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Chris Williams is the CEO of System Six, a modern accounting firm focused on providing dream accounting careers to their team members and superior services for their clients. In this episode, Chris explains how to achieve just that, including the criteria for selecting System Six for acquisition and what challenges he faced along the way. Besides Chris' journey with System Six, he and Stuart also discuss life outside work, the best golf spots in the Bay Area, and how his wedding preparation is going.
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.
Stuart McLeod 00:00:01.034 [music] 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. [music] Today, I'm joined by Chris Williams, the CEO of System Six. He's a modern accounting firm focused on providing dream accounting careers to their team members and freeing up customers' time so they can focus on their business, their family, and interests. Chris spent 10 months looking for a small business to acquire. To fulfill his entrepreneurial passion, acquired System Six in July 2021. Previously, Chris had worked in finance, and rediscovered the path of search funds, essentially working with small business investors to seek out, acquire, and grow small businesses. It's my pleasure to welcome to the Accounting Leaders Podcast, Chris Williams. Welcome, Chris.
Chris Williams 00:01:01.545 You have COVID too, like me?
Stuart McLeod 00:01:03.503 No. No, I don't. So you've got COVID at the moment?
Chris Williams 00:01:06.855 Yeah. I'm on the tail end of it. We all got it at an accounting conference a couple of weeks ago. A bit of a spreader down in San Diego.
Stuart McLeod 00:01:13.395 Oh, no way a few people got it.
Chris Williams 00:01:14.281 Yeah, [crosstalk] said, hi. Someone was there early in the first panel. I missed the first panel, but you guys had a booth, and everything going well. I hope they're over it. We didn't contribute too much to this super spreader thing.
Stuart McLeod 00:01:30.418 I mean, I think four or five of us got it out of I'm on a group tax with 20 or 30 owners. A couple of us got it, but it's that time of year. I'd never gotten it. It was time to get it.
Stuart McLeod 00:01:41.681 Yeah. I think we've [inaudible] a couple of goes at it now. Ever since getting back from Aussie we've sort of just struggled to recover. I think not being in the routine of travel doesn't help either. I got to get back into that. And how was the San Diego conference? It was AccountingWEB? Is that what it was, AccountingWEB Live?
Chris Williams 00:02:03.094 Yeah. I mean, I'm still new to all of these, right. So I'm like learning which are the better ones and not. It was really good in terms of the community of businesses that were there. It was all modern cloud Karbon users, even if they're not on Karbon, people who think-- nobody on QuickBooks desktop, all that stuff. It was definitely, I just think, lightly attended. I think there are as many firm owners as there were vendors. The vendor ratio wasn't right. I think because it's their first year doing it, but I've been to Thriveal, and I went to New Heights last year, and this was a much more focused community of, yeah, modern cloud accounting firms that I can learn from versus the desktop mentality or the super tax heavy mentality. So it was good. The content wasn't that useful, but all the side conversations were good.
Stuart McLeod 00:02:51.207 Yeah, well, that can often be the case. I mean, the accounting industry generally is kind of not too bad at getting like-minded people together. I don't think the industry is so broadly populated. I don't think accountants see each other as competitive per se. I guess that does happen, but not in such a significant way where people are competing day in, day out against each other. I think maybe vendors. I don't know, maybe vendors compete a little bit more although all the vendors seem to be selling up. So all our competitors seem to be selling up, so we don't mind.
Chris Williams 00:03:30.077 Yeah, they're gone after NetSuite.
Stuart McLeod 00:03:33.311 This one in Australia that [inaudible] reconciled recently. The UK one sold not that long ago. So I think that maybe the vendors are thinning out and the choice is becoming more limited, but back to your story, right? I guess it's quite interesting how you came into the accounting industry. You want to walk us through that a bit?
Chris Williams 00:03:57.100 Yeah. No, 100%. I recognize I've got a bit of a different background. Yeah. So I bought System Six, obviously. You and I have talked before. I bought it last year, last July from Jeremy, who's Jeremy Allen started the business 2008, 2009. Still a great friend and mentor to me and to System Six, but yeah, I acquired the business last year. I came into cloud accounting from a different background, so I did sort of more of a traditional finance investing path out of undergrad. I worked at investment bank and then I worked at a private equity firm for several years, went back to business school, and then after business school was basically faced with that typical decision, "Hey, do you go back and take the more traditional corporate route which is very lucrative? Or take something a bit more entrepreneurial on, roll the dice?" And it just felt like for me a really good time in my career to take on some risk, look for something that could be more energizing and motivating for me long term. So I sought out to acquire a small business to run, put a group of investors behind me, and this is becoming somewhat common path out of business school. It's called the search fund. Basically, just forms and you can structure it or you can make it a little bit more informal. I took the more informal path, which was just work with some mentors, "Hey, I want to go find an awesome business to buy that I can grow in scale," so I spent about a year looking for a business to buy across a bunch of different industries. Some common themes in terms of what I was looking for, and one of my investors pointed me to outsourced accounting and outsourced finance services. That led me to cloud accounting and that led me to System Six. So, yeah, a bit of a different path, but I think it's been energizing for us, for me, to have a bit of a different perspective, not as someone who's built it from zero to one, but now really trying to take it from one to 10 or whatever number you want to throw in there.
Stuart McLeod 00:05:46.824 Tell me what was some of the other industries or businesses that you looked at during your search and-- yeah, let's start with that.
