Alastair set up flinder three years ago with his business partner Luke Streeter:
“Luke and I worked together at PwC for a few years. We worked well together, shared the same values and saw a different way that accounting firms could function. We saw a different service appetite from fast-growth businesses, and what they wanted from an advisor. They wanted something that wasn’t being offered and we saw a big gap there and so jumped ship from PwC just under three years ago to set up flinder.”
Clearly Alastair and Luke must be doing something right having won a few awards this year but it’s been no overnight success:
“We set up flinder with no clients three years ago and, whilst it appeared as an overnight success, it actually took almost ten years to build up to that success. Whilst it appeared quite quick, you’ve got to strip it back and look at the careers that Luke and I had and what brought us to this point – this magical moment of us working together. You could call us a small-medium-sized practice (SMP), and whilst we do work with SMEs and fast-growth businesses, some of the experience we have is very different to many of the SMEs we work with. I worked for six years in consulting focusing on finance function excellence, building shared service centres and optimising the way a global finance team balances the delivery of the competing demands of transactional processing, control and insight. We are taking the experience we have developed, shrinking it down and making those principles relevant for small businesses. At the end of the day, a finance function still needs to process transactions efficiently, be well controlled and have strong governance regardless of its size.”
We are seeing more and more Finance Directors and CFOs coming from industry and setting up in practice with a fresh pair of eyes. They’re using technology and cloud in their current employment, but now they can deliver that experience to a larger client base:
“We’re seeing more diverse backgrounds coming into develop practices, and we’re seeing a lot of people that might have been a Finance Director or people that have worked in industry setting up a practice based on this higher value-add that a Finance Director or a CFO can bring to the strategic insight. Technology has made that possible – go back ten years and many of the processes would be manual. Technology has now made it possible for small businesses to get that insight that was never previously delivered. I see those coming from an industry background as one of the larger threats to our business and the scale we want to get to, rather than a traditional practice trying to become Cloud-enabled or a fully digital practice, because they’re the ones that can add real value to businesses.”
It feels like you guys are starting to get some incredible traction in the UK market. Are you able to give us any idea around the kind of growth you’ve had, over the last couple of years?
“So, we started with just me and Luke and after about six months we hired our first team member, Chris. Chris isn’t an Accountant, he’s a Data Engineer, and that’s the importance we place on leveraging data. In this new world, it is the power of data and what we can, in turn, deliver back to the business through harnessing this data across the entire business, not just focusing on the financials.
We hired Maryna very quickly after that so after 15 months we were four people. Fast forward to today, where in the last 15 months, we’ve hired about 15 people – one a month, which, for a service business that is non-equity backed, is a pretty fast pace. By the end of 2020, we probably want to get to about 32 people, I would have thought. In terms of revenue, last year we saw 150% growth and this year has been about 250%, and next year we want to double our revenues.”
It is quite unusual to find a data engineer in an accountancy practice, so we asked Alastair what was the thinking behind bringing one into flinder:
“It’s very easy to use different off-the-shelf applications in a business: there will be a finance system, like Xero, QuickBooks or Sage; a CRM system; and an e-commerce system or EPOS system like Shopify. Small businesses are very easily, literally at the click of a button, using new, different, best of breed applications rather than an ERP system, because for the SMEs, that’s not relevant.
They are housing data about their operations: people from an HR system; the number of customers, sales and time of day from an EPOS system or an e-commerce system; and obviously a finance system. Some of them talk to each other badly, some of them talk to each other a bit better, some of them don’t talk to each other at all.
We want to stitch the data together, because then it becomes a more efficient, seamless, one point of entry and one version of the truth. However, the most powerful thing you can do with this data, is to understand what’s going on in the business. We’re all about the why, so you can make much better and more informed decisions from that why, or interventions, going forward.”
“The most powerful thing you can do with this data, is to understand what’s going on in the business. We’re all about the why, so you can make much better and more informed decisions from that why, or interventions, going forward.”
Given this is quite a new concept for accountants and stretches beyond the traditional finance data world, we asked Alastair for an example of this in practice:
“From a finance system, you can see if your revenue’s gone up or down – it tells you what’s happened, but it doesn’t tell you why it happened. The why is “How many customers have I had? In which country? How many sales has a particular Sales Agent made?” Those sorts of things are the why, and that comes from different applications than the finance system. Our idea about data is that we can add much more value to our clients by enriching the finance story with the colour of non-financial information, playing it back to the client with our interpretation and helping them make sound business decisions. That’s what I see as the future in this domain, whether it’s accounting or business advisory or whatever you want to call it – and accounting is way behind the curve, compared to other industries.”
