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Gary Bell is the Co-Founder and Partner at FLB Accountants, an independent firm of Chartered Accountants based in the UK. In this episode, Gary and Stuart chat about Gary’s experience attending the first-ever Karbon customer conference in Lake Tahoe, FLB’s rationale for going hybrid, working with high-profile clients such as Apple TV, Netflix, and Amazon, and some exciting projects he’s working on in the renewable energy space.
Join Stuart McLeod as he interviews the world's top accounting leaders to understand their story, how they operate, their goals, mission, and top advice to help you run your accounting firm.
S1 00:00:06.268 Hi. I'm Stuart McLeod, CEO and co-founder of Karbon. Welcome to the Accounting Leaders Podcast, the show where I go behind the scenes with the world's top accounting leaders. Gary, welcome to the Accounting Leaders Podcast. We should start off with where we left off on stage.
S2 00:00:27.320 Yeah, yeah. Absolutely.
S1 00:00:28.850 How was your trip to the West Coast? And in particular, my local town of Incline Village and Lake Tahoe?
S2 00:00:37.900 Yeah, a fantastic trip. It was a fantastic setting and location. It was great to just see some of the scenery, which often adds to these things. The Karbon X experience was fantastic. And I know it's the inaugural event, and very well organised and run. And you guys did a great job of making us feel at home for that weekend.
S1 00:00:59.415 Oh, good.
S2 00:00:59.943 Yeah, which was superb. Obviously, some extremely exciting development upcoming with Karbon that I think we're very much looking forward to embracing and betting within the business.
S1 00:01:11.113 You helped us out so much, and I'm forever grateful of the effort that you personally and your staff put in to assist with the launch of Practice Intelligence. And yeah, I can never thank you enough for that. But it's customers like yourself and FLB that make all that effort worthwhile. I thought that one of the special things for me was seeing the love that customers share in the room and the conversations that were going on between yourselves over dinner and during the breaks. And then even out on the early morning runs.
S2 00:01:57.140 Definitely. I think it was-- One of my experiences of it is almost immediately walking off stage and just being accosted by the huge number of people wanting to know more. And I think it's fantastic, because you can see the industry really starting to understand the power of obtaining that data and how they can start to use that data. So it was some really, really interesting conversations with some very forward-thinking individuals.
S1 00:02:27.435 Yeah. I feel like, I've always sort of felt like we're-- being too early is wrong, of course. But we are quite up the progressive curve. The Karbon customers are well along. And certainly nowhere near - the lag is little - the middle of the curve. But I feel like over the last, as we move into post-COVID, that we are, that the industry is progressing. Particularly in the UK, the more traditional mid tiers are getting a bit of a rocket under them and seeing people like yourselves do so well and use technology as a value proposition, right. This is a totally new concept to thousands of firms across the UK in particular.
S2 00:03:22.167 No, definitely. I think my take on it is that those mid tiers and upper tier firms, they're just slower to embrace change, for all the right reasons--
S1 00:03:31.892 Sure.
S2 00:03:32.524 --in terms of the process of everything that they need to go through. If you look at those firms that are slightly smaller and more agile, they're able to embrace this change and move with it very quickly. And that gives us the benefit of actually almost outshining some of those larger firms, while they put in place the process and diligent steps they need to, in order to embrace. But they're definitely on the same page, moving in the same direction. And I think in the UK, the other part we're starting to see is the more traditional practices. They're starting to fall away. It's a generational thing where--
S1 00:04:15.590 It is. Yeah.
S2 00:04:16.289 --as the generations that still want the paper filing front of things start to retire from the industry, the younger generations that, in those firms have been pushing for a while, are actually starting to implement change. And I'm sure you guys are experiencing that with the firms in the UK you're starting to work with and touch base with.
S1 00:04:34.813 Yeah. I mean, selfishly, the competitive landscape has thinned out over the last 12 months, right. I think I would always prefer an environment of innovation and people doing new and interesting things. But it's hard. And these companies that have sort of come in as over the last couple of years and then sort of sold off, for whatever reason, it helps us, but-- trying to be nice. But the traditional vendors, the IRISes and the Sages are under pressure because they've been slow to innovate. They've been sort of able to-- And this happens in the US. The CCH and Thomsons. You already saw it with MYOB in Australia. These companies lose their culture of software development, right. That's the way life goes.
S2 00:05:28.545 Yeah. I mean, and that's so evident because you look at all of those major software platforms. And they're still desktop. Yes, they use the right language in terms of promising us that the cloud is coming. 5 years, 3 to 5 years would be my guess is when it's available. And that really holds back an industry, because you want to be a more agile firm to give this full flexibility, but you're still having to rely on legacy systems. I mean, crikey, I remember it wasn't that long ago that IRIS had moved from a Btrieve database to a SQL database. And at a time when everything else was running on SQL. And I think you're right. They lose an element of their innovation. But that's the norm. They have to move to buying in the innovation, rather than having it internally. But I think some of those, I mean, the big disruptor is obviously Xero. It's changed the landscape. Sage, now, in my mind, are making some really good headway on trying different things and moving into different areas, certainly with the [Go?] proposal. [Move?], kind of a very sensible one, and a fantastic product that lots of firms take advantage of. And you, Karbon obviously appreciate that as well.