Chris Williams 00:05:55.755 Yeah. So the theme, right, is you got to have a bit of a focus in terms of what are you looking for. So for me, it was kind of two things, basically: one, I live in the Bay Area. I've got a fiance who's got an awesome job that she loves here in the Bay Area. She works in real estate. So one of the few industries that isn't going remote because they have an incentive to bring people back to the office, so I was looking for a business that I could run from, I would say Northern California or the West Coast. I wasn't looking to move across the country. If I bought a business in Tahoe where you guys are, we make that work, so that was one lens in which I was looking through things. But the other thing is obviously I'm an inexperienced operator, so there's a couple of key-- this is not rocket science, but a business with pretty recurring, steady revenues that aren't tied to the owner, right. You buy a construction business where it's all the owner's relationships. That's going to be really hard to take on. A business in a growing industry because as an experienced operator, if you're swimming upstream, that can be really challenging. I think even the best operators in the world can have a hard time turning around a business and a struggling industry. So those were two really big key focus points for me, which was sort of repeat recurring revenue and a growing industry, so I felt like there were good tailwinds behind us. So that led to-- I tried to apply my background a bit as well, so coming from finance, real estate finance, so I was looking at blue collar services to the real estate industry. COVID hit, that changed a lot of perspectives there. I started looking at finance services, wealth advisors, registered investment advisors, software in that ecosystem. So you end up looking at a lot of different industries because you kind of want to be pretty high volume. Find an industry, spend a couple of days. Do you like it? Reach out to a bunch of owners. If nobody gets back to you, move on. It's a sales job. So I was a bit all over the place for sure. But with a common theme of something I could run from the West Coast and get business attributes.
Stuart McLeod 00:07:52.193 Yeah. And what about in terms of the Bay Area, software is an obvious sort of recurring revenue area. Did that sort of cross your mind for a bit?
Chris Williams 00:08:02.420 No. I mean, it crosses my mind, I think, every day as we talk about scaling, as we talk about churn, that can be done a lot easier from software than it is from service businesses, a couple of things. One, I don't have a technical background, right. I can speak accounting language from working in finance, but in terms of leading a group of engineers that's harder to do without that skill set, so that was one thing that weighed on me. Two, just from an M&A environment, obviously, everybody, every private equity firm, every individual high net worth investor is chasing after those small SaaS products or on-prem that they want to transition to the cloud. So I felt like I would have a better chance looking somewhere that's perhaps a little bit less competitive, but yeah. I mean, I saw a few software businesses and took a look at them. They obviously trade for very different multiples, so when you talk about financing the purchase, when you talk about the growth trajectory you need to hit to make your financial outcomes happen, that's very different. I mean, you know that, right? Whether it's venture money or gross money, right, you can't buy a software business with a ton of debt the way you can buy a services business. So it just changes some of the economics there, too. But I definitely looked at some. Yeah. I mean, it's best business model in the world, right?
Stuart McLeod 00:09:18.700 Oh, I don't know about that [laughter]. Somedays.
Chris Williams 00:09:20.855 There's pros and cons to everything. Yeah, yeah. [inaudible] software is going to eat the world, but easier said and done.
Stuart McLeod 00:09:28.479 Oh, sorry. I thought you said it's the easiest job in the world. No, it's not the easiest. Software is eating the world. There's no doubt about that. I think it was probably from your description of it, it sort of sounds like you sort of come home a little bit in the end, having gone through looking at all kinds of different businesses, looking at all kinds of different recurring revenue models, and the one that kind of suited you the most was leveraging leaning on your background in finance and business school, etc..
Chris Williams 00:09:53.904 Yeah. I mean, at the end of the day, if you want to run a business, I think it needs to be a business that makes sense for you to run, and something you could see yourself selling. As a small business owner, I'm selling every day, whether it's internally or to customers. Do I speak the language? Yes. Am I excited about the product we're providing? Yes. So, yeah, I think you're right. Some of that stuff I didn't really realize until after I bought the business. Also, the network I have of people who are acquiring small businesses who then are like, "Oh, man, I need to fix my accounting and my payroll and all that stuff," and they're like, "Oh, Chris, you own this business," but I think it's a really good market to be in, and I'm really excited I found it.
Stuart McLeod 00:10:31.620 Did you consider sort of starting from scratch?
Chris Williams 00:10:33.916 No. I think that's just a very different risk profile when you think about what does success look like in four or five years. I think if you're going to start from scratch, it makes a lot more sense to try to start sort of a venture-backed, shoot-for-the-moon business, right, because getting from zero to one is so hard and if you are starting a service business, it's going to take you five years to even get to hiring your tenth employee. For me, I wanted to get to scale both financially for me and also for my role. And so I felt like it's better to buy an existing really strong foundation and build on top of that and start the service business. I think if I wanted to start something, I would have been more of a venture-back start-up, but I just didn't have any ideas. And maybe that's not my risk tolerance nature.
Stuart McLeod 00:11:24.243 No, that makes sense. And so what was the process like with Jeremy? Jeremy and I have got to know each other really well over the years, and as somebody who was a great champion of Karbon and our efforts, and we massively appreciate that. So I imagine it was a pretty good process, a pretty straightforward process, but given he's such a great guy. But what was it like for you?
