Ep. 109: Brian Suthoff - Accountants Driving Data
Brian Suthoff, CEO and co-founder of Tally Street, joins Count Me In to talk about why accounting and finance professionals are well-positioned to drive data across the organization and make strategic decisions to improve the bottom line. Tally Street helps small to mid-sized businesses keep and grow customers via actionable insights automatically generated from sales transactions. Prior to co-founding Tally Street, Brian founded Hub Beverage, the first craft spirits distributor in Massachusetts, and Localytics, where he helped grow the company into the leading mobile engagement solution. In this episode, he discusses the opportunities created by Big Data for accountants, how to harness Big Data in a cost effective way, and trends accounting and finance professionals can seize for future growth. Download and listen now!
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Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. Once again, this is your host Adam Larson, and I'm pleased to bring you another engaging episode of our series as Iintroduced to you episode 109, and our featured guest, Brian Suthoff. Brian is the CEO and Co-Founder of Tally Street, a company that helps small to mid-sized businesses keep and grow customers through actionable insights automatically generated from various sales data. In his conversation with Mitch, Brian discusses, how big data translates to great opportunities and explains why management accountants are best fit for driving this growth in these businesses. We'll hear more as we transition over to the rest of the episode now.
So Brian, before we kick things off, why don't you tell me a little bit about yourself and give us some background on Tally Street and exactly what you do.
Yeah, great. Thanks, and thanks for having me. So Tally Street is focused on helping small and mid-sized businesses who want to grow and get paid, generate more value from the financial data or the accounting data that the businesses are already managing. The inspiration for Tally Street really came from a couple prior experiences of my own. Most of my background has been in big data and analytics, but then about four years ago, I started a liquor distributorship in Boston. Very traditional small business, just me and a couple other people. And, you know, we were successful in growing that business across Massachusetts, but very quickly ran to the point where we had, you know, a couple hundred customers and couldn't keep them all in our heads, and we're basically missing having access to the kinds of customer analytics and insights that I was used to having and more tech focused businesses. So as we looked at ways to try to solve that problem, what we found is that accounting and finance teams are really sitting on a wealth of customer data inside that accounting system. That's really being untapped in most small and mid-sized businesses. So that's really, our goal is to help managerial accountants generate the insights, the customer insights and information that large businesses have had for a long time, but to do that at kind of a scale and a cost that's appropriate for small businesses, so they can make better decisions and be more profitable and successful.
So I know for us, you know, our accounting and finance listeners, our members, a big focus for us is using this data and making some kind of actionable insight, you know, something where we can make more strategic business decisions, but again, we're targeting accounting and finance professionals. Now you don't necessarily have that background in accounting. You come from the big data side of things. So, you know, how have you been able to kind of adapt with that target audience and then, you know, what kind of opportunities do you recognize with this diverse background?
Yeah, learned a lot over the last couple of years, as I've been speaking to more accountants and financial professionals and just catching up always on the industry and changes on the industry, and one thing I noticed in the recent issue of the Strategic Finance magazine is they had a great article on data visualization. And, you know, I think the reason that article is published is plenty of people have said, you know, everybody's an analyst these days, right? And roles are changing, and managerial accounts role is also changing from being mostly a record keeper or compliance cop to now also providing those insights and helping the businesses make better decisions. But the problem that a lot of these businesses have, and what I've seen is that they don't have the kind of the data lakes, the big data sets, the pristine sets of data that large enterprises tend to spend a lot of money managing, but they do have, or the best set of data they do have is their accounting system. And that's where we think that managerial accountants can, can really win, right. Is they're sitting on the best data set, that typically exists in most small and mid-sized businesses. So it's an area where they can start to apply those, analytic skills, presentation skills, using the data they already have, and they're already familiar with and generate a lot of additional value for the organization. If you just think about what's in that accounting system, the sales transactions, payment transactions, it has what every customer bought the price they paid when they bought how often they purchased, how much money they've spent, just a wealth of information that can be shared across the organization and in a number of visualizations, but also putting it into other systems like CRMs that sales and marketing teams use.
And then ultimately, what is the opportunity that would come out of this once they start tapping into this data? What are some of the examples or some of the outcomes that you've seen typically?
Yeah, great question. There are, there are examples across the entire organization. I tend to think of things, you know, they start with generating revenue, of course, but move on to managing costs, forecasting, customer behavior, forecasting, cashflow, understanding customer profitability, you know, just to take an example on the revenue side, again, that, you know, the accounting platform, whatever it is, has records of every sales transaction, which is connected to a customer and exactly what they bought and the kind of smart software that exists today, and what we're building at Tally Street can analyze all that data and start to group those customers based on, on those patterns, those buying patterns. So for example, you could look at customers who they've been around for a long time. They buy quite frequently and they spend a lot of money. So they have high lifetime value, which is a key metric that you often hear. Those are kind of your champions, and then on the other end of the spectrum you might have the ones who were just never a good fit to start with. maybe they only bought once. They didn't spend that much. They didn't, you know, obviously it didn't stick around that long if they only bought once. If you start to then understand work with the rest of the organization, once those groups are made of customers, you know, what are the common characteristics or profiles of the champions and how does that compare to the common characteristics or profiles of those kinds of poor fits or mismatches. And then that can really drive a much smarter sales strategy. We have a customer who, who did this and basically boosted their net revenue retention rates. So, you know, a measure of how they retain customers and the revenue from those customers over time from kind of the mid 80% range to 105% in 2020, which is really saying a lot given the crazy year that 2020 has been.
