In the Slipstream – Episode 25 – The Case for Offshoring – Jon Ryall

 

 

Scott Charlton: 
Hello and welcome to In The Slipstream FM, the podcast, which helps accountants and financial planners run a better business. My name’s Scott Charlton and I’m the director in charge of the coaching program here at Slipstream Coaching. Today, we’ll be talking about the case for offshoring, a topic where accounting and financial practitioners are often short on the specifics. If that’s you, then today’s podcast will help you make an informed decision about whether offshoring has a role to play in your firm in the future. The particular example we’ll be covering relates to an accounting firm but it’s suddenly worth planners also listening to this episode as much of what is discussed is equally applicable.

Scott Charlton:
For example, think about all the SOAs your firm needs to produce annually. That’s quite a lot of work that needs to get done so it makes sense to consider if you’re getting it done in the best most cost-effective manner. My guest today, Jon Ryall of Frontline Accounting, is well qualified to talk about offshoring because he not only employs it in his own firm but is actively involved with an offshoring business as well. Then after the main interview is finished, stay around because I’m going to share some practical marketing tips that will make a substantial difference to the number of new clients you attract to your firm. Let’s get started.

Recording:
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Scott Charlton:
I’ve been looking forward to today’s conversation with Jon Ryall for two reasons. Firstly, I know that Jon runs a very successful and expanding accounting firm and secondly, I recently read a compelling book by his business partner, Mark Cottle. Captivatingly titled, Offshore Or DIE! With an exclamation mark to which Jon contributed a very important chapter. The book provides a compelling case for offshoring being part of the way your firm operates. In the case of Jon and Mark’s offshoring company, 70 Australian and UK accounting firms agree. That’s quite a lot of everyday practitioners who have looked at offshoring and decided in the affirmative. Come and meet Jon, I’m sure we’re in for an interesting discussion.

Scott Charlton:
So Jon, welcome to the podcast.

Jon Ryall:
Thanks, Scott, good to be here.

Scott Charlton:
Excellent. Now look, I’ve been really looking forward to our conversation today because to my mind, you’re a very entrepreneurial practitioner and in amongst what you do there are some big, big differences. To dare I say, a typical accounting practice, which is definitely something I want to explore today. But perhaps first things first, might set a bit of context. So would you mind giving me some bit of a thumbnail sketch of your career sort of say? From sort of a bright-eyed bushy tail accounting graduate to where you are today?

Jon Ryall: 
Sure, yeah. So I started in the profession, early 2000s at a meteor firm in Melbourne. Worked my way up through tax for a couple of years, moved to audit. Went in and worked for the Big Four in the middle market private client’s area and sort of kept working my way up. Eventually left there and went to a small firm for about a year. This was sort of a small suburban firm before going out on my own. Well, going out with my business partner, Mark and that’s where we started Frontline. Really that was based off of the idea of cloud technology coming in and just seeing what Xero could do. Also with the idea of working offshore and building a team in the Philippines. Matching the two up and servicing your clients here in Australia.

Scott Charlton:
So they sound like some really big ticket ideas that you had firmly in mind and maybe what you had sort of as part of your destiny just couldn’t fit certainly with a really big accounting firm?

Jon Ryall:
Yeah. The name Frontline, our initial tagline was in the trenches with you. That was kind of our idea, how do we get actually closer to our clients and more involved in their businesses?

Scott Charlton:
Yeah.

Jon Ryall: 
I think the technology was probably the thing that kind of gave us the push. Is it you know what? We can actually see what they’re doing, interact with what they’re doing. This is probably not so much big news these days but back in sort of 2011, 2012, it was still pretty new. We had that in mind anyway. How do we offer better service to clients, actually make a difference in their business? Yeah, that’s I guess the back story there.

Scott Charlton: 
Excellent, okay, all right. So I know that you’ve got two businesses that sort of work hand in glove. For benefit of our listener, maybe you could give just a bit of a thumbnail sketch on both your Australian based accounting firm. Then sort of and same again or a thumbnail sketch of your offshore services.

Jon Ryall:
Sure. So the accounting firm was started late 2011, early 2012. A cloud-based firm mainly working with Xero. We have recently owned into our practice in Brisbane, we’re just merging at the moment. We have merged. We’ve got about … I think we’ve got 19 staff altogether including our offshore team. The second business is called the BPO, Business Process Outsourcing business. It’s Frontline Offshore Services based out of Manila. What we do there is we’re a staffing solution for accounting firms. We really started that business by accident almost. We won an award back in 2013 for innovation based on that model, what we’re doing in the Philippines. It generated a lot of interest in the industry and people started coming to us asking for advice. How do they get it set up?

Jon Ryall:
We really just offered some space in our office and started charging fees to help them, some of our colleagues set up their offshore teams and the business took off from there. I think we hired about 72 in the first year and we’re up over sort of 270 in our offices over there right now. We’re seeing about 70 firms.

Scott Charlton:
So the offshoring tail is giving the Australian-based accounting dog a pretty good shake.

Jon Ryall:
Absolutely.

Scott Charlton:
 Yeah.

Jon Ryall:
It really has caught a wave there, we just happen to get in early and a lot of it is luck. Just having a crack and then it just turns out that it just happens to be right at the front-end of where the industry is going.

Scott Charlton:
Yes. That’s really interesting because, around that time that you were actually sort of perhaps sort of first setting up your overseas operation, I remember I facilitated a meeting. It was maybe about … The principals of about a dozen accounting firms and one of those firms had set up an offshore operation. It wasn’t the Philippines but location doesn’t matter. They were a little bit adventurous in what they were doing. The prevailing atmosphere in that room was basically one of stone them. Just there was a lot of sort of high horses of ethics and sort of concerns about client information concerned. It just those people must have felt like they were on a real witch hunt and yet these days, I think practitioners and their clients are far more open-minded in terms of business model. Perhaps we’ve all experienced sort of being run by Rodger who speaks with a very Indian accent to give us our IT support and what have you. That perhaps it’s we’re all prepared to have a more global view of how business is run.

