My name is Chris Hooper, and I’m the C.E.O. of Accodex, which is a market network for freelance accountants.
Heather Smith: Excellent. Thank you. And I am glad to hear you pronounce it, Accodex. Because that’s not how I would have pronounced it. When did you know you wanted to be an accountant?
Chris Hooper: Well, I didn’t really know that I wanted to be an accountant until I was probably knee deep in the accounting profession, but I knew that I wanted to study accounting at the age of like 18 or 19. I’ve been in business prior to that, and was good at making money, but not necessarily very good at keeping the money. And I knew that accounting was the language of businesses as is referred to, and I realised how important that was to actually, like to not only learn, but to master. So, that’s kind of what got me involved in accounting at college. And I suppose the best way to learn is to learn by doing which got me into working in public practise, and then kind of that snow balled and here I am.
Heather Smith: Fantastic, yeah. You had a very, very steady progression via your LinkedIn profile in the accounting world which, similar to me, I just loved accounting. I was probably 14 when I started loving accounting. In your LinkedIn bio, you state, “I honestly believe that accountants have the ability to change the world. They just don’t realise it yet.” How can accountants strive to be global leaders who change the world?
Chris Hooper: I think the first thing to that is actually just like owning it, and acknowledging it. Like … and I think having an appreciation and understanding for how important accounting actually is in the context of like the entire world. So, you know, the best way to actually conceptualise this is that if every accountant, and I’m talking about right up and down the end of the book, like the value chain from like book keeping, payroll, accounts receivable, accounts payable, you know, right down to sort of, you know, controllers, C.F.O.s, auditors et cetera, et cetera. If the entire accounting value changes went on strike for a week, the entire war would be brought to a … like to grounding halt.
Chris Hooper: And I think when you think about it from that perspective, it kind of gives you a new-found appreciation for the importance of the work that were we actually do. But I suppose on the flip side, I think both the external sort of world don’t really pay much attention to us as a profession, and I think part of that is because we don’t even hold ourselves in that high regard as a profession. So, I think, yeah, the first step is just really acknowledging how important accounting is in the context of the entire world.
Heather Smith: Yeah, absolutely. I totally buy into what you’re saying there, and that was one of the reasons I went into it because I think it was … it’s the oxygen for the business.
Chris Hooper: Yeah.
Heather Smith: You work with a … are associated with a lot of freelance accountants. Can you unpack for our listeners what a freelance accountant is, and how they actually are able to operate?
Chris Hooper: Yeah. So, I think the first thing to do to is to make the distinction between the sort of two different types of freelance accountant. So, the first one is kind of like the contract accountant, and I’ve met plenty of them through my travels. And they do, you know, either contracts, sort of steer for work. So, they work in one company for an extended period of time. So, six to sort of twelve months, and they’ll just work for that one company. There’s this the busy season contracts as well, which is, you know, you kind of go from like big firm to big firm by simply their busy seasons. So, to give you an example, all the busy season in Australia is kind of that July to September period. You can work July to September, take that time off from October to December, and then end up working for a firm in the United States, working there all the busy season.
Chris Hooper: You’ll be kind of advertising the reporting periods, you know, so it’s June year end versus December year end, and you kind of working really hard for concentrated period of time so that you can take the other half of that time off, you know, from extended period of time. And I know that a lot of accountants are actually like carving out a tremendous lifestyle doing that where they’re basically only working six months of the year. So, that’s kind of first side of freelance accounting. That’s the sort of sub-contractor or 1099 type freelance accountant.
Chris Hooper: The other side is more sort of reminiscent of like the sole practitioners. As everyone … your listeners would actually be sort of familiar with, is traditional sort of sole practise. But I think that notion of sole practise needs to be sort of reconciled back to sole practise in the 21st century in the sort of cloud accounting era, right? So, if I had have asked you to describe what a sole practitioner would look like to twenty years ago, they would have had a small office in a country or suburban town with maybe one or two staff working for them, and so on and so forth. The sole practitioner or freelance accountant in this cloud era is basically laptop, internet connection, you can work from anywhere in the planet, I will take on as many or as little clients as I actually want to, and I would do as much work and basically, I’m in control of the full scope in services I offer, and also at the type of clients that I actually work with. So, you know, those are the two distinctions.
