A Conversation with Alex Oxford, CEO, and Growth Lead at TaxValet: Part 2
Hosts & Guests
Alex Oxford, CMI, Founder & CEO of TaxValet
Meredith Smith, State and Local Tax Senior Manager
Judy Vordran, Leader, Educator, Advocate, J.D., CPA
Topics Discussed in this Episode:
- The value of creating emotionally safe and open work environments
- Assigning tasks to team members based on individual strengths
- Using data to help your client make the best decisions
What You Will Discover:
- [1:47] Creating a Safe and Accepting Work Environment at Tax Ballet
- [9:37] Sales Tax Registration and Employee Engagement Platforms
- [12:41] Exploring the Emotional Side of Business
- “Every single person is unique in their own way, even the people who aren’t that unique, because sometimes tax accountants, are just kind of tax accountants. And that’s okay. Creating an environment where it’s okay to show up and be who you are, and you will be loved, accepted, cherished just as you are is important.” -Alex Oxford [02:27]
- “If our core purpose is to transform negative emotions and it’s something positive for our clients, partners, and employees, if we have too many clients, then we’re not going to be able to deliver on that promise for new clients coming in the door. And we’re not going to be able to deliver it for our employees because they’re going to be overworked and stressed out.” -Alex Oxford [07:08]
- “We’re able to do surveys for different departments. But when we talk about data, I think it’s really easy for a lot of business owners and data junkies like myself to just think about the quantitative. But a lot of it is the qualitative information gathering.” -Alex Oxford [11:19]
- “One of the things that I’m the most excited about is being able to proactively identify issues with our clients that need to be escalated higher up in the chain of command before the client realizes it needs to be escalated and before the employee realizes it needs to be escalated and then being able to look at these issues and pinpoint what the root cause is.” -Alex Oxford [12:21]
Meredith Smith: Do you find, because it seems like maybe business and some traditional, like large companies have had to shift, right? I started in public accounting almost 20 years ago and it was very like, you come in, you work, you don't know your employees, you don't know your coworkers. It's very kind of like concrete, a little bit rugged and cold. Businesses are shifting. Your philosophy behind that kind of emotional business, it seems like the company as a whole has a lot of emotional intelligence, really resonates with the people who are kind of applying or you know, do they know what they're kind of getting into from a company's values perspective and that emotional capacity?
Alex Oxford: It's funny because we see this earlier on in the interviews with some of our candidates and they might be a little buttoned up and it takes a while. Even some of our new hires, it takes a few months for them to really feel comfortable and feel safe to open up and be themselves. I can't really speak to what the rest of the world is doing because I'm the quintessential millennial here. I'm so spoiled and lucky that the companies and the mentors and people that I've worked with, I've really just attracted people that are aligned with me. And I'm not really comparing myself to anyone else. Like I'm trying to figure out like what is the best, what does the best mean to me and how do I roll that out? But feeling safe on the team is a big one. And you know what? If you're quiet and a little reserved, that's okay. If you're zany, that's okay. Like there's no one perfect mold for every single person. I wouldn't even say that at Tax Valet, we call it the culture, a vibe like every single person is really unique in their own way. Even the people who aren't that unique, because sometimes tax accountants just are kind of tax accountants. That's okay too. Creating an environment where it's okay to show up and be who you are and you will be loved, accepted, cherished, just as you.
Judy Vorndran: We have some really amazing attributes in each of our teammates, and they don't all do the same exact thing the same way. We try to source the work in ways that are effective for them that they're going to love doing, you know? Cause they're really good at it.
Then other people are better at the other things. So do you find that people do more repetitive things? Or do you assign your group by clients, like you're going to handle this client and then you're going to have so many clients? Or do they make sure that filings get done?
Alex Oxford: There's a lot there, right? We have the new client onboarding team. They are doing the Nexus review, massaging the data out, doing the initial advisory, coming up with that sales tax action plan for where we're going to do permits, start dates. They're dealing with the tax settings. Then we have a separate team that's working on the sales tax permit, registrations and everything involved with that. And then we have our sales tax accountants, which are dealing with the account after all the initial setup on a monthly basis. And then we track our capacity for that team. It's changed over the years, so it used to be that we looked at it based on the amount of revenue. So, each sales tax accountant has to have x thousands of dollars a month in terms of client revenue. We realized that wasn't a good system, so then we changed it to a number of clients and then we realized that wasn't a good system because one client can be really complicated and not a lot of money, or it could be a lot of money and a lot more simple.
