7th September, 2018
John Smit says he owes his punctuality to being the son of a Dutchman. But it’s more than time management that allows him to run a successful accounting practice on his own.
Most businesspeople know accountants and bookkeepers tend to put in a lot of hard craft to help their clients and earn a crust.
And then there’s John Smit, a Chartered Accountant based in Auckland who manages a practice of 185 clients without the help of any full-time staff.
We’ve been keen to hear how Smit has handled this feat of logistical ingenuity, so I recently gave him a call to hear the full story.
John, the son of a Dutch immigrant to New Zealand, first remarked on my own punctuality (my phone call is patched through to his office at the exact time we’d agreed on), and suggested I may have been Dutch in a past life.
Perhaps always running against the clock, John first entered the world of finance as part of a vocational education.
“I started out at 17 working in an office and worked my way through a number of different accounting-type jobs as I graduated, at which point I began working at a firm full-time,” John said.
Despite the amount of work on his plate, I notice that John has that hallmark, slightly self-deprecating tone that’s nearly ubiquitous among Kiwis. You get the feeling he’s serious about his work without taking himself too seriously.
“Going out on my own wasn’t easy to begin with. I wasn’t great at charging my clients or in handling their complaints in those days.
“I became quite defensive about the whole process – every time I sent out a bill I’d immediately expect it would be challenged.”
But overcoming these types of hurdles has been part of the process for John, who never planned to be managing his operation alone.
“It wasn’t planned, but it’s worked out well in the long run,” said John. “My wife, Sue, was an accountant and she worked with me for a while, so did one of my boys, Nick, who helped out a lot before starting full time as a teacher in 2017.
“Sue’s sister and my niece also pitched in along the way – so many family members have helped out and I also have a lot of family members as clients.”
But when Sue passed away, John began to consider how he could run his business in the most streamlined way possible.
“Since Sue passed away I’ve essentially been working on my own, so I’m doing as much work now as I did with a full-time equivalent.”
READ: Pricing your services
The clear trend John has witnessed over the course of his career lies in the way that software reduces the amount of time accounting firms spend doing basic data entry.
“And it’s gotten to the point that I’m now able to recover my fees entirely through the efficiencies gained by the technology,” he said.
“I started out working with clunky, DOS-based systems where everything needed to be entered manually.
“You’d spend hour upon hour entering bank statements, using information from cheque butts; you’d have to write codes on all of the statements and then reconcile them all at the end of each month.”
From a world of dot-matrix printers and photocopying everything in triplicate to a streamlined practice on the cloud, John has managed to use the efficiency offered by new tech to grow his client list to a whopping 185.
“Now I have around 60 of them using MYOB Essentials and a smaller number on AccountRight. So if I get a cheque-butts-and-bank-statements client, all their information is on the cloud, allowing me to dial in and create rules to automatically code more than half of their transactions.
“Then I just enter the occasional code that isn’t automatically generated, which has removed an enormous amount of the time burden compared to what it was 10 years ago.”
John manages his clients through MYOB’s Accountants Office Ledger, although he was initially wary of the upgrade from General Ledger as it came at a particularly busy time of year.
“The upgrade process was pretty easy with a little help from the team at MYOB,” said John.
“I spent quite a bit of time on it in the first few weeks, but I’ve got the system working well now.
“It takes me about half an hour per ledger to update the information that needs to be entered into the Directory Page, and to make a few formatting changes to the financial reports to suit the way I like to display them.”
It means John has been able to continually update and improve on the way he works with his clients through Accountants Office, without them having to do anything (let alone even need to be aware of the changes).
Doing things this way has also allowed John to become more confident in billing for his time – an issue that plagued him when he first started his practice.
“The first year of working with a new client, I charge them based on time taken, but when billing for the next year I charge out the same amount unless there’s significant change in the work required to be done,” he said.
“Of course, I continue to keep tabs on my time, but I don’t have to be too specific about it. It’s always been tough to figure out what to charge people, but the technology has certainly made it easier to help set my client’s expectations.”
When it comes to my question about how the proliferation of tech solutions is potentially threatening to accountants, John remains nonplussed.
“I think the data entry person’s job is at risk, but accountants in general wouldn’t be concerned.
“As I see it, my role has never really changed.”
While he’s worked with high-growth, high-performance clients, John identifies his target market is the smaller end of businesses and sole trader operations.
Clients are happy to contact John if they need advice, otherwise he reserves the advisory-based conversations to an end-of-year interview.
“I think that’s a very useful meeting,” he said. “The job is straightforward: I just need to keep my clients on the straight-and-narrow with the tax man and make sure they’re running profitably.
“But what they absolutely hate is having to do the books, so I work to make that job easier for them – and that’s where MYOB come in, because Essentials and AccountRight just make it that much simpler.”
Having spent a career in the accounting industry, John’s a man who’s figured out the secret formula to working smarter without necessarily working harder: in order to succeed, keep it simple.
Become a valued MYOB Partner and receive a wide range of benefits, including early access to new software, marketing tools as well as enhanced resources and training opportunities. NZ-based bookkeepers and accountants can learn more about the benefits of the Partner Program here, while Australian-based practices can find relevant information on the topic here.