Category: Online Accounting Technologies

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In Bookkeeping, Accounting, and Information Technology: The Value of Outsourcing

The Value of Outsourcing

The small-business market, unlike the mid- and enterprise markets, utilize the general services of public accountants in much greater volume and typically for more fundamental business services – such as business bookkeeping and daily process support. Larger organizations typically employ accounting and bookkeeping departments and/or in-house personnel, and rely on outside accounting professionals for higher-level work. Small businesses, on the other hand, want to hand off much more of the core bookkeeping and checkbook management functions to their public accountant. This creates a volume of fairly mechanical work which can be burdensome and not terribly profitable for many CPA firms. But this level of work is of significant value to the small business owner, and thus the value of outsourcing to the accounting professional should be clear.

CPA firms started to step away from bookkeeping activities (this is in the 1980’s or so), reserving their time for compliance, audits, and other engagements referred to as the “higher level work”.  As business accounting became more complex (largely due to advances in information management technologies as well as accounting and tax regulations, which generated a LOT more detailed information to “account” for), many professional firms saw a need to focus on their core offerings, and not on the lower level bookkeeping and record keeping activities.  As a result, the emerging cottage industry of bookkeeping service providers grew in power and numbers, and came to represent a critical intermediary between the CPA and the small business owner.  Truly, bookkeepers and software consultants are often the folks who help to automate the processes, capture the information, and organize the data so that it is useful to the accountant.

The issue that revealed itself was that small businesses started to pay more attention to the technology and business solution advice and direction of their bookkeepers and consultants than the advice of the CPA.  In a lot of cases, the CPA kept an arm’s length from the business, concerning themselves with their tasks, and not paying significant attention to how the data is collected or controlled.  As long as they got the data, that was OK.  As the reality started to set in, that bookkeeping and information management consulting also delivered the “higher level” accounting work, CPAs once again sought a means to gain more direct participation in the client business… but through a somewhat less direct manner than previous.  Now, partnering was revealing itself as the means to more fully engage the business, and the bookkeeper or consultant, in the overall accounting value chain, resulting with the delivery of work as well as value back to the accounting professional.

The enabler of this value chain, where the accounting professional, the bookkeeper, and the business owner can all work in concert without limitations in systems or based on location, is the cloud.  Providing standardization in terms of data platforms and integration, offering mobility and device independence, and combining resource management and access into a comprehensive approach to solving business problems is enabled through cloud technologies and connected solutions and services.

For many, this concept of fully technology-enabled business seems frightening, like a loss of control or individual accountability.  But it’s important to recognize that, as things become more complex, the opportunity for specialists is always created.  In the ever changing world of technology, it’s a dangerous approach to believe that you can be all things to all people, just as in accounting or tax.  You can’t be a specialist in every area, so you specialize in your niche, do it better than anyone else, and outsource/partner to get the rest done.  This is a philosophy of the cloud, and it’s working.

The true value of outsourcing, whether it is a small business outsourcing their bookkeeping and accounting to a public accountant, an accounting professional outsourcing bookkeeping work to a bookkeeping provider/partner, or those businesses outsourcing information technology management to cloud solution providers, the end-result can include improved focus on the core business, greater agility in embracing and adjusting to new strategies, improved quality of information through attention to process and control, and a much higher level of value delivered to all participants in the value chain.

Make Sense?

J


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Using QuickBooks to service a niche or specialty practice

Using QuickBooks to service a niche or specialty practice

Intuit QuickBooks is the most widely recognized and accepted accounting and finance solution for small businesses, making it clear why so many accounting and bookkeeping professionals rely on QuickBooks to serve their small business clients.  The features and functionality of the QuickBooks desktop editions have become cornerstones of small business bookkeeping.

While the QuickBooks financial products address a wide variety of general accounting needs, providing functionality required by most businesses, there are many ways to use QuickBooks and other Intuit partner extensions to orient your services to the needs of specific industries.  In short, it’s easy to use QuickBooks to service a niche or specialty practice.

One thing that’s really important to remember when considering the QuickBooks desktop editions for businesses is that they are not tied to the PC desktop and local network any longer.  Cloud computing for these essential desktop financial and business applications isn’t out of the question because they can be hosted, providing the same anytime/anywhere access benefits that SaaS solutions offer.  So, now that we know that QuickBooks desktop editions can also be considered a type of “cloud” solution (when delivered by a hosting provider), let’s talk about how to apply the product line to a variety of business needs.

