trusted advisor – Page 21 – Cooper Mann Consulting

August 24, 2012

Bankable: Giving Small Businesses Credit

Whether the economic environment is “friendly” or not, small businesses will turn to their banks to secure lines of credit and get funding to smooth out bumps in cash flow and availability. Getting credit is always a challenge, even in the best of times. When the economy stalls and times are tough, getting the necessary cash to support the business gets even tougher.

A recent post on blogs.wsj.com (Wallstreet Journal) discusses the results of a survey (Federal Reserve Bank of New York’s Small Business Borrowers Poll), where it was revealed that “small-business owners in New York, New Jersey and Connecticut are still struggling to acquire credit for day-to-day expenses and expansion”. What a surprise. Times are tough, and the banks need to manage their risk and increase the predictability of repayment for loans and lines of credit. If accountants are looking for reasons to adopt and implement analytics and forecasting for their clients, there you go.

Accounting professionals can help their clients get the credit they need, by helping demonstrate how “bankable” the business is. Here are three ways to improve the odds when trying to get financing for the business (and where the accounting professional can be a pivotal player), according to an article on Bloomberg Businessweek: Three Ways to Make Your Small Business “Bankable”

1. Tighten up your books. The value of good financial reporting cannot be understated. By being able to demonstrate profitability and a strong balance sheet, you reduce the ambiguity that is often present in a small business’s financial statements. Banks look to manage their risk and increase their predictability with the loans and lines of credit they give. Owners who can do that for them will stand a better chance of getting approved.

2. Showcase your strategic thinking. Give financial institutions an idea of how your strategy will help your bottom line. Broad brush strokes won’t cut it here. Provide specifics as well as the quantitative and qualitative reasoning behind it.

3. Get some help. Although most small businesses don’t require a full time chief financial officer, many should consider hiring a reputable, outsourced accounting firm. The right one will give you a better understanding of your company finances.

Make Sense?

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

August 23, 2012August 27, 2019

Accounting Online and Outsourced Accounting – Focus on Enabling Your Client

Accounting professionals and those involved in business bookkeeping and accounting service delivery have been literally bombarded with messages about “taking your practice to the cloud” and “working closer with clients using the cloud”, but what does all this really mean for the average professional practitioner? Does it mean that the software and processes already established in the practice need to be replaced? Does it mean that accounting professionals need to get all of their clients into online applications? Are the tools used by the professional practice obsolete? These are all valid questions, and are issues not always addressed in the marketing messages of the various “solution” providers. The complexity exists with the variety of tools and solutions most professionals use in servicing their business clients, and no single-solution cloud service is able to adequately address this variety. As a result, many professionals are either trying to assemble their own toolkits through an expensive and frustrating process of trial-and-error, or are avoiding adoption of new technologies altogether.

There are a lot of ways to “enable” a professional practice, focusing on the technologies and applications supporting efficient and profitable service delivery. The key in selecting the right tools to support the practice is to fairly evaluate the nature of services to be delivered, and understanding how and where in those processes the firm and the client “touch”. It is in the interaction – of people, data and systems – where better technology-supported collaboration with the client should be established. In many cases, this means focusing on improving the client system and the accounting process will benefit as a result.

Processes which are entirely internal to the practice must certainly be evaluated and improved, but the initial problem – the new area of focus – is in how the firm and the client work together. The needs in this area will necessarily drive adjustments to internal processes, which is to be expected. Most practitioners have already established their methods of dealing with clients, workloads, paper and software that have been around for a while. It is the new client demand – to get more benefit from existing providers and solutions – which must be addressed.

For example, there was once a need to obtain bank statements and cancelled checks in order to balance a bank account. This caused many accounting firms to develop a standard process of sending someone to the bank each month to pick up the paper statements and documents for client accounts, so that the bookkeeping could be done and accounts reconciled. With the advent and acceptance of online banking tools, the process for most accountants has been adjusted to where the bank activity data is simply downloaded and integrated into the company accounting information, rather than transported in the form of paper documents which are then keyed in as data. This simple example of “enabling” the client accounting system to interact with the bank resulted in benefits to the accountant processes, and caused beneficial changes to be made in the internal process of the firm (no more driving to the bank, timely access to bank data, more accurate data due to single-entry of information). While the client likely doesn’t care how the books get done, they do care about the information being timely, complete and accurate. Thusly is the accountant value increased through the simple use of a readily available technology.

As accounting and finance professionals look to find ways to deliver greater value to their business clients, they would be wise to explore how and why they interact with those clients and understand what is missing – what more can be done – to support and advise those client business owners. By focusing on helping the client “tool up” their enterprises to support more efficient and profitable operation, professionals will find that the resultant benefit is more consistent and streamlined access to client data. Enabling the client, in many ways, is enabling the firm.

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August 21, 2012

Online Accountants and Their Clients: Working Smarter, or just Closer?

There are a wide variety of ways to work closer with your clients, and the thing that you will always want to remember is that “one size does not fit all”. In other words, not every client will like using your favorite technology or software, and not every business owner will recognize your suggestions as solutions, because perhaps they did not recognize the problem in the first place. But that’s OK, and perhaps how it should be. You see, using the right tool for any given situation is the proper approach, rather than trying to shoehorn everyone into the same solution or method. With a client-centric approach, you can still develop consistent internal processes to keep your service delivery as efficient as possible, because many of the core services you provide are consistent across the client base regardless of the solution in use. The trend is to help your client work smarter, and it will bring you closer to the client than ever before.

Determining what is right for each job or task should be part of your value, whether it’s deciding how to connect remotely with your client, or helping your client find the right software system to support their tasks, with you ensuring that the integration to the accounting system is there and working properly. Where the focus was once placed on accurate data entry, now it’s on placing the proper solution in front of the user, and through the use of the solution to perform their various tasks, the necessary data is collected. Accounting professionals should recognize that the collection of information in real time facilitates better business decision making, and that they can be instrumental in delivering this decision support resource to their client.

As an example, I know the owner of a small construction business. This guy runs around with estimates, invoices, receipts, and other paperwork in his truck, and getting him to stop long enough for his bookkeeper to collect all that paper from the truck cab is one of the hardest and most annoying jobs she has. Her focus is on collecting the paper and then entering the data and getting invoices and reports out. The accountant is frequently requesting more information or clarification of data, as well as the information necessary to meet various reporting deadlines. Even after implementing QuickBooks accounting in the office for this business, the ultimate problem wasn’t solved. Certainly, the information is better-organized and accounted for once collected and entered, but the business owner still lacks timely information about the performance of his business, and sees little additional value in his accountants participation beyond the annual tax return.

On the other hand, I know another guy (landscaping this time) who has an accountant that has him use his phone to record just about everything he does as he does it. He bids a job, and sends it via email. He gets paid for a job, then snapshots a copy of the check and deposits it. Buying equipment or supplies? Sure, but electronic payment and approval tools let him track that as it happens, too (again, snapshot a copy of that receipt, etc.). For this business owner, there is more business going on because less time is being spent doing the paperwork of business. The bookkeeper in the office has the information necessary to keep things up to date, and can focus on how to streamline things even better. The accountant has a much higher quality of information – faster – upon which to advise the client (which he has time to do, because he’s not cleaning up bookkeeping data or collecting information for reports and returns). This business owner sees much more value in the participation by his accountant, because real issues are able to be identified and addressed in time to make a difference.

So, for today’s accounting professional, bookkeeper or consultant: is the idea of “working closer” with your client simply the concept of working remotely on the same systems at any given time, or is it to know more about their business and to help them do business better?

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May 22, 2012October 2, 2017

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.

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