Chris Williams 00:11:49.043 It starts with, like I kind of said earlier, in a lot of ways, a sales role from my perspective, building a list of cloud accounting firms that were kind of 10 to 15 people or 10 to 50 employees, and then emailing them and saying, "Hey, I'm looking to acquire business and scale it. Are you interested in selling?" Jeremy responded, and it was an evolving, developing relationship for us. We met first in fall 2020. He wasn't quite yet ready to sell. He was definitely thinking about it. I had some conversations already, I know, with kind of more of the regional accounting firm buyer. Yeah, I was at the time looking for, I think, a little bit bigger businesses, and I was just early in my search, and so I wasn't quite ready to jump on something. And then he and I stayed in touch. I was actually kind of emailing him, trying to get him to sell into this market of small business acquisitions because our services are very good for new business owners who are trying to modernize. And I sent him an email. He went quiet for a couple of months. He had some personal stuff happen that took him, I think, outside of work for a few months, and then he kind of wrote back to me and probably March 2021, "Hey, I've really appreciated our conversations. I'm thinking more and more about selling the business. I've actually got a couple of offers. I'd love to talk to you about them." Then we sort of transition that conversation into, "Are you still interested in buying the business?" We had preliminary kind of evaluation conversations. Then I actually went out there. I don't know if you've been to their new place in Michigan, but.
Stuart McLeod 00:13:13.873 No, no.
Chris Williams 00:13:14.678 I had to go audition for a couple of days. We went hiking. We spend some time on the water. And to his credit, he cared a lot about, I think, who he was selling the business to, not just top dollar, but who's going to take care of the team, who's going to take care of the customers. And I think he liked the idea of selling to a person versus selling to a firm, which creates all those integration challenges. So it was pretty-- yeah, we got to know each other, put an [inaudible] together, negotiated over points in that, kicked off diligence. There's a lot of back and forth on the purchase agreement. There wasn't a ton of hair in diligence, which is good when you're buying an accounting firm. You don't want your books to be messy.
Stuart McLeod 00:13:54.067 He's pretty well organized, I imagine.
Chris Williams 00:13:55.703 Yeah, yeah. And it's been a really good post-acquisition transition as well. He got out of the business pretty quickly, which I think is good to allow for sort of change in leadership. But he and I catch up at least kind of once every couple of months on big problems I'm facing, and he's been a really good sounding board.
Stuart McLeod 00:14:13.121 That doesn't surprise me at all.
Chris Williams 00:14:15.278 Yeah, he's just a good dude.
Stuart McLeod 00:14:17.058 Yeah, he is. What about the team during transition and how obviously a lot of his great team have been? Brooks and others have been with him for a long time. How's the team sort of accepted the transition? I'm sure there's always changes and people move on. People come in, all of that kind of thing. What's that been like for you?
Chris Williams 00:14:37.322 Yeah, I think you got to come in with, "Hey, I'm here to listen. I'm here to learn. I'm here to help. I'm here to bring energy." System Six was growing, but Jeremy had been focused on selling the business for a little while, focused on other aspects of his life. And so I think the team has definitely appreciated some more focus on, "Hey, we finally rolled out Ignition. We'd still been doing [crosstalk] in Microsoft Word until the end of 2021." So I think people were nervous out of the gate to be expected, right. Like, "What's going to happen?" Big change. And so I really tried to not make any changes, just carry the torch forward. "Hey, if there's an easy win, like rolling out Ignition, let's do that," but we definitely haven't made any significant changes other than really just growing faster and breathing energy into all that is there. We lost a team member in January, and now there's transition, there's making sure the team gets reallocated, and that has definitely worked. But I think, all in all, I recognized pretty quickly that I think System Six had a really good culture and a really good mission, really an inward-focus mission of creating a phenomenal place for people to work in cloud accounting. And I think if I tried to change that and try to push our team a lot harder and, "Hey, if you're working 30 hours. Now, you got to work 40 or 45." We'd have a big issue, but just trying to honor that, I think for the most part, people have been happy that the transition wasn't rockier. There weren't really any big changes, and we've hired a lot of people in the last six months, and I think that gets some people energized that, yeah, now we're trying to really push forward.
Stuart McLeod 00:16:12.376 Talk more about that internal mission and how that translates into team work and team effort and how you've been able to expand on that.
Chris Williams 00:16:22.076 Yeah. I think it comes down to the core realization of, "Look, we're a service business, right." If our team is not in a good place, if they're dragging their feet at work, if they don't want to be talking to a customer because they think that customer is really prickly, we're not going to be able to provide good services. Karbon, all kinds of other tools help us do our job well, but at the end of the day, it's people doing the job. It's not software that's running on autopilot. So I think that's got to be the absolute core mission for any service business is have a fantastic environment for your team, especially, look, we're a remote business, so people have choice of where they work. They're not tied by geography. That's something I think I definitely appreciated more and more over time once I got here was that if our people aren't fired up and loving System Six-- obviously, that's not the case every day. We got problems. We're working on them, but I think just talking about that more internally, but I've also been talking about it with customers. I talk about it in every sales call just to sort of set the precedent of, "Hey, we are absolutely focused on delivering an excellent service to you as a customer but more importantly, we want this to be an awesome place for our team to work. That means we have expectations of you as a customer around communication style, communication cadence," so I think how we furthered it, I think maybe talking about it a little bit more with customers just so upfront, they kind of understand we're not sort of just a pushover service provider.
