Transcription
Aderson Oliveira: I have spoken with Meryl Johnston. She is the founder of Bean Ninjas, which is a company that provides fixed-fee based bookkeeping services. She talked about the time-saving benefits of working with a bookkeeper for your business. She went through the dynamics of how to work with a bookkeeper and what you should expect out of the engagement. She also said that business owners should get to know more about accounting because it's a fundamental skill that can drive the growth of their business. Have a listen to sharpen your accounting skills.
Hello, hello, Aderson Oliveira here. This is another interview for the OuchSourcing Podcast where I talk to business owners, to specialists, to experts, and to people like you and me that are trying to make the outsourcing process and the outsourcing life better, and today, I have a great guest. Her name is Meryl Johnston, and she is the founder of Bean Ninjas, which is a company that provides fixed-fee bookkeeping services. Meryl, thank you very much for being here. Welcome.
Meryl Johnston: Thanks a lot and thanks for having me.
Aderson: Perfect. First, let me tie this back to the audience of why outsourcing and bookkeeping? Well, if it's not obvious already, Bean Ninjas is providing bookkeeping outsourcing. So, that's the connection. Now, we can ease into our conversation. So, Meryl, let me ask you this. Let's get some background information first. Can you tell us what Bean Ninjas is and how it came about? I mean, give a one to two-minute explanation of how it came about.
Meryl: Sure. Bean Ninjas, as you mentioned, we provide fixed-fee bookkeeping services, and we specialize in Xero, which is our accounting software. The way that it came about was that I was -- so, previously, my background is, as an accountant, I'm a chartered accountant, and prior to Bean Ninjas, I had done my time working in a big accounting firm, I'd worked in commerce, and then decided that I'd had enough of the long hours, and I wanted more time to surf and travel, and so started an accounting consulting business.
That was called MCJ Consulting, and that was back in 2013, and I was doing project-based accounting work there, so implementing accounting systems, and I was generally working with larger clients. They had 100+ employees. It was a chunky kind of project work where my cash flow was up and down, and it was quite difficult to scale a team around that kind of project work.
Bean Ninjas came about when I looked at what I considered the floors in my consulting business model and looked at the type of business that I wanted to run, which was a business that had recurring revenue where we were doing regular work every month and where we could create processes and build a team around that so that I could still have a bit of time to surf and do that work remotely from anywhere in the world.
Bean Ninjas was engineered around what I wanted out of a business. I've not achieved that my first time around, and I joined forces with another account called Ben, and so we launched Bean Ninjas together back in July 2015. About 18 months in, I actually bought Ben out of the business and he went on to do virtual CFO-type work, so he has a business doing that, and now I run Bean Ninjas as the sole founder, and also a lot of the team has continued on.
That's a bit of background about how we got started, and now Bean Ninjas is two years old, or just over two years old.
Aderson: I'm going to start by covering something basic. I know the difference, but I want everyone to know the difference as well. What is the difference between an accountant and a bookkeeper? Tell me?
Meryl: We get asked that question all the time, and I am an accountant, and a lot of people in our team are accountants, but the service we provide is bookkeeping. There's a couple of different types of accountants. Normally, if you ask someone, "What does an accountant do?" the typical answer is that they will file taxes. So, personal income tax or for business, and they might help with advice around what type of business structure to use, or asset protection, or to minimize tax, and that's typically what an accountant will do.
Now, there's a couple of other types of accountants. So, there's management accountants which help businesses improve performance by looking at data within the business. So, they might help with things like putting together a cashflow forecast, or putting together a budget so then you can track your performance against how you were expecting to perform. Management accountants, with businesses this size, we probably interact with. A lot of businesses would be aiming to work with someone like a virtual CFO who is helping to improve the performance of the business, whereas the tax accountant will assist with making sure that you're meeting your compliance deadlines and paying the optimal, or the minimal amount of tax.
Where a bookkeeper fits in with this picture is that bookkeepers are responsible for making sure that all of the data is entered accurately in the accounting system. So, bookkeepers will often have a lot more knowledge than accountants around how to use particular accounting software because they're in there day-in, day-out entering transactions, and will also have knowledge around how to integrate different systems. So, Xero and QuickBooks Online, I know Xero has about 500 other add-ons that can be integrated.
