Tag: accountant profitability

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QuickBooks Accountant Niche Practice Specialties: Tools for Accountants Working With Contractors

QuickBooks Niche Practice Specialties:

Tools for Accountants Working With Contractors

For accounting and bookkeeping in a small business, Intuit QuickBooks is still the “go to” solution.  QuickBooks has functionality needed by most businesses, and some editions of QuickBooks offer more in-depth process support for specific industries and business types.  Accountants and bookkeepers working with QuickBooks may rely on essential bookkeeping and reporting features to get basic accounting done, but supporting the processes and offering the functionality business owners and managers need – processes and functions which are specific to the business type and how it operates – is essential to developing a solid business management and reporting system.

Accounting and bookkeeping professionals can be instrumental in developing these systems for their clients, and can use the data collected within these solutions to provide more detailed reporting and actionable advice relating to business activities and trends.  Creating a niche practice and specialty means knowing how to address the needs of the niche client and having the tools to make it happen, so accounting professionals working with QuickBooks clients should seek to leverage the Intuit partner network of developers and QuickBooks-connected solutions and extensions to orient their services to the needs of specific industries and client business types.

The most obvious example of applying an industry-specific orientation of QuickBooks is to use the Premier Industry offering of QuickBooks desktop edition.  With the Premier Industry editions, additional functionality and reporting for specific industries is addressed directly within the application.  Industry editions exist for non-profit, manufacturing, and contractors, among others.  A lot of practitioners have met the additional needs of their business clients by using these industry-specific editions.

With QuickBooks Premier Contractor edition, for example, businesses can go beyond general accounting and address specific needs of a contractor or construction business, including tracking and reporting on job costs and profitability, handling estimates and change orders, and billing clients by time and materials, job phase, or percentage completion.  Accountants and bookkeepers working with construction businesses can help their clients more accurately and efficiently address the unique requirements of this type of business by offering the user functionality which is relevant to their daily tasks, such as making deposits, entering and tracking bills, and reporting on the progress and status of jobs.

Contractors may also have unique payroll reporting requirements, most of which are not adequately addressed within the QuickBooks solution directly.  It is in this area of compliance and complex reporting where the accounting professional may be of particular value, ensuring that these additional business requirements are met and that the data is complete, accurate and timely.

By utilizing the Intuit partner-developed application from Sunburst Software Solutions to extend the functionality of QuickBooks, contractors and the accountants who support them are able to create comprehensive and accurate prevailing wage payroll reports, including the most frequently required WH-347 Payroll Certification Form and the WH-348 Statement of Compliance Form.  Further, the solution also provides reporting for nearly all municipal, state, and federal paper forms required in each state. The solution even includes electronic certified payroll submission, compatible with LCPtracker, Hill International {formerly TRS Consultants}, Elation Systems, and other agencies.

QuickBooks has the framework for holding information about customers and jobs, tracks estimates, progress invoicing from current accounts receivable and work complete, and a means to accurately record and track retainage payable and/or receivable.  To complete the requirement for AIA billing and other construction business-specific needs, Sunburst CAPS application for QuickBooks holds additional project information, architect information, retainage method data, and billing forms to print in linked records.  CAPS also provides a mechanism for percentage of completion calculations with full accounting for stored materials.  The information is then merged together from both programs to generate the final billings – ready for signature, notarization, and mailing.

Addressing this additional level of complexity and compliance for contractors is a critical element, and an essential benefit, of working with accounting professionals who understand the needs of construction businesses and employ the tools and applications to meet those needs well.  It is through specialization, and knowing how to address the unique requirements of (and to capitalize on the opportunities presented in) the client industry and business, that accountants and bookkeepers will demonstrate and retain their value in today’s challenging economy.

Make Sense?

