The Innovative Accountants

In this episode, I’m thrilled to be joined by @David Adderson, the co-founder of @Youtopia, a premium cloud accounting service that helps simplify your finance department..

In this conversation, David and I explore how we can integrate technology into your client's workflows as an accountant and how to help make their finance operations simpler and more streamlined.

🌟 Some of my favourite parts were:

✅ How David’s holistic early career experience outside of accounts helped his view of using tech efficiently;

✅ How AI is shaping the accounting landscape not currently as Artificial intelligence but more as Automation Intelligence

✅ The shiny toy syndrome and the need to ensure you are fully utilising existing software rather than just bringing in more toys;

✅ How it is mindset management with the Finance Department or Business Owner that is the hardest part of introducing new technologies;

✅ How David trials new tools to ensure that any new tech is rolled out only if it makes life markedly better either on the Client or Youtopia’s workflows.

 Business Book Bonus Section:

·       Eat That Frog - Brian Tracy - https://amzn.eu/d/aFbR8UF

·       The Diary of a CEO Podcast - https://stevenbartlett.com/the-diary-of-a-ceo-podcast/

·       Lewis Morgan Podcast - https://www.lewismorganpodcast.com/

·       The ups and downs of a small business owner Podcast - https://www.youtopia.co.uk/podcast

Transcript

Adam (00:02.264)
Okay, so today I'm here with David Addison, who is the co-founder of Youtopia, a premium cloud account service that helps simplify your finance department. David, welcome to the Fractional CFO Show. How you doing?

David (00:14.894)
Hi, yeah, thank you for having me. I'm good, thank you, you?

Adam (00:18.588)
I'm very well, thanks for asking. So today we're looking at how we can integrate technology into your client's workflows as an accountant, how to help make their finance operations simpler and more streamlined. So David, to start with, would you mind giving me a bit of an update, an overview of your career so far?

David (00:39.702)
So I originally started working in industry and said that I would never work for a practice. I then kind of moved around a bit. One of my, actually if I go back to my first job, I started in finance. There wasn't enough work for me and I'd kind of...

used to be quite good on spreadsheets compared to the rest of the team, so I'd get things done quite quickly and I was almost just a junior, so it was quite hard to find the work for me. And I ended up working all around the business, so I did kind of a few months in every single department, which I think has made a huge difference on my impact and my view on business. I went from customer service to sales to marketing to...

goods in, to working in the warehouse, to picking and packing. So it was a great kind of in-depth insight into how a business runs.

Then I went and worked for a small company and I was the only person in finance and that was a great experience. As I say, I said that I would never fit in an accounts environment or in a practice environment with other accountants. Ended up working for accountants. Didn't really enjoy it. I enjoyed it, but I thought it was too much focus on the tax compliance. It was too much.

kind of rush jobs at the end of the year and that's not what I liked or what I wanted to do. So we decided to set up Utopia which was focusing on two main elements, so it's me and my business partner, Catherine, and it was focusing on the tech side and streamlining as much as we could, which is what I bought to the table, and she focuses on having that strong relationship and making sure we're working very closely with the clients and making sure that they're...

David (02:43.478)
kept up to date at all times and that's where Utopia came from.

Adam (02:49.668)
Excellent, excellent. There's a lot to dive into there. I particularly like your early experience in accounts but also customer service and sales and warehousing and that kind of holistic view is a real education and gives you an understanding as an accountant now of how the businesses you serve operate in the real world, right?

David (03:12.274)
Exactly that. The biggest thing for me actually was the software that we had at the time was something called Chaos Control, which everybody just used to say it was chaos. But not many people actually used it efficiently and it wasn't really lining up. So different departments were dabbling on their bit, but they were almost all bodging to get it to work and the

One of the key things I was trying to do was pull all departments together to efficiently run it and make sure it was working properly.

Adam (03:46.272)
And that's a nice segue into what you do now, right? In terms of the tech and the streamlining and the efficiencies through software.

