Cooper Mann Consulting

January 31, 2013July 9, 2013

Virtual CFO Services and Partnering with Bookkeepers

Many accounting professionals seek to become more involved with their business clients, helping to institute the controls and establish the processes which support sustainability and higher levels of business performance and value. Acting as the Virtual CFO to the business, these professionals use historical financial information and detailed operational data to guide their clients towards stated goals.

While this move to engage clients are deeper operational levels is a worthy effort, there is often a disconnection in the supply chain for these services. In too many cases, there is discord or a lack of understanding and trust between the CPA and the bookkeeper supporting the daily processing of the business information.

The business bookkeeper is the person “in the trenches”, getting daily information organized and processed, reconciling accounts, and generally tasked with recording transactions resulting from business activities. Because the bookkeeper operates very closely with the business, they are perhaps in the best position to provide insight into how operational tasks and various business functions are performed and “accounted” for. While the bookkeeper may not have the skill or experience to design change in these systems, they are a particularly powerful source of current process information and, in some cases, represent the barrier to change.

Years ago, as CPAs removed themselves from daily bookkeeping services to focus on “higher level” work, the opportunity was created for outsourced bookkeeping services to fill the gap in providing daily book and record keeping tasks for small businesses. Small business owners in particular need help with the management of their bookkeeping and accounting, and without the availability (or affordability) of getting this service from the accounting professional, businesses turned to the bookkeepers who stepped in to fill the gap. Yet every year, businesses turn over their bookkeeping and documentation to CPAs who simply re-create the bookkeeping in the form of “write-up”, trusting only their own work when it comes to tax and financial statement preparation.

It would seem that there would be a naturally occurring desire of CPAs to partner with professional bookkeepers in order to provide a full service capability to business clients and eliminate the need to reinvent and write-up the information, but this is often not the case and may be partly due to the reality that CPAs are trained on accounting principles while many bookkeepers are really only trained on the use of a software product. Too often, bookkeepers gain their education primarily based on using QuickBooks software, and “speak” the language of QuickBooks rather than “accounting” resulting with a minimized view of the bookkeeper value by the CPA.

The CPA is thinking in terms of AR and AP subledgers, while QuickBooks bookkeepers think in terms of customers, invoices, and bills to pay. While the language of QuickBooks has been designed to be meaningful to the non-accountant user, it is this very language and presentation which has made QuickBooks both a popular small business accounting solution as well as a foundational solution for an outsourced bookkeeping offering.

Working more closely with the bookkeepers, CPAs could help their clients not only achieve a more accurate and timely accounting of activities, they could also influence areas where necessary controls should be implemented, or where inefficient processes might be improved. Providing not just information but also direction and actionable ability, these accounting professionals are now positioned more directly to provide the CFO services businesses need.

CPAs must find a way to get past their prejudices in working with business bookkeepers, and recognize that these operators “in the trenches” could be their most useful resource – and their most powerful ally – in the supply of Virtual CFO services to the client.

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The Truth About Death and Taxes – Preparer Regulation Makes Sense

There’s an old saying that there are only two sure things in life – death and taxes. While it isn’t the happiest of thoughts, perhaps a more sullen reality is that there is one thing that honest taxpayers have in common with those who participate in tax fraud and evasion: mortality.

It is not something we like to talk about, but it’s a problem that continues to reveal itself over and over again. Tax preparers with little or no training are preparing tax returns for individuals and businesses, and sometimes it isn’t until after the death of the taxpayer that a problem is found. The unfortunate result is that the heirs of the taxpayer are often left with the problem and the tax bill.

A recent article in CPA Practice Advisor highlights three more instances where cases of tax fraud were identified, and where the preparers were the culprits and not the tax payers. Regulation of tax preparation professionals just makes sense, and will go a long way towards protecting businesses and individuals – and their heirs – from tax problems created by unskilled or fraudulent tax preparation.

Joanie Mann Bunny Feet

Make Sense?