J

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Trends Impacting Every Business | Forbes.com

Trends Impacting Every Business | Forbes.com

You think good accounting isn’t a big factor in getting business credit?  Consider this tidbit from Intuit’s CEO Brad Smith, from a recent article on Forbes.com:

Two-thirds of Intuit’s QuickBooks customers were declined a loan due to poor FICO scores and other credit measurements. In the Loan Finder trial, a business could opt-in to allow banks to use QuickBooks data to evaluate if a prospect was a credit risk. As a result of this additional data, the banks provided several hundred new loans with an average of $10 million dollars.

Accounting professionals… isn’t this something you could be helping your clients with?

Read more about helping make small businesses bankable 

Make Sense?

J

  • 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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Dashboard Reporting Tools: Gauging Accounting Relevance

Dashboard Reporting Tools: Gauging Accounting Relevance

Dashboard reporting tools can be of great assistance when accounting professionals want to help their clients understand how the business is performing.  In most cases, these tools do a good job of showing owners the details of the profit and loss or cash flow reports, presenting the information in a way that non-accountants can understand.  Many accounting professionals have turned to these reporting solutions to increase the value of the accounting work performed.  After all, if the client can’t really understand the P&L and the Balance Sheet, then the reports won’t do them much good.

While simplified graphical reporting solutions are beneficial to the business, providing more insight into historical business performance, they don’t do much for the client on a daily basis if the accounting data isn’t up to date.  Accounting professionals should recognize that these dynamic reporting solutions, tools which can provide business owners with real-time information on business activities and performance, can go a long way towards increasing the relevance of the accountant’s involvement in the client business.

Accounting professionals today are fighting battles on several fronts, and remaining relevant to the client is one of them.   This isn’t too surprising, given that many accounting professionals see their clients only at year-end when the tax return needs to be prepared.  In some cases, the business owner doesn’t even remember the name of their accountant – they just know they went there last year at tax time.  This arm’s length relationship between the accounting professional and the business clients leaves a lot of opportunity on the table for both parties.

When accounting professionals aren’t closely involved with their clients, they risk losing the client to a more attentive, consultative professional.  Many firms believe that the low profitability of bookkeeping and processing daily work for clients means that they should focus only on “higher level” opportunities, yet business owners will tend to seek advice from those who work with them on a regular basis, and who understand the issues that challenge growth and profitability.

Accounting professionals who recognize the value of providing regular bookkeeping services to their clients also recognize the value of working closer with the client, providing useful and actionable information rather than historic data long after-the-fact.  These professionals are more likely to reap the rewards of “higher level” engagement opportunities from the client, because they help to identify the need and are able to support it with real data and insight earned through regular involvement with the business.

Make Sense?

J

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about Data Warriors: accounting in the cloud
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Accounting Professionals: Is Your Value Tied Up in The Accounting Software?

Accounting Professionals: Is Your Value Tied Up in The Accounting Software?

Subtitle: when all you have is a hammer…

There was a time, not so many years ago, when it made sense for an accounting firm to take the position that all clients must use the firm’s preferred accounting software product or they would not be clients.  For these firms, the concept of standardizing transaction entry and data processing across the client base made sense, and provided a means to create maximum efficiency in handling the bookkeeping and accounting processes.  Typically, firms handling small business clients would select Intuit QuickBooks for client use, and offered QuickBooks training, QuickBooks transaction processing, and use of QuickBooks add-ons to support the model.  With Intuit QuickBooks “owning” the small business market for accounting software, it made sense for accounting professionals to leverage the popularity of the solution to the benefit of the practice.

As cloud-based solutions and online application services have emerged (including QuickBooks Online Edition and Intuit Partner Platform – IPP – integrations), many accounting professionals have simply continued with the philosophy of applying QuickBooks (the hammer) to every client engagement.  These firms focus on the software as a basis for delivering what they believe is value in the engagement.  In short, these professionals focus their value in the use of the product (licensing, installation, training and support), and in their data entry skills (efficiency in entering and reviewing transactions in the product), rather than in the greater value of business intelligence, insight and actionable advice.

