AI will lie to you about your taxes

No, thank you. But thanks for having me.

Yeah, so I I'm an accountant by trade. I've spent most of my career building up through the the accounts ladder and the individual seats within a finance function. and then I joined Stride about four and a half years ago and at that point was was hired in as a w one of the members of the leadership team. And over that four years we've refined the direction of travel that we believe Stride should be going down and upon that journey. pushed and pushed and pushed and got the business to where we thought it was ready. We then had the opportunity to management buy out the company eighteen months ago and and bought in and became a director that way.

So so we help we help found the businesses often, but it's it's any business really where the finance seat requires more than you know a couple of hours a month and we offer a CFO service it's known as a fractional CFO service to normal people, but with the full office, back office finance function behind it. So all the compliance standards are met, all the bookkeeping is done, and then we drive the strategy and direction on top. That so it's it's a full suite of everything you could possibly need from your finance function, we deliver that service.

So a a lot of the businesses I deal with before we started dealing with them believe that finance exists because I need the bank to be reconciled, I need money coming in and money going out. And then I need to tick a box that says to my local government I'm doing things correctly and I'm not, you know, laundering money and I'm gonna pay my taxes at the end the year. And the problem is that when you look at it that way, it's a it's a resource drag is the finance function. And it's not really giving you any any insight into what the numbers are telling you. And a lot of the owners that we deal with, they're getting to a point where it's no longer about ticking the boxes and being compliant. It's about I need financial clarity, I need to know what my numbers mean. So where am I making money? Where am I losing money? Are there particular products or services I'm delivering that are costing me rather than benefiting me financially? they might have questions along the lines of COVID happened a few years ago and using the dreaded COVID-19. And a lot of businesses were we're really stuck. What do we do next? How do we get through how many months worth of cash do we have left? And they don't have the answers to those questions available. Your finance function should be able to provide you the answer to all those questions. And then once you have the answers to what's going on, you can then start thinking about what's coming, right? So in the next 18 months, I want to do this, I want to pivot my business direction and go for a completely different service line. Or we can help go, what tools do you need to understand how that might impact your profitability, impact your cash flow. Think about how you know you need to staff that, refine the operations on that and make it so that it's a value add to your business, the return on investment, rather than costing you more money and you go, that didn't work and you you wasted half a million pounds on something you shouldn't have started in the first place.

So I think I think a lot of them have probably got their numbers in the right place, but they might not be doing them in the best in a most effective way. Similarly, one of the cases we find very regularly, we talk about quite a lot in our book, The Finance Seat, is where someone has been in that business for twenty years as a reliable bookkeeper clerk, they're getting all the money in, they're paying all the money out to the suppliers at the right time. But they haven't actually they they're not doing the high level finance, they're just getting things done. Because they've been there for twenty years. the b business owner starts leaning on them more and more saying, right, I need more reliable forecasting, I need an idea as to what happens if I do this. but there's a natural trust between those two people because the owner needs to know things are getting looked after and they they trust that person implicitly. But that person's then stepping up into a field that isn't relevant to them. And I like to think of it if you're a mechanic on a car, if you're someone that can change a tire and you can do that all day, every day, It's great. It's a really good place to be. There there's a need for that particular role. But if I then suddenly turn around to you and say, I need my spark plug change, I need the engine remapped, I need this going on, that person may not know how to do that. But because they've been there so long and they're so reliable, you go, Well give it a go. And actually something breaks when you do that normally. So that's where we find most businesses are at. Similarly we find where the owner hasn't got that person they can trust and they go, Do you know what it is? I'm gonna keep doing it myself. Because I can trust myself to do it in a way that I understand. But that's not scalable. You get to a point very quickly where you'll go, that becomes a full-time job. And where's the owner best deployed in their business? They're best deployed in maybe servicing customers, maybe developing a strategy on where the business is going next, maybe thinking about how do they improve the niche that they're in in their market, but their time's swallowed up by doing finance and not getting much back out of it.

Exactly, exactly. Yeah, and I mean we we we lean into the entrepreneurial operating system, which is EOS, and and what that that book teaches, so traction written by Gina Whitman is is a system that people can use in their businesses. And what we found is one of the things they talk about is right people in the right seats. Now, right people is defined by the values that they have, right seats is defined by where they're best deployed. They get it, they want it, they have the capacity to do it. Now, most people sit in the finance seat because they're the right people and they want the control, but they aren't the in the right seat when they're in that role. And so actually when you look at it that way and you go, I need to be in this place and this place, you know, that finance seat needs go somewhere else. Who can it go to? So how do you find the right person to fill that seat?