Jon Ryall:
Yeah, I absolutely agree and it’s been happening on many of our client’s businesses, hasn’t it? Obviously big corporates sending the call centres overseas and we’re not immune from that and I guess it’s just how to position so that we can take advantage of it.

Scott Charlton:
Yes. Another part of my personal journey on this was I went to a meeting that had been organized by the Queensland office of what was then the Institute of Chartered Accounts, now CAANZ. This was to discuss the merger posed between the Australian Institute and the New Zealand Institute and the national president was up and he spoke. He was a partner in one of the really big firms. The discussion went sort of pre-readily from sort of saying, look that merger is a no-brainer but let’s talk more global issues. He volunteered that he had a budget for growing his team for the next 12 months of 12 team members but he could only have six as at were onshore. I thought, well look if the national president is talking that way, well, It’s really telegraphed that we all need to be perhaps looking at this with fresher eyes.

Jon Ryall:
Absolutely.

Scott Charlton:
Cool, all right. Look, I’d like to start first if I may with your Australian-based accounting firm. Having read some of your literature, Jon, I sense that you’re man after my own heart, an accountant who is like really dissatisfied with just doing the historical accounting and tax compliance bit and you’ve found ways to add value to your business clients. So would you mind sharing a bit about the types of clients you like to work with and what you do with, then for them?

Jon Ryall:
Yeah, sure. So most of our clients are … Well, 99% of our clients are on the cloud. So they’re happy to use mainly Xero. We wouldn’t turn away a MYOB or Quickbooks or whatever the case may be. The clients we’ve really gone for are the ones that I guess are open to using the technology we want to work with. Maybe they feel neglected by their previous accountant. We find that a fairly prevailing sentiment there and they need responsiveness. They need to … It’s that in the trenches with you type approach, being close to the business. Yeah and I think over time we like to think that we can help them get A, control of their business, get some visibility about their key numbers, stay close to the numbers, have some good reporting, good reliable data. Then based upon that then you can think about growth.

Scott Charlton:
That’s great, I’m getting literally goose bumps when I hear you talk that way. It’s just what an accountant can do for business clients is really terrific if you have that orientation. Good, okay. Now, I would also like to turn our attention if I could to matters marketing, an area where accountants rightly been criticized for laying behind. Minimal as it might be the preparation I’ve done for this meeting, it’s pretty clear that you and your firm are prepared to do things differently. If I just take the simple example of the Frontline website, your accounting firm. That’s definitely not a typical account’s website. For starters, it just works beautifully on a mobile device but more than that, it really it’s only function appears to be a lead generation, not a sort of a glorified CV and list of bullet points.

Scott Charlton:
So have I got that right and could you expand a little bit about what you do with the website?

Jon Ryall:
Yeah. Really, that was the idea when we started it and we tried to make it as un-accountatish as possible if that’s a word.

Scott Charlton:
I think you’ve succeeded, yeah.

Jon Ryall:
So if you look at the website, we’re really trying to appeal to people that have been neglected by their accountant. I wouldn’t say that on its own, it’s generated a lot of referrals or a lot of leads, I think that comes down to I think social media and everything that you’re doing around that. Directing people there and that sort of thing but it does give people a pretty good rundown of what we’re about.

Scott Charlton:
Cool, okay. So if you’re bringing clients in at the front-end, it’s obviously important to be fulfilling the promise of the back-end. Like most accounts would sort of rather run through a burning building than let clients down and not fulfilling promises. Now, you’ve mentioned before that you’ve got an offshore component to your team. So what’s been your personal journey with respect to offshoring? Because at some point in the past, you would’ve known nothing about it and then maybe a bit later on, you might thought, gosh, now it sounds a bit dangerous. Now, it’s integral to the way business is done. So just talk us through that journey.

Jon Ryall:  
Yeah, so back in 2011 or 2010-2011, my business partner, Mark was following a guy called Taki Moore. You may have heard of him, runs a coach-marketing machine. Marketing sort of coaching for business coaches actually. So he was talking about having an offshore VA, virtual assistance. Very cheap, Philippines-based. That was new and we hadn’t heard that idea before. We did some research and it was a few basic websites you could kind of have a go with. You had O-Desk back then, which has become Upwork, we had a bit of play around with that. When I guess got to the point you end up launching the business, Mark was working with a large Nasdaq listed subsidiary here in Melbourne and he had some international travel as part of that. He went over to the Philippines just to do a bit more research on finding how do we go about the process.

Jon Ryall:
Basically, the next thing, we started interviews and had our first employee hired within the next month or two after that. So that, her name was Cherry. We had some like a BPO that we were using over there and she just had a desk in the office in the CBD there and we just communicate with her each day. It was the early stages of the business and really my experience with it was I was just trying to train her up job to job to job. It was I guess it’s probably not the ideal way to do it but we were learning at the time.

Scott Charlton:
Yeah.

Jon Ryall:
They come to you with some good background potentially, good people, good with their debits and credits but no knowledge of the Aussie environment. No knowledge of Aussie tax and you have to think of ways to get that information into them as quickly and efficiently as possible.