The most obvious example of this is the Premier Industry offering of QuickBooks desktop editions.  With the Premier Industry editions, additional functionality and reporting for specific industries is addressed directly within the application.  Industry editions exist for non-profit, manufacturing, and contractors, among others.  A lot of practitioners have met the additional needs of their business clients by using those industry-specific editions

With QuickBooks Premier Non Profit edition, for example, you can go beyond general accounting and provide information specific to not-for-profit organizations, such as:

  • classes to report by location or program
  • donation statements for donors and contributors and reports on their activity
  • form 990 – Statement of functional expenses – for the IRS
  • budgets and finances tracked and managed by program

One of the other things to remember when servicing a niche clientele is that sometimes less is more… meaning you want to give people the functionality and information they need, but not so much that it becomes confusing to them.

In retail, for example, it doesn’t make sense to have the store workers operate in the QuickBooks financial software because it doesn’t do what they need, and it has a lot more functionality and information than they require.  In most cases, the financial system has information you don’t want the store operators to access.  In this type of situation, it makes sense to look at what the user needs, and give them the solution which meets that need, while at the same time recognizing that the information from that system needs to integrate with the accounting solution at some point.

Using the QuickBooks point of sale solution is great for this.  It allows an accounting professional to work with a retail business owner, providing the back-office and accounting support required, but the front-office uses the solution that gives them the functionality they need to accomplish their daily tasks.  POS runs at the store or retail locations, and the data integrates back to the QuickBooks financial system for the accounting department to work with.  I’ve worked with a lot of practitioners who specialize in some form of retail, and the thing they all have in common is that they handle the back-office work for their clients while the client operates the POS and sales functionality directly.

With the huge number of tools in the market which help automate and integrate data into QuickBooks financial, it often doesn’t matter what POS solution is being used, as the data can likely be exported from the POS and imported into QBFS.  Using the QuickBooks POS solution certainly makes this process more straightforward, as the integration functionality is designed into the product.

Another way to use QuickBooks to service a niche customer base or market is to find the extensions which offer functionality the client needs, but which also limit access to the core financial application.  For example, you may work with a business user who needs to manage customer information and produce invoices for work performed, but this user may not need access to the full QuickBooks product.  In this case, it might make sense to use the QuickBooks Connect service to provide the information access and invoicing capability the client needs.  QuickBooks Connect extends the information in the QuickBooks desktop financial product to the web, and provides users with the ability to manage customer information, manage invoices and payments, and other functions.  The information syncs with the QuickBooks information using the Intuit Sync Manager service, so the data is always up to date.

There are lots of different solutions in the market which extend QuickBooks functionality or access to data, and which address unique needs of various types of businesses.  It used to be a fairly complicated process, extending business applications to incorporate new functionality or to address changing business needs.  While the landscape of software development has not settled on a single method, toolset or approach (and is likely never going to), Intuit attempts to address the problem by offering standardized API sets (application programming interface) and SDK (software development kits) to allow developers to create “standards-based” integrations and extensions for the product.  Using Intuit or partner-developed extensions and applications, just about any type of business can be served – including addressing unique industry requirements or specific industry functionality – and still use QuickBooks desktop solution as the foundation for accounting and financial reporting.

Make Sense?

J

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The Cloud is Not the End of ERP

With the emergence and general acceptance of “cloud” technologies and services, many in the information technology industry have begun to wonder if the traditional approach to enterprise software – the ERP solution – is nearing its useful life.  Is this the end of ERP?  Well, the hype sometimes becomes the reality, and businesses are moving in droves to software-as-a-service to find the cost and efficiency benefits promoted in the sales materials, and they’re finding them.  Look at Sage’s acquisition of Intacct as an expression of increased focus on cloud-based solutions. This activity around the cloud and cloud-based software-as-a-service represents a major change in how people access and consume information technology and business services, a change that’s being driven by the huge momentum of the overall growth of “cloud”.  The market is moving to a customer-centric subscription model, where the legacy approach was more in tune with the “purchase it once and use it forever” mentality, and customer relationships were largely centered on upgrade cycles.

“As an economy and a culture, we are rapidly moving away from owning tangible goods and, instead, gravitating towards becoming members of services that provide us with experiences  – such as listening to a song, using a car, watching a movie or collaborating with our colleagues.

Of course, this cultural transformation has profound implications for business models. Why? Success is no longer gauged by counting how many units of your product you have sold. Rather, success is measuring how many customers are using your service on a recurring basis and how successful you are monetizing those recurring relationships.”

Forbes.com guest post written by Tien Tzuo http://www.forbes.com/sites/ciocentral/2012/02/09/the-end-of-erp/

While it sounds like the cloud is the right approach for everyone, looking at the variety of real business situations in the market suggests that, as always, one size does not fit all, and more “traditional” ERP solutions may well continue to be the right foundation for many enterprise operations.  Particularly when considering that many businesses already significant investments in platforms and infrastructure, software and data integrations, and operational process support, cloud software solutions may not provide the necessary functionality to support existing business.  Further, integrations that may be available and supported with legacy systems are often not available with cloud-based counterparts, while different integrations based on cloud standards may be present.

