Category: accounting practice growth

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Disruptive Trends = Emerging Opportunity: Adapting to a changing technology and business environment

Every new day brings some new advancement in business technology, and much of this advancement relates to cloud computing, mobility, and new social computing models.  Information technology and solutions applied to business use have rapidly evolved away from paper-based or fixed-location tools, and are now oriented towards enabling mobility and anytime, anywhere access to business applications and digital data.

Trends driving change in business technology today may be reflected in two main areas: enabling solutions which are revealing benefit not previously recognized, and disruptive approaches which represent trans-formative changes to how businesses operate.   Disruption and transformation often generate new business opportunity, yet many professionals in accounting/finance and information technology fail to see the new potential available and resist anything which represents significant change.  These professionals equate change with risk, and are reluctant to entertain either.

An example of a class of solutions which enable the organization to “know more”, providing decision support through deep analysis and reporting of key business data, is the new generation of data visualization tools now available in forms and formats easily accessible by any business professional.  Previously, business owners had to rely on system analysts and accounting professionals to compile and report on various aspects of business activity.  Using spreadsheets and database driven chart-building systems, manipulation of large volumes of data was unwieldy and limited by available computer resources.  Moving beyond previously recognized boundaries in data collection and aggregation, tools now available assist users in combining data from disparate sources, and offer a rich suite of analytics coupled with the simplicity of drag-and-drop selection and exploration.

The opportunity introduced with this new capability does not rest solely in the analysis of the data.  Rather, it is in the control and the structure which must be developed to ensure that all relevant data being collected, and in the structure and control placed on those data collection and integration processes which will ensure that the information is properly associated or correlated, and accurately integrated into the model.   Completeness and accuracy of data is of critical importance, as is an in-depth understanding of the nuances of structured and unstructured data relationships.

In addition to the enabling solutions emerging on the market which are driving deep changes in how businesses see themselves are the advancements in technology which cause fundamental shifts in how business use technology to support operations.  The most evident advancement, often viewed as an approach which is disruptive to more traditional models, is the emergence of “cloud” computing models.  Cloud computing, connected services, and fully-managed outsourced IT solutions address a number of issues which have burdened enterprise IT deployments since IT departments were invented.

The difficulty for IT managers is that they are often overworked and underfunded, as information technology is not often viewed as a strategic differentiator but merely as a necessary cost of supporting operations.  Users view IT as being unresponsive and ineffective, and have little understanding of the balancing act required to meet user demands and at the same time deliver standardized enterprise computing services in a secure manner.

Mobility and the cloud has changed the landscape of business IT, and the concept of “there’s an app for that” is now fully ingrained in the user mentality.  Cloud solutions, sometimes introduced to the business by non-IT personnel and often viewed as “rogue IT” projects, have won adoption by business users due in large part to the simplicity of implementation, and often because they can deploy the solution quickly, outside of the boundaries established by internal IT management.  Information management within the organization must necessarily extend now to mobile computing devices, where an entirely new set of issues is revealed in terms of personal device management and distribution of corporate data and intelligence.  Professionals assisting the business with information management, access, collection and integration processes must now give greater consideration to incorporation of mobile device and application management, as well as the risks introduced with the broad use of personal computing devices within the organization.

The cloud represents a convergence of social and mobile computing, and introduces an entirely new class of business metrics to measure due to the significant increase in available data captured at various levels and through various types of virtual interactions.  With users being able to engage wherever and whenever they choose (“there’s an app for that”, again), businesses must shift IT focus to strategic enablement, creating standards for outsourced deployments, and infusing each effort with the security and control required, which is a mainstay of IT operations.

Big data, visualization and analysis, and mobile and social computing are changing how we do business.  As the trusted advisor to the business, the accounting professional should embrace these changes and the opportunities they present to deliver more value and service in each client engagement.  Accountants can help their clients understand how to do more with less – leveraging technology to improve operational efficiencies, and to structure, capture, integrate and analyze the relevant data which will reveal the risks and potentials of the operation under a variety of circumstances.

Disruption creates your opportunity to bring order to the chaos, helping clients compete and flourish in a difficult economy, and providing the proactive guidance and analytical support necessary to build and sustain profitability.

Make Sense?

J

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
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Bringing Order to Inefficient Business Processes: Give people easy to use tools that make sense, and they’ll use them.

Give people easy to use tools that make sense, and they’ll use them.

Most businesses need a little help streamlining those frustrating back-office processes that remain as barriers to better information collection and use.  What sort of processes?  Time keeping, for whatever reason or need, is one of them.  Maybe employee time spent relates specifically to billable project revenue, or possibly time spent is part of an embedded cost in an engagement.  Or, time tracking may simply be a means to capture data on employee productivity.  In a lot of situations, getting time records from contractors or employees is like asking them to move a mountain.  Maybe there is a mountain to move, depending on how many sheets of notes and handwritten records they’ve got stacked up.