So, some accountants will have knowledge about that, but often, it will be the bookkeeper who's doing the day-to-day transactions that we'll know how to set up as integrations, and then each day, make sure that the accounting records are kept up-to-date and accurate, and then the accountant will then use that information either for tax purposes or to improve performance of the business.
Aderson: I'm going to go here to my case, I'm going to ask for a one-on-one consultation here a little bit. I have a tax accountant. She does not do my bookkeeping; I do my bookkeeping. What would you tell me that I'm missing out on?
Meryl: It's quite common. In terms of a financial team life cycle, the most common team, initially, would be a business owner who would have an accountant who helps with tax and then they would do their own bookkeeping. That can work, but as a business grows -- there's a couple of factors about when you would outsource bookkeeping. One is the value of your time. So, as the business grows, you as a business owner, your time is probably -- a lot of people can see that bookkeeping is a lower-value task than something like sales or talking to customers. So, as your business grows, it makes sense for you, as the business owner, to outsource some of those lower-value tasks, and so bookkeeping is often one of those first tasks that are outsourced so that you can free up more of your time.
But, with something like bookkeeping, you're providing access to financial information, so often as a business owner, you want to keep that information separate. You might not want to share that with the rest of your team, which is why it sometimes makes sense to outsource that outside of the business rather than having a team member look after the bookkeeping.
If I was having a conversation with you, we'd look at, "What are your requirements at the moment, how long does the bookkeeping take you, and are you optimizing it, so are you getting the information out of the accounting system that you need?" because it's one thing to allocate all of the transactions, but it's another to have it structured, to have the chartered account structured in a way that's giving you information that's useful so that you can track different profit margins or track different overhead expenses, and then make decisions about that.
Aderson: The reason why I ask is I know the benefits and I have a good friend that just hired a bookkeeper, and according to him, now, he walks away from everything text-related, and the bookkeeper, actually, is the one dealing with the accountant directly.
Meryl: Yes, and that's how it should work. That's how we like to work too. Bookkeeping, it can be quite stressful, especially if you don't have a background in tax or accounting. Knowing that you have these deadlines to meet and that you'll be fined if you don't meet those deadlines. So, it is nice knowing that someone else is taking care of that, and that the bookkeeper -- this is how it should work: the bookkeeper should be liaising the tax accountant, and the accountant should be asking questions from the bookkeeper first rather than bothering the business owner so that everything's getting sorted out and filed, or lodged, depending on their country, and then the business owner knows that it's done, and they can focus on growing their business.
Aderson: When I first landed on your site, I said, "I need that. I need that for me," and I keep outsourcing more and more things on my business, in my life as well. So, I said, "I need that." But, I found a problem. The problem is that you guys are only supporting Xero. How come? How comes no QuickBooks? Come on, tell me.
Meryl: That's an interesting question, and a question that we're asked all the time. I am Australian and we started as an Australian business, so Xero is very popular in Australia. But, now about 30% of our client base is in the U.S. and Canada. QuickBooks is very big in the U.S., and so we're often asked that question.
This was actually a decision that we made when we launched the business two years ago, because there's a whole range of different accounting software out there, and we wanted to streamline our business and be the experts in one piece of software. So, all of our team, we focused a lot of time on training and trying to stay at the forefront of what's happening in the industry, and it's very hard to do that, and we were trying to do that across multiple pieces of the software, because they can work quite differently.
Before we started, we actually did quite detailed analysis of what we considered the top three accounting software tools available for the type of clients that we work with, which are small online businesses. I say small, so a turnover of between 100,000 and up to a couple of million dollars, and at that time, when we did the analysis, we went through the sales process, bills, payroll, reporting, integrations available, the number of bank feds. When we did that analysis, at that time, we thought that Xero was the best tool for the type of clients that we wanted to work with.
Occasionally, there are exceptions to that, so if someone's using Infusionsoft, there's a better integration with QuickBooks Online than there is with Xero. So, there are exceptions to that, and if we do a scoping call with someone and they want something where QuickBooks is a better option, then we'll say that, "QuickBooks will suit you better," and then we'll refer them to another bookkeeper, and that's part of our bigger version of having a niche and doing something really well, because bookkeeping is a pretty big market. So, we've made a decision to focus on Xero, focus on online businesses like e-commerce and concentrate on doing just that one thing really well.
