Category: outsourced accounting

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Success in the Finance Department: Better Data and Analysis

Success in the Finance Department: Better Data and Analysis

CFOs and corporate controllers are beginning to recognize the increased value they can deliver to the organization when they take a more holistic and comprehensive approach to data reporting and analysis.  The key is in delegation of duties, and establishing the controls and connections which ensure proper (and complete) flow of information throughout the enterprise.  The finance department can easily become overburdened if not structured properly, but can be as easily undervalued if the sole focus is getting the numbers right.

An article on CFO.com discusses some of the elements of structuring the finance department for greater success, and identifies the value of taking a proactive, consultative and analytical approach to business finance.

“For a CFO, “success is not just about getting the numbers right, but also uncovering the story behind the numbers: taking raw accounting information and creating cogent and compelling management discussion and analysis,” says Eileen Kamerick, managing director and CFO at investment bank Houlihan Lokey.

Those who take the big picture into account are more likely to develop an organizational structure that isn’t merely reactive. That will allow staff to come up with more ideas and, ultimately, help drive revenue and run the business. “You have to create an organization so you aren’t in the engine all the time,” Kamerick notes.”


This is a great article… read the entire post on CFO.com here

You’ll find that it makes sense.

J

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Accountants and their Clients Online: Who Owns the Data?

Accountants and Clients Working Online: who owns the data?

Mobile device support and remote access to applications and data is becoming a standard requirement for most businesses today.  The “online” working model goes a long way towards addressing problems face when they need to get team members together no matter where they are.  When the information is stored and managed centrally, it is easier to provide access to outside accountants or other professionals.  Yet, while this collaborative working model solves numerous problems, it also introduces a number of issues that neither the business owner nor their outsourced professionals may have thought about.  One of these issues is the challenge represented with dissolution of the engagement, and subsequent division of information assets related to it.  This separation can become unfriendly and problematic if the parties do not have an agreed-to plan.  Quite frequently, disagreements result from the use of subscription-based online services which are not clearly delineated as customer-controlled versus provider-controlled.  In these cases, clients may benefit from the use of a service through their provider, not understanding that the provider ultimately owns or controls access to the solution and maybe even the data associated with the account.

In general, it is safe to take the approach that whoever pays the bill for the service is the owner of the data associated with it.  This “he who pays the bill owns the data” approach is simple and it makes the most sense.  Consider that the individual paying the bill for the services is the individual who is financially obligated for what occurs with the service, so it makes sense that they would have authority over service access and usage.

It is quite common in outsourced and online accounting models for a professional firm to subscribe to services or solutions which help them support various processing needs for their clients.  Solutions such as Bill.com or Paychex provide tools to assist professionals in efficient delivery of various process-support services, such as bill payments and approvals, or payroll processing and reporting.  These tools are utilized as part of the professional service offering, and are generally not directly exposed to the client users (other than in specific contexts, perhaps).  Separating the client from these systems is usually not difficult; the professional simply stops using the solution for that ex-client.   Since the transaction information from the solution ultimately integrates into the accounting data file, the accounting firm can simply return the accounting data file to the client without losing their process support data in the online service.  On the other hand, if the client was the subscriber to the solution and the accounting professional was “invited” to participate with them, the separation would mean that the accountant no longer had access to the online data, and the client would retain use of the solution.

In contrast to a process-supporting solution, separations become far more complicated when the online solution includes fundamental tools for the client like general business application access and data storage.  Consider that a business decides to use SmartVault for its document management needs, and also wants to connect documents and files directly to transactions in their QuickBooks accounting system.  In this situation, the accounting data and the document vault are closely connected, and contain a wide variety of valuable business documents and files.  When the solutions are both run as online services, where the QuickBooks applications are hosted along with the integration for SmartVault, both the accounting professional and their business client can work more closely and in real time, creating much more value in the relationship.  If the relationship does not work out, however, separating applications and data can be a frustrating process for both parties if there isn’t a clear understanding of who gets what.  It would be easier perhaps if the question centered on an accounting data file, but in these situations the problem extends to questions of ownership of source documents, working papers, and even application software licenses.

Accounting professionals need to protect the value of the work they perform on behalf of the client, and the business owner needs to have their business information and applications.  Clearly understanding how to orient subscription based services to protect the interests of both parties is an important element in providing the highest level of professional service to clients.  In some cases it makes sense for the professional to own and control the subscription, particularly if the service is an element which supports professional services delivery.  These tools help you provide services to your clients, and the client benefits from the result of use of the solution.  If the client leaves you, then it is up to them to “tool up” their own operations to handle those processes.

In other cases, it makes far more sense for the client business to own and control their online services, and invite their outside professionals to participate. The benefits of working together are still present, and the remote access and mobility aspects benefit the business owners and team members as much as their remote professionals.  The accounting professionals can preserve their working papers and other work product on their own systems, drawing a clear line between their retained data versus that of the client and making a potential future separation much easier to facilitate.

jmbunnyfeet

Make sense?

J

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Working With the Right Numbers: Financial Data Analysis Requires Accurate Financial Data

There is a lot of discussion these days about big data and financial data analysis.  One of the most valuable aspects of the available tools for performing financial analysis, forecasting and “what-if” scenarios is the ability for a business to benchmark their performance against other businesses in similar industries.  By comparing their performance metrics with other like businesses, an owner or manager may be able to identify items in the performance profile which could be improved or which may represent differentiation from competitors.

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.

