- The story of her own practice Power Finance
- Her discovery of Xero and shifting to a 100% Xero practice
- Everything you need to know about Grow Your Practice series
Subscribe to Episode 24 of Cloud Stories on iTunes
Heather: What is your superpower?
Melanie: My superpower would definitely have to be FUN, Heather.
Heather: Very good. The “Queen of Fun”.
Melanie: I do like to have fun, and I think that life is very short. I think that I have philosophy that we need to make the most of being in the present moment, and that’s really hard to do in our life. We often find ourselves worrying about what’s happened in the past and then worrying about what’s going to happen. So, I think trying to focus on where you are exactly now and getting the most out of that moment is really important.
Heather: Yes, absolutely. That’s very good. I’ve not had someone come to me with fun before but excellent. You’re the “Queen of Fun”. We love that. So,
For seven years, Melanie, you’ve run your own practice which is called Power Finance. Can you describe your business to our listeners?
Melanie: Business as it is now or—
Heather: What it was when you started. What it was in that sort of period before you took the next leap.
Melanie: My business started out as me on my own. I am a sole practitioner bookkeeper. In 2012, I discovered a product called Xero through my accountant actually who is Richard McArtney from Bentleys in Newcastle. Thank you, Richard. I remember actually looking at the industry and how it is now. Essentially, I had run quite a successful bookkeeping business before and sold it in 2006. I had a break from the industry and came back in 2012. I had discovered the whole concept of cloud. It was around June 2012 that I discovered Xero and also discovered Xerocon. I found myself travelling to Melbourne, to the 2012 Xerocon with one client. And that was really the start of the journey. I just knew that this cloud movement, so to speak, was something that, if I didn’t get hold of and get on the journey, I felt like I was going to miss out. So, it was very exciting.
Heather: That’s really interesting that you took a client to Xerocon. I think that business with clients is actually really beneficial. You can kind of see different perspectives of what’s happening there. So, that’s really interesting, and it’s a big investment to go to Xerocon. Were you using Xero before that or was that your real introduction to it?
Melanie: That was my introduction. Obviously, I was an MYOB consultant for the majority of my career, and a whole part of my first business was based around that model. So, I knew how incredibly beneficial those conferences were—that I would be getting to network with peers. Interestingly enough, I actually connected up with people that had already been in that software ecosystem at Xerocon. So, it was a reconnection of existing friendships and then making new ones. So, I knew I had to immerse myself in that experience and learn and understand as much as possible as to what other people were doing so that I could take that away and start to develop my own business model.
Heather: So, was that really the catalyst for your practice moving to a 100% Xero practice?
Melanie: It was. I never forget turning out there, and it was at the exhibition centre, I’m walking in and seeing people in t-shirts and they had VW Kombi vans. It was like accounting, all of a sudden, become cool. It was just like nothing that I had ever experienced before. I remember coming away from the first day thinking, what is this Xero thing? It was just a whole lot of fun which I love and an awesome amount of learning. I think that I definitely got my return on investment.
Heather: Excellent! It’s really exciting to see that it had such a massive impact on you. So,
A year ago, you started with Xero as the Head of Bookkeeping there. It’s quite a unique initiative for a software company to do that. Why did you think that Xero saw the need to appoint a Head of Bookkeeping?
Melanie: I had this conversation with Chris Ridd and a few people internally within Xero when I first started, but I think they felt it was a definite way to be connected as to what was happening within the industry and also show the support for our accounting and bookkeeping industry. It’s essentially a conduit so that the role becomes the voice of the advisor—whether it be accountant or bookkeeper—back into Xero and also the voice of Xero back to the advisor channel. And it has been very successful.
I think there have been a lot of partners that have talked to me about different things. They may not necessarily have felt comfortable about it because I think, when you’re talking to one of your peers, there is just that level of understanding there. Both myself and James Solomons who is our Head of Accounting are still in practice. And it does make a difference because essentially we’re doing the same things that other advisors are doing. We are speaking with clients on board and welcome clients for doing conversions. All those parts of things that happen in the day-to-day happenings in our practice.
Heather: Yes. I think it’s essential that someone in a role like yours keeps their hands in with that experience in the real life and in the trenches because it seems to be so quickly that you can forget it, and I think that the role has been fantastic in that you have a real deep understanding. And people, I can see, dealing with you have a deep respect for you because you have that level of understanding. So,
What it’s like working for Xero?
Melanie: That’s a very interesting question, Heather. I’m glad you asked that. When I first took the role, I have been self-employed since 1994 with a very short space in time where I worked for Leap Legal. It’s a fantastic piece of software. That’s for around 18 months. I was really worried because I actually thought I was going to be unemployable. I didn’t know how I was going to fit into the infrastructure of being in an employed situation again. Xero, what you see on the outside—the values of authenticity, transparency and realness—is exactly what you see on the inside.