Aderson: What I'm reading there is there's an opportunity to have Bean Ninjas for QuickBooks, maybe.
Meryl: Yes, absolutely. It's very hard. We'll either get customers that come to us that would sign up if there was QuickBooks, and a couple times, we've thought about whether we should branch into QuickBooks as well, but we always come back to our purpose and our concept of having defined processes that everyone in the team can follow, and it's easy to train new accountants or new bookkeepers. So, we come back to that and always make the decision that, "No, we're going to stick with Xero and be experts in that," and that's actually paid off. Earlier this week, we were actually announced as Xero's regional bookkeeping partner for Queensland, Australia. We won that award just a couple of days ago actually.
Aderson: Congrats.
Meryl: Yeah, very proud.
Aderson: I truly believe in focus. I mean, what you're talking about is focus, and that's fine. It's hard in the beginning, but once you make that commitment, it's just easy to check, "Hey, does this go against our core differentiators? Yes or no? Yes? Great, we just walk away and we don't look back." I'm all for it; I'm all for focus. Let me ask you this, Meryl, can you give me a bit of the feeling of how it is to work with a bookkeeper? Because, I've been running my business for 10 years now, I don't have a bookkeeper. I tend to, but I would like to have a little preview of how does it feel like working with a bookkeeper? Is that something that we do daily, weekly, monthly? What is the flow? Tell me a little bit about that.
Meryl: It probably depends on the size of the business and how often they need information. With our larger businesses, we are in there reconciling transactions a couple of times a week, and then they can run reports, and we all often send them reports on a weekly basis. But, it is more expensive to do bookkeeping at that frequency. It's usually only larger businesses that actually need those reports and want to make decisions that will do that.
For smaller businesses, it's often done on a monthly basis. Although, we do try and encourage compliance, as their business grows, to start keeping on top of everything weekly, just having a set day where we do the bookkeeping. We'll send over a couple of questions about transactions that we haven't seen before, or suppliers we haven't seen before.
But, generally, working with a bookkeeper, you would agree on a frequency, and that's usually weekly or monthly, and for some people, it's daily, but that's not the norm. Usually, you would argue there'd be a scoping process up front to talk about what kind of reports would be useful for you as a business owner, and then the chartered accountants. For the chartered accounts, it's the account codes that you use, so if you're wanting to track different sales categories, then you would have a different account for each sales category, and the same with expenses. So, it's important to agree on that up front and then also discuss what types of transactions.
That's usually something that the bookkeeper would present back to a business owner to say, "Well, we have an account code called software costs, and our standard is to code Google, Dropbox, a whole range of Help Scout," we generally would code to that account code so that the business owner knows, when they're looking at their reports and something's spiked up in a particular month that they weren't expecting, they'll know what should be in there and then can investigate why it has gone up or down.
That's how the relationship would start initially, and over time, bookkeepers get familiar with the types of suppliers, the type of transactions that come through. So, there might be some questions that, initially, at the beginning of the relationship to understand who suppliers are and what particular costs are, and over time, that number of questions would reduce.
So, the goal is, eventually, that the bookkeeper who had enough of an understanding of the business that they can go and code or reconcile all of the transactions and just present a set of reports to the business owner each month where they can just have a look on their phone wherever they're out and about and see what's happened and trends between particular months.
Aderson: When you say "reconcile", does that mean, also, the time of entering -- if there is anything manual to be done there, is that done, as you said, for small to mid-sized business, that's usually done once a month. So, once a month, the bookkeepers sit down and reconcile everything, it does the work in a single shot. Is that how it happens?
Meryl: When I say small to mid-sized, let me rephrase. I say that it would be a freelancer would probably do it once a month -- so, a business that's getting out to maybe $300,000, anything more than that and they have a couple of staff, then we'd definitely be trying to get them to do the reconciliations weekly, just because the volume of transactions would be higher and it just gets everyone in a good, consistent routine.
