outsourced accounting – Cooper Mann Consulting

August 14, 2017August 14, 2017

Cloud and Digital are Driving Change in Professional Practice

Accounting and Finance Professionals: Cloud and Digital are Driving Change in Professional Practice

Accountants and financial consultants working in public practice are experiencing a revolutionary change, evolving from documents and paper-based processes with after-the-fact reporting to real-time business management and providing services which support daily decision-making. The underlying cause for this evolution in business accounting is the technology: cloud and collaborative computing models are enabling much closer and regular interaction between accounting professionals and the businesses they serve. Even more, technology is taking its proper place in automating once tedious activities, allowing professionals to focus on causes and results rather than on transactions.

What is the real impact this is having on the accounting profession? It’s forcing a new focus and attention on change management within the practice, and is causing professionals to recognize the requirement for standardization of processes and development of controls which are the foundations for creating sustainability in a business. The goal now is placing reliance on process rather than people, which establishes the basis for intelligent automation. Standardization of processes does not require that the firm lose its personality. Rather, the mission at hand is to imbue the organization with its unique flavor and approach and to use process automation to develop and support consistency in the functions performed.

While cloud computing models allow accounting and finance professionals to work closer with their business clients, it is important that the practice look at those client interactions and develop standards for processes supporting frequently performed functions. These operations generally represent the activities within the firm which generate the highest levels of profitability due to the consistency in approach and repetition of tasks, and are the activities to apply intelligent automation to first. Those activities or engagements which represent the “one-offs” are often the most costly for the firm to perform, and therefore may not be the most profitable of activities and are certainly the most challenging to support with any significant level of automation. It is in this area where AI will find useful value in the practice, where a more informed answer than simple process automation is required.

The surprising finding when looking at many professional practices with more than one partner/professional involved is that these firms often fail to develop even the most basic of standard processes which apply throughout the firm. Rather, each partner or professional has “their way” of handling things, which challenges the supporting personnel as they try to deal with multiple working methods. The result is a lack of consistency in the service delivery to the clientele and reduced productivity and profitability for the firm.

The thing that these firms are failing to recognize – the light bulb over their heads that just isn’t lighting up – is that cloud computing and collaborative working models aren’t designed just to enable and facilitate a closer working relationship with clients. They’re also able to be applied inside the professional practice, enabling a more productive and efficient workflow which addresses the strengths and capabilities of the entire organization. And it doesn’t stop there. Businesses are relying upon their accounting professionals to provide guidance and develop controls and standards to support the client transformation from paper-based to digital operations, and embracing the entire realm of data and interactions associating with the business. Digital transformation in a client business demands transformation in those firms who serve it.

As professionals learn to go deeper in client operations they would do well to look internally, too, exploring how increased attention to process automation and consideration for the firm’s own “digital transformation” might lead to great profitability through market differentiation and improved performance.

Make Sense?

February 24, 2015

Trusted Advisor is About the Work, Not the Title

Many accounting professionals believe they are THE trusted advisor the client comes to for advice and guidance on business financial matters. Having fully bought into the messaging about the value of the accounting and tax work, these professionals are feeling pretty relaxed about their client engagements. They believe the client will come to them with questions and provide the opportunity to deliver advice or work. And each year many clients return to get their taxes prepared or financial statements produced, and even new clients may appear. But the work remains largely the same – financial statements and tax returns, and addressing additional needs only when the client brings it up, which isn’t all that frequently.

happy_client On the other hand, there are professionals who recognize that a proactive approach to helping clients results in better and richer client engagements and better-performing client businesses. These professionals are truly the business advisors to the client – the trusted partners who understand the variety of conditions which impact business performance and care to make sure they are properly addressed. This advisor not only reports but makes recommendations and provides guidance on certain situations or processes which are essential in the business model. These professionals recognize that the bookkeeping and operational information collection is not simply a means to an end; these professionals understand that these foundational processes and the information they encompass are the important details which reflect the true performance of the business… details which no summary report can fully describe.

Having more direct participation in clients’ financial systems is a highly successful component of practice building, helping the firm to mine opportunities that may be hidden in current or new client engagements. This does not mean that the accounting professional becomes part of client operations or workflows. Rather, it suggests that the accounting professional understand these aspects of client operations and assist in the development of necessary controls and processes involving data collection or validation. It may include the implementation of KPI and benchmarking solutions to help identify problems and map improvements, or it may involve the installation of a solution to improve the importing of orders and other transactions into the system, improving the efficiency in processing the information while at the same time reducing the potential for manual data input errors.