Yeah, so we we were having a lot of conversations with a lot of business owners and we're trying to it's it's like anyone, isn't it? Explain how you do something in an effective way. And and what we found is that a lot of the business owners just don't understand how the finance seat would work if you were say a twenty million pound business and one of these massive businesses that we see as well. And we kind of started articulating more and more the same story of if you build it properly There's different functions you can expect from that finance seat. But the reason we call it finance seat is again leaning on EOS, you use an accountability chart rather than an organizational chart. So you might have someone who is the finance person, but actually, when you break their role down into the different seats, every level is important. So you have your data entry level, you have your financial control level that's making sure that so you your data entry is what it says on the tin, right? Getting data into a system. Financial controller is then the person that goes. Is this compliant? Am I doing things right? Am I ticking all the tacked boxes? Am I developing this in the right way? Your management accountant's then going into that and going, how do I get the insights out of that? How do I get my margins on specific products or services, etc.? Your finance director is then the level above that where you might start going, you take a strategy and you go, how do I make this happen in the business? And you deploy that strategy and you're help-to-account and making sure it happens. And your CFO is the one that normally looks outwards and goes, right. I help the leader with the strategy, but I'm also going to find the ways to fund that. So do I go get debt service? Do I build relationships with key suppliers, key customers, and start moving other levers around? So when we were articulating that more and more, we thought I think a lot a lot of the problems that we're seeing in businesses where they are in that kind of transition from one to five million, let's say, where they're maturing from a founder-led and founder-driven business, and they're becoming a more mature business, let's say, where every individual component of that business needs to be driving towards a goal and the owner is becoming the bottleneck really. So how do you move that owner into the right place? And a lot of it was articulating all these different seats, all these different roles, but then it goes beyond people, right? It also goes down to the systems you have in place. you have the right processes in place. But developing developing that cons consistently as well, I've come across many businesses who are been around for 30, 40 years. And they're still using systems that were built in the nineties. We've gone so much further, we all know the the dreaded AI movement that's going on and everything's changing. So why haven't you moved your systems onto these new platforms developing in the right way? So you should review them fairly consistently. But how do you review them right? And well you start with the end in mind. It's the the old bit of business adage, where do I want to be? Work your way backwards down to then how do we get to that place and then we build it forwards. So very much it defines how we do things in the right way, articulates that to people who need more than just a quick five minute elevator pitch and gives them hopefully some practical tools that if they didn't want to use us, they could do it themselves.

Yeah, absolutely. So I mean, one of the key things AI does is it it makes it gives you time, right? So you can ask instead of building a spreadsheet from scratch, you can ask AI to go and build the backbone of that spreadsheet, for example. not that we use spreadsheets all the time, but you can you can get a lot of the what I call grunt work done by the AI, and then you can use that AI tool to then say, right, I've now got more time to allocate to this project and I can start adding value in that project rather than spending the time Building the tool that's needed, right? but it's down to where where where I think we need to be cautious of AI is understanding our own limitations. So personally, I've been training in finance for over a decade now. So I understand how if you pull this lever, that does this, and pull that lever, that does that. Understand where you know that's illegal, that's legal, that's okay, this is gray area, all those sorts of tax thresholds. So when AI says Yes, you can you can absolutely take cash and not declare that on your tax return. Someone might take that on face value. You can't, you need to apply that accounting knowledge and skill to the back of it. So that's where we need to be cautious. AI can be a tool to streamline our processes, speed up decisions and really give us finger on the pulse. We could get live data, for example, exactly where we are this very second in a business. But you need someone who can understand the outputs of that AI to interpret that in the best way.

