Neil: If you’re tired of doing all that boring, accounting, repetitive, bookkeeping kind of stuff, well today on the show, I have Andrew Wadsworth and we’re going to talk about how you can automate a lot of your bookkeeping between your CRM and your accounting software.
So Andrew you’ve just come out with this new plug in for Ontraport and Xero users called XOSync. What led you, what problems did you see in the marketplace that you wanted to try to solve with this new plug in?
Andrew Wadsworth: Well, a lot of the clients that I’ve had in the CRM platforms that we’ve had, all this clients that are using platforms like Ontraport and Infusionsoft, often when they get started they start selling, and they love seeing the revenue coming into their accounts. But then it comes to a point where they need to report accurately on that revenue against costs and things like that, and they retrospectively often have to do that.
What motivated me to get XOSync up and running was seeing so many clients come to that problem, especially Ontraport clients who weren’t accurately collecting taxes either in Ontraport, and then had to retrospectively have those taxes be inclusive in their accounting system, so that’s one of the problems there.
Neil: Yeah, problems over there in Australia you have different taxes, obviously, than we do here in the US, but yours are a little more cumbersome to track. Am I correct in that?
Andrew Wadsworth: No, I don’t think that it’s more cumbersome. It’s every state, county, and country across the world have different taxes, and there’s different ways they need to be reported. In Australia, it’s relatively simple. We have the goods and services tax, which is 10%, and then that’s just 10% on all of your sales revenue.
The way that it usually happens though is that the amount that is sold is inclusive of the tax, So if you’ve got a widget selling for $11 then a dollar of that is that is the taxable amount. So it’s $10. The way Ontraport does products is you have a product price and then you can add tax on top of that, and that’s not really the way that Australian businesses generally do it. Generally, the price that is shown on the website, say it was $10 is the price that people are going to be buying that for, and then it’s including the tax.
So if you change the country and the order form to Australia and then add suddenly 10% that’s not the way that businesses or consumers are used to interacting with the purchase. So basically the advertised price is the price, and it has to be inclusive of tax. I think it’s that way as well in Europe. In Europe, it works with the VAT as well. Their taxes are sort of a similar sort of thing. But, anyway, the problem is that if your system, if your CRM, or wherever you’re getting your revenue from doesn’t collect tax properly, in the end you’re going to have to correct that in your accounting system.
Neil: Yeah, the tax was just the general how much did you make, right. Because Ontraport or any of these CRMs are not really made as accounting software. At some point, I’m going to have to take this information from my CRM sales gateway, whatever I’m using, my shopping cart and get that information into some sort of accounting platform. I’m guessing most people are doing that manually today.
Andrew Wadsworth: That’s right. Any small business that is not currently using an accounting platform is really just waiting for a big headache to come their way because you really want to be saying accurate reporting of your business to make the right decisions in order to grow. The only way to really do that is to have all of your expenses and revenue coming in and accurately reconciled against your bank accounts on a regular basis. Xero, as an accounting platform, is magic at helping that run really smoothly because of all the smarts they have built into their application. The machine learning basically of, if you keep reconciling certain transactions a certain way, it sort of remembers that and creates rules around that, so it’s lot easier to keep things up to date.
Neil: You know I like rules. You’re talking my language.
Andrew Wadsworth: That’s it, yeah. So there’s rules you can create, and then it has its own sort of rules that it follows as well automatically. It’s the ones that you can create and the ones that it comes up with. So really bringing Xero, which is an amazing and beautiful accounting software that many businesses use. In fact there’s a million users around the world now using Xero.
Neil: Wow, I did not realize it was that popular.
Andrew Wadsworth: Yeah, it’s one of the fastest growing ones. Then you got Ontraport, which is such a fantastic automation system, where it has so many triggers and so many different ways that you can pass from one stage in a process to the next stage of the process, automatically. So bringing this high high level of automation into a bookkeeping system and having them married together means that certain aspects of your bookkeeping or finance department in your business can be automated.
One great example was one client that I had, which was a property inspections company. So the property inspections company had lots of inspectors. There was about 20 across Australia, and each one of those inspectors carried out their own inspections at properties in different cities. But the main company would need to be invoicing their clients, and then the inspector would be invoicing the company for their share of that sale.
Neil: So they were kind of like an independent contractor working for this inspection company.
