Xero Partner Spotlight: Shahar Plinner & Uri-Bar Joseph (7 min read)

Meet Shahar Plinner & Uri Bar-Joseph of Formations, a Xero Silver Partner

Formations is a complete financial management solution for self-employed, automating the creation and ongoing management of S-Corps - the most efficient tax structure for self-employed. Formations users save thousands of dollars every year on taxes, get access to affordable health insurance and other Fortune 500 level benefits, and receive monthly paychecks so they can enjoy the perks of a predictable income. With Formations, self-employed can maximize the financial potential of their business, improve their financial wellbeing, and save on average, $12,000 per year.

About the Practice

• Location: HQ - Kirkland. Servicing - Anywhere in the US where high-speed internet is available
• Year Established: 2019
• Contact: [email protected]
• Industries: Full-Time Self-Employed
• Favorite Xero Product/Feature: APIs

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Xero & Cloud Accounting

When did you start using Xero and why?

[Uri] For us, finding an accounting software that we can utilize as the backend infrastructure for our solution was critical. We looked at a bunch of options, including QBO, which we have used in the past. Our requirements for an accounting software were for it to be stable, reliable, and trustworthy, as well as flexible enough from a technology perspective that it would allow us to utilize it as the backend solution. APIs and the flexibility of the APIs was critical. Xero answered on all of these requirements. 

Additionally, we wanted to find a partner that shares our vision for the self-employed market in the USA. With Xero, we found the people as well as the company shared our passion and vision on what we are trying to do, and they were willing to go the extra mile to achieve those goals. This interview is a great example of it. The marketing funds, partner program, your desire and willingness to meet us at the places that we want to go to was a huge part of our decision.

[Shahar] As Formations represents the future of the tax industry, we wanted to go with providers that represented the future as well. We believe that self-employed are heading into a new era, so we want to pick the technologies that align with the message that Formations is looking ahead as the established solution.

What do you think is the biggest misconception about cloud accounting?

[Shahar] I think it goes back to the discussion of old fashion. We had a huge pushback at my previous firm (GPL Tax & Accounting) to move people from Quickbooks Desktop to QBO. Mainly it was the pushback by the CPA’s and bookkeepers, but the misconceptions come mostly from industry, pushing back on the ability for cloud-based technology to be a secure, fully-featured software. Cloud technology has these connotations for being young, edgy, loose. And when it comes to our industry, there’s some reluctance around using it for financial and personal data. But it’s mostly because the industry is old-fashion, and quite frankly, old. Because when it comes to users, it is a pretty easy sale. People are moving to office 365, Google, AWS and Amazon, and understand the benefit of moving into something that is accessible everywhere and on the go. Shouldn’t your tax and accounting be the same?  

[Uri] The two biggest misconceptions we’re trying to disrupt are that it’s boring and that it’s only compliance driven. The way that we think about accounting is that it’s not boring, but super-exciting, and that it needs to be business oriented. I think Shahar gives the best example of how you can approach a tax account from a business perspective and not a compliance perspective. It's not that you need to be compliant, but the state of mind should be that there is a rulebook for this. It is very defined and very clear. How do you use it to the advantage of my business? How do I make the most out of it for my finance, tax structure, and my business? This is the approach we’re taking with Formations. Most people think “oh I need to talk to my accountant, it's so boring, I need to provide all this information,” they go through the motions of being compliant and it's a huge missed opportunity. We want them to be excited about the opportunities tax and accounting is giving their business to thrive.

How does technology play a role in your client/advisor relationship?

[Uri] As we are building a tech solution for self-employed. All of our relationships are based on technology. The conversations we have with clients, the transformation of information, and the presentation of data are all based on technology. Technology is at the heart of everything that we do here at Formations, and I think we are finally getting to a point where tax and accounting is now being disrupted. That is one of the reasons that FinTech is one of the top 3 industries in terms of innovation, growth, and investment. 

[Shahar] Additionally, as we are a tax solutions company, technology allows us to show clients their tax position on a daily basis. Currently, there is nothing like that in the market and I think this is the biggest mystery in self-employment life. Taxes are the largest unmanaged expense for business by far, and if you are not managing the largest expense of your business you are deemed for failure.

What is your favorite Xero feature and why?

[Shahar] I would have to say the rule engine. The fact that you can minimize the work and create a hands-free data entry environment is priceless. It has allowed us as decision makers to focus more on insights of a client and the strategy needed to further assist them. We are excited to see the continued development of Xero as a platform because this will be the future of the industry. 

Do you specialize in any specific industries? What made you interested?

[Shahar] We focus on professional services, real estate brokers, financial advisors, insurance agents, and the 1099 community of independent contractors which are working full time. We believe that this is the most underserved community in the nation, this is the community that our tax sophistication can impact by saving $15,000 on the first $100,000 they are making. This is our focus and where we want Formations to really help these people facing this problem. 

What does the future of accounting look like to you?

[Shahar] The fact that businesses or self-employed individuals are living in the dark related to their financials is something that will change in the future. Cloud computing in 2020 allows you to be connected and integrated with all sources of data and sources of financial data which can be collected and brought into one place to give you more insight about you and your business. 

The future of accounting is combining all of this information with AI and machine learning, and using technology to make better decisions for you without emotions involved. We can see that the biggest mistakes done by business owners are related to emotional decisions about something. If you can just take the emotions away and let the data tell you a better story, this is the future of accounting. Cloud accounting is ready to let business owners make decisions based on data. We believe Formations will take it to the next level by connecting your retirement, savings, loans, micro-loans, your individual taxes into one place where people would not necessarily need to interact, but simply make easy choices that will allow them to save thousands of dollars, or not miss new opportunities to make money.

What is your proudest accomplishment this year as Formations?

[Uri] To me it is the fact that we completed our tax filing in time for all our customers. It is a huge accomplishment primarily because it shows the power of continuously managing our customers’ financials. We don't need to go through the huge effort of collecting their information once tax season opens. We are ready at any given moment with information and the way we manage their tax and accounting all year long not just during tax season. It is a different way to think about managing tax. Most people think about managing tax once a year. I honestly do that myself still, but it is starting to change.

What are you looking forward to in the coming year?

[Uri] For us, it's about helping real people; we are looking forward to bringing what we do to as many people as possible and help them to achieve their financial potential and improve their well-being. There are four pillars we care about and want to help people take care of: Business well-being, Compliant, Personal well-being, and your Family well-being. We want to be able to help our users and customers with all four of those pillars.

To wrap up tell us a little bit about yourselves

Desert island companion: [Shahar] My wife. No question.

Talent you’d most like to have: [Uri] Play any type of musical instrument…

Go-to-app: [Uri] Nowadays, Netflix 

What is your strongest personal quality? [Shahar] Adjusting and reading people. I am very approachable.

What inspires you? [Shahar] People. And those who work hard and play hard. 

Which living person do you most admire? [Uri] My wife. She’s an OBGYN who helps bring life and save lives every day.

Company that didn’t exist 5 years ago that has become essential to your life: [Shahar] Uber. Everywhere I go and all offices I visit I travel Uber. [Uri] Formations

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