data analysis – Page 22 – Cooper Mann Consulting

July 30, 2012

More Than an Accountant: A Trusted Business Advisor

More than an accountant: A Trusted Business Advisor

Accounting isn’t available for re-invention. The rules were established long ago, and my debits and credits aren’t any better than yours. Accurate accounting, completed tax returns, and quality audits are an expectation of every client of a professional accounting practice. So, with accounting being somewhat of a “known quantity”, how does a firm show that it can do so much more than simply crunch the basic numbers, and demonstrate their value as a trusted business advisor? The answer is in knowing more about the client business and operation, and using that knowledge to identify opportunity for both the firm and for the client.

Accounting firms serving growing businesses must deliver value, insight, and long-term service to their clients. These firms desire to enhance their service deliveries to existing clients and prospects, and need efficient and effective tools to support the effort. For today’s accounting professional, that toolkit needs to include data collection, integration, and analysis. The accounting professional’s participation in these areas is critical. Data collection and integration efforts must be controlled in order to ensure accuracy of data in the financial systems. This becomes the first and most important element – making certain that the data in the financial systems is accurate and complete. Only then may additional steps be taken to add more value to the service delivery.

A primary method of adding value to accounting service delivery is to enhance the firm’s ability to provide data analysis and deep insight into business and financial performance. This is, of course, enabled through the monitoring and control of data flowing into the financial systems, ensuring accuracy of information used for analysis. Staying abreast of changing financial needs and finding additional opportunities to add value to client deliveries is a key element in gaining new business and revenue for the firm, and adding to the “sticky” nature of the firm’s services. Engaging with clients on key financial trends and industry performance metrics can help to set the firm apart from its competition, differentiating services and offering far more value to the client.

Financial analysis tools available today offer accounting professionals more capability and process support than ever before. With direct integrations to practice management and engagement solutions, firms gain the ability to map and sync data automatically from core firm applications. This ability can significantly improve upon the time and effort required to introduce data into the system, and delivers efficiency and scalability which allows the firm to easily expand use of the solution to the entire portfolio of client engagements.

There are numerous benchmarking and reporting tools today which make reading and understanding financial data easier and more accessible for business owners and managers, yet these solutions rarely address the needs of the firm in terms of mining the entire portfolio of clients for new opportunity where the firm can deliver more value and service. The selection of the right tool for the firm becomes a key element in this respect. The solution must deliver not only better analysis and reporting for each client, but should also be oriented to provide a system-wide view for the firm members and participants.

A key aspect to the efficient application of these tools is to systematize the activity, and structure it as a standard process within the business. When it becomes part of a firms DNA, to structure, compare and analyze client engagements for trends and similarities and then to take advantage of the opportunities revealed therein, the firm has a practice model which speaks to sustainability and growth over time. For smaller firms and solo practitioners, this approach is what turns individual accomplishment into a long-term business model.

The solution is out there, and it’s available today for practitioners who wish to introduce efficient and scalable ways to identify client opportunity, capture it, and deliver on it. Turn your firm into a value machine, and deliver the trusted advice your clients need. A little investment in this area can deliver large returns for years to come.

Make Sense?

Interested in learning more about tools which can help your professional practice get more opportunity from every client? Contact me @JoanieMann on Twitter, or connect with me on LinkedIn or Facebook.

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

July 19, 2012March 26, 2019

Data Dashboards and Financial Analysis: Comparing Apples to Aardvarks

It’s been said that the only constant is change. Businesses are being told that having the strength and agility to meet those changes is what makes the difference between success and failure. But in order to address change, to understand the possible outcomes in various “what-if” scenarios, a business has to understand how it is performing today, and then must capture and compare measurements over time to be able to identify trends and similarities. Only then, when the business has the information necessary to view performance over time, is it then possible to introduce changes and forecast potential outcomes. When the analysis includes many businesses rather than just one, even more may be revealed in terms of comparative performance levels under varying circumstances.

