An Accounting Technologist embracing symbiotic relationships with software providers | Clayton Oates
An Accounting Technologist embracing symbiotic relationships with software providers | Clayton Oates
Heather Smith: Thank you so much, Clayton, for being on Cloud Stories with me and our listeners today. I’d like to start off by asking you,
Who are you and what do you do?
Clayton Oates: Wow, that’s a great question. First of all, thank you so much for having me on the show today, Heather, it’s an absolute pleasure. I know it took a while to get this episode happening, and I’m so glad that you persisted. It’s something I really wanted to do, but I’m a bit of a procrastinator at times, too, so last minute and you probably experienced a little bit of that.
Clayton Oates: So look, who am I? I’m a regular guy, I’m just wanting to live life well, hopefully contribute along the way, get along with other people. These are sort of traits, I suppose, and values that I have. I don’t wanna get confused with who I am and what I do, I’ve done that at times where my background of accounting and accounting technology and all of that, and we’ll probably dig into that a little bit. But you know, there’s been moments where I’ve thought that’s who I am and that’s actually not who I am.
Clayton Oates: I’m a dad of five, husband to one. My wife’s put up with me for nearly 25 years now and I feel like I’m living a blessed life, really. Sure, there’s been moments along the way and there always will be, and challenges, but that’s … everyone’s got those, you know. So yeah, I’m just trying to do my best and help others and share from some experiences, maybe steer some people away from some pitfalls that I’ve gone through so that they don’t have to, and learn off others as well.
Heather Smith: Absolutely. I think you and I have a lot in common, so I’m really looking forward to this interview today, and I’ve just passed the 25 year mark on the marriage.
Clayton Oates: Okay, yeah, there just seems to be like … a lot of us have been in parallel universes to some respects, even in country but also around the world that I’ve discovered. It’s wonderful seeing this convergence of these circles, if you like, and you know, people that … we’ve got some wonderful stories. Everyone’s got a story out there, and I think what you’re doing is enabling that to be shared and I commend you one that.
Heather Smith: Oh thank you, thank you. Yeah, look, and I think that’s similar in that it’s trying to extract and share as much information as possible. People come back and say, “But why do you do that?” I am like, “It helps the community. It helps people. It helps people quietly or it helps people in a big way.”
Clayton Oates: Yeah, absolutely, and I think the forum, the platform of podcast, how amazing is it? That this is actually happening, we’re around to see it. In the past it was more the one on one conversation and you sorta had to go through layers and levels to even tap into resources. Now it’s just available for all that are prepared to dig in and learn and explore.
Heather Smith: Yeah, I was contacted over the last few days by a lady called Kelly. She was trying to help me with a Zapier issue I was having, and she’s based in London. I said, “Kelly, you’ve kind of helped me with that, but tell me a bit about yourself?” So she came back with a few paragraphs about herself and I said, “Kelly, you’re very similar to Helen …” and she’s in London, I said, “You’re very similar to Helen Goodman and she’s based on the Gold Coast and I did an interview with her.” She came back and she goes, “Yes, I listened to that interview and I thought exactly the same.”
Heather Smith: That was really lovely, ’cause they’re both very unique people, but finding one’s based in London, one based on the Gold Coast, and they saw it and I saw it, they’re doing very similar things. So it is amazing, because I think that it can be a little bit lonely, and the podcast and social media and those, jumping into those nice areas can provide you a lot of support and help you push. ‘Cause we constantly are sort of at the cutting edge needing to push forward, so.
Clayton Oates: Yeah, absolutely. I think we’re ultimately, yeah, sure, in business and our vocation for ourselves but we’re not by ourselves. You know, the ability to sort of connect and have this resource out there is tremendous.
Heather Smith: Yes, yes. Now, what I’d like to start with by asking, ’cause people perhaps will, possibly won’t know. You live in a beautiful area of Australia.
Could you please describe where you live, and talk to me about the advantage of living and building a business in a small, regional Australian town?
Clayton Oates: Yeah, sure. I mean, again, I think I’m the luckiest guy alive, really. I live in a small country town in northern New South Wales, the far north coast of northern New South Wales. In fact, I’m sitting here at the desk actually looking out the window. Around probably eight kilometres away is the ocean. It’s sort of a … I don’t know, it’s 180 degree view, almost, of the south Pacific if you look far enough. So to have that … that was always a dream come true to sort of live where I wanted to live and then make the work happen around that.
Clayton Oates: But it wasn’t always the case, you know, I started out at Price Waterhouse in Melbourne, actually, university in Melbourne. I then, I was at PwC for four or five years and couldn’t see myself being a partner in a charted accounting firm. No disrespect to those that are, it just wasn’t my path. I couldn’t see myself fitting in there, ultimately, at that level. So fortunately I met my wife, Jacinta, and having grown up in Victoria where do you wanna go? Well, you wanna go north. Ideally Queensland. This was pretty close, and I met her in Melbourne and she lived up here.
Clayton Oates: So I was madly in love and she was probably the one that was showing interest. I didn’t think I’d ever find someone else, so hey, she was in this part of the world and I had no clue where this is. We’re just at a little country town called Alstonville. I’d heard of Byron Bay, that’s about 20 minutes from here. I honestly thought, like most Victorians, Byron Bay is somewhere near Noosa and-
Heather Smith: Oh.
Clayton Oates: That’s true, they think, “Wow,” they think, “Sunshine Coast”
Heather Smith: Do they? Okay. Not there.
Clayton Oates: Anyway, very pleasantly surprised. I came up here in 1993, had a few interviews with accounting firms. Not that I really wanted to go back into accounting, I was wanting to get out, but there weren’t any job opportunities around this area, it was a recession time. Fortunately found a firm, actually, in Lismore, an incredibly progressive firm, you know? A firm that was actually implementing value pricing and fixed pricing in 1993.