Stuart McLeod 00:17:50.483 Yeah. Setting expectations upfront with the client base is pretty important, right?
Chris Williams 00:17:56.095 Yeah, they get it, right. If you couch it and pay for us to provide good services to you, our team has got to be in a great place. That's why we charge high fees so we can pay our team well, and that's why we have these expectations of you, so ultimately we can serve you well. I think people like to hear that because they recognize, "Oh, yeah. We're dealing with a well-run business on the other side."
Stuart McLeod 00:18:15.003 No, completely. No, I understand. And have you sort of adapted the marketing, too, and go-to-market to increase that growth since you took over?
Chris Williams 00:18:25.473 Yes. I mean, candidly, we've been fortunate. We're not really spending really any marketing dollars. We spend a little bit of money to refresh the website. I think more than anything, I'm just spending a big chunk of my time on sales. If you look at the numbers, certainly our filter of inbounds to calls, I'm a salesperson for now. I am taking more calls as a percentage of inbounds than we were doing before. Some of that is a waste of time because those are bad prospects that we should have filtered out before I get on the phone with them, but if I'm taking a few more calls per month at the same volume of inbound customers, that's going to lead to more growth, so that's probably the biggest thing. And then I would also say we've been trying to filter for larger customers, just basically increase that. For us, it's weekly recurring revenue, but to some extent onboarding a $ 200-week customer versus onboarding a $ 500-week customer, there's some stuff in there that's just fixed, right. Like you got to get them set up on Karbon. So why not get that set up for a larger customer? So by orienting my sales energy to some of the larger customers that come into our system, that's a little bit of a flywheel. We're taking on more larger customers, so then they're referring us. These are two to five million dollar businesses versus before we were doing more kind of 500 to million and a half in revenue range customers. So yeah, some of that has been my network friends who bought a business and now they need help and they bought a five or seven million dollars revenue business, and that's a bigger ticket for us. So that helps growth too, obviously.
Stuart McLeod 00:19:56.390 Yeah, no, definitely. And what about in terms of the customer base and growing that revenue, what type of customers typically do you service?
Chris Williams 00:20:04.765 Yeah, for us, I think we have a few counter philosophies, and that's probably just wrong on my perspective, but we're not really niching very aggressively right now in terms of industry. I think you naturally develop some niches, 10% to 15% of revenue just based on referrals, so we don't have like, "Hey, we only serve customers in this industry." I do think for us it is more we don't want to serve a customer who just wants very simple plug-and-play outsource bookkeeping because they can probably get that done cheaper, whether it's a $50-an-hour old school bookkeeper, some of whom would do really good work, or just other firms that have a lower price point. We're really looking for someone that wants outsourced finance services. That's bookkeeping every one of our customers are doing bookkeeping for. But it's also, "Hey, we're going to process payroll for you." We run over 1,000 jobs on Gusto on a bi-weekly basis. We do BillPay for 60, 70 percent of our customers, so that lends itself to a little bit larger businesses, kind of that one to five million dollar owner has been doing it and their time should be spent somewhere else. So give us your finance operations, give us your BillPay, give us your invoicing because I think that helps create stickiness. The more parts of their operations we can be involved in, the more time we can take off their plate, but also the more we can increase stickiness, which is a good thing for our business, obviously.
Stuart McLeod 00:21:28.910 Yeah. And do you think you'll move into a niche of some sort? Do you think that that provides benefits for the firm?
Chris Williams 00:21:35.409 Look, I mean, as we keep trying to grow, I think once we start spending marketing dollars, I think you have to have some niches because just to try to market to small businesses is way too wide of the sloth and you're not going to get any productivity out of those dollars spent. So I think what we'll end up doing is we'll start building niches within teams. Even today, 95% of our customers are QBO, but we've got one team that's got all the zero experience. So if we get a zero prospect, we send them there. We've got a little bit of that. One team does a little bit more around wealth management and wealth advisors. There are some nuances there. So I think we'll build niches on teams, probably, but not in System Six, we'll have four or five drop-downs on our website of industries we love to serve. But I don't think it's ever going to be planted our flag in just one industry because we're trying to become a decent-sized business, and I don't want exposure just to one industry. But I think you can have a niche in the type of customer in terms of what are you doing for them, like I said earlier, with the buis ops and all that.
Stuart McLeod 00:22:39.356 Yeah. And I mean I guess the aspect of where you're up to, I mean, you're probably not going to focus down onto one particular area. You're going to keep that sort of progressive technology advanced founders that are great to work with or business owners that are great to work with and make that your thing, right.
Chris Williams 00:23:01.493 I admire and look up a lot to what Acuity is doing. And you talk to Kenji, and they are oriented towards startups, right. But it's really about technology among technology usage by their customers, and it ends up being across industries. So I think it can be more size and tech literacy is an absolute mandate for us, right. We're not serving anybody on desktop. So that starts to build a bit of a ICP talk and venture language, who's our ideal customer? It's got to be someone of a certain size and who wants certain things in their business. And some people don't. Some people want to stay manual.
Stuart McLeod 00:23:40.015 Definitely. And how do you manage the team? Is everybody remote? Because I know Jeremy had a bit of a concentration out in Seattle for a while.