The new challenge facing many professionals – the reality of the current market – is that there are myriad solutions and approaches available to address client bookkeeping and process needs which work really well, and it is not always a good idea to try to turn a client using one of them into a “nail” just so you can hit it with your favorite hammer – QuickBooks.   With Freshbooks, Wave Accounting, Xero and other solutions which handle various business accounting or bookkeeping requirements quite well and for an attractive price, small business owners are more frequently electing to implement applications outside of the QuickBooks product line even as their accounting professionals are continuing to promote QuickBooks for everyone.  The reason business owners are electing to use these other tools is simple: they work for them.

In reality, this issue has existed in some form for a very long time, and was perceived to be primarily in markets where technology adoption and use is low for various reasons.  The truth is that a lot of small business owners find ways to accommodate their information management and record keeping needs, and they use whatever approach works for them and what they want to accomplish.  Sometimes the approach involves Internet solutions and online applications, and sometimes it does not (Excel spreadsheets with stapled piles of receipts are still quite popular and in widespread use by SMBs and Entrepreneurs).  When that small business elects to engage the help of an accounting professional, the last thing they want to be told is that they have to make a big change to how they get things done.  It’s fine for the accountant to provide guidelines for when information will be made available to support getting the accounting work processed, but it is not necessarily okay to dictate immediate changes in software and systems supporting the business daily operations.  In a lot of cases, the accounting professional simply has no real basis for the requirement to change, other than to support their own efficiency (which is the wrong basis for making a client change their systems).   It’s that silly cost-benefit thing. If it costs the client a lot (change always = cost), and the client does not perceive or experience an expected benefit, then it makes no sense for them to make the change.

Consider a professional accounting firm in Los Angeles, California.  This firm serves small businesses, and has a pretty significant market available to sell to.  LA is a market where technology adoption is high and broadband Internet is cheap and reliable, so this firm has elected to use a product-based focus (e.g., the QuickBooks approach) in qualifying clients and crafting engagements.  Clients must conform to the solution set and the workflow in order to participate with the firm.

Now, consider a professional accounting firm in Elkton, Oregon.  This firm serves just about every business in town (population 195) as well as businesses from a few nearby towns.  Broadband Internet service is sketchy at times, and provider options are few.  This rural area of Oregon is not known for being particularly “high tech”, and computers and software and online application services are not among the things many of these business owners focus on or even care about.  The accounting firm serving this market is not focused on what accounting solution the client uses (or not), and they aren’t pushing to have all their clients purchase and install the same accounting software so that the firm’s processes can be more efficient.  Interestingly enough, this firm is likely doing better work and probably developed a closer and more intimate relationship with their client than those who have fully “standardized” the client base.  The reason is that the firm, whether out of necessity or out of desire, recognizes that each of their clients may have unique needs, and it is up to the firm alone to create maximum efficiency in meeting them.  Further, delivering personal service and useful insight instead of simply providing the work product has allowed the professional to more fully reveal their value to the client.

The truth of the small business accounting market is that there are more businesses like those in Elkton than in LA. Accounting professionals should consider whether they are in a position to “filter” their client opportunities based on use of certain software products and online solutions, or if they will accept that business clients come in all sizes and shapes – with various needs and wants and self-developed methods of getting things done – and that the firm is willing to embrace them as they are and work with them.

Make Sense?

J

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Managing The Purchasing Process: More than just expenses

Managing The Purchasing Process: More than just expenses

When a business owner hears the term “expense management”, they immediately get a vision of traveling employees with piles of receipts and vouchers to be organized, accounted, and possibly reimbursed for.  The image is fleeting, gone out of mind with no lingering thought, because this business owner does not have personnel who travel frequently, and does not have to deal with volumes of expense reports from employees.  Expense management solutions aren’t anything this business owner is looking for.