Heather Smith: Wow.
Clayton Oates: Actually, one of the partners there, Ric Payne, you know, went on to go around the world, ran bootcamps for accountants on how to build their businesses, results accounting network. I was lucky to sort of fall into that. But yeah, as far as living here, I remember the guys at PW sort of saying, “Clayton, you’re gonna disappear off the edge of the earth,” you know, they sort of had this path that you should become part of a large corporate or … and you know, I was a country kid to start with. I grew up on a farm in northeast Victoria, so you know, the country area, I had an affinity to that.
Clayton Oates: I suppose, building a business in this part of the world, first of all I was quite selfish. I wanted lifestyle. So if this was a piece of the wedge, you know, living where I wanna live. Then I thought, “Well, I can work then, I can create the work from here, it doesn’t have to be just geographically bound in this area, it can be further around the state. It could be national and it could even be global. So I sorta had that mindset in the ’90s, I could see then when the internet sort of kicked on that we were told that we could live where we wanted to live and do the work we wanted to do from there.
Clayton Oates: I just naively believed that, you know? The internet was dial up in those early days. It was-
Heather Smith: Absolutely.
Clayton Oates: So you know, to be here 25 years later, I couldn’t think of anywhere else I’d want to live although there are a couple special places that I do love visiting. You know, places … and they’re small towns as well like a Queenstown or Sausalito, you know, near San Francisco, and Banff in Canada. I love those three places, but yeah, people say you travel a lot and would you move to another part of the world, I don’t know, it’d be a fun experiment but I’d always wanna be back here, so I’m staying.
Heather Smith: Yeah, yeah. It’s interesting because on LinkedIn a gentleman from BDO, Michael Macolino posted up a picture of himself at the Gold Coast beach saying that, “I’m living the dream, I’m answering emails from our Gold Coast beach,” and someone came back and commented on, “Work from the beach, that’s not the reality of Cloud,” and when you’re at the beach you should be enjoying the beach, not enjoying working. But I think I buy into what you’re saying there is that I kind of think I can be anywhere and they can be anywhere and the intersection is the skills that I can transfer from me to them.
Heather Smith: What that’s meaning for me is … and for you is that we can live anywhere. I think that you’re doing this as well, take extended holidays anywhere.
Clayton Oates: Yeah, absolutely. That’s … you know, this was sort of a lifestyle by design choice. I had to find a vehicle that was going to enable that and accounting technology happened to be the thing. But definitely in my mind … I was at the beach yesterday for a few hours, you know, just to … ’cause it was such a glorious day. I certainly didn’t take my laptop, but I think the point that someone’s making there really is that yes, it does open up choices and freedoms, and it’s incremental, our mindset around this.
Clayton Oates: It’s like, hey, where I was desk bound previously I can now move, sort of broken down one of those barriers. “Oh, I can be out and about and I don’t have to be pegged to that physical location.” But I would suggest if you’re gonna be doing bookwork at the beach, get through that phase as quickly as possible because there’s a whole … more life on the other side. But I’m certainly not denigrating that mindset and that stepping stone there, so.
Clayton Oates: Coming back to the sort of regional area for me personally, I think the great thing about country business for me was that you’re accountable, because you’re going to see the client on a Saturday morning at the soccer match. They are going to talk at the local pub about you, either good or bad. So there’s a constant accountability, whereas larger cities I suppose you can be a little bit lost, although now with social we are on display. You know, there are recommendations, there’s reviews, there’s good and bad being posted. All of that.
Clayton Oates: So I think just, you’re not going to please everyone all the time. We need to get through that. But also just that accountability, and there’s a centeredness on realness that I’ve been fortunate to experience in a country town.
Heather Smith: The Australian government who’s encouraging everyone to move to a region of Australia should get you as their ambassador, shouldn’t they?
Clayton Oates: Well, you know, it’s a doable thing. If that’s what you want, you know. I hear a lot of people complain about, “Oh, traffic,” and, “Oh, this,” and “Oh, that.” You are generally not tied to it. I suppose moving up here with no … I didn’t have a family at the time and so it was easier in a way. Although, there was this expectation that you’re on a career path that you had to do. So, no, I took 50% less income coming here. That wasn’t a problem.
Clayton Oates: I didn’t need the most amount of money. I was conscious about time and lifestyle and choices in living, so I was always prepared to trade that off and continue to do that. It’s this balancing act of really, is this going to add to my quality of life, what I’m about to embark on, or is it going to detract from it longer term?
Heather Smith: Yeah, absolutely.
How did you discover accounting technology?
Clayton Oates: Well it maybe discovered me, actually. You know, back in the … this ’93 I moved to Lismore or this part of the world, worked in the accounting firm there. I was really wanting to get out of accounting. I’d gone back into it, so having left tax in Price Waterhouse in Melbourne, now, so I was looking for something else. I was looking at investments and I was looking at other small businesses, what can I start that’s low risk? Yeah, I had some knowledge and experience in accounting but I was only four or five years in so I could’ve easily switched out from that.
Clayton Oates: But I thought, “Oh, I have learned something here. How could I use that? How could I use that as well as something else?” I did accounting really to head up my own business. I thought, “I need to learn accounting, I need to know finances, I hear that most reasons small businesses fail is lack of financial management, things like that. So I better know that first.” That’s really why I did the accounting degree, actually.
Clayton Oates: So then I was thinking, “Well, how could I gain leverage off what I’ve already created?” I created relationships in the accounting firm up here. How could I spot and help them fulfil a need or something’s wanted in the marketplace. So in 1994, thereabouts, late ’93, early ’94, what was happening in our world? I mean, it was accounting technology. We’ve gone from, interestingly, before that we were seeing the poor production of manual cash books coming into the accounting firm. What do you mean you can’t add across and down and we should have this balanced?
