Future Accountant profile: Lucy
Lucy Cohen is the founder of Mazuma, an award-winning subscription-based accounting firm
Tell me about your business
I started Mazuma in 2006, in a pre-cloud technology world. When I qualified at 23, I saw that small businesses weren’t well-served by accountants, and I thought I could find a better way. I decided to take accounting and bookkeeping off their plates entirely, by giving them a purple envelope they could send to me, and I'll do the rest.
People still send us physical, purple envelopes, but we've developed our own digital purple envelope - our own app, which does bookkeeping for us with artificial intelligence.
We're the first to market with a subscription model in the UK. And we're still really the only people who do it truly is a subscription, kind of like a Netflix for accounts. We very much took a manufacturing business model and applied it to a professional services business. And every time we encounter a problem, we evolve.
Are you evolving new services?
I'm a big believer in doing what you're good at, so we don’t usually add on extra services. If we do, it's very considered, because we make our money on volume and on margins. Any extra service deviates from the process and affects our margins. We’ve got tiered pricing, so you've got an option of different levels of service: whether you want a one-day turnaround, and how much data storage you want. That's how we remain efficient.
How do you see accountancy changing?
I think we're going to see a real divergence, where some firms become hyper-local, or hyper-niche. For example, only serving clients in the beauty industry, or in a specific geographic area.
How do you see your business fitting into the future of accounting?
When you've got a hyper-local business or a hyper-niche business, you don't really want the bottom 20% client base because they don't make you enough money. You want to be able to charge nice advisory fees, and add on services, offering them time, care, and attention
But for a very small business, that’s not actually necessary. Most don't want to have a monthly meeting with their accountant, they just want it out of the way. That's where we step in: we’re serving people who think accounting is just a problem to be solved. We do it well, and we do expertly. But we're not going to dress it up as anything it isn’t.
What’s the biggest innovation happening in accountancy?
I think integration is going to become more prevalent and it's going to become an expectation. There's an expectation that platforms will integrate with each other. And I think that software developers will have to open up, as we’ve seen with open banking.
How is your firm coping with new trends in accounting?
One of the reasons we built our own platform was so that we could integrate with whoever we wanted. We typically have clients who are not digitally native, but they do use a smartphone and some apps. But they're not going to kind of put things into a mileage tracker, for example. Likewise, though, we do have some clients who do those things and really enjoy them, so we didn't want to alienate either set. That's why we have the paper and digital options. And so for us integration was a key to being able to engage with both cohorts of clients.
What are the biggest lessons you’ve learned in the last few years?
The biggest learning is to only implement change when you need to, and for very good reason, because people don't like change. They just don't have the energy to adopt more change, especially this last year, we've had so much change and uncertainty that as an accountancy provider, being stable, consistent, and reliable helped our relationship with clients.
How are you managing your digital and paper clients?
Essentially, we digitise the paper clients with scanning technology. We charge a small fee to do that, but clients don’t mind. At that point, they become the same as digital clients. There's only one additional step in the process, which we keep ring-fenced from the rest of the process.
What were the biggest challenges you faced?
For us, it's the fact that we've always done things a little differently. We've always been a bit of an innovator. It’s a massive challenge to be first to do anything, because it's hard to tell people why they should bother changing.
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