Strategic Advising and the Future of Accounting with Ian Vacin


Ian Vacin at Scaling New Heights

When I decided it would be good to align LivePlan’s method for advisory services with a workflow toolset, I wasn’t sure where I would begin. Then I met Ian Vacin, VP of partnerships and education at Karbon (and known accounting industry thought leader). He understood my vision right away, recognizing the value of a standard process for advisory, and how that would benefit both accountants and LivePlan equally.

The LivePlan Method for Strategic Advising is a business process for standardized advisory services. It is a template within Karbon workflow software.

Ian has continued to share his industry knowledge, provide feedback, and collaborate on ways to help our customers. Through this interview, I wanted to give our readers a chance to listen in on the type of conversation I’ve been having with him during this last year, letting him speak plainly and sharing his breadth of experience.

Ian’s responses have been edited for readability, but otherwise what follows is a lively conversation about the accounting industry, practice management, Nerf guns, Strategic Advising, and the future of accounting. Many thanks to Ian!

Kathy Gregory: In the accounting industry, you are a stalwart. What is your story? How did you begin, and get where you are now?

Ian Vacin: I was an industrial engineer by trade. I paid my way through college doing consulting work for most of the semiconductor companies in the [Silicon] Valley. I did a lot of process work, a lot of programming, and a lot of fabrication optimization.

I ended up moving to a few different startups in roles like systems architect, product marketing and product management. Eventually I landed at a company that was building what is now [considered to be] artificial intelligence.

My third day on the job in that company, our CFO embezzled all our investment cash, and flew overseas. We went from having a little over 100 employees with $3 million+ in the bank, to overnight having absolutely nothing in the bank.

Gregory: Oh my gosh.

Vacin: Yeah. I was part of the senior management team, on the product and marketing side. We spent six months trying to get bridge loans, trying to manage what we could before we ultimately shut it down. My biggest lesson learned was the sheer importance of finance to survive and thrive.

Through the almost nine months of sheer, utter pain of trying to salvage that company, I learned how critical it was to understand how the finances had to be managed, and how closely they had to be understood. Even though I had taken many accounting classes in Ian article 1undergraduate school, I didn’t really know what I needed to.

I went back to graduate school for my engineering masters and my MBA, and decided that when I came out there would be one place I really wanted to work: Intuit.

It was through those years at Intuit that I got an appreciation of how critical those who serve small businesses in a finance capacity are to the fabric of the small business economy, and ultimately the global economy. I decided at that point what I wanted to do long-term was to enable companies that can enable entrepreneurs to not go through the pain that I went through. That’s the back story.

Gregory: You have been a big part of growth and change at now three different and major tech (software) companies in accounting. What do you love about the work you do? What drives you?

Vacin: I’m extremely impatient, stubborn, and I don’t like doing the same thing twice. When I was at Intuit, I helped develop and craft their rotational programs. I changed jobs every year for the first four or five years I was there, learning every QuickBooks and Quicken product. Eventually, I was working hand in hand in the accountant channel to really understand how it all comes together. My job there was to reinvent it, and set it up for growth.


Then, I saw an opportunity at Xero to make a huge difference in the accounting industry, and made the move. I changed roles a lot too, doing different things, and then ultimately got my work at Xero to a place where I knew it could be self-sufficient. At that point, I thought it was time for me to go out and actually hit another critical part of the equation for accounting professionals: workflow, client communication, and team collaboration.

Karbon is the result of that, and in service of what I’ve done in the previous two jobs, to be a massive disruptor, because if you can disrupt you ultimately will change things for the better for everyone involved.

Gregory: I think this is a good time to talk about Karbon, and why Karbon right now. Karbon does a lot for accounting firms. If you had to pick one overriding benefit, what would it be?

Vacin: Karbon is about communication and collaboration. We might have been a little bit ahead of the curve when we started it. I don’t think it is now, but when we started Karbon we didn’t set out to create practice management.