Chris Hooper: I’m obviously much more familiar with the latter description, because obviously Accodex has networked all of those sort of freelance sole practitioners. What a typical day looks like for them is pretty much no different from any other day in public practise. And I think the most important thing is that the time frames, or the time, is always the difference, right? So, if you want to take Wednesday off, yeah, that’s fine, but you know, as long as the work gets done, you know, the work gets done. So, you can swap a Wednesday out with a Saturday and not even have to worry about it. If you wanted to start work on, you know, at 12:00 P.M. and you didn’t have any meetings in the morning that’s fine, yeah, and you might have to stay back a little late. And when I stay back, I mean like staying logged on for a little bit longer. So, it’s location independent, and it’s also not like specifically like 9:00 to 5:00 anchored in terms of time and when the work is done.
Chris Hooper: I think the other distinction to kind of make between the freelance accountants that I actually work with, is that some may not even take on a full world of coins, right? So, I see the distinction in terms of the partners at Accodex is that there’s two types of partners here. We… They got what I call the base mode partner, which I definitely like fell into that sort of like that area when it’s like, “Look, I just want to be able to write my own destiny and work as hard as I want to,” yeah, which for me was like a millionaire was awake, “and I want to pull in as many clients as I can, and I want to build a seven figure client base, and I just want to work my face off,” right?
Chris Hooper: So, I speak to just as many of them, you know, in … at Accodex or talking about joining Accodex. But then also on the other hand, I see the last stop partners, right? Now, the last stop partners aren’t necessarily, “You know, I want to work from a laptop on a beach while sipping, you know, making Mai Tai’s.
Heather Smith: Mai Tai’s
Chris Hooper: Right? Yeah, exactly. You know, it doesn’t necessarily mean that. It means I’m need to sort of make my career, which is accounting, you know, work with the rest of my life, right? And whatever last stop is for that person is what I mean by last stop. So, for some people, it could be like going to a different beach every singe quarter. For other people, it could be like, you know, “I want to volunteer to my community,” or, “I want to spend more time with my kids and work from home.” Like, it doesn’t really matter from our perspective what that actually looks like. So, I mean, that’s kind of what a typical day looks like, and I think the big caveat is like what do you want it to look like? And that’s a shocking question to ask accountants.
Heather Smith: Yeah, absolutely. I think you gave a really amazing description there. I started my career probably as the contract accountant, and that’s a great way, because the recruitment office is just peachy for anything. And it’s a privilege to actually learn and just be thrown in the deep end and go, “Oh, you’re suddenly responsible for this for the next six weeks.” And you just jump around. Really great way to learn, but I probably now sitting in the lifestyle freelance accountant. And we can earn a really good income, and I feel that that message really needs to still get out there to people because I just see people being crushed with the work hours, that beast mentality work hours. I’ve not heard that term before. So, Chris, you are in the first few pages of Google with the title ‘Accounting Futurists.’ Assuming the title of ‘I’m an accounting futurist’ was quite a bold move. What was your thought process behind taking on that title?
Chris Hooper: Well, I’m going to tell you that Google did inform a whole bunch of that. But no prior to that, it was really about my studies and research into the future and into foresight, you know, like number of firms and founders that you’d be familiar with. I got very lucky back in 2010-2011 when I actually started about my firm. You know, I started it with a friend of mine from high school, and we were just going to start a firm that was just going to be a regular accounting firm. And we were making the decisions, the big decisions about what software are we going to use? What service should we get? Et cetera, et cetera. And at the time, we had MYOB that was the incumbent, and we’re looking at accounting office to do all of our tax and statutories, and then by virtue of that to that we’ll open a sort of … we focused on MYOB like desktop products.
