Category: sustainability

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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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Pressure to Deliver More Value and Intelligence

Pressure to Deliver More Value and Intelligence

Okay, I get it.

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

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

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

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

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Compliance in the Cloud – Their System; Your Responsibility

Can you outsource compliance to the cloud?

Outsourcing IT to a cloud service provider can be tremendously beneficial for a business.  The model allows an organization to offload not just IT infrastructure costs, but also the costs associated with developing and maintaining all of the practices and processes involved in managing and maintaining the infrastructure and systems.   There is tremendous responsibility in handling everything from platforms and infrastructure to creating best practices for maintenance, management of scalability and growth, forecasting bandwidth requirements, implementing and monitoring security compliance, creating effective and comprehensive disaster recovery plans, and more.

The question which begs to be asked is whether or not HIPAA, PCI/DSS or any other compliance requirements, and the complexities, risk and legalities that come along with them, can also be outsourced to the CSP. For that matter, can any real level of responsibility be fully outsourced, where the liability for non-performance or noncompliance is also fully shifted?

Ummm. No. It is still your problem.

What too many companies really don’t understand is that they aren’t eliminating risk by moving to the cloud, and the requirement to meet various compliance requirements really can’t be outsourced. Particularly in this area, businesses need to recognize that outsourcing certain functions doesn’t reduce or eliminate responsibility or liability.  Just the converse, it could make things a bit more difficult if you don’t keep close tabs on how the provider implements and is involved with your solution. Even beyond that, what is the impact to the business operation when requirements are not met?  Cost recovery from the provider may be one option, but how does that help the business remain operating in the meantime?

“Gramm-Leach-Bliley (GLB) Act  Requires financial organizations to enter into contracts with third parties that they share their customer information with (including cloud vendors) to ensure that the third-party handles that information securely. Executives of those financial organizations can be held personally liable for failure to do so.

Sarbanes-Oxley Act (SOX)  Defines specific security mandates and requirements for financial reporting to protect shareholders and the public from accounting errors and fraudulent practices. SOX dictates which records are to be stored and for how long and requires the data owner to know the location of the data in the cloud and to maintain control of it. Failure to comply can result in fines and/or imprisonment.”

source: CIO.com

This discussion Isn’t limited just to compliance with regulations (at least it shouldn’t be)

In this conversation we need to also address what a business should do in terms of protecting and preserving its information assets (data!) even beyond what the CSP offers. Keeping confidential and private information secure and protecting the data of the business (and clients or patients or other entities) is essential, even when the CSP fails in its obligations or abilities.  This aspect of disaster recovery and continuity planning is not often considered by the CSP yet remains critical to the business customer. The sales pitch, however, never really delves into this area, because it represents an aspect of service coverage that the provider simply can’t provide.

Illustrating this particularly difficult aspect of outsourcing to the cloud is the hard lesson learned by customers of a QuickBooks hosting provider who experienced a severe outage due to a ransomware attack. The hosting service provider promised customers it backed up their data and it did, but the backup archives were also compromised.  In order to restore service, customers were expected to have their own backups of the cloud-hosted data.

While there may have been items in the service agreement which address these issues, I can say – based on a great deal of experience in just this area – the service providers rarely make this point very clear to customers, and more frequently tell customers backing up their data is no longer something they need to really worry about. It’s like that really tiny type at the bottom of a contract that nobody notices until it is too late.

“..restoration proved more difficult in Texas. Lezama explained that for the Texas clients, the backups had been compromised as well, because their backup data had synchronized with corrupt files. But Cloudnine clients are obligated backup their own data as well, as a sort of third-level security measure..”

source: AccountingToday

With compliance in the cloud, it’s their system, but your responsibility.

Outsourcing IT to a cloud service provider in no way eliminates or reduces the obligations of the business to manage certain aspects of information systems and data.  What outsourcing can do is deliver a greater operational capacity and agility more affordably.

The responsibilities to establish information and systems management practices and processes remain firmly with the business, and actually represent a strategic component of the business that is unwise to outsource anyway. Resilience in a business and its ability to conform to regulatory and other requirements are the foundations of sustainability. Remember that cloud providers and services can be leveraged to improve certain cost and system performance metrics, but it remains solely with the business customer to find ways to reduce risk and create a greater assurance of continued operational capability.

Make Sense?

J

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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