David (03:53.866)
Yeah, exactly that. So that's probably why my main focus now is whenever we talk to a client or we take on some new work is looking at their tech stack, looking at what they're using and what they're doing, pulling it all together and making sure it's working efficiently and they're utilizing the software that they have.

Adam (04:14.108)
Yeah, absolutely. And that's a great point, because I think often people get these software packages, they learn how to do what they need to do in it, and then they forget everything else. And the bits around the edges are often where they can make some real savings or improvements. But because that wasn't the initial workflow, that's not what they do, right?

David (04:32.894)
Yeah, exactly that. I mean, we do it ourselves. We find a software, we love it, we put it in, and we've actually set a task, an annual task, to go back and review our current software. What new features have come out? What can we utilize? What can we do? And we've actually almost shrunk our tech stack.

So whereas we grew kind of growing it, you know, bringing in new tech, because again, I like shiny objects. So it was a new shiny toy. I'd bring in this new tech like this is great. This can do this. Actually, we've already got something that can do it. So why are we bringing in more? And that's a big thing. And if businesses don't review that often enough, you just keep going and keep going and end up just having a very dysfunctional system.

because they don't all fully integrate or they're not utilised fully and you end up paying a lot of money for all these different softwares that you don't need.

Adam (05:33.324)
and that require extra licenses, require additional support, and then end up slowing things down because everyone's using different parts. No, 100% agree, 100% agree. And I think that takes us on nicely into sort of the developments that are happening today because what do you see as some of those most exciting developments in accounting tech that you've observed recently, mindful of not wanting to add on bits like we were just talking about, but what is most exciting you?

David (06:04.662)
I mean, AI is probably the most exciting thing for me. It's incredible what it's doing, where we're going. Although I wouldn't say it's artificial intelligence, I'd say it's more automation intelligence. And I can't take that quote. That was actually given to me from somebody who is a supplier who's currently using kind of bots to do reconciliations and things like that. So...

I think the industry is going to change hugely, providing this all works over the next year, maybe two years. And a lot of the kind of basic entry, data entry side of it will be drastically changed.

Adam (06:53.336)
And so that brings me on to the next question in terms of which roles you think are going to be most impacted. Will you and I still have a job in five years time?

David (07:03.694)
Absolutely, there will always be jobs, there will always be things to do, but if you're working like a robot, the robot will take your job. So I think it's going to be a lot harder for entry-level jobs. I think people coming out of universities, people coming into the industry, the original jobs that were there for them that was just kind of data entry or it was doing the basic stuff, I think that will change.

But that doesn't mean the jobs won't be there, it just means they'll come in at a management account level. They'll be looking at the reports and they'll be looking at how do we fix them, how do we look at the P&L, how do we enter the accruals, the prepayments, how do we do all of that bit. Absolutely, that bit might also change. If I'm hopeful enough, I think that will change. And then it will be...

We'll almost become the storytellers, we'll almost be that finance guidance, but the day-to-day manual entering will be streamlined even more.

Adam (08:12.356)
Yeah, I agree with that actually. I think there's the, and I think it's always been the way, right? There's the sort of processing parts of accounts and then there's the storytelling parts and you need one to do the other, but if you can streamline the processing then it gives more time for everyone to focus on the storytelling and that ultimately is how we make difference, right?

David (08:33.826)
Exactly that. The key thing for any business owner is actually giving that information back. You're making this profit, you're doing this, you're spending too much money in this area. It's understanding them reports and understanding what they can do with that, not necessarily doing the work. The problem is you have to do all that basic work.

or the bookkeeping, you have to do the data entry, you have to make sure everything's tidy before you can even start to look at the reports. So it's a huge key part to the role and it needs to be done to a very high level of detail, but if it is done to that level of detail then you can use them reports, you can use that information and you can make really great strategic decisions on the back of it.

Adam (09:22.844)
Yeah, agreed, agreed. So you talked about the reconciliations and the processing and all of that. Can you share some examples of any tools, you mentioned AI, but any tools or platforms that you have seen integrating AI into those areas that are really working well and sort of starting to revolutionize things now?

