Category: small business trends

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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 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-jmbunnyfeet1Make 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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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.

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 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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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?

J

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

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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

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One-Write System Revolutionizes Accounting

One-Write System Revolutionizes Accounting

These guys had the right idea, they just didn’t have the cloud.

It’s amazing how much time and energy continues to be spent on duplicate data entry and re-keying information generated by one system into another.  Human-based data entry is prone to errors, takes time, and carries with it the burdens of employee costs and resources.  It is a problem that businesses of all types have battled for years, but new solutions are available, and many of them are enabled via great software, the Internet and the cloud.  You see, the cloud – which is the term popularly applied to all of the interconnected “things” on the Internet – creates the path of communication which allows data to be passed to a variety of applications or systems, allowing for seamless collection, integration, and aggregation of business data.

EDI (electronic data interchange) standards have existed for quite some time, and in recent years these methods have expanded to include a variety of platforms and more open “standards-based” approaches.  Even in the small business world, business owners using traditionally limited software products are now able to enjoy sophisticated extension and integration of their applications, largely enabled and facilitated by cloud technologies and software-as-a-service offerings.

To provide a really simple example of the problem: when an individual writes a check, that check must be recorded in a variety of places and for several purposes – to record the expense and to record the reduction of funds in the account, etc.  When a product is sold to a customer, inventory is relieved, sales are increased, accounts receivable or cash is increased, costs of goods sold are experienced, and customer activity is captured.  All of this information must be recorded and the activity accounted for throughout the financial and operational systems, and can represent a tremendous burden if not automated.

One of my clients, to provide an example, sells computer parts through an ecommerce website.  Orders from this fancy website are emailed to their order operators, who then turn around and re-key the orders into the ERP system.  Because of the number of orders to enter on a regular basis, there are two different operators working in the department – both of them responsible for making sure website orders make it into the “real” operational system.

By implementing a single software solution which could take automatic transaction file exports from the ecommerce system, format them and import them into the ERP system, the company was able to reduce personnel costs, improve accuracy and timeliness of data entry, and increase customer satisfaction. If we look closely at the need to use different pieces of business information in different ways, we begin to recognize the size and complexity of the problem and the true value of these integration solutions and automation tools.

Automation takes technology, but technology doesn’t have to be complicated.  A better pencil is technology, and we figured that one out pretty well.

OK, maybe our concept of what is complicated has changed a little bit.  Remember the One-Write checkbook systems?  It was pretty cool, and truly innovative.  You put the check on a little pegboard thingy, and when you wrote the check, the check register was “automagically” filled out for you.  Amazing.  Sounds pretty simple, but take a look at the description of this innovative, highly technical device, and tell me that it wasn’t at least a little intimidating at the time. But we got used to it, didn’t we?  Maybe even liked it?

Make Sense?

J

Accountant’s Apparatus 

RECORD KEEPING SYSTEM AND METHOD EMPLOYING PLURAL FORMS AND CO-OPERATING REUSABLE ADHESIVE STRIP

United States Patent 3661407

Two different, but related form sheets are provided for use in sequence by different departments. Each form sheet has two separate pluralities of headings thereon, one for each department. Each form sheet has also one or more strip receiving spaces extending transversely across both pluralities of headings thereon. A plurality of strips of re-usable, adhesive backed writing material are provided, each strip being of a size to fit onto, and to extend the entire length of, one of said spaces. With one of the strips adhesively applied to its space on a first form sheet, data entries are made on the strip by the originating department in register with each of the headings of the first plurality thereof. The strip is then peeled off and forwarded to a follow-up department, where the strip is adhesively applied to one of the spaces provided on a second form sheet and entries are made on the strip by the follow-up department in register with each of the headings of the second plurality thereof. The completed strip is then peeled off of the second form sheet and returned to the originating department, where it is adhesively reapplied to its previous space on the first form sheet for billing and filing as a permanent record of the complete procedure.”

 And then came the portable edition for all you mobile business executives, because portability and mobility was (is) essential.

“Pocket-size one-write checkbook

United States Patent 4332400

A wallet-sized checkbook particularly suited for use in conjunction with a one-write check record keeping system wherein an entry is made on a journal page simultaneously with the writing of a check. The checkbook enables records of checks written in the field to be subsequently transferred directly on to a one-write journal page. The book comprises a cover having an interior pocket and a writing surface fastened at one end to the inside of the cover. A data sheet of coated release paper overlies the writing surface and releasably carries a series of ink-receptive strips adapted to receive ink from a carbon strip extending along the reverse side of a one-write check. A check is positioned on top of a selected strip on the data sheet by a series of pins which project through pre-punched holes in a widthwise margin of the check. Indicia on the opposite margin of the release paper cooperate with the pins to assist in the check-positioning function. Thus, data written on the front of the check is transferred via the carbon to the underlying strip which can be subsequently peeled from the release sheet and applied at the appropriate line of a journal page to provide an accurate record of the field-written check.”