And so, then we really narrowed in on it being based on the number of data channels because the number of data sources makes the ongoing complicated. But you know, Judy, there's a whole project, it's been in the works for all year. We're rolling it out this year. We have new software we've been developing that's going to completely streamline and automate the data preparation and manipulation. On average our sales tax accountants have 13 clients each. We're going to be increasing that to about 17 clients by the end of the year and just pushing the envelope further.
Judy Vorndran: It's not going to kill 'em, it's just going to make them more efficient.
Alex Oxford: That's good. Exactly. I mean, we're going to be growing in terms of clientele in 2023 by about 40%. And we're only hiring one sales tax accountant. And just keep in mind that Tax Valet is what 41, 42 people right now. It's pretty great. That's awesome. But, you know, we're always keeping track of the capacity. We look at qualitative and quantitative capacity each quarter, every single team. We've got a similar sort of survey, basically asking them, how overwhelmed and stressed out they are? If they had one more client, would they be able to keep up with their client work? Would they be able to keep up with their special projects? Would they be able to keep up with their continuing education? Then that creates an index. And then we have our quantitative measures, which is, here's our formulas and math saying what the capacity should be. Then, if the formulas and the math that we've done don't match up with the qualitative surveys, then we know that our math is wrong and we need to rework that. And we've been reworking and refining this over and over. But you know, it's these formulas that we use that we predict out over the next three years.
And we say, here's how many sales tax accountants do we need to hire? Here's how many new client onboarding managers or permit specialists that we need to hire in which month to be aligned with our sales and growth forecasting? And that gets pushed into our financial forecasting.
We do profit and loss and balance sheet forecasting, I think four or five years into the future on a monthly basis. And it all just happens automatically. And so this has just been one of the key ingredients to our success is. Really understanding all of the different cogs and how they're all related to each other in this really complicated sales tax system.
Judy Vorndran: There was a time, and I don't know if that's the case so much for you now, but you were like, we're not taking new clients. And it was on your website, right? You had that at the beginning. I want to send you something Alex, and you're like, Nope. So if you lose something, absolutely are moving, you can't wait a year. I will say some of my clients that don't start take a year to decide to start, like they've done nothing.
They don't have a process and they just put it away. Right? But if you've got a process and you need someone to get it done. So you're going to be shopping it and you're going to lose that business. Do you feel that readdress if you turn them away? Or is it just like there's somebody new next door or coming right down behind them? It's fine. Right? How do you deal with that when you did that years ago?
Alex Oxford: Oh, that's such a great question, Judy. It still pops up from time to time too, because we're tracking our capacity. But going back to our core purpose, if our core purpose is the transform negative emotions, and it's something positive for our clients, partners, and employees, if we have too many clients, , then we're not going to be able to deliver on that promise for new clients coming in the door, and we're not going to be able to deliver it on for our employees because they're going to be overworked and stressed out.
So that really was why we did that. And we also needed to slow down at certain points so that we can build the infrastructure to continue scaling. There have been some clients that have said, , like, I want you and only you, and I know I'm accruing penalties and interest, but I want you guys so darn bad.
And I'm like, oh, sheesh. So nice. however, When we meet with prospective clients, we tell them, what we're interested, what we want to do is we want to get them to the best solution for them, whether that's Tax Vale or someone else. So we meet with clients all the time and they need something that we can offer.
We will refer them out to someone else. Sometimes we'll send them the Tax Connect. Sometimes they'll send them to Michael Fleming at Sales Tax and more. Some, you know, sometimes we'll refer them to p Johnson. I mean, there are just certain situations where we just, we. It's not within our skillset. Yeah. Um, but then when we are out of capacity, we tell them, look, we don't have room.
Here are the referrals. We'll even like send over our notes that we'll have from meeting with them and do the introduction because we're really in it for them and you know, it's that going to make us money. No, not necessarily, but it's the kind of person that I am and how I want the company to show up.
Judy Vorndran: No, it's all about making the world a little bit better place. That's how I feel like I, one of my marketing person says to. I want to get rid of some of these calls, and I'm like, there's not an easy way for me to tell you not to have me talk to them. If I talk to them for 15, 20 minutes, I probably know if we can help 'em. I don't know that I can give you a list. Yes, because it's complicated, you know?
And they're not in every state. It's so complicated. And they're not in the same thing. We have a client that has two subsidiaries. They've been compliant in multiple states, but not some. , two different business units. You know, totally different customer base. One's heavy in one state and the other doesn't even touch the state.