Regardless of the depth of direct involvement in client systems, professionals can more fully benefit from every client engagement by providing some level of training, consulting or supporting service in addition to compliance and reporting work. Services may be aligned toward helping clients set up or support their own in-house bookkeeping and controllership responsibilities, or they may be more suited to providing real-time guidance and review of client business performance data. Either way, the quality of the financial information derived is generally far better and requires less work to adjust and report on.

The key is recognizing that the work involved – whether it is through training, regular process and data reviews, or more direct participation – is not intended to simply streamline reporting on outcomes. The work the trusted advisor performs is intended to help the client save money and improve business and financial performance, and the practice is rewarded with higher value billable services and a much increased opportunity to engage the clientele in other efforts.

jmbunnyfeet Make Sense?

January 22, 2015

State of the Union: The Irrelevance of Good Accounting?

finance I’m a little concerned, and any professional in accounting and finance who works with small businesses should be just a little concerned, too. Why? Because there is a belief out there that some nifty software and Internet Of Things (IoT) approach to finance will ultimately eliminate the need for a small business to work with skilled, trained accounting professionals. Remember the marketing slogan introduced by Intuit with QuickBooks – the one that suggested that, “if you can write a check, you can do your own books”? Most accountants will tell you that it is not true, and the ability to operate a product like QuickBooks does not magically turn poor accounting and bookkeeping information into good business data. In fact, it most frequently enables bad information to turn into bad business decisions – quickly.

DIY bookkeeping solutions have been around for a while, so why the distress about it now? Up until this point, it hadn’t been so overtly stated to small business owners that having less-than-great accounting data is very much OK, and that the role accounting professionals play in small business finances is more of a burden than benefit. Consider the statement made by President Obama in his recent State of the Union address:

“Let’s simplify the system and let a small business owner file based on her actual bank statement, instead of the number of accountants she can afford”

If I’m an accounting professional, I am pretty steamed up about that statement because I know how screwy business accounting data gets when the work is done by folks without the proper training. Incorrect or improper accounting treatment can make a big difference when it comes to filing those taxes mentioned…. and not in a good way. That transaction on the bank statement… Is it a cost of goods sold or a regular business expense? Is it an asset or supply item? Is it a reimbursement or revenue? Is the payroll deduction before or after taxes? Is that even a viable payroll deduction item? These questions and more arise frequently in a small business, and the treatment for these items is improper as often as not.

There is a big value in what a trained accounting professional can offer a small business owner, and the value often translates to eliminating unnecessary tax burdens and the delivery of accurate reporting – both of which are really important when it comes to actually trying to grow a healthy and sustainable business.

Small businesses are often considered to be the fuel powering our economy. Doesn’t it make sense for us all to recognize that smarter businesses are likely to be more successful, and that more successful small businesses means growth in the economy? The importance of good fiscal and financial management and reporting – in business and in government – is not something to minimize, and suggesting that it takes no intervention or skill to do the job properly reflects poorly not only on the person saying it, but on the entire establishment.

jmbunnyfeet Make Sense?

December 11, 2014September 25, 2018

Audit or Advice? Small Accounting Firm Practitioners and Small Business Clients

When a small business owner needs advice about running the business or strategizing on financial matters, one would think that the business owner would engage their accountant in the discussion. Following along with that logic, many small firm practitioners believe that their small business clients will ultimately engage with them for this advisory work and move beyond statutory audit and compliance work. For a great many firms, however, there remains a struggle to achieve more work and greater opportunity from client engagements; the firm remains relegated to performing mechanical functions of accounting and reporting and fails to gain the additional work which is truly desirable. There are a number of elements which present themselves in this discussion – considerations that the small firm practitioner may not be addressing – and which are likely contributing to the firm losing the opportunity to deliver more and deeper services to the client.

First, let’s consider why small business owners initially engage with their accounting professionals. More than with larger businesses, smaller businesses tend to rely more heavily upon the involvement of outsourced accounting professionals simply because the business isn’t able to justify the cost of staffing the position full-time. Needing office managers and bookkeepers or data entry operators is often a more evident need to the business owner, where assistance with daily operational and information management processes are more urgently required. Functions considered to be “accounting” could effectively be outsourced to a 3^rd party and handled in more of an after-the-fact basis. For many small business owners, accounting is something which can be performed after all the real work is done, and presents the information necessary for payment of taxes, processing of payroll reports and the like. The accounting professional is typically engaged because the business owner knows this work must be done by somebody, and believes the selected practitioner to be competent and trustworthy, and they’re also probably local.

