Automation is all the rage in small business accounting software. How come automation in practice management software has moved so much slower?

“It’s almost (worthy of) a detective story,” says Rob Cameron, CEO of FYI Docs, a new practice management software. “A VC asked me, ‘Why hasn’t someone done this already?’ It’s because you’re dealing with unstructured information.”

Compliance requires sourcing many types of documents from different areas, often requiring clients to fetch themselves. On the other end, firms can slow down jobs by moving them through various levels of approval. In smaller firms, the work of managing documents, jobs, emails and billing occurs across multiple systems. Automating tasks across those systems hasn’t been possible.

This is why the average job to complete a tax return is still about 23 hours, according to FYI Docs’ research.

Cameron saw the potential of using an integration platform such as Zapier to trigger tasks across multiple applications. FYI’s goal is to use scripts running over several apps to reduce that compliance window to 11 minutes.

This involves using algorithms to identify the content of emails, to systematically create, name and store reports and other documents, and to move and assign tasks between staff and projects.  

FYI Docs squarely competes with Karbon, a similar concept and tool co-founded by three former Xero executives, Stuart McLeod, Ian Vacin and John Freeman. The differences appear to be FYI Docs’ singular focus on becoming an open process automation platform that moves client data between an array of applications (like Zapier). Karbon has approached the same problem as one of communication and customer relationship management (CRM).

(Another factor which could have as much impact on growth as product design: Xero shut out Karbon from sharing data with any of its practice tools due to a falling out with management.)

 

How does FYI work?

FYI automates the capture, filing and processing of source documents to support accounting and tax. Here’s an example of one of its automated workflows working across multiple apps:

• Identify key documents required to complete a workpaper
• Find the documents in a client’s HubDocs account
• Import, file and name the documents following practice-wide rules
• Update the associated workpaper with cross links to the source documents
• Compare and validate the amounts in the workpaper

Cameron says the firm has automated 30 processes and has a long roadmap of many more. “We have 12 months of glorious process automation coming up,” he says. The completed processes include monthly billing, onboarding clients, ASIC payments, annual statements and tax assessments.

For the latter, FYI contacts ATO for a tax assessment, checks it with Xero Tax to see that it agrees, then brings it with the resulting file and metadata into FYI. It then creates a templated email to send to the client.

FYI can run custom processes across Xero (blue client file) such as running a defined set of reports to support Xero Workpapers. The reports are saved in the customer file in FYI as links to Xero.

FYI can automatically capture documents from Dropbox, Google Drive or Microsoft OneDrive and file them in FYI, eliminating the client request goose chase. All activity in FYI is tracked in an audit log.

A slightly more unusual automation identifies negative sentiment in client emails. If a client complains to an accountant about fees or quality of service, FYI will instantly notify the partner.

“The interesting observation is how much the world has moved onto emails, and how they’re all sitting in everyone’s inbox and unstructured,” Cameron says. “They are a very rich source of information but also a risk as well,” he adds, referring to Australia’s recent royal commission into banking.

FYI has been designed specifically for firms running on Xero Practice Manager and brings together document management and CRM, and process automation. The platform is not a standalone practice management solution, or at least not yet.

Xero Practice Manager handles all the task management, time and billing. Xero also acts as a central database for clients and staff. To technologists, Cameron explains FYI as a combination of Microsoft Office 365, (document management), Hubspot (CRM), Asana (task manager), and Zapier (process automation.

The open-door policy with Xero has made it possible to deeply integrate the products. Instead of storing a PDF from Xero Workpapers in the FYI Docs client file it stores a cross-link that opens up the document in Workpapers. (Tasks don’t flow from FYI to Xero Practice Manager – yet.)

 

A strong history – with the competition

“This is the fourth time that I’ve built this product,” Cameron says. In 2006 Cameron sold a document management solution to MYOB called Level 31 which helped accountants move to a paperless office. That took seven years to build and sell (starting from 1999).

Cameron stayed on for five years as MYOB’s global head of product strategy for accountants. He then left and built the management accounting tool Dovetail, “a combination of bookkeeping and virtual CFO”, which he sold to MYOB just two years later in March 2014.

Then followed his second stint at MYOB as platform strategy manager for the company’s Accountants in Practice division.

A chartered accountant for 20 years and a successful software entrepreneur twice over to MYOB. Why shift to its biggest competitor?

“I was inspired by the Xero story,” Cameron says, citing its launch from Wellington, New Zealand into a billion-dollar powerhouse with a global footprint in just 12 years.

It’s also clear that a good dose of pragmatism helped Cameron decide to focus exclusively on one accounting platform, and why this time he chose Xero and not MYOB.  

“When you work with a single platform your ability to onboard goes through the roof. Rather than doing all (practice management solutions) and having a crappy user experience across all of them,” Cameron says.

As one of the first to market with cloud-based practice management software and the first to make it free, Xero swallowed a good chunk of firms in two key categories; early adopters and small to medium practices. These don’t pay as much for practice software as the larger firms on MYOB Accountants Enterprise. But it is easier for smaller or more entrepreneurial firms to switch to new products and they are more open to trying new things.

FYI Docs includes features such as an approvals process and customisation through extra fields to handle large firms with multiple offices and many partners. But Cameron is not keen to sell to them. “I don’t enjoy working with them that much. Their decision time frames are ridiculous,” Cameron says. “We are going after 50 seats. We’re not going after the multinationals.”

According to Cameron, Xero is investing time and resources in helping Cameron bring FYI Docs to market as quickly as possible. Cameron has had deep access to developer teams working on the practice management tools including Xero Tax and Workpapers as well as Xero Practice Manager.

Xero’s vision and delivery for practice management has been spotty over the past three years. It has launched excellent ideas such as Xero HQ. But it has failed on more pressing stuff such as better integration between Xero Workpapers and Xero Practice Manager, both acquisitions. Firms don’t pay directly for Xero’s practice management software so it’s not surprising that their development is not a priority. Is Xero supporting FYI Docs because it is doing what Xero could never afford to build itself?

FYI Docs will be at Accounting Business Expo 2019 at Darling Harbour, Sydney, on March 20-21. You can register for a free ticket here.

Rob Cameron is presenting two session at the expo, details below.

• Tuesday 11:50am – 12:20pm

Why Process Automation is the Killer App for Faster Compliance

• Wednesday 10:05am – 10:35 am

Cloud document management – finally a solution that doesn’t ask your practice to compromise

Image credit: FYI Docs