Better Scaling Through Automation: The Sequel CFO Story

Receipt Bank

Scale has always fascinated me. I remember as a teenager when a career counselor asked me, “What do you want to do?” I would say, “I don’t know, but it’s in business.” The idea of being able to say “This is what I built” had such appeal. And when we talk about building a business, we’re ultimately referring to scale.

Scale is something I address every day, on behalf of my clients and for my own business.

CFOs for Hire

My company, Sequel CFO, offers premium bookkeeping to businesses that aren’t at the stage where they have an in-house CFO—not yet, anyway—but who need the value and insights a CFO would bring. Sequel CFO is so much more than traditional bookkeeping or accounting: It’s financial mentoring from people who have decades of experience running billion-dollar businesses. 

There’s a skills gap between the financial advice a small business needs and what a traditional bookkeeper provides. We fill that gap. Our vision is to be the most impactful CFO service provider in Australia. My clients are fast-growing small businesses, and they achieve feats they could never have done without us. Offering support through that scaling process is integral to what Sequel CFO does.  

For my own part, my company has seen exponential growth in the last year. How do I scale for that? When I started Sequel CFO, I began by writing four words on a whiteboard: “Scalable, Virtual CFO, Business.” Then I spent nine months defining each of those words.

I also realized early on “scalable” meant that from the beginning I would have to look outside Australia to build a global team. I’m glad I did that, because once we went to market, in the first three months we saw crazy growth. 

What Was Stopping Us? Two Things

Despite this growth, we kept bumping into two problems that held us back. Initially, I didn’t think of Sequel CFO as a bookkeeping company. I thought we were a financial mentor company. We are a financial mentor company, but what I hadn’t realized is we need to offer premium bookkeeping in order to provide our clients with solid advice.

The first problem we kept running into was rubbish in, rubbish out. I would go to a board meeting prepared to offer advice based on a set of financials where it would turn out the numbers were wrong. As someone offering advice from outside, you can only say, “The numbers are wrong, we need to change that,” so many times before you start to lose trust. Once that trust is lost, your influence in the boardroom is gone. That’s why we started doing bookkeeping: to get those right numbers. And it’s premium bookkeeping. We’re doing cash flow budgeting and monthly insight reports.

Accurate data is the key to maintaining boardroom confidence and building trust.

That’s where we encountered the second problem, the back-and-forth with clients, which is extremely difficult to budget for. With bookkeeping, you don’t know whether a client will ignore your email 10 times or if they’ll respond right away.

I knew if we were going to be scalable, we had to automate as many processes as possible—even if the benefit was marginal. This would allow us to focus on our core service: advice. That got me looking into how I could automate my clients’ AP.

Making the Call on a Solution

When I searched online for a solution, the platform that kept coming up was Receipt Bank. There were a series of requirements it had to fulfill. The first was it had to be mobile. You can’t build a business anymore without mobile being near the top of your usage requirements. At the time, Receipt Bank was the only platform of this type with a mobile app. We were also entirely using Xero, so quality Xero integration was a must. Receipt Bank was the best product on both counts.

But the major reason I ended up signing with Receipt Bank was that their customer service is unbelievable. I was trying to build a business with a model that didn’t exist yet. That meant I didn’t have peers I could turn to when I had a question. Once, in the early days, I called my Receipt Bank account manager to talk about value pricing. If someone is going to listen to me rant for an hour about value pricing, that person is a partner for me. He put me in touch with other accountants in Melbourne who he’d had very similar conversations with. That network I built through his recommendation ended up being a game changer.

Even today, when I have a problem I haven’t seen before, I can still call the people at Receipt Bank. I can’t put a price on that.

As a business owner looking for solutions, you can’t put a price on great customer service.

I enjoy the big-picture stuff more than going into the details, so once I picked Receipt Bank and it came time for the 30-day trial, I handed it to the head of my global team to write the process maps that we would then use to train our clients.

There’s undoubtedly risk to handing someone else such an important piece of your company strategy, but my focus right from the start was around the importance of our international team to scale the business. It’s hard to service clients when you grow fast. A knowledge-based business is hard to scale, but one strategy that has worked for us is getting the lowest-paid people to do the highest value work they can do. I love saying, “You’re a 24-year-old CPA with three years’ experience, you’re tech-savvy, go work out how to use this tool.” Essentially, I gave access to the people who would use the platform daily, because their opinion counted more than mine. 

Automation Means I Can Focus on the Value-Add

I’ll give you a couple examples of how my team uses automation from Receipt Bank to deliver amazing customer service to our clients.

A catering company is complicated from a bookkeeping perspective. Caterers have a massive number of invoices and 80% of them are COD, because that’s the nature of the fresh food industry: they’re dealing in perishable goods. In addition, the invoices have a mix of GST and non-GST items. A caterer will also want to break down their invoices by client, so they can account for the cost of catering an event. Being able to see line-item allocations becomes crucial in a case like this.

Not only does Receipt Bank allow us to automate source document entry into Xero, but it allows my team to then look at the source documents and work out patterns of suppliers used for types of event. Understanding why a transaction is happening, not just coding it in, enables you to better understand that business and provide higher value work.

Having efficient processes and accurate data is essential to my company’s role of providing consultant CFOs. I want to have the greatest impact within my client’s budget. That means I need to focus on the high-impact areas like cost saving, strategy, and what’s next for their business.

We had another client that was doing over $10 million in business. But they had a massive admin problem, and it related to how they managed their invoices. They had a lot of invoices, and each one would take forever because it had to go around the office to get approved. They never knew how much was owed to particular suppliers. And they actually employed someone full time, costing $60,000 a year, to chase invoices and code them into Xero.

We trained everyone in Receipt Bank, and that became transformative for the business. Not only were invoices being approved in a timely manner, but it meant they could replace that $60,000 admin role with a purchasing manager position. The new position had a far greater impact on the business, since that person is now negotiating bulk deals with suppliers.

A success like that changes the culture of a business. Suddenly you have other teams within that business saying, “Look what happens when we pay attention to process.” Now, they are exploring what other parts of the business they can automate to focus on the value-add.

The impact Receipt Bank has had on our clients has been immeasurable. I think it’s impossible to scale a knowledge-based business today without a tool like Receipt Bank.

Knowing When and How to Scale

As I look back on my time building this business, I’ve learned a lot about scale. The first piece of advice I give about scaling a business is to know you don’t have to. Some businesses are profitable being small. Don’t think about scaling unless you really want to.

The first question to ask yourself is: Do I want to scale? You don’t have to. But if you do, you need a strategy.

If you want to scale, you need a strategy. Look at all the elements that enable you to do what you do and understand your options to scale each of those elements. How do you scale AP? How do you scale AR? Training, onboarding, customer service? The answer will often be automation.

I once had a problem where I realized I probably couldn’t grow more than two or three clients a month because it just took too much time to bring them on board. Everyone stands to lose money at the start of an engagement with a client because of the time and effort required, so how do we scale that? I designed a hefty, 20-page welcome package that ran through everything. The package now does the work for me.

Scaling isn’t a one-time answer but a constant question. I know this personally. In the past 12 months, Sequel CFO has grown to two cities: Melbourne and Sydney with a Global Team in Manilla. I’ve come to realize we have to work with a franchise model to keep up with the pace we’re growing. That puts all the more emphasis on automation. But because of the processes and tools we already have in place, I know we’ll be fine. Thanks to platforms like Receipt Bank, the idea of scale doesn’t weigh on me.