Mary-Clare Switz Expert Business: Financial Foundations for Solopreneurs

Nigel Rawlins: Welcome to today's podcast where we are diving into the world of small business finances and accounting with our special guest, Mary- Clare, the bookkeeping guru that every entrepreneur dreams of having in their team. Mary- Clare has been my personal bookkeeper for many years, and her expertise combined with her tech savvy approach has been a game changer for my business. In this episode, we'll explore the critical financial elements that all small business owners need to know, and we discussed why enlisting the help of a bookkeeper early on can be a crucial investment in your success. Mary- Clare will also share her insights on leveraging Xero, a powerful accounting software package that helps you stay on top of your numbers and make informed decisions. As our podcast is based in Australia, we mention the Australian business tax known as GST a 10% addition to invoices, and mention the BAS statement, which is the quarterly report and reconciliation process for GST payments and receipts. Get ready for an enlightening conversation, which will encourage you to take control of your small business finances like a pro. Mary Clare, welcome to the Wisepreneurs podcast. Thank you for agreeing to be a guest. Can you tell me about what you do and how you got to here, this place in time? Mary-Clare Switz: 0:36

Oh, that'll be a long story. So what do I do? I'm a registered BAS Agent , which is one step below a tax accountant. So BAS is business activity statements which means I'm a fancy bookkeeper. So I can do I do bookkeeping, payroll reporting BAS statements, installment activity statements tend to help businesses, track their expenses. Help with payroll. Payroll is one of my passions. Sourcing the right award and keeping people up to date with award changes because that happens every year. One of the things I do is helping businesses find the right software solution to help their business streamline. So the obvious one, of course is the bookkeeping software. Most people are familiar with the likes of MYOB which was one of the starters many years ago. I'm very passionate about using Xero, so I'm a specialist in Xero. Most of my clients are on Xero. Quite a powerful program, but it's also the programs that help with payroll, and that could be timekeeping software. So when you start talking about award interpretation, if you take a hospitality business where you can have different times before six o'clock in the morning, a different time after six. Different time on a different pay rate, I should say on Saturdays and Sundays and it can get very complicated and helping people finding a good timekeeping solution that can help a business roster so they can manage their wage costs as well as assist them in processing payroll accurately to the award. Is very good. And there's some really good solutions out there.

Nigel Rawlins: Oh, that's fantastic. Basically what you are is looking after the financial side of a business and making sure they've got all their systems in place. But how did you get to this point in time? What did you do before you became a bookkeeper and then how did you become a bookkeeper? Mary-Clare Switz: Oh, I was actually very early adopter. Our family when I was young, in teenage years, the family, had our own businesses: 3:29

explosive supply, importation and supply here in Australia. My stepfather and mother had Special Effects Australia. So did special effects for movies and then moved into electronic manufacturing. So I started very early in the whole concept of business. After we moved to the states to expand the electronics manufacturing, we were very early adopters of computers. So we had computers in the office for a small business, and this was very unusual at the time, in the late seventies. So a classic black screen with the white dots down the page. So I got thrown in to working in the business and eventually moved into the office. So by the time I was 18, I was managing all the accounting part of the business, which at the time was about a 3 million revenue. So we're talking early, eighties, very early eighties. So that's how I started. I actually wanted to be an architect, but every time I turned around to venture off into something else, I kept getting back into bookkeeping.

Nigel Rawlins: So have you always worked for yourself in bookkeeping? So obviously at some point you moved away from the family business. Mary-Clare Switz: 4:57

I moved back to Australia in my very early twenties and one of the first jobs I got when I got back here, aside from waitressing, was working at Lincraft. I worked in their accounts department. So we're talking 1985-86, and that was very old school compared to what we have on offer now. So I worked there and then again ventured off to do something else, but I just kept coming back. So I did work for a couple of other people, ended up doing their bookkeeping and then somewhere along the line I was working for another bookkeeper and had jobs on the side of my own and it went from there and I was out on my own solely.