So so of course you you your best source of leads comes from your client base. If you deliver an exceptional service, your client will refer you to their network, their partners, their friends, and that's where you can get quite a bit of growth. But obviously having a focus on marketing is also key. So we also have our own marketing engine, if you like, and strategies. Now, one of those is the book, the finance seat. Hopefully we get that into as many people's hands as possible. The other one that we've been doing at the minute is we've spent the last two years building a community of businesses who operate on the entrepreneur operating system in the UK. getting people in a room together to just as a masterclass almost and go, I've had this problem in my business, how do we solve it? The reason it's specific to EOS is because EOS gives us a language, common language we can all speak. so everyone can say, I have this problem in my business. Let's say I've got an issue with wrong person, right seat, what do I do? in any other business sphere that may may not make sense. What is a wrong person? How do you can you turn that wrong person to right person? It's a question that then comes up and you spend twenty minutes refining the question, whereas in this room people go, I know exactly what you mean. This is what you can do next. So we found that building that community together has helped A promote EOS, which I f f firmly believe on a personal level, if they taught that in school, in business school, if the you know, if it was government led, everyone should be operating on EOS, I think business would do significantly better as a result of just the the way that it fixes a lot of problems that you have in business. but the community that we've then had comes this masterclass and what we've found is we've by being the the driver of the wave that built that community, we're now ready to ride that wave. So we have strong relationships across the best businesses in our view in the UK. And we form relationships with them. We take we spend we take our time building a relationship and articulating how we do what we do. Hopefully someone will on the back of that go, I think I could really benefit from your services. I'd like to go ahead with some sort of discussion in that way. or we can at least add value to them in that process and develop their business to help them grow themselves anyway.

I don't know. Yeah. We do, yeah. So so we we use again it's an EOS tool. there's a lot of EOS going on in in our sphere. so we use something called Division Traction Organiser, shortened to the VTO. And on that VTO is is our ten year target and every other target we have so the next three years, next year. our ten year target, which is now only seven years away, is to deliver quality service to a hundred quality clients. Happy, healthy, and fulfilled employees. So each each part of that has a very specific meaning. So quality service is net promoter score nine plus per individual business or 80 plus in old money. So we want to get the best possible service being delivered to clients who feel the value of that rather than it's just I've got to pay the accountant because they need to do my tax return. Hundred quality clients, now they're businesses that would like Benefit from our CFO service strategic insight and growth. And the reason for 100 is because 100 felt like an aspirational target to go for. And then there's a revenue number on the back of that, but that depends on your average order values and all sorts. But if we can get to 100 quality clients, we then believe firmly that we can have happy, healthy, and fulfilled employees. And that means they're well paid, they're well looked after. We have a more modern workplace, if you like. So for example, I'm currently in my home office. Working from home has been an exceptional benefit to myself. It's one of the things that means that I start at I mean I'm a business owner, so I don't actually do this, but you start at nine o'clock, you finish at five o'clock. As soon as I start and finish, I'm on and off, I'm back home, I'm where I need to be. I can have cuddles with my dog at lunchtime, for example. So part of building that culture of we're people driven people first, rather than an an old machine of just let's get everything out that we can out of people with no benefit to them individually.

I I think one of the one of the biggest things I've learned in probably the last two years is running the EOS community's taught us what the good businesses are doing well and what the bad businesses aren't doing well. And frankly, having a a VTO, vision traction organiser, a ten year plan that's really clearly defined and means something to everyone in your business, all the way down from the top of the chain where you're the founder, all the way down to your cleaner in the back. Everyone understands how their small role, big role, medium role builds in towards that 10-year target. And we believe that's where people find satisfaction, right? As they're going, I am helping this business by doing this, and that translates into that, which then translates into that. Everyone's bought in, and that builds quality, it builds happiness in your employees, and it grows from there. So I'd say if you're not currently using EOS as a tool, that will definitely unlock. a lot of thought processes but then doing it right as well is gonna be key. So anyone can use EOS but to be an EOS business you really need to be fully invested and bought into the concept.

So it's it's currently on Amazon Kindle store. you can also order a paper copy there. We'll be doing an audible in early twenty twenty seven and then trying to get it everywhere. We're trying to get it in the likes of Waterstones and your normal bookshops, etc., around around the UK. but also around the world, it's available anywhere and everywhere. So probably Amazon Kindle is the best place. it is been it's been marketed under a company called Motusio. So O T U S I O. and the reason we did it via Motusio was just so that it was it's it's it's own book, it's its own engine and it talks about how Stride does what Stride does, but it is a separate piece. Again, core focus is part of EOS. Stride's focus is delivering CFO services, not publishing books. So if you go to Motusio.com you can also find all of the tools that are available in the book on that website.

Thank you, Microsoft. Pleasure.