Chris Hooper: But on story, and I think … I hope people from MYOB are actually listening to is, when I contacted MYOB, I must have been like lumped with like the worst sales rep. Because it was like, “Oh, startup accounting firm. So, like new accounting practise here, which means like zero and billables. So, we’re going to pick the worst sales rep, and we’re going to give him to you. And after like literally weeks of trying to like follow up and not getting phone calls returned or emails replied to, obviously my mind and I started to wander elsewhere.
Chris Hooper: So, I dived into Google and started looking. And there was this sketchy like New Zealand startup called Xero who when I contacted them, they immediately responded to me. And like they were super excited to talk to me, and like were super excited about what we had planned so the practise and were hyper-responsive. And I don’t know if you remember Xero that far back. It was not that great a product, right? It had bank feeds and a general ledger, and that was about it, right? They didn’t even have payroll, but the thing is it was on the cloud. I was very impressed with the bank feeds. It was on the cloud, and I had an open API I could manoeuvre some stuff with data flowing. But then also, they talked to me about the vision of the product, and where they wanted to take it, right? And that was enough to kind of like buy in.
Chris Hooper: And it was quite funny like, and I’m glad that for the record, I actually posted this on Facebook, I woke up at like 4:00 A.M., you know, in the middle of the night, and like there was just one word in my head which was Xero. And I immediately texted Marcus, who was my business partner, and I said, “We are holding on Xero.” And then I like posted that to Facebook just going, you know, something sounding on “Holding on Xero, and yes I know it’s me to, you know, dream about accounting software.” But I kind of follow my intuition, and we went all in on Xero. And that worked really well for us, as you can imagine, in terms of the efficiency guides, and everything else that kind of fell out the back of that.
Chris Hooper: And I thought to myself around sort of 2015 or 2014 really, when I started thinking about this being great, you know, the first three years in practise had been great. It was good, but it wasn’t sustainable, you know. There is an economic sort of trend called Mimetic Isomorphy https://en.wikipedia.org/wiki/Mimetic_isomorphism, which means the industry in the market converges on the market leader as it were. So, I knew that over time, naturally that every single firm was going to have a certain competitive advantage that we had. But I also realised the value of having that competitive advantage even if it was only for three to five years, in terms of advertising that. And I thought to myself, “If I can predict the future consistently and basically build businesses and build strategy around that model of the future, then I can consistently arbitrage the market, and always ensure that my firm is like five to ten years ahead of every would-be competitor.”
Chris Hooper: And that’s what kind of what led me to starting Foresight, and then yeah, and then in terms of the accounting futurist thing, it’s like “Well, I’ve studied foresight, you know, and just as you study accounting you are an accountant, you know, you study foresight, and you are a futurist, I guess.
Heather Smith: Okay, that’s what you studied, foresight. Foresight.
Chris Hooper: Yeah. So, I mean, it’s a pretty vague and emerging academic discipline. So, it has no way near the amount of rigour, you know, in terms of standards and regulation and stuff like that you’d expect from the accounting profession. But I kind of went to that and then I hit Google, and a lot … You know, because I wanted to learn from people that were futurists in the accounting space. And after spending about half an hour on Google, I found nothing and I went, “Well, I guess if no one else is claiming it, then I’m going to plant a flag on it, and then obviously push out a whole bunch of content in terms of stuff that I had studied and learned, and share that with the rest of the market.” And that’s kind of how that all came about.
Heather Smith: Fantastic. I love that. I love that you identified Google search is a great way of identifying where there are actually gaps in the market. What I also really like, if I jump to what you actually shared there, was your decisions and your thought process around choosing an accounting solution. We, as listeners, will be aware. We currently have about 750 apps sitting in the ecosystem across all of the accounting solutions. And a lot of them … A lot of accountants are freaking out. They keep saying, “There’s so many out there. I can’t choose them. I don’t know which one to choose.”
