Partner Pages 2019: The power of the personal touch

A sleepy country town with a population of 3,000 doesn’t seem like the ideal backdrop for a thriving public accounting business. But Kristen Lovett, founder and senior accountant at KLAS Business + Accounting, saw a gap in the market in Tenterfield, New South Wales, for a practice with a real human focus. Twelve years on, Kristen is proving that small town firms can think big. Here Kristen shares how adding the human touch set them on the path to success.

I wanted to create something that other businesses would aspire to, but that meant making some changes. The population in Tenterfield wasn’t high enough to support business growth – and with four local accounting firms all pulling from the same talent pool, we weren’t exactly spoilt for choice in the ‘highly qualified accountant’ department.

We had to start thinking bigger, so we decided to do away with the desktop- and the server-based system we’d been using for 12 years. It was a good system and we were comfortable with it – but growth doesn’t happen in your comfort zone.

Switching to the cloud would expand our reach considerably, meaning we could employ people from anywhere to work with clients in any location. It was a long and sometimes difficult road, but the benefits and efficiencies we’re seeing now have made it completely worthwhile.

Getting through the growing pains

We changed our practice management software, our tax work, our accounting, and our work papers over to Xero and XPM in one big hit. It was a lot of change to cope with all at once, and we spent 12 months considerably behind as we tried to get to grips with how our new system worked and how we could get work out of it. One year in, I still wasn’t feeling as though I had control of the business. I didn’t have enough visibility and I couldn’t see how we were performing. Most of all, I wanted to be able to schedule my clients to work again in the way that I used to. After consultations with Xero, it turned out that our set-up wasn’t best practice. So, after 12 months of everyone getting used to one way of doing things, we all had to learn a different way. Our team obviously had to be managed through this. It was a really difficult time with many stumbling blocks, but we came out the other side a lot stronger and a lot closer for having gone through it together.

Out the other side

Although it was challenging, taking that step marked a turning point for our business. Xero is very versatile and can be configured to suit your own individual practice – in fact I have dealings with three practitioners and we all use it very differently. But you need to make sure that it’s set up to provide you with the information you need in the format you need. We decided to seek a consultation because we wanted to be able to use the software to its full potential and we didn’t feel that we were doing that. For example, every task that we did for a client used to have its own job within Xero Practice Manager. On Xero’s recommendation, we brought everything back into one annual job with individual tasks within it. We’ve now got more management control and more visibility, and we can most certainly see our productivity.

A whole new world

Switching to the cloud has really opened up our market and made it so much easier for us to deal with clients in other locations. We’re actually at a point now, for the first time ever, where we need to chase work because our capacity is so fantastic.

With a staff base of 12, we’re still quite small in the scheme of things, but we’re growing. We’ve added three highly skilled and highly talented accountants to our remote Australian team – one in Sydney, one in Toowoomba, and one on the Gold Coast – as well as two qualified accountants in the Philippines. We’ve gone from fiercely competing for local talent to having a waiting list of people wanting to work for us because they are excited by our approach to culture.

Pushing back against digital connectivity is suicide for accounting practices, because no one wants to spend all of their time doing bookwork. Nine out of ten clients say that they hate it, and eventually, they’re going to want to work with accountants who are proficient in online accounting software. We found the more you push back against this kind of change, the more you limit your market.

Power to the people

We really believe in empowering our clients and teaching them better ways of doing business, so whenever we complete a job, our procedure is to give the client three value-adding improvement points. It doesn’t necessarily need to be about their numbers – it could be about the importance of fitness and keeping your mind clear, so you can look after yourself when you’re going through challenges. That’s not a typical accountant conversation, but it’s very relevant to the human side of business. And that’s at the heart of what we do.

Tips for managing a large-scale software switch

1. Always start with the end in mind. It will get difficult through the process of change, so stay focused on where you’re going.
2. Get out of your comfort zone. You need to do that in business.
3. Talk to a Xero partner consultant first. Before doing any of the setup, talk to them about best practice recommendations.
4. Show your team the vision so they see that the growing pains are worth the outcomes that will be achieved.
5. Get case studies, or speak to other accounting firms that have gone through switching software, and bring back those learnings to help motivate and reassure your team.
6. Think big. Your digital reach far outweighs your physical reach, so use it to grow your business to its full potential.

Kristen’s story is taken from the new issue of Partner Pages – a magazine of beautifully curated content, written by partners, for partners. Get your free copy at the Roadshow Australia 2019.

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Source: Xero Blog