Many accounting professionals are still struggling with finding the right approach to help clients get better financial reporting on a regular basis, in as near real time as possible, without having to practically live in the client systems.  These professionals are often still approaching the problem by attempting to get the client to participate in the financial systems directly by inputting checks and payments, creating invoices, and doing other types of work the client needs to perform – and using the accounting system to do it.

This approach may well be the source of the dilemma, and all because the client is being asked to work in the accountant’s software rather than with a solution which addresses specifically the tasks the business users need to perform on a regular basis.  When users have tools which don’t suit their requirements well, they tend to not use the tools properly, if at all.  When users are provided with tools suited specifically to solving their functional or process support problems (Service Oriented Architecture approach, or SOA – what Doug Sleeter calls “chunkify”), usage and accuracy can increase dramatically.  Getting the numbers right means getting the supporting solution right first. When these solutions are properly configured and deployed, data collection and integration can become a “stealth” process, silently passing information from one system to another, significantly improving the accuracy and quality of data.

Accounting professionals who focus on assisting their clients with applying the right solutions to support operational as well as accounting processes, and who help to create the controls around the appropriate flow of information end-to-end, are delivering very high levels of value to those client businesses.  It is the assistance these consultative professionals provide, helping the business facilitate its processes faster and more efficiently, which increases the accuracy and, ultimately, the meaning of the resulting financial data.

Make Sense?

J

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
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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?

J

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
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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?

J

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The Holistic Approach to Cloud-Enabling Your Firm

The Holistic Approach to Cloud-Enabling Your Firm

Today’s professional accounting or law practice has a number of issues to contend with, not the least of which is technology.  While IT has been serving the firm for years, shifting paradigms in computing are leading professionals to wonder exactly which direction they should turn for advice.  It’s easy, at a high level, to see the value and benefit of outsourced IT services and being able to focus on your core offerings, but it’s a little harder to find exactly which path your firm should follow.  One thing has proven true over the past few years: taking a holistic approach to cloud-enabling your firm is far better than any uncoordinated exchange of applications and services.

There are four areas the firm should explore when looking to more fully leverage technology to its benefit, which is what “cloud-enabling” the practice really means:

  1. Transitioning to a paperless (or less paper) office
  2. Exploring alternative billing methods (value versus time?)
  3. Outsourcing non-core and non-strategic tasks and processes
  4. Streamlining procedures to create consistency in service levels

The challenge is that firms have numerous options and approaches being thrown about, none of which represent obvious solutions to the entire problem.  In pieces, cloud services and online applications can deliver new capability and functionality, but a professional practice has the requirement for systems to work together to be effective.  Re-entry or redundant storage of data is inefficient, so it is difficult to streamline procedures when the systems run on different platforms or don’t integrate well.

One approach is the “hybrid” approach, where you take the best of the tried and true, and deploy it in new ways to create new capabilities.  Also introducing cloud-based and SaaS solutions where they can truly help the firm innovate makes sense, as long as those solutions can connect back to the core systems. The key is to not lose what efficiency and business intelligence the firm already has while attempting to transform and improve upon those models (digital transformation).

The new thinking by some firms is to adopt web-based practice management solutions that make it easier to collaborate with team  members and clients.  Many of these solutions get great reviews and indeed do make it easier for users to access information from anywhere and on mobile devices.  Lots of neat features for the forward-thinking practice are available, yet the problem is that these solutions usually don’t have general accounting functionality required by the business, nor do they address some of the fundamental capabilities that apps on the desktop can.

For the online applications serving line-of-business functionality, the easy answer to finance department questions is to connect to an online accounting solution, like QuickBooks Online.  While this may serve the needs of the developer, the needs of the business finance department often outpace the functionality available in the smb online accounting products.  To address this reality, many developers have created the means to export data to the QuickBooks software running on the local desktop.

The desktop editions of QuickBooks remain extremely popular with professional service firms and the businesses they serve. In a cloud and mobile world, the firm and their client doesn’t have to be tied to the local desktop in order to keep their desktop software or collaboratively work in the data.  When the QuickBooks desktop software is setup within a secure remote access environment (whether on-premises or with a hosting provider), users benefit from the same mobility and realtime collaboration advantages as with a SaaS solution, like anytime/anywhere access.

Virtual desktops and remote application models allow users to access what seems like a workstation in the cloud, with business applications such as QuickBooks and Microsoft Office and whatever else the firm uses. The desktop is a true Windows platform, so the features and functionality are just as they are when working directly on a local PC.

Most remote or virtual desktop setups also let the user access the Internet and use a browser on the remote desktop, allowing users to run the SaaS solutions they’ve subscribed to alongside their desktop applications yet still remain in a totally virtual and mobile working environment. This approach allows the firm to centralize management and administration of internal servers and networking resources, or eliminate much of the maintenance and management by outsourcing to a hosting provider. Outsourcing the hosting and management of systems further establishes predictability in cost and increases IT agility.

The thing to remember is that one size does not fit all, and every firm will need to work within their own requirements and motivations to come up with the proper approach.  What works for a solo practitioner or small firm won’t necessarily work for a larger firm… or maybe it will, depending on the company culture and structure. There are a lot of options with the cloud when it comes to outsourced information technology models, online practice management and other business solutions, and mobile services which reduce the impacts of time and distance.  It’s time to start implementing on-demand access and mobile-friendly service options before the competition leaves you behind.  Interestingly enough… the competition that looks like a huge and successful firm could be just one person using some really smart IT.

 

Make sense?

J