The Accounting Technology Lab Podcast – Review of Clockwork – Nov. 2023

Transcript (Note: There may be typos due to automated transcription errors.)

SPEAKERS

Randy Johnston, Brian F. Tankersley, CPA.CITP, CGMA.

Randy Johnston 

Good day. Welcome to Technology Lab. I’m Randy Justin with co host, Brian Tankersley. and today we’d like to talk to you about another FPN, a tool called clockwork. Now, Brian and I have tracked this tool for some time, along with the CEO and founder who made us aware of the tool. And there were many things that were interesting in the reporting capabilities of Clockwork as it was evolving. And the features have become far more sophisticated over the last 12 months. Now, originally, the founders showed me how they were using AI, they’ve extended their capabilities in that area. But there are a variety of capabilities that are interesting and useful. So Brian, I think what I’d like to do is, you know, have you explained to the user some of the key things that you’d like them to know and see, and then we’ll talk about some of the positioning on this product as I would see it.

Brian F. Tankersley, CPA.CITP, CGMA 

So as we jump into this, you know, we’ve got, the clockwork is really designed to be just an overall FPN a software. So, you know, as we look at, as we look at the client accounting and bookkeeping services that a lot of us offer, you know, the, the missing piece that that we really don’t have at these businesses is the the modeling the cash flow forecasting the scenario planning into the CFO services, that that are in there. And so a lot of people are adding that as an advisory service. And so, this is a platform that accounting firms are using to, again to go in and solve that problem. They have a dashboard tool, they have financial they do, they do financial modeling, cash flow forecasting, custom metrics, and scenario planning. And as we start looking at this, this is the key thing here, I want you to understand is this is not a product, even though the people behind this company have have experience with with enterprises, this is a product is designed for small businesses, okay, so when you go read the, the about page on here, you can see a picture of the of this, the one of the founders, family restaurants. That is, again, that is one of the tools, one of the reasons they established this tool. And you know, but they’ve also got people that have experience at Boeing and other enterprise class places. So so this is the best way, best way I can think of here is they’re really trying to bring enterprise class if p and a down to small business. And so their integration is with a of integrations primarily with QuickBooks Online and Xero. They have an account. And so again, this this dashboard, gathers the information and it classifies things you have, again, it will go through and give you cash flow forecasting, it will do, you can do some financial modeling. And again, the balance sheet projections. You can do cash flow forecasts, you can do custom metrics. They do have an accounting firm program, okay. And they assert that you can save 10 or more hours months in here with your advisory. They’ve got a lot of a lot of heavy Caz operations in here, primarily, it looks like looks like more corporate bookkeeping, than than accounting firms. Although they do have one accounting firm listed in their list of logos. They also list in here, they’ll show you trends and other pieces in here. They will actually go through and the cool thing about this is they’re actually using AI to go through and learn the cash flow patterns and the cash timing capabilities that you have. You have within here. And again, the the thing about this is that it’s, you know, again, they’ll they’ll go through and they’ll help you get to this advisory thing, you know, one of the hardest things about about taking accounting firms and partners that have only worked at accounting firms, and that’s no sleight against anybody. But you don’t know what you don’t know. If you haven’t, we haven’t worked in done analytics for a big company. The sophistication of that analysis is quite different than what you might think. And so they’ll they’ll help onboard you and help get you up to speed to do that kind of advisory and that that on ramp piece, I think is one of the most important things that they do. If for no other reason than you know a lot of a lot of accounting professionals want to know the answer to every question when they sit down in a meeting and that’s not possible in FPA but If you can know, the kinds of questions that are going to come up and have a good idea of what the answers are, and you know, the the coaching can help you understand when to say I don’t know, and do it shamelessly.

Randy Johnston 

Yeah. So Brian, I let you go for a while there, because the key here is that this is well beyond financial reporting, it is pointing towards advisory, you know, the key trends, being able to identify the cash flow, you know, my favorite scene in this for small businesses is cash is king, is clearly a big deal in there. And too many firms are trying to use financial reporting tools. To do these trend analysis. Now, we’ve recorded other podcasts on what we consider to be advisory class tools for impact data being a good example of that, that will do a lot of this reporting in Power BI. But this particular product is all built in here. And, you know, one of the claims that they make is that spreadsheets only take you so far. And, you know, they go on then to say that the your gut instinct meets real time financial data, there’s a lot of I’ll call it ethical things about this company that I like, I know, when you were talking about the about page earlier, that, you know, this particular vendor really talks about their values of integrity and inspiration and being principled and authentic and persistent and collaboration, preparation, positive attempt and disagreeing commit, I mean, again, the strategy behind the product makes sense. But just as important is all of their financial and modeling, and custom metrics and scenario planning. So the thing you correctly identified is this vendor has decided they’re going to focus only on the entry level market, they figured plenty big enough, with QBO, and Xero. And many of you are trying to run client accounting services products, using just reporting tools. And again, I’m not criticizing these kind of like you said earlier, you’re not trying to make sure to have anybody on CFO metrics. But if you’re using, you know, the likes of the fathoms, or the spotlights, or the drafts, you’re only getting a part of the story as we see it. And, you know, a draft is probably the most sophisticated of the three I just mentioned. But you know, Brian, I know you and I have maintained a spreadsheet of all of these financial reporting tools and enable Xero, QuickBooks sage intact, you’ve done that for years and years. Last time, I remember we had 92 of them in the list. I think there’s more than that now. But I don’t believe that you can build the type of modeling that you get inside this product, yourself. So you know, the net here then is I’m going to turn us to pricing because the pricing is so interesting in this product, the philosophical approach for this vendor is they want every one of your clients on the platform, bar none. And because of that, they have a free version. And the free version will do a 12 month financial model, a 12 month cash flow forecast, it’ll give a financial health dashboard and it provides 18 standard metrics. Now, to that one, I simply asked the question, Where else would you go for the whole those things? So Brian, do you want to talk a little bit about the plans and features?