Another process to look at is expense management and reporting, where all those random size receipts taped to a piece of letter paper, credit card statements with lines blacked out with a Sharpie, and spreadsheets of purchase requisitions for things you’ve never heard of before get stacked in the in-box where you not-so-secretly hope a fire will start some time during the night.  Someone actually has to go through this information and enter it into the system, and then decide what to do with the requests.  When this “someone” is the owner or manager, it means taking time away from actually running the business.  When it’s the bookkeeper, more focus may be placed on data entry than on verifying spending authorizations or managing the cash flow.

While almost every business has these time and expense management needs in their business, it is an area of automation and “tooling up” that is often overlooked.   One of the reasons for this may be that a lot of the solutions users are asked to implement just aren’t “usable” enough, or don’t really fit the context of what the user needs to accomplish.  In order to get the most value out of any business solution, workers must actually use the solution.  It has been proven time and again that, if you give people easy tools that make sense, they’ll use them.

Your accounting software may have time tracking with it, but does it make sense for your employees to access accounting just to record their time?  How about your contractors?  Employee reimbursable expenses paid by credit card can be accessed directly via transaction downloads from the bank, but does it make sense for you to have access to the employee’s account?  While there may be many ways to accomplish these tasks, there are only a few really effective ways which deliver the access as well as the security, and the relevant functionality that makes it easier for good workers to capture good data.  Selecting a system with the right functionality is key, but finding a system people can and will actually use means you’ve found a real solution, not just a system.

Make Sense?

J

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Discussion on hosted service options at The Sleeter Group ASC 2012

Discussion on hosted service options at The Sleeter Group ASC 2012

Are you having a hard time understanding the best approach to hosting your business applications – wondering why it costs what it costs, and why some applications seem harder to get hosted than others?  While installing applications on your desktop seems pretty straightforward, it may seem like nothing short of rocket science to get an application installed with your hosting provider.  And, to make matters worse, a handy little software widget you just bought for $20 now means you must have your own entire virtual server just to run it in the cloud? What’s up with that?

There is a lot of confusion regarding application hosting services, what customers expect from them, and what service providers are reasonably able to deliver.  Unfortunately, software developers, customers and service providers are not always on the same page when it comes to trying to solve the problem or making it easier for businesses to adopt the service.

To attempt to address the issue, and to (hopefully) provide some clarity and guidance around the application hosting service model and its use in your business, I will be presenting a session on application hosting, including QuickBooks hosting, at the 2012 Accounting Solutions Conference, presented by the Sleeter Group and being held this year in Anaheim, California on October 22-24.  The discussion will include information on typical hosting provider models, as well as application issues and considerations businesses should be aware of when looking to have their software and systems delivered by a 3rd party.

In all fairness, I will not be recommending specific providers, nor will I suggest that any one provider is better than another.  Each hosting company has their own strengths and weaknesses, which is true with all businesses.  The focus of the session is helping attendees learn what they need to know to begin a basic evaluation of whether or not hosting of their applications makes sense, and to recognize those factors which will impact cost, performance, and usability.  Further, I’ll also be talking about how hosting isn’t a standalone solution, and how cloud-based applications and services may be combined with hosted application services to deliver the necessary functionality for the best value (“can you say chunkify!” to use a Doug-ism).

So, I guess you need to come to Anaheim in October to learn some stuff, and then take a day at Disneyland.

Make sense?

J

Get ASC 2012 conference session information here

read more about the confusion over hosted licensing on The Progressive Accountant http://www.theprogressiveaccountant.com/tech-tips/confusion-over-hosted-licensing.html

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Knowing More: Accountants Delivering More Value with More Information

Knowing More: Accountants Delivering More Value with More Information

An article on CFO.com titled “What Does Sustainability Really Cost?” discusses the need for accounting and finance professionals to collect, analyze, and report on business data which is not always represented in the financial statements.  In many ways, this speaks to operational and other elements of the business, visible only with a closer look and through a deeper understanding of the operations and the many and varied factors which impact them.

Integrated financial reporting, which combines financial reporting with reporting of intangibles and other off-balance-sheet factors, needs CFOs’ support, investors say.
CFO.com (http://s.tt/1lWOa)

The focus of the article is one of sustainability and the ability of a business to maintain operations, profitability, and growth over time – and an integrated reporting approach which more fully describes this information, as well as elements relating to business risk and corporate governance.  In order for investors to fully understand the business health or the risk of investment in the operations, it takes looking beyond the balance sheet into operational metrics and detailed performance and supply chain data which is not often fully available in high level financial reports.