The big frustration we saw inside accounting firms was a very difficult communication and collaboration issue in order to get the work done. You’re constantly barraged by emails that come in from clients. You then have text messages, you may also have live conversations. You have this infinite problem of trying to chase down details and data in order to just get the work done. All those communications, and all that data that you collect, influences what you’re supposed to deliver and how you’re going to deliver it.Ian 3

The communications and the collaboration become the linchpin in a firm. If I’m a small business owner, I don’t really care how the sausage is made per se, but when I call my Strategic Advisor up, I want the answer. I need the answer to be able to make a decision or do something instantly in my business or personal life.

The response time that has to happen from the point the phone is picked up, the question is asked, and the answer returned, really determines the level of servicing, and the appreciation that client has for the Strategic Advisor.

In a multi person (accounting) firm that question sits in somebody’s inbox somewhere, and it’s not necessarily the (right) person that’s getting called. Even if it is the (right) person that’s getting called, it’s infinitely difficult just to find the last communication, or what was the last thing said.Karbon

Karbon was created to bring all those communications into one view no matter who said it, when they said it, or where they said it. It then became clear on the back of that communication and collaboration that we needed to build workflow, to influence what was being done. That ultimately has become broader into practice management.

Gregory: I love how simply Karbon presents a fairly complex process, which is the combination of workflow and task management, and also adds the full incorporation of email. Can you talk a little bit about the development of Karbon from the user perspective? How does your team determine and prioritize features?

Vacin: We didn’t build any code for almost a year. We spent quite a lot of time just sitting in firms, understanding what they did, observing what they did, and understanding the root causes. We wanted to create what now we call a new approach to practice management. Our approach was based on what we saw, what we overheard, what we witnessed: the communication and collaboration that didn’t exist.

Most of our team has been trained in two different methodologies on how to design and build, from time spent at Intuit and Xero.

The Intuit side is customer-driven innovation: understand the customer’s pain, get to the root causes of the issues that they addressed, and then ultimately present various different solutions and use rapid prototyping to create a design that meets those needs. It’s based on input and feedback, and the customer embedded in the process of design. Intuit is the best in the business at building a better mousetrap!

Now move to the other side—Xero—an innovation, design led company. It’s less about what the customer says, but what the customer is not saying. It’s understanding the underlying problem and thinking of other ways to solve it, beyond what might beIan 4 described from a customer. The design team is not prescribed on what to do, but thinks openly about how to solve a problem in ways that would lead to a faster and better outcome.

We’ve married these two philosophies within Karbon. We have solid design experts that really think about how to simplify a given process in a workflow to make it drop-dead simple to use. We also use customer-driven innovation to move it through design in a way that’s understandable and predictable for the actual user. We constantly are trying to balance those two.

Gregory: I want to pivot to Karbon the company. Let’s talk about culture. A company’s culture can be varied, and is entirely dependent on the management team and the employees that you end up hiring, and how they all work together. Can you offer your perspective on culture? How has culture affected your career over the long term, and how do you nurture it at Karbon?

Vacin: Yeah, culture can be influenced, it can be nurtured, but it cannot be controlled. I’ve worked at very large companies from PWC to IBM, then Intuit, and Xero, and various different startups—and [in every case] culture starts from the founders. It starts from the senior management, and it embodies the personalities those people have. As the company gets larger, it becomes systematized and more prescribed, but you start getting subcultures that exist in departments, and groups, and teams, and so forth.

The culture ultimately manifests itself positively when it’s understood and attended to, from a top-down perspective, in order to enable the day-to-day between the staff. You can create negative consequences, and I’ll give an example. Back in a previous management role, I was in a hurry for a company party we were going to have and I wanted to do something to try to energize the team. I ended up buying Nerf guns for everybody, because that’s what you do in tech I guess, and supplied Nerf guns to everybody on the team. They had a blast!

Well dial it forward one year when we went from being 40 staff to being almost 300, the nerf guns actually became a destructive cultural element. People didn’t want to participate in having projectiles flying over their head. The culture had evolved. It was more mature.

From a Karbon perspective, we tried to be thoughtful on who we brought in, and I would say the culture itself is embodied by all the employees that originally came on.

One of our cultural aspects is simplicity and elegance. It’s taking ownership of what’s going on to better the customers that we serve, and striving each day to deliver the most we can in service of the customer.

Gregory: Two years from now, what does Karbon look and feel like?