That's very impressive. And, you know, especially as you said, recent times, you know, I just taking it a little bit further here to some of the analysis, you know, often requires, a lot of invoices and payment data, and you said that there's just so much information at the fingertips of accounting and finance professionals, you know, different platforms presented in different ways, but I'm sure there's gotta be a better way, to really organize and make sense of this data. Right. So, you know, in your opinion, what you work with your clients, or, you know, your personal preference, what is the most cost effective way to go about doing what you're talking about here today?
Yeah, there's, there's been a huge change across the industry in the last, five or 10 years and really accelerated this year that makes all of this possible in terms of analyzing the data and then presenting it. And that's really been the move to cloud-based accounting systems. So QuickBooks online, NetSuite are great examples, but when we move from having all the data in a, in a back office server and instead shifted to the cloud, it's now available and accessible to other tools really for the first time at a very affordable and cost effective way. As I said, this change has been going on for awhile, but it really accelerated this year and in 2020, and then combined with that software has gotten smarter and better. So artificial intelligence machine learning, have made it more cost effective to analyze these large data sets all the invoices and other information, and then to discover the insights inside them. Right? So the, this combination of, of changes really is providing accountants the tools they need to move up the value chain from doing that again, kind of compliance oriented work to discovering these insights and, presenting them and making them available throughout the organization.
We're talking like everything obviously would just flow seamlessly and we're able to do all of this, and, you know, it makes it, obviously much more cost-effective businesses become profitable, but in order to get to that point, I'm sure there have to be challenges, you know, with so much data available and so much information, you know, how do you advise clients to make sense of everything? You know, what are some of the common challenges I guess, is what I'm getting at and how do you help them tackle those challenges and overcome it to reach this point of, you know, increased revenue and profitability and everything else?
Yeah, so there's a, you know, famous quote, what gets measured gets done. But it's not only measuring it, measuring something, but being able to communicate it and present it in a good way. And that goes back to the, you know, the magazine article we talked about at the beginning. But the first challenge is getting access to the data and being able to analyze it. That's helped and help solve by this move to cloud-based systems. Next, is being able to actually just crunch that massive volume of data, smart software helps that. And then third is really doing the presentations and, again, producing it or smart software can help organize it and get you a long way towards that goal. But then you can put it in other tools as well. So you can take the same information and, and move it into spreadsheets. You can move it into a CRM, you can make it available to other parts of the organization for presentation. And that really drives, you know, the first goal really is to help people ask the right questions. So then you know where to dig into more detail to find the right answers.
So something you just mentioned was ultimately tackling these challenges, coming up with some kind of decision, some kind of insight and sharing with the rest of the organization. So how do you go about sharing this data across the organization? And, you know, going back to that article, I'm familiar with it, and we talk about how you need to understand that not everybody in the organization necessarily has a finance and accounting background and can interpret this data. Right, but the information that's in that data, the story behind it is so important. So, you know, how do you go about sharing that and telling that story so that it makes sense to everybody in the organization.
Yeah, as I, you know, again with my data analytics background or, you know, a lot of the accountants, love spreadsheets, love getting into the data, but not everybody else does, right? So, many people prefer charts, many people won't understand, an accounting system if they're given access to it. So a great way is to democratize the data. So democratize that analysis and get it to people in a way they can best consume it. For some executives that might be giving them a prebuilt report of the, you know, the slides, the charts, that they need to track on a regular basis for others in the organization like sales and marketing. They often, instead of living in the accounting system, they live in a CRM. So they spend all of their time in HubSpot or Salesforce, which is where they're managing customer interactions, upsells, cross sells, support issues. So we think a key opportunity is to basically take that those insights and information like customer lifetime value, churn risk, credit, risk, et cetera, that are produced from the accounting system and make it available in the CRM, which is where the rest of the, of the sales and marketing teams, especially in support teams will tend to access it. And it's really easy to get started. Tally Street connects to most cloud-based accounting systems in just a few seconds after the initial sales and customer data are gathered and analyzed, then connecting to a CRM like HubSpot or Salesforce takes just another few seconds, and then the information is there for you and your team to use, to make better decisions and create new visualizations within the platforms that everybody is already using. and those visualizations can really be con you know, created there. So maybe going back to that article one area where I might disagree with that a little bit is, you know, instead of using something like power BI or Tableau to create visualizations, use the tools that already exist, for example, the tools in the CRM, where people are already logging in accessing dashboards and accessing information, and you know, if you have any doubt that that's where things are going, you just have to look at Salesforce spending about $16 billion to acquire Tableau last year.
So certainly a lot has changed this year, and it sounds like you are doing a great job at helping people take advantage of these changes for their businesses. you know, I always like to wrap up conversations by kind of taking a step back and then looking into the future. So now that we've kind of summarized what's going on, we look ahead, you know, 2021, what are some trends that maybe have started, or you think are going to start, at, for accounting professionals and what do they really need to know? What do our listeners need to know and make sure they take advantage of in the year to come?
I think a key thing to keep an eye on in 2021 is a new function or group called revenue operations. We first saw this and we're seeing this really in more of the tech world or high tech companies, but really at its edit's core rev ops is a, a new function or an evolution of a function that better align sales, marketing support, and accounting and finance across the customer life cycle. . So you'll often hear to customer 360, right? That full view of, of the interaction and engagement with a customer and organizing that under revenue operations to support those different functions really helps companies have greater predictability over their own growth and their own revenue by sharing information across all those teams. We think the ideas and functions that you see in revenue, operations organizations in the tech world are gonna migrate to other industries in 2021 in the following years.,and this is just a fantastic, a phenomenal opportunity for our accounting and financial professionals to kind of get out in front and take advantage of this function to really help their organizations grow.
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