Nigel Rawlins: So what made you choose that you'd rather work for yourself than any of those other people? . Mary-Clare Switz: 5:49

Oh, working for yourself. You're in control. If I decide that I'm going to leave, At two o'clock this afternoon, it's on me. It might not be the best decision that I make for the day, but that's my decision to make. I can, I don't have to work the nine to five parameters. I can be at home working at midnight if I want to. I. It's managing that workload and then taking that time off when I see fit. Of course, there's catches to that. So I like the flexibility of working on my own and it's up to me to push me to improve the business so that I, can reap the benefits. I couldn't fathom working for someone else as an employee.

Nigel Rawlins: So how long have you actually been working for yourself now? Mary-Clare Switz: 6:41

Probably about 10 years. 10, 11 years now. 11 years, yeah.

Nigel Rawlins: And you mentioned that you like to try and improve your business. And what do you mean by that? What sort of things do you do to improve your business? Mary-Clare Switz: 6:49

I've gotta walk the talk. If I'm talking with businesses about improving their businesses, I've gotta be able to demonstrate and practice, bettering my business. So efficiencies is one thing that, I'm all about becoming efficient wherever I can, even if it's a micro improvement. Getting the right software one of the key factors I used is changed over about five years ago to a practice management software that basically wrangled my email and I can disperse it to different jobs within the business for different clients move email and jobs around, between staff members and getting control of my email was so important to this. Going from here to there within a couple of months..

Nigel Rawlins: In other words, you had a great big list of emails and you had to find them Mary-Clare Switz: 7:42

Spot on.

Nigel Rawlins: So how many clients do you have at the moment? Mary-Clare Switz: 7:50

Around 70. And it does fluctuate depending, through the last few months has been several businesses who have sold, but a couple of those, whilst they're selling one, they're already working on their next venture. So it can chop and change as people flex and grow and my role in their business might actually change as well. I've got one client who he first saw me about eight years ago as a sole trader. He's now much larger business with two other partners, 15 to 20 employees at any given time. Hired staff who do the bookkeeping, but I'm still involved on a quarterly basis as well as ongoing support. So my role very much shifted for that business and I'm still very much part of their team now.

Nigel Rawlins: That's interesting when you say that. So you've got your hands- on for some business, so in this one you've actually got almost like a mentoring or a coaching role? Mary-Clare Switz: 8:40

Yes. Yeah, so my engagement with clients can be anywhere from someone who's not even registered for GST, where I will help them, in little bits. So it could be that they've got an income under $75,000 to have GST, right up to the multimillion dollar business. So it can be, I might touch their books once a quarter. I might be there twice a week and it's all in between. I might only deal with their payables and they deal with their sales. So it really, it's a mix and match, a la carte menu depending on the business.

Nigel Rawlins: So obviously if you've got 70 clients, they're not all demanding your time at the same time, or do they? Mary-Clare Switz: 9:27

BASS time can be tricky. End of year's really tricky because of course, employees. want used to be called the group certificate which is now done through my My Gov, and that's a matter of timing, and of course then people wanting their tax returns done. So no, they're not all wanting a bit of me at the same time. Through Covid , I did find that everyone wanted a slice of me now, because of what was going on in their businesses and the stresses that they were faced with. So that can be tricky and stressful for me. But again, working on my business is how do I manage that and how do I improve my management of that? Everyone wanting a slice of me.

Nigel Rawlins: So was there any other software that you found useful? Obviously the one to deal with the emails and the client projects is really important. What other software have you found? Mary-Clare Switz: 10:20

Slack. I, okay. I know a lot of large businesses use Slack, but also small ones. We've got currently four people on my team. But it's that communication and I'll have one overseas, one working at home, me mixing between working at home and in the office and one coming into the office. Communication was a really big issue. So I've got my practice software where we manage all the workflows and the bank statements coming in and the queries. But then there's those little side conversations that don't really relate to a job and how do we have those and have group conversations. So I had used Slack a few years ago with my business and had used it with one of my major clients. newsletters, industry specific newsletters so that they've gotta go to for some resources that aren't hidden in the practice software. They did move away from it because it wasn't quite fitting their needs. So I reintroduced it again early this year. And it's worked for us. I can also share with the team And one thing, I have one channel called Good Morning and everyone is required to, when they check in for the day, no matter what day of the week they happen to be working. I ask everyone to say Good morning, so that everyone sees that it helps because only two of us work five days a week. The other two are working part-time. So it meant that we know when someone is working, that they've clocked on to work for a while and someone might actually say, look, I've clocked on now, but I'm gonna go have to pick up my daughter. So I'll be back at two. So yeah, the good morning channel's very important.