January 29, 2013

Remote Access to QuickBooks – a free report from the author of Radically Simple Accounting

Remote Access to QuickBooks – a free report from the author of Radically Simple Accounting

Radically Simple Accounting

Madeline Bailey, author of the book Radically Simple Accounting, is offering a free report on Remote Access Options for QuickBooks.

The free report provides details and simple explanations to help every QuickBooks user or consultant understand how best to leverage the Internet to work when, where, and how they need to.

Cloud computing and the Internet have introduced both challenges and opportunity for QuickBooks users and those who support them. Madeline’s report provides real-world information, links to live services, pricing, and personal evaluations that anyone looking at remote access options will find useful.

Everyone’s talking about remote access and QuickBooks, but the options are so plentiful and confusing that only a few have made the move. For those still wondering what solutions will work best for them, this report may clear things up a bit.

Joanie Mann Bunny Feet

Make Sense?

January 29, 2013October 28, 2015

An Educated Guess is Not a Crystal Ball – Forecasting the Future

If every business could peer into the future to see how they will perform, there wouldn’t be a need for historical data and performance benchmarking. Unfortunately, nobody has a crystal ball, so it becomes necessary for business owners to plan for the future. By making educated guesses with valuable information gleaned from the past, companies can establish the path they will take to growth and profitability.

Accounting professionals are great at producing accurate historical financial performance information. The value in this historical data is only partially found in the periodic reports and financial statements generated. The primary value, the insight delivered from this historical data, is the information it reveals about the business operation over time. It is from this historical data that certain trends are identified, providing a basis for making the educated guesses necessary to learn how the business will look in the future.

Forecasting is very important for businesses, as it provides the framework for laying out your expectations for the business. In essence, it is a way to (hopefully) predict what your business finances will look like in the future based on forecasted growth. And, armed with the forecast, you can now more confidently build a reasonable plan to reach your stated business goals. While there are myriad approaches to creating a business forecast, it makes sense to simplify the process and focus on the area you likely spend most of your time attending to: sales. Use your sales goals and projections as the basis for establishing a forecast, setting realistic goals for the current year and for a few years after that. Once you’ve forecast the new sales goals, you can more easily appreciate what it will take in personnel and other costs to support that growth.

Recognizing that the forecast is simply an educated guess, it is important to regularly compare actual performance to the forecast to see if the business is on the right path to reach the established goal. If sales are not growing as projected, then the business may need to make adjustments in terms of personnel hiring and other plans to ensure that costs don’t outpace sales. Without a path to follow, business owners will not necessarily know if the operation is “on track”, as there is no track to be on – there is nothing to measure success against. Certainly, profitability is the goal, but it is a matter of degrees of success, and the business will not know whether it is being as successful and profitable as it might be.

Accounting professionals should help their clients create realistic forecasts, along with organizing the information and formulating a plan for the business owner to follow. On an ongoing basis, the accounting professional’s involvement delivers continued value by helping the business owner recognize and respond to changes in the business, adjusting plans as necessary to keep the business on the right path. And, no crystal ball is required.

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One Write System Revolutionizes Accounting

January 25, 2013October 9, 2017

Remote access to client bookkeeping comes in many forms because clients come in many forms

There are a lot of conversations in LinkedIn and other groups, where bookkeepers and accountants are discussing their various methods of accessing client QuickBooks data and applications remotely. While these conversations are quite helpful for some folks, there are others out there that simply get confused due to all of the possibilities. There are many ways to work remotely with QuickBooks clients, and there are a lot of different situations where one approach may work better than others.

The key to remember here is that REMOTE ACCESS MATTERS. Time and distance is the enemy when it comes to outsourced bookkeeping, and whether you like visiting your clients or not, having remote access to their data can be the key element in providing the highest level of service and value possible. Remember when PCanywhere became available, and we were all excited because now we could use a modem to dial directly in to the client PC? OK, maybe I’m talking to a crowd that’s too new to remember that excitement, but believe me, remote access is something all outsourced accountants and bookkeepers have been looking for. Now that really good options are available (a lot of options), it makes sense to get a better understanding of what you can and can’t do with various remote access approaches.