David (09:44.962)
So, I mean, from a very basic level, Xero have changed the industry a lot. There's Xero, there's Dext and Hubdoc, which are both very similar softwares that are taking photographs and going from a picture from your mobile phone or from a PDF upload, it's doing all the data entry. Then we've got Xero that has that basic suggestion for how to reconcile or how to match, which is great, but it's not quite.

not quite perfect and we're currently looking at a few other softwares at the moment that we we're thinking about trialing one is Box for that which is a fascinating one that is using a much higher level of automation intelligence to do the reconciliations.

and hopefully will then integrate between other softwares, not just looking at Xero, it can hopefully integrate with Outlook or Gmail and start to produce from that side. We've also got things like practice management software. Again, I guess it's very specific to the industry, but practice management software, which will almost be able to produce an email for you or response emails. I know...

Google are doing it anyway and Outlook are doing that anyway. They're trying to find out how their emails can be responded to instantly without too much human interaction.

Adam (11:15.976)
Yeah, okay, great. Some good tips there. I know that, and I think we talked about this when we spoke the other day, when I first started out in the industry 20 years ago or so, we were due to replace Excel with finance systems. And guess what? Excel's still here, right? For all its multitude of sins. Why is AI different this time?

David (11:37.854)
Why is it different? I think Excel, the finance industry, we like to just fall back to what we know. So if you look at a lot of people in finance, they stick to what they know and they're good at it. They don't really like to move too much. Excel works, in short Excel is a calculator. So instead of actually using a calculator, Excel is great.

But for most things, we've tried to really move away from it. What will be the difference is we still think we'll use Excel. I still think us as humans kind of have to go back to some of this software. But hopefully a lot less.

So instead of doing all of these reconciliations, hopefully we're only doing one or two, because the software has done the rest of them for us. And we're already seeing that zero you can put a fixed asset register in, you can run depreciation in. So that's one reconciliation that hopefully people aren't having to do in an Excel spreadsheet manually.

Adam (12:51.934)
Yeah.

No, that's right. And I think, yeah, it was a slightly facetious question because I, I'm inclined to agree with you. I just know that the pace of change with these tools, particularly in larger organizations, can be slower than, you know, the developers, the tool makers, if you will, often realize. And so it's about, and I think you touched on this before, you said trialing the software and it's about getting those trials in, getting them done and

workflow of that organization. And with that in mind, it'd be interesting to hear your view from you as a practice and with your clients. How do you do those trials? What is really high level? Kind of what's the approach you take?

David (13:38.906)
So I guess we try almost everything on ourselves first. So we go, we find the software, it looks great. Let's use it on ourselves. Let's do it on our business. If that works, let's pick two or three businesses that are happy to use it or happy to try all these softwares and then we'll start to roll it out. If everybody kind of...

is happy with it and it's still moving in the right direction then we go across the board and we try and roll it out to every single person obviously only if it's needed. So I think a key thing that we look at is does it save time or is this just an extra hassle? Personally my main focus is to try and does it help the client? If it's not helping the client does it make a drastic impact on us that's worth the client changing their procedures or not?

Or is there another way that we can do it that makes a client's life easier? So everything that we're kind of focusing on is almost streamlining for the client. If not, does it make a major impact on us?

Adam (14:47.248)
Yeah, I think that's right. And in terms of the client first approach, that's absolutely the way I would see it working. Do you offer any kind of financial incentive or anything else, or is it literally just you find like-minded clients who are sort of aligned and looking at ways of improving things?

David (15:05.898)
I'd say we're very fortunate that we find very much like-minded clients. We don't do any sort of financial incentives because sometimes it doesn't work, sometimes it does work, and if it does it streamlines everything they're doing. So if it makes their lives easier then it's almost a no-brainer because it's not cost them any more, but it's working. Sometimes we do have to put in that cost.

So I guess to start with we wouldn't charge the client for that software and then we would say that this is what it costs, this is what it is. It's made this impact, are you happy to continue with it? But no, it's not like a cash incentive or anything. It's about making their life easier all the time.