S1 00:06:43.979 I haven't spoken to James in a little while. Somebody like him going into a company like Sage. He'll have some moments.
S2 00:06:51.412 Yeah. I'm sure. And I only met James a couple of times, but very interesting guy. He's got some fantastic opinions that I think a lot of the industry are aligned with. And does a fantastic job, so I'm sure he'll be making some headway. Perhaps help you steer a ship.
S1 00:07:10.836 Exactly. He'll certainly have some interesting meetings, I'm sure. But FLB, since you got back, are the wheels still on? They didn't fall off for you while you were on the other side of the world?
S2 00:07:23.816 No. No, not at all. I mean, we're very fortunate. We've just got such a superb team in the business, kind of the management team in the business do a fantastic job of running the day to day, which allows me to play around with things like Practice Intelligence, which is great. So no, they very much kept the wheels turning. And yeah, it's just kind of continued growth. I mean, it's an interesting one in the UK, which I'm sure may be the same elsewhere. There's just this huge waterfall effect at the moment where the bigger firms are-- everyone is struggling for talent, so what that means, and the bigger firms appear to have taken this approach of well, we're just going to double our fees or significantly increase the fees. So what that means is some of their smaller clients filter down, and everyone has to make the same decisions. So we're having a lot of conversations with a larger client base, which is fantastic. And there's also a huge amount where we're doing around helping businesses understand the information that they're getting, and how to better present that. I mean, the dashboarding that we saw at Karbon X. We've been doing that for our clients for a while, just to start to aggregate some of their data so that they can see things in a more kind of succinct presentation what's important to them.
S1 00:08:43.868 Yeah. That's the beauty of a good account business, being able to learn a compelling story with numbers.
S2 00:08:51.832 Yeah, definitely. I completely agree. And there's this concept which I'm fully aligned with, of a trusted advisor. And I'm sure it's the same for firms round the world. You work with a client for long enough, and you get the phone call about, "I'm getting divorced," which you find yourself trying to help that. Or, "I want a new car."
S1 00:09:11.403 Sometimes it's the same day.
S2 00:09:14.503 Yeah. Exactly. Exactly. Often from the same person.
S1 00:09:17.290 That's right, yes. Yeah, the two incidents can be related. Sometimes the car before the divorce depending on--
S2 00:09:24.754 Exactly. Exactly.
S1 00:09:26.528 --the number of zeros in the car.
S2 00:09:28.777 Definitely.
S1 00:09:29.662 Well, let's talk a little bit about the stack thing. Do you use like a Futrli or any of those to present those compelling numbers to a client base? Or you put all of that together yourself?
S2 00:09:40.404 No, we do use some of the platforms. We're using Fathom's platform. We use a little bit of Spotlight Reporting.
S1 00:09:49.684 Yeah. All the Antipodeans.
S2 00:09:52.317 Yeah, exactly. But we do have some clients where actually we created almost some bespoke reporting. And every accountant in the room would always know how to use Excel.
S1 00:10:04.645 Yes. It's the go-to.
S2 00:10:05.288 It's just the go-to, because you know how to present it differently. Yeah, I think it's some of the products like Futrli and Fathom. They're fantastic tools. It just takes us time to get a team up to speed with how to use them to then be able to impart.
S1 00:10:23.233 Yeah, yeah. And knowing enough about stuff like that, the benefit of having a client base in consistent vertical, if you've got 300 veterinarians that you're servicing, putting together report packs for that client base, that's where your margins come from, right?
S2 00:10:45.908 100%. 100%. It's that almost niche marketing to say, "Well, we want to focus on a particular sector." The KPIs are the same for every one of those veterinarian practices.
S1 00:10:55.664 That's it.
S2 00:10:55.711 Just it makes, as you say, the margins, but also the onboarding of the client quite straightforward, because you've got a defined process. You know exactly what you're doing. And you haven't got to pivot to embrace it.
S1 00:11:09.761 Yes. The wheels aren't being reinvented every time a new client comes on board. So I know you guys have been growing like amazingly. How many staff now, offices? What are you doing sort of office versus work at home, and all that kind of thing?
S2 00:11:26.161 So we're now up to, I think it's 110 at the last count, in terms of [us as a?]--
S1 00:11:31.236 Wow. Yeah.
S2 00:11:31.605 --team. We're still growing. So we've got plans to increase that by in the region of a further 20% this year. Office wise, we've got office in Reading, one in Soho, and then we've got an office in Epsom as well. So three offices. In terms of the forward-looking plan, at the moment, we're operating a three/two scenario, where three days in the office, and two days from home. And we've been quite firm with that.
S1 00:12:00.671 Right.