Scott Charlton:
Yeah, good. Okay, all right, well I’ll just-

Jon Ryall:
I did that to start with and …

Scott Charlton:
Yeah. So keep that on hold because that’s sort of like there’s more I would like to explore there. But just sort of still in the sort of the accounting firm sort of perhaps listening to this sort of coming to grips with how this sort of a first step might be made. I’d share the observation and I’m interested in your thoughts on this. That the firms who put a toe in the water, quickly find that the systems that they have got for their office when you apply the extra dimension of distance really aren’t good enough. That you can have a situation of garbage in and a lot of crap back. So would you care to comment on that?

Jon Ryall:
Yeah, definitely. So obviously over the last six years, we’ve got to talk to lots and lots of firms and lots and lots of experiences on how they’ve gone with the model. It’s definitely the case that if you don’t have systems, you’re going to multiply the problem when you set up an offshore team. It’s going to get more complicated and worse for you than better. Sometimes people come with a workflow problem or they’re in over their head with what’s going on the onshore side. The offshore team is not necessarily going to solve that overnight. That it’s a lot a firm plays, it’s an investment in your firm. Yes, if you do it right, it will create a lot of capacity, give you more options on how to service your clients better and more flexibility with your staffing but you got to give it time and you’ve got to be prepared to work on your firm to ensure that works.

Scott Charlton:
Yes. Now, I’ve had the pleasure of reading like a terrific chapter, which you contributed to a book that Mark, your partner wrote. So I know we’re going to talk about the book itself a bit later on but I would like to pick up a couple of things that you’ve written about. Firstly, your formula of the team performance, systems times training times monitoring. You’ve even got a good accounting fashion, a little score and I really like the checklist for each of the years you provided. So for the benefit of the listeners who haven’t yet read this, the chapter in the book I refer to, could you just provide a little more detail about that?

Jon Ryall: 
Sure. So that formula I got from a lawyer friend of mine who was using it in relation to how to build good culture in a business. The formula is systems multiplied by the training multiplied by the monitoring equals the performance of the business essentially. Be that the formula is that if you do particularly badly in any of the one of those three things, you get a really low outcome. So it’s a bit like a three-legged stool. If you remove one leg, the stool doesn’t stand. Now, it applies really, really well for offshoring but it would still apply to a business in general anyway. I like to say what’s good for the offshore team is good for the onshore team.

Scott Charlton:
Yes.

Jon Ryall: 
I guess the way pull that is you have to have systems in place for transferring the information checklists for the staff to follow. Ideally, a system’s manual, if you’ve got something like that, really, really helps. It provides direction for the staff that are really setting up and working with you overseas. You obviously need to train them on how to apply all that, the systems. So that you just don’t hand it over and expect they’re going to understand it. They need to be shown, trained. Then there needs to be accountability and the monitoring side of it. How do you make sure that what they’re doing is visible to you and the outcomes are visible to them? They’re getting good feedback on whether they’re doing good or not so good.

Scott Charlton:
Yeah.

Jon Ryall:
Yeah, if you can get the three working together, you’re going to do really, really well.

Scott Charlton:
Fantastic, okay. In practice, what’s a day in the life of a firm that uses this? So you’ve perhaps sort of seen a client, you’ve taken delivery of, I’ll use a technical term here, their staff. So what happens from that? How does it flow sort of back and forth to get the job done in a typical example?

Jon Ryall:
So a typical example, you need to have the administration in onshore somewhat organized. The collective path standard in or maybe it’s actually being sent to the client and being collected in an online format to start with, that stays together.

Scott Charlton:
Yeah.

Jon Ryall:
It’s loaded up to say a Dropbox or a Google Drive, some way to transfer that data, make it accessible. The team, the offshore accounting team, the job’s allocated as it would with your normal workflow. They get busy getting the work done and then getting it back for review.

Scott Charlton: 
So are there any sort of extra challenges by working with a team member in another location?

Jon Ryall:
The number one challenge is just communication I think. There’s an extra level of trust there because they’re not sitting in a desk next to you. So what you want to be able to do is make sure you’re checking in with the person regularly and that you’ve got visibility on how fast jobs are being turned around. You can actually, you need to be able to measure what’s going on. When you flying blind that’s when problems happen. Communication being Email only, I have seen that plenty of times and that’s really how to mess the whole thing up.

Jon Ryall:
So we had one firm over, we do a bit with the UK now and they’re probably a couple of years behind in terms of the development of the industry I think. But we have one firm recently that came onboard, they sounded quite keen. They hired a bookkeeper to work in our Manila office.

Jon Ryall:
We found out later that they only had one webcam in the entire office. So it was just culturally, they just weren’t ready for it really. That person, it felt fairly disconnected from what was going on in the UK office. They were frustrated because they felt they weren’t getting the results that they were looking for. I think they were hoping for sort of almost like a contractor relationship where the person is almost running their own business and able to drive it himself. You got to look at it like an extension to your own team and you try to integrate them into your firm and into your team and make them feel part of what’s going on as best as possible.

Scott Charlton:
Very good because they’re humans too, aren’t they? They want to be part of something.

Jon Ryall:
Absolutely and we try with our offshore services there. We do a lot around culture and that sort of thing but it is up to each individual firm to make them feel like that’s their firm. So yeah, face-to-face is really important, probably the most important actually. Just having to jump on Skype or Zoom or Go To Meeting, whatever tool you use and checking in with them each day. We like to do daily hurdles, we’re a big fan of that. Bring them into the hurdle, you just have to make sure there’s a screen that the onshore team will stand around the boardroom table or whatever and then the offshore guys will log into the meeting remotely. Then we’ll just operate like a normal daily hurdle, the issue we talked about here.