Nigel Rawlins: And I guess the other thing we're 70 clients and for staff, where do you turn stuff off? Turn the phone off. Do you ever have to do that as well? In other words stuff you do as well? Mary-Clare Switz: 12:16

Sometimes, my first thing that I do in the morning when I sit down in front of the computer, and that could be at home before I actually leave to go to the office, I'll triage. So in my practice management software where all the emails come in, it's called triage, and there's two bits, it's actually split. There's triage, and low priority, and I can mark, say it's a marketing email that comes in regularly and I want to read it. I can mark that to come in as low priority. So triage is where I start my day and I'll push off items to staff members or to me. And then go from there. I don't like talking to people on the phone while I'm doing the triage. It's very much the goal of In Box Xero. So I get very excited if I manage to do that. It doesn't happen that often, but I do try to get there.

Nigel Rawlins: So tell me about some of the clients. Is there a particular group of clients that you work with or are they a variety of industries Mary-Clare Switz: 13:29

It's ended up being a variety. I do have a passion for hospitality. My family owns a cafe in Geelong, so I've got experience of being a hospitality owner, but through the years between all my gigs as a bookkeeper, I've worked a lot of hospitality myself, both front of house and in the kitchen. And I've had my own children have all worked in hospitality as well, so I'm very familiar with that as an industry and the angst that can go with it. It's a very stressful industry. So I've always said that hospitality is one of my specialties. The odd thing is I tend to attract tradies and I don't wanna get into the gender thing, I don't know whether I play the wife role or it's an odd attraction.

Nigel Rawlins: It is. I think you might find that, because traditionally I think the wives have done the books, but it gets complicated and I don't know about you, but I've worked with a number of tradies lately. And hired them and trying to get bills out of them is impossible. And you're trying to budget and it takes 30 to 60 days before, you say, how can you run your business doing that? So maybe you keep them honest or on the ball. Mary-Clare Switz: 14:26

Yeah. I dunno what it is. So I have quite a high percentage of tradies and I've been quite successful getting them from point A to point B. And like you spoke about, getting paperwork from them to be able to, what's that bank transaction going through? Quite successful at that. I use what used to be called Receipt Bank, which is now called Dex. A document management for invoices, bills coming through. And I will say to a tradie, the first thing we're going to do is put you on a receipt bank. You can use your phone if you go to the petrol station, snap a photo in the Dex app that I will see that. And then you've met your obligation of maintaining the paperwork. That was a huge game changer.

Nigel Rawlins: So what you are telling me there is you are giving them the discipline of running the financial side of their business And they're listening to you, aren't they? They're doing what you say. Yeah. Good. They're good boys. Mary-Clare Switz: 15:44

Yes. Yeah. I actually had one tradie quite a few years ago now, still a client. He was out on his own and he was lost. He was already in Xero, but he didn't know how to use it. The paperwork was his thing. He had no idea what to do with it. He said it just sits in the ute. So I bought him two big pencil cases. I said, gave him both. I said, you will put all your receipts in here and every, every couple weeks you'll drop off one, and then next time you come around, we'll swap. About two weeks later, he rang me nearly in tears. Someone had broken into his ute. They took one thing and it was the pencil case full of receipts. Obviously someone thought there was money in it, but he had changed his behavior. The receipts were no longer piling up on his dashboard. They had made it into that pencil case. And getting a change like that with a client means he can get the next change.