First, when you’re looking at any true SaaS solution (true being a relative term, but here we mean an app service that was built for the web and is offered as a subscription model), consider that the solution exists only on the web, and that when a business subscribes they are generally subscribing to a single company data set. Unlike QuickBooks desktop, for example, where you can have numerous company data files, QuickBooks Online and other SaaS solutions generally build a single company data file associated with the subscription. When you want to access different companies, you may have to log in as a user of the company you’re accessing.

If you’re an accounting professional, there may be an edition or approach that allows you to connect to multiple client accounts, but then again, there may not be. So be prepared to have to log in as each individual client to access their data. When this becomes the situation, what’s the difference between one client having QB Online and one using Xero, Wave, FreshBooks or Kashoo? None, really, other than the fact that you need to get to know all of the solutions a bit. As a bookkeeper or accounting professional, this shouldn’t be so much of an issue, as debits and credits and basic accounting theory doesn’t change with the accounting software (basic “accounting theory” isn’t really available for redefinition).

The other thing to recognize about these solutions is that the data belongs on the web with the app, so it’s not like you’ll be copying the data file to your PC to work on. You might export the data to another solution, but you won’t be using the SaaS solution offline.

If the client isn’t using a SaaS solution, then it is likely a desktop solution, where the application is installed on their local PC. This type of solution – QuickBooks desktop editions being the most popular and easiest example to work with – gets installed and runs from the PC. Data may be stored on the PC or on a network hard drive, but the program is running locally on the user’s computer, and is using resources on the local computer (memory, processor, etc.). There are only a few ways to make this type of application into something you can access remotely, and one of them is by using a remote control approach.

Remote control is where one computer connects to and controls certain aspects of another. This is like the old dial-up approach, using PCanywhere-type applications to control one computer from another. These days, the Internet rather than a dial-up phone connection is the preferred method, and there are web service providers which “broker” the connection and communication between computers, providing added features and layers of security. Using a remote control solution (examples are LogMeIn or GoToMyPC) simply allows the user on one computer to control the keyboard and mouse, and view the display, of a remote computer. It doesn’t matter what is running on the remote, so a bookkeeper could use this approach to access a client PC and QuickBooks desktop applications and data, or even to connect with the client so they can log in to QuickBooks Online or Xero together.

Some bookkeepers work with their clients, showing them how to do things and connecting to client resources in order to get work accomplished. Others connect using their own resources or accounts, and work concurrently with the client. Still others may export data from the client solution into their product of choice, not even working within the client application at all except to make adjustments and data exports. It all depends on the collaboration model you and the client have going, and it is unlikely that any single model or approach will work for the entire client base.

QuickBooks hosting introduces a bit of a wrinkle in the concept, but not much of one. Really, hosted QuickBooks desktop editions should be viewed to be not less and not significantly more than a QuickBooks Online or other SaaS approach. If the client would benefit from working online (most client would), then having them host their QuickBooks desktop applications and data with a hosting provider makes sense. However, just because the client is hosting their QuickBooks doesn’t mean that you should immediately assume that you’ll have access to their applications or data. Like with a SaaS solution, you’ll likely have to have an account to log in with, and that account could be a separate login allowing you to work at the same time as the client, or the account could be one that is shared with the client and where only one of you can log in at the same time.

Since a hosted solution is accessed online just like a SaaS solution is, you don’t have to have the software installed on your own PC, and you only need an Internet connection to access the application and data at any time. A major difference of working with a hosted solution is that you could possibly have the application installed on your PC, and could copy the data from the host and work on it offline.

With all of the options available, accountants and bookkeepers have realized that the selection of client collaboration approaches depends on a number of factors, and that professionals may end up applying an unlikely combination of solutions in order to address meeting various client preferences as well as their accounting needs.