Scott Charlton:
Now, Jon, lots of accountants get really misty-eyed about the sorts of great things that they could do for their clients if only they could get on top of their compliance, which they never quite do. You, on the other hand, you’ve largely cracked that nut, that sort of you can get that sort of work done quickly and efficiently. Which sort of leaves the ability to be more involved proactively with a client. So if your offshore aren’t sort of just snowed under with all of the usual stuff, what is that you and your onshore team are doing with your clients?

Jon Ryall:
Yeah, good question. At this point, a lot of the … I like to view the business as … I really view it as a business. So I’m trying to work out who get the work as much as the works through my offshore team as possible first and then the onshore team is really around quality. Making sure that the quality is at maximum standard and minimize the tax, providing a proactive advice and that sort of thing. The offshore team don’t have that hands-on contact with an Australian business, that’s hard for them. They just need the numbers on the spot.

Scott Charlton:
Yes.

Jon Ryall:
So the onshore guys, it really is client service-based, so they’re building a relationship with the client. Identifying opportunities, making sure we’re billing what we should be billing, advisory work. Look, that is a work-in-progress, that does … I’m the sort of person that doesn’t want to do all that work myself, which might be different to a lot of other practitioners out there that are heavily building themselves out. So it really does come around to building both the team onshore and offshore. It does I guess in thinking it through in sort of structured … How do I provide a structured advisory services as opposed to me having to go out there and shoot from the hip?

Jon Ryall:
So that’s sort of where we’re working on.

Scott Charlton:
Good, okay great answer. So you’ve got team members who are doing accounting and tax work. Are there any other tasks that you offshore, admin tasks or other things?

Jon Ryall:
Yeah, so the numbers are around 60%-70% of our staff are accounting. 20% or 30% of staff, I think it’s 60% accountants, 30% admin and 10% other. Okay, so the other being maybe IT support, marketing and a few other, maybe a couple of legal ones in there. The admin is a big one. I actually think the admin is even easier to offshore than even the accounting because less, it’s simple, it requires less training. So corporate secretarial, phone answering, you could have various sort of projects. Maybe you got a system’s migration to do, maybe there’s some new software that’s being set up. We’ve done all of that sort of thing offshore. I personally … Offshoring is a great way to free yourself up, get yourself a PA. I have my Email running through my offshore PA, I have my travel organized, I even have my personal finances done by my offshore PA.

Jon Ryall:
So it really is, it’s up to you I guess. Anything that doesn’t require physical presence can be done offshore, and it’s up to you to work out what makes the biggest difference.

Scott Charlton:
Good, okay, all right. So let’s explore if we may that the nuts and bolts of offshoring and perhaps firstly, could we check in with some definitions. We’ve been talking about offshoring, is that the same as outsourcing or how does that sort of fit or are they completely different?

Jon Ryall:
Completely different. Outsourcing is basically where you’re taking a discrete piece of work or project and sending it to an outside company. The workflow of it and the way it’s done is their problem, not yours. They hopefully provide it back to you in a complete agreed format within agreed price and timeframe.

Scott Charlton:
Yeah.

Jon Ryall:
Offshoring is different in a sense that you retain control over how the work is done because you have essentially got your own dedicated team working just in another location. So that’s the big difference. I’m not suggesting that one is better than the other because it really is a fit for needs type thing. Like I said, someone coming to me with real problems with their workflow, I would tend to turn away because it’s the offshoring solution won’t solve and outsourcing solution might. Because you send it off and it will just get done. It’s a bit like a Samsung phone versus an Apple, it’s what do you prefer?

Scott Charlton:
Yes, okay. You’ve mentioned the Philippines. Why have you chosen that as the base for your offshoring?

Jon Ryall:
Yeah. The main reasons are their English is really good English-speaking tendency there. I think it’s taught in school. Education, particularly for the younger ones, they’ve done a lot with their education so you’re getting qualified people coming out and speaking good English. Like for Aussies, the location is quite reasonable, it’s an eight-hour flight from Melbourne, though if it’s direct and the industry itself it is really geared towards servicing international. So the BPO industry over there, I think is their second biggest industry. It brings in tens of billions of dollars into their economy every year and so they’re very used to servicing Aussies, UK, US. So it’s an easy fit I guess you would say.

Scott Charlton:
Yeah, okay. Now, on behalf of all the accountants who are listening to this, Jon, well how the economics work? I’m sure accountants would want to know about the cost?

Jon Ryall:
Yeah. So when you’re offshoring the costs you’re looking at is roughly around 20,000 a year inclusive. There’s components in that because there’s things like your salary, theirs the leasing fee, which is fee to cover all the overheads and our fee. They get health insurance and then we run a couple of events a year. If you budget around about 20 you would pretty much right with that. Depending on the salary, it might be a little bit more, if you’re going for someone more experience or a little bit less and if you’re sort of … Maybe one year experience.

Scott Charlton:
Okay, I’m just sort of sensing a lot of people leaning in right now following that. So what sort of education and skills could somebody expect from offshore staff to do sort of the accounting work?

Jon Ryall:
Yeah, good question. So when we’re hiring we’ll get college graduate for start usually. They’ll have an accounting … I’m assuming we’re talking accountants here.

Scott Charlton:
Yes.

Jon Ryall:
I could talk about that. Some of them would have a CPA and it will be a local CPA, a Philippine CPA. Okay. It’s a relatively hard qualification for them to get and they often have to take time off, actually quit their job and spend three, four, five months studying to get through that. It’s common but I don’t know that it’s absolutely necessary to get a good employee. It’s sort of a bit of a bonus I guess.

Scott Charlton:
Right.

Jon Ryall:
Because you’re still going to have to train them on the Australian side of it anyway and that’s the challenge I guess.

Scott Charlton:
Okay, all right. So what sort of training is required? I’m thinking firstly to get them up and going and then ongoing.

