John and Darren discuss leveraging data insights to empower firms. They emphasize the importance of capturing and utilizing various types of data to enhance client services and firm productivity.
Full Video Transcript:
John Mitchell: Hello and welcome. We’ve got another great episode here for you on the Canopy product. I’m so excited to talk to you today about leveraging data insights to empower your business model. My name is John Mitchell and I’m, as always, with my friend Darren today. Darren, are you ready to go today?
Darren Root: Ready to go. Let’s talk about insights.
Darren Root: Let me set this up a little bit. When you say leveraging data insights to empower your business model, I just want to be clear on how we define a business model. It is who you want to serve — so you’re going to leverage insights to understand who you want to serve, what you want to sell them, the products that you sell, and how you want to deliver that, the technologies that get used to deliver those services. So when we say leveraging data insights to empower your business model, that’s what we’re talking about.
John Mitchell: Yeah, the who, the what, and the how. It’s something we’ve been talking about for a really long time, just to bring some simplicity to your business model. The truth is, part of the reason we’re involved with Canopy is because we are so dedicated to getting the business model right in your firm. And we believe this product allows you to follow your business model along. Insights is no exception.
Darren Root: A lot of people think of Insights, John, as reporting. In a lot of ways it’s how you get the information that’s being accumulated inside your firm.
John Mitchell: Yeah.
Darren Root: How do you get insight into that? Things like how productive the firm is, what products are being sold, what’s the realization by staff person, by client, by product — all of that kind of stuff. That’s what we mean by insights here.
John Mitchell: Well, let’s talk about some of those kinds of insights. What was it like when you were practicing? I never want to make you feel old, but back when you were using tablets — if you wanted to get insights, what kinds of things were you recording? What kinds of things were you getting insights on at that point, and how has that translated into what we’re doing now?
Darren Root: When we put practice management into our practice a number of years back, it was largely time and billing, and projects and tasks. So the kind of reports you could get were how much time was being spent on a client, which I think is potentially important, and how you’re realizing time off of that, what your billings were like, and maybe what work has been done and what work was yet to be done. It was literally those four things, and you’d go run a report and then go down through them.
Darren Root: In today’s world that feels a bit archaic. In a product like Canopy, you can have this information at your fingertips on a dashboard. That’s a huge difference, John.
John Mitchell: Of course, all of that information is driven by capturing that data, getting it accurate, getting it all in one place. One of the things that I love most about this tool is that it takes what is often a pretty disparate set of data points coming from all different kinds of point solutions, and it brings them all into one house and says, here’s your data, all of your data. To me, that brings a simplicity that makes me want to use this data to do something.
Darren Root: Essentially inside Canopy, John, they’ve built an engine that allows a report or a dashboard to be generated on essentially any field that data can be captured on inside the system. So it makes it incredibly powerful. If there’s a field in the system, you can report on it. That makes it really, really powerful.
John Mitchell: Let’s talk a little about the different kinds of data that we’re collecting in an accounting firm. This is a really important discussion, because the more cognizant and more aware of the data we can be, the better we are at capturing it. We often talk about data being everywhere. It’s almost like this invisible thing floating around your firm. What Canopy does is give you a place to collect it, to absorb it, and to put it in. But I think it’s still really important to talk about what types of data we are capturing.
Darren Root: Traditionally, the types of data that have been captured for the last 25 years in accounting firms has been around firm productivity. So if we look at firm productivity as a type of data, that’s what we’ve been used to capturing. But I want to add to that technology data.
Darren Root: Technology data is the data on the technologies your clients are using. Is this client using QBO? Are they using QuickBooks Desktop? If so, where’s that file and what version is it? That’s technology data. The reason that’s important is that as you try to move all of your clients into your technology business model — back to the business model, the who, the what, and the how — this is the how piece. We want to collect that data so that our team can move those clients into the tech stack our firm wants to support, which will make you more efficient and more effective.
Darren Root: The type of data that seems to really swirl around accounting firms with no way of capturing it is the business soft data. You may know things like, is this client a partnership? But the things that live in people’s heads are things like, do they have a buy-sell agreement? If they have a buy-sell agreement, is that buy-sell agreement funded? Those are concepts of soft data that live around a firm.
Darren Root: It’s the technology data and the business soft data that allow you to make clients better. It’s where advisory services really start coming in. Because if I know I have a partnership as a client and I know they don’t have a buy-sell agreement, that’s an opportunity to make that client better. Or if I know they have a buy-sell agreement but I know it’s not funded, that’s an opportunity for advisory services.
Darren Root: So all these kinds of data are super important to capture in a firm. And then you want to be able to report on those different types of data — what technologies are the clients using, but then also how profitable is this client. As you start thinking about curating your client list into the kind of clients that are ideal clients for you, that client data and how you measure ideal clients is super important. Does that make sense?