S2 00:12:01.095 And the reason is the development of the junior team. You can take a seasoned pro and sit them at home five days a week, and say, "You crack on. No problem." The challenge is the trainees coming through. They need that interaction. They need to see what's happening in the business. And ultimately, you get in this situation where okay, well, you meet your trainees in the office to be taught. Well, you need your seasoned pros in the office to teach. So hence it's kind of a line we think will--
S1 00:12:35.838 Osmosis. Learning by osmosis is fucking difficult over Zoom, isn't it?
S2 00:12:41.037 Exactly. Exactly. And it's that. It's silly things like the feedback, if you're face to face sat next to someone, you can give immediate feedback, and say, "No, no, no. Just like that." Whereas I think if you're trying to do things remotely, what typically happens is, I see myself just going, "Oh, I know how to fix it. I'll just fix it." And the individual doesn't get the feedback to say, "No, change it like this." This is what--
S1 00:13:04.428 It wasn't the learning experience that they could have had.
S2 00:13:06.927 Precisely.
S1 00:13:07.649 We also found, it wasn't a disaster or anything, but two years into the pandemic, even internally, relationships. People have never met. You got managers and different dynamics for us all over the world. And I kind of felt like it got to the point where if you wanted to, you could hide behind Zoom and email, internally. Tough conversations over Zoom are not the same as a tough conversation face to face, right. You don't get to know the person. You don't get to have the watercooler.
S2 00:13:49.686 That's very true. Those watercooler moments, we often refer to them in the office, because actually, they're where the good ideas come from. They're where you get that touch-in, the check-in point with your team to say, "Is everything okay?" "Yeah, I'm fine." "Well, no. Actually, I've got a problem here. Can you help?"
S1 00:14:07.170 No, even over Zoom, you might not know if people are kidding. In the workplace they say you can even ask. But you know what I mean. Somebody might have had the worst weekend in history, and you turn up at 9:00 AM on Zoom. And it's not like that you just saw them in the coffee shop downstairs. Like, "Oh, fuck, Gary. I fell off my bike. Or my kid was in hospital, broke his whatever." You know.
S2 00:14:37.123 I think that's fair. But then conversely, you look at some of positives. And for myself, I probably get hours back every single week, because your client base is now happy to say, "Do you know what? Let's not bother meeting. Let's just jump on a Teams call." Whereas before, you've got an hour to get there. An hour, an hour, an hour.
S1 00:14:57.000 Especially in the UK.
S2 00:14:59.549 Yeah. And you look at it, and actually, that's a huge time saver across the business. And I think, actually, it works, because you get straight to the point. And everyone's happy with that.
S1 00:15:11.587 Yeah. We're experiencing a very similar thing, particularly in Sydney, where most of our R and D gets done. We've now got R and D in Toronto. And Halifax, of all places. You've been working with Sudat and his team. There's now, I think, 6 people in total on Practice Intelligence, so there you go. Staff of 6 for you, Gary.
S2 00:15:36.894 Yes, perfect.
S1 00:15:37.338 But we hired 90 people in the first six months, maybe 100-odd people in the first six months of the year. And we're very clear about this is not a fully remote role. You need to be in the office at least three days a week to onboard. And John was really adamant about hiring people in Sydney. We're not a fully remote company. We're a company with offices, and it's just the way that we're built. And that's the type of company we want to run. And I mean, we see in particularly the tech industries, like the more liberal companies saying, "Fuck hybrid. We're just going fully remote." And then you see the Elons of the world go, "Okay, you can work from home as much as you like. As long as you've already done 40 hours in the office this week."
S2 00:16:34.907 Yeah. And I think the risk I see is if you try and go fully remote, where's the culture? And the heartbeat of the business is the culture. I mean, that's it.
S1 00:16:46.065 Yeah. Particularly professional services, right, well, I like to think suffer as well, but especially accounting.
S2 00:16:53.993 Yeah, definitely. And I know this, I met a couple of people at Karbon X who are kind of fully remote, and absolutely, hats off, fair play. Their recruitment techniques are clearly better than ours. But I think that culture is so important, because everybody is then pushing in the same direction, and understanding the core values of the business.
S1 00:17:16.971 I think UK geographically is obviously very different to US. Like Bruce Philips, who you want to spend some time with. He was remote when he started with us. When was that? 10, 12 years ago. So he was on that train. And I think everybody has got their way, and remote is certainly a way and a strategy to overcome labour shortages. I think how are you going sort of competing against the London-based firms for staff and the like?
S2 00:17:52.588 So geographically in what we call the Thames Valley corridor. So traditionally, there's been a big commuter belt would go kind of up the M4 into London, to work into London. And there's definitely been an uptake in the number of people, the number of CVs coming across our desk where previous experience kind of London, they're starting to look outside of it. And I don't know if that's because there is a slight turning of the tide where employers are saying, "Right. Get yourself back in the office now." And it's perhaps that--
S1 00:18:25.788 Yeah. Yeah, yeah. And they go, "Can't be fucked sitting in a car for two hours a day, three hours a day, or."
S2 00:18:32.013 Exactly. Let me get on a train that's overcrowded and--
S1 00:18:34.836 Yeah, yeah. And the Wi-Fi doesn't work.