Jon Ryall:
Yeah, so we’re big fans of running like a boot camp style whereas soon as you immersed them in as much of the Aussie stuff as you possibly can. If you structure it before you start, it would make your life easier and you intermingle that with maybe some simple work, maybe some BAS, some individual tax returns and maybe some simple businesses. So that’s put aside two or three months just for that. We do run a training service where we call it like an incubation service, where we will run that training and I actually work within our team. Their desk sitting next to someone in our team and actually going through all of those things in the curriculum. If you want to do it that’s fine, and we’ve got plenty of materials that would support you in doing that.

Scott Charlton:
Okay, yes.

Jon Ryall:
Now, if you can do that, that will make it easier, particularly if you’re just starting out. Once you’ve gotten through the first one or two staff, you won’t need to do so much because they would be able to train each other.

Scott Charlton:
Of course, yes.

Jon Ryall:  
There’s a bit of a compound effect with this is if you can get through that initial difficult sort of first six to 12 months, yeah, that knowledge would be retained and it’s just much easier to I guess grow that team from there. Aside from that, I would say after that you just want to treat like you would treat your own office. A lot of firms have monthly training or weekly or whatever it is and just involve them there. So whether it will be technical, non-technical that sort of thing.

Scott Charlton:
Yeah. It’s just really I guess it comes back to that concept of I’ll treat them as your own team members as they are. If you’re not training your Australian team, well you’re an idiot. So why wouldn’t you also train your offshore team?

Jon Ryall:
Yeah.

Scott Charlton:
Cool, okay. So you probably actually answered my question but for the benefit of the listeners, I’ll ask it anyway. The process of using offshore team members, how does this all sit with the quality control expectations of Australian accounting bodies?

Jon Ryall:
Yeah, it’s the way to approach that is really how you would approach it anyway for your own firm. Taking into account if you’re setting up same multiple locations. That’s the extra complexity around that is having in multiple locations. Your work is going to be … You need to train your team. That’s the first thing so that you can actually get them doing reasonable quality work. The quality control should still be coming through your managers and some you’re doing reviews anyway. So there’s not any really major shifts or changes there.

Scott Charlton:
Yeah, good answer. I’m starting to sort of get a bit of a better feel for how all these works. Is there any sort of typical misconceptions that Australian accountants have about offshoring?

Jon Ryall:
Some of them come and I think they can be a bit of a misconception that I will just send all the rubbish over to the Philippines. I will just send the boring work and any data entry type, yeah just low-level type of stuff. If you put the effort in and if you have the right structures in place, they’ve come to you looking for a career and they will develop along similar lines to hiring a graduate in your local office. You put the time and effort into that, then they get better and it’s the same concept. So having a bit of a plan for their career, starting them on simple work but then gradually upping that and pushing them I think it’s important.

Scott Charlton: 
Nice, yeah.

Jon Ryall:
Yeah, aside from that I think Australia is very multicultural. I think we’re used to working with different cultures anyway.

Scott Charlton:
Yes.

Jon Ryall:
There’s cultural differences there. Maybe I’ll just touch on that just briefly. So typically Filipinos don’t tend up to speak up so much, they tend to say yes more. They’re more used to that hierarchical type of management. So from an Aussie side, we can tend to have this conception that no news is good news. That if I haven’t heard from them, they must be busy. That’s not necessarily the case, you have to … They’re thinking that you know what they’re doing. So there’s been plenty of times where you have this rude awakening. Hang on, they’ve been doing nothing for the last two days and they were sitting there waiting for you to say something but they’re too scared to put their hand up. So you’ve got to really push through that and set the right expectations with them. I don’t suggest you accept it but just be mindful of it.

Scott Charlton:
Well, I think it’s all of that can be readily handled by what you mentioned before, by communication and daily hurdles and those sorts of things. Yeah, you can work your way around that. What about data security? I go back to that initial sort of discussion I had with the stone in stone out situation. That was one of the things that was throwing up. What would you say about sort of someone who might have some concerns about that?

Jon Ryall:
Yeah, and it’s a hot topic at the moment I think with I believe the legislation mandatory reporting. Legislations coming out on that one with in terms of security breaches. Data security I guess again, you got to think about that what kind of did data security do you need for your firm anyway? So if you have staff in your Aussie offices, so you have to think about can they misappropriate the data?

Scott Charlton:
Yeah.

Jon Ryall:
Okay, so that versus then you need to extend that to the Philippines and is it going to continue to be effective?

Scott Charlton:
 Yeah.

Jon Ryall:
Okay. With a lot of software going to the cloud and offshore does lend itself to using cloud software.

Scott Charlton:
Sure.

Jon Ryall:
The focus becomes more around more password management and access management.

Scott Charlton:
Yes.

Jon Ryall:
So having security around, being able to lock them out if something needs to or a staff leaves, you have some kind of software that manages that for you. Then also, you have to think are you okay with people login in from home and that sort of thing and there are ways to lock that down. Probably not for a full detail discussion here because we could probably spend a whole hour talking about it.

Scott Charlton:
Sure.

Jon Ryall:
It’s so far to know there are solutions around that, which really don’t cost a lot of money. That’s really what I think going to make sure that you’re compliant and it’s just something, which you should be thinking about as firms anyway.

Scott Charlton:
Anyway, yeah. Now-

Jon Ryall:
Sorry, we’ll also add, in terms of the physical security on the ground in the Philippines, that is very, very … It would be much more stricter than what you would have here in Australia. So, there’s security guards in our office complex, there’s thumbprint scanning to get through the doors, there’s security cameras, the USBs are disabled on the computer, so they can’t download and take away that sort of thing.