Andrew Wadsworth: Exactly. For example, the company comes to a Web site. I mean, sorry the client comes to the website, and says, I want to buy an inspection for say $500. That transaction occurs, that money comes into the account, and then later the inspector needs to be invoicing to say 60% of that. Okay, so, $300 will be paid then to the inspector retrospectively after.
So if this needed to happen manually, when that sale occurs through an order form on your website, you then have to create that invoice in your accounting system and make sure that it’s reconciled properly. But then also you need to receive a bill from the inspector for every single transaction that goes through, and make sure that it’s paid and it’s the right amount against the right inspection and so forth.
So this process was happening in a business, and they were doing roughly 200 inspections a month. Each inspector, at the end of each week, would need to send an invoice against all the inspections that they’ve done, and they would need to accurately invoice for the ones that they’ve done. And then someone in the parent company would then need to go through each invoice and make sure that each one is the accurate amount that they’re invoicing for and then pay them.
So as you can imagine, there’s a lot of time in that for each inspector and also the parent company.
Neil: 400 transactions a month, correct, 200 from the consumers and 200 from the inspectors.
Andrew Wadsworth: Well, the inspectors would be paid once a week based on all the inspections they’ve done. But, yes, there’s a lot of work.
Neil: A lot.
Andrew Wadsworth: Because all of the inspectors need to create their invoices and send them through, that need to be checked. Even if an inspector was spending say two hours, that’s 40 hours, if there’s 20 of those guys that’s 40 hours they’re spending doing that work. And then obviously all of those invoices need to be checked and then paid. So there’s also time on the parent company each week. So you’re looking at 50 hours a week for this organization to do this part of their business which is bookkeeping, it’s making sure that they get paid and make sure it’s accurately reporting.
Neil: Very repetitive, small piece of it too, and then that was 50 hours. That’s pretty incredible.
Andrew Wadsworth: Yeah, so I looked at that problem, and when I was advising them on helping streamlining some of their process, we’re helping with some of their quoting, their booking systems, and then I saw this problem, and thought, well, that’s a great one to automate with Ontraport. What we did was we took the order in Ontraport, and then when that order happened in Ontraport for the $500 inspection, I created an integration with Ontraport and Xero to automatically generate that paid invoice as soon as that transaction occurred. So therefore that didn’t have to happen anymore. But at the very same time, automatically generated, based on fields in the contacts record in Ontraport against which inspector was and stuff like that, a bill from the correct inspector for 60% of the transaction amount. So that technically is called a recipient created tax invoice, and there has to be an agreement between the inspector and the parent company to be able to do that, just a written agreement saying yes you can generate an invoice on my behalf, but that means that every time a transaction occurred a bill and an invoice was created automatically that no one really needed to do anything for.
Andrew Wadsworth: Then at the end of the week, the finance department of the parent company would just have to go through and look at those 20, well there’s 20 inspectors accounts and just pay them on what their balance was for the week. So it reduced the amount of time from about 50 hours to about two hours.
Neil: Wow. Yeah, I want to know a whole lot more about that, but that’s going to get really detailed and off the topic of today, so you and I are going to have to talk about that because that sounds really cool to me. But the main gist of this was you were taking things from, that we’re getting input in Ontraport and now they’re automatically showing up at an accounting software, in this case Xero, and nobody had to do anything. How could this same idea translate to like the person you were talking about who had just started a business, and they were using, setting up something in Ontraport and Infusionsoft or whatever platform they’re on.
Andrew Wadsworth: Well, as you know, the platform I use the most is Ontraport, and with the new product that IT Mooti, my company, has just made it’s between Ontraport and Xero. And we’re focused on creating a product specifically for Ontraport users because we know that this is something that’s needed within that community.
Other CRM systems that people may be using Zoho, or Infusionsoft anything else, like those may have their own integrations with Xero as well, but this was a particular use case, the Ontraport platform in this case where I could see it really needed it, it really needed something. There was a lot of problems with integrating to bookkeeping from there. So if you’re starting out or if you’re using Ontraport, or if you’re not, if you’re selling through Ontraport for example, the XOSync plugin, will take all of your transactions that are occurring, based on which products it is, which shipping has been chosen, if any coupons have been used, the discounts are applied. Anything that changes that order really is mapped across to how that would integrate properly with your accounting system.
So we’re basically mapping products in Ontraport to items in Xero and discounts, have their line item. Then the other thing that’s really important is mapping your gateway to the correct bank account, so that if you’re transacting through PayPal, the payment goes into the PayPal account, if you’re transacting through authorize.net that’s going to be in your bank account, or Stripe et cetera, they’re all going to be placing the payment against that invoice that’s created into the correct accounting code.