Chris Williams 00:23:48.919 Yeah. I mean, that's dissipated. Some people have just moved out of Seattle over time. There are several team members who are still with us who used to live in Seattle, but yeah. So we're fully remote. We're 28 people now in 14 States. So we get together once a year and we're doing it in Denver this year. Everybody and their spouses or plus-ones, however you want to define it, are coming out for a couple of days, just kind of team hangout time. We're not doing conference room-type stuff. So doing a gathering like that once a year, we're going to conferences again now, so we're bringing some of our team to Xerocon. We'll bring some more to QuickBooks down in December, so that's another opportunity to get together with people. But yeah, we're remote business. No [inaudible] about it. That means probably more meetings from, "Hey, how are you doing?" More meeting time is dedicated towards those, "Hey, what's up in your life?" Top five, bottom five conversations. But if someone said to us, "Hey, I'm really looking for the experience of an in-person firm in a remote environment," I'd probably say, "Hey, we're not a fit for you because we're a remote-first company that's going to be different than going into an office." Yeah, remote and I think that's definitely not going to change for us.
Stuart McLeod 00:25:02.128 Yeah. With the conference or the get-together in Denver, have you got a bit of a concentration up there, do you?
Chris Williams 00:25:08.096 No, we learned this last year. We did it around the transaction, so we did it in Michigan, actually. Jeremy hosted everybody. It was kind of a hand-off and phenomenal weekend. They're amazing hosts, but 45 minutes away from a regional airport makes travel really, really hard for people when they [crosstalk] across 14 states. So we are picking an airport, basically picking cities based on an airport that most people can get to in one flight and Denver fits that. We're going to hotel or resort. We've got some space at the pool. We've got dinner out on town both nights going. Everybody wanted to go whitewater rafting. So we're doing whitewater rafting. That's the activity on Saturday.
Stuart McLeod 00:25:45.168 Okay. [crosstalk]. Don't wipe out half your team.
Chris Williams 00:25:48.482 Yeah, we're not doing-- I said no, class-Vs. No class-Vs. I've done some of those crazy trips on the American River by [inaudible]. You got to make sure you get a good guide.
Stuart McLeod 00:26:02.300 The only rafting is down the Truckee River we've done with the kids.
Chris Williams 00:26:07.165 Oh, the Truckee River floats.
Stuart McLeod 00:26:08.864 At best, you barely move and get both sunburnt and shit-faced by the time you get to the bottom.
Chris Williams 00:26:15.882 Yeah, I think that's more drinking. I know that the 4th July Truckee River floats, that's a drinking activity, not a floating activity.
Stuart McLeod 00:26:23.868 Absolutely. These days you can walk most of it, unfortunately.
Chris Williams 00:26:27.557 Yeah. I know. I know.
Stuart McLeod 00:26:29.508 Hopefully, might get a bit of rain over the spring. But what's next for System Six? You guys are obviously growing. 28 staff and expanding. You're doing a fair bit of the sales. Where do you think you'll be sort of this time next year at least?
Chris Williams 00:26:44.408 Yes. I mean, look, I think our long-term goal is, I think about building a business that's got 100 employees, and I want to get there. And I don't know if it's five years or six years or seven years. It's not two years because that would break us, but we are now at the point, yeah, with 28 staff. So we've got four-team leads, each managing sort of five to seven people on those teams where I think we're kind of at our max without more time from a management perspective, which means we've got some people on our team, people you know, Brooks and Kelly, who are still doing some client work, still doing a good amount of team management work. And I need to get them more and more into business management seats. And also I think we've got probably some external management hiring to do, head of accounting type role. Several people are wearing that hat right now, and that's for it to be a 40-person firm next year, let's say that, we need sort of a full-time head of services type role. More dedication towards low code deployment across our customers. Build out a little bit of that engineering light team. We've got one great team member today and let's scale that. So we're going to keep hiring, obviously, service staff probably a little bit slower than we have the start of the year, but to get to that long-term goal, we've got to build an awesome management team that is excited about joining me to build and scale and put in place more processing systems. So what I'm experiencing is it's hard to find the time as a leader to work on those big projects, especially when I'm doing sales. So I got to do a better job of getting into that important not urgent quadrant. I'm sure you've heard all about that. But yeah, in a year from now, having that team in place.
Stuart McLeod 00:28:24.815 Yes. And what about your systems? I mean, you talk about low code or no code. You talked about putting Ignition in and doing your proposals, at least in an automated way. Hopefully, that integration is working for you. What are the most important systems for you that you've discovered or that you've inherited and or put in System Six?
Chris Williams 00:28:43.571 Yeah. Obviously, Karbon is core to everything that we do. And I know you played a huge role and still do in giving some product advice and feedback, but I feel like we have these conversations with Ian, with Patty and your team. We were probably front of the curve and how you're using Karbon a couple of years ago, but there's a lot if you guys are rolling out tools. We're not necessarily rolling them out ourselves. So Ignition and Karbon have some integration, right, and automatic integrations. And we should be deploying that [crosstalk] time tracking. Can we move budget and time into Karbon, get outside of [Toggle?]? So I feel like for us, our core stack is Gusto, Bill.com. For our customers, QBO, and then internally it's Karbon, it's Ignition, it's [Toggle?] right now for time, it's Gusto. And I think getting all those systems to talk to each other a little bit better, that's how we stay leading edge. Some of that's low code, some of it's direct integrations, some of it's just adapting client tasks. We're trying to use more client tasks. So that's kind of where I see us going from a systems perspective is just making better use of what we've got in place.