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Read more about hosted QuickBooks desktop editions

Read about the race to find the secret sauce of hosted application services for small businesses

January 23, 2013

Licensing and Virtualization: Changes to SPLA May Impact Provider Cost Models

In many application hosting environments, machine and operating system virtualization provide the only realistic means for delivering services for applications which were never designed for high-volume multitenant implementation. In these environments, providers rely upon technologies from Microsoft, VMWare, Citrix and Parallels to provide containment of application environments, creating frameworks where single-tenant applications and hosted infrastructure may be affordably offered to subscribing business customers. Because many of the applications being hosted today do not conform to the various standards which exist for high-volume and multitenant delivery, providers have taken what we’ll call “creative” approaches to virtualized application and environment implementations. Under certain licensing models, these approaches may be sustainable for a period of time. However, recent adjustments to core licensing components and pricing from key providers, Microsoft in particular, may significantly impact the cost of service delivery for providers with less than optimized infrastructure.

One of the notable changes in the Microsoft SPLA (Service Provider License Agreement) is the treatment of Windows and RDS users in the “desktop as a service” model. In previous editions of the SPLA, as was offered with 2008/R2 licensing and prior, providers could select from two different models when implementing service: the SAL-only (server access license) model, which applies on a per concurrent user basis to the infrastructure, or the PL (processor license) model, which applied to the processors installed in systems with Windows operating system and SQL server instances.

For high-density and multitenant environments, the per-processor approach is far more cost efficient to implement, as it allows the provider to create a scale economy with the infrastructure, leveraging hardware and resources across many subscribing tenants. Reducing the cost model to a base infrastructure rate also introduced predictability and stability in recurring costs for the provider, even as subscriber numbers and subscription revenues increase.

The problem reveals itself with the providers deploying “not optimal” infrastructure, whether by design or due to legacy application requirements. These providers rely upon the per-user pricing models to support access and usage to the infrastructure, largely due to the fact that the infrastructure has grown “out” and not “up”. Deploying more servers and more VM instances allowed these providers to present legacy applications as part of a managed application service model. While the management of the infrastructure is greatly complicated with this approach, it is often the only means to addressing the needs of popular “noncompliant” applications (such as Intuit QuickBooks and Sage 50). With the SPLA changes introduced for Windows 2012, these service providers may be in a bit of a tough spot. You see, the per-user option for licensing Windows server access is gone, and only the per-processor licensing model remains.

Microsoft is wisely addressing the needs of the market which is demanding more capability and affordability in terms of cloud-based access to applications. These pricing adjustments are necessary to support the needs of service providers who are increasingly stretching their infrastructure investments to deliver higher user density at a lower per-user cost. Further, application developers seeking new markets and delivery models are taking advantage of these virtualization approaches, creating hybrid and hosted solution models around their legacy application products. The licensing approaches which support these higher density application deliveries introduce options for developers to optimize their applications for the hosted model rather than dealing with immediate comprehensive re-development (which isn’t an option for many ISVs – independent software vendors).

The IT world is forging ahead with cloud computing, high-capacity infrastructure, and heavily virtualized environments supporting larger numbers of users. Software developers must take heed, and embrace these deployment models (or at least adjust to the point of supporting them) in order to have a chance at keeping pace in the anytime, anywhere world of today’s business technology. This means working collaboratively with hosting service and infrastructure providers, crafting services which have the required scalability and incorporating a deployment model agile enough to take advantage of infrastructure licensing benefits as they are introduced.

What was a serviceable pricing structure yesterday may be an anchor holding your profitability down tomorrow. Service providers – make sure you’re keeping a close eye on licensing requirements and delivery cost models, and consider that building up your infrastructure capability is often more cost efficient than building out.

Make sense?

BuildingUP.biz | CooperMann.com

Licensing for Hosted Application Services: Why it costs what it costs

read more about the confusion over hosted licensing on The Progressive Accountant http://www.theprogressiveaccountant.com/tech-tips/confusion-over-hosted-licensing.html