Neil: Wait a second. Hold on because I just got excited there because that’s something I hadn’t even thought of. So not only are you pushing over the invoice information, you’re also taking it all the way through to collecting the invoice and depositing the money in the bank account.
Andrew Wadsworth: That’s right.
Neil: Wow! Okay.
Andrew Wadsworth: So if you’ve got an automated feed already in Xero, like Xero allows you to create bank feeds from all of your bank accounts. For example, I use eWAY which is a payment gateway. I use PayPal, which is a payment gateway, and I use Stripe. I’ve got three different gateways set up which I can transact in Ontraport with or other services that we use. Each of those have a transaction account with an automated bank feed coming into Xero.
What that automated bank feed is, it’s like the bank statement. It shows the fees, the amount of money that’s coming in, and then the transfers out of it. Does that make sense?
Neil: Yes. That makes sense. Exactly. So when I’m done-
Andrew Wadsworth: That all needs to be reconciled against actual invoices or payments for fees or transfers from your Stripe account into your bank account.
Neil: Actual GL accounts in your ledger, it’s all getting mapped to something in there, so that it all ends up in the right place on my accounting sheets, on my balance sheet, and on my P&L that I had these credit card fees, and they’re in the right place. Wow! that’s nice. I didn’t know it went that far.
Andrew Wadsworth: Yeah. That’s the beauty of it is. It actually matches, or even all of your products, just say for example, you use subscriptions and you sell consulting and you sell products. So you’ve got three different sales accounts where you want to be tracking each month your improvement in those areas. Every time you sell one of those products it doesn’t just go into your sales account, it goes into the specific account that you want that product to be going into automatically.
Neil: So really this whole process, whether it’s your plug in, or some other platform they’re using, this whole process could really eliminate a lot of the steps a bookkeeper would be doing, or you’d be paying a bookkeeper to do as a small business.
Andrew Wadsworth: That’s exactly right. What I want to be paying a bookkeeper to be doing is not the stuff that’s automatable. I want them to be looking at my reports and making sure they’re accurate, and presenting me with any opportunities that I have within my accounting system that could be improved on. This actual creating an invoice and moving money from here, there, exporting a CSV and importing it, all that sort of stuff is what I don’t want to be paying them to be doing, especially when there is a way of automating it. So that’s where this sort of system can really help.
Neil: Right. Yeah. Because this is numbers paint a story right. Without numbers we can’t figure out exactly what’s happening in our business. I think, you and I were discussing this a little bit before we hit the record button. But a lot of small businesses, especially getting started out, skip this step because they don’t really understand numbers and don’t want to understand numbers, and don’t realize that they can be so helpful. So I think any of this thing we can all we hear-
Andrew Wadsworth: We get very excited about our promise, what we’re wanting to deliver to our clients, and that’s where we get really wrapped up. Sometimes we even forget how much this is actually costing us, or we even forget to include how much we’re paying ourselves in our profit and loss and things like that. The reason why people are afraid of it is because it often paints a dark picture about how your business is actually running because people often work way too much and don’t pay themselves enough, and then if they actually accurately report on that they can see that maybe what they’ve got is not a profitable business at the moment. But for me that’s great. That’s a good opportunity to then look, and say, well, what is working.
If I’ve got all of my sales coming into the right place and I can see where the expenses are related to those sales, I can then say, well, actually, you know what, my subscription service isn’t working. It’s costing me far too much to run that in my business. Let’s just cancel that and focus on consulting, which is clearly going to be, it’s clearly where I’m making my money or something like that.
Neil: Right. Right. Yeah, everything starts with the truth, and numbers tell us the truth. So we can’t make change without that.
Andrew Wadsworth: Exactly. I had another example where a client used to have a business that was all based on affiliate commissions. So that was selling other people’s products online, and therefore they were receiving monthly affiliate commissions from those products. All that money is coming into their bank account and reconciled against the commissions accounting code in their bookkeeping service.
Then they started a new business, which was helping other small businesses hire VAs. This was all in the same accounting software. So they’ve got their affiliate commissions coming in from their previous business plus their sales revenue from their new service and expenses et cetera. They’re looking at their profit and loss, they’re going, wow, I’m making a pretty good profit at the moment. Kept running their business, kept running their business. Then after six months they started to realize that, oh, wait a minute, there’s a lot of revenue coming in here that is from my previous business that doesn’t actually relate to any of the expenses or income of my new business, which is related to helping businesses hire VAs.
