spent over 12 years working in practice before i decided that i wanted to go at it alone and that decision was made in 2019 and i was working for a medium-sized practice at the time and when i handed my notice in there they didn't want me to leave so we came up with a bit of an agreement whereby i do two days a week for them i took on mtd for vat as a kind of year-long project with the view that at the end of that year i could then phase out and go fully self-employed and they would have kind of had what they needed out of me by that point and it would work for both parties so that's kind of how i ended up fully self-employed i did kind of do that gradually i had that year um whereby i still had a little bit of secure income which which really worked for me to be honest it kind of took a bit of the fear away from jumping from full full-time employment which was all i've ever known since leaving school to to self-employment which is obviously a very scary journey for anyone um in terms of that first client my first client was a very good friend of mine whose business has gone from strength to strength she had only been in business um around two years prior to me taking over the accounts and and as i say her business has really boomed since that point so that was a really nice kind of first client um story and journey to follow to be honest just because of the success of her business and then so you didn't really do much advertising how therefore did these guys find you like your new clients yes i just hit social media basically that is how i've built my business up to now it's been a mixture of social media along with current clients recommending me new clients to come my way and the social media side of advertising has worked for me not in terms of saying here i am this is what i'm doing i can do your accounts more just giving something back to the community again during the pandemic that gave me a perfect opportunity to do so i was able to kind of dumb down the government legislation if you like and just kind of make that um into a format that the average small business owner could understand and i think the effort that i put in to kind of help the local trade and the group shares that i did the video footage i put on local facebook group pages and explaining to those businesses the kind of support that they could get it just kind of escalated to be honest and before i knew it people were saying oh yeah we saw your video and without that we wouldn't have known what we were entitled to so when i say i didn't advertise maybe i did but it was a bit more subliminal you know a bit more kind of i'm here and i can help you in this moment that you need help but that meant even if it was six to 12 months down the line if somebody would then said oh do you know of a local accountant i was kind of the first one to to come into the minds of the local businesses yeah for sure i mean being front of mind is super important but also like genuinely you were doing something good like it wasn't necessarily only to attract clients like i'm sure there's a lot of people who watch those videos who you don't even know about and who found those things really really useful um but i'm sure like it was an amazing thing to sort of build authority do you know what i mean and like somebody who really liked to showcase that you're someone who knows what they're talking about so i think that was a really really smart move and well done you for sort of doing that um and i'm gonna go and have a look at these after i'm sure there's a lot that i can learn from them so that's really cool um and again like with that transition you were saying that sorry going back to you talking about the transition from full-time to a full-time employment two days a week into having your own successful business with the benefit of hindsight would you have done anything differently um no i don't think i would to be honest in terms of setting up the practice there's nitty-gritty things that have had a huge impact that i could have done earlier or done a little bit differently a prime example was i thought that i could manage without practice management software at first and that that would be a cost saving i could run it on spreadsheets until a certain level all well and good and i did run it on spreadsheets but then the migration over to practice management software is a very complicated one once you've got a lot of clients on board so there's those kind of elements like that where if i could go back in time i would make small changes but then again i think there's always lessons to be learnt and you're never going to get everything right the first time you try in business and i had i have to even now i have to listen to the advice that i'm giving to clients that are quite new to business and take that advice on board myself i think as accountants we can put ourselves under quite a lot of pressure to be almost the perfect business owner from day one but that's not realistic just because we can advise all these other businesses when we spot pain points within what they're doing and help them doesn't mean that we're going to um kind of be mistake free if you like oh definitely definitely and i think that kind of like feeds into the point that we are offering advice and offering this service to improve other people's businesses but sometimes we get bogged down on just working on theirs that we forget about our own so i kind of wanted to ask you whether those kind of that year where you were working on mtd for that whether you that kind of gave you the opportunity to sort of think oh i'm going to be doing this myself one day what else is going on here apart from me managing my own portfolio what does operations look like what does billing look like what does marketing it like did you sort of was that something that went through your mind at the time it absolutely was yeah i think mtd for that was a classic example of that was the first installment of mtd that hmrc pushed upon us and we all know that inevitably every tax will fall under mtd whether that takes them two or ten years if we are going to be there one day and i think the lessons i learned within that vat project were um to be organized basically the most vital lesson that i learnt um in terms of as a business owner you always need to keep a very good eye on what's around the corner and what's approaching and i think certainly as an accountant it can be very easy to get bogged down