As a person working for Xero, there is a sense of trust and employees taking ownership for their roles and what they’re doing. Everyone has a voice. It’s just an incredible amount of respect. There is no corporate trail or hot desk. There is no sort of an important office in the corner where you can have access to the leadership team. It’s very much a team environment rolling together and it’s incredibly supportive. So, I was pleasantly surprised and I honestly believe that those cultures and values that we have internally with Xero have really helped me be incredibly successful with the role. It’s just amazing.
Heather: Yes. That’s really interesting to hear because I know, for a lot of us who run a business, the thought of going back to employment is kind of just overwhelming. Could we actually cope with it? So, it does seem like a lot of staff members I speak to at Xero actually have a business on the side. So, it’s an interesting entrepreneurship mentality perhaps that they’re growing there. So, this is a little bit of a hard question so hopefully I’m…
In his book, A Whole New Mind: Why Right-brainers Will Rule the Future, Daniel H. Pink writes that, for a business to survive and thrive, they need to deal with three crucial questions. Those questions being: can a computer do it faster? Is what I’m offering in demand in an age of abundance? That means, for example, can targets sell it cheaper? And the third question is, can someone overseas do it cheaper? So, a business needs to address those questions if they want to survive and they want to thrive. These questions seem very apt in the accounting and bookkeeping industry. How does an old school bookkeeper compete with the computers and a cheaper labour availability?
Melanie: That’s a very good question, Heather. You’re right it’s a very hot topic at the moment. Just recently, Digital First shared an article that I had written about the robots are coming. I have some fairly strong views on this, and I think the biggest thing that answers all three parts of that question is simply relationship. No matter how we do the work, no matter who we are competing against, price wise even, and no matter where the work is based, the relationship part of what we do with our clients is incredibly important because good relationships bring trust, bring strong foundations and it’s almost a given with clients that the technical part of what we do is simply there.
It’s about how we work with those clients and how we move along their business journey with them. That really strengthens that whole scenario. So, full bookkeepers are working in that space where they are seeing this cloud movement, so to speak, and almost the delivery of the service and the way it’s changing. My encouragement would be to look at ways that you can find to integrate those particular tools and environments within your existing business because it’s going to bring your efficiencies which will allow you to service your client even better. But the most important thing to focus on is continuing to have that strong relationship with your client because that is going to stop your client from going to other places because you have that. It’s no different from the way that we operate in relationships on a personal level with our friends, with our partners. You have to work and do things that strengthen that relationship, and it’s the same with business.
That might be that you might make a meeting time once a month to have a Skype call to discuss with your client their current profit loss and actually work out the question, where did my money go? It’s little things like that build the points in the bank of relationship. That’s really how I feel when things are moving. Also, it allows us to step into that space of helping our clients with things other than simply just compliance.
Heather: Yes, absolutely. Everyone who is listening in knows I hate compliance. I kind of want us to go to that next level and really give something back and use those in numbers in the decision-making and growing the business process. So, I’m not sure if you’ve answered but you perhaps have answered it. Let’s see, my next question for you, Melanie, was
What do you predict the future would look like for bookkeepers?
Melanie: You’re asking me all the hard ones. The future of bookkeeping. I think that essentially that we’re going to see hybrid practices, and I know that in my own practice we have this scenario where we’re using some outsourced work. When I say outsourced, it doesn’t necessarily mean that it has to be overseas. Outsource can be somewhere in Australia or it can be a contract in another state or it can be somebody from overseas. It doesn’t really matter where they are located. So, it’s about having a hybrid operation where a bookkeeper is having a lot of that compliance work taken care of in a back-office environment that is leaving them to focus heavily on the client relationship providing other key services to the client and essentially managing that whole business. So, I definitely see that we’re going to see more hands on with clients. We’re going to be stepping up the relationship. We’re going to be stepping up the types of services that we provide, and that could be anything from helping with data, helping with cloud integration, helping with HR, and looking at their business systems and working out how we can help them become more efficient.
Heather: Yes, and I think that’s absolutely where I think that the bookkeepers who are in the business have such a good understanding of the business should be doing. Just asking questions like around efficiencies. That can really help the business because many small business owners are not speaking to any professionals on a regular basis about what they’re doing. So, definitely, I think that is the scenario.
Melanie: I think there is a definite myth out there about the perception of what bookkeepers do, Heather. I think for a long time, in the small business sector, I know from my own experience, when I tell people I’m a bookkeeper, a lot of the response I get is they think we are getting data from invoices and we do admin type of work. Sure, that’s part of what we do but I can tell you from the amount of bookkeepers that I chat with in our industry the range of skill level and professionalism is just incredible. We’ve got this group of highly skilled people that can do so many things. A part of what I would really love to see happening is that profile of what a bookkeeper is doing so we can help educate our small business that they have this incredible people. They’re ready to help them in their journey.
Heather: Yes, absolutely.
In conjunction with Xero, you have initiated an educational programme called Grow Your Practice. What does the programme encompass, Melanie?