Our idea around the Digital Accountancy Show that we’re putting on next March and through this magazine, is to help the industry understand what’s achievable through the use of data, and how we can help our clients and provide insight like never before. We asked Alastair for an example of where flinder has helped clients to bring all this data together:
“An easy example for people to relate to is a retailer, because it’s quite tangible – there’s a physical thing there, everybody buys something from a retailer. One of our clients is a retailer with an omni-channel presence, so they have a store, they have trade, they have e-commerce. They want to understand how each of those business units are performing so we’ve got their P&L segmented by those three different areas, but that only tells us what’s happened, it doesn’t tell us why it happened.
We need to understand footfall and traffic so: for e-commerce we’re bringing in Google Analytics; for the store we’re bringing in footfall; and for trade we’re bringing in number of opportunities. Then we’re looking at conversion rates for each of those as well: for e-commerce it’s the web traffic conversion to a customer purchasing; for the store it’s footfall compared to how many people have actually purchased something which you can see from their EPOS system; and for trade, the number of opportunities that have converted into an actual client.
Straight away they can start understanding a bit more richness about what’s going on in their business and they can look at conversion rates. They can look at average order values (AOV) versus budget, they can see what’s going on this month versus last month or this week versus last week.
If you buy something on Amazon you see recommendations of what other people have bought. If you’re putting higher value product placements at the checkout, then the temptation is that someone’s going to buy a higher value product, so your overall average order value is going to be higher. Understanding what your AOV is can help inform how you position product and manage that whole customer journey. That can give reasons and rationale as to why your revenue’s gone up or down, and how you can make interventions for subsequent months to increase your average order value and your revenue.”
This is a very different approach to managing and integrating data than many in the accountancy industry will be used to and we were curious as to how flinder was delivering that approach and whether they have had to train their team to deliver that insight to their clients.
“We’ve got big visions and plans for flinder and, for it to be a scalable solution and a scalable business, it can’t be just me and Luke so it needs to be filtered down into the team. All our team members are mapped to our values in our business and that’s why they’re brilliant flinder people. But of course, the way we’re doing things is different to other accounting firms, other advisory firms and other coaches, so we need to trickle down the flinder way of doing things and train people in that. We are developing at pace so we are implementing “lunch and learns” and developing learning and development programmes around that. It is about sharing experiences with our people, how to talk to clients, how to strip back and break it down between finance and non-finance, conversations and datasets and business drivers and all those sorts of things. So there absolutely is an element of training needed for the wider team.
There are two parts to this: we have very rich data and we have very deep relationships with our clients. We are very present in the Board and they seek our opinion to influence their strategy. That’s really, really fundamental and important to us to be as deep as that with our clients, so we can really help them and add value. We do some of that via the face-to-face relationship where we are translating what we see into insight and challenging and helping direct that strategy.
The other side is that we build dashboards for our clients, based on heterogeneous data sources so that they can have that rich intelligence, and with some clients, it’s up to them to make sound decisions.”
So, we have hand holding relationships with some clients and others it’s more like a SaaS business than anything else. Our solutions are very bespoke and tailored to our client’s business, their pain points and to their strategy, so that they can answer the right questions for themselves. We provide it in a way that’s relevant for them and user-friendly, so they can absorb it as easy as possible.”
One of the reasons why a lot of Accountants are nervous about entering this space is because they don’t know how to deliver that joined up information and that insight and how to have that type of conversation.
“I recently gave a talk ‘How to Be a Kick-Ass CFO’ at Mercedes-Benz World on our view of management information. The audience included CFOs and FDs and afterwards they were saying, ‘This is brilliant, you have the best job ever, how can I do what you’re doing?’ rather than, ‘Oh, can you come and help me?’. That was a little bit interesting but it’s not an overnight thing. Some of what we talk about, the way we do it, the processes, the methodologies and all this has been built up over time. I mean you obviously can condense it down, but overall it’s been a ten-year journey, and whilst you can accelerate all that, it’s not an overnight thing.