in the day-to-day work of actually getting the accounts out the door getting the compliance done but we still need to take a step back um certainly once a month at the moment i make sure i pencil out a day to work kind of on the business instead of in the business but ideally to be honest i think i will be doing that once a week eventually especially if i have them you know the staff there that can be doing the legwork i think from a business point of view it's very very important to keep that plan going um in terms of actually running a business prior to the employment where i did my uh mtd for that project i worked alongside a small practice director for five years and he very much took me under his wing and taught me a lot of what i know today and i was very lucky to have the five years i had within his practice because i didn't only learn a lot about accounts and tax and you know all of that good stuff alongside alongside studying um but i also got to learn a lot about running a small business it wasn't always pretty you know i got to kind of feel the pain points with him it was a husband and wife business i saw the pressure that it put on their home life at times you know all of that stuff that sometimes i don't think practice owners realize is there in the background when they're working for a medium-sized practice i got to experience first-hand from from working with such a small practice for those five years that's amazing and i'm sure like anyone who's listening will be probably thinking what did you learn so not to put you on the spot but if there is anything particular that you kind of that you really took with you to sjc m i'd love to hear it i think one of the main things that i see a lot of or i hear of a lot of practice owners tripping themselves upon is they put a lot of pressure on themselves to make the right decision especially when it comes to technology anything that's kind of seen as advanced in the tech world that might catch their eye and they think oh should i go for it should i not yes okay it is a huge migration if you make the wrong decision and then have to move softwares however a lot of the time no matter what it is you're using whether it's just a tiny little app in the background or a main software for your accounts production you're never going to experience it truly from the demo that they'll offer you online you have to use it and you have to see whether it fits your client base and i think one thing that i learned is although mistakes can be very kind of take a lot of time up and be a bit of a nightmare within practice nobody's gonna get that right from day one and the more softwares and products and packages you can experience the more likely you are to find the one that fits perfect for your practice or as near to perfect as you can and i think the other thing that i really learnt is that the kind of ethos of a business is very important if you if you have an ethos to your business that means a lot to you for example my tagline is balancing um technology with humanity i think if there's something like that that's very very important to you you have to constantly remind yourself of why you're doing what you do otherwise i think the growth and the way that it can spiral very quickly you can go from having 10 to 100 clients in a very short space of time you can kind of get lost in what you're doing and it's something that i've almost caught myself with but then managed to pull back on and go no hold on a minute i promised that i wouldn't let go of that humanity aspect of my offering so kind of quite a few times i will admit that i've had to almost sit myself down and have a word of myself and think why am i doing this what is the what is the kind of backbone and the tagline of this business and in doing that i've been able to go from strength to strength but without losing the whole reason behind what i do yeah i think both of the things both of the points that you make really resonate with me particularly on the tech side like you sort of saying that inaction is probably the worst thing like you just sort of standing still is is gonna mean that you're eventually taking steps backwards in your business because you're not taking that step towards trying one bit of software because you're not sure and it's like you have to go for it at some point because otherwise you're just not going to get anywhere and i think that's the point i sort of find myself in now where i'm exploring all of these different things and i'm like they all sound kind of similar but they do you know i mean but i'm not too sure and it's just that taking that leap of faith that's really important and sort of from what you're saying is kind of like the more you do it the less of a big big deal it's going to be to you and your business so just you know to me as well like you know to just take that step and go for it and see where you end up um and the other thing i think as well your point that you make i think is really really amazing is that you know you've got your niche you've got your your your ethos and you sort of have to double down on it i think um because otherwise you kind of like have this loss of direction it's not it's not clear where you're going you might end up with a portfolio of clients that just yeah it's a portfolio of clients yes it pays the bills but it doesn't fit your business yeah absolutely and so that's that's i don't know about you but it's certainly been like a turning point for me where i'm just you know we get inquiries often which is a great great thing but more often than not we're saying actually this isn't what we do we do xyz things these are the things that we are good at these are the things that we love to do and where we can provide the most value yes um so yeah both of the points that you made absolutely amazing and yeah really resonate with me but um moving more like into the tech side of things i wanted to kind of pick your brain on something because i think tech and ai are sort of developing at such an exponential rate that there might be aspiring business owners practice owners sort of listening and thinking well is it a matter of time before these sorts of artificially artificial intelligence-enabled software just kind of make the traditional compliance accountant redundant and i wonder whether there's any part of you that worries about that personally no it doesn't worry me um i think a kind of analogy that i always like to use when