As a business grows, we recommend that, rather than the business owner being the point of contact for questions that they have an assistant who the bookkeeper can liaise directly with the assistant for copies of receipts or questions about transactions. Because, the whole point of the exercise of outsourcing is to free up the business owner's time. So, that's how we like to work. A freelancer or a consultant may not have an assistant, in which case, we'd work directly with them. But, as a business grows and they're hiring staff, we recommend working directly with the assistant to answer questions with the reports going to the business owner.
Aderson: Okay, so let's talk a little bit, Meryl -- let's move to your team. Let's move to your organization, your team, how you are growing the organization, because I would assume that you are hiring people all over the globe. Actually, first of all, let me ask you which markets are you attained to at this point in time?
Meryl: We have clients in the U.S., Canada, the UK, Australia, and Hong Kong. We don't actually promote that we -- we don't say Hong Kong on our website, but we get referrals there occasionally, so we've got a couple of clients there too. But, majority of our clients are in Australia and the U.S., and then we have local bookkeepers in each of those countries. The local bookkeepers manage the relationships, and they have an understanding of country-specific laws like GST in Australia, or sales tax in the U.S., and then we also are slowly building a team in the Philippines.
Aderson: The ones that you have, because in a way, you also outsource. Because you work with people all over the globe, I can imagine that some are full-timers, some are part-timers, correct?
Meryl: Yes. I was just going to say the staffing mix has changed over the first few years. When we actually started the business, I spent some time, I spent about a month in India, and was trying to build a team to do all the bookkeeping with a team of chartered accountants in India, and that's the direction that the accounting industry was moving, but I've learned a really valuable lesson from that.
Because we were such a new business and we didn't have to find processes, that didn't work for us. So, after a couple of months, we are very scrapped working with the team in India, and then went to local bookkeepers. Because, our number one priority was to give a good experience to the client, and part of that is about accurate bookkeeping. The part of that is being easy to communicate with.
That was when we realized that local bookkeepers would provide a better experience, and only once we've improved our systems and then a local bookkeeper could manage someone somewhere like the Philippines to handle some of the processing, but not impact the client experience, then we could go down that path.
We're actually only now two years now. We just recently got our first full-time staff member in the Philippines. So, that was quite an interesting lesson for us, because I followed what I thought was happening in the industry. Oh, everyone's getting teams in India, or Philippines, or other lower-cost country. But, the lesson for me was that you need to have processes and other strong people in the business first before outsourcing to a country like them.
Aderson: Let me explore that topic a little bit more that you just mentioned there, Meryl. Because I hear that quite a lot and I like to see different perspective on the subject, what were some of the challenges, let's put it this way, that you had when you experienced doing with India, and now with the Philippines? But, again, back then with India, what were some of the challenges that you had there?
Meryl: Because we didn't have defined processes, there was a lot of time spent going backwards and forwards explaining tasks, and then I felt -- because I wanted clients to have a good experience, I was reviewing every email that went out. So, I wasn't actually saving much time, and in fact, it was probably taking longer. But, I realized that that was my fault because we didn't have proper processes, whereas now we have checklists, and we have a whole lot of notes, and a handover process from the team that do the scoping call with the client to the team that are doing ongoing deliveries. So, there's a whole lot of steps and we've been refining it over two years.
I think there's probably two challenges. One was the lack of processes and the lack of training that we provided to the staff in India, and then the other was the communication skills. Because we were only communicating by email too, there was probably some things that were getting lost in translation, which made a lot of backwards and forwards between me and the team, and also me needing to review everything. So, it actually slowed business growth because if we had hired local staff earlier, then they could have run with client relationships sooner, which meant that Ben and I could have focused on growing the business rather than on doing nitty gritty with our client work.
Aderson: What you're telling me is that, yes, it works fine with Philippines or with India as long as you have strong processes in place that people can follow them? Is that where I'm getting?
Meryl: It is, and so now, we've got a great staff member in the Philippines, and she is excellent at following processes, has a high attention to detail and a really good attitude. But, she wouldn't necessarily have the skill set to create the process. So, I feel like there's two different people, or possibly more, that someone has a different skill set in creating a process and solving all of those problems as it is to following it. So, either you as the founder need to create those processes or hire someone to create those processes, and then train other people.