Scott Charlton:
So they may actually be that there’s a back-filling effect that someone like you have excellence over there and adopt some of that back onshore.

Jon Ryall:  
Yeah, that’s right.

Scott Charlton:
You mentioned that the cloud technology, which as you say is an enabler but it’s also highly dependent upon internet continuity. What is it like in the Philippines?

Jon Ryall:
Look the internet, it’s comparable to here really. In fact, it’s probably better than depending on where you are and what kind of setup you have in your office. It’s fine, it runs it I think sort of 10 Mbps up and down, sort of around about that on a personal computer. You have computer by computer basis. Yeah, it’s a different place to do business, a different place to work from than Australia. It isn’t as first-world as what we’re used to but we’ve got I guess multiple redundancies built into our office for that. If one goes down, we got three others that kick in type of thing.

Scott Charlton:
Okay. So if somebody listening to this is sort of thinking of look, that sounds like something I should explore, what’s the availability of team members? Are all the good ones gone or is there sort of still plenty that could be in the recruitment pool?

Jon Ryall:
Yeah, Manila is a very big place and I think that’s one of the advantages for in terms of solving your staffing problems is that you’ve got access to quite a deep pool of talent over there. There’s I think 10 million around that CBD type area. Always recruiting accountants.

Scott Charlton:  
Right, okay. Yeah, so I’m thinking in particular and sort of often in the coaching work that I do. I’ve come across firms like really good firms that they are struggling to find Australian-based accountants. I’m thinking particularly of those in the regions whether the talent pool is like good luck with that. You’re advertising in the capital city in the hope that you’ll find somebody who lives in the capital city that once upon a time, came from your region or even in some of the outer suburbs. Like as I say, like really good firms and the principles are dynamic and they’re forward thinking. But I just can’t sort of get the team members they need to sort of make the equation work.

Scott Charlton:
But these actually is a circuit-breaker that you can find the teams to fill your business plan. Any thoughts on that?

Jon Ryall:
Yeah, absolutely spot on there. We have lots and lots of regional firms and it might be a town with 5,000 or 10,000 people in the town. How many good qualified accountants are there going to be able to get? It’s not many. It’s just another option for them and again it’s an investment in the firm. It takes time to get them really producing and getting them up to that sort of senior level but it’s definitely an option, definitely a solution there.

Scott Charlton:
Well, it’s just it is a game changer, isn’t it? If you’re in a town of 10,000 and all of a sudden you can tap into the deep pool of talent that you mentioned of 10 million then it certainly broadens the possibilities, isn’t it? Cool, okay. Now, I’m going to go sort of a little bit off-piste here and sort of half of the listeners to our podcast are from the financial planning world. Your businesses are from pretty clearly accounting focus. But I’m thinking that the same principles could apply to planners. Jon, the observation I’ve made is most financial planners drive down the highway in their businesses with a foot firmly on the break. Because they know that if they bring back a briefcase full of new work, that they can’t get the work done. So they’re thinking firstly before the advisor has given you, you got to compile a statutory document, statement of advice. Then after that, there’s a whole lot of sort of administrative sort of tasks required to sort of place investments, et cetera.

Scott Charlton: 
So conceivably, this is something that could also be offshore. Have you seen anyone do that well and are indeed they’re providers in the sort of Manila neck of the woods that do something similar for financial planning that you do for accounting?

Jon Ryall:
There’s a number of firms in our client base that have done it. It’s usually been around the kind of the administrative support, para-planning types of support.

Scott Charlton:
Yeah, sure.

Jon Ryall:
They can be systemized checklists, templates that sort of thing. It’s very easy too if you put the timing to it, making sure that the person’s trained up on it and it’s something that they can follow, definitely.

Scott Charlton:
Yeah, that’s good. Yeah, is that something that you guys would contemplate or you’re just sticking to accounting for the time being?

Jon Ryall: 
Yeah, for the time being, our expertise hasn’t been financial planning, we don’t have a financial planning background. I’m not sure, I couldn’t give you another provider with your hand on heart that says they do a fantastic job. Not to say they’re not out there but just something that we haven’t seen yet.

Scott Charlton:
Yeah, sure. No, that’s fine. Now, the division of duties if I’ve got this right, you’re based in Australia and your partner, Mark is based in the Philippines?

Jon Ryall: 
Yeah, correct.

Scott Charlton:
Yeah. So I’m interested in exploring the partnership chemistry between the two because clearly the way that’s structured. You’ve got two businesses and you look after one in one part of the world and the other one, that sort of Mark predominantly is looking after. So would be every reason why you could’ve gone on separate directions but it sounds to me like your partnership is as strong as it ever was. So just talk me through how it is that you have stacked together? Although the business’ certainly changed when you sat down together with a blank bit of paper and said, well, what do you reckon?

Jon Ryall:
Absolutely. Mark and I couldn’t be more sort of opposite when it comes to personality.

Scott Charlton:
Okay.

Jon Ryall:
Yeah. So he’s sort of … So for those that understand the disk profiling, he would be a ID, I’m a SCI. So I sort of high S with a CI. He probably moved away from accounting and wears on more of a technical guy. He’s more of the CEO type I guess you would say. But having said that, when it comes to business, we’re really on the same page and how to run businesses and how to resolve situations and just values that we have are very similar. I think we’re better together than if we’re out doing our own thing individually. That is sort of how I-

Scott Charlton:
Yeah. I always look for one plus one equals five and the fact that you’ve got complementary skills is perhaps one of the bits of glue that keeps it together. So other than the values that you’ve just mentioned and in any keys to a successful partnership in your experience?