“..added material information will make investors a happier group. A more comprehensive approach to reporting would help investors more easily determine a firm’s ability to generate future cash flows, says Ian Ball, chief executive officer of the International Federation of Accountants and chair of the IIRC working group for integrated reporting. “Financial reporting on its own isn’t any longer telling us enough about a company to really understand its prospects,” he adds.

In recent years, about 80% of a company’s value was on the balance sheet, which contrasts to about 20% today, notes Ball. The reversal stems from the burgeoning presence of intangible assets among corporations. “If you’re trying to figure out whether a company’s worth investing in, you’ve got to understand the other 80% to understand the company,” he adds.
CFO.com (http://s.tt/1lWOa)

Deeper and more informative reporting on the business performance, as well as the data supporting the continued ability to perform at such levels and under what conditions, is what businesses owners need whether they recognize it or not.  Many business owners and managers believe they have the information necessary to make daily decisions, yet find their resources lacking when it comes to obtaining financing or meeting challenges posed by various unforeseen events.

Whether the economic environment is “friendly” or not, small businesses will turn to their banks to secure lines of credit and get funding to smooth out bumps in cash flow and availability.  Getting credit is always a challenge, even in the best of times.  When the economy stalls and times are tough, getting the necessary cash to support the business gets even tougher.

Bankable: Giving Small Businesses Credit http://wp.me/p2hGOJ-c1

Implementing dashboard analytics and other reporting tools is not always the initial answer, because part of the underlying problem may be that the right data is not being collected, or is not accurately accounted.  Developing a complete picture and providing an accurate and informed analysis of the data requires getting the right accurate data.  This is often where the process starts, ensuring that the systems in use benefit not only the work, but the information and reporting needs of the business as well.

When speaking to accounting professionals about the additional valuable services they could be providing to clients by using these KPI reporting tools to identify additional consultation and advisory services clients need, the feedback I generally get from the professional is that “you have to get the numbers right, first”.  It seems that, even with the ready availability of powerful and affordable software solutions to run the business, accounting and finance still tends to be an afterthought for many business owners.  Relegated to the back-office, and being an after-the-fact recipient of transactional data, accounting is still viewed by many as a “necessary evil” of doing business rather than an area of potential strategic advantage.

Working With the Right Numbers: Financial Data Analysis Requires Accurate Financial Data http://wp.me/p2hGOJ-9y

When the information systems in use appropriately support operational requirements of the business, the necessary data may be more easily collected for analysis. This is where accounting professionals should help their clients, to improve the quality of data available for analysis and for integration into financial systems.  It is through this attention to operational process support, getting the right tools in front of the user to support their job function and tasks, which will allow the collection of detailed information about the operations, and which ultimately provides the basis for a great deal of insight into the business.

It is in the interaction – of people, data and systems – where better technology-supported collaboration with the client should be established.  In many cases, this means focusing on improving the client system and the accounting process will benefit as a result.

Accounting Online and Outsourced Accounting – Focus on Enabling Your Client http://wp.me/p2hGOJ-bU

Accounting and finance professionals wondering how to increase their earning potential from the  existing portfolio of clients should look more closely at the operational and managements aspects of the businesses rather than focusing solely on tax return and financial statement preparation.   The value to the client is far greater and has a more direct impact when it helps in the performance of daily activities and provides support in overcoming challenges in cash availability, financing, and other issues business owners regularly face.  Know more about the client business, and the information you both gain provides the foundation to deliver greater service and tangible value.

Make Sense?

J

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
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Accounting Online and Outsourced Accounting – Focus on Enabling Your Client

Accounting professionals and those involved in business bookkeeping and accounting service delivery have been literally bombarded with messages about “taking your practice to the cloud” and “working closer with clients using the cloud”, but what does all this really mean for the average professional practitioner?  Does it mean that the software and processes already established in the practice need to be replaced?  Does it mean that accounting professionals need to get all of their clients into online applications?  Are the tools used by the professional practice obsolete?  These are all valid questions, and are issues not always addressed in the marketing messages of the various “solution” providers.  The complexity exists with the variety of tools and solutions most professionals use in servicing their business clients, and no single-solution cloud service is able to adequately address this variety.  As a result, many professionals are either trying to assemble their own toolkits through an expensive and frustrating process of trial-and-error, or are avoiding adoption of new technologies altogether.

There are a lot of ways to “enable” a professional practice, focusing on the technologies and applications supporting efficient and profitable service delivery.  The key in selecting the right tools to support the practice is to fairly evaluate the nature of services to be delivered, and understanding how and where in those processes the firm and the client “touch”.  It is in the interaction – of people, data and systems – where better technology-supported collaboration with the client should be established.  In many cases, this means focusing on improving the client system and the accounting process will benefit as a result.