Aderson: Out of curiosity, and of course, everything here is out of curiosity, how do you go about finding people, local people in the different countries, in the U.S., in Canada, in the UK, Australia? I know that you are from Australia, but in the other countries, how do you go about finding them?
Meryl: It's generally all been through networks. Our first U.S. and UK staff member were both recommended to us through networks that we had. Our third international staff member had heard me interviewed on a podcast that was pitched at accounting firm owners, and he approached Bean Ninjas. Our early hires, we did have to put ads out on job websites in Australian sea, and also on LinkedIn to find staff. But, now, most of our staff come to us -- they either approach Bean Ninjas because they'd like to work -- I think Bean Ninja's a bit different to a typical accounting firm, or they're friends with someone that works here, or they're connected to us in some way.
In the early days, it was the traditional job channels, and then we actually had one of our strategies was a Facebook ad of me working at an island surfer, because it's a remote role, so we actually ran Facebook ads to that, and that actually created a lot of interest. We actually got a couple clients out of that. That was our only successful Facebook ads campaign, and it wasn't even targeted at clients. It was actually about hiring staff.
Aderson: Let's talk a little bit more now about your clients. You mentioned briefly that you focus usually on the online entrepreneur, on the online type of businesses. Is that the only one? Talk to me a little bit about your client profile.
Meryl: Working with online businesses, that evolved. So, when we first launched Bean Ninjas, we just wanted to work with anyone. We were working with all kinds of clients from trades made in cafes, online businesses, and it was only about six months in where we sat down and didn't exercise, and looked at a whole range of factors to try and work out, "Well, who is our ideal client?" and then what we wanted to do from that is then to work out how to market to that ideal client.
But, the first exercise was working out, "Well, who are we the best people," and so we looked at which customers were having the best experience with us, who was actually loving working with Bean Ninjas, and then which were our most profitable clients. So, we had set up tracking within Xero so that we could track margins on each client so we were able to get some trends around different industries to see which clients were unprofitable and which industries were good to work with, and then we looked at who did we enjoy working with.
As a remote business ourselves, we find that we liked working with other businesses where we could work remotely, so where a team member didn't need to be on site at a particular cafe or location. So, they were the three factors we used to look at our ideal clients, and online businesses are still quite broad. So, within that, we then had specialized in a couple of segments within that, which was e-commerce. Again, that just happened naturally. We've started with a few e-commerce clients, and then it's a bit of a specialized area of bookkeeping.
That evolved from there, and then some software as a service-type businesses where they're developing software and selling it, and then also quite a lot of consultants and coaches. So, someone that was an expert in something, and then they've written a book, they had a podcast, they're professional speakers. We've worked with quite a lot of people like that, and quite a few had membership sides as well. So, it was partly it evolved and partly, we actively thought about who we want to have fun with who we're working with. We want to enjoy each day and the people that we're interacting with. So, that was actually quite a big factor too.
Aderson: I'm from Toronto, Canada. If I look here locally, it's hard to find an accountant or a bookkeeper that has experience dealing with well-aligned type of businesses, so it's very fresh to hear that this is your soul, most of your focus goes towards that audience, you know?
Meryl: Yes.
Aderson: Meryl, one of the ways that we learn as people, as these owners is by problems, facing problems, facing roadblocks, facing mistakes, and facing, what I call, horror stories. I know that you have horror stories there. I don't know if you are willing to share some of those with us. Feel free to share a horror story. It might be dealing with a client, it might be dealing with a provider of outsourcing works somewhere else. But, tell us a little horror story and what were the lessons that you learned out of that story.
Meryl: Probably the biggest event and the biggest challenge that we had within Bean Ninjas was actually the business partnership and me buying out my business partner. I wouldn't call it a horror story because it all worked out for the best, but that was probably the most challenging experience of me in the business.
Ben and I, we were equal partners and co-founders in Bean Ninjas, and about a year in, we realized that we wanted to take the business in different directions. So, Ben had a young family to support, so he had more fun than actual commitments than I did, and also, maybe, more risk-averse, so I wanted to grow faster -- he had a family, so that was probably a major consideration and the kind of risks that he would take.