asked this question i have been asked this question a few times over the last couple of years is when supermarkets first got the self-serve checkouts everybody was fearful for the workers in the supermarket you know we were going to go into supermarkets all of a sudden there'd be one shop manager and nobody else on the shop floor whereas in reality we stand at those self-serve checkouts and actually we probably need more help and assistance than we did before they existed because if we don't scan our item and place it on that counter at exactly the right moment that till setting off what uh the flashing light and we're having a human to come over and help us and for me that is exactly what is happening and what is going to happen further and further in accountancy actually it's an enabler the technology is there to save time to eliminate human error to give us accuracy and to give us a much better view of what's happening in our clients business and it's not there to replace the human you can't replace the human with that technology because without the human intelligence behind the tech the tech won't work um a perfect example that i like to to kind of give on this one is there are software packages out there that would tell a client you know that they could for example do their own tax return it's all well and good but without the let the understanding of legislation behind the technology that's there it's almost pointless having the technology because the output is only ever going to be as good as the input and if you don't know exactly what you should be inputting your output is not going to be worth it you know it's not going to be viable and i think for me it's only ever going to be a human being that can interrupt that process and say this is where you need to this is where you've gone wrong or this is what you need to do or to actually look at the output and make sense of it it's only ever going to be a human being doing that yeah i think i think i'm i think i'm in agreement with you and um although it is making some things a bit easier and certainly there is a there's definitely like a space for tech i totally agree that the heat like it's it's your understanding of accountancy your understanding of taxation that's really going to make a difference because ultimately you're never gonna like somebody who's just inputting stuff that doesn't know what they're doing is never really gonna be able to check whether the output whatever the tax return looks like at the end is correct they're just literally putting blind faith in the software and clicking submit and i just can't see that like sort of working out long term um and also like just errors of a mission like you might have you might think you've thought of everything and actually a lot of the times i don't know about you but with clients they're like oh yeah i just need to give you this and this and and i'm like and and i think yeah you i probably could do a set of accounts based on what you've given me but you certainly wouldn't have the best position because actually you haven't thought about this this and this and those are all taxable deductions so you know like give them over here we'll put them in the accounts and we'll have a much better picture and i just can't see a time where technology will be able to sort of do that for you maybe like in the distant distant future but having said that i still think that the role of the accountant is changing because of it and so like we're kind of moving towards like a bit more of an advisory strategic partner kind of role rather than the person who just you see once a year and they give you like this bit of paper to sign and just to bring it back a little bit because we were talking about compliance and we were talking about sort of bookkeeping and tech and all that kind of stuff i wanted to pick your brain on something because it happened to me a couple of years ago when i was quite early on in in bookkeeping and i didn't really and i hadn't really used cloud accounting software that much so i was kind of still a bit new to it and um i was challenged on bookkeeping fees not that i do so much bookkeeping and i hadn't even at that point but i was like i think this is how much it's going to be and they said to me well look we've got the software we've got the bank feed we plug it in we've got the bit of software that reads the invoices and the vat so we link all of those things together and we just click and it all reconciles and we press submit the vat return and that's it so why do you need to charge me any money for this and you and i know that that's not the case but it's have you ever felt that people's perceptions of how these technologies work have hindered your ability to either charge fees or maybe like even undermined your position as an accountant slightly and i think the key here is to go in with confidence and go in with you know one way i like to tackle this is dependent on what that client does themselves i can think back to a conversation i had with a decorator once of exactly this you know he was convinced that he could do the bookkeeping himself and that my fee was too high very similar to what you're saying really and i think there's two ways to go about it i think you can kind of let the client go and try and do the bookkeeping and vit themselves and then maybe when they realize that actually that is not what they want to be spending their time doing and and that you are worth paying that fee for or i think you can kind of turn it on its head really um going back to my decorator client as an example um i said to him well i can paint a wall you know and it it's it's the same kind of idea that i can paint a wall but the minute that there's a bit of loose plastering or there's a bit of a damp issue within a house you know and i'm trying to paint a wall and the paint's falling back off the wall or what's happened here it's the same kind of idea you know it's all well and good them saying we can do the bookkeeping we can click these buttons we can have a bank feed running and then it produces the vit return itself that's fine but when you come across something that's partially exempt for that or you've got you know you've bought something from a different country or brexit happens and then everything changes and you know all these things that they actually come across once they start doing the bookkeeping i think for that kind of client that's almost trying to barter