Mark Tooby: My name’s Mark Tooby. I’m a business adviser at a firm of chartered accountants. Part of my role is to work with businesses who are looking to improve their accounting procedures. A lot of them may be on old-fashioned desktop-based software, or some even still using just spreadsheets. And so myself and the rest of the team will go into clients and help them identify how they can improve their existing system, move from desktop-based to cloud-based, and look at the available apps.
Mark Tooby: We are Xero Platinum Partners and we recommend Xero to our clients. We work with them to show them that Xero, which is a piece of cloud-based software, will work for them on an accounting basis. And then we will work with them to look at various software add-ons, e.g. Flowlens, that will help their business grow and help them improve their internal productivity on an accounting basis.
Mark Tooby: So we’re based in the North West, and the North West has a long history of manufacturing. So we have a lot of manufacturing-based clients. When we’re looking at moving them onto cloud-based software, we’re also looking for the add-ons that will work with them in their manufacturing environment. We would normally go into clients, investigate what system they’ve got, look at what manual systems they’re using, and then help them identify suitable software that will work for them to move that onto a cloud-based system.
Rich Dale: And thinking about the JCS scenario in particular, can you just describe your side of the story, if you like?
Mark Tooby: Yeah, yeah, no problem at all. So we were approached by JCS who were looking at possibly outsourcing their bookkeeping and internal accountancy due to a retirement. So we reviewed all of their systems – the existing desktop-based software and their spreadsheets that they used. We then worked with them to look at possible software-based solutions for them too.
Mark Tooby: So we were approached by JCS Nuclear Solutions. We were their existing accountants, but they were looking at, due to an internal retirement, possibly outsourcing their internal bookkeeping systems. So we came in and reviewed their procedures, the existing software that they were using, the desktop-based software and the spreadsheets they were using. We reviewed this and looked at the possibilities of what we could move to cloud-based.
Mark Tooby: And so we’re a Xero certified partner. So obviously we recommended Xero as the accounting software, and then we started to look at potential software for the daily operations, CRM.
Mark Tooby: So we started to look at Xero, which we’re partners for on the accounting software, and then we started to look at various MRP software for the day-to-day running of the business. And so we went in and performed a review, met with the client and the existing staff to see what reports they produced and where we could see possible long-term time savings and efficiencies by bringing on board cloud-based software.
Rich Dale: And were you involved in the process mapping exercise or did you kind of take that as almost like a brief, I suppose, once you knew what JCS needed?
Mark Tooby: Once we quoted the client as to what we could possibly do, and it was agreed that in principle we would take over the outsourcing of the bookkeeping, etc, we then built an action plan of how we would implement that over a period of time. And so JCS directly looked at the software to make sure that it would deal with what they wanted to do on a day-to-day basis. We then reviewed it so that it would fit in with all the accounting software, and worked on it that way.
Rich Dale: And how does Flowlens fit in with the accounting software? How does it make your job then easier?
Mark Tooby: Very much easier. In the case of this client, they had a substantial number of spreadsheets. So if they needed information, it could only be got by one person, and could be the amalgamation of three or four spreadsheets. Because Flowlens is real-time, it enables not only the staff at JCSN to be able to get the information live – we of course have access to that as well. So when we’re producing management accounts, it gives me access to that information straight away.
Mark Tooby: For my colleagues that are working on day-to-day bookkeeping, they have access to that information as well without sometimes having to go back to the client directly.
Rich Dale: Is there a time saving element?
Mark Tooby: The impact piece with using cloud-based software and the real-time information is that it enables us sometimes to get the information directly without having to go to the client. And so that does save a lot of time, not only at our end for not having to go back to the client, but also at the client end as well. Previously, in this case, the information could be on four or five different spreadsheets.
Mark Tooby: And so finding the right spreadsheet, finding the right amount of information, whereas now we’re looking at cloud-based real-time information not just in Xero but in Flowlens as well.
Rich Dale: From your perspective then, the onboarding process, how did that work for you as the accountant and the advisers?