Heather Smith: And what I heard from you, was you recognised, as I saw as well there wasn’t all the features in Xero. However, what you bought into was great support, and that’s something that I always say. I say, “Look at the support. Don’t look at the solution, look at the support they’re actually offering. Because if you don’t have the support base, you’re going to struggle. Maybe not in the first three months, but somewhere down the line you’re going to struggle if that support base is not there. And look at the vision.” And that was actually something that you pulled out which I haven’t actually thought of, but I kind of think of, “Does it have longevity?” But I guess that perhaps aligns with look at the vision in terms of what the solution is. And I think maybe accountants and bookkeepers can listen to what you said there, and hopefully that helps them in their assessing. They don’t need to know the 12 different inventory solutions. Pick one that you feel aligns with great support. Would you agree with what I pulled out there?
Chris Hooper: Yeah, absolutely. Look, I think it’s support, and then I think, like you said, vision or belief or conviction in the products, right? And I think that was the one thing … The main thing that sold me on Xero was back then, the conviction in the product that I honestly believed that they believed what they were saying, and that was enough for me to kind of like hitch my wagon to their product even though it was in it’s infancy.
Heather Smith: Yeah. And it’s beyond the salesperson’s lingo. It’s that true belief in the solution. And sometimes, I think sort of you and I, we spend a lot of time talking to these apps, breaking down what we’re actually … understanding where they’re actually coming from and where that relationship is going to take. And Clayton Oates calls that a symbiotic relationship, and moving forward with that. So, your focus on predicting the future of the accounting questions. And I have accounting profession. You have focused on predicting the future of the accounting profession. I have a few questions about this.
Heather Smith: Broadly, what do you think the future looks like for accountants?
Chris Hooper: Okay. So, this … You’ve got to unpack that a little bit. So-
Heather Smith: I just wanted to ask you open-ended, let you tell us what you thought about it.
Chris Hooper: Let’s just unpack that because you need to look at it from a few different kind of perspectives. So, in terms of like the … Let’s look at technology, because that’s the easy one, first. This is change is kind of like the only constant, and improvement is also like just a constant there. So, the first thing you need to look at in terms of the future of accounting is just the proliferation of the technology that actually exists on market at the moment.
Chris Hooper: So, we will continue to actually say like cloud technology just proliferate to the market basically, until there is no desktop accounting software. And this is actually why I was talking to you a couple of weeks ago about Europe, and South America, and Africa in terms of one of the leading products over there. And a wide sort of discovery there it’s very desktop-centric. So, the first thing is like, you know, I believe in it … This isn’t a radical prediction. It’s like I know that eventually, every single business on the face of the earth will be on cloud accounting software. Period. End of story. I could’ve said five years ago, and that would have been this radical outlandish statement. I say something like that, and everyone thought, “Yeah. Of course, Chris. Tell me something I don’t know.” Right? But you need to acknowledge that first.
Chris Hooper: I think the other thing that you’ll see in terms of technology is constant improvement. And with that constant improvement comes disruption which is again a played-out sort of cliché word. But I think the way to think about this is the natural sort of like leading, yeah? So, you are talking about the add-on ecosystem before. What will happen is that winners and market leaders will emerge. So, if there’s 10 different inventory apps to pick from, for example, over time you’ll get consolidation and attrition, yeah? So, you get consolidation either through winning more market share and just kind of improving the product so it’s a clear stand out, and then by virtue of that, the further ahead one player gets, the more kind of fall by the wayside, or they’re kind of like acquiring each other and converging into this sort of life that hinders that company.
Chris Hooper: Regardless, the thing that your viewers and listeners need to be aware of is that sort of consolidation and attrition pattern that actually happens in technology, like in technology markets. So, you can expect to see that some more as well. A lot of people talk about sort of like AI and block chain machine learning, natural learning with processing, and all of that sort of stuff. And it’s great to have those conversations, but when you’re looking at the actual proliferation of just cloud accounting, the software we’ve been playing with for almost ten years now, when you look at the global proliferation of that technology, we’re not even at a critical mass yet across the world.