Adam (15:43.016)
Yeah.

Adam (15:49.872)
No, I see that. And that kind of business case approach of like, this is the cost, this is the benefit, and do you wanna continue is a way around that, absolutely. And do you think just on the sort of, on the negative side, I guess, and coming on to how you outlined at the moment, you've got your two areas of your firm, you've got the tech and streamlining piece, and then the client relationship piece. Is there a risk that with the reliance on AI, we might lose something as accounting professionals?

is going to be on the sort of value add, on that sort of dealing and liaising with clients, but is there a risk that we go too far the other way and rely too much on the tech?

David (16:29.774)
Absolutely, that could easily be done. And I guess also if you look at a stereotypical accountant, they don't really like to talk to people or anything like that. So there is a huge risk that a stereotypical accountant would just rely on that tech and have it all fully automated and pulling through. I don't think that's what the clients want, or that's certainly not what our clients want and need. I think there will be a place for that.

but certainly not with us and certainly not what we want to do. I think there will be a huge reliance on AI though. And what we need to do is we need to take that on board and make sure that we are having them conversations. We're going out and talking to the clients. We are spending that time giving them quality feedback rather than taking it and doubling.

doubling our capacity and filling ourselves up doing automations, in my opinion.

Adam (17:33.88)
Yeah, I'm of the same opinion. And I think you touched on a really important point there, which is the stereotypical accountant. And there's a, you know, there's a stereotype for a reason, which is a lot of accountants do like to sit behind the spreadsheet and spend their time doing that. Uh, and that is frankly, how the industry has developed, how professional qualifications train people to, you know, to be to a certain extent, there's a personality trait as well, but there's also the way that

you know, nature over nurture. We do nurture accountants to be like that. And so I think it's another reason why there has to be a real focus from an industry point of view, from an examining body point of view, from an operational side of things to ensure that we're training up the next generation to really focus on those softer skills, right?

David (18:22.426)
Exactly that. There's a huge focus on getting the numbers right, data analysis, and without kind of stereotyping too much, that tends to be somebody who wants to sit at home, wants to hide behind the spreadsheet, wants to hide behind the numbers, and just churn through that work. It's almost again working like a robot.

That's what I personally wanted to stay away from. Let's let robots do that bit and we'll do the human bit.

Adam (18:54.712)
Exactly, exactly. Moving on slightly, I think...

You've touched on it before in terms of integrations of the different software systems within the workflows, but I'm sure you've seen this. I've certainly seen it where you, you introduce a new piece of software, which has a new workflow, which has a knock on effect, uh, which you didn't imagine. It comes back to trialing, but how important is it to get those right and to consider the holistic view of, you know, the system within the wider workflow of the business.

David (19:29.23)
Yeah, I mean that's huge. We have to do a lot of hand-holding when we do it. We have to make sure that we're always available and we're constantly coming back to that relationship side. It's that communication. It's making sure they are comfortable with it and they are on board before we start. So whether that's the finance people need to be comfortable, they need to be accepting this change or this improvement or whether that needs to be the business owner depending on the size.

But we need to have that buy-in from everybody that's willing to do it, or that's going to be affected, or at least by most people. Because I'd say the mindset management is the hardest part. Actually, the software is incredible. It can do everything it needs to do. It just might change certain procedures and certain processes that humans aren't happy to change. We don't like change. We feel uncomfortable with change. And...

I think it's fear of the unknown almost because we don't know what that means. Is the job still going to be there? Are we going to be made redundant? And actually it's going back to, as you said, are the jobs going to disappear? No, they're just going to have to adapt.

Adam (20:46.3)
Yeah, I see what you're saying. And I think it's change and fear of jobs going, but there's also change and fear of jobs changing because there's that comfort with.

I've always done it this way. I know how to do my reconciliations. I know it takes two days for this and three days for that. And I've worked my life around that to some extent, particularly people who've been in the industry a long time. So there's the handholding you can do, but there's also sort of, sometimes you just need to bite the bullet and go for it. And it's, it's that balance, right?