When they took out that commission account out of their profit and loss, suddenly it showed that they weren’t actually doing that great, or it’s great as they thought they were. This is again where if you don’t have things represented properly, you can be fooling yourself that really how well you’re doing, or you might be missing opportunities as well.
Neil: Right. Well, we’ve talked about one side of the problem that you saw, which is getting information from CRM into accounting. But then I think you’ve also solved another problem and that’s collections may be. Is that how you would phrase that?
Andrew Wadsworth: Yeah. So a lot of consultants don’t sell through order forms instead they invoice and then receive payment into their bank account via direct transfer or payment through some sort of option on the invoice. So basically you’re issuing an invoice for the time that you’ve done or for the project that you’re doing, and then your client pays that later. This is typically how people use invoice when their consulting, use Xero when they’re consulting, they’ll invoice their clients and then get paid later. But they still may have a CRM like Ontraport too for communicating to their leads and prospects and managing their customer relationship.
So what we’ve done with XOSync is allowed any invoice or any client that has any invoices outstanding or overdue in Xero to pass that information into the CRM into Ontraport. So that automation can be run based on people who have any money outstanding. So I’ve created a campaign in Ontraport in the new campaign builder that is triggered by the overdue amount being greater than zero.
Then we wait a day and then we send a message which has a link, it’s a unique link for the client to be able to view their invoices in the last 30 days, or any of the invoices that have been issued in the last 30 days, 60 days, or 90 days. You can actually add a parameter to decide what the length of time is. What this does is automatically send anyone who owes you money in your business, their statement of invoices, whenever the overdue amount is hit.
An overdue amount is basically when you create an invoice you have the date the invoice is due. And as soon as that date passes that becomes overdue. So it’s basically an automated reminder that you can send to them, say, hey, these are all your invoices. Download the ones that you’ve paid, if you need a PDF version of them, and also pay the ones that are unpaid. It shows a table of all of those invoices, and the total, so that they can see where they’re at.
Neil: Right. And the beauty of this is it’s going to allow the business owner to keep focusing on current client’s projects, getting new clients and not focusing on trying to collect money that’s already on them.
Andrew Wadsworth: Yeah, that’s dead time. Any time that you’re spending following up with clients, requests for invoices, trying to get paid that’s all dead time in your business. It means that you’re not focusing on growing your business or like focusing on sales or delivery. Whenever I see time being wasted in that bookkeeping part of your business, chasing money that’s really dead time. And that’s where this is really useful because in Ontraport there’s so many great creative automations that you can create based on inputs to a contact.
So simply by adding in a field that says $1,000 is overdue on this client, you can then run any kind of automation you want on that. It could be a task for your finance person to follow up manually with them. It could be an SMS to remind you to give them a call. It could be an email like I’ve suggested with a link for them to view their invoices, and with a reminder to pay them. But all of that can happen automatically.
Neil: Yeah. Or a combination of all of the above as it gets further and further behind.
Andrew Wadsworth: Exactly. You just don’t want to have a surprise when you log into your accounting system and go wow, people owe me now, $20,000, $30,000, and I have to try and manually get in touch with all of these people. I’m sure some of the people listening know what that feels like. You’re already busy today, and suddenly you’re like, wow, if I don’t chase these invoices I’m not going to get paid. I’m not going to be able to pay my staff. I’m not going to be able to pay my bills. So having that automated follow-up is really important.
I must mention Xero does have some invoice reminders built in that you can schedule. However, it’s quite limited. Whereas Ontraport the sky’s the limit. As long as you know that someone owes you money, the way that you handle that can be a number of ways. I’ll give you an example. For my business, I send out anybody who owes me money, I send out their statement every Thursday. So it’s just a friendly reminder. I also send them out in that e-mail is a link to all of their paid invoices too. So if they haven’t downloaded a PDF of what they have paid in the past, they can get it in that link.
So it basically solves two problems. One, they’re never going to ask me for a PDF version of their invoice, and two, they’re always going to know on a Thursday if they owe me money, and they can pay by downloading that invoice and paying on that invoice.
Neil: I assume you have rules built in for if they get further and further behind. It’s going to send you a reminder or something else is going to happen at some point, I would assume.