S2 00:18:37.166 Yeah. Exactly. Exactly. So I think we've been very fortunate with the talent that's become available. I think there's also-- there's pressure in the industry with the amount of work, like across every sector, it just seems there's a talent gap.
S1 00:18:55.380 Yeah. In everything.
S2 00:18:57.277 And I think we've always tried to maintain a culture, that yes, there's some pressure, but there's also some lower pressure time throughout the year. And I think a lot of the CVs we're seeing now are from people where you get the impression that pressure cooker just keeps on going. And actually they're starting to think, well, there's more to life than just working 60, 70 hours a week.
S1 00:19:22.740 In 6-minute increments.
S2 00:19:23.941 Yeah, exactly.
S1 00:19:24.855 And a lot of that, the more clever London firms are on to it, right. They're poaching your staff, probably, paying London wages and letting them work from home perhaps four days a week, and the office once.
S2 00:19:40.532 Yeah. I think that's right. And we've lost a couple of people, as every business does. And some of those ideals have run true. I think it's going to be interesting to see what pans out with the way the economy is looking at the moment, and whether that has an impact, really.
S1 00:19:57.852 And a new Prime Minister, of course, this afternoon.
S2 00:20:00.100 Yeah. Exactly. Exactly. That could be a head-in-the-hands moment. Depends on how that's going to pan out. It can't get much worse.
S1 00:20:08.448 Worse than Aussie changing this roundabout of government. But yeah, well, you've got inflationary pressures, not helped by Russian situation, invasion, basically. Interest rates going up. Brexit still sort of filtering through all the economy. I mean, it's hard to find some good news for everything for the next couple of years, probably.
S2 00:20:34.356 Yeah. I think the good news is that there's a lot still happening in the UK. I mean, we have a number of clients that are inward investment clients. So perhaps US or other European territories, they've latched on to talent or kind of IP in the UK and kind of acquiring that. And that doesn't seem to have slowed down. A lot of the things I saw-- feared Brexit may have done is steered some of the big USPE firms to think, well, actually, we'll go to Amsterdam instead of London. And that doesn't seem to have happened. I think there's still some really innovative things that have been developed here in London, particularly in the fintech sector. It's blowing up. It's huge right now. And lot of that is still London. Brexit, you can't just turn off London being the--
S1 00:21:27.926 The finance capital of the West, right. Yeah, I mean, I'm talking way out of my pay grade now, but the UK as a risk compared to the rest of Europe doesn't seem to have diminished through Brexit or anything like that. I mean, I think they're encouraging investment. There's entrepreneurial visas. They are trying to induce or entice people to come to the UK.
S2 00:22:00.396 Yeah, definitely. And one hopes that that will become a little more liberal, in that they've got a points system. That points system, of course, will tweak and change slightly over time. But I think we'll hopefully see a loosening of it when you see where the real gaps are. I feel there's a bit of a bumpy road before too much happens, to identify what are the gaps and how can we loosen that, the red tape, a bit.
S1 00:22:27.111 Yeah, yeah. The government's got to get out of its own way. And in terms of FLB, what's the average client look like? What are the major industries that you're servicing these days?
S2 00:22:42.773 Yeah, it's an interesting question. I mean, we've got, I guess you'd argue three primary strands to the business in terms of divisionally or sectors. So we term one of those as very much our general client. We've tried desperately to come up with a--
S1 00:22:59.316 A compelling name.
S2 00:23:01.091 But we're just accountants. Maybe you need to need to speak to [Sudat?].
S1 00:23:05.717 That's right. He's next door. You can grab our marketer for 10 minutes.
S2 00:23:09.404 Yeah, exactly. And that said, that team service, kind of whole range businesses from, yeah, I think the smallest clients are kind of part-time hairdressers through to some fairly chunky recruitment businesses, to manufacturing businesses. All sorts of different things, logistics. There's a real kind of mix of clients where, actually, you're that going to outsourcing and providing a wide range of services for them, which works very well. And the kind of secondary thing for us is not in terms of scale, but the second division is renewable energy and infrastructure.
S1 00:23:50.713 Oh, cool. Yeah.
S2 00:23:51.641 So we do an ever-growing amount of work in that sector, where we're working with some rather large kind of institutions with helping the financial process for some of their vehicles. It's very, very kind of expansive growth. And some of these things are huge in that they buy in 30 companies at once.
S1 00:24:14.147 Yeah, right.
S2 00:24:15.018 Yeah. It's challenging to resource, because you need the people there for when they're land [crosstalk]--
S1 00:24:20.243 Face the professionals?
S2 00:24:21.080 Yeah. Very much. But for us, it's a huge growth sector that we're focusing on. And then, I guess the hot topic for us at the moment is the media and entertainment and technology space, so we're doing a huge amount in film and television, looking after everything from financiers interested in film production through to actually helping out with the production accounting of some of these productions. So ultimately, on many things, there's a real skills shortage in the industry. And what we're making huge strides towards is being able to provide the productions with a variety of options, so here's some talent that will help you get through with your main team or premise. But we can help fill some of the gaps. We've got a number of productions we're doing. We're actually, we've gone through the kind of first and second iterations with the producers of the studios, and they love the remote concept. And actually, we're able to offer that professionalisation of the services. And we're working with some of the really big studios, in terms of we've got deals going on with Apple TV--
S1 00:25:36.663 Cool.