David (21:17.214)
Yeah, yeah, exactly that. It's a hand holding as well as biting the bullet. Almost, you know, this is what is happening, this is where we're going. Let us support you the full length of it, let us put zero in. Like, I still am doing zero conversions now, which blows my mind that people are still using redundant versions of Sage 50 because, as you say, that's what they've always done, that's what they're comfortable with. So it's a huge, drastic change for them.

And we started doing this sort of ten years ago, so to me it blows my mind that we're still doing that, but it's fear of change, it's fear of the unknown.

Adam (22:00.86)
And it's the entrenchment of a certain system, particularly in larger organizations where, you know, it's so much more costly.

and there's so many more minds to change, it's that entrenchment and sort of the opportunity cost of changing that people are trying to avoid. So I think it's important that we, and you touched on it there, communicate and handhold throughout the journey to make this a success. And actually that brings me onto sort of communication more broadly. And we've talked about...

AI and technology with regards to doing the job. Have you found any tech or AI help on the actual elements of communication and how tech can enhance communication between you and your clients, not just the day job?

David (22:49.838)
Absolutely. So you can write a blog on ChatChiefBC. But using exactly that, but using AI you can do all sorts. It's already doing emails for us. It's already pre-filling. When you're typing your email out in Outlook or Gmail, it will already push that forward and it will predict what you're going to write. So that's already happening.

Adam (22:56.861)
Many people have.

David (23:19.318)
but it's hopefully going to continue in a much better process. There's, I've seen things like accountancy practice managers, practice management software, sorry, which will take an email, a client has said, can you send us this bill? It will then go collect that bill, put it into the email, it'll write an email saying, here's the bill that you've just requested

David (23:49.31)
So it's almost doing all of that work for us. I've not seen it properly myself. I've just seen kind of videos and snapshots. So that's something I'm really interested in, but it's trying to do that without losing that element of personal touch. On the flip side, we've looked at a lot of other things. So it's having an automated email or automated reminder.

Again it's going back to that automation intelligence rather than artificial intelligence. So automatically having a reminder to say happy birthday, automatically having a reminder to say here's this job, here's the information we need on the 5th of April, chase the personal tax returns, not to wait until the 31st of January.

David (24:42.766)
and then to keep reminding them along the way. Because unfortunately, you know, we all get emails, we kind of go, yeah, I'll deal with that later. We file it, it's gone, and we've forgotten about it. So we need to make sure that we have them remind us. And things like that can be automated. It's as long as you have that informal or that formal kind of conversation, you have that discussion, you're having the other.

contact with the clients. So I guess it also comes back to them the compliance side. All of that compliance stuff, there's deadlines, there's dates, it can be automated, but it's trying to now make sure that you set the time aside to have them discussions and to go through it in detail.

Adam (25:34.032)
Yeah, absolutely. And you mentioned there about ChatGPT and about sort of how you stay abreast of it, I guess is the question. Because there's so much, there's so many blog posts about ChatGPT, there's so many podcasts, there's so many such a fire hose of information. So how do you ensure you stay ahead of the game, understand which tools you need to be investigating, trialing, potentially rolling out?

David (25:59.298)
So I guess as an accountant we're very lucky. If any of our clients sign up for a new tool, we get to see because it comes through on their invoices or their documents. So we kind of, oh, okay, that one looks interesting. Let's have a dive into it. I follow a couple of AI groups on LinkedIn. There's a really great page called AI Generative, which I follow and.

that post every now and again, five or six different softwares that are making big changes. I have a few groups of accountants again that I'm in that we talk about different things that are going on in the industry, what's happening, and also the clients actually telling us. I've got a few clients that are incredible, so they will say to me, oh, have you seen this one? Have you heard of that one?

Half the time I kind of say no, I've never seen it. Let's have a look and let me let me understand it a bit better Then I guess also going to trade shows so There's a huge one the digital county show. I'd say that's probably the best one in the industry I am slightly biased because I get on quite well with Dan but It's a great show it's has about 70 yards

businesses, they're showing off their tech, their software and what's going on. So talking to them and seeing what they're doing is great every year.