It doesn’t sound all that difficult, really. Not on the surface, anyway. There are a lot of tools and resources available now which make this type of analysis a walk in the park. With accounting moving “online” and into connected web service, and with accounting professionals working closer than ever before with their online clientele, the data available is astounding and analytics providers are eating it up. It’s actually possible for a small business to subscribe to a solution, upload or sync up their QuickBooks or similar financial information, and magically have a really cool dashboard to look at that makes financial statement reading obsolete. More often than not, there’s also a feature that lets the owner compare or benchmark their performance against others in the same industry. And that’s the problem.

Stepping back a bit, let’s now talk about XBRL (eXtensible Business Reporting Language). In its simplest form, XBRL can be described as an application of XML (eXtensible Markup Language) intended for use in business reporting. The idea is that all financial reporting should be “marked” in certain standard ways, so that it is easier to compare and monitor. XBRL is considered by many, including the AICPA, to be a “language for the electronic communication of business and financial data which is set to revolutionize business reporting around the world.” Even though it sounds logical enough, it hasn’t taken off as quickly as everyone thought.

So what does XBRL have to do with data dashboards and industry performance benchmark comparisons for those small businesses we discussed earlier? They both suffer from the same dilemma, and that’s lack of consistency in definitions and taxonomy (categorization).

Because businesses have a lot of, um, flexibility when it comes to financial reporting, it is not unusual for the application of a single term to mean one thing to one company, and a very different thing to another. As an example, what one company calls “operating revenues” may be what another business calls “net revenues”. Does “inventory value” mean the same thing to a business using a FIFO costing method versus LIFO?

When you try to perform an analysis of the financial data of two companies who report or label their information differently, it makes it really difficult to trust the comparison because you may very well not be comparing the right things – apples to apples. It may be more like apples to aardvarks. I can’t tell you that the solution is out there, because at this point I don’t think it is. I say this because the problem starts where the data is created and initially “categorized”. There are few standards, and even fewer that are actually implemented on any sort of broad basis. The problem exists in the trial balance software, in the accounting products, and in those Excel spreadsheets everyone carries around with them.

The best, first step any accounting professional can take with their clients is to make every attempt to address the financial reporting in a standardized manner, and capture and categorize the data appropriately from the get-go. It’s the only way you’ll avoid spending days with Excel spreadsheets and working papers, attempting to normalize client data into a framework that is available for a useful and trusted comparative analysis.

cropped-jmbunnyfeet1 Make Sense?

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

July 17, 2012September 25, 2018

Accountants Need Business Intelligence, too

I think that accountants recognize that their profession is in the midst of transformation, and technology will continue to play ever-more critical roles in helping professionals meeting these trans-formative challenges. There are increased pressures on a variety of levels, not the least of which is the pressure to differentiate and find new value and opportunity to deliver to clients. While this has always been a challenge for the professional accountant, the do-it-yourself tools and services available today have served only to increase competitive pressures, and have made it more difficult than ever for accountants to demonstrate their business value to the client.

Being a successful business today means being able to make decisions – informed decisions – quickly. Business owners need reliable and actionable information now, providing greater ability to adapt to the complexity, risk, and volatility of the market. In terms of differentiation, one of the challenges plaguing accountants, delivering higher levels of business intelligence to the client is a key differentiator, and one that can not only set the practice apart from the competition, but also help to establish the firm as an industry leader.

The difficulty that many firms have faced is finding the right opportunity to deliver more intelligence to the client. Not understanding what tools and solutions may be available, and not knowing how to identify real areas where the firm can add value to client engagements, becomes the barrier. For accounting professionals, business intelligence is not just a tool to measure performance, but should be the foundation for exploring the depth of services and advice potentially deliverable to each and every client.

Because many professional practices actually operate as more of a “collective”, with individual partners handling their own books of business, there is often no good way to understand the overall mixture of clients being served by the various practitioners in the firm. Certainly, billings and collections are measured, but there is often little “intelligence” applied to analyzing the client base as an entire system and identifying those clients where similar needs may exist or where differentiated service offerings may apply. Applying a level of business intelligence to this problem, and providing the firm with a means to analyze the various properties of the entire client base and client performance, becomes the centerpiece to increasing the value of and opportunity within every client relationship.