Mark Tooby: So obviously Flowlens was part of a larger project. We had to implement Xero and then move forward to give the client management accounts and various other reporting schedules. So the onboarding process was part of our overall onboarding process. It was part of a project that involved moving the desktop-based accounting software over to Xero, obviously Flowlens, and for us to then start to produce monthly management accounts and various other reports. So we had our own onboarding process and change.
Mark Tooby: And the hardest part of my job is trying to persuade people that they need to change. And that was the easiest part of this job – they said, we need to change. So then it became easy for us.
Mark Tooby: They had their own internal accountant that produced all the information. And yeah, from our point of view, we looked at it and there were 15 spreadsheets. I reviewed them all and the first thing I said was, oh my word, the amount of work that’s been duplicated here is phenomenal.
Mark Tooby: So what we did from our point of view was we reviewed what records they had. So they had a desktop-based Sage system. So of course that’s based miles away, so no-one’s got real access to that. And then there was a substantial amount of manual records via spreadsheets. So that was what our review was – to look at that and say, well, you can – all those manual spreadsheets – you can use a piece of software that will do that for you.
Mark Tooby: And at that stage we made a couple of recommendations, but they did a lot of their own work as well in that area.
Rich Dale: That’s what I was saying. We love clients like JCS who aren’t afraid to just roll their sleeves up and get stuck in and sandbox trial ideas. You’re not going to break anything. It’s not live, critical information.
Mark Tooby: But the best thing of all was that they looked at it and they said we might just have to change our own internal system slightly. People are always expecting – and Oliver’s not here – expecting that it would do exactly what they’ve always done. And it won’t. You’ve got to go out and spend 200 grand to get something written for you. And they’ve had a quote, by the way, and it’s scary, you know.
Mark Tooby: And so from my point of view – and I’ve done three or four of these different types of software – this was the easiest one because they knew what they wanted and they accepted that they would have to change their own internal systems slightly.
Rich Dale: Yeah, yeah, I know. It’s that huge payoff – spend 200 grand, spend 200 quid a month, you know.
Mark Tooby: Yeah, yeah. And to me it’s a no-brainer. You’re in a situation where normally the software is overkill. The software is written to be used by so many potential businesses that there’s always going to be some things that you won’t use, but you just don’t use them. You just ignore them. I tell clients that all the time. I only need to use that. Ignore the rest, just forget it’s there.
Rich Dale: How has Xero changed your business?
Mark Tooby: So I’ve been at the practice for five years. I came on board to work on the Xero team. So I’ve done nothing else but Xero. I’m the Xero champion in the building. To me, cloud-based software is the only way forward. I wouldn’t recommend anything else.
Mark Tooby: So I joined the practice five years ago, and they’d been working with Xero for 12 months, and I was brought on board to help them drive and develop the use of Xero by the clients. I can’t see going forward any reason why clients wouldn’t use cloud-based software. And to me, Xero is the best piece of cloud-based software. It’s designed to be used really on a day-to-day basis by accountants, so it’s easy to understand, easy to use. The real-time information on Xero is substantial.
Mark Tooby: The fact that we can have access to it, we can look at it. But most of all it’s the apps that can connect to it that are substantial. From document-reading apps to MRP and SME manufacturing software like Flowlens, for example – all those sort of apps make Xero a substantial piece of software to use.
Mark Tooby: So we were approached by JCS because they were looking at possibly outsourcing their accounting function as one of their internal staff was retiring. So we produced our own onboarding schedule for all the work that we were potentially going to do, and the Flowlens onboarding fitted into that. I dealt with Flowlens staff and I found them to be enormously professional and organised, and it just worked, as far as I’m concerned, as a dream. We planned our own onboarding and the Flowlens onboarding just slotted into it and worked very well.
Mark Tooby: We planned the go-live day. It connected to Xero perfectly and everything seemed to move along very, very smoothly. And once it went live, I don’t remember there being any problems at all.
Rich Dale: What would you recommend if you’re a manufacturer?
Mark Tooby: So obviously if you’re thinking of moving to a cloud-based system, you’ve got to have a decent piece of accounting software, which is Xero. But then you need to look at your processes, what you want from the system. And I think people fall into the trap of assuming that the cloud-based software is going to do everything exactly as you do it on a manual system.