Stuart McLeod 00:29:52.091 Hopefully, you're joining us next week, but we're at Karbon X, but we're looking I think we're starting to sort of progress into the situation with firms like yourselves that have been at the forefront of technology and forefront of no-code or low-code, automating your operations to move into a level of maturity where you're looking at using the data and using the systems to just improve that 1% a month or 1% a quarter or 1% a year for all I care. But I think we're slowly starting to get there. In terms of things-- I mean, it's not really about Karbon, but really about using the data in all these systems that we use and tying them together better and getting the reporting up and going and combining the systems we use in an effective and efficient way. Not in a frustrating and not slow, but complex way so that you can utilize these systems in ways to operationalize better and automate better and improve better and ultimately, improve your margins a little bit by little bit.
Chris Williams 00:30:56.257 Yeah. And I think it's like we've done a-- the team I stepped into and obviously, Jeremy and Joe who is with you all did a great job setting this stuff up is getting a lot of stuff in G sheets and a little bit of custom scripting to push something from [Toggle?] into G sheets, combine it with QBO. But like, "Hey, we did that a couple of years ago when some of this low-code stuff didn't exist. So how can we make it a little better right now?" And then in two or three years from now, how can you make it a little better? So I think kind of having this mindset of internally, we're probably always going to be improving the way our systems work and talk to each other, and when you guys start really rolling out kind of gross margin analysis inside of Karbon, like, "Okay. Great." Then we sort of ditch the custom work and we start using Karbon. I think we know what the systems are we want. It's just like, "Hey, they got to change every couple of years as you can make them more efficiently." Yeah, I mean, we have so much data that we could be learning a lot more from for ourselves, for our customers, and that's a 10-year vision type thing. But I mean, think about all the data small business accountants have, right?
Stuart McLeod 00:32:05.260 Yeah, yeah. No shortage of what you've got these days.
Chris Williams 00:32:08.139 If we figured out a way-- I mean, Karbon should do that. I don't know. I don't know who does this. Figure out a way to package our data together, maximize it. That data is incredibly valuable. Think about the insights we're getting on the economy right now from purchasing power across our businesses. Hedge funds will pay a lot of money for all that.
Stuart McLeod 00:32:23.785 Yeah, yeah, yeah. Now, we don't want to sell it, but we are certainly making progress in helping you, the royal you, you, the firms improving your businesses, because at the end of the day, service businesses is just about that continuous improvement. And if you can operationalize and automate and just improve a little bit each month, well, then you're going to get to a situation where you got your 100 employees and everybody's operating pretty effectively. You're going to be a pretty high margin and profitable, but also mission-bound and mission-based business that is doing good in the world, right. They're not mutually exclusive.
Chris Williams 00:33:03.030 Yeah. I mean, at the end of the day, if our mission is to first and foremost, provide a great place for our team to work, what's a better work environment? Having people having to go switch between systems to look at how much time they spent on a project? Or is it right there inside system. Or like, "Man, our sales process needs a lot of improvement." A lot of stuff in G sheets and how that's a better experience for our team if all of my notes are in one place, so it all comes back to, I think, building a better place for people to work.
Stuart McLeod 00:33:37.615 No, definitely. And then ultimately the clients benefit and employees learn. Or hopefully, working on the things that they enjoy and not the things that they have to do because Chris tells them to, right?
Chris Williams 00:33:51.105 Yeah, I mean that's been another, I think, learning for us as we grow. Not every team member has to enjoy doing the same thing. Some people want to-- look, we don't do much of the advisory type work right now, and I actually don't think we're going to go into that aggressively the way other firms are, but we do it here and there for sure. And there are team members that want to do more of that. So for the customers that want it, let's give it that team member. We don't need to ask every team member to be an advisor. Some people just want to be great at sending off clean books every month, doing payroll and all that stuff, and all that. So there's many seats on the bus, so to speak.
Stuart McLeod 00:34:27.477 No, definitely. And you're making a bigger bus, so it sounds like you're building a family and working towards that. And you've got a wedding coming up. What else outside of work, what keeps you busy?
Chris Williams 00:34:40.527 Yeah, yeah, yeah. So I got engaged three or four-- well, yeah, actually yeah, three months ago. Just [crosstalk].
Stuart McLeod 00:34:47.742 Congratulations. Well done.
Chris Williams 00:34:49.479 Thank you.
Stuart McLeod 00:34:49.765 She said yes? [crosstalk].
Chris Williams 00:34:51.411 Yes, she said yes after a lot of begging and pleading and [inaudible]. Yeah, we're trying to take our time planning a wedding. I think a lot of people let that take them over and become chaotic, and we don't want that to be our experience. At the end of the day, our wedding really is meant to be about us starting our marriage together, and we don't want to lose sight of that. So we're moving slowly. She's from kind of central coast area, inland, kind of Salinas Carmel Valley, inland from the coast. So we're probably going to get married down there because it's a beautiful area. We just kind of want to show that to people. We're probably a couple of years away from kids. I think Blair is working in a real estate investment firm and really focused on kind of-- she just graduated from business school a year ago. So we're both sort of in the like, "Hey, let's put our heads down for a couple of years and let's get ourselves out of the weeds."
Stuart McLeod 00:35:41.874 Yeah, build a bit of wealth. Get rid of some student debt.