For smaller businesses and those in emerging markets, subscription-based IT models may make more sense, especially as popular traditional software makers have introduced their cloud-based counterparts which will likely incorporate the features or functionality of their legacy systems, while taking advantage of the capabilities introduced through cloud integration and interoperability standards.  Strong consideration should still be given to “traditional” ERP solutions, however, as there may be a level of stability, usability, or process support desirable by the business.

Utilizing these traditional ERP systems does not mean eliminating the potential for the business to benefit from cloud solutions.  Rather, cloud platforms and hosting solutions, as well as cloud-based integrations and extensions, are enabling mobility and collaboration around legacy systems, delivering cost and efficiency benefits just as significantly as those who have adopted a full-on “cloud” approach.

“It also makes sense to explore “edge” investments. […] there are significant innovation opportunities outside of core operations. Look to take advantage of the ERP platform’s capabilities in these spaces. Or implement low-cost, smaller-footprint solutions – even if on an exploratory basis. If they are fully adopted later, you can integrate them into the ERP backbone and expose standardized data and processes to the edge.”

from Deloitte’s Tech Trends 2011 report titled “the end of the “Death of ERP” 

So, what does this mean for your business?  It means you need to consider all the possibilities.

First, evaluate cloud-based options, and balance features with cost, time-to-value, and operational requirements.

Then, selectively innovate.  Figure out which areas of the business give you a competitive differentiation and innovate in those areas.

The traditional thinking, which is in line with the traditional ERP approach, is that all of the business functionality has to be incorporated into a single platform solution.  This is certainly no longer the case, and businesses are finding that they now have an ability to take advantage of the benefits of their existing systems while extending and innovating through the use of cloud services.

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Help Your Business Move to the Cloud

With all of the cloud computing options and services available to support business operations and administration, selecting the right ones can be a daunting task for any business owner.  While some cloud solutions offer simple “get started” options and “click to activate” plug-ins, its important to recognize that each business and operation works a bit differently. While there are standard requirements to support every business, individual business owners may have strong beliefs or habits that will impact how well or not a solution works for their particular operation.

Selecting the right technologies and applying platform and application solutions wisely can introduce efficiency in both time and cost that was previously not recognized by the business, or it can create all sorts of havoc and disrupt what were once smoothly-operating workflows. And once a solution is “plugged-in”, consider what might happen if it needs to be unplugged at some point in the future.

Because there is no single solution or set of products which will provide the necessary functionality for the lifespan of the business, it’s important to establish a process and framework which recognizes the need for agility and addresses the requirement to meet new business needs as they arise.

“With the evolution of cloud computing, one inescapable reality continues to surface and that is, as with service-oriented architecture before it, the fact that cloud computing promotes the idea of continuous proliferation of services,” said Daryl Plummer, managing vice president and chief Gartner Fellow.

While software and data integrations and “plug-in” data may be delivered through technology, there will always be a requirement for individuals who understand just how the pieces need to fit together and how the data and work must flow. Its okay to rely on service providers to service and support the implementation, but the direction and design of how the information and work will flow throughout the entire company can provide a strategic advantage and should be an internally-driven project.

As your business looks to the cloud for innovation, efficiency, and mobility – remember to keep your feet firmly planted on planet earth until you know where you’re going.  There are a lot of options available, and not all of the hype is representative of reality.  You’ll want experienced professionals to help you get off the ground the right way.  That’s where we come in.

“What sits between you and the cloud will become a critical success factor in cloud computing..”

Daryl Plummer, managing vice president and chief Gartner Fellow

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Helping Businesses Last With Better IT

  • Are you experiencing challenges in understanding or implementing the right business information technology strategy?
  • Are you having trouble bridging the gaps between business requirements, business processes and available technology?
  • Are organizational or productivity issues preventing your business from being as profitable as it can be?
  • Do you know that you should be running more efficiently, but for some reason are not?

Perhaps the right outside perspective can lead to simple changes that can take your business to its best level.

Cooper Mann Consulting’s team can help you address those challenges and create winning strategies that can positively impact your business. In depth knowledge of business processes, years of experience in multiple industries combined with thorough understanding of accounting and finance markets, software development, and hosting technologies enable us to provide timely and strategic advice to our clients.

We focus on providing professional solutions that can help businesses to grow, reduce operating costs, optimize business process and maximize output. We help to create innovative solutions that increase productivity and efficiency through higher levels of collaboration and integration. We provide professional, cost effective and timely advice for our clients, helping them concentrate on their core area of business and enabling the discovery of strategic differentiation.

We help businesses build stronger foundations and create process sustainability to support growth.