Melanie: The series essentially covers my own business journey from more than 200 clients in a year, Heather, and how I did it—what worked and what didn’t work because I had so many mistakes. It’s a six-part webinar series which goes over a period of six months. We take our practice attendees over a journey which encompasses things such as business planning, why we do what we do. The second session covers pricing. That’s a very hot topic and it’s essentially all about having a change of mindset where we were so used to billing by hourly rates. How can we actually start to look at providing those value-based packages to our clients? What does that look like? The third session is on practice tools—all the great Xero practice tools that we have to help us in our practice. The fourth session is all on automation. What tools are out there that we can pick up and implement into our business to be more efficient? Also, how can we apply those same principles to our clients’ businesses? The fifth session is on positioning. So, it’s all about, how can we get these solutions that we spent the last few months developing in front of our existing clients that don’t even have it yet? The last session is essentially a talk radio style session. It’s kind of similar to what we’re doing which allows everyone to talk about their experience.
To wrap it all together, we have a LinkedIn group where everyone can collaborate, and that has just been fantastic. So, we’ve got a whole community there where we are encouraging and supporting each other along that journey.
Heather: Excellent! So, who is this program suited to?
Melanie: It’s suited to any bookkeeper at any level. I think that a very wise man said something to me once, he said, “Mel, when you go into conferences and you looked at learnings, there are always different types of things. Chew on the meat and spit out the bones.” So, I think it’s like anything. Some of the more advanced people on their journey may look at it and say, “I’m doing that.” That’s okay. It’s a confirmation that we have that similarity although there may be pieces they might take away and implement. But it definitely force somebody that is just transitioning from a traditional onsite hourly based practice. Definitely, this would be something that you would want to do to understand how it all fits together.
Heather: Excellent! So, with respect to the word Grow, are you suggesting people grow their practice revenue, their practice client base, or their staff numbers?
Melanie: That’s another interesting thought. I think growth, as we would call it, can be perceived in different ways. We just actually completed series one and some of the feedback we’ve had has been that we’ve had revenue increase, we’ve had staff increase, but the most interesting one I found is that especially sole practitioners have found growth. So, it’s not only about showing you how you can essentially increase the size of your business if that’s what you want to do, but it also shows you how you don’t want to increase the size or revenue. How can you grow your own time back to do the things that you want to do? So, that might mean getting rid of some clients that may be don’t quite fit with what’s happening within your business model and being more efficient about delivering your services. So, it’s been a very interesting journey to see how bookkeepers have picked up that term of “growth” and what it looks like for them.
Heather: That’s really interesting because that’s really important. I know a lot of bookkeepers I speak to say they’re happy being solo, but they kind of don’t know what to do. So, it sounds like it’s suited to both those and the ones who are like, I want to grow and dominate and have a lot of staff on board and grow my client base. So, it seems to cover all of that.
Melanie: I think it really gets back to the definition of the term success. Success can mean something very different to different people, and it gets back in that very first session we cover when we looked at why we do what we do. That is the moment in time where we decide where we want to go. There is definitely no right or wrong. It’s essentially about making it. This is what I want to do. This is where I want to go. How can I actually make it work best for me?
Heather: Excellent! So, how can people get involved with the Grow Your Practice series?
Melanie: If you actually google what Xero and Grow Your Practice, it will take you to our learning page and you can register your interest. Now, there are two key things. You need to be a Xero partner. If you’re not a Xero partner, you can go to xero.com, click on the bookkeepers tab and register to be a partner and you also need to be Xero certified. So, that means if you haven’t sit our certification, then you need to just simply go through the online training modules and sit that test. It’s free and you can do it at your own time. So, they’re just the two things that we have as criteria to do the programme. If you’re interested, come on board with us.
Heather: Is it available to global Xero partners?
Melanie: It’s available to our Australian regions just at the moment. I am working with our global team, at present, to look at rolling the series out to our other bookkeepers in other regions. So, watch this because that’s coming real soon.
I understand you’re running Grow Your Practice session at Xerocon. What will that cover?
Melanie: The Grow Your Practice Xerocon sessions is going to be great. I’m really excited about it because Rod Drury is going to be part of that session. This is essentially is his brainchild. Rod is very passionate about the bookkeeping channel and very committed to the success about bookkeepers. So, it will essentially be Rod sharing his vision for the series and the bookkeeping channel with males. So, I’m looking at some of the results that we’ve had from the first series here in Australia. I will be giving a snapshot of some of the really key highlights and some things that bookkeepers can take away and implement into their business from that session, and we will also be hearing from Rock Stars from the series that have picked up the challenge and grown their business in very different ways. So, it’s going to be a great session and I’m really looking forward to connecting with our bookkeepers there.
Heather: Excellent! Thank you so much, Melanie, for sharing such wisdom with us today. We have loved having you on the show and I’m sure the listeners are really going to benefit from this, and we would love to have you back as soon as you have some fresh time in your calendar. Everyone, please if you’re listening in and this is of interest to you, pop down to Melanie’s Grow Your Practice session at Xerocon and register your interest. So, it sounded to me like, even if you’re overseas, you can register the interest. So, at least you know that they’re interested, but it’s only for Australian practices at the moment. Thank you, Melanie.
Melanie: Thank you so much for having me along today, Heather, and thank you so much for all that you do for our industry in Australia and globally. Thanks to Cloud Stories for having me.