Nigel Rawlins: So how do the tradies find you? Is it word of mouth saying, look, you are messed up. You gotta go and see Mary- Clare. Mary-Clare Switz: 17:02

I'm not always aware of how they find me. I know I had one client who found me in the phone book and he came in, he sat down. Right, we'll start and he left, and 20 minutes later his mate rang and said, can I have what he's having? And to this day, that's gotta be four years ago. The original client, he's moved on to someone else. But the other guy who wanted what he was having, he's still a client four years later. I've never met him.

Nigel Rawlins: I've gotta admit, every time I speak to a tradie, if I've hired one to do some work around the house or something, I've had to talk to them about charging properly. I've told one, one for not charging enough. It's not in my interest that he charges me more, but I said, mate, you had to drive. You've gotta do the job, then you've gotta bill me. Then you've gotta drive away. You can't work for probably an hour for my half hour job. And he says, yeah, but I'm only gonna charge you for that bit. I'm saying how can you make a living? Yeah, I'm assuming that's going on all the time. Mary-Clare Switz: 17:44

I've had those discussions. I had one builder who I looked at what he was charging somebody, and I rang him up and said, mate, what are you doing? Anyway, it turns out it was a family member who was suffering cancer, so he was doing very much family mates rates and he said, but normally I don't charge much more than that. And I said we need to talk .

Nigel Rawlins: Yeah. It needs to be a minimum charge it. That's what. I said, you can't just turn up because you can't. If you do half a day's work, that's probably it. You're not gonna do much more. And if they're quoting, see, what they don't understand is quoting is actually selling. They're actually going to sales mode and taking all that time. And it's value. They need to value their own work. And if they're too cheap, people won't value that. Yes. There is a call out fee. You're out in the country, there's a hundred dollars call out fee. Mary-Clare Switz: 19:28

Okay. I value you by coming out to you, but there's a fee so that you'll value me.

Nigel Rawlins: And they have to believe that too. I work with women mostly women. And it's interesting you work with men. And I spoke with a psychiatrist, a couple of podcasts back, and he says the way he works is he's the big brother to women, the big brother, that they always wanted to talk to them honestly and to help them. And he said for women, they generally coach men and they're like a big sister. So that may be what you were talking about there, that they listen to you like a big sister, not some bossy person or something like that. Somebody's helping them out and I guess if they're not married, you're, you are doing that role of the bookkeeper wife sort of thing, so keeping them on their toes. So if you are moving into a business or thinking of starting a business you've been working somewhere else and this is the first time, what are some the systems they should start thinking about if they start a business? Mary-Clare Switz: 20:11

If they start a business one, the very first thing is getting bookkeeping software. There's no point in trying to do it Excel. If someone comes to me and they've just started a new business, one of the things I say to them, you need to set up your business so it's ready to sell tomorrow. And I get a funny look and I say, if you can do that now and work on your business as if you are going to sell it, you might have no intention of selling it. There's going to be that one day where suddenly your whole world changes for whatever reason. and you want to sell or you have to sell. If you've done all that pre-work since the day you open the door bam, you will get a good price for it.

Nigel Rawlins: And you've got proof that it works. Yes. Yeah. So is it expensive? Should they start with a cheap software or would they go straight to Xero? Mary-Clare Switz: 22:03

In my opinion, I would say go straight to Xero. There are some other products out there that are more expensive, maybe not so good. There's another product out there that's a lot cheaper, which I don't think is as good as Xero and long term as a business expands, it can be problematic. So I tend to be a bit one eyed with Xero. It's a solid program, it gets 'em started. The thing with Xero too, and the other online softwares is it's realtime records. It's not they're dropping your receipts in for the last six months. It's real time data. The added benefit is dealing with the accountant. If the tax accountant also has access, and you as a client need to get some interim financial, say that you need a new truck or new wizz-bang widget to run your business. That the accountant can assist you as well. Now, the accountant's not having to wait till the end of the financial year to be able to help. So Xero is a go to. That's a bare minimum.