on the fee and you have to re-educate them in what they are paying you for they're not paying you to just click a few buttons if they were it would be a lot of you know it'd be a much cheaper service they're paying you for the years of experience and for the fact that if there was something wrong with in the bookkeeping or if a vat law did change which affected that business you would pick up the phone and let that client know and i think until these things happen some clients won't believe it yeah absolutely absolutely and so yes and that's that sort of like covers off the tech side of things um so moving more towards what we do as as people like you mentioned your tagline which i think is really lovely is balancing technology with humanity and that really resonates with me because i feel like relationships with clients but also with staff are really at the heart of everything that we do so i think we've sort of touched on it a little bit but how i guess have you leveraged technology to give you the space to be more valuable to your clients i think there's a few sides to this one i think the obvious one is time saving so the technology that we can implement not only makes the records more accurate but it also saves everybody time and although generally speaking accountants don't bill on time anymore obviously the backbone of the fees that we charge a client are still dependent on time because every business has to take time into uh into consideration when pricing so i think the fact that technology can save a lot of time both for the client so the client can get on with running their own business and then for us as accountants so that we can then implement that time in talking to the client and not just sat here typing in dates amounts and back rates of their purchase invoices so i think that's a huge side to it that if we can save time with this app or that app then that's time that we can spend then helping you on your business and without the fee you know creeping up and up and up um i think in terms of um what the technology can do for the business itself you have to you have to look at each business individually and i think there are always going to be some businesses that do just need a bookkeeping software and that'll be enough but i can also think of a lot of examples whereby the technology available to a business that they haven't necessarily been using has actually opened up so many doors for them and i think sometimes they need because it's such a a vast space and it's such a confusing world of which apps would actually work for a business i think that whole app advisor role can be very very valuable to a client because although they might see an advert for a certain app or a certain piece of tech and think oh that might help my business i think to come along as the accountant and say do you know what i used to have a small corner shop like this that ran an old-fashioned till instead of a till that did stock control as well that was hooked to the bookkeeping for example and i think until you can actually put a real-life example on the table clients can sometimes say or think that app's really expensive and i don't think it'd help my business whereas we can come in with that kind of real life experience and say to the client i've seen this issue within a certain trade before and i know for a fact that this app or this piece of tech could help your business i think um training clients on how to use software is something that's very very important as an accountant and in that i mean the the kind of a big mistake i've seen in practice in the past is signing a client up to a certain app or a certain piece of tech and then just kind of leaving them to it that's never going to prove the the worth of that piece of technology because until they get the training that they need nobody's going to kind of fully benefit so i think any app or any plan of action that an accountant has has to be in a kind of hand-holding exercise with the client until confidence is growing on both sides yeah it's amazing how how far-reaching the role of the accountant is and like just you saying the words app advisor made me think wow like to assert like it's definitely the case you are doing that it's just when you coin the phrase like that i just think that's insane that we're doing that and it's really good because ultimately you're right like we are the people who have the experience we do look after 50 100 different clients who are all doing things different ways some are doing it well others are doing it very badly and we can kind of like pick up from all of those experiences and put them together and that's you know that's our experience and that's what we put into our offering to sort of add the value and that's i guess where we're headed to with this accountancy adding value helping them implement things that are going to improve their businesses so that is all about how i guess technology is is elevating the work that we do in giving us more space and more time and and ability to just focus on those value-add services rather than kind of being swamped down with like shoebox upon plastic bag upon other things of like receipts and things and you know like i don't know if you've ever done it but i'm kind of old enough to have like written written down bank statements lined by line by line like thousands of them absolutely yeah exactly so all of these things are now kind of like resolved as we say like that it's the outputs that matter and it's the outputs that really we can kind of like take on and advise our clients with so i just wanted to ask you sort of for anyone listening who's thinking about the long term of the accountancy landscape what do you think it's going to look like over the next five years what changes do you think may come in i think mtd for self-assessment is going to be the next huge change in not only how the tax system works but how as accountants we need to work i think my number one tip for anybody in practice or anybody thinking of going into practice at this point would be um to really future-proof your practice to be able to cope with the demands of mtd for self-assessment and also to open up the correct channels of communication with your clients about that now again going back to the vat mtd project that i was on i learned that organization is key and also the communication is key you really don't want to still be having clients in a couple of years time that are still