Mark Tooby: So I think you need to look at your manual system, look to see what you want out of it, and then see how the software is going to work. Because normally you have to make slight changes to your processes to be able to use a piece of cloud-based software.
Rich Dale: And what’s the benefit of that?
Mark Tooby: Normally moving from manual systems or even desktop-based systems is normally time. It’s a saving of time. If you’re using a spreadsheet-based system, you’re normally entering something two, three, four times. Whereas if you move into a piece of software like Xero or Flowlens, you put the information in once, then that information is available to anyone that has access to those systems.
Mark Tooby: Often if you’re using, for example, Excel spreadsheets and you’re using five or six of them, one person’s got main access to those and needs to sort it and produce a report for other people. By using cloud-based software, that information is live and available to whoever needs it instantly.
Mark Tooby: So by using cloud-based software, it enables you to standardise your procedures. And by standardising your procedures, what your staff have to do is easier to train. So if you’ve got a company that has complex procedures, you have to spend a lot of time trying to teach staff those procedures. If you’ve got standard procedures by using standard cloud-based software, it makes it much easier to recruit new staff and train staff in the procedures that you have.
Rich Dale: How do relationships like Flowlens plus Xero help you add more value to your accountancy clients?
Mark Tooby: Okay, so when we get involved with clients on a day-to-day basis by moving them onto cloud-based software, that gives us the ability to work with the clients. Old-fashioned accountants used to look at things six months after the year end. Look at what happened last year. There’s the tax that you’ve got to pay. There we go. I’ll see you again in 12 months’ time.
Mark Tooby: The accountancy profession has changed enormously. Now we’re less accountants and more business advisers. We work with clients like JCS Nuclear. We look at the current information, the current month’s figures. We’re not just looking at that, we’re looking at six months, nine months, 12 months, two years in the future. We actually become more of that. We can become part of their team. We’re almost like their internal finance director. We now have more time to look at tax planning and business planning, cash flow projections, whereas in the past we concentrated more on compliance work. Now we’re looking at helping the business.
Rich Dale: What’s the kind of impact that has on the bottom line for your clients as a group?
Mark Tooby: So by having access to real-time data with software like Xero and Flowlens, that means that the client has an understanding of where they are now, where they’re likely to be in the future. That enables them to… If business changes – the last 18 months has been the strongest 18 months we’ve had because of real-time data – companies have been able to make instant changes to their businesses. In the past you’d be getting information that was 12, 18 months out of date. Now you’re getting information that is maybe only a month out of date.
Mark Tooby: And so you can make serious business decisions three months before the year end if the company is profitable. You can look at making decisions on pensions and tax saving, but not only that, you can look at decisions on growth. You can monitor your margins. Again, by using software like Flowlens and Xero, you’re able to see what your trading margins are, that they’re consistent. If you’ve had a drop in trading margins, you can look at why that is. And as you know, for running a business those are substantial tools.
Rich Dale: Could you put a figure, again speaking generally, on the kind of improvement? Do margins improve when people are on that monthly cadence rather than six-monthly or 12-monthly?
Mark Tooby: I’ve regularly… you know, we’re working with clients that are using cloud-based software like Xero and Flowlens regularly. I’ve seen almost, sometimes in excess of a 20% improvement in time spent in the accounting functions. That’s meant that either the proprietors, the directors of the company have got more time to spend generating more business, or if they are using admin staff in this area, the admin staff have got more time to spend on more important issues – debt collection, as opposed to spending time re-inputting information.
Mark Tooby: And so, you know, it’s difficult to put an exact value because every client’s different. But all the clients that I’ve dealt with over the last two or three years that have moved on to cloud-based software have always seen an improvement in the amount of time that staff have got available to do more work.
Rich Dale: And one last point on that – do people get paid quicker? Because that’s what we generally see, that people’s cash flow just improves.
Mark Tooby: So of course one of the benefits of using cloud-based software is cash flow management. By using Xero and Flowlens, it’s freeing up some of your staff’s time to spend more time on cash flow management. But Xero itself has tools to enable you to send more reminders, and the software lets you monitor who owes you money. And so because it’s live, in real time, you’re much more efficient at debt collecting and you’re getting more time to do that as well.