Brian F. Tankersley, CPA.CITP, CGMA 

Sure. So the first paid plan is called Insight. And it includes all those features Randy just mentioned. And it adds a five year financial model, a 12 month cash flow forecast with driver based forecasting. And, and again, it’s yeah, it’s it’s kind of a simple tool. If you want to start, you know, dipping your toe into advisory, you know, with a little bit of financial modeling and other things like that, to try to do some light forecasting. You know, again, the the Predict tool adds 52 week cash flow forecast along with the invoice and Bill management. And they’ll go through and work on the cat, you can also go through and do cash timing for deferred revenue and expense planning. So you can go through and plan what this looks like. And then you also have unlimited custom metrics with non financial data. You know, and I think this is one of the things that is a big change here. With respect to how we need to operate when we’re doing advisory is we need to track those non financial metrics as much as the financial metrics. So you In a restaurant, we need to track the number of customers the average check amount per seat, we need to track margins on different categories. And what percentage had the add on add on things like appetizers, desserts and drinks at a full serve restaurant, so that we see how well we’re our folks are doing a suggested selling. And so this, this custom metrics in here gives us the ability to do that, where we can look at, you know, again, existing customers versus new customers and, and all kinds of other spreads across that data. Now, on the high end, the the product will even go into, in the ultimate version, you can even add payroll system integration, priority support and training, and then they have a dedicated coach to help you out and, and get you rolling through here.

Randy Johnston 

Yeah, so Brian, thank you for covering those. And I would just tell our listeners that the grid on the website shows all those features against each other. But part of the reason I knew it was time to talk clockwork that they had matured enough was that they had the payroll integrations completed or in progress don’t have all the ones but they’ve got the key ones, they just added balance sheet, forecasting. And of course, Brian just explained some of that non financial data import. So you know, with all of those things in play, that was good, but then the CEO explained to me that, that they had just come finished completely rebuilding a lot of components inside the platform. So again, I started listening carefully to the philosophical approach, the idea that you could put everybody on the platform for free, that you could mix and match, as I recall, with this platform, the licensing, so for some clients get more sophisticated capabilities for others less, I realized this might let a lot of you provide the guidance that is needed for advisory services inside your client accounting services practice. And if we’re trying to get to client accounting services, 2.0, I think you need tools like this to get there. So Brian, any parting thoughts for our listeners on today’s product of clockwork?

Brian F. Tankersley, CPA.CITP, CGMA 

You know, I think the I think the critical thing that we’ve got to do here is we’ve got to move toward, like Randy mentioned, the KAS 2.0 and include more of this, this these advisory services, where we’re helping clients with things like budgets and financial planning and projections and those kinds of things. And we’re answering the questions where there is no, according to the code direct, right answer, we’re answering questions that are, you know, when can I retire and maintain my style, my lifestyle? And when? When will we reach this revenue goal that we have? And you know, are we on track to be to achieve the goals that we set for our five or one year, five year 10 year plans? You know, this is the kind of tool that lets you measure those financial, non financial things. Now, for years, when Randy and I sat down and do consulting with with software companies will often ask them, hey, what’s the metric that you’re trying to drive by this effort? And what’s the what’s it look like? And how are you evaluated? And how’s your team evaluated? And how is how is our work evaluated? And that’s an important question to ask here. Because the your clients don’t have that level of sophistication that these enterprise software clients do. And this helps give you with those non financial metrics, this helps give you that now, the other cool thing that I saw on their site, is that in all the paid plans, not the free plan, but in the paid plans, they have hourly sync of the data. So every hour it will get updated. So it gives you almost a real time dashboard. And they’re asserting that they’re they’re thinking hourly, I’m sure they’re thinking at least hourly, if not more frequently, if they if they put that as their service level that their meeting they plan to meet. So you know, I think this is a very sophisticated tool that will let you do more sophisticated analysis. It is it is not the least expensive tool I’ve ever seen in my life. But again, if you’re getting into these advisory conversations, the cheap the most, the worst thing you ever bought was cheap software. And you need the right tool to do this. And if that’s the case, I think you need to look really hard at clockwork, because nobody wants to be the average accountant. Okay, we want to be that we want to be the best financial advisor As far as we can be, and, you know, the this is an area where people are willing to pay more I think if you have the right expertise, and if you don’t have the right tools, I think you’re in real trouble trying to compete with people that are using tools of this sophistication.

Randy Johnston 

Very good. Well, we appreciate you listening to us in the technology lab today. Hopefully you’ll consider clockwork it clearly is a strong advisory tool with a lot going for it will talk to you again in the near future. Good day.