Clayton Oates: We had 31 money column books that people would pack everything and sundry, literally, in the last column. Bank recs weren’t balancing. So what we did actually, in late ’93 early ’94, we ran workshops for small business on how to actually do your bookwork. We were trying to empower, the bookkeeping fraternity wasn’t in place really at any scale at that stage. So we were trying to teach them how to get their bookwork right. Now, these were manual cashbooks. I remember going buying 500 of them. You know, we had all the clients and we’d ran workshops, we put a logo on it.
Clayton Oates: We actually had this book, and about six months later I saw accounting software and I thought, “Oh my goodness, out with the books, this is the future. We can automate this, we can get clients getting their bookwork done electronically.” I was a bit of a computer nerd to start with, had an interest there. So I was thinking, “Okay, well how could I take that,” I enjoyed the interaction with the client.
Clayton Oates: That was something I really wanted more of as a 20 something year old in an accounting firm. How could I understand their businesses more? Oh, accounting technology was going to be the lever and the enabler to do that. Then I sorta had that choice, do I go and do it myself and have the, yeah, this is autonomy. I think I’ve got total freedom. As we know, owning a small business doesn’t necessarily give you that unless you think about how you’re going to structure it.
Clayton Oates: What I did was I took it to the partners in the firm and said, “Look, I think this is another division of the business. I think this is, you know, they come in to get their tax done, audit, business advisory, but what about accounting software technology? That’s just gotta be base camp, every small business is going to need it. So we can either be part of the solution or part of the problem. What if we got trained up? What if we chose a suite of vendors?” Really back then, in the mid-90s there was a lot of software companies. You know, they were DOS based.
Clayton Oates: I can remember looking at 30 to 40 software vendors and thinking, “Who’s gonna win this race? Who’s actually gonna be the top two or three?” We had layers of the market, so we had cashbook, we had sort of integrated client accounting systems, so SMBs. Then we had sort of mid-range clients in our region. We weren’t dealing with multinationals but we had mid-range clients. So we thought we needed a software solution, ideally two, perhaps three, in each of those bands of the market.
Clayton Oates: So we went out and we interviewed software companies. I tried to get as high up the food chain as possible and to CEOs, ideally, because I wanted to see that we had cultural alignment with the accounting firm, with myself, and then the shared vision as to where it was we were taking this. So we settled on a couple of vendors in each level of the market there. It was quicker than Microsoft Money in those days, in the cashbook. It was QuickBooks and MYOB in the SMB space. Then there was a sort of Attache and Sybiz in that sort of, you know, back in those days in that mid-range market.
Clayton Oates: To learn more than one, because the natural tendency, accountants were saying, “No, just go, ‘x’ product, because that’s the one we know.” I thought, “No, we’ve got to actually work out what is going to benefit the client the most. Do your due diligence, have an assessment with the client.” So we pushed back against just doing what it was that the rest of the market was doing.
Clayton Oates: In order to do that, we had to have a team. I had two other team members. The partners said, “Yeah, this is a great idea, why don’t you go and do it?” They sort of provided some resources, it was a low risk entry point to a business for me because there was a client base and I was working with them. But it didn’t dawn on me for a couple of years, well it probably did, but I didn’t have the confidence to say, “How can I own some of this?” I actually helped create the division of the business without thinking of equity, although I did share in sort of growth targets.
Clayton Oates: So sort of three years in they said, “Yeah, sure, why don’t you buy into it?” Great, I will, I’ll go and borrow some money. We were living in a garage at the time with five or four kids, actually, at that stage.
Heather Smith: In a garage?
Clayton Oates: Yeah, in my wife’s parents place. We thought, right-y-o , it was delayed gratification. It was like, the business, if you feed the business, build the business, the business will feed you longer term. So I just had a sort of longer term mindset around that.
Clayton Oates: So I partnered up with the accounting firm, we built a software advisory division. Actually, it was a separate entity to the firm which enabled us to instal, recommend, supply, sell, support accounting software technology solutions into businesses. It sort of settled in that mid … sorry, the SMB market, because that’s where the masses were and that was where the most … however, we did support the higher end solutions as well, as needed, so.
Clayton Oates: The thing on that is, what I sort of say to people is, you know, “You’re an independent professional. Maintain your integrity and your professionalism at all times. You can have incredible partnerships and relationships with software vendors. In fact, it’s a symbiotic relationship. But if you’re feeling as though it’s one sided or you’re just a channel to market then you need to, perhaps, as a professional sort of query that. Because who are you doing this for? If you’re just doing it for yourself to streamline your business operations and processes to sure up some margin in your accounting firm and if that is the purpose, you’re missing the point.”
Clayton Oates: The point is that we’re actually trying to enable small businesses to have buy back time in their life and owners and operators actually spend less time and effort on their business. Add more value, increase profit. You know, bring home more cash into the business, enhance customer relationships. All those sorts of things are what we’re about, and I think we need to stay focused on that and get … you know, sure, naturally if you help other people benefit then things will benefit you. It’s in that order.
Clayton Oates: So yeah, what happened was from there just to wrap up the story is, in year 2000 that accounting firm got bought out by a larger group. It became part of Investergroup in those days, and turned into WHK or Crowe Hallworth these days. And I thought, “Why don’t we-”
Heather Smith: Oh, wow. That got big quick.
Clayton Oates: Yeah, just went boom. It was actually an engineering company that bought 70 accounting firms, a listed public company, in the year 2000. So I think they could see GST and other opportunities that were happening in our country at that time.
Heather Smith: Yeah. So for people listening in, GST was introduced in 2000 in Australia, which massively changed things, yes.