Over time, we realized that we're getting frustrated with each other and the way that we're working. I didn't have a family, so I was willing and able to work 60 hours a week if I needed to do, whereas Ben had another business which he needed to work in to earn enough to support his family, so he wasn't able to work or put in the same number of hours that I put with Bean Ninjas, but also didn't have the same growth admissions that I did.
We also had different management styles, and one of the mistakes that we made early on, because we had similar skill sets, both being accountants, we ended up doing a lot of the same roles. So, we could both do sales, we could both do the bookkeeping work, we could both manage staff, we could both write blog posts. At the beginning, each of us was doing a bit of everything.
We did work that issue out over time, and then we created separate roles. I was responsible for marketing and business development, and then Ben was responsible for managing the team and service delivery. But, again, we had another mismatch because I was being really active in growing the business and bringing clients and wanted to go faster, then Ben was responsible for the service delivery. So, I was bringing in more clients than we could handle.
Again, that caused some issues, and there was a period more than a year ago where some of our service standards dropped because we were taking on too many clients at once. That was really challenging because we wanted to grow. But, for us, the number one source of new business was referrals, because our number one goal was to do good work and give clients a good experience, and we had a couple of clients that were unhappy and leave. We hadn't really had that before. We'd have clients leave because changes happened within their business and they didn't need us, but not because we've done poor work.
That was really difficult for both of us to handle, and we learned from that and put processes in place. But, as an equal business partner, it's very difficult. You don't want to manage your business partner. I felt like I needed to back up and support them as well. If he was going to make decisions for the team, then I needed to be there backing him up, not having a different opinion, because as a leadership team, we needed to have a united front. I felt like we needed to make changes in the operational part of the business, but also I felt like I couldn't give instruction to an equal business partner, so I needed to persuade him, and that's where we started to have those conversations, which are difficult conversations to have.
That's when we both realized, "Okay, maybe we are actually wanting to go in different directions. Maybe we are better with one of us buying the other out, and then we went through a whole process of working out how to come up with the deal and putting a contract in place. How do we make this not impact clients and impact any of our staff?" So, that was a huge project to actually take that from the initial conversations that, "Maybe we're not right as equal business partners," to actually, "How do we actually make this happen?" and for me to buy Ben out, and then that transition plan.
I'd say that's the biggest challenge that I've faced in founding Bean Ninjas, but I'm really happy with how it's worked out. Ben, we actually still have a really good relationship, and he's the tax accountant and does virtual CFO work for a lot of Bean Ninjas clients. I feel quite proud, actually, that through that difficult situation, we're able to come out the other side and negotiate it without lawyers and still now be able to refer work to each other and still have that good relationship.
Aderson: Thank you very much for being that open. I'm sure that it was not a horror story, as you said, but a tough story.
Meryl: I should add, at the beginning, we didn't feel comfortable talking about it, but then Ben and I have done a podcast interview together that was called "The Breakup", and so we both talked about our experience. So, that's why I feel comfortable talking about it now.
Aderson: In hindsight now, Meryl, when you look back, what would you have done differently? Maybe it's not going in business with a 50-50 partner, but what could have been done differently? If you want to go with a partner, what could have been done differently?
Meryl: Good question. If I had my time again, I probably still would have had the business partner. Maybe, we would have structured the agreement differently, but I don't feel like the business would have grown so quickly if I didn't have a business partner, so I probably still would do that. But, maybe, I think, in hindsight, we should have had a separation between ownership and the wages that we were paid, because our contributions were quite different. So, that is something that we should have done differently.
We've made lots of mistakes along the way, but I think it's all of those things that you learn from. So, we've made mistakes around not hiring early enough that we've made that mistake a couple of times. So, then the team is really busy in hiring. Our hiring process takes about four to six weeks by the time we do rounds of interviews, and skills tests, reference checks, police checks. So, that takes a period of six weeks, and then it takes about two months to have someone trained on all of our systems and running effectively. So, that's quite a long lead time. It's hard to get that right in terms of flagging three months early that now is the time to start that hiring process when you don't need them quite yet. I'd say that's probably the most common mistake that we've had is around staffing.
