Yoke Har Lee: Magic numbers take Kiwi firm further

BankLink's strategy is to provide good service, rather than racing to offer the latest technology, says the company's Richard Reese. Photo / Martin Sykes

Accounting solutions company BankLink is used to collaborating with the competition in order to grow.

In New Zealand BankLink competes head-on with MYOB to provide data for accounting and GST reporting. But in Australia, BankLink has a solid relationship with MYOB, which distributes BankLink's system in that market.

Richard Reese, BankLink's chief operating officer, says the company has also been selling its own products directly to Australian clients. It works the ground hard, he says, conducting over 50 client seminars a year to serve its customers, many of whom are stretched across rural Australia.

BankLink supplies accounting companies with financial data from banks, which is then used as the basis for compulsory financial reports and GST returns. A critical part of this business is having comprehensive coverage of banks in its financial database.

The company's 1993 expansion across the Tasman was not always a bed of roses.

"When BankLink started it was a very small company, often having to sniff the oily rag in selling its services," says Reese. "The founders have a lot of stories to share about having to sleep in dodgy hotels - doing it the rough way."

Things took a turn for the better when a distributor agreement was signed with software vendor Solution 6 - parts of which have since been taken over by MYOB. The distribution agreement gave BankLink a strong kickstart in Australia and business expanded quickly in 2000 when that country introduced GST.

BankLink was started 23 years ago by three men who saw an opportunity to build a service around accounting companies.

Derek Jones, a chartered accountant, and business partners Malcolm MacDonald and Stephen Agnew decided to find technology to help deliver financial data from banks to accounting houses.

"The company literally started in the front bedroom of Derek's house before moving to a small office in Manukau Rd," says Reese.

Today BankLink not only has the lion's share of the Australasian market for accounting solutions, but is also making preliminary moves into Britain.

To succeed there BankLink will have to get support from the banks to provide financial data which can then be added to its system. Reese reckons about a quarter of British banks are lined up. "We have got a few people on board whose main role is to bring the banks on."

Britain, he says, is a natural market as it has similarities with the Australasian financial reporting system but a different tax environment.

The challenge is overcoming the differences in accounting practice and in the British banks' operating environment.

"UK is our first step. Once we have nailed the UK down, in due course we will look at other opportunities."

BankLink has data arrangements with over 100 banks in Australasia, covering data on everything from normal cheque and deposit accounts to farm trading accounts.

Its 4200 accounting clients handle over 330,000 business accounts in the Australasian market.

The company is achieving a compound growth rate of 15 per cent year-on-year and considers itself a mid-size company, with sales in the $20 million to $30 million range.

BankLink's success is achieved by being attentive to the needs of accounting houses, providing them with a way to streamline data for seamless merging and reporting.

"We have had clients who have used our system who used to spend days or weeks on data management who have managed to reduce that to two to three hours," says Reese.

"From the business owner's point of view, that is how much efficiency they have achieved. These efficiencies achieved - they can then use the resources or people to do more work."

Reese says BankLink's success is not about racing to introduce the latest thing. "We are not about being the first in using technologies ... We are about being a service solutions company providing high-quality solutions."

The recession has reinforced the fact that businesses need to get back to basics.

"The message we have been bringing to clients over the last 12 months, through our seminar series, is the need to stay focused on the business," says Reese. "Part of this involves getting good and accurate financial information for their business. Having good data can provide additional value."

BankLink recently won the prize for most innovative approach to international business at the NZ Trade and Enterprise International Business Awards, with convener of judges Jack Stephens praising the company for showing "truly innovative thinking to get traction in new markets internationally".