S2 00:25:37.094 We're working with Sky. We're working with Netflix. So there's a big, big growth area for us.
S1 00:25:43.031 What's the investment in film and TV and production in the UK like at the moment?
S2 00:25:48.831 Red hot. Red hot. I think there's two things that are driving that. One is the tax incentives here in the UK.
S1 00:25:55.283 Oh, they've cranked the incentives?
S2 00:25:57.178 Yeah. The incentives have kind of been there for while. But they're being cranked. I think that, actually, the exchange rates probably help. Seem to be [crosstalk] studios.
S1 00:26:04.132 Oh, yeah. No, yeah. My two weeks have got considerably cheaper. We appreciate it.
S2 00:26:10.899 Yeah, definitely. And it's also the UK market has got a fantastic set of studios. So they're kind of--
S1 00:26:18.201 Right, okay.
S2 00:26:18.653 --[crosstalk] the ability to actually make the productions here in the UK. You've got the kind of Pinewoods, and they're growing. And there's huge investment going into building more studios for the film and TV production. And it's all in a relatively compact area, which I think helps. If we look at some of the things we've worked on in the US. Actually, of course, you've got kind of the central LA areas. There's big areas in Canada as well. But UK seems to be a very growing, very quickly growing in that area.
S1 00:26:53.583 Yeah. The streaming companies have just got the valuations have come off. Albeit the cash has perhaps tightened up a little bit. But the volume of money that's just gone through the Apples, the Netflixes, the Amazons.
S2 00:27:07.676 Yeah. I mean, look at kind of, I think the easiest comparison is probably 2019. 2019, there was about just short of 8 billion spent on film and TV production in the UK. And actually, the anticipation is that's going to grow significantly over the next 3 to 5 years, which is why we're very much latching on to it and looking to grow in that area.
S1 00:27:29.431 Yeah. And I'm sure having interesting clients helps recruitment and retention as well.
S2 00:27:35.597 Absolutely. There's one thing to promise someone a career in accountancy, which may not necessarily entice everybody.
S1 00:27:45.641 There's only a few sexier jobs available, right.
S2 00:27:49.854 Exactly. Exactly. But I think what we're finding is that the film and TV spin on it actually encourages people to think, well, this is enticing. This is [crosstalk]--
S1 00:28:00.604 Yes, it is.
S2 00:28:00.764 This is exciting, it's kind of-- And then technology's the same, right. We have a strong technology team looking after businesses of all sorts, whether it be SaaS companies or your traditional resellers. That's interesting because they move and--
S1 00:28:16.308 Yeah, yeah. High growth and solving interesting problems. I want to go back. You mentioned energy companies. And I noticed the acceptance of sort of carbon neutrality and progress towards investment in current infrastructure is significant in the UK. And I think the reticence is nowhere near as high as it is in the US. There's still a lot of denial in the US. How are you sort of resourcing that? What kind of projects, customers you work with? What are kind of the interesting aspects that you see in that area?
S2 00:28:59.449 Typically, what we're doing is we're working with private equity firms, or VCs that are building out a portfolio of sort of solo sites. Wind farms, or anaerobic digestion, or hydroelectric where actually, the play for them is the long tail revenue. It's like an investment strategy where they are building-- one assumes they are building out a larger portfolio that ultimately that portfolio creates a 7 to 12 percent return every single year. The sun shines, the wind blows, you're producing energy. And one assumes their concept is to build this out, with a view to flipping it to pension schemes or something of that nature.
S1 00:29:48.993 Yeah. It's obviously a play for the recurring revenue.
S2 00:29:52.265 Exactly.
S1 00:29:52.681 Yeah. And the investment in that area in the UK is seeing the trend go the right direction?
S2 00:29:59.941 Yeah, very much so. It's kind of a-- It's a very hot topic. We're an island, so we kind of have to produce as much as we can ourselves. There's some very big projects that have been greenlit by the government in terms of off-shore wind farms. And I think the Russia piece has really just highlighted it at a time--
S1 00:30:20.440 Yeah. The requirement to be self-dependent.
S2 00:30:23.527 Yeah, exactly. And look at the other move in terms of by 20-- I think it's 2030, they'll stop selling petrol or gas-based motor vehicles. It's a full move towards electric spearheaded by the government. That's a huge change, and that's going to bring with it a demand for electricity, rather than oil out of the ground. And so you've got to find a way of how do you create enough energy to do that?
S1 00:30:50.477 In a clean way and store it, as well.
S2 00:30:52.809 Exactly. Exactly. So no, that's some of the stuff we're looking at. We've also got a number of other projects that we're working with the founders on that are around carbon offset, so looking at things where you take a traditional process. That traditional process is incredibly carbon generative, and there are some really clever things happening around really starting to slash carbon emissions for some real big blue chip companies that help them move in the right direction. Because ultimately, they've all signed up to the Paris Accords in terms of we're going to try and become carbon neutral. I think everyone's now motoring towards, well, we've got to do that.