With the convergence of market environment changes, regulatory and jurisdiction conditions, as well as changes in behaviors (cultural, sociological, technological), a new level of demand has been created for business and financial advisory services. Yet small business owners often remain reticent to approach their local small firm practitioner for the service. Why is it that the client doesn’t often approach their small firm practitioner with requests for advice and advisory services?

Part of the problem is perception. Small business owners often believe that their needs require specialized knowledge and experience to address, and that the skill and experience can only be derived from a larger firm. Particularly if the smaller firm is not presenting itself in a manner that suggests that business advisory services are not only offered but are a specialty, the firm may simply lose to competitors who communicate the ability more effectively (something larger and more established firms are able to do via referral and reputation as well as through marketing).

A possible way to address the competency and perception issue is partnering, where firms join to collectively deliver solutions to the client. Where one firm may specialize in an aspect of the engagement and the other firm addresses other areas, the delivery of full service to the client is ultimately the goal, and sharing the work and the revenue is often a more agreeable approach than losing out on the engagement altogether.

Another factor presenting itself in the equation is the “entrepreneurial spirit” from which many small businesses are fueled. A small business owner is often somewhat of a superman, taking on multiple roles and performing a variety of functions in the business. It is this DIY (do-it-yourself) attitude that contributes to the business growth and success, but it is also sometimes the barrier to achieving a higher degree of success. Believing more in the personal power of critical thinking than in the reliance on the professional’s education, experience and insight, the business owner simply refrains from asking for advice because they don’t think they need it.

Frugality is another factor playing into the small firm/small business relationship. Small business owners may want advice, but they don’t want to have to pay for it. Anyone selling products or services to small business recognizes that there is a certain amount of consulting and advice that accompanies most sales. For some, this is simply a part of the sales process; helping the customer determine that this is the best choice and they should buy it. It’s not so simple with accounting and finance, however. There’s a big difference – and perhaps large risk associations – in giving advice versus performing accounting and compliance work. Certainly, advisory services aren’t something the firm would elect to give away, so it becomes essential that the value of the advisory service be expressed in a way that the client can understand and believe.

I once heard a financial planner address this same argument, where a prospective client suggested that they couldn’t really afford to pay for the advice. The financial planner countered with the argument that a good financial plan will increase the return, which then recoups the cost of the advice. If you pay $100 for the advice, and you earn $500 more than you would have without the advice, then it kind of feels like you’re getting paid to get advice because you gain more than you spend. It’s the same with accounting, finance and business advisory services: sound advice should improve the rate of return, which would more than compensate for the cost of the advice. The trick is getting the client to view the service as something real and valuable and not as snake oil, and to make a commitment to following the advice. Real value must be communicated and tangible results measured and delivered, not smoke and mirrors. Otherwise, the client return isn’t there, and the advice proved valueless.

As regulatory requirements increase – and become increasingly complex – the demand by small business for outside help also increases. It is this ever-expanding demand which represents opportunity for small firm practitioners to capture more (more interesting and more profitable) work from their small business clients. But competition is also growing from new providers and systems delivering advice, forcing adjustments to how the small firm must present its offerings and services, as well as change how they deliver and support those offerings.Whether through partnering and referral models, the development of new competencies and capabilities, creation of new workflows and methods, or some/all of the above, small firm practitioners must adapt in order to get that opportunity.

While the small firm practitioner may recognize that the small business client is greatly in need of advisory services, what they may not recognize is that the traditional approach has turned around, and it has become more likely that the client will seek advice first and statutory audit work second. For small firm practitioners, it is time to recognize that relationships are changing and how business is done must evolve to meet and advance that change.

jmbunnyfeet Make Sense?

April 29, 2014December 7, 2017

The CPA for Small Business: Proactive, Responsive, and Helps Paint a Beautiful Picture

I once read an article written by Doug Sleeter which describing the findings of a published report titled What SMBs Want from Their CPA. The report was a summary of results from a study conducted by The Sleeter Group, and was intended to help accounting professionals understand the factors in the market which influence business use of professional accounting services. While adoption and use of technology was not named as the top item on the list, capabilities which can be rendered only if such adoption occurs were. In short, it’s not the technology that clients demand, but the level of service that professionals can only deliver by embracing advancements in technology and applying them to the client engagement.