Clayton Oates: Yeah, it was a catalyst. In fact there’s all these waves before that, you know, it went from DOS to Windows. Network computing, I’m sure, there was era’s of waves before that. But that big trigger of actually sort of technologising or bringing technology to small business that GST was the catalyst there and then.
Heather Smith: Yes, so you-
Clayton Oates: And so-
Heather Smith: You actually went through paper based and then using it without even using a mouse using a computer.
Clayton Oates: Oh yeah, absolutely. Well, you see, Windows 3.1 and sort of these drop down menus, “Wow, oh my goodness.” Instead of hot keys or control, alt, you know, all these function keys on the top of the keyboard.
Heather Smith: Yeah.
Clayton Oates: Back in the WordPerfect days even. Yeah, so 2000 I thought, “Right, we’ve proven the model. It’s taken five or six years,” every accounting firm in Australia I thought could benefit from having a software advisory division of the firm and implementing and being involved in the implementation of accounting technology in their small business clients.
Clayton Oates: Because it just made total sense, you were helping them out getting their bookwork right, they knew where they’re up to it on a constant basis, and if you quality control it, you will get a better input into your accounting firm that you can leverage off and be more current and present and not having to do all the fix up stuff. Pollyanna idealistic, and we’re not even still quite there yet, you know? We’ve sort of … there’s still more to go there but we’ve made great progress.
Clayton Oates: I thought, “Well, 70 firms, we’ve done it in one, why can’t we do this now in 70 firms nationally?” Unfortunately what happened is the focus of the investor public company was that, “No, we see accountants as a ticket to financial advisory. We think financial planning, financial advisory is the future and this accounting technology thing, no, we don think that’s really part of the future.” So I then had to get out … I thought then, “How do I get out of there? This is not going to work at this stage.”
Clayton Oates: So luckily I had a … they offered me an avenue to actually extract the business, take the business by the balance of it and we’ve been independent ever since the year 2000, which has been great. So then we work with other accounting firms and bookkeepers and still have small business clients as well. We try and bring everybody together.
Heather Smith: Oh, wow, that’s a really interesting journey. I did like, and I didn’t cut you off when you said it, but I did like at the very start how the very first thing that you said about partnering or working with software was you needed cultural alignment. That was the very first thing you said, which I think actually a lot of people wouldn’t even go, “Oh, do I need cultural alignment?” Like does that even factor into it? But that they’re feeling I guess … what do you mean by that, cultural alignment?
Clayton Oates: Yeah, look, you know, it could be a big topic. I mean, we had to feel, I had to feel personally that this was going to be a forever relationship because what I wanted the-
Heather Smith: A forever relationship? I love that, like forever friends.
Clayton Oates: Yeah, it’s a marriage.
Heather Smith: Best friends forever.
Clayton Oates: Yeah. There are divorces though, we have had that.
Heather Smith: Yes.
Clayton Oates: And when, yeah, the sands shift. But the thing was is we were sitting on the desk of the side of the client. We were on their side of the desk, basically, in those days, and think of your desk, physical desk. So we were sitting with them, but we wanted this back to back relationship. We had the view that, look, this is our client forever until, it’s obviously client prerogative, so if they decide no we’re gonna move on. Well, that’s it. You know, that’s fine. That happens. But we see that as a forever relationship so the software vendor relationship needs to be the same.
Clayton Oates: Because we … and when there were 30 software vendors around, we assess their models because we didn’t want to back a software vendor that was going to be out of business in a year. You know, I looked at their business models. I didn’t know everything, you know, I wasn’t the CEO or everything like that but I thought, “Is this sustainable? Is it a good product that’s getting better?”
For the up and coming 25 year olds who’ve started their software business, how do they get in front of Clayton Oates … how do they meet your requirements? If we can work through that, how do you look at their business model, like are you talking to them about that? Or are you looking on their website?
Clayton Oates: Well, yes, I have and I’ve been involved in enhancing at vendors over the years, those models. But I’ll go back one step of first of all you need product market fit essentially for the client base that you’re looking to serve. You know, so there’s no point sort of getting carried away with a software solution that you love and think that’s going to be awesome or a niche app, for example, and you are not intending or have existing clients or intending to build a client base that that application would be relevant to. So, and you sort of want that 80/20 rule, really. You just want 80% of your clients being covered off by that software suite that you actually choose, because you wanna gain leverage and leverage off your skillset, but you can replicate that into the client base.
Clayton Oates: In interviewing the vendors, the things I look for was, have you got a good product that’s going to get better? So is there an innovation mindset there, and ideally some track record but it doesn’t always … that doesn’t mean you preclude a software vendor and particularly apps that don’t have a track record yet, because you can miss some absolute diamonds there. The cultural alignment piece just is that, are they treating you as though you’re a partner? A genuine partner, this is a partnership relationship with the client. Or, are you viewed as a channel to market?
Clayton Oates: This is where … and there’s nothing wrong with being a channel to market, unless you don’t know you are. Because at some stage, you will just, you’ll realise, “Oh, all they care about …” I’m saying “Oh,” a general conversation here. But they’re focused on their sales targets, and I’m a conduit for them to achieve that. Instead of saying, “Hey, how can we actually address the challenges of the small business fraternity around the world, or in … and together, the accountant and bookkeeper and software consultant, you know, especially any accountant or bookkeeper that’s listening to the call today probably, or goes to events, software related events. You have got in you, in your DNA somewhere the desire to bring technology to the clients, and also into your firm, obviously.