S1 00:31:39.337 Yeah, yeah.
S2 00:31:40.183 It's said, and now we've got [to do it?].
S1 00:31:42.191 It's easier said than done. What's the most interesting project you've seen, you reckon?
S2 00:31:47.139 The most interesting one we've seen at the moment is around the production of aluminium.
S1 00:31:52.498 Oh yeah? Very energy-intensive process.
S2 00:31:55.267 Massively energy, and at the moment, hugely inefficient, because everything's kind of produced in one country, moved to another country for ore, moved to another country for canning.
S1 00:32:07.481 Right. We should say it's "aluminum" for my adopted home country.
S2 00:32:15.698 Definitely. But yeah, that's a very exciting project with the ethos behind that being actually to recycle, rather than using the raw ore. Which yeah, that's very exciting when you see what the carbon credits and kind of the back [crosstalk].
S1 00:32:33.583 What are they recycled out of? Do they extract anything?
S2 00:32:37.151 Yeah. It's typically going to be cans, right. So it's--
S1 00:32:41.053 Oh, okay. Yeah, okay.
S2 00:32:42.422 Collect the can, reuse the can. But at the moment, there seems to be a real deficiency in recycling that material. And actually, if you can aggregate enough of it together and recycle the same thing, you're going to be able to create the volume that you need.
S1 00:33:01.823 There's some fascinating projects going on. One that I saw which I thought was just such an obvious but clever idea was the storage and capture of emissions from ships. Shipping contributes, I don't know, some significant volumes of CO2 every year. And there's plenty of room back there to capture the emissions, store them, wait till they come into port, bury it. Do whatever they do. And there's tiny little startups that are just-- I think it's out of-- I want to say it was out of the UK, but I'll have to look it up. But I genuinely believe-- I mean, we've got a great name for this stuff, but I genuinely believe that, like I say 10 years ago, 20 years ago, every company was a technology company. In 10, 20 years, every company is going to be a green tech company.
S2 00:33:58.568 Yeah. I think that's fair. And I caught one just the other day in the press about the storage of energy. It's a small startup out of, I think it was Finland, using sand. Literally a big massive silo, grain silo, just compact with sand that you can store heat at 500 degrees Celsius that you can then release. And it stores for a long time. And I mean, that's going to be the game changer, is the battery and the storage of [energy?].
S1 00:34:25.164 Yes. As the size of batteries comes down, as the kilowatt hour goes up.
S2 00:34:34.384 Exactly. Exactly.
S1 00:34:35.256 Yeah. And the other-- I mean, the industry is still-- Tesla is what, 15, I want to say 15 years old or something-ish. Maybe a little bit more. But there are some significant social and cultural issues regarding producing the raw materials for lithium, cobalt, etc. Where I live, there's-- Actually one of the founders of Tesla, JB Straubel has a recycling company. It takes phones and pretty much anything that's got these battery in it and they bring it all back to the original materials, ready to go again. It's incredible, just the technology that's going into it. The smart people in the world are doing incredible things. The money.
S2 00:35:28.975 Yeah. Yeah, I agree. I think one of the other areas that I've got an eye on that I think is going to progress very quickly is kind of medical health care.
S1 00:35:39.456 Oh yes.
S2 00:35:40.455 And if you just look at what the world was able to achieve with regards to COVID when the mind and the focus is on one particular thing, there's going to be some huge advancements, in my mind, with kind of medical. And we see that again, in the UK, we see a huge number of biotech kind of startups that are getting some real traction in particular areas. And ultimately, they're attracting the investment, right.
S1 00:36:05.409 Yeah, yeah. Well, yes. And I mean, many world-- the world's western population is getting older. I can tell from Brexit, but that's in the UK as well.
S2 00:36:16.492 Exactly right. Exactly right.
S1 00:36:17.699 If you weren't heading up FLB, what would Gary be doing?
S2 00:36:25.172 Oh, that's an interesting one. Well, the dream as a kid was to be a professional golfer, but realised I definitely lacked the talent.
S1 00:36:35.995 Well, you don't need anything. You can play on the LOV tour.
S2 00:36:40.067 Yeah, exactly. That's good for players. I can definitely--
S1 00:36:42.815 There you go. A quick 750 for you, just to turn up.
S2 00:36:45.167 Yeah. I could hold up at the bottom of that leaderboard. No, I think, I mean, obviously to when I was a bit younger, I was in sales. So I spent quite a lot of time selling double glazing, of all things. So I think had I not gone down the accountancy route, I definitely would have gone down a sales route.
S1 00:37:02.208 Well, I think you are in sales.
S2 00:37:03.853 Yeah. True, true. Mainly selling something differently.
S1 00:37:08.062 Yeah. Just not commission-based.
S2 00:37:09.961 Yeah.