Aderson: Let's talk a little bit more about -- we are almost towards the end here, but let me ask you this. How do you define success to your clients? I mean, you have your portfolio of clients. How do you say, "Hey, this is working very well for this client and that client," how do you define success from their perspective?
Meryl: If I put myself in that client's shoes and think about what they want from a bookkeeper. I think they want peace of mind. They want to know that all of their deadlines are being met without them needing to drive it. They want someone contacting them about upcoming sales tax deadlines or whatever it is. So, peace of mind that someone else is driving and taking ownership of that process. They want as little input from them as possible. So, they want someone on the other end that's being proactive. We've been successful, we've been proactive in being able to answer most of our own questions and set up processes internally and use technology so that, rather than asking questions, we'll use a tool like Receipt Bank so that the business owner can take photographs of receipts when they're out so it's very easy for them.
If we've saved the business owner time, and it's been successful, then the last one is if the business owner is receiving reports that are helping them to drive their business forward. It's not enough just to receive reports and not understand them. We want everyone to understand the reports they're receiving, and then be able to use those reports to make decisions.
Decisions like they might have too high a percentage of admin staff if they're a service business, their admin staff percentage is too high compared to their delivery staff, or their overheads are too high compared to where their sales are at the moment and they need to cut something back. So, having the information to make decisions like that, and part of that is about accurate reports, but the other part is understanding them. So, we try and take the time to talk with any new clients the first time they get a set of reports to make sure that they actually make sense.
Aderson: What you're saying is that it's not only data collection that you're providing - I mean, data collection, data categorization - you are actually analyzing the data on clients' behalf as well? Is that what I'm getting here, a little bit?
Meryl: We don't actually do the analysis. For a couple of large clients that are on custom packages we do - my skill set is on that kind of analysis - we can do it, but that's not necessarily something that we sell in our big scheme packages. So, usually we recommend either the business owner develops those skills in a certain way and books to read so you can develop those skills, or that they hire a virtual CFO that does the analysis. But, we can collect the data and present it in a way that it's easy to do that analysis. But, it requires a certain understanding of industries and also accounting knowledge to be able to do that analysis.
Aderson: That answers the question. Thank you for that. Meryl, if there is one thing here that you'd like people to leave this conversation knowing about - it might be about bookkeeping, it might be about outsourcing, it might be about something else - is there any one thing that you want people to leave this conversation knowing?
Meryl: I think it probably should be a bookkeeping tip, because that's my area of expertise, and my tip would be for business owners to invest in their own knowledge around accounting. I think it's a fundamental skill and will drive success in your business. It's good to outsource the processing, but I think every business owner should have an understanding of what a profit and loss statement is, what a balance sheet is, how to interpret what they mean, and also be aware of things like what a cash flow forecast is. Even if they're not creating it themselves, at least know what it is and that it might be relevant for their business at some point in the future.
So, business owner knowledge and the other would be move to cloud accounting software as soon you can. It's difficult once your business is established to change accounting software, and it's a pain moving from even something like spreadsheets, and you can save a lot of time. The cost of the accounting software, I'm sure you'd save at least an hour or two every month, and your hourly rate, as a business owner, would be worth more than the cost of the software. So, I would encourage everyone to get Xero or QuickBooks Online, start it as soon as possible, and start building your accounting processes. One day, when your business grows big enough, you might want to outsource it.
Aderson: Love it, and I might as well consider changing to an accountant that supports Xero maybe at some point.
Meryl: Yeah, it's great software.
Aderson: Meryl, again, thank you very much for your time here. Before I let you go, I would like you to tell people how they can reach out to you, how they can contact you via the website, via social, whatever you like. Please go for it.
Meryl: Our website is BeanNinjas.com. If you wanted to connect with me, I'm on Twitter, Meryl Johnston. We can maybe put a link to that, and the website's, probably, you'll get the fastest reply from me.
Aderson: As usual, all links will be posted in the show notes of this interview. So, again, Meryl, thank you very much for your time, for your expertise, for sharing your knowledge in bookkeeping, for preaching about Xero as well. I'm going to consider that heavily now, and thank you for your time, and hope to catch up to you at some point in the near future. Thank you, bye.
Meryl: Thanks a lot.