So it's not an apples and apples analysis, but it's one client. So it's complicated and they're like, we just want to fix it. You know, like, but you know, and also the thing for us that we really struggle with is the sales tax registration. Be getting other income tax filings and all that. And I know you have to defer some of that.
I don't think people realize. I just had a call this week and it was an office manager, so not a cpa, not a bookkeeper. And she's freaking out, like going online to figure out the sales tax registration, like I can't do this. And I'm like, you're right.
It's a legal document, signed under penalty of perjury. You got to do certain things and guess what? The next state's slightly different. You're better to have guardrails and that's where we come in. Right. And you provide something unique to that. And so do I. That's fascinating. And you've obviously built a wonderful business on a premise that is similarly aligned in values to mine, which is obviously why I've admired you and I'm glad to have you here. What other questions we got?
Meredith Smith: Well, something that kind of talked to me. My husband's a data junkie and so you don't often find in this consultancy space in the tax realm of like, collecting data on your people and how things are moving. What's one way, and it sounds like you use data to help you kind of guide in your decisions. What are some of the tools that you use to collect that data to help you kind of make the best decisions for the company or kind of get where you want to.
Alex Oxford: Oh, sure. Google forms for surveys. One of the key tools that we use is called Lattice, which is an employee engagement platform, and so it will send little pulse surveys through Slack. I think you guys use Teams, which is kind of similar. It'll send a couple of questions each week asking about, I think there's like a hundred questions in this inventory talking about work, place, relationships and stress level -- and all these different things. And so we're able to see what is our employee NPS in real time, net promoter score. Is it going up, is it going down? What are the areas that employees feel like they're getting support in or not getting support in? We're able to do surveys for different departments as well, and it's all anonymized feedback. We looked at that pretty regularly, but you know, we talk about data. I think it's really easy for a lot of business owners and data junkies like myself to just think about the quantitative, but a lot of it really is the qualitative information gathering. So what are the conversations that we should be having with which people, and what is the insight that we're trying to glean?
Because a lot of this emotional stuff, you can't just put an index on it. We need to figure out what's going on here and why. And so we do a lot of talking. We talk a lot. I talk a lot. I mean, yeah, collaboration.
Meredith Smith: Alex, as we wrap up, you are our first recording of the new year. If you had won New Year's resolution for Tax Valet, what would it be?
Alex Oxford: Well, like, gosh, when I think about New Year's resolution, it's like changing. You might have to edit this because it's going to have to gimme a second because when I, when I think about New Year's resolutions, I think about changing something that's or wrong. Okay, go ahead. Or it could be just at like continuation of something that you Yeah,
Judy Vorndran: I was going to say mine is like building better process, building better teaming, collaborating. You know, the firmly culture taking care of each other. I just want to keep doing it. And finding ways to do that effectively as a group. Communication, collaboration. I mean, those are my key touchdowns. But how do you do that? It has to happen, as you know, intrinsically with the humans doing it.
Alex Oxford: Yeah, so if I were to throw out a New Year's resolution, it's actually something that we're working on for the year, and we've got a lot of really big, juicy, exciting projects that we're working on. But one of the things that I'm the most excited about, Is being able to proactively identify issues with our clients that need to be escalated higher up in the chain of command before the client realizes it needs to be escalated.
Yes. And before the employee realizes it needs to be escalated, and then being able to. Look at these issues that are being escalated and pinpoint what's the root cause that was leading them to be escalated in the first place. So was it a training issue? Is it topical? Do we need to build out more documentation?
Do we need to set better expectations because. , we've done a really good job so far, but small problems become big problems as the company grows, and so we just don't have a streamlined process for proactive, , issue, , identification and root cause analysis before it even becomes a problem.
Meredith Smith: Well, Alex, thank you so much for being here. Thank you for sharing your story, the kind of basis of an emotions company. We don't often kind of get that perspective, and we really appreciate that time, the relationship that we have with Tax Valet. So again, thank you so much for your time and for being.
Alex Oxford: Thanks so much for having me. Ihad a lot of fun. We got to talk about things that I don't usually talk with other people outside of the company
Yes, you're a really big deal. I'm really glad to know you and connect with you and collaborate with you. I look to you as a sort of mentor in a way too, as an al a, I don't know, an ally, I should say Ally.
Meredith Smith: Well, this has been another episode of SALTovation. ‘Til next time.
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