S1 00:37:11.935 If I wasn't heading up Carbon, which I love and I enjoy, of course. I love my team and our customers, obviously. As you know, we live in a beautiful part of the world. That lake, the last two summers, so as you know, we're sort of surrounded by the sierras, and the California fires caused the smoke just to sort of sit at 6,000 feet, like a bowl. Come August, hopefully, touch wood, hopefully it doesn't happen this year. But so I thought the reason they can't get them early is often they just start in such remote places. California is a big place. You sort of went New Mexico that they feds started accidentally. But a lot of these, the Malibu fires just took off so quickly that they just can't get to them. And there's an academic in Italy that came up with a way of being able to get to remote fires. And did all the mathematics on getting drones, number of commercial drones with retardant and into remote areas. And so the idea was, the number was about 120 commercial drones with a volume of retardant - I can't remember the number, 100 litres or something - into a fire based on these spreading conditions within 32 minutes or so, was able to put out 96% of fires. Something like this. I thought, fuck, that's a good idea.
S1 00:38:51.147 And the joy for me in that would be A, the tech, like recharging. Getting 100 drones, one of those old military plane or something. Having them recharge with either water retardant, and recharge their battery while they're mid-air, and controlling this whole operation, hopefully doing good for the world. Because fires contribute, depending on how you measure it, they are the most contributory to CO2 emissions. Because if you measure the lingering release of CO2 out of the soil, once these old-- a lot of these old forests burn in uncontrolled ways, is the most significant contributor to emissions of CO2 every year. And you look at Australia a couple of years ago. Just millions of acres. California, millions of acres last year. And anyway, so there's-- If I wasn't doing Karbon, there you go.
S2 00:40:01.669 No, there's so many of these things, isn't there? You just kind of read the papers. And you go to-- you flip through the next one and you think, "Wow, what a great idea that is. How revolutionary that's going to be." Yeah, it's an interesting time, without a doubt.
S1 00:40:16.107 I think it's an easy trend. You can imagine that the VC deck, right. You get 100 pages in and you still wouldn't be past the doomsday headlines of the trend.
S2 00:40:33.442 Yeah, definitely. There's so many. It must be tricky right now to be in that VC world.
S1 00:40:39.002 Yeah. Picking--
S2 00:40:40.794 Picking what to back. You can just see it. Every day, they're getting these thousands of things come across the deck, and how do you pick the right one?
S1 00:40:49.999 I don't know. Pick them all.
S2 00:40:51.774 Yeah. That's--
S1 00:40:52.733 Some of them, that's their strategy, right. Like the [Bill Gates?] of the world have got so much fucking money, they can afford to pick them all. I don't know. Like always, I guess, they back founders.
S2 00:41:04.481 Yeah. I think that's right. It's got to be the individuals, right. And to a certain extent, of course, the concept helps.
S1 00:41:10.995 Yes. And also the problem is so big. And the world is just heading for this such a catastrophic state, that you can back them all with-- Hopefully we're better off, but--
S2 00:41:29.418 Yeah. That's true. There's a lot of high technology things from what we've been discussing around kind of carbon offset and drains. It's kind of huge technological kind of demands, in some of those things. And there's a little bit of-- in my mind, it's still the simple but disruptive are the ones that are going to--
S1 00:41:49.596 Yeah. Win the day.
S2 00:41:50.818 Win the day. Definitely.
S1 00:41:51.874 Yeah. There is a huge central point of convergence, right, of climate change and technology where people are always looking for a technology to solve these issues.
S2 00:42:05.687 Absolutely. Look at the solar panels. When they first came out, they're just these huge big things, where you've got--
S1 00:42:14.722 They produce like a nine volt battery where as now--
S2 00:42:16.831 Yeah. Exactly. In a whole day.
S1 00:42:18.542 That's right. Yeah. On your whole roof.
S2 00:42:22.205 When you look at it now, we're doing some work at home and you start to look at it, and you think, well, hang on a minute. They're now rooftops. You can get solar panels that are just rooftops. You plug in your Tesla power wall, so you can store some of it. And the technology is there, we know. But certainly not released in the UK. But you charge your car off of your solar--
S1 00:42:42.349 That's the dream.
S2 00:42:43.135 And then actually, you turn it on the other way. So that when you need to power the lights at night, it's sucking off your car.
S1 00:42:50.213 Yes. Yes, I saw that.
S2 00:42:51.940 It's going to be fun to watch, right. And driverless cars. That's the one I-- I've got very young kids. And it does cross my mind as to my 18-month-old. Is he ever going to actually drive a car?
S1 00:43:04.889 Yeah. Will his first car have a steering wheel, or not?
S2 00:43:08.376 Yeah, exactly. Exactly. That's yeah.
S1 00:43:10.499 It certainly won't have a clutch. I can guarantee you that.
S2 00:43:12.997 No, that's true. I mean, we've always been big on the stick shift here in the UK.
S1 00:43:17.981 Yes. You have. You have.
S2 00:43:19.622 But it's definitely a dying thing. I don't think I could ever go back.
S1 00:43:23.556 I watched Top Gear the other night. I've always been a fan. And they had a 1920s or something with a-- And Freddy wasn't great on the clutch, but yeah, I don't know if I'll ever drive a car with a-- Amanda doesn't know how to drive a stick. There's not many people in the US of the next generation that would know.