Jon Ryall:
Yeah. The skills, obviously having complementary skills is a good thing, being on the same page business-wise. I think keeping egos in check, I think that’s important because if you can’t have people that are … So Mark and I will often look at things from very different angles but we’re both I guess prepared to be wrong and trust that we know that we don’t see the full picture. I think that’s important. There will be plenty of times where he’ll override and say no, that’s not right and vice versa and we’re okay with that and sort of trust that.

Scott Charlton:
Yeah, okay. No, that’s a good answer.

Jon Ryall:
But the other thing we have in common is I think people are more important than money. If it was purely financial, I think that there’s a lot of personal things that are happening in a partnership. Interactions that can trigger emotions and things like that. If the person is more important than the financial outcome, then you can work through it.

Scott Charlton:
Very profound, very good. So the same sorts of things that the disciplines that you espouse for to getting the accounting work done and in terms of sort of regular communication and the use of that sort of Skype or Go To Meeting, that will also apply in terms of your interactions? Because chances are you would interact more that way than face-to-face.

Jon Ryall:
Yeah, exactly. So we’re talking daily over Zoom and just having that constant communication updates and problem-solving is important.

Scott Charlton:
 Great, okay. So it’s really clear that Mark and yourself are prepared to take very strategic views of business, not just in Australia but internationally. So I’m interested to get your thoughts, in terms of say the future for your Australian accounting business. What are the things that you’re preparing for?

Jon Ryall:
Yeah, good question. I think the fundamental work, my personal view because you’ve got all of these kind of sprookers out there saying that almost apocalyptic, the accounting is going become obsolete and all of that because it’s all going to be automated. I don’t really subscribe to that, at least not on the near term. So the underlying service to me doesn’t really change, it’s just how it’s delivered. So I think around that we’ve always needed to be close to our client’s businesses but the tools are going to get better and easier to do it. I think there’s going to be more integration between the various software that we-

Scott Charlton:
Yes.

Jon Ryall:
My personal view is I think we’ve had that initial disruption and I think that it’s now more of a maturing of how do we use cloud technology and make sure that it’s working efficiently and integrating well and that sort of. Yeah, I think continually, we have to be … A client’s expectations probably have gone up and we’ll continue to go up because they understand that the technology is changing things. So they expect, I think they’re going to demand more responsiveness. I think they’re going to have less tolerance for. They expect … There’s plenty of times where the client is more geared up on what’s going on than the accountant. I think they’re going to have less tolerance to that when it comes to how businesses are run and technology and that sort of thing.

Scott Charlton:
Yeah.

Jon Ryall:
In terms of the Philippines, I think that’s only going to continue growing and we’re still really early. The people that got on early have staff in their teams that have got maybe three or four years’ experience now. So they’re starting to hit that sort of senior level and I think that’s going to continue and eventually, they’ll actually have manager level staff in their offshore teams. Now that’s in the next five years, which I think will be even more of a game changer because it’s going to put less reliance on the onshore team. So it’s an investment like it’s those that are doing it I think will get the long-term benefits as the people in those teams develop.

Scott Charlton:
Okay, that would be interesting to sort of see how that unfolds. What’s most exciting for you about the future for your firm?

Jon Ryall:
I think for me personally, our businesses are really built for lifestyle more than money. We want to be profitable and everything but I want to spend time with my family, I want to be there when the kids are growing up and be able to do things, opportunities to travel, all of that sort of thing. I think you’re able to do that with what we’re doing. The way we’re setting it up, that’s probably what I’m excited about. Is building a business that I guess builds your life opportunities.

Scott Charlton:
Very good. Excellent. Now, in closing, Jon, you’ve actually been to one of my bold accountant workshops so you know a little bit about where I am coming from. We’re encouraging practitioners to act boldly. So normally where I’m interviewing successful practitioners such as yourself, I like to throw in a catch-all question about a business situation. But today, with your permission, I would like to take a slightly different approach because there’s no question that Mark and yourself have acted boldly with the offshoring and that certainly a credit to the two of you.

Scott Charlton:
So I said today, I would like to explore an article that you’ve posted on your LinkedIn profile about how you opted out of Emails. Now, if that is not bold, I don’t know what is. So can you tell us why and how you’ve done this?

Jon Ryall:
Well, I think the why is really easy, I just find Emails stressful. I’m sure everyone listening, you must find Emails stressful. When you start your business, you’re just happy to get some Emails from clients and yeah particularly with start-ups. So we didn’t have a big ego so we were always happy to get the Emails. Over time though, that really wears off. So I had it on my phone, you have the experience. You wake up, first thing you do in the morning, you reach for your phone, check all the Emails have landed. It’s just not a fun way to live. So I’ve heard about the concept of Xero Inbox, which is a Google type thing where a system for clearing your Emails every day or whatever. Even that I guess that works to a degree but then you still always busy on your Email.

Jon Ryall:
So again, Taki Moore is a great guy worth looking into. He gave us this concept of inbox Xero where you just don’t have no Email. So basically, there’s a whole bunch of steps there. So setting up a help desk so that the Email can go not straight to you. If your clients can Email and most of that can be routed straight to the team. So we did that and that’s working really well using a simple product, Zendesk for that. Then I trained my PA to monitor my inbox all the time or daily. I’d love to say I’ve switched Email off completely, I haven’t quite got to that but she is filtering through my Email, categorizing urgent versus non-urgent, getting Emails out to the team before I have to sit there and read them. That sort of thing.

Jon Ryall: 
A lot of my Email now is just FYI, just fix my eye, just so I know what’s going on, just a quick scheme. There’s one other step that I think I missed there. We’re using Slack as well. So for the internal type of communication, that just takes a lot of that back and forth out of it, people sending Emails around and CC-ing everybody. You can do that Slack. They get to see it and just dealt with instantly rather than have been something that clogs your inbox and has to be followed up later.