Chris Hooper: So, it’s a bit early to kind of be having that AI, machine learning conversation at this juncture. Absolutely, there are companies working in that space just like there were companies working in cloud accounting in the late ’90s, right? But should you be predicating or you’re in client business around artificial intelligence and machine learning, probably not right now. I think it helps to kind of be aware of that and think, you know, when you’re daydreaming, “How is that going to impact my business?” But I don’t think you need to actually put anything into action.
Chris Hooper: The other thing I wanted to talk about in terms of the future is actually about the future of the labour force. I think that is a huge consideration that a lot of people are talking about or thinking about. So, the first component of the like future of the labour force is that with cloud accounting, the barriers to offshoring have basically vaporised, right? So, 10 to 20 years ago, the big four kind of had a monopoly on offshoring, and that was basically because of technology constraints, right? So, you would need massive amounts of physical server into the structure, you would need a secure channels between your office in New York and your office in Vietnam et cetera, et cetera.
Chris Hooper: Nowadays, the barriers to offshoring have vaporised entirely, and have actually become democratised as well, right? So, it’s not like I can hire someone full time. I can hire someone for three hours to do one specific thing for me, and I can get that turned out within 24 hours by going to upwork.com, and it’s done. So, I can actually build an army of workers or sub-contractors or freelancers, form sites like Freelancer and form Upwork, and I can build that team all across the world, yeah? So, the barriers to offshoring have basically vaporised by virtue of technology. So, that’s something that is actually like an immediate consideration versus AI and machine learning, is that that needs to be considered in terms of the strategy for firms.
Chris Hooper: Another thing in terms of the labour force is really about succession planning and career longevity and that sort of thing. Everyone blames the millennials for this and rightly so, I am one of them and I am definitely guilty of this, is that the millennial generation was really, I think, the first generation on mass to go, “Well, what is the point of all of this? What is the purpose, right? So, if a millennial can’t find true purpose and meaning in their work, it doesn’t matter how much you pay them and how clear the partner track is. If there’s no purpose and meaning in the work, then they’re just not going to be interested in it. And what I’m saying over the last sort of five years, because now the millennials are kind of in their latter 20s and kind of tipping into 30, is that more and more of them are questioning, really, the purpose and meaning of their actual work. And I have these conversations every single day. And, I mean, that’s an important consideration in terms of the future of the labour market.
Chris Hooper: The other thing is about, “Well, why do I have to work full time?” That is a huge consideration. Now, 20 years ago, you had to work full time because the firm had basically rented out office space, and we had an opportunity cost per square metre on that floor space. So, each account has 10 square metres, that’s going to cost us like $4000 a year in floor space. We had a physical server infrastructure. We had a computer on a desk, the desktop cost money, the computer cost money, the server cost money, et cetera, et cetera. So, I needed you in the office at least 40 hours a week to maximise my return on investment, you know, on a square meterage basis, and on a self cost like fixed asset basis.
Chris Hooper: Because we’re sort of moving into this like 100% cloud sort of era, that is no longer a consideration or a reason to justify or rationalise the 9:00 to 5:00. There was a very clear economic argument in the ’90s and earlier. That argument doesn’t exist anymore. And with that, I think millennials were going, “You know what? I would much rather work two days a week, you know, and earn 30 grand than work five days a week and earn like 100 grand.” So, that has to be played into consideration as well in terms of future of that. So, what I’m fully expecting is to be this kind of like mass migration in the labour market. More and more people moving to kind of freelance, to casual, to permanent platform, and I think clients need to consider that in terms of their labour strategy, and I think firms need to start considering that like about now.
Heather Smith: Yeah, absolutely. So, you’re seeing just this mass migration into the freelance world from large practises?