John Mitchell: It does. Darren, when I think about all this data being leveraged — we use that word leveraging in the title, and then the word empowered, literally to impart power on — basically what we’re doing is saying, how can we use this data to go deeper with our best customers? That’s something you and I have talked about for a while. We get so spread thin in accounting firms when we just serve whoever comes in the door, when we just serve the next person in front of us, instead of saying who is our best customer and how deep can we go with them. The only way to really know that throughout the firm is to be able to see it in one place. That’s what I love about the way Canopy has set this up.
Darren Root: In my experience running a firm, and in talking to accounting firms, most firms are really a mile wide and an inch deep. Time is a limited resource, and the amount of time the entire firm spends is mostly spent doing compliance-related work, because that’s all they have time for.
Darren Root: On the other side of this is what the client wants from the firm. What the client wants is for the firm to really be thinking about them as a client and making sure they’re holistically served. So there are always these inconsistent or non-congruent pieces of the firm that need to be reconciled, so that the firm has the time and the data to holistically serve the customers. Because that’s really what the customer wants.
John Mitchell: That’s so well said, Darren. I can’t say it any better than that. I want to jump in and actually see the product, the Insights side of the Canopy tool. And there’s no better person to do that than our friend Armin. Armin is going to give us a little bit of a demo, show us through Insights, and then we’ll come back and wrap up with how we believe this can best affect your firm.
Darren Root: Perfect.
Armin Kadic: Let’s talk about our Insights module and how Canopy helps you track your KPIs, manage reports, and see exactly what’s going on at the heart of your firm. Navigating to Insights here, Canopy gives you the ability to create all of your own custom reports and dashboards. We pull in all the different data points from the different modules inside Canopy and allow you to select any of those data points you want and format your own custom reports.
Armin Kadic: Not only do we give you the ability to format custom reports, but we’ve built live boards and report templates that can be used for your firm right out of the box. These templates and dashboards can be customized further if you want to add additional KPIs or metrics, or you can use them as is.
Armin Kadic: Jumping into the billing realization report, this quickly allows me to analyze a realization summary client by client, so I can see how profitable we are, how much we’re billing, and whether we’re making or losing money on our overall clients. If you drill down into the clients, you can see the team members spending time across the client base and how efficient they’re being.
Armin Kadic: Navigating through the different fields in this report, you’ll notice I have the ability to aggregate, filter, and sort the different fields available. This allows you to quickly sort and see who your most profitable or least profitable clients are if you plan on making changes in the future.
Armin Kadic: Across the top, you’ll also notice I can quickly filter this report into service items, so I can see what my most profitable services are. I can filter the report by team members, so I can see how each team member is doing across the different services we offer. And I can also filter this by tasks, so I can see how we’re doing across our work — are we being efficient, and are we making money for the company.
Armin Kadic: Canopy also has a budgeted versus actual report that was recently built in, and I wanted to share it. This report does a good job of highlighting how many tasks are active in the firm, how much time has been budgeted across these tasks and jobs, and how much time we have left to complete the jobs we’re actively working on. This report gives me a weekly budgeted report, a monthly budgeted report, and an annual budgeted report.
Armin Kadic: Across the report it’s going to show total budgeted hours, available budgeted hours, budgeted utilization percentage, actual hours, actual available hours, and then actual utilization percentage. This is based on a 40-hour work week, or a 175-hour work month.
Armin Kadic: We make it really easy to create different reports, as we can slice and dice the data in different ways and help you track all of the KPIs that are relevant to your firm. These are just sample reports and dashboards we’ve made available to you. You can create your own or further customize the reports we have in Canopy.
John Mitchell: Thanks, Armin. Darren, the power there — that word empower really comes out when you see what this tool can do, and really just what capturing the data in your firm can provide for your team, and that clarity your customer is looking for in the way you serve them.
Darren Root: Yeah. If you just watched Armin’s demo, it’s important to see that firm productivity is still an important piece of your firm-wide operating system, as is realization, and those things are accounted for in the platform. But then also client productivity, such an important factor as you go after those ideal clients, and then this idea of budgeted versus actual. You can see that Canopy has really done a fantastic job of bolstering and creating a world-class Insights tool.
John Mitchell: Darren, I have a conversation on a monthly basis with an accountant friend of ours named Terry, who talks about being a mile wide and an inch deep in his firm. That’s where that phrase comes from. And it reminds me that when I talked to him last, he talked about leveraging data in his firm and what it means to his firm, but also what it means to his team and to him himself. He said, “I’ve been doing this a really long time and I feel re-energized by going deeper.” He has been frustrated his whole career with this idea of advisory services. And capturing that data is the gap between being able to pull off advisory services and just talk about it.
Darren Root: It is, John. I do believe that Canopy is a tool that can help people like Terry do this.