Vacin: If you looked at Karbon just six months ago it’s completely and utterly different. We take it three months at a time. That’s because over the last two years, we have been surprised each and every time by market changes, our customers, and the direction of the industry.

At one point, we thought the financials were a really important piece of what we were doing.

What we were told by our customers is that they don’t have any options in the marketplace to deliver on things like management of the firm, how to get the work done, and keep their team on task for the high priorities.

Those things sit outside financials. Originally it was just about giving a really simple way to look at time and budgets, but it’s morphed into something much more sophisticated, which is capacity planning (which we just began releasing).

Gregory: That’s where your engineering background probably makes the biggest difference I’m guessing. Engineers understand systems.

Ian 5I hope Karbon can turn the tide in the industry on the subject of capacity planning. Having task lists, and knowing who’s doing what work is great, but capacity planning is where accounting firms will maximize their profit.

Vacin: Capacity planning is a topic that’s not well understood, and it requires a delivery that’s very easy for someone to interact with in order for them to not only understand, but to leverage it to really drive their firm in a strong direction. For us it’s about how to creatively deliver that particular level of functionality in a very simple way.

Gregory: Yes! Every time Karon brings a feature set, the user interface is very simple. And speaking of simplicity, let’s finish with some industry conversation around that.


Gregory: From your perspective, when did the tide turn in the accounting industry away from desktop accounting solutions to cloud based accounting? Where do you think the industry is today in embracing that whole shift?

Vacin: I feel like the accounting industry got an infusion from the entrance of Microsoft, in 2004 if I remember right, with their accounting solution. Microsoft brought out the best in Intuit. I was lucky to be a part of that. Intuit’s roots in the accounting channel can really be tied to that point.

It brought to light how important the accountants and bookkeepers are out there, and how much they support and influence what happens in market. Prior to that, what was sold was boxes inside of large office stores (like Staples) as a do-it-yourself solution.

Cloud accounting was a huge enabler, because the amount of inefficiency that existed from trying to work with somebody in an offline solution was really burdensome for all parties involved. As a business owner in such fast and changing times, the inability to make quick decisions based on really solid information, sets you back. The ability to say “I always have everything I need at my fingertips,” is a huge transition.

I do think that the industry has taken a lot longer than anyone had predicted to make that adjustment and change. My biggest surprise over the last three years is the inability by accountancies to adopt [cloud accounting].

Firms that have made changes find themselves in a very advantageous position. Look at just the M&A activity—if I’m a firm that has modernized my systems, processes, and how I do business, I can get up to 3x multiplier on this year’s revenue when I sell [my firm]. Typically it’s less—more like 1.5x to 2x. But if I’m a traditional firm and I haven’t made those leaps [to the cloud], I’ll get somewhere between 0.6x and 1.1x my current year revenue. That’s a clear sign of what the opportunity is.

Looking at those facts, it just surprises me people aren’t making the transition that they have to make. I see really hard working, great people, and for so many I’m concerned that they’re just going to continue to struggle and go backwards.

Gregory: I’ve heard the argument that the baby boomers just figure, “I’m going to ride this out and let the younger people worry about it in their own firm.”

Vacin: One of the most sophisticated individuals I’ve met happens to be in his seventies. I was flabbergasted when we had him at one of our roundtables a few years ago, and he was explaining what he was doing and how he was doing it. It was far more progressive than any other firm I’d ever met. I don’t think age is the predictor of it.

I think the real problem is that most firms are so stuck in the weeds of the day-to-day tactical. In a highly seasonal business, you go in these high waves of large amounts of work. If you don’t have your best foot forward, you ultimately get so taxed that even when you come out of that season, you’re so exhausted, you’re not able to spend the appropriate time to make movement forward.

There’s only so much time in the day, but you have to transition to higher profitability work, because if not, you’re just running after a target that’s getting less and less profitable each and every year.

The market’s changing underneath you. People who are doing things in more efficientIan 6 ways are charging rates that are less than what you are today, and it ultimately suppresses what you’re able to charge. I spend an exorbitant amount of time on how to transition to a smaller number of clients, but charge more for that. Again, it takes time to evolve that in a firm.