Chris Hooper: Yeah, essentially. Because the whole question is like, “Why do I have to be here 60 hours a week?” And when there’s not a good answer to that question, people start beginning to question everything.
Heather Smith: Everything, yeah. And am I correct in saying, and this is how I would define it, but let’s see if this is the same way you would define it. When I talk about a freelance accountant, they may well have a team of people that they are offshoring or outsourcing … Let’s say outsourcing so it can be in any country, anywhere what to … Do you agree that that’s what you would call a freelance accountant?
Chris Hooper: Yeah, absolutely. I mean, that’s the … do you want to service a million dollars in phase? Well, if you do, then good luck trying to service that all on your own. And again, there is no barrier to that, you know, with all of the BQOs that are kind of like cropping at our counting century. But then also, if you want, if it’s just for a specific project, I can assemble a team in the space of like 30 minutes on Upwork or Freelancer, and then I’m kind of done.
Heather Smith: Yeah, absolutely. Absolutely. And I think that people need to be aware and they should … If they’ve not tried out, like go try out Freelancer or Upwork, or even Fiverr. Fiverr has some great people on it.
Chris Hooper: I’ve used it before. I absolutely love it.
Heather Smith: Absolutely, yeah. Do you think, Chris, that the educational framework is meeting the needs of future accountants, and what is needed without being too leading in final bit?
Chris Hooper: Yeah. So, I mean that the easy answer is no, I don’t think so. It’s natural-
Heather Smith: Which I agree with.
Chris Hooper: Natural truth, act like a bit of a lag time in terms of like what the private sector is doing, and then there’s a lag between what the universities are teaching, and also the responsiveness from government and regulators. So, that’s kind of natural to expect. But I think universities that are kind of thinking about this proactively can actually do very well while there are students. In terms of what’s missing, I think there definitely needs to be a focus on like soft skills and just interpersonal skills. So, communication, leadership, problem solving, and that sort of thing, because I think because I think in order for you to kind of add the most value in the accounting profession, you really need to be client-facing very earlier, much earlier than some of these traditionally espoused in the accounting profession. So, definitely on soft skills. And I think with that, we shall bond a lot with soft skills. It’s kind of this counselling psychology type element as well, because I think the accountant plays just as an important role as technical accountant as they do like guidance-counselor, you know, ‘my coach’ type thing.
Chris Hooper: And I think back can be quite overwhelming for accountants that haven’t been trained or prepared for that, you know. So, I think that accountants need to be equipped with that. Because I think the profession in terms of what you’re exposed to in terms of your client problems, because your job is to fix client problems, yeah? There’s a lot of problems where the accounting, yeah, and then the rest of it is under consideration. So, soft skills over there. And then I think the other one is like hard technical skills. But I think this is cross or multi-disciplinary in terms … It’s like software, business information systems, you know, I think like advanced Excel would be great, right? Because it doesn’t even need to be like products specific. But, you know, if students knew Excel, they knew SQL, and even some just basic programming languages, it has … codings for APIs and stuff like that, it’s going to make their life a lot more easier, and I think it’s almost an expectation of the profession that you kind of have these days.
Chris Hooper: And then I think the other thing is like hard technical skills. So, in Queensland is it called TAFE as well?
Heather Smith: Yes. Yes. We call it TAFE.
Chris Hooper: It must be a national thing. For the international, listeners, that like vocational education.
Heather Smith: Or technical college. A technical college.
Chris Hooper: The technical college, right? I’ve found that people who’ve done like a diploma in accounting, I think it’s called, at TAFE or a technical college versus those that have done a bachelor’s degree or even beyond, the actual production of work in terms of output is better from the vocationally trained TAFE graduates than it is from the university graduates, right? Because in TAFE, your assignment for GST or sales tax is “Prepare this return, yeah?” Like more assignment for income tax is “Prepared this return.” Whereas in university, your assignments for income tax are “Read the Income Tax Assessment Act and then sort of argue all these cases.”