I would say, obviously, come to the Digital Accountancy Show and listen in to the experts and see and hear what’s going on in the arena at the moment. Where we always start is to listen. We listen to what our clients or prospective clients are saying, what their pain points are, and we try to come up with solutions that meet their pain points. We’ve obviously thought well outside the box, in terms of some of the solutions we’re doing, and I think almost being challenged by people that aren’t Accountants. There’s a pre-determined way of doing something you’ve always done if you’re an Accountant – maybe in a faster way, maybe in a more slick way, with cloud technology – but trying to think outside the box and being challenged by someone that’s not in the industry, or the profession can be really insightful.”
Obviously doing things the way flinder does involves using products, processes and technologies that are outside the norm for accountancy practices:
“If you come back to what we do, we absolutely run finance functions but actually we’re an accounting, consulting and data analytics business and, because of that, we’re running projects as well – longer-term projects, rather than just recurring activities every month or every quarter. So we need a project management tool and we use Asana for that. We use Asana quite widely in our business for finance function work too.
We use Airtable as a master data database and our one source of the truth. We’re finding it is a very powerful application with a very powerful API which is good because you can integrate one thing to another which is what we do. Then we use Pipedrive for our CRM.
Obviously, we have real-time information available to us about our team, about our operations, about our revenues, about all sorts of revenue expansion on clients and about our MRR (Monthly Recurring Revenue) to really keep on the pulse.
There’s very, very split opinion about timesheets and I think a lot of firms would probably be surprised to know that we use timesheets, but we don’t bill on timesheets other than consulting projects. We use timesheets to understand the productivity of our team and we use Harvest which is a great, simple application.
We also use Typeform to capture feedback from clients, NPS scores, team feedback and a few other things and we integrate it into a couple of applications as well. We’ve also built our own application that sits on top of Xero, separate to reporting and we use it to monitor the data in Xero – to understand what’s going on inside Xero.”
What about from an accounting package perspective, does flinder work exclusively with Xero?
“Probably 90% of our clients use Xero but we’ve got some on QuickBooks and we’ve got some on AccountsIQ as well. Some of the more complex enterprises, run their businesses on AccountsIQ and then one of the other technologies we use is UiPath, which is a Robotic Process Automation (RPA) tool which most accounting firms probably won’t have had exposure to. I mentioned that we start to break down processes and understand how we use technology. There’s obviously cloud applications out there like Receipt Bank taking away the data entry and some other great applications but there are still gaps between those applications and still human beings involved. We are trying to take some of those more mundane, repetitive tasks away from our team so they can push up the value curve, and use Eve (who’s our robot) to do those tasks and activities for us. So again, that’s probably something that’s quite different where we’re using RPA to become significantly more efficient – that’s really taking technology to the next level in SMPs, I think.”
A lot of firms are looking to move to a fixed fee, recurring revenue, business model but naturally they still find that they want to understand their profitability on jobs and their productivity. How does flinder manage that aspect of their business?:
“Broad-brush is that we just want to know which are our most and least efficient clients and why, and which processes we are spending most time on and how can we break them down and eliminate them. First and foremost, we see whether we use technology to eliminate a human being doing it. If we can’t do that, can we do it smarter or can we move it to a lower-cost location, or something like that, or is it a non-core or non-value adding activity? That’s the rationale behind timesheets. Initially we didn’t use them, but with a lot of new people coming in, and trying to get them to do it the flinder way, we needed to see where there were inefficiencies in our processes.”
What are your ambitions and what does success look like for you?
Success for us is building a brand that’s recognised absolutely across the country, maybe even internationally. Ultimately, our ten-year vision is to build an accounting firm that’s a top-50 firm which is a pretty tall order, but that’s what we’re trying to go for. But, first and foremost, we’re building a brand. We want our brand to be recognised and to be synonymous with absolute quality and excellence, and we want to be an amazing place for our team to develop. Actually one of our objectives for this year is, and continues to be, that ‘flinder is an awesome place to work’.
Why should Accountants come to the Digital Accountancy Show next year?
“I have a huge passion for the profession that I’m in. I’ve been in it for, I don’t know, something like 20 years now, and I’ve got a very clear view on what accountants should be doing and what they’re capable of doing, and helping them unleash their talents. I think they have that talent but I think it’s been boxed away. Helping them unleash that talent is very important to me because I think the British economy and SMEs deserve to be serviced by those accountants that are delivering much more than what the stereotypical accountant is delivering. So, I think those coming to the show will absolutely get that. I’m hoping they’ll get a lot of inspiration, from listening to other stories and seeing how technology can really help them drive efficiencies to what clients really want.
We just want good conversations and inspiration, they are probably the main things, really. Inspiration, I would say.”
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