Clayton Oates: So if that is who you are about and then why are you doing it? You know, our view and vision, why are we helping a client? It was to help them buy back time in their life. That was the thing, you know, buy back time was the sort of a tagline that we had. Because the two things, I remember in the ’80s growing up as a kid, or in ’70s, really, early ’80s, “Technology’s coming, wow”. You know? Microwave, my goodness. Ooh, I’m not putting food in that. VCR, like this stuff seems pretty basic now.
Clayton Oates: But the thing was, what was it going to give us? We were told by the sales people that it’s gonna give you more leisure time and less paper. Okay, well late, probably on mass really haven’t turned out the way they should, so I felt as though there was an unmet promise to keep. The time factor was massive. You know, most small businesses don’t work, the owner does. You know, Michael Gerber talks about that. So us as advisors, you know, how can we put our feet in their shows with a toolkit that actually can make a difference? So that was really, you know … then how could I help that vendor? How could I help their business become better?
Clayton Oates: Look, you’re gonna put forward solutions and the thing for us is, too, as accountants or bookkeepers, we’re very good at spotting where something doesn’t quite work. If the bank recs out by a cent, most small business owners will go, “Oh, it’s only a cent.” No, for us, we don’t know if that’s $10000 worth of income or $9999.99 of drawings. So you know, it’s perfection. That could be our challenge, it can hold us back from implementation. But it’s actually then working with those vendors to say, “Look, this is what the clients are telling us that they would love.”
Clayton Oates: Instead of you saying, “I found a problem in your software, and yours is broken, that one over there is better. They do it better.” You know, all this sort of comparison stuff. This is an abundance. This is not a zero sum game. There is abundance here. We are just getting started, and if we’re playing games over, you know, them and them and they like me and, at the moment and, you know, I’m getting something from them. With software vendors? No, we’re all missing the point. We’ve got to clear that and become the clear conduit to the end customer, which is the client.
Heather Smith: Yeah, yeah, absolutely. I know it is … it’s frustrating when the solution that you’re working with doesn’t hear you, and it’s awesome when they do hear you. So I know that after like, an implementation, I will typically send the solution maybe as sort of a 10 page spec review of how it went and issues I faced. Some of them just completely ignore me, don’t even respond to that. I’m like, highlighting, “These are issues in your software that you need to kind of address.” Then others are like, “Can you turn this into a white paper for us and we’ll publish it on your website.” It’s like, yes. You get it, you own it, you’re a part of us and we’re a team. So I really buy into that.
Clayton Oates: Well I think the two, the other thing that I’ve always consciously tried to do is actually always put my feet in their shoes as well, in the software vendor’s shoes, and understanding commercial reality is so important, you know?
Heather Smith: Yeah, absolutely.
Clayton Oates: It’s not just about, “Hey, here’s the 10 things that I know that you need or need to fix in your software,” it’s like, okay, then at their end they actually have a whole list that they’re trying to work through. Software vendors, the product managers, the developers, you know, it’s tough. Then they’re in a competitive landscape as well. So we need to have some empathy around that, and … but don’t give up on the actual, how can I help make this better? Because you will eventually tap into someone in that organisation, and it may have to be the CEO in some instances and that’s how I … I was fortunate to meet a few of the CEOs over the time.
Clayton Oates: Just say, “Look, this is what the customers are telling you.” The client, we say clients, but they’re thinking customer. “This is what they’re telling us.” You know? And we’ve articulated, “Here’s the challenge, the problem if you like. But here’s a couple of solutions. I thought about it, if I was running your business this is what I would do. Take it or leave it, I don’t …” the thing is where we have expectation around that we think, “Oh, now they should do this.” That can be a problem, so … but if we just say, “Look, this is what I’m hearing, this is what I’m seeing,” and yeah, not everyone will pick it up and run with it at that time. But we’re all in this together, I think we’ve got to all contribute.
Heather Smith: I love,
“If I was running your business this is what I would do.”
Clayton Oates: Yeah, and when I think of that, in the past when I’ve done that, you know, I’m talking to a CEO of a public company and I’m in my 20s and I go, “Are you either stupid or arrogant or what?” You know, but I just was … I was just excited on the client. I was thinking, “Right, they’re telling me this …” and it almost gave you this armour. Well it did, it gave you this armoury of like, not arrogance but it was just like, “Hey, that’s what they’re telling.”
Heather Smith: Yeah, yeah.
Clayton Oates: I’m just the mailman here.
Heather Smith: And I’m very much like that, and I kinda go through phases of, “Oh, gosh, I should just give up,” or … but then get back on board and when people embrace it, so I won’t mention named but sometimes people don’t embrace it. The repercussions are they do really badly out of it. Anyway, not always, but …
Clayton Oates: It’s almost like your kids, you know. You see potential in them, unmet potential, possibilities. But sometimes we can be further ahead of them and we want it more for them than they actually want it. So hey, you know, what do you do? Unless you’re a paid worker in a software vendor or an influencer in that organisation then we’re really just a third party contributor. Or hopefully we’re more than that, but …
Heather Smith: Yeah, no, I completely think that that’s really important.
Where do you think innovation is in relation to accounting tech at the moment? We’re in 2018. What phase of the wave do you think we’re at at the moment?
Clayton Oates: Yeah, it’s a really good question and it’s … I suppose what I look at over 25 years is, is this just another one of those again? Having seen accounting technology adoption happen in the mid-90s, sure, we went from paper base to desktop. Then in 2009, oh, well even before that in other parts of the world there was Cloud based accounting software. Australia started that 2009, 2010, ’11, era where it really just happened here or started to happen. That was an innovation in itself, it was like a convergence of great ideas and a platform and enablement to make this happen.
Clayton Oates: I suppose what I look at too is I’m trying to again put my feet in the client’s shoes. If they were looking at us, if they were looking at our industry, what would they say about how far we’ve progressed? Why are some still on desktop? Because essentially there is functionality or business processes that are being dealt with well … or, sorry, not well, but being suffice at the desktop level and as far as applications are concerned I think small business say, “Well, why do I need half a dozen apps to do the thing that I’m already doing in one application? That’s a little bit of a hard sell.