Adam (27:35.736)
Excellent, excellent. Now I think LinkedIn is a goldmine for information if you know where to look and if you sign up to the right groups and follow the right people. And surprisingly, sort of good quality content. It was always something that I was a bit skeptical of but in the last, I guess, year or so I've really started to investigate it and there's a lot on there isn't there?

David (27:55.486)
I, yeah, exactly, I would agree with some people. When you first start, you end up having it, it's a CV, it's terrible, you follow the wrong pages, you follow the wrong people, all the content isn't aimed at what you want it to be. And I understand why people switch off from it very early doors. It's what you make of it. So if you go out and you build and you follow the right accounts, the people you're interested in, the things that you're interested in, the places you want to end up,

then it's absolutely huge because then your content is targeted at stuff that you're interested in and want to see. So there's almost two sides to LinkedIn. There's those who don't use it properly and those that do.

Adam (28:39.888)
Yeah, no exactly. You've got to curate it like with all these things haven't you? So that's good and that's a nice segue onto sort of our section at the end of the pods which we're calling our business book bonus section where we ask our guests to provide us with a recommendation for our audience of a business book or other type.

of business content to make it a little bit easier, podcast or LinkedIn or whatever that might be that's helped you during your business career and you'd like to recommend. So Dan, what would you like to recommend to the audience?

David (29:14.46)
Ah, does this just have to be one?

Adam (29:16.859)
It can be as many as you want.

David (29:19.07)
Okay, perfect. So I'm not very good at reading books, however there is one or two that I've kind of looked at quite a lot. So one that has always resonated with me is eat that frog. And that is the basic concept of it is Monday morning, first thing, eat the frog, do that hard task, do the thing that you keep putting off, do that job that you don't want to do, and eat that frog.

So that's one of the books that I've tried to read. Again, I'm not very good at getting all the way through them. I kind of learn what the moral is and then leave it. The podcasts that I really focus on, there's two that I really like. Obviously the Stephen Bartlett one, which everybody talks about and everybody looks at. I like to listen to that. But there is also one from Lewis Morgan, who was the FD of Gymshark.

and he talks about investing and what he's doing and how he's doing it. It's only kind of a short podcast and he hasn't released any episodes recently, but it really opened my eyes to what investing does and why we need to do it.

Adam (30:37.196)
Excellent. So two, well three really good ones there. So I'll add a link in the show notes to Eat That Frog, Stephen Bartlett, as you say most people know about, and Lewis Morgan, which I hadn't heard of so I'm gonna check him out. Absolutely. Thanks for that. Okay, so is there anything before we wrap up you'd like to say that we haven't covered? No, David.

David (31:00.899)
I mean, I could talk for days, so I'm going to say no. I would like to throw another podcast in there, but I won't do it. There's a great podcast which you're interviewed on and I've learnt so much from doing that. So that's us doing our own podcast, which is basically just interviewing people. And I've learnt so much.

Adam (31:16.82)
Feel free, go for it.

David (31:27.938)
just from talking to business owners and talking through their story and their journey. So my advice to people would actually be ask as many people what they're doing but not having that small talk conversation at a networking group. Sit down, deep dive, ask them what they've done, where they've been, how they've got there, how unbelievably tough it's been, how the highs have been incredible and they've celebrated them.

because it's a really tough journey starting a business on your own. So make sure you have enough people around to talk to and to go through it with.

Adam (32:09.068)
Absolutely, and I think I can underline how good your podcast is, so I'm very happy to put a link to that in the show notes. And I think also, to your point, talking to people asking questions in a podcast style doesn't even need to be on a podcast, but the activity of crafting a conversation and getting information to and fro between two like-minded people, you learn a hell of a lot from that, so I couldn't agree more.

Excellent. Well, thank you very much for joining me today, David, on the Fractional CFO show. Definitely appreciate your insight, your perspective and your time. Thank you.

David (32:45.986)
and thank you for having me.