Chris Williams 00:35:45.416 Yeah. I mean, as you know, look, I love living in Sausalito. It's a beautiful place, but I'm not buying a home here anytime soon. So we're taking time, I think, on some of those bigger life things, but really trying to enjoy the fact that, yeah, we're happily engaged, living in Sausalito, going to town on the weekends. Just a great place to be and not lose sight of that. I like to play a lot of golf in my spare time. It's another big draw of being in California. You can do that year-round.
Stuart McLeod 00:36:15.359 Which golf course?
Chris Williams 00:36:16.873 It's raining less and less, right. So I can play more and more.
Stuart McLeod 00:36:22.984 Do you play up in Marina a bit?
Chris Williams 00:36:24.772 Yeah. So it's fun. I don't know if you-- Mill Valley has nine-hole executive course--
Stuart McLeod 00:36:31.147 Yeah, yeah. I know it well.
Chris Williams 00:36:33.321 --which is very underrated. You can show up there early in the morning or you can show up late in the day. It's run by the city and there's nobody there. And it's just like kind of a free for all. So I go there. Peacock Gap up in San Rafael is nearby, and then there's a ton of stuff down in the Peninsula, too, so there is a good place to golf.
Stuart McLeod 00:36:50.766 I'm sure you get into Presidio and knock around there a bit?
Chris Williams 00:36:55.310 Yeah, Presidio is fine. You've got to be on your game to get a tee time there. And then they fell off. And yeah, Presidio is narrow and you will knock it around. You will hit some trees when you're there. That's weekend activities for me. At the sizer we're at, a lot of times I want Sunday afternoon to work on the business because it's one of the quieter times I get. So we're working hard to right now, too. But that's something I want to be doing.
Stuart McLeod 00:37:22.064 Yeah. I miss the Italian restaurant on 2nd and-- Main and 2nd. Azzaras was it?
Chris Williams 00:37:29.130 Down in Old Town?
Stuart McLeod 00:37:30.365 Yeah, yeah, yeah. Yeah.
Chris Williams 00:37:31.600 Yeah, that's still there. Golden Gate Market, too. We go there. That's our spot. Those sandwiches, right?
Stuart McLeod 00:37:37.830 And the smoothies. I miss the smoothies at Golden Gate.
Chris Williams 00:37:42.389 Well, the guy who runs it-- the guy who runs the coffee shop there, he's Australian, right?
Stuart McLeod 00:37:47.537 Oh, no, we lived there about six or seven years ago. We did run into some Aussies. I don't know if he was there.
Chris Williams 00:37:54.815 Yeah. No. The guy who makes the phenomenal coffee in Golden Gate, he's Aussie, so I thought maybe [crosstalk]--
Stuart McLeod 00:38:00.594 No, I will say hello to him to make his way up here like all of us.
Chris Williams 00:38:04.078 Yeah. No. I think we think we love Sausalito for now. We don't think Bay Area is forever. Central California has definitely got our-- Blair went to Santa Barbara for college and her sister lives in Carpinteria, and we love that area, so that may be on the long term if we can pull it off.
Stuart McLeod 00:38:20.805 There you go. My wife got Cate and Thatcher on the list of boarding schools for the girls, so we might be down there before you know it. We've only got two years to go.
Chris Williams 00:38:35.109 My goal is to move from a very expensive zip code to an even more expensive zip code down in Santa Barbara, right?
Stuart McLeod 00:38:39.710 Yeah, that's it. That's it. Yeah, Harry and [crosstalk].
Chris Williams 00:38:45.013 [crosstalk].
Stuart McLeod 00:38:46.082 There you go. Yeah.
Chris Williams 00:38:47.078 Good places.
Stuart McLeod 00:38:48.459 Trying to keep it cheap. Kate and Harry has it down there. You can knock around with them on their little $30 million acreage by the Bay there.
Chris Williams 00:38:57.602 Yeah. I'm not sure Montecito is in our price range anytime soon, but we're happy to--
Stuart McLeod 00:39:03.555 It's next door. It's next door. It's fine.
Chris Williams 00:39:05.203 Yes. You can drive by the Polo Club.
Stuart McLeod 00:39:09.023 They won't let you and I in. That's for sure.
Chris Williams 00:39:11.156 No, no, no, no.
Stuart McLeod 00:39:13.562 That's all right. That's all right. Amazing part of California and certainly great places to raise kids. I imagine that your wife-to-be got family down there that can help with the babysitting, etc..
Chris Williams 00:39:27.394 Yeah. And that's something on our mind. You probably thought about it too, right? It's a rat race here in the Bay Area. Not that Santa Barbara is drastically different from those schools, but I think being somewhere that's a little bit slower speed, where it's a little bit easier to be in our kids lives, is very important to us. So I think that's why we'll probably leave the Bay Area.
Stuart McLeod 00:39:47.434 Yeah. Don't die on me. We're in Tahoe for that very reason. I've spoken about this before. We prefer the skiing aspect out on the lake and there's still enough for the activities for the girls to stay connected to their community and connected to their sports. They're doing equestrian, not baseball. They're doing skiing, not soccer. It's a different life, but one that we chose very deliberately.
Chris Williams 00:40:16.220 Easier for mom and dad to go to practice.
Stuart McLeod 00:40:18.545 Oh, fuck. I much rather skiing than fucking soccer and sit out in the field, getting freezing gold. Yeah. It's a little bit selfish and a little bit vicarious, I'm not ashamed to admit it.