Clayton Oates: So we want to see continuation of build out and I know parodies being talked about and end of the beginning and all that sort of stuff, but in some aspects it just hasn’t finished happening yet. The end of the beginning hasn’t really happened, if you’re talking to the end customer. Because they’re saying, “Well, okay, if I wanna switch to this solution and the pure Cloud based solution, I still can’t do ‘x’, that’s important in my business.” It could be something like sales orders or whatever, in more advanced inventory management.
Clayton Oates: Now, I do get it that … or what else should be under the hood? You know, the client says, “Well, okay. Why …” and it’s interesting looking at the recent acquisition by Xero with Hubdoc. You know, that capturing documents. I think that’ll build out a lot more, ’cause the client would say, “Why do I have to have a third party actually to grab my data and bring it in?” And they’re company client centric here, not necessarily accountant, bookkeeper. So what else should be under the hood, you know? Is it the analytics? The dashboard type reporting, at a … that would suffice the [maxes 00:35:51] of small business.
Clayton Oates: I see that innovation happening in the pure Cloud based applications, but I suppose I’m having 25 years in thinking, “Come on, let’s make this faster. Can we just …” we’ve got thousands and thousands of people in these organisations. I’m looking at, from my lens and saying, “Just these 10 things. Help me nail that.” But again, commercial reality, understanding the vendor’s situation, I need to put my feet in their shoes and have empathy as well. But that doesn’t mean you take your foot off the gas and don’t keep pushing, I think. Because I think that ultimately will benefit everyone.
Clayton Oates: Look, there’s a way … there’s being respectful, I think, is key too. Having a respectful relationship with a software vendor. I’ve been incredibly fortunate, I just see some amazing things happening in each and every software vendor that I talk to. A lot of it doesn’t get headlines, a lot of it isn’t sort of been [spriuked 00:36:48] about around the world. I believe in all of them, essentially, if they’re again on the cultural alignment piece, the ones that I’ve looked at and said, “You know what? You’re good people, you might need a better funding model, who knows? There could be some relevance issues in your current software suite,” but they don’t get out of bed each day and say, “You know what? I’m not gonna stuff up Clayton’s world and his client base.” They’re actually genuinely trying to run and work and run their business and look for what’s needed and wanted out there. So I think having that empathy is really important.
Heather Smith: Yeah, absolutely, absolutely. I think what you were kinda talking about there is like, do we promote a tech stack, a sexy tech stack, or is that tech stack Frankenstein’s monster, and how can we get that sort of the … it together within one thing, or even just a simple one login password to access all of them. But one of the things that history has seen in this industry is sometimes acquisitions happen and no further development happens within what was acquired for whatever strategic reason that is. So it is interesting. Sometimes the acquisitions happen, and they don’t incorporate well. So someone described it to me like Play-Doh, that each of the solutions are like Play-Doh and sometimes the Play-Doh doesn’t kinda fit well together, seamlessly.
Clayton Oates: Yeah, well that’s right, and I think it comes down to the M.O. (modus operandi), the reason for why the acquisition actually happened in the first place, you know? Was it to disrupt a competitor, was it really just to sure up supply in a particular area? Or was it really just to leverage and add more value to the end market. Time will tell on that, or as a short term investor, you know, requirements, does it look good to the stock market? And all those sorts of things.
Clayton Oates: So it’s stuff that we don’t really … we’re not privy to or involved in. But yes, time does reveal everything and we’ve seen those cycles before, that’s for sure. I just think, yeah, I suppose there is, I have had sort of an underlying concern that we could be entering an innovation winter where that there is sort of this … there’s been this fast uptick … I actually love the Gardener hype cycle, I don’t know if people … you know, if you take a moment, check out Gardener with their hype cycle. It talks about the sort of over inflated expectations when a new technology arrives on the scene. It’s not so much the sort of technology adoption lifecycle, but it’s really this tick up of, “Wow,” it’s almost like when the Cloud came along.
Clayton Oates: This is all going to be over in six months, we’re gonna have AI driving, the bots are gonna be in charge. You know, I love the thing about the bots. I think it was Marc Andreessen was talking about a conference he went to and it was a chat bot conference. There is one out there, and they had T-shirts that said, “What do we want? Chat bots? When do we want them? Can you please repeat the question.” So it’s not quite there yet, but.
Clayton Oates: The thing with the Gardener hype cycle, it sort of articulates, and I encourage everyone to have a look at it because it’s sort of … as accountants and bookkeepers we’re fairly conservative, we’re measured, we’re like, “Okay, I need validation.” Sure, you’ve got the early adopters and boy, I admire those guys. I know you’re one of those as well. You get in there, you just, it’s a minimal viable product and you’re actually, “I’m gonna help build this out. I’ve got all the cuts and scars to prove it.”
Clayton Oates: But for most of us it’s like, “Well, I’ll sort of sit back on the sidelines and wait a little bit.” There’s not necessarily anything wrong with that, if that’s the way you operate. So stay aligned to who you are, but don’t stay there for too long because the late majority’s gonna happen and you will have missed it completely. But the thing with this is that we’ve got these overinflated expectations, then what happens is we sort of, because of expectations. I love this, that, you know, expectations, it’ll hurt you every time if you have unmet expectations that are out of your control.