Yet, what does happen every day is that equipment, materials, supplies, and services must be purchased to keep the business operation going.  Calls are made to vendors, price quotes are developed, and purchase requests are typed up in Excel spreadsheets and piled on the owner’s desk for approval.  The business owner rifles through the various requests, and brings in the bookkeeper to help work through the decision of which items to authorize based on current cash availability.  Because the availability of working capital changes frequently with billings being sent out and receipts being deposited daily, the owner and the bookkeeper spend much of their time together figuring out which purchases to make and when.  It is a continual and ongoing process, taking a lot of time and attention away from other important business matters.

Too often, thoughts of managing these efforts with more structure places the problem “in a box” and addresses only half of the issue – the purchase.  While managing materials requirements and predicting when parts or supplies will be needed is one side of the problem, factoring those purchasing plans in to the cash requirements of the business, and having a meaningful and effective way to monitor current cash, expected receipts and purchase requirements together is essential.  This ability requires that the payments management solution also address receivables in order to have the cash flow and availability information necessary.

Expense and purchase management processes generally involve three main steps: planning, tracking, and reporting.  As the process involves planning, it suggests a proactive rather than a reactive approach to cash management and purchasing activities.  By bringing together all of the critical data which describes “inflows and outflows”, the business owner has the information necessary to not only forecast (plan) cash requirements but to also understand the availability of working capital.  Knowing ahead of time that traditionally slow paying contracts aren’t factored into immediately available cash is important, and being able to make adjustments to purchase schedules based on availability of funds is essential.

Expense reporting may not be a big part of the business, but managing cash flow and purchasing goods and services is, even in the smallest of enterprises.  Make sure the business has the tools in place to help bring an additional level of intelligence to purchasing activities, and that those tools deliver the benefits of a structured (but not time-consuming) purchasing approvals and proactive cash flow management process.

For accounting and finance professionals, this is a highly valuable area of service you could be providing to your clients – helping to implement the tools and solutions which not only allow you to work in more depth with client businesses, but which deliver immediate visible and actionable benefit to the client.  This is just one of the ways accounting professionals can work closer with their clients, and the benefit is delivered each and every day (not just at tax time).

Make Sense?

J

  • Is your purchasing and expense approvals process holding up your business? Read more…
  • Read more about using the cloud to extend “connectedness” beyond traditional boundaries 
  • 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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Knowing More: CFO and Accountant Value in Understanding Business Operations

Knowing More: CFO and Accountant Value in Understanding Business Operations

Accounting professionals are being pressured to deliver more value and intelligence to their business clients every day.  The pressure comes from a variety of areas, not the least of which is the fact that a lot of do-it-yourself tools are now available which lead business owners and managers to believe that they know what’s going on in the business.  Lots of charts, graphs, and dashboard presentations make the numbers more readable, but they don’t say whether or not the numbers are even right.  Even more important, they don’t deliver insight based on experience and understanding.  This is where the accounting professional’s value really comes from – providing insight based on good data and quality data analysis backed by experience and understanding of the business.

You can’t be a good CFO or a strategic business partner to your CEO until you thoroughly understand operations and how they drive performance,
CFO.com (http://s.tt/1rtoZ)

Knowing what makes a business valuable is important, but what many business owners don’t fully understand is how to best increase that value.  Generalized reports which summarize financial information, distilling it into a standard set of metrics, often don’t tell the business owner what they really need to know – how to go about increasing the overall value of their business, whether it is through improved profitability or through growth.

The business owner understands the operations, but not necessarily how operational activities actually impact value and profitability.  Helping owners know more about their enterprises requires that the accounting professional also know more, where gaining a deep understanding of operations and learning what business functions are addressed and how becomes the key to bridging the gap between operational knowledge and business valuation. This is where the accounting professional or CFO can really make a difference, and can help to apply their knowledge in building business value directly towards those areas which fundamentally impact it.

Make Sense?

J

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about Data Warriors: accounting in the cloud