In this interview with Hamish Mexted - Founder of Convex Accounting - he shares his view on the relationship between advisory and accounting, and the benefits of having clear business strategies when looking to grow your firm.
Convex Accounting is an accounting and legal firm based Wellington, New Zealand. The diverse team at Convex Accounting pride themselves on providing clear insights for businesses that create new opportunities, leading to more wealth, employment and better pathways for their clients.
What industries do you serve the most of?
We serve a wide range of industries from hospitality to proficiency services such as web designers, lawyers, and tradies.
We’ve noticed that people who are attracted to us as their accountant want to build and develop their own businesses in the same way that we have.
Do you find that people only want to look for accountants based in their local area? Or if they’re more open about location?
What COVID-19 accelerated was people being comfortable with Zoom and not having a face to face meeting. It was a trend that was coming but it’s a trend that’s definitely been sped up a little.
Today, our second biggest customer is in Auckland, and we’ve got customers all around the country so it doesn’t matter where you are.
What are your thoughts on advisory services within the accounting industry?
In my view, there is no difference between advisory and accounting. Although people try to draw a distinction. What accountants need to do is get really close to their customers and give them good advice. When accountants step back and go “I'm going to do your set of accounts”, it’s really just bookkeeping they’re doing.
I also think we as accounting firms get it wrong if we look at it and say - it’s the job of the director or the partner of the firm to do the advisory work. I feel it’s also the job of the grad. Because the grad is the one that is doing the GST return and they need to be able to spot the errors. Although they don’t have the experience at the moment, they need to hear a more experienced staff member have a conversation with the customers so they can learn and take it in.
As an industry, we’re conscious of time on the clock, so most firms don’t want to have the grad writing off time because that’s a negative. Whereas if the grad is in the meeting with a client alongside a senior staff member, it teaches them how to be better accountants by guiding our customers how to run a better business.
Do you think the role of technology plays a huge part in improving your internal efficiencies?
You need the technology stack but people are equally as important in the equation. At the end of the day, you still need staff members who can build relationships and who can be articulate about what they’re saying, irrespective of the tech stack you’ve got.
However, if you don’t have the right tech stack, you can’t scale your team to be able to deliver. So you have to be able to grow your tech stack at the same time as growing capability in the team but you can’t have one without the other.
How have you seen the technology that you have rolled out with your clients add value to their businesses?
Technology creates the efficiency our clients need to get their business really profitable. It propels them forward in a way that would take them longer if they didn’t have the tech stack. Because they’re not going to have visibility around profit lines or visibility around staff efficiency. It’s stuff that the business owner could probably work out themselves but they’re not going to work it out as quickly and they’re not going to get it as right as they would when armed with the right tech stack.
Do you find that you may face hurdles in getting clients to be on board with accepting technology that is more innovative or is something they’ve never used before?
Yes there’s always pushback from humans towards any change. None of us really like change. So you’ve got to get them over that and you’ve also got to get them over the cost hurdle because no change comes for free. And then the bigger change is institutionalising it within the business.
For instance, we can go in and set up a new piece of software for someone, but if there is no one internal that understands the ins and outs of that, then it’s going to fall apart or we become their helpdesk every second day of the week which is not the outcome we’re after. So the main hurdles for people is a) change itself, b) the cost, and c) who is going to drive it for you as a business owner internally?
How do you work your way around those push backs from clients?
Everything is the conversation. Oftentimes, we would tell them a story about the previous customer or what we do in our own business. We’re really open with our customers about every element of how we run our business. It’s the stories that make them feel comfortable.
Being a business can be quite lonely for people, they want to hear that people have gone through the same stuff before and that it’s going to be okay.
Have you guys used technology that utilises automation in any shape or form? And how has experience been like for you guys?
Yes we do. All of our practice management has automations built into it. The automations though and the triggers around them are always only as strong as the person using the system. If it relies on a box being ticked and someone doesn’t tick the box then the whole automation breaks, so you’ve got to have the automation set up right in the first place and a robust training system around it.
You also need an automated process exception to spot the point where someone hasn’t ticked the box and the automation fails - how are you going to pick up that the automation has failed and what are you going to do when it breaks?
Does your firm process payroll?
I outsource our internal payroll to a bookkeeper. Because the bookkeeper is exceptional at payroll and they know the ins and outs of it. The New Zealand payroll system is ridiculously complicated when it comes to annual leave entitlements. We live in a business which is a time precious, but it’s not hard on deadlines whereas payroll is. So it’s quite a different way of operating. You can definitely make money from payroll but you’ve got to do it properly and we’ve kind of made the strategic call that it’s not the place we want to go when there’s people out there who are a hundred percent up to date with the legislation and the staff and resources to make it work.
As business owners we’re all so used to taking up everything. If there’s revenue there we usually think we should take it and say yes to that opportunity. The harder thing is being clear on what you’re not going to do. If you’re going to say yes to something, you’ll be compromising something else. Which is why you’ve got to have clear business strategies on what you’re going to say yes to and what you’re going to say no to.
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