Clayton Oates: Then we go through this trough of disillusionment, and we think, “Oh, it’s not gonna happen anyway. No, it’s … driverless cars, there was an accident. They can’t fix it, no one’s gonna do that.” Then what happens is we need that recalibration, and then we move out through this sort of slope of enlightenment. It’s a slope, it’s like, uptick slope, “Ah, well yes, maybe it does work.” I’ve watched this over the years with accountants going to conferences. You know, I’ve been going to conferences for more than 20 years and I’ve watched the big ones now grow from sort of 50 people to thousands of people over the last seven or eight years.
Clayton Oates: So there’s this slope of enlightenment, “Ah, this will work. Oh, okay. I can see my place in it, I can see the relevance to it. Oh, I can see how I can perhaps articulate it to my client.” At the same time, you’ve got all these converging sort of slopes happening about pricing and relevance to the audience on marketing, communication, business workflow, all those sorts of things.
Clayton Oates: Then we move out, beyond the slope of enlightenment is this plateau of productivity. I suppose what I’m looking at is, “Okay, am I getting an innovation winter fear concern mixed up with a plateau of productivity where it becomes productive, it is mainstream?” But then if we zoom out a bit, then there’s this nother uptick. So the progression is upwards, but it’s not linear. So I would … I’m always concerned, too, that maybe there’s … and I’ve watched it in Australia or other parts of the world where a single vendor has dominance or even a duopoly. Competitive breeds innovation, I think.
Heather Smith: It does, absolutely, yeah.
Clayton Oates: So because we’re becoming more global now, as well, we are global. You know, the fact is this is a global play and this niche geographical piece plays that can happen in countries, and that’ll be fine, that’ll be good for some vendors. But this is truly global, and I wanna see that just continue to build out and roll out, and people articulating the vision and how the professional advisor is a part of that vision, genuinely enabling and empowering small business.
Heather Smith: Yeah, absolutely. Absolutely. Look, I’ve taken up so much of your time, Clayton. It’s been so interesting listening to you, I’m sure everyone’s gonna really benefit from this. So should I, to cut it short quick, but I feel like I should get you back on the show very quickly.
Clayton Oates: Well, I think I could talk underwater with a mouthful of marbles.
Heather Smith: I think you can! I think you can.
Clayton Oates: When you’ve lived it, isn’t it, like yourself, you’ve been around this, it’s your thing, you’re very passionate about it, you’ve got to sort of temper that sometimes and pay attention to others.
Heather Smith: Yeah, look, I think that people will really get a lot of insight from what you’ve shared today. So how about you share with us what’s kind of on your horizon that you’re looking forward to, and how people can get in contact with you?
Clayton Oates: Yeah, sure. Well a couple of things, I’m just fascinated seeing where this is heading. What I love, actually, is seeing people … like me, I suppose, 25 years ago, in my 20s, questioning my role in the profession. Questioning the relevance, would I stay, would I go? I’m just seeing now that that wave of that generation saying, “You know what?” And I’d be encouraging them to say, “Stay at it.” You know, you’ve got some expertise in terms of baseline around accounting and that’s important, or bookkeeping.
Clayton Oates: But how can you expand that out? Don’t feel threatened about what’s gonna take away from what you’ve got and trying to hold onto something or have entitlement about what you’ve created. Take it to the next level. Take it actually, and invest in this. Invest your mindset, your skills, and your time into … and pay attention to what does the client want? Always ask, “What does the customer want? What does the client want?” So I’m fascinated to see that play out.
Clayton Oates: I’m actually … as you know, I go to a lot of events so I’m heading off to Boston at the end of this week to Accountex US. It’s been amazing to be able to have the privilege of attending, first of all, I started to go to conferences internationally just to learn more. Because I wasn’t sure where our world was heading, you know, seven or eight years ago. So I was questioning whether I’d even stay in it. So thankfully I went to Doug [Solida’s 00:45:41] conference in the US as it was known then, and had an incredible time but learned a heap and also understood that we’re in a global village. Others are experiencing similar things if you just get out there and actually have a chat to them, you can all help each other.
Clayton Oates: Yeah, there’s a few more events towards the end of the year as well. To be able to travel in an industry and a profession that you love doing and to give you that sort of freedom and choice to do it, I just feel incredibly blessed and I’m glad through all the times when I thought, “Gee, I should get out, I don’t want to do this anymore, it’s changing too fast,” you know, resisting it, I’m so glad and thankful that I stayed in it.
Clayton Oates: So I’m looking forward to seeing where the next generation actually takes this platform that we didn’t create, we just stood on the shoulders of giants before us. So I’m excited about seeing people actually utilise this industry to impact others and create some sort of lifestyle choice and freedom, if that’s what you want. I know it can do it for you. I’m so thankful that it came along for us, and I just want to see if I can help other people achieve the same thing.
Heather Smith: Would you say to the 25 year old who’s heading into a large accounting firm, partnership role, would you say to them, “Look, consider jumping out and starting up your own business”?
Clayton Oates: Yeah, I mean, there’s again, I think it does come down to alignment. Don’t ever do it just for the money either way, right? Try and put that to one side, ’cause you’ll eventually make the money but you’ll still be stuck if it’s, or you’re in a … you know, so get that sort of to one side. Be bold in terms of who are you, and is there cultural alignment there? Can you … but so there’s two parts. There’s two sides to this. It’ll work either way because you will make it work.
Clayton Oates: You take you with you wherever you go, and that’s what I loved about moving to northern New South Wales, a country town of 4000 people from a big city firm. I was taking my attitude and mindset with me wherever I was going. You’re in control of that, so therefore you can chart your course. Is it gonna be easy? It’s gonna be challenging. Simple as that. Life’s a challenge at times. Is it worth it? You betcha. Work out a model, a way that gives you what it is that you want. You know, I would encourage you to stay and run and go with it.
Heather Smith: Yeah, and embrace lifelong learning as you have done.