The important thing for professionals to remember is that their business clients need informed consulting and knowledgeable advice. Business owners want to know if they are performing well in their respective industries and are creating long-term value, and they need guidance and support in order to understand business performance and make the necessary changes to improve it. Business owners trust their accountants to do quality tax and audit work, but if they aren’t able to get a higher level of consultative service from their trusted accountant, they’ll go somewhere else to find it.

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

July 12, 2012

Food Truck Research Revealing Small Business Trends: low cost ops, mobile, social

Food Truck Research Revealing Small Business Trends:

low cost ops, mobile, social

In a recent article on InformationWeek.com, author Patrick Houston distills Emergent Research data relating to shifts in food service paradigms and the growth of the Food Truck Industry into 3 important points that every business should consider. With the trends driving these mobile businesses towards specialized and customer-oriented service, certain realities are revealed regarding how this segment of the food industry, and small businesses in general, are addressing increased cost and competitive pressures.

Emphasis on operating expense

Businesses are shifting away from large investments and fixed expenses and are more frequently seeking variable cost, or “pay as you go” services. Even shifting from capital expense to operating expense isn’t enough; the operating expense base must be reduced where possible. “The shift reflects a broad reality of the post-recession economy. For the foreseeable future, that reality affects IT plans, as you seek to meet line-of-business strategies designed to please customers seeking the same opex-vs.-capex advantages.”

Smaller roll-outs, and “prototyping” of services is essential

Small businesses aren’t in a position to gamble on the success of a major product or service roll-out, and are finding that localized testing or limited release of services is a good way to gauge success without going all-in. Particularly with the challenges in obtaining financing for any sort of startup operation or business expansion these days, businesses are learning that going in small may not only be the best option, it may be the only option.

Be mobile, local, and social

Food trucks aren’t the only businesses that recognize the value of mobility, localization of services, and social involvement. Small business owners of all types have always found new opportunity by making valuable connections through social interactions. The rise of social media services on the Web has served only to increase these opportunities by introducing users to virtual communities and groups, extending reach and influence beyond localized boundaries. That being said, the social approach also serves localization very well, and allows businesses to interact at deeper levels with those in the local area or region as well. Mobility is also critical to delivering the cost reduction and agility for the business, and creating a means to meet the customer on their own terms.

The big thing to get from this article is the message about doing more with less. Smaller businesses, or smaller workgroups, are more agile and can generally innovate more readily than large groups. Cloud computing and leveraging technology to benefit the business can introduce amazing capabilities for the business, yet don’t have to represent the big expenditures that purchasing and installing technology used to require. And remember that the customer experience is what’s important, and you have to do business with the customer in a way that suits them.

Make Sense?

Doing more with less is what sustainability is all about. Read more…
Data Warriors – Accounting in the cloud. Read more…

July 6, 2012July 17, 2017

Data Warriors – Accounting in the Cloud

Data Warriors – Accounting in the Cloud

The cornerstones of building and supporting a professional accounting, bookkeeping or financial services firm are the tools and resources that assist the professional in building their practice clientele. In today’s market, that means understanding the value and application of cloud computing models and services.

Information management paradigms are changing, and professionals who can help their clients to achieve maximum performance and profitability through increased efficiency and innovation will find that the practice evolves into a more effective and agile organization, and the quality of their client engagements is taken to an entirely new level

Not participating in a cloud technology model is making a decision to not participate in today’s technology-enabled flow of business opportunity. Ensure your continued relevance and value, and communicate to your clients and peers that your firm is prepared to meet the demands of an intelligent and informed clientele and market.

What does the “cloud” really mean to accounting and business? Well, it means a lot of things.