The report and article placed a specific focus on trends relating to technology adoption and use in the professional practice, and establishes a foundation for firms to understand why technology is and always has been a key factor in the success of the CPA-client relationship. It’s not that the accounting professional must become a skilled technologist and promote high technology to the client. Rather, the success factor rests with the firm’s motivation to implement technologies and tools which will improve their ability to deliver more (and more valuable) service to the client in a more direct and timely manner.

The survey’s two critical questions posed to small business owners who use the services of a CPA were 1. What factors played a role in your decision to leave your former CPA?, and 2. What types of services would you like to receive from your CPA? Both questions are pretty straightforward, and the top responses from surveyed SMBs were equally unambiguous.

To the first question (factors playing into a decision to leave former CPA), the top two answers indicated that reactive and/or unresponsive are the problems which ultimately cause a small business owner to change accounting professionals. The top response was “Former CPA didn’t give proactive advice, only reactive”. The close second response was “Former CPA had poor responsiveness”.

Unfortunately, these responses more than accurately describe many professional firms and their approach to client service. These firms are perfectly content with waiting for clients to deliver after-the-fact information, delivering reports long after their relevance has past, and providing no sense of urgency in helping clients address business issues facing them here and now. These firms are content to work with their write-up and trial balance solutions, depreciation and amortization and tax products – and give little consideration to how they could adjust their operation to a better, more relevant and rapid delivery of service and insight to the client.

The second question, “What services do SMBs want from their CPAs?”, was met with the same responses professionals have been hearing for years; small business owners need help with business planning and business strategy and they wish the help would come from their CPA. It is surprising how many accounting professionals list business planning and strategy among the services they promote on their websites, and then just sit back and wait for clients to ask. Communication with clients remains relegated to annual reminders for tax information, or maybe slightly more frequent notes about other tax or compliance work to be done. It may be a bit unfair to place all the blame on the professional. Regulatory and reporting impacts on business are increasing and are increasingly complicated. Many professionals find it challenging enough simply to keep up with changes relating to the services they currently and regularly provide.

This is where practitioners should seriously take notice, and accept that the ability to meet changing market and customer demands is by intelligently leveraging technology to accomplish what people and process cannot do alone.

It takes information technology to speed up the bookkeeping, accounting and reporting processes; technology is required to help turn information into useful and relevant data;
technology facilitates the faster collection of information from and the delivery of information to clients;
technology is applied to reflecting numbers as pictures and helping users visualize the meaning of the data, and
technology enables the collection and analysis of “big data”, which leads to AI advancements and greater intelligence delivered through the applications businesses use.

The Sleeter Group report clearly demonstrated that small business owners continue to need and want more than just tax returns and post-facto reports from their accounting professionals, and that the lack of attention in these areas pose a direct threat to the small business/CPA relationship. Professionals can remove the threat by working closer with their small business clients, applying technology and process controls to get better information in a more timely manner, and returning the result with greater insight. Be proactive and be responsive, and apply the necessary technologies and business philosophy to get there before the client base looks for satisfaction elsewhere.

I’ve said before that small business owners don’t care about the numbers, they care about the picture the numbers paint, and they care about getting to a place where the picture is absolutely beautiful. With the right tools in place, their CPA can help guide them there.

jmbunnyfeet Make Sense?

October 28, 2013

New York or Las Vegas? It doesn’t matter if you can work online.

The 10th annual Accounting Solutions Conference, held by The Sleeter Group, is being held in Las Vegas on November 3-6. By all accounts, it’s looking like the conference will again bring together some of the best and brightest in accounting and business technologies.

The annual “Sleeter Conference” event is among the best opportunities accounting and bookkeeping professionals have to explore and learn about the technologies, service models, client management tools and other elements involved in delivering accounting, bookkeeping and consulting services to small business clients. With the introduction of so many new ideas and solutions designed for small businesses and their accountants, it is no wonder that professionals look to this conference to help make sense of it all.

With the right strategy and through the innovative and efficient use of technology, people and processes, even the smallest of organizations can compete with the big boys. Accounting professionals, pro bookkeepers, and small business consultants and advisors are not simply participants in the financial processes of these small organizations – they are the influencers and implementors of the solutions and methodologies which will generate the positive impact in the client business. Information technology -mobile access solutions and innovative tools for working together – makes it possible to deliver these benefits to clients, whether they’re in Vegas or the Big Apple. Come to the conference and hear all about it.

While you’re there, stop by the Uni-Data Skyline Cloud Services booth and check out some of the new stuff that’s going on in the QuickBooks and general application hosting world. It’s pretty cool! I give it 5 bunnies.