Scott Charlton:
The dreaded CC. Yeah good, okay. Look, for everybody who is hanging in there for the duration of this interview perhaps that’s the ace in the pack. So well done and I think that this truly bold and yeah, good on you for doing that. Jon, in wrapping up today, I firstly like to thank you just sincerely on behalf of the listeners for you sharing your journey. There’s a mountain of really wonderful information that I think many can actually sort of take into their thoughts and more particularly, their future business planning. So this interview today could’ve been a real game-changer for many of the listeners so I do thank you sincerely for that.

Scott Charlton:
For people who want to know more about offshoring, I know that Mark with assistance from yourself have written a really intriguingly titled book called Offshore or DIE! With the word die in red capital. So how could somebody get hold of that book?

Jon Ryall:    
Yeah, so anyone that wants a copy of that book, just send an email to book@frontlineaccounting.com and you-

Scott Charlton:
Great, I’ll put details of that in the show notes and if people mention this podcast, hopefully, somebody on the help desk, the other receiving end would snap to attention. Jon, if someone wants to contact you, is LinkedIn the best way of doing that?

Jon Ryall:
LinkedIn is a great way to do that. Just look me up under Jonathan Ryall or go to our website, which is frontlineaccounting.com.

Scott Charlton:
Great, I’ll put all the details so there in the show notes. So Jon, thanks once again and I really appreciate your time today.

Jon Ryall: 
Thanks for having me.

Scott Charlton:
Well, that concludes my interview with Jon Ryall. A practitioner who’s been involved with offshoring for seven years, both as a provider and as a customer. I hope that this interview has made you more informed on the topic. If it’s not already part of your business model, perhaps offshoring could be part of your future. Certainly, non-CBD firms who find it difficult to get quality, professional team members might just have found a viable alternative. I’m think particularly of regional firms, where traditionally a shallow talent pool has presented quite a challenge. I’ve put Jon’s contact details in the accompanying show notes.

Scott Charlton:
Jon is also readily contactable via LinkedIn. I also want to make a case for reading the book, Offshore or DIE! That Mark Cottle has written on the topic. You’ll definitely get an understanding of the nuts and bolts of offshoring from reading it. Like me, the accountants listening to this podcast will doubtlessly be delighted that the book is available for free. Yes, free from the frontlinephilippines.com website. I’ve put the website address in the show notes. I must say that I was very impressed with the chapter that Jon contributed to the book. Even if you knew nothing with offshoring, Jon’s provided excellent checklist and guidance notes for running the back office part of your operations. Incidentally, there’s another good book on offshoring. This other one is mainly orientated to non-professional support services. You might like to read it, it’s called Virtual Freedom by a fellow called Chris Ducker. I’ll put details about Chris’s book in the show notes too. Chris really knows his topic and provides lots of good information. I particular rated how he explains relevant cultural differences that one needs to appreciate to get the best out of offshore team members. So there’s plenty to assist you if you wish to go down the offshoring path.

Scott Charlton:
In the second part of today’s episode, I’d like to share a game-changing marketing tip, one that will make an enormous difference to the number of clients that you bring into your firm. So let’s imagine that you’ve done some really good work in putting together a business that’s ready to go to the next level. Not only have you identified an ideal client niche, you’ve developed some bespoke services, which will add compelling value to people in that niche. You’ve trained your team in providing those services and have brilliant systems and checklist with which to actually do the work. You’ve got plenty of capacity to take on extra business. You’ve even followed my tips from an earlier podcast and smartened up your website for when those prospects come looking for you. Now you’re ready to tell the world about how you can help them and add lots of value. There’s just one problem and it’s a really big one. You don’t have enough prospective clients to talk to.

Scott Charlton:
There’s a simple reason for this. You’ve likely never actually focused upon this aspect of your business. Now you know it’s important. Here are seven quick tips to get your marketing database up and going. That is people who aren’t clients now but who potentially could buy your services in the future.

Scott Charlton:
Firstly, appoint a database champion, someone whose role it is to drive the growth of the database on ongoing basis.

Scott Charlton:
Two set a target size of your database. Half a dozen prospects is most likely not enough. Aim to get several dozen on your way to the first 100. Ultimately, you will want much more than this but it’s a good start. Business cards go to your desk, wallet and briefcase. Even the console and glove box of your car. Tick all these out and accumulate the business cards of people that you have spoken to that should be on the database. If possible, jot down on the card some further details about the person and how you met them. These information along with their Email address is gold and should also be put into the base.

Scott Charlton:
Now, go to your Email system’s contacts and identify anyone who also fits your preferred criteria. Do the same for your home Email system and your LinkedIn profile. Go through attendance list of seminars you’ve conducted and indeed any past events where you have collected business cards. Six, conduct a brainstorming session with your team, who is not in the database but should be. Think about friends, colleagues, and people you have met through business associations and industry conferences. Seven, autopilot. From now on consider yourself to be in the database building business. For example, after any function, you go to and any seminar you run, make it your practice to gather up information you accumulated on prospective clients. This is particularly effective when used in conjunction with lucky door prices you provide, where you encourage people to submit their business card. Functions, where you invite clients to bring a friend can also work well. A quick meeting with your champion on a weekly basis will help to keep the database up to date.

Scott Charlton:
Follow these tips and you’re on your way to a large and growing marketing database. It’s such an asset when it comes to attracting more clients to your firm.

Scott Charlton:
That’s the end of our show today, thanks so much for listening. I hope you got lots of practical information out of it. If you like what you’ve heard, please recommend it to team members and colleagues. Until the next time, onwards and upwards.