S2 00:43:49.252 And the bizarre thing is, why would you?
S1 00:43:51.223 No.
S2 00:43:51.793 Yeah. I think when go back many moons ago, and you had these gearboxes, you're automatic and kind of three seconds later, it changes gear.
S1 00:43:59.910 Yeah, yeah.
S2 00:44:00.901 But you look at some of the things now, at the Porsche and BMW. That these gearboxes are better than you could do it manually.
S1 00:44:06.806 Absolutely. Well, then with electric, they're gears are [deaf?], so.
S2 00:44:11.486 No, no, no. Exactly. My neighbour's got an electric car. And I remember the first time he took me out in it. Terrifyingly fast and quiet, was kind of what I left that experience with. Just the whole no noise is quite--
S1 00:44:28.566 It's unique. It's new, isn't it.
S2 00:44:30.061 Yeah. It's very unique. It's very unique. And I've always been a bit of a petrol head, so I've always liked the loud rumbling noises.
S1 00:44:37.354 There's something about that, right. Taking off with a mid-mounted eight cylinders behind you. There's a lot. There's something in that.
S2 00:44:46.307 Definitely. And then you get in a car, what's the Tesla Plaid, 0 to 60 in 1.99 seconds?
S1 00:44:51.951 Yeah. No, I counted. Don't worry.
S2 00:44:53.870 And you're just like, "This is insane. It goes that fast, and it doesn't make any noise."
S1 00:44:57.926 It makes my kids sick, that's--
S2 00:45:00.122 Yeah.
S1 00:45:00.980 I got to flick it right back to chill mode when the kids are in the car. Dad can have his fun by himself. "Leave us out of it," they say. And my commutes can be pretty windy.
S2 00:45:14.455 Okay. Yeah, so yeah. Thinking back to my time in Incline. It's--
S1 00:45:20.042 Yeah. Yes, well yes. That's exactly what it is. Up and over that hill. It can get a bit hairy in winter as well. What's on for the rest of the year, Gary? What are your plans for business? Plans for the family? Travelling at all? What's the idea?
S2 00:45:37.357 So we're fresh back from Greece, which was a fantastic break. Booked pre-COVID, so it's the fourth attempt at the--
S1 00:45:46.049 Oh, fourth attempt.
S2 00:45:46.634 --same holiday. But we managed that.
S1 00:45:49.290 I know that feeling.
S2 00:45:50.581 Yeah. And kind of got on the plane, kind of coming back. Great. Oh, wife's got COVID. So that's been a bit challenging. So try and get another break in this year, and go somewhere. Catch up on the three years of not really being able to travel. That's good. As I said, I've got three young kids. They kind of keep me very mobile and active. Then work wise, I think we've got some really exciting opportunities in front of us, and the sectors I've discussed, it's kind of really starting to niche a little bit in terms of focusing to your earlier points in terms of you do the same thing on scale, the margins are much greater. Growing the team, kind of attracting the talent, and just more of the same.
S1 00:46:38.462 Yeah. Keep the hammer down. You're not seeing too many economic headwinds in the sectors that you're working in, are you?
S2 00:46:46.942 No, we're not. I mean, when COVID hit, we were very fortunate. We weren't really in the hospitality sector at all. So that didn't hit us. Of course we had some clients that were impacted in travel sector. I think there's some economic headwinds, but I think the industries that we're in should be relatively robust. And ultimately, what happens, my experience is the advice you give changes, right. So we've had a period of COVID where actually, we're giving this advice around budgeting and forecasting for things. We're in a period now where, actually, the advice is, "Save me some tax please, because I'm making lots of money."
S1 00:47:27.323 Yeah, good. There you go.
S2 00:47:28.371 Yeah, exactly. Then it's going to flip back the other way, with certain clients to say, "Well, actually--"
S1 00:47:32.969 Make sure you got something on your balance sheet to get through an extra period of downturn, or whatever occurs.
S2 00:47:40.480 Yeah, definitely. And it's that age-old adage in that kind of good businesses survive recessions, and great businesses thrive. And they just do.
S1 00:47:50.484 Yeah. And we're going through the same process, making sure we got a couple of years of runway. And like all well-run businesses, you just sort of make sure that you got the resources to get done what you need to get done.
S2 00:48:05.843 Yeah. Definitely. Definitely.
S1 00:48:08.683 Gary, thank you for coming on the Accounting Leaders Podcast.
S2 00:48:11.443 You are very welcome. Thank you for having me.
S1 00:48:18.896 Thanks for listening to this episode. If you found this discussion interesting, fun, you'll find lots more to help you run a successful accounting firm at Karbon Magazine. There are more than 1,000 free resources there including guides, articles, templates, webinars, and more. Just head to karbonHQ.com/resources. I'd also love it if you could leave us a five-star review wherever you listen to this podcast. Let us know you like this session, and we'll be able to keep bringing you more guests for you to learn from and get inspired by. Thanks for joining, and see you in the next episode of the Accounting Leaders Podcast.