Processes which are entirely internal to the practice must certainly be evaluated and improved, but the initial problem – the new area of focus – is in how the firm and the client work together.  The needs in this area will necessarily drive adjustments to internal processes, which is to be expected.  Most practitioners have already established their methods of dealing with clients, workloads, paper and software that have been around for a while.  It is the new client demand – to get more benefit from existing providers and solutions – which must be addressed.

For example, there was once a need to obtain bank statements and cancelled checks in order to balance a bank account.  This caused many accounting firms to develop a standard process of sending someone to the bank each month to pick up the paper statements and documents for client accounts, so that the bookkeeping could be done and accounts reconciled. With the advent and acceptance of online banking tools, the process for most accountants has been adjusted to where the bank activity data is simply downloaded and integrated into the company accounting information, rather than transported in the form of paper documents which are then keyed in as data.  This simple example of “enabling” the client accounting system to interact with the bank resulted in benefits to the accountant processes, and caused beneficial changes to be made in the internal process of the firm (no more driving to the bank, timely access to bank data, more accurate data due to single-entry of information).  While the client likely doesn’t care how the books get done, they do care about the information being timely, complete and accurate.  Thusly is the accountant value increased through the simple use of a readily available technology.

As accounting and finance professionals look to find ways to deliver greater value to their business clients, they would be wise to explore how and why they interact with those clients and understand what is missing – what more can be done – to support and advise those client business owners.  By focusing on helping the client “tool up” their enterprises to support more efficient and profitable operation, professionals will find that the resultant benefit is more consistent and streamlined access to client data.  Enabling the client, in many ways, is enabling the firm.

Make Sense?

J

Read more about Online Accountants and Their Clients: Working Smarter, or just Closer?

Read more about Data Warriors: Accountants in the Cloud

Read more about using the cloud to extend “connectedness” beyond traditional boundaries

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Online Accountants and Their Clients: Working Smarter, or just Closer?

Online Accountants and Their Clients: Working Smarter, or just Closer?

There are a wide variety of ways to work closer with your clients, and the thing that you will always want to remember is that “one size does not fit all”.  In other words, not every client will like using your favorite technology or software, and not every business owner will recognize your suggestions as solutions, because perhaps they did not recognize the problem in the first place.  But that’s OK, and perhaps how it should be.  You see, using the right tool for any given situation is the proper approach, rather than trying to shoehorn everyone into the same solution or method.  With a client-centric approach, you can still develop consistent internal processes to keep your service delivery as efficient as possible, because many of the core services you provide are consistent across the client base regardless of the solution in use.  The trend is to help your client work smarter, and it will bring you closer to the client than ever before.

Determining what is right for each job or task should be part of your value, whether it’s deciding how to connect remotely with your client, or helping your client find the right software system to support their tasks, with you ensuring that the integration to the accounting system is there and working properly.  Where the focus was once placed on accurate data entry, now it’s on placing the proper solution in front of the user, and through the use of the solution to perform their various tasks, the necessary data is collected. Accounting professionals should recognize that the collection of information in real time facilitates better business decision making, and that they can be instrumental in delivering this decision support resource to their client.

As an example, I know the owner of a small construction business.  This guy runs around with estimates, invoices, receipts, and other paperwork in his truck, and getting him to stop long enough for his bookkeeper to collect all that paper from the truck cab is one of the hardest and most annoying jobs she has.  Her focus is on collecting the paper and then entering the data and getting invoices and reports out.  The accountant is frequently requesting more information or clarification of data, as well as the information necessary to meet various reporting deadlines.  Even after implementing QuickBooks accounting in the office for this business, the ultimate problem wasn’t solved.  Certainly, the information is better-organized and accounted for once collected and entered, but the business owner still lacks timely information about the performance of his business, and sees little additional value in his accountants participation beyond the annual tax return.

On the other hand, I know another guy (landscaping this time) who has an accountant that has him use his phone to record just about everything he does as he does it.  He bids a job, and sends it via email.  He gets paid for a job, then snapshots a copy of the check and deposits it.  Buying equipment or supplies?  Sure, but electronic payment and approval tools let him track that as it happens, too (again, snapshot a copy of that receipt, etc.).  For this business owner, there is more business going on because less time is being spent doing the paperwork of business.  The bookkeeper in the office has the information necessary to keep things up to date, and can focus on how to streamline things even better.  The accountant has a much higher quality of information – faster – upon which to advise the client (which he has time to do, because he’s not cleaning up bookkeeping data or collecting information for reports and returns).  This business owner sees much more value in the participation by his accountant, because real issues are able to be identified and addressed in time to make a difference.

So, for today’s accounting professional, bookkeeper or consultant: is the idea of “working closer” with your client simply the concept of working remotely on the same systems at any given time, or is it to know more about their business and to help them do business better?

Make Sense?

J

Read more about Data Warriors: Accountants in the Cloud

Read more about using the cloud to extend “connectedness” beyond traditional boundaries