The traditional [accounting] services truly are being commoditized, and you either have to be doing it faster, more creatively, and being more innovative around it, or you have to offer something that isn’t being commoditized.

That goes to the other services that exist, like The LivePlan Method and Strategic Advising. That’s an area where people have gravitated because it does provide a higher level of servicing at a higher rate. The efficiency of it changes the economics of the firm overall.

Gregory: Yes, thank you for pointing out LivePlan! We built the LivePlan Method for Strategic Advising specifically for this purpose—to show firms how to standardize on a scope of work for advisory services, in order to be profitable.

Gregory: What do you predict will be the hottest topic in the industry in three years?

Vacin: When something is able to become mainstream, it becomes impactful.

I do think on an AI front, it’s easier for technology companies, and companies in general, to provide predictive insights, or take logical steps based on large sets of data or previous customer behavior. You’re seeing it now being pushed into products that you use everyday, like QuickBooks and Xero, but people worry, where do we sit in society when that happens?

Back in the early 2000’s when I was in graduate school for instance, the talk at that point was the virtual workforce, and the technology that allowed you to work from anywhere. The big fear was that large metropolitan areas were ultimately going to be drained of talent because they could work in places where the cost of living was much lower, so you’d have this movement out of the big cities into more rural areas.

What happened was the exact opposite. It turned out when you went into a virtualized workforce, it forced people to actually work more closely together in a higher, denser area, which was completely against the logical thought of the time. When you work more distant (virtually), it requires you to collaborate face-to-face to deal with the problems that arise from always being apart. Metropolitan areas over the last 10 years have actually gotten more dense.

So when someone predicts that AI is going to have some sort of perverse activity to it, I would argue we have to wait and see, because it will not be what you predict it to be.

Gregory: And what I’m hearing you say is that there’s always going to be a human element, right? It will just be at a higher level of the service chain.

Vacin: Yes! If you look at what’s happening in the last couple years around farm-to-table restaurants, and the service area, people are willing to pay more and more each day to be able to interact with others and get a high level of customer service.

Whenever you go down a path where the seesaw tips to full automation, the other side of that becomes an opportunity.

In the accounting industry, someone might have their bookkeeping or their compliance work fully automated and provided for them, but remember that most people want to know that they have their “person.”

If you’ve ever asked someone, “Hey, who do you use for a financial advisor?” they’ll say the name, and they’ll say “I got my guy or my gal that does this for me.” It’s that personal element that provides assurances that someone is looking out for them, because good Strategic Advisory is not black and white, it’s a lot of gray. That can only be done from a human element.

There are parts of the business that will ultimately be fully automated and made more efficient, but it opens up other opportunities for professionals to be able to charge more and provide differentiation because they’re able to provide the human element that’s even more valued in the future.

LivePlan is a platform for standard Strategic Advising, and comes with all the resources you need for a scalable and profitable advisory business unit: meeting agendas and scripting, email engagement series, pricing and packaging samples, and more.

If you want to provide the human element to your clients using the LivePlan Method for Strategic Advising, click here to learn more and start a free trial.

IanIan Vacin is vice president of partnerships and education at Karbon and Karbon Academy. With over 25 years of experience in technology and over 15 years of leadership experience in the accounting industry at Karbon, Xero, and Intuit, Ian is passionate about helping accounting professionals be as successful as possible in order to positively impact the small businesses that they serve.

Kathy (1)Kathy Gregory has 20 years of experience in business development, including: financial forecasting, strategic planning, process development, project management, and mergers and acquisitions. She has worked in public and private, small to mid-size organizations doing business development, and strategic planning and implementation, working with executives, boards and their investors. At LivePlan Kathy runs the specialized program for Strategic Advisors. She is a graduate of the University of Oregon.

Kathy Gregory
Kathy Gregory
Kathy Gregory has over 20 years of experience in business development, including: financial forecasting, strategic planning, process development, project management, and mergers and acquisitions. She has worked in public and private, small to mid-size organizations doing business development, and strategic planning and implementation, working with executives, boards and their investors. At LivePlan Kathy runs the specialized program for Strategic Advisors. She is a graduate of the University of Oregon.
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