Chris Hooper: So, you’re getting the students come out of the universities and beyond, yeah? And if I’ll lump a shoe box in front of them and say, “Turn this into a touch attendant,” wouldn’t know how to do it. If I did that with somebody who’d gone through TAFE and threw a shoe box in front of them, they would be able to do it, right? I think that would be grateful that they did not have to do it by hand or paper. Because I think that’s still what the TAFE’s are getting them to do. So, I think that hard like outputs centric like top of technical training is super important in terms of what the profession actually wants. It is like great output yields education and training.
Heather Smith: Yeah, absolutely. I think pen and paper T balances still has a place in the education-
Chris Hooper: Absolutely. Absolutely.
Heather Smith: So that they understand the flow. And Amanda Aguillard from the US just put up a whole heap of T balances on Facebook and it looks like oh, we’re all following them. So, it’s still out there and happening, but it helps us understand the flow of what happened. And we would really like to be able to see underlying journal entries in Xero. I’ll just stop there.
Chris Hooper: Yeah.
Heather Smith: Hash tag future requests. What relationship do you think the modern accountant will have with apps, and how do you suggest they prepare for that?
Chris Hooper: Oh, that’s tough, right? That’s actually a really tough question. What relationship will they have with them? I think it probably depends on how much they’re actually being paid in terms of the app vendor. So, obviously, the more revenue that an accountant or accountant firm produces for a specific app, I think the more in-depth the relationship is going to be. So, if you’re sending like 100 grand a year-worth of business there way, then absolutely you’re going to have an account manager, you’ve probably got their mobile number, and you’ll probably have a pretty social relationship with them.
Chris Hooper: If your firm is directing a $1000 a year with of revenue to them, you’ve got a little help button at the top right hand corner of the screen, and you kind of just like fill in a form and then whoever is on the tickets that day is going to get back to you. So, I think the relationship will be determined by how much that firm is actually sending through in business a year. But then also, because you can be sending no money a year, you could be a new customer. So, look at the cross point of the product as well in terms of what their lifetime value, and how much of that lifetime value would they expect to actually get from you. If they don’t expect to get more than a $1000 a year out of you, you can expect that kind of level of service. If they do expect, and it’s like for a week, accountant that are signed on, I get 100 clients, and that 100 clients is worth 100 grand a year, then you can expect that higher level of service.
Chris Hooper: But you bear that in mind with the sort of consolidation and attrition that’s going to take place over the next years, and I think you can kind of expect a more like personable service, you know, because I think that’s going to be what sets the market leaders apart. This is the relationship there. Because the thing I keep saying at all of these conferences is that you can have all of the automation in the entire world, right? But nothing is ever going to actually sever the need for interpersonal communication, right? Ever. And if anything, my hypothesis is the more sort of connected we become, the more we actually actively seek out and crave human and interpersonal interaction. And I think that can be a what sets a SAS vendor apart.
Heather Smith: Yeah, absolutely. Absolutely. It’s interesting you say relationships, because I do find that I seem to be really happy with the solution, and then a particular staff member leaves and I was like, “Oh, I was actually happy with the staff member not the solution.” And now I start looking at where they’ve actually gone to. What are some of your favourite apps that you like to work with perhaps in your business, perhaps with your client businesses.
Chris Hooper: So, we kind of look at like the applications in like three blocks, and this might actually be helpful for you viewers and listeners. So, we look at sort of like first tier apps. And the way to think about this is if you look at distribution chart, yeah, in terms of the distribution across clients, that’s how you think about this pyramid. So, on the first tier, you’ve got the apps pretty much every single customer is using. For us, that is Xero in Australia or QBO in the United States. And then, we’ve got sort of like 99% of our clients in Australia are all Xero. 99% of our clients in America are on QBO. And then you look at the other common denominators.