Clayton Oates: Oh, absolutely. That’s your growth piece, isn’t it? You know, I love what Tony Robbins talks about, sorry to extend the session here, but there was something-
Heather Smith: No, I don’t wanna waste your time, we love this.
Clayton Oates: You know, I listened to his tapes and all that over the years. Tapes, back in the day in the ’80s and ’90s.
Heather Smith: In your cassette deck.
Clayton Oates: Yeah, that’s right, in the car and with a Walkman. Maybe one day … geez, I’m old, last century. But I thought maybe one day I’d go to one of his events, and I just happened to be in San Francisco actually two years ago and the three day conference was Unleash the Power Within was on in San Jose the next day. I lucked in getting a ticket, literally the last one, and there was 15000 other people in the auditorium, but there was one thing that really struck me over those three days. Well, apart from doing the fire walk. I think every accountant should experience that and maybe we could bring that to conferences, if we connect Xerocon, bring in the fire walk. That’ll take it to a whole new level.
Clayton Oates: But he talked about sort of fulfilment, and gaining fulfilment. When you’ve got maybe a lot of income, you perhaps generate, a lot of accountants are generating a lot of income. But they’re sort of then looking at the retirement, “I’m only gonna do this for another five or six years,” and it’s not a fulfilling sort of piece. It’s like, “Ugh,” it’s almost like drudgery. So in order to gain fulfilment he articulated sort of, “If six components are in existence in your life and your business, whatever you’re doing at the time, fulfilment will sort of fall out the other side.” The six were really, we’re all looking for some sort of certainty. We want some sort of control over our day or over our path, our future. I get that.
Clayton Oates: The other thing was variety, uncertainty. You know? Like if it’s just all locked and loaded and it’s just all cookie cutter and you know what it’s gonna be each year, that could be pretty boring and you’d lose a bit of fulfilment in the future. The third piece was significance. So am I significant, have I got something that I can … you know, are people listening? Have you got that sort of avenue? I suppose for me it was like … I can learn accounting technology and I can implement with these clients. That’s some sort of significance I’ve got in their life and significance in the firm.
Clayton Oates: There’s also then the fourth piece was connection. They took that love and connection, you know, we’re people. We need to have that connection. I love the way we have these large scale software event, vendor events or road shows or, you know the ability to get out behind the desk and actually go and meet and see other, our peers, and converse with them. The software vendors and … their team and it’s wonderful. So that’s the connection piece.
Clayton Oates: But then beyond that then there was these two other significant components if you’ve got all those others. One was growth, continuing to grow. So that’s the learning, your lifelong learning. You can have all of that, you can have your lifestyle, you can have everything. And lifestyle is essentially, chasing lifestyle is essentially selfish. Once you get that you go, “Oh, is that all there is?” So the sixth piece was contribution. Contributing to others. So it’s that growth and contribution piece, if you’re sort of stuck a little bit of where you’re at in your business or in your firm at the moment, think about growing and think about contributing.
Heather Smith: Yeah, yeah, yeah, absolutely. So control, variety, significance, connection, growth, and contribution.
Clayton Oates: Yeah. Yeah, and I just sort of watched that and I checked myself. You know, what am I deficient in here? What can I control and what do I need to add to the recipe? And it worked.
Heather Smith: Were you deficient in anything, Clayton?
Clayton Oates: Oh, yeah. I think there was times when the contribution piece definitely, I’ve found a lot of fulfilment out of contributing more. I always did, but I probably did it with an expectation that I was going to get. It just doesn’t work like … I think you just gotta give. It will come back, but don’t peg the giving to where you’re giving to getting a direct line of return because it’ll happen over to the side somewhere.
Clayton Oates: So he also, the last piece I want to sort of say on here about that conference is, well the three days with Tony Robbins, I mean, it was intense. But he also said that if you wanna change your life, just swap your expectations for appreciation. Instantly, if you’re down on something right now it’s probably because you’re either expecting something should’ve happened or your entitlement around something. Just start appreciating.
Clayton Oates: So clients is a good one. I hear people sort of dish out their clients. “Oh, this client, that client.” Or, “This software company, that software company.”
Heather Smith: And you know I absolutely hate that, I so much hate it.
Clayton Oates: Yeah, appreciate it. You have got a client. You know, you’ve got software vendors that are investing hundreds of millions of dollars in actually making a solution that you can benefit from, my goodness. Appreciation.
Heather Smith: Yeah, yeah. As soon as someone vents about a client or ridicules a client or vents about a software solution I have this little thing in my head that says, “I will never recommend someone go to them.” Because what happens in a few months’ time when they do the same thing about my client? I just think ridiculing clients is awful because everyone is an expert and you’re the one who’s supposed to help them along the way.
Clayton Oates: Well and also, you know, too, is around that sort of, the complaining piece or Dale Carnegie talks about it in his How To Win Friends And Influence People, one of the best books ever written. The title can put people off, but you know, and social. Watch out when you’re in your social environment. Never criticise, condemn, or complain. It just doesn’t, you know, it just denigrates you ultimately. You might get a little bit of buy in and banter and everything else and think, “Oh, that’s funny,” but no. Ultimately it’s chipping away at your integrity. So guard that.
Heather Smith: Yeah. You’ll always find an echo chamber that will agree with you, but you are better off putting positivity out there and I so much agree with the appreciation and being grateful every day for what we have available to us.
Clayton Oates: Yeah, absolutely.
Heather Smith: Thank you so much. Now, how can people get in contact with you, Clayton?
Clayton Oates: Yeah, well, Twittersphere, Clayton_Oates, O-A-T-E-S. You can track me down there, and ClaytonOates.com.
Heather Smith: Fantastic, thank you so much.
Clayton Oates: No worries, Heather, it’s been an absolute pleasure, have a great day.