using manual cash books or not running their business through a separate business bank account to then say to them hold on a minute all of a sudden you need to get a business bank account because you're going to have to run software you're going to have to have a bank feed you're going to do quarterly submissions by you know all of these everything that's going to change within self-assessment ntd is going to be a huge pivot for a lot of small businesses i think we've got to take the positives in that in a lot of business small business owners that at the minute are only interested in how low can we get the tax bill by the end of the year are actually going to have the opportunity to start looking at their business performance on a quarterly basis and we're going to be able to help them a lot more because all of a sudden they're going to be forced onto software instead of us just telling those that have kicked back from it so far that you know it is a good idea we're going to have to implement it so then hopefully it will prove itself i think another area that could change things is the cryptocurrency world the nfts all that side of things um i'm not going to sit here and pretend to be an expert on that yet although it is something that i plan to put quite a lot of time and effort into um even to the point where i've considered taking on a member of staff that's um very experienced in tax with the view that i could then pivot her towards learning a lot more about cryptocurrency and you know the planning and the tax implications of of that world and because i can see that not going away anytime soon and very much kind of capturing and kind of catching out some accountants that haven't given that the time of day to kind of learn about the best ways to to advise clients i think um as with anything in the world of accountancy it's always changing there's always going to be new tax laws you know things are always going to have to change um the capital gains tax return that all of a sudden had to be done within 30 days for example i think there might be more thick well it's now 60 days and they've backtracked on that haven't they but i think there might be more things like that in future where actually if you're not working up to date and up to speed all the time and you're not having that efficient relationship with your clients it might catch up with you as a practice owner um the cgt being a perfect example you know if your client's not used to communicating with you it can be very easy for them to just sell a property and not tell you about it until it's too late and then the cgt returns late for submission so i think um the main changes are going to be all pivoting towards that closer relationship and actually the more kind of seamless working with technology involved so i could tell like all of those things i i think are very very true and the thing that i kind of wanted to pick up on what you were saying about mtd and mtd for self-assessment and maybe even for vat like all of these things are basically pointing towards more detail and more complexity um do you think that there's po there may be a space for people or aspiring practice owners to sort of say do you know what i'm just going to do self-assessment mtd for self-assessment or i'm just gonna do payroll or i'm just gonna do limited companies do you know like i think for me i think that's the way that it's kind of going because i think it's difficult to kind of still maintain that general knowledge yes when everything is just becoming more and more complex in all these different areas like i get queries about payroll and i'm like okay i did know that like two years ago but what's happened since then and now and i have to refer it to somebody else just to kind of like somebody who does it every single day because the pace of change is so is so high absolutely um so do you think it's more about kind of niching down your offering to a certain extent yes so i think the niching of different sectors within accountancy is not something that i've given a lot of thought to but i think you've got a really valid point there that actually there will be room in the industry for niching of self-assessment because all of a sudden mtd for self-assessment is going to bring that work um it's sorry it's going to stop that work from being once a year mad rush january tax return season because thinking back 10 years um in practice the tax return depart even five years the tax return department were absolutely dead from you know feb march and april they were doing admin you know you had chartered tax advisors that were doing filing because they had no work to do and as much as i think that has changed in line with a lot more clients using um technology i think it's going to change even more so when mtd for self-assessment comes in so i absolutely do think that there will be a gap in the market for certain practices to pick up on that and say you know what we are self-assessment mtd experts yes i absolutely think that there will be a gap in the market for that well i mean it's been amazingly insightful fascinating conversation thank you so much for your time before i let you go there's one more question that i wanted to ask you and that is if you could go back to day one or even before you started sjcm and you could give yourself some words of advice what would they be words of advice from me would be to set boundaries with clients early on and be very clear about your offerings and the time that you're willing to spend for the fee that you have set with that client and to be realistic with yourself of how efficient you are with the first clients that you get on board so you may be able to respond to every email within six minutes whilst you've only got 10 clients but i guarantee you won't be doing that whilst you've got 100 clients and so certainly the piece of advice for me would be if you intend to grow your business and if you think it may grow um quickly then be very realistic in um the standards that you're setting from day one make sure that they are standards that you can continue through to match the growth of your practice amazing thank you so so much pleasure chatting to you and i can't wait to watch this back been great talking to you mike thank you thank you so much to make sure you catch every episode subscribe to the channel or sign up to the sage advice newsletter at the bottom of the page

2022-01-29 23:54

Show Video

Other news