Nigel Rawlins: It's one of the investments they've gotta make. All right. Let's talk about some numbers. Obviously an accounting software. Brings in revenue if they've got some revenue coming in and some of their expenses and stuff like that. So what numbers are the important ones to look at when you're running a business? Mary-Clare Switz: 23:18

Revenue of course, is very important. You don't have a business unless you have revenue and the outgoings of expenses. When I'm talking to a business, I will pick the things that are most relevant to them. So the revenue, you can have a business that might have multiple revenue streams that can cause a conversation around what's your main focus? What's going to be your bread and butter? What's the fun stuff that you like to do? The fun stuff might be the one that makes the money. Might not be. So making sure that people are focused on where they do get their income from, but allowing them to have the fund stuff as well. But hopefully steering them away from spending too much time on the fun stuff that doesn't bring them in a revenue. Yeah. And then expenses that's just a minefield depending on the business. If you have someone that doesn't have any staff. What are they spending their money on? You might have a web designer who spends a whole lot of money on software that's not translating into income, but you have to be, quite wise, the way you look at it, that software might very well be driving income. So it's spotting. Where there's no value in the expenses as opposed to where there is my software expenses every month is huge. It's a big slice of my pie, but there's a purpose for everything I use and I know I've got some fluff there that I'm not leveraging and think I should basically ditch. So yeah, it's monitoring what's relevant to that business. If you have a tradie business, for instance going to Trade Link or Bunnings is obviously going to be a high priority. It's spotting where they're spending more on expenses than income. Is it that they're not pricing right, or are they renovating their home? So there can be a whole bunch of things going on in the background

Nigel Rawlins: How do you pick that there's a warning sign? Mary-Clare Switz: 25:35

I call it the sniff test. I've been looking at numbers for a very long time. You also look at okay, taking a web designer you, that, that's one of the things that you do. If you are spending money on, say, food from one of the local food. that's not the right fit for you. You're looking at a tradie who might be spending a lot on clothes. Is that a relevant thing to them? You look at someone who provides personal services in a very intimate way, they're going to be buying stuff from Sexy Land that a tradie will not be buying.

Nigel Rawlins: What you're saying is it's gotta be appropriate for the business and I think that's really important. Because if you are running a business and you're saying you're keeping the accounts, you're gonna mess them up if you're putting your food in there. So in other words, you've got some real numbers. What is one of the biggest mistakes that you see and what you're telling me, is purchasing irrelevant things for the business or things that don't necessarily help revenue? The biggest mistake I see taking on a new client that may have already taken on a bookkeeping software, is the allocation. I've seen one client who coded everything to general expenses, everything, a hundred percent of everything. Seeing people code payroll payments to staff with GST on them. So it's that understanding GST where it's appropriate. Not putting GST on bank transfers. So it's those, it's the core bookkeeping skills is the first flaw I see in a new data file. Another one is, and this has been particularly relevant over the last two years, is working from home expenses, people claiming their rent and their electricity against the business because they've been working from home. There's very strict legislation around working from home expenses. So that's spotting those and then having a discussion. And of course that is because that's actually income tax related, I have to defer them to the tax accountant. So I'll have a pre-conversation with them about that because the consequences down the track can be serious, including capital gains on the sale of your house. Not knowing how to code stuff and home office expenses are too biggies for me in over the last two years. So in other words, when you have a client, you are helping train them to, to have an accurate picture of their business. Yes. Yeah. That's very powerful. What other things should they be watching if they're running a business, do you think? Mary-Clare Switz: 26:16

A, aside from their general expenses, payroll is a big one. Often payroll can be one of the biggest components of a business. It doesn't matter whether it's civil construction or disability services or hospitality. Beauty therapy. Payroll is a biggie. So keeping a lid on your payroll and being very aware of. The penalties. What rates for a junior in our leveraging juniors into a hospitality business can be a good way of pulling back payroll that can be a real killer. Payroll can really blow out for a business.

Nigel Rawlins: Oh, I'd say it's probably one of the biggest expenses Mary-Clare Switz: 28:45

it can be. Yes.

Nigel Rawlins: See, for the self-employed one person business, in the past I have hired people, but I find it much easier to use subcontractors now, but good ones and pay them reasonable rates. But as long as it doesn't blow out the job well, that's really good . So what about your future? How do you see your future going on ? Mary-Clare Switz: 28:51

With this industry? The requirements in the industry keep on growing. I'm working on building my business, carefully. I don't want to blow it out of control too fast. . Cuz I wanna still continue to service my clients. I've currently got a trainee bookkeeper coming in once a week. That's a bit of a give back to the industry.