Centralized access to information resources
Distributed storage and management of information resources
Collaboration and co-working
MORE data collection than ever before
- MORE data being produced by various operational systems
  - MORE need for controls on data flows and exchanges
    - MORE need for analysis
      - MORE need for critical thinking

It’s been proven that any time things become more complicated or complex, it creates a need (read = opportunity) for specialists.

There is a current a growing need for accounting and business professionals who understand how all of this “connectedness” will work. And the question isn’t really a technology question, as there are people way smarter than me handling all that. What I’m talking about is the flow of information and data throughout the system.

This used to be more in the domain of the CIO; information systems guys and data analysts. Accounting and finance, for all its business value, was the final dumping ground for after-the-fact financial data. Operationally, things could be humming along in the business and looking just fine, but the business was losing money and nobody knew it before it was too late.

But we’re finally coming to understand that virtually EVERYTHING in business has a financial impact leaving an imprint on the business: every action and activity, every relationship and interaction.

With the applications and service now being made available to businesses of all sizes, even small businesses are now able to leverage the tools and gain the insight that only the largest of enterprises were able to do in times past.

The key is in enabling the business – facilitating their processing and getting their work done – using connected applications and mobile data access tools, or even simply helping with the collection of job or invoice or expense information electronically and in real time.

The earlier in the process, where you convert information into electronic data, the better. You can then use connected systems or integrations to move and share data with others – other systems or other processes – within the business.

Accountants are already familiar with many of these concepts and tasks, where detailed customer activity and information is distilled into an AR entry, or where vendor and payments and various enterprise expenditures and resource utilizations are summarized into AP transactions and inventory valuations. Operational systems are simply ‘exploded’ views of these subledgers and subsystems, where operational data and process-specific functionality resides.

With a traditional ERP/MRP approach, software systems were designed to meet the integrated business model by hanging all of the functionality and capability off a single framework or foundation. Everything in the business was an extension from the core accounting and finance system. Less intuitive for the user than a function or process-specific tool, at least the comprehensive integration of data was there.

What businesses may benefit from with a cloud-supported model is a similar result in terms of information being shared and enterprise collaboration being supported. The difference, and the real and amazing benefit, is that specific and unique tools can be applied to support each operational segment or functional requirement in the business, and it can be done affordably and dynamically because it comes with the integration and real time information (data) exchange that single-framework enterprise systems provide.

The accounting professional becomes of greater importance in this connected system of data and functionality. Their experience with and understanding of back-office and bookkeeping process, and the collection and preparation of subledger data for proper accounting treatment, is an integral role to play in establishing the proper integrations, syncs and data flows to and from “accounting”. Accounting becomes not an after-the-fact silo of historical data, but the centerpiece – the key – to unlocking business intelligence which leads to deeper understanding of business performance. When information is power, data analysis becomes the weapon, and the accountant the warrior who wields it.

Make Sense?

June 29, 2012May 1, 2017

Pressure to Deliver More Value and Intelligence

Okay, I get it.

Business professionals all over the world are being pressured to deliver more value and intelligence every day, yet their choices and options have become so many and varied, the influences coming from so many directions, and the solutions so bathed in complexity that many simply fail to move due to fear of making the wrong decision. But this fear has existed for many years, with business owners facing new and increasingly more competitive obstacles at each and every turn of the market.

Accountants, like any other business or profession, must learn to embrace and adopt new approaches to problems facing the business, and learn to adapt to the various influences shaping the economy. For there are few absolutes in life, but the need for accountability and measured performance in business is consistent throughout history. As boundaries are broken and limits exceeded, so are the foundations of information management and analysis extended, delivering ever increasing levels of insight and resultant opportunity.

Information technology supports the foundation of business operation and individual interaction, and is becoming increasingly more familiar as the agent of change in our economy and environment. In order to retain and demonstrate continued relevance, accounting professionals must recognize the shifts in information management and computing paradigms in order to retain their value and placement in the business value chain. Where accounting and finance was once necessarily an after-the-fact reporting of results of activities, and provided only reactive guidance based on historical data, it now has the real opportunity to become a proactive force in delivering insight, leadership, and positive go-forward advice.