Chris Williams 00:40:31.748 Yeah. It's 15 minutes away, not 45 minutes away. And that stuff matters.
Stuart McLeod 00:40:35.335 No, fuck that. We're three minutes to [the chair?].
Chris Williams 00:40:39.334 Yeah, that's even better.
Stuart McLeod 00:40:41.754 Yeah. No. It's a little bit selfish, but it's pretty deliberate as well. I'm sure growing up in Melbourne, A, the snow was shit, but B, it was three or four hours away, depending on traffic, right. I love skiing and it's a very deliberate decision to be close to that. And it sounds like you're going the same way in terms of being close to family, close to the environment, to raise kids in the manner in which you choose.
Chris Williams 00:41:11.263 Right. And if mom and dad aren't in a good spot, if you're not happy because you're not skiing ever or you're not outdoors, then you're not as good of a parent. That was a big reason why we want to get into-- why I want to get in a small business, right. Is like I thought it'd be a lot more energized in my career if I was trying to lead and scale a business than working and investing, and that ultimately makes me a better parent when I'm at that stage.
Stuart McLeod 00:41:33.835 Yeah. No, I get it. I get it. I think we need to-- I think this is a good topic, we talked a little bit about this before in the podcast, but so-called great resignation is kind of an opportunity for a lot of people to focus on what does give them energy, what they are, what their purpose is, and try and match that with an employer or start their own or buy their own to help them deliver, to be energized in life and to give them spirit and to give them a purpose and to give them capacity to have that energy for their family and for their business and for their kids and their community. I mean, the world is not an easy place to be uplifted by, but all of us have got to do our own thing to make us as happy as we can be, and I realize it's a-- people have got opportunities that others don't. America is a very difficult place for that, but we can try and do-- we can try and make the world a better place in the ways that we have opportunity to do so.
Chris Williams 00:42:38.662 Yeah. And I think that is something we've been talking about even more, kind of more internally. I think Jeremy was always doing a good job of this. But like, "Hey, let's not forget you guys are providing services to firms like us to make our jobs easier," so that we can then provide services like that to our customers, which is like, "Hey, we're taking stuff off your plate. We're giving you more time." If we sign four customers in a month, that's four business owners that we just made their life a little bit less stressful. We gave them some time back. Whether it is to go spend with their family or some of them is to go focus on growing their business, but that's a pretty nice piece of impact we're making for those four small businesses as we're destressing that owner a little bit because we're taking some stuff off their plate and we're making sure it's done right. We're not doing heart surgery, but we are playing a role, and I think it's important for our team to hear that. Growth is great for me as the owner, financially, to look at and all that stuff, but everybody else should be excited about it, and I think one of the reasons is that it means that, "Hey, we're helping more people."
Stuart McLeod 00:43:40.300 Yeah, exactly. We don't profess to be curing cancer, doing heart surgery, building rockets like others, but the one thing that, like you derive more purpose as you help more people. I certainly am. I think we're up to four or five thousand customers now, and they have what? 2300, 200,000 odd clients that they work for, right, or whatever it is, and people that they interact with. And Karbon can help them be better accountants, be better organized, deliver better services. And accountants, and I'm going to talk about this next week and probably two weeks ago by the time this comes out, but how accountants, their importance in the world has increased quite dramatically over the last couple of years during COVID. The distribution of government funds or taxpayers funds, but to support economies. They've been psychologists. They've been therapists. They've been friends. They've been professionals. They've been late night lifeline to a lot. Exactly. Yeah, and if we can help with that a bit, then I know that we derive more purpose from it and we can build better company and help more people. I think that that's great.
Chris Williams 00:45:00.857 Yeah. You got to tie it back to that, right. It's like, "Why are we making this change? Why are we updating our template?" We're doing something differently in Karbon now for us, or why is there a different standard operating procedure? It's like, "Well, hey, we're trying to improve how we do things, but let's not lose sight of why we're doing all that," which is ultimately to make this a better company for you and also to make it a better experience for our customers.
Stuart McLeod 00:45:21.811 Exactly. Exactly. Hey, Chris has been fantastic. I really enjoyed our conversation, and I think we have really enjoyed our journey with System Six over the years. I mean, you guys, Jeremy did a great job, and you're continuing that legacy, and we love working with the team. And so if there's anything that we can ever do to help you make sure you reach out. And I look forward to seeing you in person two weeks ago.
Chris Williams 00:45:49.798 Yeah, yeah, yeah, likewise. I mean, we operate our business on Karbon. We wouldn't do anything without it, so we're thankful for that. And I've got great interactions with your team. We have monthly meetings with your customer success team, and I know there's a lot we can use your platform for more, and we look forward to doing that. So let's keep growing together, right? Let's go keep helping our customers more and more together.
Stuart McLeod 00:46:13.585 I really appreciate your time and thank you for being so generous. And as I say, if there's anything that we can do to help, please don't hesitate to get in touch.
Chris Williams 00:46:22.759 Let's do it. Let's keep going. Let's get after it.
Stuart McLeod 00:46:25.295 Well done, Chris.
Chris Williams 00:46:26.468 All right, Stuart, good to see you, sir.
Stuart McLeod 00:46:27.826 Likewise. Cheers.
Chris Williams 00:46:28.964 Bye.
Stuart McLeod 00:46:31.902 [music] 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, 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 on the next episode of the Accounting Leaders Podcast.