Nigel Rawlins: I was thinking if you look back, say 10 years at bookkeeping or even when you were doing books many years ago, with the nature of these programs like Xero, which I use, and you are my bookkeeper as well. A lot of it's automated, it's often being aware of what those numbers are. So your role is quite different to a traditional bookkeeper from say, 10 years ago, isn't it? Mary-Clare Switz: 29:35

It has, it's expanded. A lot of what we do now is almost consultancy and the hand holding through the business and saying, what are my favorite things to do? I don't get to do this as often as I used to, is to walk into a business and tear their bookkeeping apart, but walking into physically into their business, seeing how they operate, the dynamics between people, where they got their records stored as opposed to where the bookkeeper's working. There's all these little subtleties in a business. I love going in and helping with that, so getting a business efficient, maybe saying why are you in this office? How about. Organize you to work from this space because people will have less access to you, which means you can focus. There can be a whole range of things that you can work on. As the bookkeeping industry has got more automated, the government has also brought in more requirements. Single touch payroll was biggest one in the last few years, which changes the whole nature of the way reporting occurs from payroll.

Nigel Rawlins: So you could advise them, hey, it's time to review this. Yep. And this is how we'll do it. So really what I'm getting a good picture of is the fact that you systemize them and get them focused on making sure that this important area, the finances, which I think a lot of people neglect if they, especially a small business gets organized and you're giving them the discipline. So I think that's very important. and I think, oh, now I was gonna ask a question. Is there a difference between women who run a business and men who run a business, Mary-Clare Switz: 31:06

I'm sure there are some differences. I think it's more, I think the differences are in the personalities. I can see some women running a business the same way as a guy does, and it's about their personalities, not about their gender. I think the gender thing comes in when they're dealing with people not necessarily running their business. I've seen some shocking poor, head in the sand behavior from all sorts of people over the years, and really, gender's got nothing to do with it,

Nigel Rawlins: That's good. All right, so are you looking for more clients? Mary-Clare Switz: 32:14

Absolutely.

Nigel Rawlins: All right. So what sort of clients would you like to attract? . At what range? What sort of revenue range? Mary-Clare Switz: 32:19

Revenue range can anywhere from, a small business who's looking to build. I love working with new businesses, even though the fee base is not really huge. It's just so much fun to see someone grow. Yeah. I actually said that to a client last Christmas. It's just been a delight to watch you go from this to this, that's a personal joy for me, but also helping someone who does build their business. And get it right from the get go. I think is important rather than coming in two years, three years into it, and they're in an absolute mess and they don't know how much money they've got. Working with people with payroll, like I said earlier, payroll is a bit of a passion and getting that right. As far as industry goes, I say hospitality is a passion, but I've got such a wide range. I, I'm not particular with any industry. , and size wise really is not an issue for me either. No. I enjoy having a range of businesses of different sizes. It keeps it interesting because their needs are different depending on where they are at in their business journey.

Nigel Rawlins: So how can they find you? Mary-Clare Switz: 33:38

I have a website, , and I'm on Facebook. , so it tends to be one of the places that I do get some, a little bit of traction from. And I'm in the, some local business groups.

Nigel Rawlins: So what we'll do in this, we have show notes, and in the show notes we'll have all those details of how to contact you. Thank you Mary Claire. That was a fabulous conversation, . Mary-Clare Switz: 33:54

Oh, thanks for coming and visiting. Yes, it's been an interesting opportunity to actually talk to someone about what I do. .

Nigel Rawlins: You were first port of call because, it's. It's not a little thing looking at the numbers in the business, and yet I think everyone thinks, oh, I've gotta go get out there and get sales, and they just don't understand the backend bit. And the backend bit is the foundation. Just looking after yourself is the foundation and having good ideas. All right. Thank you. Mary-Clare Switz: 34:15

Oh, thank you, Nigel.