Chris Hooper: So, we’ve got the Receipt Banks for IP processing and expense processing. So, we’ve got receipt there, and that’s again distribution between sort of the majority of our clients. But I’d say a little less, so maybe like 80%. Because they’ve got some points that we’ve got, you know, like book keeping or ledger files four, they obviously don’t have a significant transaction volume, enough in expenses and IP to even warrant an application like that, but it’s still valid.
Chris Hooper: And then I think the other one is like reporting and analytics. Now, at the moment, we’re hedged in reporting and analytics. I’ve written about this extensively and I’ve talked to the actual, you know, the managers of these companies about the reporting rules. From my perspective, there has not been a clear market leader in terms of reporting and analytics overlays. I know exactly what that we don’t have in terms of feature sets and at the moment, not one single one of them has them, and this is war … this tug of war is kind of like playing out. So, at the moment, we’re kind of like hedging our bets. And the second we find a reporting that actually meets all my criteria, we’re kind of going to just go all in on that, but reporting is another consideration in terms of those ubiquitous apps. Because it doesn’t matter what industry they are in, what size they are in et cetera, et cetera. It’s like these are the core, right?
Chris Hooper: The next layer above that is apps that are ubiquitous but not like essential. So, that can be things like payroll and time keeping apps and so forth. And then like why do the top keeper be industry-specific apps that only work if you’re in this industry, you know? So, you think about like mind and body for health and fitness. You know, you think about Vend for like point of sale, like bricks and mortar retail, you think about, Jeez! What is it? Counter for table service like restaurants and hospitality, et cetera et, cetera. So, that’s going to represent whatever percentage of clients that you’ve actually got in that client base.
Chris Hooper: So, that’s kind of how we look at it, and then our relationship’s kind of like descended accordingly, you know. So, we may have like arguments by maybe 5 or 10% of our clients on Vend, right? And our relationship in terms of with the sales manager, or account manager at Vend is accordingly, right? We have 100% of our Australian followers on Xero, and our relationship is kind of accordingly because I am pretty certain that Xero would make much more money of us than Vend would make. So, that’s kind of how I kind of look at things in terms of the software vendor landscape. In terms of picking out vendors, another thing I actually like to look at is like the sustainability and as opposed to capitalization of that product in terms of the size they maintain, but then also how much life fuel have they got in the tank. Because when that fuel dries up, things can come to a grounding halt, and I think that’s an important consideration particularly if we’re going all in on a specific product.
Heather Smith: Absolutely. Thank you for that analysis, it was very interesting. I’m sure a lot of people would really benefit from that. We really enjoyed this conversation today. I don’t want to keep you for too long. Is there anything else that you’d like to add that would be interesting to our listeners?
Chris Hooper: Not really. I think just … You have to keep your eye on the horizon, because technological change is happening at a quicker pace. So, what was developed ten years ago in terms of that, you thought last decade was asked, you know, just right to your next decade. So, things … change is a constant, and the speed at which things change is also a constant. So, I think every single firm owner and partner needs to consider themselves are a futurist, because, I mean, change and speed are probably the main known variables here. So, you need to keep your eye on the horizon rather than the rear view mirror. And that’s probably the only thing I’ll close with on that.
Heather Smith: Absolutely. Thank you for that. So how can people connect with you, Chris?
Chris Hooper: Look, Twitter is definitely my favourite as you’ve probably gathered. So @Chrishooper87. But then also LinkedIn is probably my second favourite. Those are the only two social media apps that I’ve actually got push notifications on. I don’t even have the other ones on my phone. And email, I’m very sort of pragmatic with. I’ve got a staff member who actually looks through my email and she rehearses it. My Twitter my LinkedIn are the only ones that don’t have a gate keeper in to pause between them, and that I’m actually quite active on because I actually enjoy using them. So, those are the two platforms that people can reach me on.
Heather Smith: Oh, that’s interesting. Thank you very much for sharing that inbox strategy with us, and thank you very much for being on the show. Really appreciate it, and I’m sure our listeners will have learned a lot from this session.
Chris Hooper: Alright, thanks for having me, Heather.