Andrew Wadsworth: This is the beauty of campaigns in Ontraport, isn’t it, because if they’ve been on the campaign for a certain period of time, of course, we can escalate it. You can create this campaign to be as creative as you want. Like for example for mine, the first touch is an email to them. If they remain on that camp, if they remain there for two weeks, then I send myself a task to follow up manually. That’s just one way of handling it. You could handle it.
Neil: This is completely off subject, and we’re running out of time here. But I just thought of this because this is something that comes up often when I speak to people about automating anything in their business, and that is they think this whole automation thing is going to be cold. It’s like a canned response. They’re going to look at that and think less of me because I send them a canned response. Can you speak to that for just a moment because I know you probably have some thoughts on that.
Andrew Wadsworth: Yeah, and I think that’s true. It is true that just sending people automated responses all the time is not going to have the same level of connection that you’re going to have when you speak to someone. A real response to someone based on exactly what’s going on right now. But with automation it’s not just about having a canned response, it’s about triggering reminders or triggering task at the right time.
So for example automating the fact that they get their weekly statement is something that’s actually a service for them. It’s the way that its messaged is, hey, by the way if you haven’t got your invoices, or if you need to download any of them, this is where you can get it from. And by the way, there is an amount outstanding, you please sort that out as soon as you can, sort of thing. You write it however you want. But just the fact that that’s there.
Yes, it’s automated but it’s a service for them that they don’t have to ask. Then when that task comes to me that’s automated. I automatically get that task after two weeks of having an amount overdue by somebody, but then I’m going to be calling them. In that task, I may even have the copy or the wording or the questions that I’m going to be asking them. So even though I’m manually calling them, in my task I know exactly what I’m going to ask them, and how much they owe, and that sort of thing.
So it’s automated. There is automation there but it’s helping. Then you can blend the automation into the real actions that you take right.
Neil: Right. You can automate the human touch, that personal interaction it can be automated. Yeah, that’s something I try to get across to people. But usually they just think of these emails they get and how they’re very generic, and it doesn’t need to be like that. So I just wanted to get your perspective on that because I know you’ve been doing this a while. So anything else we haven’t hit on yet today about invoices and CRMs and automating all that, the collection of payments.
Andrew Wadsworth: I would just reiterate again how important I think that having your bookkeeping up to-date is. It’s actually really exciting, at the end of every month, to go in look at your profit and loss and know that everything in there is reconciled. It’s all up to-date and you’re actually seeing how well you’ve done in the last month compared to the previous month. Until you’ve done that in your own business, or at the point where you can do that in your own business, you’re really missing out because it’s when you can do that that you can start to set yourself some targets and set budgets and allocate money for certain things. I think that’s where businesses really start to get exciting and grow in the direction you want to take them.
It’s like you’re treading water. Every month you sort of I don’t know them. Well, money coming in, money going out. I don’t know I’m just treading water. I’m just staying busy, staying busy. But it’s when you’re organized, and you’ve got your accounts balanced that you can actually start to lead your business in the right direction.
Neil: What’s even more exciting is when it happens automatically, and you don’t have to go in and manually do all those transactions. Hey, thanks for being on the show today, Andrew. That some great stuff. I really appreciate you stopping by and sharing it with us, and thanks for coming by.
We went a little long, so let’s just do a quick recap today about today’s show. Only a couple of things I want you to take away from what Andrew and I talked about. Number one, most important thing. Numbers tell the story. Without good accounting practices it’s hard to know where your business has been, where it’s going, what’s working, what’s not working. So you really need those numbers. So that’s probably the most important thing you should take away from the show.
If you’re not doing good accounting it’s time to go, get some accounting software, QuickBooks, Xero. There’s some others out there. Those are probably the two most popular. So it’s time to check one of those out.
Number two, it’s possible to automate this stuff. That’s all I really want you to know. It’s possible to do this. You don’t have to run out and set something up today. If you’re interested, you definitely can. But there’s so much that can be automated in this world of technology and a lot of this boring repetitive accounting stuff, you don’t need to pay somebody to do. It can just be happening automatically in the background for you.
What I really want you to take away from today is that, hey, it’s possible. If you want to get a little deeper into it, you’re ready to go. You can check out Andrew’s new plug in at xosync.it, that’s xosync.it. You can check out Andrew’s new plugin that will connect your Xero account with your Ontraport account, and get them talking to each other, so you can automate a lot of these things.
That’s all I’ve got for you today. See you next time on Beyond the Opt-In.